MacK v. Kuckenmeister

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JOAN R. MACK, as Trustee of the 

Palace Jewelry & Loan Co., Inc.

401 (k) Profit Sharing Plan and

Trust,

Plaintiff-Appellee,

v.

RANDAL S. KUCKENMEISTER, CPA,

MST, as Administrator of the No. 09-15290



Estate of Charla Marie Mack, D.C. No.

Deceased, 3:08-cv-00370-ECR-

Defendant-Appellee, RAM

DARREN ROY MACK, an individual,

Defendant-Appellant,

and

JOHN DOES, 1 through 50,

inclusive,

Defendant.



10565

10566 MACK v. KUCKENMEISTER

JOAN R. MACK, as Trustee of the 

Palace Jewelry & Loan Co., Inc.

401 (k) Profit Sharing Plan and

Trust,

Plaintiff-Appellant,

v.

No. 09-15291

RANDAL S. KUCKENMEISTER, CPA,

D.C. No.

MST, as Administrator of the

Estate of Charla Marie Mack,  3:08-cv-00370-ECR-

RAM

Deceased; DARREN ROY MACK, an

individual, OPINION

Defendants-Appellees,

and

JOHN DOES, 1 through 50,

inclusive,

Defendant.



Appeals from the United States District Court

for the District of Nevada

Edward C. Reed, District Judge, Presiding

Submitted April 16, 2010*

San Francisco, California

Filed July 22, 2010

Before: A. Wallace Tashima and Sidney R. Thomas,

Circuit Judges, and William Stafford,

Senior District Judge.**

*The panel unanimously concludes this case is suitable for decision

without oral argument. See Fed. R. App. P. 34(a)(2).

**The Honorable William Stafford, Senior United States District Judge

for the Northern District of Florida, sitting by designation.

MACK v. KUCKENMEISTER 10567

Opinion by Judge Thomas

10570 MACK v. KUCKENMEISTER

COUNSEL

Mark Wray, Law Offices of Mark Wray, Reno, Nevada, for

defendant-appellant/cross-appellee Darren Roy Mack.

Todd A. Bader, Bader & Ryan Ltd., Reno, Nevada, for

plaintiff-appellee/cross-appellant Joan R. Mack.

Ryan W. Herrick and Ann Morgan, Jones Vargas, Reno,

Nevada, for defendant-appellee/cross-appellee Randal S.

Kuckenmeister.

OPINION

THOMAS, Circuit Judge:

Darren Mack murdered his wife, Charla Mack, and shot the

state court judge overseeing their divorce proceedings before

a final written divorce decree could be filed. Believing Darren

Mack and Charla Mack had agreed to the terms of their

divorce before Charla Mack’s murder, the Estate of Charla

Mack filed a motion in state court for the divorce decree to

be memorialized in an order dated nunc pro tunc to a time

before her death. The Nevada district court entered a domestic

relations order (“order” or “DRO”) over Darren Mack’s

objection. Among other things, the DRO decreed that a Quali-

fied Domestic Relations Order (“QDRO”) should issue. Dar-

ren Mack appealed to the Nevada Supreme Court, which

affirmed the judgment.

These appeals require us to determine whether state courts

have subject matter jurisdiction to decide that a state court

MACK v. KUCKENMEISTER 10571

issued domestic relations order is a QDRO as defined by the

Employee Retirement Income Security Act of 1974

(“ERISA”), 88 Stat. 832, as amended, 29 U.S.C. § 1001 et

seq. We conclude that they do and thus that the Nevada

Supreme Court’s QDRO determination in Mack v. Estate of

Mack, 206 P.3d 98 (Nev. 2009), is entitled to full faith and

credit. We reverse and remand with instructions for the dis-

trict court to direct Joan Mack to deposit the contested funds

with the court, if she has not already done so, and to award

the funds to Randal Kuckenmeister, administrator of Charla

Mack’s Estate.1

I

Darren Mack and Charla Mack were engaged in divorce

proceedings throughout 2005 and into the early part of 2006.

As part of the divorce, Darren Mack agreed that the court

would execute an order that would name Charla as the alter-

nate payee of a 401(k) plan. The state court tasked Charla

Mack’s attorney with writing an order to that effect for the

court’s signature. Prior to the signing of the order, however,

Darren Mack murdered Charla and shot the state court judge

who was presiding over the divorce.2 No written order was

entered by the state court before Charla’s death.

After Charla’s death, her estate was granted permission to

substitute for Charla in the remainder of the divorce proceed-

ings. The estate moved for entry of an order nunc pro tunc

that would memorialize what the estate saw as oral orders

entered by the original divorce judge before Charla was

1

We take judicial notice of Mack and related filings. See Robinson Ran-

cheria Citizens Council v. Borneo, 971 F.2d 244, 248 (9th Cir.1992) (court

“may take notice of proceedings in other courts, both within and without

the federal judicial system, if those proceedings have a direct relation to

matters at issue”).

2

Darren Mack has been convicted of Charla’s murder and of attempting

to murder the state district court judge. See Mack, 206 P.3d at 104.

10572 MACK v. KUCKENMEISTER

killed. The motion was granted, and on June 20, 2007, the

state court entered an order, nunc pro tunc as of January 9,

2006—a date when Charla was still alive—stating that “a

QDRO will be executed which will transfer to Mrs. Mack the

sum of five hundred thousand dollars with any appreciation

that is distributed to that five hundred thousand dollars.” Dar-

ren Mack appealed the order to the Nevada Supreme Court,

where he argued, inter alia, that the order contravened federal

law relating to retirement accounts.

While his state appeal was pending, Darren Mack threat-

ened suit against the trustee of the 401(k) plan—his mother,

Joan Mack—should she pay the benefit to Charla Mack’s

Estate. Joan Mack filed a complaint in federal court seeking

to interplead the $500,000 in retirement money.3

Darren Mack answered the complaint and filed a cross-

claim against the Administrator of Charla Mack’s Estate,

Randal Kuckenmeister, claiming the right to the $500,000.4

3

Joan Mack’s pleadings request declaratory judgment as to “the rights

and obligations of the parties with respect to the retirement benefits.”

However, the complaint, which she labels “Complaint for Interpleader,”

citing Fed. R. Civ. P. 22(a)(1), also asks that “the Defendants be required

to . . . settle between themselves their right to the retirement benefits” and

requests that she “be discharged from any . . . further liability.” At no

point does she assert that the plan is not liable to pay the benefits to any-

one, or seek adjudication of any dispute other than the dispute over the

funds that she has sought to deposit with the court. Nor has a claimant to

the stake asserted a counterclaim against her. She, the other litigants, and

the district court have treated this as an interpleader case throughout the

proceedings. Therefore, we consider her to be a disinterested stakeholder

and construe her request for a declaration as to “the rights and obligations

of the parties” as a request that she be declared discharged from further

liability upon deposit of the interpleaded funds with the court.

4

Darren Mack argues that what he labeled as a cross-claim was only an

answer to Joan Mack’s complaint and is not subject to dismissal. Darren

Mack’s filing in the district court is clearly labeled as both an answer and

a cross-claim, clearly structured as such, and clearly includes the factual

basis for his legal claim to the interpleaded funds. If his claim of entitle-

ment is precluded by the Nevada court ruling, and we hold that it is, it is

subject to dismissal no matter what it is called.

MACK v. KUCKENMEISTER 10573

Kuckenmeister filed a motion to dismiss Joan Mack’s com-

plaint, and a second motion to dismiss Darren Mack’s cross-

claim. In both, he argued that the issue of who has the right

to the pension funds mentioned in the state court order had

already been resolved by the state court and that relitigation

was barred by the doctrine of collateral estoppel. Joan Mack

and Darren Mack argued that Joan Mack’s complaint was not

estopped because she had not participated in the Nevada court

proceedings and was not in privity with Darren Mack. They

also argued that while the state court did purport to determine

who would be entitled to the retirement fund under state law,

the issue before the federal court was whether that order was

a QDRO under federal law.

The district court agreed with Kuckenmeister that “the

issue to be decided in this case” was “the rights of the various

parties with respect to th[e] retirement funds,” which “is the

same issue that was decided in the prior state court action.”

It found that because Joan Mack “as trustee of the retirement

plan . . . has no independent interest as to which party . . .

receives the retirement funds,” her “interests were represented

in the state court proceeding when the state court determined

to execute the QDRO in favor of Charla.” It therefore dis-

missed Joan Mack’s complaint and Darren Mack’s cross-

claim as precluded by collateral estoppel. Darren Mack has

appealed the dismissal of the complaint and the dismissal of

his cross-claim. Joan Mack filed a cross-appeal regarding the

dismissal of her complaint.

While the federal appeals were pending, the Nevada

Supreme Court issued an opinion in the state court appeal.

The opinion not only decided the validity of a nunc pro tunc

domestic relations order under state law, but determined that

the order was in fact a QDRO under federal law. See Mack,

206 P.3d at 109-10.

This appeal was briefed after the Nevada Supreme Court

published its opinion. Darren Mack and Joan Mack maintain

10574 MACK v. KUCKENMEISTER

that a state court lacks subject matter jurisdiction to determine

whether an order issued in a domestic relations case is a

QDRO, and therefore that its determination cannot be binding

in a federal case. Even if a state court can have jurisdiction,

they argue that the plan administrator must be given the first

opportunity to evaluate an order and determine if it is a

QDRO. They continue to argue that Joan Mack was not in

privity with any party that participated in the state court pro-

ceeding, and thus that the state court decisions are not binding

on her.

II

“Under the federal full faith and credit statute, federal

courts must give state court judgments the preclusive effect

that those judgments would enjoy under the law of the state

in which the judgment was rendered.” Far Out Prods., Inc. v.

Oskar, 247 F.3d 986, 993 (9th Cir. 2001) (citing 28 U.S.C.

§ 1738). Nevada applies “Nevada issue preclusion” to “deter-

mine the issue preclusive effect of a state decision.” Bower v.

Harrah’s Laughlin, Inc., 215 P.3d 709, 718-19 (Nev. 2009).

In Nevada, issue preclusion requires that (1) an issue

be identical, (2) the initial ruling was final and on the

merits, (3) the party against whom the judgment is

asserted was a party or in privity with a party in the

prior case, and (4) the issue was actually and neces-

sarily litigated.

Id. at 718 (internal quotation marks omitted).

The preclusive effect of a prior judgment is a question of

law reviewed de novo. See Far Out, 247 F.3d at 993. “The

party seeking to assert a judgment against another has the bur-

den of proving the preclusive effect of the judgment.” Bower,

215 P.3d at 718.

As an initial matter, we reject Darren Mack’s contention

that he has raised any issue in federal court that was not

MACK v. KUCKENMEISTER 10575

already litigated in state court. The question of whether the

order was a QDRO was actually and necessarily litigated

before the Nevada Supreme Court, as was the state court’s

subject matter jurisdiction to answer that question in the first

instance. See Mack, 206 P.3d at 109 (“Darren [Mack] argues

that in order for there to be a QDRO, the court must issue a

domestic relations order (DRO) and the plan administrator

must then determine if it is qualified.”); id. at 109-10 (holding

that “[w]hether a DRO constitutes a valid QDRO under

ERISA is a question of law,” which a state court can deter-

mine in the first instance by looking to the statutory require-

ments and underlying order (internal quotation marks

omitted)); id. at 109 (reviewing the applicable statute).

This is not the end of our inquiry, however. Under Nevada

law, a court judgment must be “valid” to have preclusive

effect. Exec. Mgmt., Ltd. v. Ticor Title Ins. Co., 963 P.2d 465,

473 (Nev. 1998). That is to say, the court must have personal

and subject matter jurisdiction. Infirm judgments are not enti-

tled to full faith and credit in federal courts. See Kremer v.

Chem. Constr. Corp., 456 U.S. 461, 482-83(1982); see also

Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 386

(1996) (noting that state court judgments are binding only if

the state court had power to enter the judgment). Judgments

issued without authority are void as a matter of Nevada state

law and, therefore, can have no preclusive effect under 28

U.S.C. § 1738. Landreth v. Malik, 221 P.3d 1265, 1267 (Nev.

2009). We must determine this issue independently. See Shaw

v. Cal. Dep’t of Alcoholic Beverage Control, 788 F.2d 600,

607 (9th Cir. 1986) (a court must deny preclusive effect to a

prior decision if the adjudicator lacked jurisdiction).

Therefore, we are called upon to decide whether or not a

state court has jurisdiction to determine that a DRO is a

QDRO, and whether there are any other jurisdictional require-

ments (such as exhaustion before the plan administrator or

joinder of the plan administrator in the state court proceeding,

10576 MACK v. KUCKENMEISTER

neither of which occurred in this case) before a state court

may do so.

III

A

[1] ERISA states that “a court of competent jurisdiction”

can determine whether a DRO is a QDRO. 29 U.S.C.

§ 1056(d)(3)(H)(i). The first question we must answer in this

appeal, therefore, is whether a state court is “a court of com-

petent jurisdiction” for these purposes. Like every court

before us to consider this question, we answer this question

in the affirmative.5

ERISA has a spendthrift provision that forbids a benefi-

ciary from assigning or alienating his rights to pension plan

benefits. 29 U.S.C. § 1056(d)(1). The statute also preempts

state laws that “relate to any employee benefit plan.” 29

U.S.C. § 1144(a). In the early days of ERISA litigation, courts

were faced with the question of whether state court DROs that

purported to transfer rights to ERISA pension funds to a plan

5

See Geiger v. Foley Hoag LLP Ret. Plan, 521 F.3d 60, 67 (1st Cir.

2008); Scales v. Gen. Motors Corp. Pension Adm’r, 275 F. Supp. 2d 871,

876 (E.D. Mich. 2003); Jones v. Am. Airlines, Inc., 57 F. Supp. 2d 1224,

1232 (D. Wyo. 1999); Bd. of Trs. of Laborers Pension Trust Fund for N.

Cal. v. Levingston, 816 F. Supp. 1496, 1501 (N.D. Cal. 1993); In re Mar-

riage of Oddino, 939 P.2d 1266, 1275 (Cal. 1997); Robson v. Elec. Con-

tractors Ass’n Local 134 IBEW Joint Pension Trust of Chi., Pension Plan

No. 5, 727 N.E.2d 692, 697 (Ill. App. Ct. 1999); Eller v. Bolton, 895 A.2d

382, 393 n.6 (Md. Ct. Spec. App. 2006); Langston v. Wilson McShane

Corp., 776 N.W.2d 684, 693 (Minn. 2009); see also Hawkins v. CIR, 86

F.3d 982, 987 (10th Cir. 1996) (assuming without deciding that a state

court could have decided whether an agreement satisfied the statutory def-

inition of a QDRO); Ronald J. Cooke, 2 ERISA Practice and Procedure

§ 2:23 (2d ed. 2003), at 2-157-2-158 (“In seeking enforcement of these

orders, . . . a state court has concurrent jurisdiction to review a pension

plan administrator’s determination of whether a state court order is a qual-

ified domestic relations order.”).

MACK v. KUCKENMEISTER 10577

participant’s ex-spouse or children violated ERISA’s spend-

thrift clause or fell victim to the statute’s preemption provi-

sion. Some courts held that the orders were unenforceable,

while others read an exception into the two provisions of the

statute and enforced the orders. See Trs. of the Dirs. Guild of

Am.-Producer Pension Benefits Plans v. Tise, 234 F.3d 415,

419 (9th Cir. 2000). Responding to this confusion, Congress

enacted the Retirement Equity Act of 1984 (“REA”), Pub. L.

No. 98-397, 98 Stat. 1426, which amended ERISA to permit

state court ordered assignments of plan benefits to former

spouses and dependents. See S. Rep. No. 98-575, at 19,

reprinted in 1984 U.S.C.C.A.N. 2547, 2565.

[2] As amended, ERISA now explicitly exempts from its

anti-alienation and preemption provisions a subset of DROs.

29 U.S.C. §§ 1056(d)(3)(A), 1144(b)(7). To be exempt, such

orders must be judgments, decrees, or orders “made pursuant

to State domestic relations law” that “create[ ] or recognize[ ]

the existence of an alternate payee’s right to, or assign[ ] to

an alternate payee the right to, receive all or part of the bene-

fits payable with respect to a participant under a[n ERISA]

plan.” 29 U.S.C. §§ 1056(d)(3)(A), 1056(d)(3)(B). The REA

also lists the few parties to whom a DRO may assign benefits,

29 U.S.C. § 1056(d)(3)(B)(I)(ii), the type and amount of ben-

efits it may assign, 29 U.S.C. § 1056(d)(3)(D), and specific

information that it must contain, 29 U.S.C. § 1056(d)(3)(C).

Assuming a state court issues a DRO that substantially con-

forms to these requirements, it has issued a QDRO that

creates enforceable interests in the proceeds of an ERISA

plan. Tise, 234 F.3d at 420; Stewart v. Thorpe Holding Co.

Profit Sharing Plan, 207 F.3d 1143, 1153 (9th Cir. 2000).

It is clear from this description that state family law, not

ERISA, has created, recognized, or assigned the alternate

payee’s right to plan benefits. As we have explained in prior

litigation, ERISA merely describes which state law created

interests are enforceable in court. See Tise, 234 F.3d at 421

(“[A] QDRO only renders enforceable an already-existing

10578 MACK v. KUCKENMEISTER

interest . . . .”). ERISA’s QDRO provision does not somehow

create a right to plan benefits or create a right to enforce a

state law order.

[3] The source and form of an alternate payee’s state law

interest in pension benefits is critical to determining whether

state courts can ever have jurisdiction to determine that a

DRO is a QDRO. This is so because ERISA grants federal

courts exclusive jurisdiction over most ERISA cases, includ-

ing those where the plaintiff requests equitable relief to

enforce provisions of ERISA or enjoin violations of the stat-

ute, while providing state courts with concurrent jurisdiction

over cases brought “to recover benefits” or “to enforce . . . or

to clarify” rights under the terms of the plan itself. 29 U.S.C.

§§ 1132(a)(1)(B), 1132(a)(3), 1132(e)(1). Because a DRO

creates or describes a beneficiary’s right to benefits under an

ERISA plan, a party named alternate payee in a DRO wishing

to enforce, clarify, or collect on those rights first requires a

determination that the rights are enforceable. Therefore, in the

course of proceedings to enforce, clarify, or collect, a court

may be called upon to determine whether or not the DRO is

a QDRO. Because a state court has concurrent jurisdiction

over these proceedings under 29 U.S.C. § 1132(a)(1)(B), see

Menhorn v. Firestone Tire & Rubber Co., 738 F.2d 1496,

1500 & n.2 (9th Cir. 1984), it follows that it has jurisdiction

to decide the intermediate question of whether or not the DRO

is a QDRO.

Joan Mack argues that the question of enforceability actu-

ally relates more closely to the actions for equitable relief and

enforcement of statutory rights described in 29 U.S.C.

§ 1132(a)(3), over which federal courts have exclusive juris-

diction. We can imagine the case where the qualified status of

a DRO must be litigated during the course of proceedings to

enjoin a violation of ERISA or otherwise enforce the statute.

Just because the question could arise in a case where the fed-

eral courts have exclusive jurisdiction, however, does not

mean that a state court could not have concurrent jurisdiction

MACK v. KUCKENMEISTER 10579

when it arises in a different context. Cf. Carmona v. Car-

mona, 603 F.3d 1041, 1051-52 (9th Cir. 2010) (“Although the

present suit, as pleaded, arises under the exclusive jurisdiction

of federal courts, when the parties proceeded initially, the

state court had concurrent jurisdiction to hear the ERISA

claim under 29 U.S.C. § 1132(a)(1)(B).”).6

Joan Mack also argues that any lawsuit that incidentally

requires a court to interpret a provision of ERISA falls within

the federal courts’ exclusive jurisdiction. She fails to cite a

single case so holding, however, and we have not found one

either. See Menhorn, 738 F.2d at 1500 & n.2 (“Congress

granted the federal courts jurisdiction, in part exclusive, in

part concurrent with state courts, over matters falling within

ERISA’s explicit provisions or this supplementary federal

common law.”). Determining whether or not a DRO falls

within the QDRO exception to ERISA’s anti-alienation provi-

sion requires no more interpretation of ERISA than determin-

ing whether a state law cause of action falls to ERISA’s

preemption provision, something that state courts are called

on to do regularly. See Paul J. Schneider & Barbara W. Freed-

man, ERISA: A Comprehensive Guide § 8.07 (2d ed. 2003),

at 8-44 n.236 (comparing state and federal court holdings

regarding ERISA preemption); cf. Marin Gen’l Hosp. v.

Modesto & Empire Traction Co., 581 F.3d 941, 945 (9th Cir.

2009) (“[A] defense of conflict preemption under [ERISA]

§ 514(a) does not confer federal question jurisdiction on a

federal district court.”).

Joan Mack also makes an argument based on ERISA’s leg-

islative history, citing a Conference Report that predates the

REA and the federal court decisions that led Congress to

6

Nor does it mean that a state court determination of the QDRO issue

in a case where the state court had jurisdiction is anything but preclusive

in a subsequent case, such as this one, where the federal courts have exclu-

sive jurisdiction. See 29 U.S.C. §§ 1132(a)(1)(B), 1132(e)(1) (state courts

do not have concurrent jurisdiction over suits brought by fiduciaries).

10580 MACK v. KUCKENMEISTER

enact the REA. See H.R. Rep. 93-1280, at 68, reprinted in

1974 U.S.C.C.A.N. 5038, 5107. Because the Conference

Report relates jurisdiction to the structure of the original stat-

ute and tells us nothing of the substantive intent of Congress,

it is not persuasive regarding the amended statute. See Bd. of

Trs. of Laborers Pension Trust Fund for N. Cal. v. Levings-

ton, 816 F. Supp. 1496, 1499-1500 (N.D. Cal. 1993) (reject-

ing argument because of the date of the legislative history and

because it “does not mesh with the plain language of

§ 1132(a)(1)(B)”); In re Marriage of Oddino, 939 P.2d 1266,

1272-73 (Cal. 1997) (same, and because, “[w]hile Congress

clearly intended that actions to enforce rights created by

ERISA’s title I would be limited to federal courts, rights to

benefits awarded in a QDRO are not derived from ERISA, but

from state law and plan terms”).

B

[4] Having decided that a state court has jurisdiction to

determine whether or not a DRO is a QDRO, at least if it is

doing so in the course of proceedings to “recover . . . , enforce

. . . , or . . . clarify” benefit rights, we must now decide

whether any other jurisdictional hurdles stand in the way of

affirming the district court judgment. The next question,

therefore, is whether or not the plan administrator needed to

have been given the opportunity to determine if the DRO was

a QDRO before the issue was decided by the state court.

Because ERISA’s administrative exhaustion requirement is

prudential rather than jurisdictional, we answer that question

in the negative.

Generally, before ERISA participants or beneficiaries can

bring suit to recover plan benefits, they must exhaust a plan’s

internal claims procedure. See Paul J. Schneider & Barbara

W. Freedman, ERISA: A Comprehensive Guide § 8.03[F] (3d

ed. 2008), at 8-11 & n.52 (listing cases). Exhaustion is

required for a variety of reasons, including “to help reduce the

number of frivolous lawsuits under ERISA; to promote the

MACK v. KUCKENMEISTER 10581

consistent treatment of claims for benefits; to provide a non-

adversarial method of claims settlement; and to minimize the

costs of claims settlement of all concerned.” Amato v. Ber-

nard, 618 F.2d 559, 567 (9th Cir. 1980). Because the exhaus-

tion requirement is a creation of the federal courts, however,

and is not written into the statute, it is a prudential rather than

jurisdictional requirement. Vaught v. Scottsdale Healthcare

Corp. Health Plan, 546 F.3d 620, 626 (9th Cir. 2008).

The REA explicitly contemplated the possibility of admin-

istrative exhaustion of the QDRO question. It requires pen-

sion plans to “establish reasonable procedures to determine

the qualified status of domestic relations orders and to admin-

ister distributions under such qualified orders.” 29 U.S.C.

§ 1056(d)(3)(G)(ii). Any time that a DRO is “received by a

plan,” the plan must promptly notify the participant and alter-

nate payee that it has received the order and of its procedure

for determining the qualified status of the plan. 29 U.S.C.

§ 1056(d)(3)(G)(i)(I). “[W]ithin a reasonable period” thereaf-

ter, it must actually determine whether the order is a QDRO.

29 U.S.C. § 1056(G)(i)(II).

[5] Based on this language, we have assumed that a plan

administrator should have the first opportunity to determine

whether or not a DRO is a QDRO. See Tise, 234 F.3d at 421

(“Whether a state court’s order meets the statutory require-

ments to be a QDRO, and therefore is enforceable against the

pension plan, is a matter determined in the first instance by

the pension plan administrator, and, if necessary, by a court

of competent jurisdiction.”); see also Eller v. Bolton, 895

A.2d 382, 393 n. 6 (Md. Ct. Spec. App. 2006); Langston v.

Wilson McShane Corp., 776 N.W.2d 684, 693 (Minn. 2009).

This assumption is supported by the text of the statute, as well

as our holdings with regard to ERISA administrative exhaus-

tion generally.

[6] We have no reason to believe that this exhaustion

requirement is jurisdictional where the others are prudential,

10582 MACK v. KUCKENMEISTER

however. Nowhere do the REA amendments require exhaus-

tion by their language. To the contrary, they merely require

the plan administrator to take certain steps so that he will be

prepared to evaluate DROs, and certain other steps if a DRO

is actually “received.” This is not to say that a state court

should not consider whether and why a litigant has failed to

present a DRO to the plan administrator before filing suit. It

should.7 We hold only that its failure to do so will not defeat

a claim of issue preclusion in subsequent litigation.

C

Having decided that a state court has jurisdiction to deter-

mine whether a DRO is a QDRO during the course of a civil

action filed pursuant to 29 U.S.C. § 1132(a)(1)(B), and that

administrative exhaustion is a prudential rather than jurisdic-

tional requirement, we must now decide whether the state

court here had jurisdiction. In this case, the QDRO determina-

tion was made by a state appellate court during the direct

appeal of a family court order, wherein the plan participant

raised ERISA’s preemption provisions as a defense on the

merits to entry of the order. We hold that the state court had

jurisdiction in this context.

[7] State courts have jurisdiction to interpret and apply

ERISA in certain cases other than “civil action[s]” filed under

7

We recognize that the Nevada Supreme Court may have decided that

exhaustion was not required in this case. See Vaught, 546 F.3d at 626-27

(“[T]here are occasions when a court is obliged to exercise its jurisdiction

and is guilty of an abuse of discretion if it does not, the most familiar

examples perhaps being when resort to the administrative route is futile or

the remedy inadequate.”). The interwoven legal questions relating to nunc

pro tunc domestic relations orders and ERISA are arguably more suitable

for determination by a court of law than an administrator of pension bene-

fits plan. Moreover, it could well have been futile for the Estate to go first

to the plan administrator, who happens to be the participant’s mother.

Nonetheless, it would have been preferable for the Nevada courts to have

conducted this analysis explicitly.

MACK v. KUCKENMEISTER 10583

the statute. Of importance to our analysis here are conflict

preemption cases. Section 1144(a) explains that certain sub-

chapters of ERISA “supersede any and all State laws insofar

as they . . . relate to any employee benefit plan.” 29 U.S.C.

§ 1144(a). Where § 1144(a) is raised as a defense in a case

that does not otherwise arise under ERISA, state courts retain

jurisdiction over the case and over the preemption question.

Moreover, the cases are not removable to federal court, even

under the rule announced in Metro. Life Ins. Co. v. Taylor,

481 U.S. 58 (1987), that certain cases implicating ERISA are

removable under an exception to the well-pleaded complaint

rule. See Marin Gen’l Hosp., 581 F.3d at 944 (distinguishing

removable complete preemption cases from non-removable

conflict preemption cases).

This is not the first time a court has been asked to address

the question of state court jurisdiction in a case that does not

fit comfortably in the § 1132(a)(1)(B) mold. In Scales v. Gen-

eral Motors Corp. Pension Adm’r, 275 F. Supp. 2d 871 (E.D.

Mich. 2003), for example, after a plan administrator deter-

mined that a DRO was not a QDRO, the alternate payee

named in the DRO filed a motion in her divorce case seeking

an order to show cause why her former husband and the

administrator of the pension plan should not be held in con-

tempt for failing to comply with the DRO. Id. at 873. The

administrator attempted to remove the case to federal court,

arguing that the order to show cause was really a

§ 1132(a)(1)(B) “claim.” Id. at 874. The federal district court

held that the state court proceedings were not removable to

federal court because ERISA was being invoked only “as a

defense on the grounds that the [DROs] do not meet the

requirements of a QDRO”; and that the state court had juris-

diction to determine whether a DRO was a QDRO even

though the case was not a “civil action” as described in

§ 1132(a)(1)(B). Id. at 876-77.

The posture of this case is quite similar. Darren Mack

raised the preemption provisions of ERISA as an affirmative

10584 MACK v. KUCKENMEISTER

defense against the Estate’s claim for a written, nunc pro tunc

DRO. Darren Mack argued that the nunc pro tunc order was

invalid because it was not a QDRO, and could never be per-

fected to become one, because ERISA does not permit pen-

sion benefits to be awarded to a deceased (as opposed to

divorced) spouse. He also took issue with the use of Nevada’s

slayer statute to justify issuing a nunc pro tunc order, which

Nevada family courts generally would not have the authority

to do, arguing that such a construction of the slayer statute is

preempted by ERISA.

[8] The Nevada Supreme Court rejected Darren Mack’s

first ERISA argument after determining that the initial oral

order for the execution of a QDRO “created a recognized

existence in Charla, the right to receive a portion of Darren’s

ERISA pension plan,” during her lifetime. Mack, 206 P.3d at

109-10. It rejected his second ERISA argument as well, quot-

ing a Second Circuit opinion that “ ‘laws of general

application’ ”—such as the slayer statute—“ ‘whose effect on

ERISA plans is incidental’ ” are not preempted by ERISA. Id.

at 110 (quoting Aetna Life Ins. Co. v. Borges, 869 F.2d 142,

146 (2d Cir. 1989)). The Nevada Supreme Court might have

been able to address these arguments without actually deter-

mining that the DRO was a QDRO. Darren Mack does not

argue that the state court determination was dicta and not enti-

tled to full faith and credit, however, and Darren Mack is the

one who argued that the order was not a QDRO, inviting the

Nevada Supreme Court to decide otherwise.8 We are not pre-

8

In Oddino, a case similar to Scales, Mary, the alternate payee, first

presented the DRO to the plan administrator, who determined that the

DRO was a QDRO, but that it awarded a smaller portion of the benefits

than Mary believed she was entitled to receive. Mary then returned to fam-

ily court and sought an order requiring the plan to calculate the benefits

as she had. The administrator objected, arguing that the state court did not

have jurisdiction since Mary was, in effect, asking the court to enforce a

provision of ERISA, which only a federal court may do. 929 P.3d at 1269.

The California Supreme Court determined that the state court had jurisdic-

tion to hear Mary’s motion, which “is properly considered an action by a

MACK v. KUCKENMEISTER 10585

pared to say that the court exceeded the scope of its appellate

jurisdiction when it reached this issue.

[9] Therefore, we hold that the Nevada courts had jurisdic-

tion to determine that the DRO was a QDRO.

IV

In a ruling that was final and on the merits, the Nevada

Supreme Court determined that the DRO was a QDRO, the

exact issue that Darren Mack litigated there and wishes to

relitigate here. That ruling is clearly binding against Darren

Mack. We must also decide, however, whether it is binding

on Joan Mack, and if not, what the proper course of action is

to resolve Joan Mack’s cross-appeal.

[10] Under Nevada state law, a party can only be barred

from litigating an issue decided in a suit to which he was not

party if he is “in privity with a party in the prior litigation.”

Bower, 215 P.3d at 718. “To be in privity, the person must

have acquired an interest in the subject matter affected by the

judgment through . . . one of the parties, as by inheritance,

succession, or purchase.” Id. (internal quotation marks omit-

ted) (omission in original). Joan Mack is Darren Mack’s

mother and the trustee of his ERISA pension plan, but she has

not somehow acquired his interest in his benefits, and thus she

is not in privity with him under Nevada law.

The District Court erred when it held that “Plaintiff’s inter-

ests were sufficiently represented in the state court proceed-

beneficiary to recover, enforce rights to, or clarify future benefits under

the terms of a plan, within the meaning of section 1132(a)(1)(B).” Id. at

1271. While we agree with the court’s sentiment—that it had jurisdiction,

and that the case was more like a § 1132(a)(1)(B) action than a

§ 1132(a)(3) action—possible complications regarding federal court juris-

diction and removal counsel us to take this extra step to distinguish QDRO

determinations made in the course of family law proceedings from those

made in separate civil actions.

10586 MACK v. KUCKENMEISTER

ings,” reasoning that she, “as trustee, has no independent

interest as to which party — Charla Mack or Darren Mack —

receives the retirement fund.” As the Nevada Supreme Court

clarified in Bower, while this case was on appeal, this is an

incorrect understanding of Nevada law. Nevada law does not

permit estoppel by representation, but actually requires a type

of privity that goes far beyond the relationship of a trustee and

beneficiary.

It makes sense that Joan Mack would be permitted to liti-

gate these issues anew. As trustee of the 401(k) Plan, Joan

Mack owes a fiduciary duty not only to Darren Mack, but to

the other plan participants. And she has a duty under ERISA

to qualify domestic relations orders. If Joan Mack were to

have filed an action for declaratory judgment, she would have

been permitted to proceed notwithstanding a state court order

regarding the same facts and issues that she wished to raise

in federal court. See Carmona, 544 F.3d at 997. But she did

not. She filed an action in interpleader, meaning that she has

“effectively disclaim[ed] any position as to which of the

claimants is entitled to the fund.” Tise, 234 F.3d at 426; see

also Metro. Life Ins. Co. v. Marsh, 119 F.3d 415, 417 (6th

Cir. 1997) (ERISA fiduciary dismissed from interpleader suit

as soon as it deposited the contested funds with the court).

[11] Even though Joan Mack will be unable to challenge

the state court’s QDRO determination in any way, it was still

error for the district court to dismiss the interpleader com-

plaint, and certainly error for it to do so because of collateral

estoppel.

Issue preclusion “applies to prevent relitigation of only a

specific issue that was decided in a previous suit between the

parties.” Five Star Capital Corp. v. Ruby, 194 P.3d 709, 714

(Nev. 2008). The requirement of privity is meant “to restrict

the application of issue preclusion to parties whose due pro-

cess rights have been met.” Bower, 215 P.3d at 717. The mere

fact that a party’s substantive rights are not implicated by

MACK v. KUCKENMEISTER 10587

applying the doctrine does not mean it is appropriate to apply

it where the party has not yet been afforded the process due

it by the courts.

[12] Nor could the district court have dismissed her com-

plaint in interpleader on the grounds that there was no true

conflict over the pension funds. A stakeholder may file an

interpleader action to protect itself against “potential, as well

as actual, claims.” Minn. Mut. Life Ins. Co. v. Ensley, 174

F.3d 977, 980 (9th Cir. 1999). Because Darren Mack has not

actually disclaimed his right to the funds—and, to the con-

trary, asserted a right in both federal and state court—Joan

Mack’s interpleader action is proper.

As the Fifth Circuit explained succinctly in Rhoades v.

Casey, 196 F.3d 592 (5th Cir. 1999):

An interpleader action typically involves two stages.

In the first stage, the district court decides whether

the requirements for rule or statutory interpleader

action have been met by determining if there is a sin-

gle fund at issue and whether there are adverse

claimants to that fund. Wright, Miller & Kane, Fed-

eral Practice & Procedure: Civil 2d § 1714 (1986). If

the district court finds that the interpleader action has

been properly brought the district court will then

make a determination of the respective rights of the

claimants. Id.

Rhoades, 196 F.3d at 600. To hold at this stage that there is

only one potential claim for the fund, this court first would

need to understand “potential . . . claim[ ]” to mean a claim

that a court will determine is not precluded by a prior court

judgment. The purpose of interpleader is for the stakeholder

to “protect itself against the problems posed by multiple

claimants to a single fund.” Ensley, 174 F.3d at 980. This

includes protecting against the possibility of court-imposed

liability to a second claimant where the stakeholder has

10588 MACK v. KUCKENMEISTER

already voluntarily paid a first claimant. But it also includes

limiting litigation expenses, which is not dependent on the

merits of adverse claims, only their existence. See Tise, 234

F.3d at 426 (“Interpleader is a valuable procedural device for

ERISA plans who are confronted with conflicting multiple

claims upon the proceeds of an individual’s benefit plan . . .

[and who thus] risk[ ] defending against multiple lawsuits

brought by the adverse claimants.”).

For interpleader to be held improper based on the merits of

the claims being asserted against the fund or stakeholder,

courts would be required to address the merits of the claims

before propriety of the interpleader. This is backwards of the

usual order, and would defeat the resource-conservation pur-

poses of interpleader. See John Hancock Mut. Life Ins. Co. v.

Kraft, 200 F.2d 952, 954 (2d Cir.1953) (interpleader is not

dependent on the merit of the defendants’ claims).

V

Because the Nevada Supreme Court opinion does not pre-

clude Joan Mack from arguing that there are multiple poten-

tial claimants to the fund, her complaint in interpleader should

not have been dismissed. Rather, she should have been per-

mitted to deposit the $500,000 with the court and then dis-

missed from the case, no longer having a legal interest in who

had a right to the funds. At that point, Kuckenmeister’s

motion to dismiss Darren Mack’s cross-claim could properly

have been granted, leaving Kuckenmeister the sole claimant

to the funds.

Therefore, we reverse the judgment of the district court and

remand with instructions that Joan Mack be directed to

deposit the contested funds with the court, if she has not

already done so. Thereupon, the district court will dismiss

Joan Mack from the case, dismiss Darren Mack’s cross-claim,

and enter judgment in favor of Kuckenmeister.

MACK v. KUCKENMEISTER 10589

Each party is to bear its own costs on appeal and cross-

appeal.

REVERSED AND REMANDED WITH INSTRUC-

TIONS.