Amicus Curiae Brief — Howell v. Howell, 137 S. Ct. 1400 (2017) (No. 15-1031)

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FILED

FEB 23 2017

| SOPRENE Con IS

No. 15-1031

eet

In the Supreme Court of the Gnited States

JOHN HOWELL, PETITIONDR

SANDRA HOWELL

TO THE SUPREME COURT OF ARIZONA

BRIEF FOR THE UNITED STATES AS AMICUS CURIAB

SUPPORTING RESPONDENT

QUESTION PRESENTED

When the parties divorced and their property was

divided, petitioner agreed that, going forward, he

would pay respondent 50% of his military retirement

pay each month. Petitioner later waived a portion of

his retirement pay in favor of veterans’ disability

benefits, resulting in a reduction of the monthly pay-

ments made to respondent. The family court ordered

petitioner to indemnify respondent for the amvunt of

that reduction. The question presented is as follows:

Whether the state court’s order violated the Uni-

formed Services Former Spouses’ Protection Act,

10 U.S.C. 1408, as interpreted in Maunsell v. Mansell,

490 U.S. 581 (1989).

(1)

TABLE OF CONTENTS

Page

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ET 7

Argument:

The Spouses’ Protection Act allows States to order

indemnification if a veteran’s post-divorce disability

poche chess me nage apmammmee

divided military retirement pay....

A. The presumption against preemption requires |

a narrow and limited view of the Act’s preemptive

force

B. Once disposable retired pay has been divided

enforce a valid division of “disposable retired

pay” as calculated at the time the divorce

became final..... le

the amounts to which their ex-spouses are

entitled under the terms of their divorce

AE ae ea Ae a

Congress’s failure to override States’ wide-

spread approval of indemnification as a

means to remedy a post-divorce disability

waiver suggests that Congress viewed that

approach as consistent with federal law and

(IID)

PRA RRASOSLE SISSIES EEL LLL LLL ee ee

Table of Contents—Continued: Page

C. Indemnification orders do not conflict with the

veterans’ disability benefits do not implicitly

preempt indemnification orders not expressly

barred by federal law eae catenin ltalinipermnasens 25

Ce icctrscceenmemenmnnnmme 29

D. The indemnification order at issue in this case

does not implicate the anti-attachment provision

applicable to veterans’ disability benefits..................... 31

I ah ceciicibisiseieninicinihaeeiarecteaescieiiierlntitiatetieenpeemamenmiiee 32

Appendix — State appellate court decisions ......................... la

TABLE OF AUTHORITIES

Cases:

Altria Grp., Inc. v. Good, 555 U.S. 70 (2008) ..................... 11

Barker v. Kansas, 508 U.S. 594 (1992) ...........cccccocceeeeeee-e- 2O

Bonito Boats, Inc. v. Thunder Craft Boats, Inc.,

EET ae 23

Burrus, In re, 136 U.S. 586 (1890) .............ccccecsceseeseeneeensenee 1l

CTS Corp. v. Waldburger, 134 8. Ct. 2175 (2014)............... 23

Carr v. United States, 560 U.S. 438 (2010) ............c00...0000.. 15

Cipollone v. Liggett Grp., Inc., 505 U.S. 504 (1992)........... 27

Clauson v. Clauson, 831 P.2d 1257 (Alaska 1992).............. 20

Geier v. American Honda Motor Co.,

LETTE 27

Cases—Continued: Page

Hendrick v. New Hampshire Dep't of Health &

Human Servs., 145 A.3d 1055 (N.H. 2016) ...........000000 28

Hillman v. Maretta, 133 8. Ct. 1943 (2013) ............2.cccecceees 11

Hisquierdo v. Hisquierdo, 439 U.S. 572 (1979)............ 12, 27

Hughes v. Talen Energy Mktg., LLC,

a 11

Johnson v. Johnson, 37 S.W.3d 892 (Tenn. 2001)........ 21, la

Koelsch v. Koelsch, 713 P.2d 1234 (Ariz. 1986)......... cnbimnine 6

Konieczny v. Konieczny, No. 97-CA-83, 1998 WL

401835 (Ohio Ct. App. Mar. 27, 1998) ..............000-.-. 23, 4a

Limbaugh v. Limbaugh, 71 8.W.3d 1

(Tex. App. 2002) ... = — =

Mallard v. Burkart, 95 So. ‘3d 1264 (Miss. 2012) peomniniell 23, 4a

Mansell v. Mansell, 490 U.S. 581 (1989)...............000. passim

Marriage of Kraft, In re, 832 P.2d 871 (Wash. 1992)......... 20

Marriage of Lodeski, In re, 107 P.3d 1097

I cscenersecsscssermnenpasnasstensncencscccersesevencensess 16, la

McCarty v. McCarty, 453 U.S. 210 (1981) ................ 2, 12, 13

McHugh v. McHugh, 861 P.2d 113

(Idaho Ct. App. 1998) ...........ccsssccessesesseserensesesennereennnnes 16, 2a

POM Wonderful LLC vy. Coca-Cola Co.,

134 S. Ct. 2228 (2014) ... _ Minidieie

Resare v. Resare, 908 A2d 1006 (RL 2006)... neue

Ridgway v. Ridgway, 454 U.S. 46 (1981)....... ener”

Rose v. Arkansas State Police, 479 U.S. 1 (1986) Maaiineseaiaal 28

Rose v. Rose, 481 U.S. 619 (1987)..........c0ccceeeeeeesene os passim

Shelton v. Shelton, 78 P.3d 507 (Nev. 2003),

cert. denied, 541 U.S. 960 (2004) ...........cccssereneee seen 21, 3a

United States v. Yazell, 382 U.S. 341 (1966)...................... 11

Wissner v. Wissner, 338 U.S. 655 (1960)............000..00000000 27

Wyeth v. Levine, 555 U.S. 556 (2009) ...........cccccseee-c-ececereeres 25

Statutes: Page

Defense Technical Corrections Act of 1987,

Pub. L. No. 100-26, § 7(h), 101 Stat. 282........0.0....0000...... 24

Homeland Security Act of 2002, Pub. L. No. 107-296,

EERE ARN Te 24

National Defense Authorization Act for Fiscal Years

1990 and 1991, Pub. L. No. 101-189, 103 Stat. 1352:

§ GEBCa), 12GB Stat. 16G1-1OGB q....cncccossscosesscceescsccccccncesscoce 24

§ 1622(e), 108 Stat. 1604-1606 .............cc.esccccccserecsnseseseeee 24

National Defense Authorization Act for Fiscal Year

1991, Pub. L. No. 101-510, § 555, 104 Stat. 1569.............. 24

National Defense Authorization Act for Fiscal Years

1992 and 1998, Pub. L. No. 102-190, § 1061(a),

ETT a ce 24

National Defense Authorization Act for Fiscal

Year 1994, Pub. L. No. 103-160, § 555, 107 Stat.

National Defense Authorization Act for Fiscal

Year 1996, Pub. L. No. 104-106, § 1501(c),

SELES St 24

National Defense Authorization Act for Fiscal Year

1997, Pub. L. No. 104-201, § 636, 110 Stat. 2579.............. 2A

National Defense Authorization Act for Fiscal

Year 1998, Pub. L. No. 105-85, § 1073, 111 Stat.

SEIS SESSA a es A ee a 24

National Defense Authorization Act for Fiscal Year

2002, Pub. L. No. 107-107, § 1048(c),

EFS EE, SE 24

National Defense Authorization Act for Fiscal Year

2004, Pub. L. No. 108-136, § 641, 117 Stat. 1511................

National Defense Authorization Act for Fiscal

Year 2006, Pub. L. No. 109-163, § 665, 119 Stat.

EAI RRET RES IB ce, OI SO STEN ee 23

VII

Statutes—Continued: Page

National Defense Authorization Act for Fiscal Year

2010, Pub. L. No. 111-84, § 1073, 123 Stat.

National Defense Authorization Act for Fiscal Year

2017, Pub. L. No. 114-328, 130 Stat. 2163:

15, 23

§ GA1(b), 190 Stat. 2UGB .n.naaae.cccccceccccccvseesccoscesccccrseeser 16

Personal Responsibility and Work Opportunity

Reconciliation Act of 1996, Pub. L. No. 104-193,

§ 362(c), 110 Stat. 2246-2247... I aed a

Servicemembers Civil Relief Act, Pub. L. 7"

108-189, § 2(c), 117 Stat. 2865-2866 2... ccccecceneeesensees 24

Uniformed Services Former Spouses’ Protection Act,

ETS I 1,3

ET 16

a icsircencenensensinnnatninosmmitiniiail 25

EC 3. 15

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EC TE Nae a ERR NS 2

inns ncnsescenciecinietaslantiniiatdedaiioiaenatetti 2

FREE er ede nee eae 2

A Ee ee ee 2

ails cecmenieseninntineeniaiatainnnipenitians 2

TT CS aCe TE 26, 31

Re 25, 29

ETT ae ET TR Roe 88 2

TT a RN 25, 26, 31

Ee aN 2

42 US.C. GBT MA NEV) nccccccsnrcccccssesesssccevses+scccecceneee 19, 27

ee eciteenentenencemnersennennnenenmmmennercsttn 28

Vill

Statute—Continued: Page

Ariz. Rev. Stat. Ann. § 25-318.01 (Supp. 2015) ................. 6, 7

Miscellaneous:

American Law Institute, Principles of the Law of

Family Dissolution: Analysis and Recommenda-

SEE AAR Ee Pe See Ee vel 18

H.R. Conf. Rep. No. 749, 97th Cong., 2d Sess

I isnisttectierhcintaitctintitieinaaaiieeaibideaialianiitaiadiaetaienancenseenes 18, 26

H.R. Rep. No. 665, 101st Cong., 2d Sess. (1990) ................ 24

H.R. Rep. No. 840, 114th Cong., 2d Sess. (2016)................ 16

3 Arnold H. ree ee Te eee

I snecapenianes eo

S. Rep. No. 502, 97th Cong., 2d Sess. (1982) Dies 17, 18, 20, 26

2 Brett R. Turner, Equitable Distribution of

Property (Bd ed. 2008) ..........-ccscccceccoeeccseesueesecessneeeseeee 18, 19

In the Supreme Court of the United States

No. 15-1031

JOHN HOWELL, PETITIONER

Vv.

SANDRA HOWELL

ON WRIT OF CERTIORARI

TO THE SUPREME COURT OF ARIZONA

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

SUPPORTING RESPONDENT

INTEREST OF THE UNITED STATES

Petitioner is a veteran wno waived a portion of his

military retirement pay in order to receive veterans’

disability benefits. One effect of that waiver was to

reduce the amount of the monthly payments that

petitioner made to his ex-wife (respondent in this

Court) under a prior divorce decree. The question

presented in this case is whether a State, consistent

with the Uniformed Services Former Spouses’ Protec-

tion Act, 10 U.S.C. 1408, as interpreted in Mansell v.

Mansell, 490 U.S. 581 (1989), may order petitioner to

indemnify respondent for the amount of that reduc-

tion. The United States has an interest in the proper

resolution of that question because the military ser-

vices branches and the Department of Veterans Af-

fairs are charged with the administration of the stat-

utes that regulate the distribution of military retire-

ment pay and veterans’ disability benefits. At the

(1)

Court’s invitation, the United States filed a brief at

the petition stage of this case.

STATEMENT

1. a. This case concerns two types of veterans’

benefits: retirement pay and disability benefits.

Members of the military who have served the requi-

site number of years may retire and receive retirement

pay. 10 U.S.C. 3911 et seg. (U.S. Army); 10 U.S.C. 6321

et seg. (U.S. Navy and U.S. Marine Corps); 10 U.S.C.

8911 et seg. (U.S. Air Force). In addition, veterans who

become partially or totally disabled as a result of their

military service may be eligible for disability benefits.

38 U.S.C. 1110 (wartime disability); 38 U.S.C. 1131

(peacetime disability). In general, however, a military

retiree may receive disability benefits only to the

extent that he or she waives a corresponding amount

of retirement pay. 38 U.S.C. 5305.’ Such waivers are

common because disability benefits, unlike retirement

pay, are exempt from taxation. 38 U.S.C. 5301(a); see

Mansell v. Mansell, 490 U.S. 581, 583-584 (1989).

b. In McCarty v. McCarty, 453 U.S. 210 (1981),

this Court held that federal law preempts state courts

from treating any portion of a servicemember’s re-

tirement pay as community property divisible between

a servicemember and a former spouse upon divorce.

Id. at 232-235.

' Under Section 641 of the National Defense Authorization Act

for Fiscal Year 2004, Pub. L. No. 108-136, 117 Stat. 1511 (codified

primarily at 10 U.S.C. 1414), a servicemember who did not retire

based on a determination of medical unfitness and is at least 50%

disabled will be entitled to receive both retirement pay and disabil-

ity benefits without waiving any portion of the retirement pay.

Petitioner is 20% disabled, Pet. App. 3a, so that provision does not

apply here.

Congress responded to McCarty by enacting the

Uniformed Services Former Spouses’ Protection Act

(Spouses’ Protection Act or Act), 10 U.S.C. 1408. The

Spouses’ Protection Act authorizes a state court to

“treat disposable retired pay * * * either as proper-

ty solely of the member or as property of the member

and his spouse in accordance with the law of the juris-

diction of such court.” 10 U.S.C. 1408(c)(1). The Act

defines “disposable retired pay” as “the total monthly

retired pay to which a member is entitled,” less cer-

tain amounts, including the amount waived “in order

to receive compensation under * * * title 38”—.¢., the

amount of retired pay waived to receive disability bene-

fits. 10 U.S.C. 1408(a)(4)(B).

In Mansell, this Court construed the Spouses’ Pro-

tection Act to foreclose state courts from treating as

community property the portion of military retire-

ment pay that a veteran has waived in order to receive

disability benefits. See 490 U.S. at 588-589. The vet-

eran in Maxsell had waived a portion of his retirement

pay, and had begun to receive disability benefits,

before the parties were divorced. See id. at 585. The

settlement agreement between the parties specifically

provided for the division of the former military mem-

ber’s “total military retirement pay, including that

portion of retirement pay waived so that [he] could

receive disability benefits.” Jd. at 586.

The Mansell Court recognized that “domestic rela-

tions are preeminently matters of state law,” and that

Congress “rarely intends to displace state authority in

this area.” 490 U.S. at 587. The Court concluded,

however, that the case before it “present[ed] one of

those rare instances where Congress has directly and

specifically legislated in the area of domestic rela-

tions.” bid. The Court held that, under the Spouses’

Protection Act’s “plain and precise language, state

courts have been granted the authority to treat dis-

posable retired pay as community property,” but

“have not been granted the authority to treat total

retired pay as community property.” Jd. at 589 (em-

phases added). The Court concluded that the Act

“does not grant state courts the power to treat as

property divisible upon divorce military retirement

pay that has been waived to receive veterans’ disabil-

ity benefits.” Jd. at 594-595.

2. a. In 1991, petitioner John Howell and respond-

ent Sandra Howell divorced in Arizona, and the family

court entered a decree of dissolution “[p]ursuant to

the parties’ agreement.” Pet. App. 2a. The decree

provided for the disposition of the parties’ personal

property, their cars and associated debts and liens,

and their 1990 tax refund. /d. at 41a. The decree also

ordered petitioner to pay child support of $585 per

month, id. at 42a, and to pay respondent “as and for

spousal maintenance the amount of $150.00 per month

until” petitioner’s anticipated retirement in October

1992, id. at 43a. The decree further provided that

“(respondent] is entitled to and is awarded as her sole

and separate property FIFTY PERCENT (50%) of

[petitioner’s] military retirement when it begins

through a direct pay order.” Jd. at 4la. The parties

agree that, under Arizona law, the family court’s entry

of the dissolution decree gave respondent a vested

property right to her share of military retirement pay.

Id. at 11a.

In the year after the divorce, petitioner retired

from the Air Force, and the parties began to receive

military retirement pay. Pet. App. 2a-3a. In 2005,

petitioner qualified for a 20% disability rating based

on a service-connected shoulder injury, and he elected

to waive a corresponding portion of his military re-

tirement pay to receive disability benefits. Jd. at 3a.

That waiver had the effect of reducing respondent’s

monthly share of petitioner’s retirement pay by ap-

proximately $125 per month, while increasing peti-

tioner’s monthly pre-tax receipts (from retirement

pay and disability benefits combined) by a correspond-

ing amount. /bid.; see id. at 33a.

b. Respondent moved to enforce the decree’s divi-

sion of military retirement pay, and the family court

granted her motion. Pet. App. 3la-38a. The court

found that the divorce agreement had given respond-

ent “a vested interest in fifty percent of the military

retirement,” and that under Arizona law, petitioner

“could not unilaterally divest her interest in the re-

tirement.” Jd. at 35a. The court held that petitioner

had “violated the [divorce] decree by unilaterally

decreasing the retirement pay in favor of disability,”

which impinged on respondent’s vested property right

to 50% of the full military retirement-pay amount. /d.

at 36a. The Arizona Court of Appeals affirmed. /d. at

‘2la.

ec. The Supreme Court of Arizona affirmed the

family court’s opinion.” Pet. App. la-l4a. The court

® Petitioner did not raise a federal preemption defense in the

family court, raising this argument for the first time in the Arizona

Court of Appeals. Pet. App. 20a-2la. The court of appeals de-

clined to consider the argument on the ground that it had been

waived below. /bid. The Supreme Court of Arizona, however,

decided as a matter of discretion to entertain and resolve petition-

er’s argument that the Spouses’ Protection Act preempted the

family court’s indemnification order. /d. at 5a.

determined that the Spouses’ Protection Act did not

preempt the family court’s indemnification order. /d.

at 7a-8a. The court noted that respondent “was

awarded fifty percent of the [military retirement pay]

years before [petitioner] unilaterally elected to re-

ceive disability pay in lieu of a portion of the [military

retirement pay].” /d. at 7a. The court concluded that

“(njothing in the [Act] directly prohibits a state court

from ordering a veteran who makes a post-decree VA

waiver to reimburse the ex-spouse for reducing his or

her share of [military retirement pay].” Jd. at 8a. The

court observed that the indemnification order did not

“divide the [military retirement pay] subject to the VA

waiver, order [petitioner] to rescind the waiver, or

direct him to pay any amount to [respondent] from his

disability pay.” /d. at 7a.

The Supreme Court of Arizona also found the family-

court order proper as a matter of Arizona state law.

Although the parties’ 1991 divorce decree did not

expressly require indemnification in the circumstanc-

es presented here, its effect under Arizona law was to

“create[] an immediate right to future pay of fifty

percent of the [military retirement pay], including

cost-of-living increases, earned during the marriage.”

Pet. App. 13a. The court explained that, once that

right had vested, “[o]ne spouse cannot invoke a condi-

tion solely within his or her control to defeat the

community interest of the other spouse.” /bid. (citing

Koelsch v. Koelsch, 713 P.2d 1234, 1239 (Ariz. 1986)

(en banc)).* The court found that, “[bly electing the

* An Arizona statute enacted in 2010 (Ariz. Rev. Stat. Ann. § 25-

318.01 (Supp. 2015)) provides that a state court in disposing of

marital property may not “[iJndemnify the veteran’s spouse or

former spouse for any prejudgment or postjudgment waiver or

VA waiver, [petitioner] did precisely that by essential-

ly converting part of [respondent’s military retire-

ment pay] share,” and that the family court’s indemni-

fication order “restored [respondent’s} share of com-

munity assets.” /bid.

SUMMARY OF ARGUMENT

The original 1991 divorce decree in this case did

not divide military retirement pay that had been

waived in favor of disability benefits. Petitioner’s

disability waiver occurred well after the divorce de-

cree and division of marital property. See Pet. App.

2a-3a. The family court’s 2014 indemnification order

likewise did not purport to divide the waived retire-

ment pay as marital property. Rather, the family

court applied Arizona’s generally applicable contract

and property law to hold that respondent’s right to

the value of disposable retirement pay had vested at

the time of divorce, and to indemnify her for the eco-

nomic loss she had suffered due to petitioner’s unilat-

eral, post-settlement action. /d. at 12a-13a. The

Spouses’ Protection Act does not preclude Arizona

courts from enforcing those state-law rules.

reduction in military retired or retainer pay related to the receipt

of [veterans’) disability benefits.” Pet. App. 9a. Although the

Supreme Court of Arizona found that the family-court order in this

case “modifies rather than enforces the dissolution decree’s prop-

erty disposition terms,” id. at 10a, the court declined to apply

Section 25-318.01 to bar indemnification because that statute was

passed after the original divorce decree in this case. The court

concluded that “the family court correctly refused to apply § 25-

318.01 to these facts” because “application of § 25-318.01 to prohib-

it the court from remedying the deprivation would diminish [re-

spondent’s} vested property right in violation of the [Arizona

constitution’s] due process guarantee.” /d. at 14a.

1. Because this case involves difficult questions of

state domestic-relations law, the presumption against

preemption applies and limits the preemptive force of

the Spouses’ Protection Act to its clear and precise

terms, or to applications of state law that manifestly

conflict with federal policy.

2. The Spouses’ Protection Act prevents state

courts from dividing waived military retirement pay

as marital or community property, but it does not

preempt state courts from ordering indemnification if

a veteran waives military retirement pay after his

divorce has been finalized and that waiver damages

the severed property interests of his former spouse.

The Act defines “disposable retired pay” to exclude

only that portion of military retirement pay that has

already been waived in favor of disability benefits at

the time of the veteran’s divorce, and it expressly

authorizes state courts to treat “disposable retired

pay” as community property of the veteran and his

spouse if state law so dictates.

Similarly, the Act reflects Congress’s intent to pre-

serve well-established state-law rules that promote

certainty, equity, and finality in divisions of property

upon divorce. Indemnification is one such remedy.

During divorce proceedings, the court and the parties

must typically balance a range of factors (including

existing disability waivers) to arrive at an equitable

property division or a mutually-agreeable property

settlement, and to determine whether additional

forms of relief (e.g., alimony or child support) are

warranted. Although federal law precludes state

courts from treating waived retirement benefits as

divisible marital property, it otherwise leaves the

state courts free to determine whether and how to

divide a veteran’s disposable military retirement pay

and other marital property. See 10 U.S.C. 1408(c)(1).

Once a divorce is finalized, however, the disposable

retired pay is permanently severed. A veteran’s sub-

sequent waiver of military retirement pay then im-

pinges on the separate interests of his former spouse.

The Act does not prohibit States from giving the for-

mer spouse a remedy in such circumstances.

Thus, although an indemnification order and a divi-

sion of property may have similar economic effects on

the veteran’s financial circumstances, the two are not

legally equivalent. The practical consequences of pre-

and post-divorce waivers also differ substantially.

When a veteran has already waived retirement pay at

the time a divorce decree is entered, the trial court

and the parties can take that waiver (and the conse-

quent reduction in the spouse’s share of retirement

pay) into account in dividing other property and in

determining whether other forms of relief are appro-

priate. But a post-divorce waiver may disturb the

state court’s careful equitable balance and the parties’

settled expectations. There are consequently good

reasons for Congress to preempt state courts from

dividing military retirement pay waived prior to di-

vorce, but to permit States to protect former spouses

against post-divorce waivers. Congress’s failure to

override States’ widespread recognition of indemnifi-

cation for post-divorce waivers of military retirement

pay further suggests that Congress views such reme-

dies as consistent with federal law and policy.

3. The Spouses’ Protection Act is designed to pro-

tect the interests of both the veteran and his former

spouse. Congress determined that the application of

state marital-property principles, with limited and

precisely defined exceptions, best protected those

interests. Congress has further protected veterans’

disability benefits by exempting them from taxation

and insulating them from attachment. This Court has

made clear, however, that Congress intended veter-

ans’ disability benefits to support not only veterans,

but also their families. See Rose v. Rose, 481 U.S. 619,

630 (1987). An order of indemnification that enforces

prior property divisions, to the extent it comports with

anti-attachment limitations, does not conflict with

those interests.

Allowing state-law indemnification remedies in the

circumstances presented here will not create the illog-

ical results suggested by petitioner. The Spouses’

Protection Act reflects Congress’s recognition that

state trial courts are best positioned to determine the

appropriate equitable division of military retirement

pay in the initial formulation of divorce decrees. The

state courts are similarly well-equipped to enforce

such orders fairly in light of any changed circum-

stances following the divorce.

ARGUMENT

THE SPOUSES’ PROTECTION ACT ALLOWS STATES TO

ORDER INDEMNIFICATION IF A VETERAN’S POST-

DIVORCE DISABILITY WAIVER REDUCES HIS FOR-

MER SPOUSE’S SHARE OF PREVIOUSLY DIVIDED

MILITARY RETIREMENT PAY

A. The Presumption Against Preemption Requires A

Narrow And Limited View Of The Act’s Preemptive

Force

Federal law preempts conflicting state law. Such a

conflict exists when “compliance with both federal and

state regulations is impossible” or when state law

“stands as an obstacle to the accomplishment and

execution of the full purposes and objectives of Con-

gress.” Hillman v. Maretta, 133 S. Ct. 1943, 1950

(2013) (citation omitted). The “ultimate touchstone”

for determining “the scope of a [federal] statute’s pre-

emptive effect” is the “purpose of Congress.” Hughes

v. Talen Energy Mktg., LLC, 136 S. Ct. 1288, 1297

(2016) (brackets in original) (quoting Altria Grp., Inc.

v. Good, 555 U.S. 70, 76 (2008)).

The presumption against preemption applies to the

Spouses’ Protection Act and limits its preemptive

scope. This Court has long recognized that “[t]he

whole subject of the domestic relations of husband and

wife, parent and child, belongs to the laws of the

States and not to the laws of the United States.” Jn re

Burrus, 136 U.S. 586, 593-594 (1890). State courts

have “unparalleled familiarity with local economic

factors affecting divorced parents and children,” and

significant experience applying state statutes contain-

ing “detailed support guidelines and established pro-

cedures for allocating resources following divorce.”

Rose v. Rose, 481 U.S. 619, 628 (1987). The “theory

and the precedents” of this Court teach “solicitude for

state interests, particularly in the field of family and

family-property arrangements,” where “[eJach State

has its complex of family and family-property ar-

rangements.” United States v. Yazell, 382 U.S. 341,

352 (1966).

This Court accordingly has applied “a presumption

against pre-emption of state laws governing domestic

relations,” Hillman, 133 S. Ct. at 1950 (citation and

internal quotation marks omitted), which requires

Congress to speak clearly if it intends federal law to

displace state law and the traditional role of state

courts in that sphere. See, e.g., Mansell v. Mansell,

490 U.S. 581, 587 (1989); Rose, 481 U.S. at 625, 628. In

accordance with that presumption, “[o]n the rare

occasion when state family law has come into conflict

with a federal statute, [the] Court has limited review

under the Supremacy Clause to a determination

whether Congress has ‘positively required by direct

enactment’ that state law be pre-empted.” His-

quierdo v. Hisquierdo, 439 U.S. 572, 581 (1979) (cita-

tion omitted); see Mansell, 490 U.S. at 587. Alterna-

tively, “a state law governing domestic relations” is

preempted if it does “major damage to clear and sub-

stantial federal interests.” Rose, 481 U.S. at 625 (cita-

tion and internal quotation marks omitted).

Petitioner contends (Br. 36) that the presumption

against preemption is inapplicable to the Spouses’

Protection Act. In Mansell, however, this Court ap-

plied the presumption and held the relevant state-

court order to be preempted only after finding that

the presumption had been overcome by the Act’s plain

terms. 490 U.S. at 587 (describing the presumption

and stating that the case before the Court “pre-

sent{ed] one of those rare instances where Congress

has directly and specifically legislated in the area of

domestic relations”). The Court concluded that, “un-

der the Act’s plain and precise language, state courts

have been granted the authority to treat disposable

retired pay as community property; they have not

been granted the authority to treat total retired pay

as community property.” Jd. at 589. Similarly, the

Court in McCarty v. McCarty, 453 U.S. 210 (1981), did

not hold that the strong federal interests in regulating

military benefits and veterans’ rights eliminated the

presumption against preemption of state domestic-

relations law; instead, it found that a clear conflict

with federal interests sufficed to overcome the pre-

sumption. See id. at 220-221, 232.

Petitioner contends (Br. 37) that Mansell disa-

vowed the presumption against preemption when it

stated that, because McCarty construed “pre-existing

federal law” to “completely pre-empt/] the application

of state community property law to military retire-

ment pay, Congress could overcome the McCarty

decision only by enacting an affirmative grant of au-

thority giving the States the power to treat military

retirement pay as community property.” 490 U.S. at

588. As explained below, however, the Court in both

McCarty and Mansell addressed only whether a state

court could treat as community property, divisible

upon divorce, retirement pay that had already been

waived. In this case, by contrast, the state courts did

not purport to treat waived retirement pay as commu-

nity property. Rather, the family court imposed, and

the state appellate courts approved, an indemnifica-

tion remedy designed to enforce a division of marital

property that predated petitioner’s waiver and was

indisputably valid at the time it was entered. Mansell

does not suggest that the presumption against pre-

emption should be disregarded in determining the

permissibility of that distinct indemnification remedy.

This case involves delicate state-law questions con-

cerning what remedial measures are available when a

divorced veteran takes unilateral action that reduces

the value of his former spouse’s share of previously

divided marital assets. Family courts are best posi-

tioned to determine how to fairly allocate marital

property and to assess the impact of unanticipated

changed circumstances on that distribution. The

purpose behind the presumption against preemption

therefore applies fully here. Given Congress’s and

this Court’s solicitude for state interests in the area of

domestic relations, any doubt as to whether Congress

preempted indemnification orders should be resolved

in favor of preserving state authority.

B. Once Disposable Retired Pay Has Been Divided

Through A Final Divorce Decree, A State Court May

Order Indemnification To Protect The Separate Prop-

erty Interests Of The Non-Veteran Spouse

The Court in Mansell held that the Spouses’ Pro-

tection Act, read in light of the Court’s prior decision

in McCarty, forecloses state courts from “treat[ing] as

property divisible upon divorce military retirement

pay that has been waived to receive veterans’ disabil-

ity benefits.” 490 U.S. at 595. The Act does not spe-

cifically address the authority of state courts to re-

spond to post-divorce waivers. Rather, the Act recog-

nizes that divisible “disposable retired pay” should be

measured at the time of divorce. After the divorce

decree becomes final, the divided portion of retired

pay becomes the parties’ separate assets. Under the

Act’s terms, moreover, the divided interest may be

fixed, and need not fluctuate with a veteran’s subse-

quent unilateral decision to elect a disability waiver.

A post-divorce waiver therefore may impinge on

the separate property interests of the former spouse.

Congress has not preempted state remedies, such as

indemnification, that are designed to protect the cer-

tainty and finality of divorce decrees. Appellate

courts in 33 States have permitted such orders and,

despite numerous amendments to the Act, Congress

has not overridden those decisions. Congress there-

fore has not displayed any clear intent to preempt

States from ordering indemnification to account for a

post-divorce waiver of military retirement pay.

I. The text and structure of the Spouses’ Protection

Act support state authority to enforce a valid divi-

sion of “disposable retired pay” as calculated at the

time the divorce became final

The text and structure of the Spouses’ Protection

Act establish that the measure of divisible “disposable

retired pay” is made before the divorce is finalized.

The Act defines “disposable retired pay” in the pre-

sent tense to be the “monthly retired pay to which a

member is entitled less amounts” which “are deducted

* * * as a result of a waiver of retired pay [in favor of

disability benefits],” 10 U.S.C. 1408(a)(4)(B) (empha-

ses added); see Carr v. United States, 560 U.S. 438,

448 (2010) (observing that, “[clonsistent with normal

usage,” the Court has “frequently looked to Congress’

choice of verb tense to ascertain a statute’s temporal

reach”). Similarly, the Court in Mansell noted that

“the [Act] does not grant state courts the power to

treat as property divisible upon divorce military re-

tirement pay that has been waived to receive veterans’

disability benefits.” 490 U.S. at 594-595 (emphasis

added).

A recent amendment to the Act’s definition of “dis-

posable retired pay” bolsters the conclusion that its

value should be determined at the time of the divorce

decree. That amendment instructs courts to value

“total monthly retired pay” based on “the member’s

pay grade and years of service at the time of the court

order, as increased by” cost-of-living adjustments.

National Defense Authorization Act for Fiscal Year

2017 (2017 National Defense Authorization Act), Pub.

L. No. 114-328, § 641, 130 Stat. 2163 (emphasis add-

ed).* Congress thus clarified that the divisible marital

property does not include future increases to a ser-

vicemember’s retirement pay attributable to post-

divorce raises in pay grade or subsequent years of

military service. H.R. Rep. No. 840, 114th Cong., 2d

Sess. 1056-1057 (2016). By the same token, courts in

valuing “disposable retired pay” at the time of divorce

are not required, and could not reasonably be ex-

pected, to assess the possibility that such pay will

decrease due to a veteran’s subsequent decision to

elect disability benefits.

In addition, the Act defines “court order” to include

a divorce decree that, “in the case of a division of

property, specifically provides for the payment of an

amount, expressed in dollars or as a percentage of

disposable retired pay, from the disposable retired

pay of a member to the spouse or former spouse of

that member.” 10 U.S.C. 1408(a)(2)(C). If the family

court in the original divorce proceeding had ordered

petitioner to pay respondent a specific monthly sum

once petitioner began to receive military retirement

benefits, the Act could not reasonably be thought to

preempt continued enforcement of that directive after

petitioner elected to receive disability benefits in lieu

of a portion of his retired pay.® By instead directing

‘ That amendment applies prospectively to divorce decrees final-

ized after the enactment date of the 2017 National Defense Au-

thorization Act. See § 641(b), 130 Stat. 2163.

® See, eg., In re Marriage of Lodeski, 107 P.3d 1097, 1100 (Colo.

App. 2004) (enforcing division of property awarding wife $436 as

her share of husband’s military retirement pay “in spite of his

[subsequent] unilateral waiver of retirement benefits”); McHugh

v. McHugh, 861 P.2d 113, 115 (Idaho Ct. App. 1993) (“The parties

negotiated for and mutually agreed to a division of the military

retired pay which granted [the former spouse] a specific monthly

petitioner to pay a percentage (50%) of his disposable

retired pay, the divorce decree ensured, inter alia,

that respondent would benefit from subsequent cost-

of-living increases in petitioner’s retired pay. See Pet.

App. 12a-13a. But neither the Spouses’ Protection

Act’s definition of “court order,” nor any other provi-

sion of the Act, suggests that the Act’s preemptive

scope should vary dramatically depending on the

family court’s choice between a percentage and a

specific dollar amount in formulating the original

divorce decree.

2. The Act permits States to adopt rules and impose

remedies designed to prevent divorced veterans

from unilaterally reducing the amounts to which

their ex-spouses are entitled under the terms of

their divorce decrees

In enacting the Spouses’ Protection Act, Congress

sought to mitigate the inequity of a preemption rule

that would deprive the non-military spouse of access

to her marital share of military retirement pay. See

Mansell, 490 U.S. at 593 (explaining that Congress

enacted the Act in recognition of “the distressed eco-

nomic plight of military wives after a divorce”). Con-

gress determined that, subject to the limited excep-

tion that waived retirement pay cannot be treated as

marital property, application of state marital-property

principles would best protect the economic interests of

both military spouses and military members. See id.

at 593-594; see also S. Rep. No. 502, 97th Cong., 2d

sum. They further agreed that this sum would not be increased or

decreased in the future ‘for any reason’ except by the application

of cost-of-living increases. The two supplemental orders issued by

the court did not alter this agreed-to division of the asset, but

served simply to enforce it.”) (footnote omitted).

Sess. 6 (1982) (1982 Senate Report). By authorizing

state courts to treat disposable retired pay “in accord-

ancé with” state law, 10 U.S.C. 1408(c)(1), Congress

“return[ed] to the States the authority to treat mili-

tary pensions in the same manner as they treat other

retirement benefits.” 1982 Senate Report 10.° Ac-

cordingly, the Act preserves state procedures de-

signed to improve certainty, maintain equity, and

promote finality in dividing marital property upon

divorce.

In the vast majority of States, trial courts are not

required to mechanically split marital property 50-50."

Rather, the process of equitably dividing property and

awarding alimony and child support (or the parties’

negotiation of those terms) requires painstaking and

delicate balancing of a host of eyuitable factors." A

® The final House Conference Report incorporated that section

of the 1982 Senate Report. H.R. Conf. Rep. No. 749, 97th Cong.,

2d Sess. 168 (1982).

’ States are divided among two property-division systems: equi-

table division and community property. Equitable division is by

far the dominant rule among the States, while only nine States

apply community-property principles. Although many States

employ a presumpti \n of equal division, the strength of that pre-

sumption varies, and most States afford trial courts broad discre-

tion to determine the equitable division of property. See American

Law Inst., Principles of the Law of Family Dissolution: Analysis

and Recommendations § 4:09, at 732 (2002). Only three community-

property States—California, Louisiana, and New Mexico—require

“equal division” of the marital estate. See id. at 22 & n.31.

* Commonly used factors in the equitable division of property

include the parties’ contributions to the marriage, the duration of

the marriage, the parties’ future financial needs, and the parties’

separate property and liabilities. 2 Brett R. Turner, Equitable

Distribution of Property §§ 8:1-8:33 (8d ed. 2008) (providing

trial court must first value property, then weigh the

equitable factors, and finally divide the property or

approve the parties’ property settlement in the final

divorce decree. See 2 Brett R. Turner, Equitable

Distribution of Property §§ 7:1, 8:1 (8d ed. 2008); see

also 3 Arnold H. Rutkin, Family Law and Practice

$§ 37.05-37.06 (2016) (Rutkin). In this case, for ex-

ample, the 1991 divorce decree ordered petitioner to

pay respondent monthly spousal maintenance only

until the date of petitioner’s anticipated retirement

the following year, at which time respondent would

become entitled to 50% of petitioner’s military retire-

ment pay. See Pet. App. 41a, 43a. Once the divorce

decree finalizes the division of property, it cannot

be modified without a compelling justification such

as mistake, fraud, or error of law. See Rutkin

§ 37.06[2][d].

When a veteran is already receiving disability ben-

efits due to a pre-divorce waiver of military retire-

ment pay, the trial court and the parties in the divorce

proceeding can take that fact into account in deter-

mining what other terms the divorce decree should

contain and how those terms should be enforced.

First, a veteran’s disability benefits may be utilized,

and, in the case of waived military retirement pay,

garnished, to pay child support and alimony. See 42

U.S.C. 659(h)(1)(A)(i)(V; see also Rose, 481 U.S. at

633-635. Second, the parties may consider a veteran’s

disability benefits when negotiating a property set-

tlement.

Although the Spouses’ Protection Act bars the

treatment of waived retirement pay as divisible prop-

detailed analysis of equitable factors); see also 3 Arnold H. Rutkin,

Family Law and Practice § 37.06 (2016) (same).

erty, it does not preclude state courts from consider-

ing the veteran’s income due to a disability waiver as

one factor in equitably dividing property.’ 1982 Sen-

ate Report 10 (recognizing that “most State courts”

consider the parties’ income even when dividing mari-

tal property) (citing Section 307 of the Uniform Mar-

riage & Divorce Act); see Rutkin § 37.06[1)[d][ii] (not-

ing the “general rule” that earning capacity may

“be considered a factor in dividing the marital estate,

but not as an asset to be divided”). Courts may also

consider the parties’ health and disability, partic-

ularly as it bears on future economic needs. Rutkin

§ 37.06[1}[d]. States therefore have substantial lati-

tude to consider pre-divorce waivers of retired pay in

crafting a fair and equitable overall settlement.”

® The fact that veterans’ disability benefits are characterized as

income, not property, also provides a coherent explanation for why

the Spouses’ Protection Act excludes waived retirement pay from

the marital estate, yet subjects both waived and non-waived mili-

tary retirement pay to garnishment for payment of child support

or alimony obligations. See Rose, 481 U.S. at 630 (observing that

disability benefits are “compensat{ion] for impaired earning capac-

ity”). By contrast, this Court has treated military retirement pay

as a form of “deferred compensation,” which is a type of property.

Barker v. Kansas, 503 U.S. 594, 599 (1992); see id at 603 (noting

that, if the Court had characterized military retirement pay as

“current income,” the McCarty decision “would have been simple”

because income is not subject to community-property division).

” See, eg., Clauson v. Clauson, 831 P.2d 1257, 1263-1264 (Alaska

1992) (“We are aware of no federal statute which specifically

prohibits a trial court from taking into account veterans’ disability

benefits when making an equitable allocation of property,” provid-

ed the trial court does not “simply shift an amount of property

equivalent to the waived retirement pay” from the veteran to the

spouse.); In re Marriage of Kraft, 882 P.2d 871, 875 (Wash. 1992)

(en banc) (noting that, following Mansell, the “general rule de-

The entry of a final divorce decree, however, marks

a critical change in the ownership of marital property,

which is converted into separate property of the par-

ties. A veteran’s election to waive retirement pay

after the divorce is finalized may disrupt the careful

balance struck by the trial court in its original decree

or upset the parties’ settled understanding in a nego-

tiated settlement. Precluding state courts from order-

ing indemnification in circumstances like these there-

fore would intrude much more substantially on the

States’ authority over domestic relations than does

the narrow rule announced in Mansell that States may

not treat waived retirement pay as marital property."

Petitioner is therefore wrong in suggesting (Br. 27-

29) that the Supreme Court of Arizona’s decision in

rived” by state courts was that “the court may regard military

disability retirement pay as future income to the retiree spouse

and * * * consider it as an economic circumstance of the parties,”

but it “may not * * * divide or distribute the military disability

retirement pay as an asset”).

" See, eg., Shelton v. Shelton, 78 P.3d 507, 509 (Nev. 2003) (“Al-

though states cannot divide disability payments as community

property, states are not preempted * * * from enforcing con-

tracts [that divide retirement benefits} * * * , even when disabil-

ity pay is involved.”), cert. denied, 541 U.S. 960 (2004); Resare v.

Resare, 908 A.2d 1006, 1010 (R.I. 2006) (“[TJhe Family Court did

not in any way divide [the veteran’s] disability benefit in contra-

vention of Mansell, but simply held [the veteran] to the terms of

the original [property settlement agreement).”); Johnson v. John-

son, 37 S.W.3d 892, 897-898 (Tenn. 2001) (“{Wihen al] [marital

dissolution agreement] divides military retirement benefits, the

non-military spouse has a vested interest in his or her portion of

those benefits as of the date of the court’s decree. * * * [A]n act

of the military spouse [that unilaterally diminishes the vested

interest] * * * constitutes an impermissible modification of a

division of marital property.”).

this case elevates form over substance. Neither

McCarty, Mansell, nor the Spouses’ Protection Act

specifically addresses the propriety of state-court

indemnification orders; rather, all three address only

the circumstances under which military retirement

pay can be divided as property. In light of the States’

traditional authority over domestic relations, and the

practical consequences that petitioner’s proposed rule

would entail, the Act’s preemptive force should not be

extended beyond what its text requires.

3. Congress’s failure to override States’ widespread

approval of indemnification as a means to remedy a

post-divorce disability waiver suggests that Congress

viewed that approach as consistent with federal

law and policy

The vast majority of States that have considered

similar questions—including the highest courts of 12

States and intermediate courts in another 21 States—

have concluded that, if a veteran waives military re-

tirement pay after marital property has been divided

pursuant to a final divorce decree, the ex-spouse may

be entitled to monetary relief if the waiver impinges

on her vested or contractual rights. See App., infra,

la-5a (listing cases by State). Courts in at least six of

those States, including the Supreme Court of Arizona

below, have relied on a “vested rights” theory under

which one divorcing spouse is precluded from taking

unilateral action that would dissipate, convert, or

defeat property rights assigned to the other spouse.

Ibid.” Despite numerous amendments to the Spouses’

@ While two state supreme courts (Alabama and Vermont) and

two intermediate appellate courts (in Kansas and Kentucky) have

rejected relief under the circumstances of the cases before them,

Protection Act and other military family-law statutes

(see Pet. Br. 40-43), however, Congress has not explic-

itly precluded state courts from ordering indemnifica-

tion under circumstances like those presented here.

Congressional silence in the face of state regulation

is “powerful evidence” that Congress did not intend to

preempt state law. Wyeth v. Levine, 555 U.S. 555, 575

(2009). “The case for federal pre-emption is particu-

larly weak where Congress has indicated its aware-

ness of the operation of state law in a field of federal

interest, and has nonetheless decided to stand by both

concepts and to tolerate whatever tension there [is]

between them.” Bonito Boats, Inc. v. Thunder Craft

Boats, Inc., 489 U.S. 141, 166-167 (1989) (brackets in

original; citation and internal quotation marks omit-

ted); see POM Wonderful LLC v. Coca-Cola Co., 134

S. Ct. 2228, 2237 (2014); CTS Corp. v. Waldburger, 134

S. Ct. 2175, 2188 (2014).

Congress has amended the Spouses’ Protection Act

several times since its enactment in 1982, most recent-

ly on December 23, 2016." As petitioner observes,

none of those courts has ruled out the possibility that an express

indemnification provision would be enforceable. See App., infra,

4a. Only one intermediate state court—the Texas Court of Appeals

—has rejected an express indemnification provision, Limbaugh v.

Limbaugh, 71 S.W.3d 1, 17 (2002), and only the Supreme Court of

Mississippi and an intermediate appellate court in Ohio have

explicitly rejected the “vested rights” rationale for post-waiver

indemnification that the courts below invoked in this case, see

Mallard v. Burkart, 95 So. 3d 1264, 1272 (Miss. 2012); Konieczny v.

Konieczny, No. 97-CA-83, 1998 WL 401835, at *2 (Ohio Ct. App.

Mar. 27, 1998).

™ See 2017 National Defense Authorization Act, § 641, 130 Stat.

2163; National Defense Authorization Act for Fiscal Year 2006,

Pub. L. No. 109-163, § 665, 119 Stat. 3317-3318; National Defense

Congress “has devoted scrupulous attention to family-

law issues surrounding military benefits, constantly

tinkering with the governing statutes.” Br. 40. In-

deed, when the House Committee was “concerned

because some state courts ha[d] been less than faithful

in their adherence to the spirit of the law” by reopen-

ing divorce cases finalized before McCarty, Congress

directly addressed the problem by amending the stat-

ute. H.R. Rep. No. 665, 101st Cong., 2d Sess. 279

(1990); see National Defense Authorization Act for

Fiscal Year 1991, Pub. L. No. 101-510, § 555, 104 Stat.

1569. Given Congress’s close attention to the inter-

play between state and federal law in this area, its

failure to override the numerous state-court decisions

ordering indemnification in these circumstances sug-

Authorization Act for Fiscal Year 1997, Pub. L. No. 104-201, § 636,

110 Stat. 2579; Personal Responsibility and Work Opportunity

Reconciliation Act of 1996, Pub. L. No. 104-198, § 362(c), 110 Stat.

2246-2247; National Defense Authorization Act for Fiscal Year

1994, Pub. L. No. 103-160, § 555, 107 Stat. 1666-1667.

Congress has also made numerous technical changes. See Na-

tional Defense Authorization Act for Fiscal Year 2010, Pub. L. No.

111-84, § 1078, 123 Stat. 2472-2473; Servicemembers Civil Relief

Act, Pub. L. No. 108-189, § 2(c), 117 Stat. 2865-2866; Homeland

Security Act of 2002, Pub. L. No. 107-296, § 1704(b), 116 Stat. 2314;

National Defense Authorization Act for Fiscal Year 2002, Pub. L.

No. 107-107, § 1048(c), 115 Stat. 1226; National Defense Authoriza-

tion Act for Fiscal Year 1998, Pub. L. No. 106-85, § 1073, 111 Stat.

1900-1901; National Defense Authorization Act for Fiscal Year

1996, Pub. L. No. 104-106, § 1501(c), 110 Stat. 498-499; National

Defense Authorization Act for Fiscal Years 1992 and 1993, Pub. L.

No. 102-190, § 1061(a), 105 Stat. 1472; National Defense Authoriza-

tion Act for Fiscal Years 1990 and 1991, Pub. L. No. 101-189,

§§ 653(a), 1622(e), 108 Stat. 1461-1462, 1604-1605; Defense Technical

Corrections Act of 1987, Pub. L. No. 100-26, § 7(h), 101 Stat. 282.

gests that Congress did not intend such remedies to

be preempted by federal law.

C. Indemnification Orders Do Not Conflict With The

Spouses’ Protection Act’s Purpose And Objectives—

Including Its Treatment Of Veterans’ Disability Bene-

fits—And Therefore Are Not Impliedly Preempted By

The Act

Indemnification to enforce a former spouse’s prop-

erty right arising out of a final division of property or

contractual settlement agreement is consistent with

the purposes and objectives of the Spouses’ Protection

Act. Although federal law is highly protective of vet-

erans’ military retirement pay and disability benefits,

Congress has not chosen to protect veterans’ interests

to the exclusion of all other objectives, but rather has

sought to achieve an appropriate balance between the

interests of veterans and the interests of their former

spouses. Use of indemnification to protect the expec-

tations created by valid divorce decrees is consistent

with that balance.

1. Congress’s carefully delineated protections of vet-

erans’ disability benefits do not implicitly preempt

indemnification orders not expressly barred by fed-

eral law

Congress has long displayed special concern for the

needs of disabled servicemembers and veterans, and

has enacted carefully delineated provisions to protect

their interests. Inter alia, federal law exempts veter-

ans’ disability benefits from taxation, 38 U.S.C. 5301;

prohibits creditors from attaching those benefits, see

38 U.S.C. 5301(a)(1); and preempts any state-law rule

that would treat waived military retirement pay as

divisible property, 10 U.S.C. 1408(a)(4) and (c)(1).

Congress has also been cognizant, however, of the

interests of divorced veterans’ ex-spouses. Congress

enacted the Spouses’ Protection Act, in direct re-

sponse to McCarty, to alleviate “the distressed eco-

nomic plight of military wives after a divorce,” while

also “protecting the interests of military members.”

Mansell, 490 U.S. at 593-594; see id. at 587; see also

H.R. Conf. Rep. No. 749, 97th Cong., 2d Sess. 165

(1982); 1982 Senate Report 1-3, 16.

In light of its purpose to protect the interests of

both parties, the Spouses’ Protection Act’s exclusion

of waived military pay from the marital estate should

not be taken to signify a broader congressional intent

that “disabled veterans keep all of their disability

pay.” Pet. Br. 19; see id. at 20. To the contrary, this

Court has recognized that military disability benefits

“are not provided to support [the veteran] alone,” but

rather, that “Congress clearly intended veterans’

disability benefits to be used, in part, for the support

of veterans’ dependents.” Rose, 481 U.S. at 630-631."

Indeed, although disability benefits received in lieu of

waived retirement pay may not be treated as divisible

property, those benefits may be used, for example, “to

‘provide reasonable and adequate compensation for

veterans and their families’” through court-ordered

child support or alimony. /d. at 630 (citation omitted);

“* Rose involved a Tennessee court order under which a disabled

veteran was required to support his children from a former mar-

riage. 481 U.S. at 622. The Court concluded that the anti-attach-

ment provision in former 38 U.S.C. 3101(a) (1988) (recodified at 38

U.S.C. 5301(a)(1)) did not foreclose the state court from holding

the veteran in contempt for failure to comply with the support

order, even though the veteran’s limited income would require him

to use his disability benefits to pay fully the ordered support. 481

U.S. at 630-633.

see 42 U.S.C. 659(h)(1)(A)(ii)(V) (subjecting disability

pay received in lieu of waived retirement pay to gar-

nishment for child-support and alimony obligations).

That nuanced scheme suggests that Congress did not

intend to implicitly preempt a broader swath of state

domestic-relations law. Cf. Cipollone v. Liggett Grp.,

Inc., 505 U.S. 504, 517 (1992) (“Congress’ enactment

of a provision defining the pre-emptive reach of a

statute implies that matters beyond that reach are not

pre-empted.”).””

This Court in Rose further distinguished veterans’

disability benefits from the benefit schemes that were

at issue in cases cited by petitioner (Br. 20-22)—

Ridgway v. Ridgway, 454 U.S. 46 (1981), Hisquierdo,

439 U.S. 572, and Wissner v. Wissner, 338 U.S. 655

(1950). In those cases, this Court held that state do-

mestic-relations law was preempted by anti-

attachment provisions similar to Section 5301(a)(1).

Rose, 481 U.S. at 633; see id. at 631-632. In each of

those cases, federal law either made the retiree “the

exclusive beneficiary” of federal benefits, see Ridg-

way, 454 U.S. at 55-60; Hisquierdo, 439 U.S. at 583; or

gave the retiree “an express right to designate the

beneficiary” of a federal insurance policy, see

Wissner, 338 U.S. at 658-659. See also Rose, 481 U.S.

at 631-633. This Court held that the operation of state

community-property principles, which required divid-

ing those benefits with the retiree’s ex-spouse, con-

flicted with “Congress’ precise specification of the

intended beneficiary” (in Hisquierdo), id. at 632; or

® But cf. Geier v. American Honda Motor Co., 529 U.S. 861, 869

(2000) (observing that Congress’s inclusion of an express pre-

emption clause “does not bar the ordinary working of conflict pre-

emption principles”).

frustrated “Congress’ unequivocal intent that the

insyred decide who should receive the [insurance]

policy proceeds” (in Wissner and Ridgway), id. at 631,

633-634. With respect to veterans’ disability benefits,

by contrast, “Congress has not made [the veteran] the

exclusive beneficiary,” id. at 634, but rather has in-

tended those benefits to provide income to support

both the veteran and his family, id. at 630. The Court

in Rose distinguished Wissner, Hisquierdo, and

Ridgway on that basis.”

Congress thus has carefully fashioned the protec-

tions afforded to veterans’ disability benefits, and has

made clear that those benefits are intended in part to

support the veteran’s family. With respect to the

veteran’s support obligations to his children and for-

federal benefits that are expressly designed to be supplemental to

the beneficiary’s other income sources. In Rose v. Arkansas State

Police, 479 U.S. 1 (1986) (per curiam), for example, this Court held

that the federal scheme benefitting families of deceased law-

enforcement officers, 42 U.S.C. 3796(e) (1982), preempted a state

statute that diminished benefits available under state law by one

dollar for every dollar of federal benefits that the families re-

ceived. 479 U.S. at 3-4. This Court explained that “Congress

plainly intended to give supplemental benefits to the survivors,”

and that States therefore could not reduce the benefits “it other-

wise would provide to account for the federal payment.” /d at 4;

see also Hendrick v. New Hampshire Dep't of Health & Human

Servs., 145 A.3d 1055 (N.H. 2016) (contrasting federal Social

Security Disability Income, which is treated as a substitute for

income to the beneficiary, with Supplemental Security Income,

which is designed to supplement other benefits and is limited to

the “use and benefit” of only the beneficiary). Unlike those federal

schemes designed to supplement the beneficiary’s other income

and benefits, veterans’ disability benefits are not protected from

offsets that fulfill the veteran’s obligations to his former spouse.

mer spouse, Congress has chosen to treat disability

benefits received in lieu of military retirement pay

like a veteran’s other income, and has not shielded

them from enforceable support orders. And while the

anti-attachment statute, 38 U.S.C. 5301, may prevent

direct attachment of a veteran’s disability benefits,

see Part D, infra, Congress has not otherwise limited

state courts from ordering indemnification based on a

waiver of military retirement pay if the veteran has

other sources of income or property that may be used

to satisfy the court order.

2. Allowing indemnification orders in circumstances

like these will not lead to anomalous outcomes

The approach taken by the Arizona courts in this

case, under which petitioner was ordered to indemnify

respondent for the economic loss she suffered as a

result of petitioner’s post-divorce waiver of military

retirement pay, does not create the stark economic

discrepancy between pre- and post-divorce waivers

that petitioner’s hypotheticals suggest (see Br. 32-33,

47-49). When a veteran has waived retirement pay in

favor of disability benefits before a divorce decree is

entered, state courts and the divorcing spouses can

take that fact into account in determining the appro-

priate division of other property and the propriety of

awarding alimony and/or child support, at least so

long as the marital estate includes assets beyond the

veteran’s disability pay. See Part B.2, supra.

Reading the Spouses’ Protection Act to permit

indemnification awards in these circumstances would

not require any state court to award such relief, nor

would it prevent courts from considering the full

range of relevant equitable factors if a veteran’s

spouse engaged in the sort of gamesmanship that

petitioner hypothesizes (Br. 32-35). For example,

nothing in the Act precludes adjustments to an equi-

table property division or support award if one party

accelerates divorce proceedings in order to obtain a

right to military retirement pay before a veteran can

finalize his eligibility for disability benefits. Cf. id. at

32. States likewise may account for a veteran’s waiver

of military retirement pay intended to undermine the

property interests of the non-veteran spouse in close

proximity to or in contemplation of divorce. See id. at

35. Similarly, petitioner’s conjecture that allowing

indemnification would treat shorter-serving military

members more favorably than those with lengthy

service (see id. at 47-49) ignores a trial court’s latitude

to take account of disability benefits in initially divid-

ing property and awarding alimony.

Petitioner’s hypotheticals also ignore the unfair-

ness of allowing one spouse to unilaterally undermine

the careful balance that the family court reached when

dividing marital assets. Adoption of the broad

preemption rule that petitioner advocates could have

other deleterious consequences as well. If a state

court administering a divorce proceeding knew that a

veteran could unilaterally reduce the amounts payable

to his ex-spouse after the decree became final, the

court might try to protect the non-veteran spouse by

awarding her an increased share of other marital

assets. That approach could produce unfairness to the

veteran, particularly in cases where no post-divorce

waiver of retirement pay ultimately occurs.

D. The Indemnification Order At Issue In This Case Does

Not Implicate The Anti-Attachment Provision Appli-

cable To Veterans’ Disability Benefits

Under 38 U.S.C. 5301(a)(1) (formerly 38 U.S.C.

3101(a) (1988)), veterans’ disability benefits are non-

assignable, are exempt from the claims of creditors,

and are not liable to attachment, levy, or seizure.

Even if this Court affirms the Supreme Court of Ari-

zona’s holding with respect to the Spouses’ Protection

Act, Section 5301(a)(1) may sometimes impose practi-

cal impediments to the enforcement of indemnification

orders like the one at issue here.”

In this case, however, petitioner has not argued

that the Supreme Court of Arizona’s decision was

inconsistent with Section 5301(a)(1), and there is no

indication that the money petitioner was ordered to

pay would come out of his disability benefits. The

family court did not “direct [petitioner] to pay any

amount to [respondent] from his disawility pay.” Pet.

App. 7a. And while “requiring [petitioner] to reim-

burse [respondent] diminishes the overall income

increase he received when he elected the VA waiver,”

id. at 7a-8a, petitioner was still receiving approxi-

mately $610 per month in disposable retired pay and

was ordered to pay respondent only an additional

$127.50 per month (adjusted for cost of living), id. at

The veteran in Mansell argued that the state court’s division of

his total retired pay violated not only the Spouses’ Protection Act,

but also the statutory predecessor to Section 5301(a)(1). In light of

its holding that the Spouses’ Protection Act precludes the division

as marital property of retirement pay waived in favor of disability

benefits, the Court in Mansell found it unnecessary to address

whether the anti-attachment provision would independently pre-

clude such a division. See 490 U.S. at 587 n.6.

3a. See Pet. Br. 24 (acknowledging that the Arizona

decree “did not directly interfere with [pl]etitioner’s

receipt of his disability pay”). Section 5301(a)(1)

therefore is not implicated in this case.

CONCLUSION

The judgment of the Supreme Court of Arizona

should be affirmed.

Respectfully submitted.

NOEL J. FRANCISCO

Acting Solicitor General

CHAD A. READLER

Acting Assistant Attorney

General

MALCOLM L. STEWART

Deputy Solicitor General

ILANA H. EISENSTEIN

Assistant to the Solicitor

General

ALISA B. KLEIN

KATHERINE TWOMEY ALLEN

Attorneys

FEBRUARY 2017

APPENDIX

STATE APPELLATE COURT DECISIONS ON

AUTHORITY TO INDEMNIFY THE FORMER

SPOUSE AFTER A VETERAN’S POST-DIVORCE

WAIVER OF RETIREMENT PAY

ing Indemnificati

On Vested Property Rights Theory

l. Arizona: Jn re Marriage of Howell, 361 P.3d 936, 941

(Ariz. 2015), cert. granted sub nom. Howell v. Howell,

137 S. Ct. 546 (2016).

2. California: Cassinelli v. Cassinelli, 210 Cal. Rptr. 3d

311, 320 (Cal. Ct. App. 2016), review denied (Cal. Jan.

18, 2017).

3. Illinois: /n re Marriage of Nielsen & Magrini,

792 N.E.2d 844, 849 (Ill. App. Ct. 2003).

4. Indiana: Bandini v. Bandini, 935 N.E.2d 253, 263

(Ind. Ct. App. 2010).

5. NewJersey: Whitfield v. Whitfield, 862 A.2d 1187,

1191 (N.J. Super. Ct. App. Div. 2004).

6. Tennessee: Johnson v. Johnson, 37 S.W.3d 892,

897-898 (Tenn. 2001).

On Contract Theory

7. Alaska: Glover v. Ranney, 314 P.3d 535, 543 (Alaska

2013).

8. Colorado: In re Marriage of Lodeski, 107 P.3d 1097,

1100 (Colo. App. 2004).

(la)

9. Florida: Abernethy v. Fishkin, 699 So. 2d 235, 240

(Fla. 1997).

10. Hawaii: Perez v. Perez, 110 P.3d 409, 414 (Haw. Ct.

App. 20065).

11. Idaho: McHugh v. McHugh, 861 P.2d 113, 115

(Idaho Ct. App. 1993).

12. Iowa: Jn re Marriage of Gahagen, 690 N.W.2d 695,

2004 WL 1813601, at *5 (lowa Ct. App. 2004) (Tbl.).

13. Louisiana: Ast v. Ast, 162 So. 3d 720, 723, 725 (La.

Ct. App.), writ denied, 171 So. 3d 952 (La. 2015).°

14. Maine: Black v. Black, 842 A.2d 1280, 1284-1285

(Me. 2004).

15. Maryland: Dexter v. Dexter, 661 A.2d 171, 174-175

(Md. Ct. Spec. App.), cert. denied, 668 A.2d 36 (Md. 1995)

(Tbl.).

16. Massachusetts: Arapfv. Krapf, 786 N.E.2d 318, 326

(Mass. 2003).

17. Michigan: Megee v. Carmine, 802 N.W.2d 669, 682

(Mich. Ct. App. 2010).

18. Minnesota: CGatfield v. Gatfield, 682 N.W.2d 632,

636 (Minn. Ct. App.), review denied (Minn. Sept. 29,

2004).

19. Missouri: Strassner v. Strassner, 895 S.W.2d 614,

618 (Mo. Ct. App. 1995).

” Cf. Browillette v. Brouillette, 51 So. 3d 898, 901 (La. Ct. App.

2010) (declining to order indemnification after veteran’s post-divorce

waiver of military retirement pay because Louisiana law gives the

veteran “sole interest” in military disability benefits).

20. Nevada: Shelton v. Shelton, 78 P.3d 507, 509 (Nev.

2003), cert. denied, 541 U.S. 960 (2004).

21. New Mexico: Hadrych v. Hadrych, 149 P.3d 593,

596 (N.M. Ct. App. 2006), cert. denied, 152 P.3d 150

(N.M. 2007) (Tbl.).

22. New York: Hoskins v. Skojec, 696 N.Y.S.2d 303,

305 (N.Y. App. Div. 1999), leave to appeal denied, 726

N.E.2d 482 (N.Y. 2000).

23. North Carolina: Hillard v. Hillard, 733 S.E.2d 176,

180-181 (N.C. Ct. App. 2012), review denied, 736 S.E.2d

490 (N.C. 2013).

24. Oklahoma: Hayes v. Hayes, 164 P.3d 1128, 1131-

1132 (Okla. Civ. App.), cert. denied (Okla. June 4, 2007).

25. Oregon: Jn re Marriage of Hayes, 208 P.3d 1046,

1053 (Or. Ct. App. 2009).

26. Pennsylvania: Hayward v. Hayward, 868 A.2d 554,

560-561 (Pa. Super. Ct. 2005).

27. Rhode Island: Resare v. Resare, 908 A.2d 1006,

1010 (R.1. 2006).

28. South Carolina: Price v. Price, 480 S.E.2d 92, 93

(S.C. Ct. App. 1996).

29. South Dakota: Hisgen v. Hisgen, 554 N.W.2d 494,

498 (S.D. 1996).

30. Virginia: Owen v. Owen, 419 S.E.2d 267, 270 (Va.

Ct. App. 1992).

Permitting Post-Divorce Waiver To Be Considered In

Revising Alimony Award

31. Arkansas: Ashley v. Ashley, 990 S.W.2d 507, 509

(Ark. 1999).

32. Nebraska: Kramer v. Kramer, 567 N.W.2d 100, 113

(Neb. 1997).

33. Washington: Jn re Marriage of Jennings, 980 P.2d

1248, 1255-1256 (Wash. 1999) (en banc).

No Relief Under The Particular Circumstances

(But Not Reaching Express Indemnification Issue)

1. Alabama: Fz parte Billeck, 777 So. 2d 105, 109 (Ala.

2000).

2. Kansas: /n re Marriage of Pierce, 982 P.2d 995, 998

(Kan. Ct. App.), review denied (Kan. Nov. 9, 1999).

3. Kentucky: Copas v. Copas, 359 S.W.3d 471, 479 (Ky. Ct.

App. 2012). But see Wilson v. Wilson, No. 2004-CA-276,

2005 WL 2398020, at *3 (Ky. Ct. App. Sept. 30, 2005) (un-

published) (enforcing an indemnification provision after

post-divorce waiver), review denied (Ky. Aug. 17, 2006).

4. Vermont: Youngbluth v. Youngbluth, 6 A.3d 677,

690-691 (Vt. 2010).

Indemnification Not Permitted

1. Mississippi: Mallard v. Burkart, 95 So. 3d 1264,

1272 (Miss. 2012).

2. Ohio: Konieczny v. Konieczny, No. 97-CA-83, 1998

WL 401835, at *2 (Ohio Ct. App. Mar. 27, 1998) (finding

reimbursement for post-divorce waiver of retirement pay

would violate federal law). But see Blissit v. Blissit, 702

N.E.2d 945, 948 (Ohio Ct. App. 1997) (enforcing “sepa-

rate provision” of negotiated property settlement where

husband agreed to pay wife “the difference” between

the gross and disability military retirement pay).

3. Texas: Limbaugh v. Limbaugh, 71 S.W.3d 1, 17

(Tex. App. 2002).

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