Amicus Curiae Brief — Egelhoff v. Egelhoff

No. 99-1529 SEP | 8 2000

In The

SUPREME Court OF THE UNITED STATES

DONNA RAE EGELHOFF,

Petitioner,

Vv.

SAMANTHA EGELHOFF, A MINOR, BY AND THROUGH

HFR NATURAL PARENT KATE BRENINER,

AND DAVID EGELHOFF,

Respondents.

On WRIT OF CERTIORARI TO THE

SUPREME COURT OF WASHINGTON

BRIEF OF THE STATES OF WASHINGTON, ARKANSAS,

COLORADO, MASSACHUSETTS, MONTANA, OKLAHOMA,

UTAH, VERMONT, AND WEST VIRGINIA,

AS AMICI CURKIAE IN SUPPORT OF RESPONDENTS

- CHRISTINE O. GREGOIRE

Atiorney General of Washington

JAY D. GECK*

Assisiant Attorney General

WILLIAM BERGGREN COLLINS

Sr. Assistant Attorney General

1125 WASHINGTON STREET SE

OLYMPIA, WA 98504-0100

(360) 753-6200

Counsel of Record for the Amici Curiae

Additional Counsel Listed Inside

BEST AVAILABLE COPY

MARK PRYOR

ATTORNEY GENERAL

STATE OF ARKANSAS

KEN SALAZAR

ATTORNEY GENERAL

STATE OF COLORADO

THOMAS F REILLY

ATTORNEY GENERAL

STATE OF MASSACHUSETTS

JOSEPH P MAZUREK

ATTORNEY GENERAL

STATE OF MONTANA

W A DREW EDMONDSON

ATTORNEY GENERAL

STATE OF OKLAHOMA

JAN GRAHAM

ATTORNEY GENERAL

STATE OF UTAH

WILLIAM H SORRELL

ATTORNEY GENERAL

STATE OF VERMONT

DARRELL V McGRAW JR

ATTORNEY GENERAL

STATE OF WEST VIRGINIA

TABLE OF CONTENTS

INTEREST OF THE AMICI CURIAE .............cccssscesceseeseseeeenees I

PPE GID PRDUIPEINEIEDT © ccceccccrccecescrscosssvssseserocsscosecssovess 2

SIT alsin inteeneneeniaaddasteeptedesnse cesssesecessseesccossccssceesoes 4

I. CONGRESSIONAL INTENT TO PRE-EMPT

STATE LAW SHOULD BE LIMITED TO

FIELD PRE-EMPTION DEFINED BY THE

PROVISIONS AND OBJECTIVES OF ERISA .............0... +

A. Recent Decisions Properly Implement The

Strong Presumption Against Pre-emption

Of State Law By Focusing On The

Provisions And Purposes Of ERISA.....0:.........c:cccccee0ee 5

B. ERISA Pre-emption Should Preserve The

ae 9

Il. ERISA DOES NOT EVIDENCE

CONGRESSIONAL INTENT TO ELIMINATE

STATE POWER TO DETERMINE VALIDITY

OF BENEFICIARIES TAKING PROPERTY

a ene 1]

Ill. THE SAVINGS CLAUSE FOR STATE

REGULATION OF INSURANCE SHOWS

THAT CONGRESS HAS NOT PRE-EMPTED

APPLICATION OF STATE LAW TO

SPPIEPUED DUPED cccccrcccccscecessscoscsscsscscosessosscscssoseres 15

EET Nn eee 16

il

TABLE OF AUTHORITIES

Cases

Alden v. Maine

ge Ee nr 9

Boddie v. Connecticut

Se Cs re re ee scirrciscetiticiaciiniitiadaiittiadpaaaiainii nastics 10

Boggs v. Boggs

ey es a cicerisintaittsiinenaicdiiinieniial tits dase cainimemiiea hana )

California Div. of Labor Standards

Enforcement v. Dillingham Constr., Inc.

FT es ee iciesiscetietnanniicaiansininasesciaininiinasitiiininiliamaiies 8,9

DeBuono v. NYSAA-ILA Med. &

Clinical Serv. Fund

a scicrcciaearesicnisiitadeianeiitanateitaiticilenideideiieiiieitaiaaidiaie 7

Emard v. Hughes Aircraft Co.

153 F.3d 949 (9th Cir. 1998),

cert. denied, 525 U.S. 1122 (1999)..............eee biniisnemineninia 14

Florida Prepaid Postsecondary Educ.

Expense Bd. v. College Savings Bank

Eee cs Gay Ce rccansnsersceninesnnnenrenseenmmennnsaninsietanenton 10

Geier v. American Honda Motor Co.

ee els a, ee ee hcnccccncccsncennitnnniieisitensinninenebiguminiaiianes 10

Head v. New Mexico Bd. of Examiners

in Optometry

a TD 15

In re Marriage of Chavez,

~ 80 Wash. App. 432, 909 P.2d 314 (1996)... cece. 12

Kimel v. Florida Bd. of Regents

Se italiani taal 10

Labine v. Vincent

OU a aia iia italia ai alialile 10

Loving v. Commonwealth of Virginia

ey Oe ee acacesrnmnichinnintnisaneicititeiicies litinniiilitebiaieinanstitenie 10

Mager v. Grima

iia lc a 10

Medtronic, Inc. v. Lohr ;

I 6

New State Ice Co. v. Liebmann

eT REN SR te Rec r e Re e 10, 11

New York State Conf. of Blue Cross &

Blue Shield Plans v. Travelers Ins. Co.

I CR elena ial 6,7

New York v. United States

SE are eres Oe cee anes ee eT oe 10

Printz v. United States

ee iittala tate ee 10

Seminole Tribe of Florida v. Florida

gk SS nee amen ee 10

Shaw v. Delta Air Lines, Inc.

ee ee en 6

United States v. Morrison

I 5

Statutes _

15 U.S.C. §§ 1011-1015

eT 15

Employee Retirement Income Security Act (ERISA).............. l

ERISA § 514(a)

EEL TP TIT iiciisictentciinnenncnnedaendiniidiinns 6, 7, 8, 11

ERISA 514(b)

as Oe I accicncseniniineanicntntantatientetieddeninnis 15

een 12

Ss RIEL Cy Shs Ain GPU TIIIIT nnsiniininsrcnietnsitseidinmmimenndnaeaniionn 12

Tex. Fam. Code Ann. § 3.632 (West 1997) .............cccccceeeeeeees 12

RE ee 13

Wash. Rev. Code § 11.07.010................::ccceceeeeeees 11, 12, 14, 15

Wash. Rev. Code § 11.07.010(2)(D)(i) ............ccccecceeeeeeeeeteeeeee 14

ey et Ge ee acreccnccscnnsnstesensnseenectemmmmnmneteninens 13

es See, Goat re 2a ccrrrenrennnsscntennennnsnmmennmmveveneennnte 12

Other Authorities

Jeffrey G. Sherman,

Mercy Killing And The Right To Inherit,

61 U. Cin. L. Rev. 803, 876 n.12 (1993) ooo. ccccceeeeeeees 14

Kenneth Weber,

19 Washington Practice — Family And

Community Property Law § 32.4 .....ccccccccccccseeeeeesseeeeeeeeseeees 12

l

INTEREST OF THE AMICI CURIAE

The State of Washington, together with the other amicus

curiae, respectfully submit this brief in support of Respondents.

The amici states have two vital interests to present to the Court.

First, amici states have a strong interest that the Court

apply traditional principles of pre-emption to the Employee

Retirement Income Security Act (ERISA). Under traditional

principles, ERISA pre-emption reflects the narrow scope of

federal interests necessary to the purposes of ERISA, without

unnecessarily pre-empting state laws that might superficially

relate to an ERISA plan. In other areas of federal regulation, the

Court continually emphasizes the presumptions that favor state

law, except where there is a clear showing that Congress

intended to preclude states from a particular field. This Court’s

initial decisions interpreting ERISA, however, strayed from these

principles and announced an analysis that examined whether

state law “relates to” a ERISA benefit plan. This approach

effectively eliminated the normal presumption in favor of state

law. Recent ERISA decisions, in contrast, have properly relied

upon the normal presumptions against pre-emption by redirecting

the pre-emption analysis to the provisions of ERISA. The amici

states have a strong interest in this narrower approach to ERISA

pre-emption, which is consistent with federalism values that

presume the states will define the property rights arising out of

marriage, divorce, and the transfer of property upon death.

Second, amici states are concerned with preserving

application of the state laws that determine validity of a

beneficiary designation, and the effect of marriage, divorce, and

other actions on that designation. The amici states submit this

brief to describe to the Court how state laws regarding

beneficiaries protect the interests of state citizens during

marriage, divorce, and after death. The interest of the states in

this area is particularly high, because pension and welfare

2

benefits are often the largest financial asset earned during a

marriage or a lifetime of employment. State laws that address

beneficiary designation ensure fairness and mutuality during

marriage, divorce, and when property is transferred after death.

Washington’s statute, for example, reflects the common

understanding and the legal reality that divorce distributes all of

the property held by two ex-spouses. This serves a presumed

intention to cease designating an ex-spouse as a beneficiary after

divorce has fully addressed the rights of the ex-spouse and

eliminated his or her rights in a pension or as an insurance

beneficiary. Other states have analogous laws that determine the

validity of a beneficiary designation in a variety of related

circumstances.

ERISA does not regulate the domestic matters

addressed by these various state laws. The amici states,

therefore, are vitally concerned that ERISA’s regulation of

pension and welfare plans not be interpreted as congressional

intent to pre-empt state laws that address validity of beneficiary

designations, which are vital to ensuring fair legal relationships

during marriage, divorce, and in other circumstances. States

are interested in allowing their citizens to continue relying on

state marriage and probate laws to define their legal rights and

expectations, without having inconsistent results for a

beneficiary designation in a benefit plan regulated under

ERISA.

Amici states therefore ask the Court to affirm that ERISA

did not pre-empt application of Washington law to determine that

the beneficiary of the pension plan and insurance plan had been

revoked as a matter of law after divorce.

SUMMARY OF ARGUMENT

In recent decisions, the Court has shifted away from

determining pre-emption of any state law that “relates to” an

ERISA benefit plan. Instead, the Court has discerned Congress’

3

intent to pre-empt state laws by looking to the provisions and

purposes of ERISA. With these recent cases, the Court has

provided a meaningful application of the strong presumptions

against pre-emption of state powers over subjects like domestic

relations, property ownership, and the transfer of property upon

death. State powers should not be pre-empted where no

particular provision of ERISA speaks to the subject, because

Congress presumably did not intend to displace those traditional

state powers.

This Court should now clarify that ERISA involves

traditional field pre-emption principles, where the field that is

pre-empted is defined by the procedural and _ substantive

provisions of ERISA. With this field pre-emption approach to

ERISA, the Court preserves the federalism relationship between

the states and the federal government, ensuring that state laws

continue to govern local civil matters, except where Congress

pre-empts states from a field.

When these recent pre-emption decisions are applied to a

state law that determines whether an ex-spouse is a surviving

beneficiary to an insurance policy or pension benefit, the Court

should start by recognizing that this type of state law serves the

state’s interest in defining marital property and in ensuring a fair

and complete distribution of property during divorce. Marriage,

divorce, and probate laws are historically the province of the

states. State laws that address beneficiaries reflect other state

laws that require an employee to name a spouse as a beneficiary,

which protects community property rights. Invalidating an

ex-spouse as beneficiary merely reflects the expectations of the

former spouse, that the divorce eliminates the marital property

relationship that caused the designation in the first place.

Moreover, the Court should recognize that state law

already affects the validity of beneficiaries named in ERISA

plans. Plans must deal with issues such as whether there is a

valid marriage, who is a lawful child, or who has survived in

4

circumstances involving simultaneous death of an employee and

beneficiary. If state law were not applicable, then other state

objectives would be frustrated, such as the application of the

common state slayer laws that prevent a murderer from being the

beneficiary of a victim’s pension or life insurance.

State laws provide the details that fulfill the expectations

of people in their domestic relationships. ERISA, in contrast,

does not speak to these domestic and local issues. Its provisions

do not show congressional intent to pre-empt state laws in this

field. Rather, the preservation of state law in this case is

consistent with Congress’ overarching purpose of protecting

employees who rely on these laws to order their affairs and

ERISA plan benefits for distribution of their property after death.

In addition, the Court should consider the broad

preservation of state authority as it applies to insurance. Under

ERISA’s savings clause for state insurance laws, it creates no

field of pre-emption that precludes application of state laws in

the context of determining lawful beneficiaries to an insurance

policy.

ARGUMENT

I. CONGRESSIONAL INTENT TO PRE-EMPT

STATE LAW SHOULD BE LIMITED TO FIELD

PRE-EMPTION DEFINED BY THE PROVISIONS

AND OBJECTIVES OF ERISA

Every state has laws that defines ownership of property,

marital relations, and matters of inheritance. These state laws

ensure the fairness and mutuality of marriage by defining the

rules of marital property, divorce, and inheritance. The citizens

of the states rely on those rules, living their lives and developing

significant expectations based upon them. It would most likely

exceed the constitutional limits on federal power if Congress

tried to do what the states have accomplished in protecting the

5

expectations and understandings of citizens with regard to

marriage, divorce, and death. '

ERISA, however, regulates pension plans, life insurance,

and other benefits that arise within the backdrop of state

laws governing marriage, divorce, and inheritance. ERISA

pre-emption should recognize that these traditional areas of state

laws existed before ERISA. By starting with the presumption

that these state laws are to be preserved, pre-emption is limited to

fields defined by the provisions and purposes of ERISA. This

approach to pre-emption accomplishes the intentions of Congress

as expressed in the provisions of ERISA, while assuring

employees that ERISA benefit plans will not frustrate normal

expectations rooted in the state laws governing marriage, divorce,

and inheritance.

A. Recent Decisions Properly Implement The

Strong Presumption Against Pre-emption Of

State Law By Focusing On The Provisions

And Purposes Of ERISA

1. “In all pre-emption cases, and particularly in those in

which Congress has ‘legislated in a field which the States have

traditionally occupied,’ we ‘start with the assumption that the

historic police powers of the States were not to be superseded by

the Federal Act unless that is the clear and manifest purpose of

' In United States v. Morrison, 120 S. Ct. 1740 (2000), this Court

ruled that the Commerce Clause did not provide Congress with authority to

adopt a provision of the Violence Against Women Act. According to the

Court: “The Constitution requires a distinction between what is truly

national and what is truly local.” Morrison, 120 S. Ct. at 1754. The Court

rejected the argument that commerce was implicated owing to the impact of

violence against women on the national economy. The Court rejected this

reasoning because it could also justify federal regulation of “family law

and other areas of traditional state regulation since the aggregate effect of

marriage, divorce, and childrearing on the national economy is undoubtedly

significant”. /d. at 1753.

6

Congress.’” Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996)

(quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230

(1947)). As explained further in the next sections, the text of

29 U.S.C. § 1144(a) (ERISA § 514(a)) reflects congressional

intent that pre-emption arise from the “provisions” of ERISA.

This approach is like this Court’s traditional approach to field

pre-emption, and ensures that the scope of pre-emption does not

undermine or eliminate the presumption against pre-emption of

traditional state power.

2. The first two decades of ERISA pre-emption decisions

do not provide a meaningful application of the normal

presumptions that ERISA does not pre-empt state law. The

Court’s initial ERISA decisions fail because they try to find

congressional intent in the statement of § 514(a), that the

“provisions” of ERISA “shall supercede any and all State laws

insofar as they may now or hereafter relate to any employee

benefit plan”. 29 U.S.C. § 1144(a) (emphasis added); see Shaw

v. Delta Air Lines, Inc., 463 U.S. 85 (1983). Because ERISA

benefits arise at the intersection of a number of traditional areas

of state law, it is not surprising that a number of state laws seem

to “relate to” ERISA benefit plans. These original pre-emption

rulings placed a cloud over state authority, enabling arguments

that anything provided as an ERISA plan was immune from state

regulation.

3. In recent rulings, the Court has properly rejected the

literal application of the broad words of § 514(a), holding that

congressional intent cannot be reliably discerned from the words

“relate to”:

“If ‘relate to’ were taken to extend to the furthest stretch

of its indeterminacy, then for all practical purposes

pre-emption would never run its course, for ‘really,

universally, relations stop nowhere.’ But that, of course,

would be . . . to read the presumption against

pre-emption out of the law whenever Congress speaks to

7

the matter with generality.” New York State Conf. of Blue

Cross & Blue Shield Plans v. Travelers Ins. C 0., 514 US.

645, 655 (1995) (citation omitted).

Instead, the intent of Congress is best determined by evaluating

the “objectives of the ERISA statute as a guide to the scope of

the state law that Congress understood would survive”.

Id. at656. The New York surcharge in that case had “an

indirect economic influence” on ERISA plans, but did “not

bind plan administrators to any particular choice and thus

function as a regulation of an ERISA plan itself”. /d. at 659.

Travelers Insurance thus adopted a better approach to

determining congressional intent by focusing ERISA

pre-emption on whether state law was “regulating the plan itself”

or interfering with the “objectives” of the ERISA statute. This

properly implements the text of § 514(a), providing that

pre-emption arises from “the provisions of this chapter and

subchapter III of this chapter”. 29 U.S.C. § 1144(a). This is no

different than the Court’s traditional approach to field pre-

emption, where congressional intent to pre-empt is discerned

from the nature and scope of the federal law. The express

language of § 514(a) is congressional confirmation that the fields

defined by provisions of ERISA shall pre-empt state laws that

might purport to supplement or duplicate these provisions.

The approach in Travelers was continued in DeBuono vy.

NYSAA-ILA Medical & Clinical Services Fund, 520 U.S. 806,

813 (1997). The DeBuono opinion explains that one must go

beyond the “unhelpful text” of § 514(a), with its expansive

reference to state laws that “relate to” an ERISA plan. To

overcome the “normal presumption against pre-emption,” the

Court again turns to the provisions of the ERISA statute to

indicate “the scope of state law that Congress understood would

survive”. /d. at 813-14. Accordingly, the regulation and

taxation of health care facilities is a “field that has been

traditionally occupied by the States.” Jd. at 814. The Court

8

required the opponents of that state law to show that Congress

intended that ERISA would pre-empt that type of state law.

California Division of Labor Standards Enforcement vy.

Dillingham Construction, Inc., 519 U.S. 316 (1997), also

illustrates again why the various methods for analyzing the words

“relates to a plan” in § 514(a) do not reflect congressional intent

to pre-empt state law. Dillingham Construction involved a

California law requiring contractors on public works to pay

prevailing wages. California applied its law to an apprenticeship

program that was itself an ERISA benefit. Dillingham

Construction recognized that nothing in ERISA overcame the

presumptions that protected this area of traditional state

regulation.

“(The] substantive standards to be applied to

apprenticeship training programs are, however, quite

remote from the areas with which ERISA is

expressly concerned — reporting, disclosure, fiduciary

responsibility, and the like... . A reading of § 514(a)

resulting in the pre-emption of traditional state-regulated

substantive law in those areas where ERISA has nothing

to say would be unsettling.” Dillingham Constr., 519

U.S. at 330 (citation omitted) (internal punctuation

omitted).

This ruling in Dillingham Construction finds pre-emption by

examining the provisions and objectives of ERISA itself, asking

whether ERISA has anything to say about the subject.

4. No matter how this case is decided, the Court should

confirm that the scope of ERISA pre-emption is not

“expansive” and not to be derived from the breadth of the

words “relate to”. The focus on “relates to” is an illusory test

“since, aS many a curbstone philosopher has observed,

everything is related to everything else”. Dillingham Constr.,

519 U.S. at 335 (Scalia, J., concurring).

Instead of focusing on the words “relates to”, the Court

should adopt the approach suggested by Justices Scalia and

Ginsburg in Dillingham Construction. Under this approach, the

phrase “relates to” “is meant, not to set forth a test for pre-

emption, but rather to identify the field in which ordinary field

pre-emption applies—namely, the field of laws regulating

‘employee benefit plans described in section 1003(a) of this title

and not exempt under section 1003(b) of this title,” 29 U.S.C.

§ 1144(a)”. Dillingham Constr., 519 U.S. at 336. The Court

should “apply ordinary field pre-emption, and, of course,

ordinary conflict pre-emption” to ERISA. /d.

Under this pre-emption approach, the states retain full

authority to legislate over matters of property ownership,

inheritance, and marriage so long as state law does not enter a

filed where federal regulation is exclusive or conflict with

implementation of ERISA. See Boggs v. Boggs, 520 U.S. 833

(1997) (applying conflict pre-emption to void a testamentary

transfer). This approach to pre-emption preserves the traditional

state laws that form the context in which individual employees

understand their pensions, life insurance policies, and other

benefits regulated by ERISA.

B. ERISA Pre-emption Should Preserve The

Balance Of Federalism

1. Applying traditional field and conflict pre-emption

analysis to ERISA is consistent with important principles of

federalism. The Court’s federalism jurisprudence “requires

that Congress treat the States in a manner consistent with their

status as residuary sovereigns and joint participants in the

governance of the Nation.” Alden v. Maine, 527 U.S. 2240,

2263 (1999). This Court has been vigilant in enforcing the

structural limits in the Tenth and Eleventh Amendments on the

power of Congress to commandeer state government or waive

10

state sovereign immunity.’ The principles of federalism behind

these decisions apply equally in an ERISA pre-emption case.

This is because a pre-emption case “is a case about federalism,

that is, about respect for the constitutional role of the States as

sovereign entitles”. Geier v. American Honda Motor Co., 120

S. Ct. 1913, 1928 (2000) (Stevens J., dissenting) (citation

omitted) (internal punctuation omitted).

2. A significant value of our Constitutional federalism

is that it allows for local variation in the law to reflect local

differences in the values and expectations of the citizens of

each state. Civil laws concerning marriage, divorce, and

inheritance emerge from the fabric of society where state laws

predominate. This Court has long upheld the presumptive

power of the states in these areas, subject only to Constitutional

restrictions.”

Preservation of state authority enables different

approaches to the solution of the societal problems.

“To stay experimentation in things social and

economic is a grave responsibility. Denial of the right

to experiment may be fraught with serious

? See New York v. United States, 505 U.S. 144 (1992); Printz v.

United States, 521 U.S. 898 (1997); Seminole Tribe of Florida v. Florida,

517 U.S. 44 (1996); Florida Prepaid Postsecondary Educ. Expense Bd. v.

College Savings Bank, 527 U.S. 627 (1999); Kimel v. Florida Bd of

Regents, 120 S. Ct. 631 (2000).

> Mager v. Grima, 8 How. 490, 493 (1850) (every state has

power to regulate the manner and term upon which property within its

dominion may be transmitted by will or inheritance); Labine v. Vincent, 401

U.S. 532, 537 (1971) (states make laws concerning intestate succession);

Boddie v. Connecticut, 401 U.S. 371, 385 (1971) (Douglas, J., concurring)

(power of state over marriage and divorce is complete, except as limited by

constitutional provisions); Loving v. Commonwealth of Virginia, 388

U.S. 1, 7 (1967) (marriage is a “social relation subject to the State's

police power”).

11

consequences to the Nation. It is one of the happy

incidents of the federal system that a single courageous

state may, if its citizens choose, serve as a laboratory;

and try novel social and economic experiments without

risk to the rest of the country.” New State Ice Co. vy.

Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J.,

dissenting).

Congress, of course, had no intention to federalize marriage,

divorce, or inheritance as a byproduct of ERISA regulations of

pension plans or insurance plans.

3. When pre-emption is consistent with federalism, it

ensures that state laws implement commonly held expectations

about property, marriage, divorce, and death. For example, a

person with one private life insurance policy and a second life

insurance plan provided by an employer would expect state law

to apply to both policies. If ERISA pre-empts, it frustrates his

expectation that both policies will reflect his marital status or his

divorce in the same way.

II. ERISA DOES NOT EVIDENCE CONGRES-

SIONAL INTENT TO ELIMINATE STATE

POWER TO DETERMINE VALIDITY OF BENE-

FICIARIES TAKING PROPERTY AFTER DEATH

To show that ERISA § 514(a) pre-empts application of

Wash. Rev. Code § 11.07.010, petitioners must overcome a

strong presumption that Congress intended to preserve state law.

Pre-emption requires a showing by petitioners that the provisions

of ERISA were intended to create a field of ERISA regulation

that pre-empts states from determining the validity of

beneficiaries after divorce. Amici states show in the following

sections that the state laws before the Court reflect local interests

and understandings regarding marital property, and that ERISA

does not address these matters. _

12

1. Washington law recognizes that a spouse is typically

the designated beneficiary to pension and life insurance benefits

simply because of the status as a spouse. The Washington statute

- that revokes beneficiary designation after divorce serves as an

understanding regarding the effect of divorce. A person who

divorces in Washington expects, under state law, that there will

be a complete distribution of all property and debts including,

community property, separate property, as well as other factors.

See Wash. Rev. Code § 26.09.080, App. at la. All properties,

including future interests, are accounted for and virtually all

properties are divided or assigned to one of the spouses during

the dissolution of marriage. See Kenneth Weber, 19 Washington

Practice — Family And Community Property Law § 32.4.

Retirement benefits are an asset earned during the marriage and

divisible upon divorce. E.g., Jn re Marriage of Chavez, 80 Wash.

App. 432, 909 P.2d 314 (1996).

When a Washington citizen undergoes a dissolution of

marriage and division of property, he or she reasonably believes

that the divorce proceeding extinguishes the rights of the former

spouse. Wash. Rev. Code § 11.07.010 implements this

expectation. It ensures complete division of marital property by

applying a rule of law to all non-probate properties where a

former spouse might have been named as a beneficiary. This

rule enables divorced spouses to start new lives or to remarry

with such beneficiary designations deemed revoked. Put simply,

the ex-spouse has ceased to survive as a spouse and, as a matter

of law, is not a surviving beneficiary. Numerous other states

have laws that implement similar expectations regarding

property.

* Examples of analogous state laws include: Tex. Fam. Code Ann.

§ 3.632 (West 1997) (requiring redesignation of ex-spouse after divorce);

Okla. Stat. tit. 15, § 178 (1981) (ex-spouse deemed to predecease unless

redesignated); Mich. Comp. Laws § 552.191(2) (requiring divorce decrees

to determine or extinguish rights of spouses in each of their life insurance,

endowments, or annuities).

13

2. As noted above, ERISA regulates benefits that exist in

a context of detailed state laws governing property, marriage,

divorce, and inheritance. The following three examples illustrate

analogous state laws that may affect beneficiary designations in

ERISA plans.

First, the pension plan in this case recognizes that federal

law requires consent of a spouse for designation of a non-spouse

as a beneficiary. JA at 39-40. The determination of the validity

of a beneficiary, therefore, requires reference to the state laws

that determine whether or not a participant employee is lawfully

married or divorced.

Second, ERISA does not explain how to determine

whether a designated beneficiary “survives”.° A variety of

state laws exist to determine who survives as a matter of law in

a number of situations where it would affect inheritance,

ownership of property, or rights to life insurance proceeds.

E.g., Wash. Rev. Code § 11.05.040, App. at 3a (Uniform

Simultaneous Death Act provisions for paying proceeds of life

insurance when there is simultaneous death of insured and

beneficiary). In a situation involving questions of survival, the

ERISA plan should look to state law in order to determine the

beneficiary.

Third is the slayer statute. Slayer statutes prevent a

murderer from inheriting his victim’s property, often invoking

the legal fiction that the murderer has, as a matter of law, failed

to survive the victim. E£.g., Wash. Rev. Code § 11.84.030,

App. at 5a; see generally Emard v. Hughes Aircraft Co., 153

_ * The Plan in this case provided that if an employee failed to

designate, “or if you have an invalid beneficiary designation, or your

beneficiary is no longer living, benefits will be paid in the following

sequence: |. To your surviving spouse. 2. If there is no surviving spouse,

to your children in equal shares”. JA at 40 (emphasis added).

14

F.3d 949, 960 n.11 (9th Cir. 1998), cert. denied, 525 U.S. 1122

(1999) (discussing slayer statutes). The state policy behind

slayer statutes is to protect a property owner by eliminating profit

to a person who wrongfully causes his or her death. In 1993, 44

states and the District of Columbia has slayer statutes, four states

had a common law bar. See Jeffrey G. Sherman, Mercy Killing

And The Right To Inherit, 61 U. Cin. L. Rev. 803, 876 n.12

(1993). In states with slayer statutes there is the expectation that

one spouse will not benefit from the murder of the other spouse.

However, under petitioner’s theory, ERISA requires the payment

of pension and insurance benefits to a beneficiary wife who

murdered her husband, overriding state law.

3. It is beyond the scope of this amicus brief to address

fully why application of state law to determine validity of

beneficiaries does not interfere with the provisions of ERISA.

The amici states, however, observe that the state law in this case

is not significantly different from a slayer statute or the Uniform

Simultaneous Death Act. If there was a dispute regarding the

validity of petitioner’s marriage, if petitioner had been a slayer or

if she had died in the car accident with the decedent, state law

provides for a basis for determining whether she was a valid

beneficiary to nonprobate property. Wash. Rev. Code

§ 11.07.010 occupies the same field as the slayer laws and death

acts. It provides circumstances when ex-spouses do not, as a

matter of law, survive as a beneficiary.°

® Indeed, the Washington statute in questions places no real

burden on ERISA plans at all because, under Wash. Rev. Code

§ 11.07.010(2)(b)(i), the plans may include a plain statement that statutes

which otherwise would operate to revoke or disclaim a beneficiary

designation upon divorce do not apply and will not override a beneficiary

designation.

15

lil. THE SAVINGS CLAUSE FOR STATE REGU-

LATION OF INSURANCE SHOWS THAT

CONGRESS HAS NOT PRE-EMPTED APPLI-

CATION OF STATE LAW TO INSURANCE

POLICIES

In 29 U.S.C. § 1144(b) (ERISA § 514(b)), Congress

preserved normal state powers to regulate insurance. As part

of such regulation, states can impose the type of revocation

requirement and non-survivorship rule of Wash. Rev. Code

§ 11.07.010.

“In areas of the law not inherently requiring national

uniformity . . . state statutes, otherwise valid, must be

upheld unless there is found such actual conflict

between the two schemes of regulation that both cannot

stand in the same area, or evidence of a congressional

design to preempt the field.” Head v. New Mexico Bd

of Examiners in Optometry, 374 U.S. 424, 430 (1963)

(quoting Florida Lime & Avocado Growers, Inc. vy.

Paul, 373 U.S. 132, 141 (1963)) (footnote omitted)

(internal punctuation omitted).

There is no uniformity regarding the nature and

regulation of the life insurance policies purchased by ERISA

plans. Accordingly, even if state law is not applicable to the

pension plan, the Court should consider separately the

application of Wash. Rev. Code § 11.07.010 to the insurance

proceeds. See also McCarran-Ferguson Act, 15 U.S.C.

§§ 1011-1015 (saving insurance regulation for states). This

broad preservation of state authority confirms that application

of state law is not pre-empted in the context of the insurance

policies. Analysis of pre-emption in this case should, if

necessary, take into account Congress’ preservation of state

power in the field of insurance benefits.

16

CONCLUSION

For the foregoing reasons, the amici states respectfully

request that the decision of the Washington State Supreme Court

be affirmed.

Respectfully Submitted,

CHRISTINE O. GREGOIRE

Attorney General of Washington

JAY D. GECK*

Assistant Attorney General

WILLIAM BERGGREN COLLINS

Senior Assistant Attorney General

1125 WASHINGTON STREET SE

OLYMPIA, WA 98504-0100

(360) 753-6200

September 18,2000 *Counsel of Record

APPENDIX

la

26.09.080 Disposition of property and liabilities—

Factors. In a proceeding for dissolution of the marriage,

legal separation, declaration of invalidity, or in a proceeding

for disposition of property following dissolution of the

marriage by a court which lacked personal jurisdiction over

the absent spouse or lacked jurisdiction to dispose of the

property, the court shall, without regard to marital miscon-

duct, make such disposition of the property and the liabilities

of the parties, either community or separate, as shall appear

just and equitable after considering all relevant factors

including, but not limited to:

(1) The nature and extent of the community property;

(2) The nature and extent of the separate property;

(3) The duration of the marriage; and

(4) The economic circumstances of each spouse at the

time the division of property is to become effective, includ-

ing the desirability of awarding the family home or the nght

to live therein for reasonable periods to a spouse with whom

the children reside the majority of the time. [1989 c 375 §

5; 1973 Ist ex.s. c 157 § 8.)

2a

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3a

11.05.040 Distribution of insurance policy when

insured and beneficiary die simultaneously. Where the

insured and the beneficiary in a policy of life or accident

insurance have died and there is no sufficient evidence that

they have died otherwise than simultaneously the proceeds

of the policy shall be distributed as if the insured had

survived the beneficiary. [1965 c 145 § 11.05.040. Prior:

1943 c 113 § 4; Rem. Supp. 1943 § 1370-4. Formerly RCW

11.04.210.]

Reviser’s note: The subject matter of this section and RCW

11.05.050 relating to insurance also appears in RCW 48.18 390

4a

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Sa

11.84.6030 Slayer deemed to predecease decedent.

The slayer shall be deemed to have predeceased the decedent

as to property which would have passed from the decedent

or his estate to the slayer under the statutes of descent and

distribution or have been acquired by statutory right as

surviving spouse or under any agreement made with the

decedent under the provisions of RCW 26.16.120 as it now

exists or is hereafter amended. [1965 c 145 § 11.84.030.

Prior: 1955 ¢ 141 § 3.)