# Amicus Curiae Brief — Finch v. Galaway, Administrator, on Behalf of Estate of Galaway

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2005
- **Citation:** 544 U.S. 1056

## Text

— (=)

MAY 3 - 2005 No. 04-1283

IN THE

Supreme Court of the United States

KIMBERLYE FINCH,
Petitioner,

v.

EDDIE LEE GALAWAY, Administrator,
on behalf of Estate of Bradford Wayne Galaway,

Respondent.

On PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES CourRT OF APPEALS
FOR THE FirtH Circuit

Motion Or THE GUARDIAN LIFE INSURANCE COMPANY OF
AMERICA For LEAVE To FILE BrieF Or Amicus CuRIAE
In Support OF PETITIONER AND BrieF OF Amicus CuRIAE

ALEXANDER H. WHITEAKER Respecca M. ALCANTAR

THE GUARDIAN LiFe INSURANCE Counsel of Record
COMPANY OF AMERICA WILson, ELser, Moskow!Tz
7 Hanover Square, Law — H23F EDELMAN & Dicker LLP
New York, NY 10004-2616 5000 Renaissance Tower
(212) 598-8441 1201 Elm Street
(212) 919-2711 Dallas, Texas 75270

(214) 698-8000
(214) 698-1101

Attorneys for Amicus Curiae
The Guardian Life Insurance Company of America

194234 g

COUNSEL PRESS
(800) 274-3321 + (800) 359-6859

MOTION FOR LEAVE TO FILE BRIEF
AND LATE FILING

Amicus moves the Court to grant it leave to file late its
motion for leave and brief. Amicus brief was due on April 25,
2005. Although amicus was a party to the lower court who filed
the interpleader action and an amicus at the Fifth Circuit, amicus
was never served or received notice that petitioner Kimberlye
Finch filed petition for writ of certiorari. Counsel for amicus
made numerous attempts to contact counsel for Kimberlye Finch
about the filing of his brief, but received no response until it
was too late to file a timely response.

Pursuant to Rule 37.2 of the Rules of this Court, Amicus
Curiae The Guardian Life Insurance Company of America
(“Guardian”) hereby moves for leave to file a brief amicus curiae
in support of the petition for a writ of certiorari filed by

Kimberlye Finch.*

As more fully explained in the accompanying brief, amicus
curiae Guardian issued a group insurance policy to Bradford
Wayne Galaway’s employer, which provided Bradford Wayne
Galaway with basic life insurance and accidental death benefits.
The policy constituted an insured employee welfare benefit plan
governed by Title I of the Employee Retirement Income Security
Act of 1974 § 3(21)(A), 29 U.S.C. § 1002 (“ERISA”).

Bradford Wayne Galaway named his then spouse,
Kimberlye Finch, as the beneficiary to the policy. On or about
June 20, 2002, Bradford Wayne Galaway and Kimberlye Finch
were divorced. The divorce decree divested Kimberlye Finch
of all rights, title, interest, and claims in and of all policies of
life insurance insuring Bradford Wayne Galaway’s life.

* Petitioner Kimberlye Finch consented to the submission of
the accompanying brief. Eddie Lee Galaway declined to extend his
unconditional consent to the filing of the accompanying brief.

uae. |

On November 8, 2002, Bradford Wayne Galaway was
killed in an airplane accident. He died intestate and had not
changed the named beneficiary on the life insurance policy
prior to his death. Kimberlye Finch, the named beneficiary,
and Eddie Lee Galaway, the administrator of Bradford Wayne
Galaway’s estate, both claimed sole entitlement to the
insurance proceeds.

On May 30, 2003, Guardian filed an interpleader action
in the United States District Court for the Northern District
of Texas, Dallas Division to resolve the competing claims to
the proceeds. Subsequently, Eddie Lee Galaway and
Kimberlye Finch filed competing motions for summary
judgment seeking the benefits under the plan.

The District Court granted summary judgment in favor
of Eddie Lee Galaway based on the Fifth Circuit’s precedent
of applying the federal common law to the facts of the case.
The appellate court affirmed. In reaching its decision, the
appellate court held that Kimberlye Finch “explicitly,
voluntarily and in good faith” waived her beneficiary status
in the policy, rather than deciding the case based on the
policy’s named beneficiary as the United States Supreme
Court recently did in Egelhoff v. Egelhoff, 532 U.S. 141, 148
(2001). However, no guidance was provided by the appellate
court on what constitutes an “explicit, voluntarily and good
faith relinquishment.”

The Fifth Circuit’s holding continues to deepen the
conflict among the circuits and burdens the administration
of ERISA plans in light of this Court’s decision in Egelhoff.
As such, review of the lower court decision is warranted.

The petition filed by Kimeberlye Finch provides a
compelling basis for granting a writ of certiorari.
The accompanying brief will assist the Court in determining
whether to grant certiorari because (1) amicus can

more broadly inform this Court of the uncertainty and
burdens engendered by the lower court’s decision; (2) the
accompanying brief addresses additional points to provide
substantial support on the burdens of companies who
administer ERISA plans; and (3) amicus discusses at length
the federal common law and the confusion among the courts
on what constitutes an “explicit, voluntarily and good faith
relinquishment” of benefits.

Accordingly, amicus respectfully requests that the Court
grant leave to file the accompanying brief amicus curiae.

Respectfully submitted,

ResBecca M. ALCANTAR
Counsel of Record
WILson, ELser, Moskow!Tz
EDELMAN & Dicker LLP
5000 Renaissance Tower
1201 Elm Street

Dallas, Texas 75270

(214) 698-8000

(214) 698-1101

ALEXANDER H. WHITEAKER

THE GUARDIAN LIFE INSURANCE
COMPANY OF AMERICA

7 Hanover Square, Law — H23F

New York, NY 10004-2616

(212) 598-8441

(212) 919-2711

Attorneys for Amicus Curiae
The Guardian Life Insurance
Company of America

i

TABLE OF CONTENTS

TABLE OF CITED AUTHORITIES ............
STATEMENT OF INTEREST .................
STATEMENT OF THE CASE .................
i TOPE SPIE argu a areas
I. The Decision of the Fifth Circuit Deepens a

, Mature and Irreconcilable Conflict Among the
Circuits and this Court’s Decision in Egelhoff

v. Egelhoff on the Administration of ERISA

PO Seles eke bees dicen ee ae

II. Certiorari is Warranted Because Resolution of
the Conflict in the Lower Courts Over the
Question Presented is Vital to the Orderly
Administration of ERISA Plans ..........
CA 6 Novas Clb a eae cedaeer aus

Ft PE Pe ree fe ne Se Bit Paley a ate

Page

il

TABLE OF CITED AUTHORITIES

Page

CASES
Brandon v. Travelers Ins. Co.,

tye Breigi fe B.) errr 6,7
Central States, Southeast & Southwest Areas

Pension Fund v. Howell,

So1 F.3G O72 COG CIE. BED cccccccsccseccts 8
Clift v. Clift,

210 F.3d 268 (Sth Cir. 2000) ................ 7
Curtiss-Wright Corp. v. Schoonejongen,

584 UB. Fa CCSNee 065.000560060004n55n ee ll
Egelhoff v. Egelhoff,

Se Ue WEE CASED occ ci ccanddackemenaeel passim
Estate of Altobelli v. IBM,

uae wt le err re 7,8
Estate of Zienowicz v. Metro. Life Ins. Co.,

205 F. Supp. 2d 339 (D. N. J. 2002) .......... 7,8
Fort Halifax Packing Co. v. Coyne,

GS2 UB. 1 CIGD 6 <cce6nsskuaarenee 4,9, 10, 13
Fox Valley & Vicinity Constr. Workers Pension

Fund v. Brown,

O97 F.2G Zia CH Ge, BIRR) ccncwsscecsevuss 6,7

Guardian Life Ins. Co. v. Finch,
335 F362 COCA, BOO kiki icavisetiavaa 3,5,8

iii

Cited Authorities
Page

Ingersoll-Rand Co. v. McClendon,

sete trsthniacs-- in. KELTLPER OPT CO Pe 12
John Hancock Mut. Life Ins. Co. v. Timbo,

67 F.Supp.2d 339 (D.N.J. A Coon We ue. 8
Lyman Lumber Co. y. Hill,

877 F.2d 692 (8th Cir. cn a ee 6,8
Maclnnes v. MaclInnes,

677 N.W. 2d 889 (Mich. App. 2004) .......... 8
Manning v. Hayes,

212 F.3d 866 (Sth Cir. WE Ai cigecc se 5,7,9
McMillan vy. Parrott,

913 F.3d 310 (6th Cir. ey, MEE EEE ES 10, 15
Melton v. Melton,

324 F.3d 941 (7th Cir. ae, ET EL EER ee 6,8
Metro. Life Ins. Co. v. F linkstrom,

303 F. Supp. 2d 34 (D. Mass. ere 7
Mohamed v. Kerr,

53 F.3d 911 (8th Cir WE éesitevec tl 7

RULEs

1 on ha PS PEP POET PETE PRS Oat

iv

Cited Authorities
Page
STATUTES P
Employee Retirement Income Security Act of 1974
© SESE AD, AP Cian B BOOR ios csc cconicnses 1,5
Employee Retirement Income Security Act of 1974
§ 3(21)(A), 29 U.S.C. § 1104(a)(1)(D) ........ 5,9

Texas Family Code Annotated
§§ 9.301, 9.302 (Vernon 1998) ............... 5

l

BRIEF OF THE AMICUS CURIAE

Amicus Curiae The Guardian Life Insurance Company
of America (“Guardian”) submits this brief in support of the
petition filed by Kimberlye Finch for writ of certiorari to
the United States Court of Appeals for the Fifth Circuit.’

STATEMENT OF INTEREST

Guardian provides this disclosure of its interest.
Guardian is a mutual life insurance company organized and
incorporated under the laws of the State of New York, having
its principal place of business located at 7 Hanover Square,
New York, New York 10004. Guardian initiated this lawsuit
by interpleading the funds of a life insurance policy governed
by Title I of the Employee Retirement Income Security Act
of 1974 § 3(21)(A), 29 U.S.C. § 1002 (“ERISA”), due to
competing claims to the benefits. The interest of amicus
curiae are set forth in the motion and accompanying brief.

STATEMENT OF THE CASE

The facts of this case are not in dispute. Bradford Wayne
Galaway and Kimberlye Finch were married on September
22, 2001. On February 1, 2002, Guardian issued a group
insurance policy to Bradford Wayne Galaway’s employer,
which provided Bradford Wayne Galaway with basic
life insurance and accidental death benefits. The policy
constituted an insured employee welfare benefit plan
governed by ERISA.

1. Pursuant to Supreme Court Rule 37.6, this brief has been
authored in its entirety by undersigned counsel for the amicus curiae.
No person or entity, other than the named amicus and its counsel,
made any monetary contribution to the preparation and submission
of this brief.

2

Bradford Wayne Galaway named his then spouse,
Kimberlye Finch, as the beneficiary to the policy. On or about
June 20, 2002, Bradford Wayne Galaway and Kimberlye
Finch were divorced. The divorce decree divested Kimberlye
Finch of all rights, title, interest, and claims in and of all
policies of life insurance insuring Bradford Wayne Galaway’s
life.

On November 8, 2002, Bradford Wayne Galaway was
killed in an airplane accident. He died intestate and had not
changed the named beneficiary on the life insurance policy
prior to his death. Kimberlye Finch, the named beneficiary,
and Eddie Lee Galaway, the administrator of Bradford Wayne
Galaway’s estate, both claimed sole entitlement to the
insurance proceeds.

On May 39, 2003, Guardian filed an interpleader action
in the United States District Court for the Northern District
of Texas, Dallas Division to resolve the competing claims to
the proceeds. Subsequently, Eddie Lee Galaway and
Kimberlye Finch filed competing motions for summary
judgment seeking the interpled benefits under the Plan.

The District Court granted summary judgment in favor
of Eddie Lee Galaway based on the Fifth Circuit’s precedent

Finch “explicitly, voluntarily and in good faith” waived her
beneficiary status in the policy, the estate would be entitled
to the proceeds.

By its decision dated December 22, 2004, the Fifth
Circuit affirmed the district court’s decision holding that

3

Kimberlye Finch waived her rights under the plan. In doing
so, the Fifth Circuit concluded that application of federal
common law did not undermine this Court’s decision in
Egelhoff, because Egelhoff is inapplicable to the present case.
Guardian Life Ins. Co. v. Finch, 395 F.3d 238 (Sth Cir. 2004).
The circuit court reasoned that Egelhoff does not address the
application of federal common law to ERISA plans. “Rather,
Egelhoff only addresses whether ERISA preempts a state
statute that automatically revokes the designation of a spouse
as the beneficiary of a life insurance policy upon divorce.”
Id. at 242.

The Fifth Circuit further acknowledged that the goal of
uniformity espoused by. this Court in Egelhoff is not
undermined when courts rely on the federal common law of
waiver to determine if a beneficiary has waived her rights
under an ERISA plan. The court reasoned that Egelhoff never
held that uniformity would be undermined if courts relied
on federal common law, because plan administrators must at
times look to the federal common law when administering
ERISA plans. Rejecting the assumption that reliance on
federal common law would undermine national uniformity,
the circuit court further surmised that the Court in Egelhoff
strongly suggested that courts can at times rely upon common
law principles when determining the identity of the
beneficiary of an ERISA plan. /d. at 243.

The circuit court’s decision continues to cast doubt on
whether plan administrators are to follow the federal common
law or this Court’s decision in Egelhoff on how to determine
competing claims to an ERISA plan’s life insurance benefits
brought by a participant’s estate and that of participant’s
former spouse. The existing Fifth Circuit authority requires
the plan administrator to examine the federal common law
in making this determination. Whereas, Egelhoff mandates
that ERISA’s goal of uniform application can only be satisfied

4

by restricting the administrator’s decision to the beneficiary
designation set forth in the plan documents. It is this conflict
among the Circuits that amicus addresses herein.

ARGUMENT

I. The Decision of the Fifth Circuit Deepens a Mature
and Irreconcilable Conflict Among the Circuits and
this Court’s Decision in Egelhoff v. Egelhoff on the
Administration of ERISA Plans

Guardian administers retirement and employee benefit
plans, similar to the Plan at issue in this case, throughout the
United States of America. These plans are typically governed
by ERISA. As pronounced by the Supreme Court:

One of the principal goals of ERISA is to enable
employers ‘to establish a uniform administrative
scheme, which provides a set of standard
procedures to guide processing of claims
and disbursement of benefits.’ Uniformity is
impossible, however, if plans are subject to
different legal obligations in different States.

Egelhoff, 532 U.S. at 148 (quoting Fort Halifax Packing Co.
v. Coyne, 482 U.S. 1, 9 (1987)). Notwithstanding this goal
of uniformity, different jurisdictions apply different rules
regarding the distribution of plan benefits to plan participants’
estates and their former spouses. In cases where the
entitlement to benefits is contested, Guardian is forced to
interplead the plan funds to determine their proper recipient.
While the outcome of each interpleader action provides a
resolution as to that specific case, no uniform guidelines have
emerged to assist plan administitors with determining future
competing claims to plan proceeds. Hence, ERISA’s purpose
of providing uniformity in administration of qualifying plans
has been frustrated.

5

The Fifth Circuit, as exemplified in Finch, continues to
frustrate ERISA’s goal of uniformity. Its decision deepens a
mature and irreconcilable conflict among the circuits and is
inconsistent with the application of ERISA and this Court’s
decision in Egelhoff. ERISA requires that an employee benefit
plan be administered “in accordance with the documents
and instrumezi: governing the plan... .” 29 U.S.C.
§ 1104(a)(1)(D). Further, the plan “shall specify the basis
on which payments are made to and from the plan.”
Id. § 1102(b)(4). Rather than enforcing the provisions of
ERISA and allowing plan administrators to easily determine
beneficiary status by looking to the plan documents, the Fifth
Circuit simply circumvents preemption mandated by Egelhoff
in reviving state law under the guise of “federal common
law.” Specifically, the Fifth Circuit’s justification that
Egelhoff is inapplicable to this case — because Egelhoff
addresses a state statute and not federal common law —
provides a distinction with no meaning since the Fifth Circuit
federal common law was shaped by Texas Statutory law.
Manning v. Hayes, 212 F.3d 866, 870 (Sth Cir. 2000) (holding
that courts should borrow from state law; specifically,
sections 9.301 and 9.302 of the Texas Family Code? in
determining the federal common law to apply to these types
of cases). Thus, applying the federal common law provides
the same result as if the state law had not been preempted at
all. This result effectively renders ERISA nonsensical, as the
Act requires plans to be administered to their terms, preempt
State law to assure that end, and then reincorporate state law

2. Sections 9.301 and 9.302 of the Code provide that a pre-
divorce decree designation of a former spouse as beneficiary of a
life insurance policy is not effective unless (1) the decree designates
the insured’s former spouse as the beneficiary; (2) the insured
redesignates the former spouse as the beneficiary after rendition of
the decree; or (3) the former spouse is designated to receive the
proceeds in trust for, on behalf of, or for the benefit of a child or a
dependent of either former spouse. Tex. Fam. Code Ann. §§ 9.301,
9.302 (Vernon 1998).

6

into federal common law so that plans are not uniformly
administered according to their own terms.

Not only does the interpretation of the federal common
law by the Fifth Circuit, as well as the other circuits favoring
the federal common law approach, render administrative
provisions under ERISA illusory, but it further complicates
the process of determining beneficiary status under the federal
common law as no consensus among the circuits adopting
this approach has been achieved. This point is illustrated by
the recent decision of the Seventh Circuit in Melton v. Melton,
324 F.3d 941, 945 (7th Cir. 2003). Melton turned to the
federal common law concerning waiver in determining to
whom the plan administrator should have paid plan proceeds.
The court reasoned, “when we are evaluating whether a
waiver is effective in a given case, we are more concerned
with whether a reasonable person would have understood
that she was waiving her interest in the proceeds or benefits
in question than with any magic language contained in the
waiver itself.” Jd. at 945-946. This subjective approach to
applying the federal common law provides no guidance to
plan administrators in determining beneficiary status.

To further illustrate this point, the Fifth Circuit followed

the federal common law as set forth by the Seventh and
Eighth Circuit when initially determining the validity of a
waiver of plan benefits. See Brandon v. Travelers Ins. Co.,
18 F.3d 1321 (Sth Cir. 1994) (citing Fox Valley & Vicinity
Constr. Workers Pension Fund v. Brown, 897 F.2d 275 (7th
Cir. 1990); Lyman Lumber Co. v. Hill, 877 F.2d 692 (8th Cir.
1989)). Contrary to the holdings in these circuits, however,
the Fifth Circuit rejected any requirement that a waiver be
specific or explicitly identify the benefit that is waived. Jd.
The Fifth Circuit later refined what constitutes an effective
waiver of benefits when it held that the federal common law,
as influenced by state law, requires that a waiver of a

7

beneficiary interest be “explicit, voluntary, and made in good
faith.” Manning, 212 F.3d at 874. The guidance provided by
the Manning court, however, has provided little assistance
towards the uniform application of the federal common law.

Unfortunately, no clear guidelines have been established
to assist the lower courts in what constitutes an explicit,
voluntary, and good faith waiver so that the federal common
law can be uniformly applied. The Fifth Circuit has merely
Stated that “explicit” indicates something other than silence,
and “voluntary” means not coerced. Manning, 210 F.3d at
872. Further, the court set forth the following subjective
requirement for waiver: “We will only find waiver if, upon a
reading of the language in the divorce decree, a reasonable
person would have understood that she was waiving her
beneficial interest in the life insurance policy at issue.” Clift
v. Clift, 210 F.3d 268, 269 (Sth Cir. 2000), citing Brandon,
18 F.3d at 1326. As such, the Fifth Circuit has created
yet another ambiguous test, thereby perpetuating the
inconsistencies in the federal common law. See, e.g., Fox
Valley, 897 F.2d at 275 (specificity is required); Estate of
Altobelli v. IBM, 77 F.3d 78 (4th Cir. 1996) (the divorce
decree must include a specific waiver of benefits); Mohamed
v. Kerr, 53 F.3d 911 (8th Cir. 1995) (the analysis is fact
driven); Metro. Life Ins. Co. v, Flinkstrom, 303 F. Supp. 2d
34 (D. Mass. 2004) (specific intent is required); Estate
of Zienowicz v. Metro. Life Ins. Co., 205 F. Supp. 2d 339
(D.N.J. 2002) (agreements must identify the benefit being
waived).

Contrary to this Court’s recent decision in Egelhoff, these
subjective approaches to translating the federal common law
require plan administrators to disregard plan documents and
circumnavigate the legal waters of fifty states and divorce
litigation within those states. “It would be an overwhelming
burden to require plan administrators to decipher divorce

8

judgments to determine if an effective waiver had occurred
as opposed to simply examining plan documents for the
named beneficiary. Having to file interpleader actions, where
multiple parties are making claims to plan proceeds would
also be burdensome to plan administrators.” See MacInnes
v. MacInnes, 677 N.W.2d 889 (Mich. App. 2004).

In fact, not only would it be burdensome to require this
of a plan administrator, but it may be an impossible task as
the law is not only unsettled between the circuits, but within
the district courts, as well as the state courts. The Fourth,
Fifth, Seventh, and Eighth Circuits have adopted federal
common law approaches. See Estate of Altobelli, 77 F.3d at
81-82 (4th Cir. 1996); Lyman Lumber Co. v. Hill, 877 F.2d
at 693-94; Melton, 324 F.3d at 945-46. However, of those
Circuits, only the Fifth and Seventh have reaffirmed that
approach since Egelhoff. See Melton, 324 F.3d at 941;
Guardian Life Ins. Co., 395 F.3d at 238. The Sixth Circuit
and at least one district court in the Third Circuit hold that
a clear beneficiary designation in plan documents or
instruments cannot be disturbed by a waiver in external
documents. Central States, Southeast & Southwest Areas
Pension Fund v. Howell, 227 F.3d 672, 676-77 (6th Cir.
2000); Estate of Zienowicz, 205 F. Supp. 2d at 343-44.
Another case in the Third Circuit came to the opposite
conclusion before Egelhoff was decided. John Hancock Mut.
Life Ins. Co. v. Timbo, 67 F. Supp. 2d 339, 343-44 (D. N.J.
2002). Additionally, a conflict may also exist in the state
courts, as state courts are only bound by precedent from their
own courts and this Court. See Note: Egelhoff v. Egelhoff:
The Supreme Court's Latest Attempt to Clarify ERISA
Preemption and the Decision’s Effect on Texas State Law, 54
Baylor L. Rev. 503, 527-30 (2002); see also MacInnes, 677
N.W.2d at 892 n.3.

9

This lack of uniformity is contrary to one of the core
purposes of ERISA, to enable employers to establish a
uniform administrative scheme, which provides a set of
standard procedures to guide processing claims and
disbursing benefits. Egelhoff, 532 U.S. 148 (2001) (quoting
Fort Halifax Packing Co., 482 U.S. at 9). In Manning, the
Fifth Circuit stated: “While we can certainly appreciate the
simplicity of the bright line rule embraced by the Sixth
Circuit, that simplicity comes at too great a cost.” 212 F.3d
at 872. Yet, it is clear that the differences in how the federal
common law is applied within the majority circuits alone
will necessarily create significant confusion in the courts.
Without one single, simple, and objective standard, plan
administrators cannot promptly pay benefits, but must
undertake a subjective legal analysis of the law within the
applicable jurisdiction (often retaining counsel), without any
assurance that a decision to pay will not result in double
liability. The choice being, then, to take the risk of paying
the benefit twice or interpleading adverse claimants. The only
solution is for this Court to hold that ERISA plans must pay
benefits in accordance with plan documents as set forth in
the Act. 29 U.S.C. § 1104(a)(1)(D).

II. Certiorari is Warranted because Resolution of the
Conflict in the Lower Courts Over the Question
Presented is Vital to the Orderly Administration of
ERISA Plans

This Court has long recognized the host of obligations
and responsibilities associated with plan administration.
E.g., Fort Halifax Packing Co., 482 U.S. at 9 (plan
administrators must determine the eligibility of claimants,
calculate benefit levels, make disbursements, monitor the
availability of funds for benefit payments, and keep
appropriate records in order to comply with applicable
reporting requirements). Plan administration is unnecessarily

10

further complicated when administrators are required to
fulfill these obligations and responsibilities in many different
States, all potentially subject to varying laws. “Given the
vast number of tasks a plan administrator must perform,
Congress believed ‘[t]he most efficient way to meet these
responsibilities [was] to establish a uniform administrative
scheme, which provide[d] a set of standard procedures to
guide processing of claims and disbursement of benefits.’”
George A. Norwood, Who is Entitled to Receive a Deceased
Participant's ERISA Retirement Plan Benefits—an Ex-Spouse
or Current Spouse? The Federal Circuits Have an
Irreconcilable Conflict, 33 Gonz. L. Rev. 61, 81 (1998)
(citing Fort Halifax Packing Co., 482 U.S. at 9).

Moreover, it was Congress’ intent in enacting ERISA to
simplify an already chaotic system subject to multi-
jurisdictional standards by “bring[ing] a measure of
uniformity in an area where decisions under the same set of
facts may differ from state to state.” H.R. Rep. No. 93-533,
p. 12 (1973). Creating this uniformity was among the primary
goals for the Act. McMillan v. Parrott, 913 F.2d 310, 312
(6th Cir. 1990) (Congress intended “ERISA plans to be
uniform in their interpretation and simple in their
application.”) (citing H.R. Rep. No. 93-533 (1974), reprinted
in 1974 U.S.C.C.A.N. 4639, 4650). More than thirty years
after ERISA’s enactment, however, Congress’ goal of
uniformity and simplicity in plan administration has not been
realized.

Despite the federal scope of the legislation, the
administration of plans subject to ERISA has not been
uniform across the country, as the rules that plan
administrators are required to follow in identifying plan
beneficiaries are neither easily discerned nor simply applied.
The current split in the circuits requires plan administrators
to strictly adhere to plan documents in a minority of

11

jurisdictions in making this determination and, in the
remaining states, attempt to follow the nebulous federal
common law, as influenced by pre-empted state law.
When plan administrators attempting to identify plan
beneficiaries are forced to look beyond the plan documents
and analyze divorce decrees, various state statutes, state
case law interpreting the statutes and decrees, and the
federal common law, uniformity cannot be achieved.
“Uniformity is impossible . . . if plans are subject to different
legal obligations in different States.” Egelhoff, 532 US. at
148. When uniformity is compromised, plan participants,
plan administrators, and the courts pay the price.

Plan participants benefit from a uniform administrative
system because uniformity furthers another fundamental goal
of ERISA — it enables plan participants to easily learn their
rights and obligations under their plan at any given time.
Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 83
(1995). In Schoonejongen, this Court reasoned that plan
participants can quickly determine their rights and obligations
under their ERISA plan because ERISA is based on an
“elaborate scheme” that is “built around reliance on the face
of written plan documents.” /d. This reliance is misplaced if
plan participants reside in jurisdictions that follow the
majority approach requiring plan administrators to analyze
a participant’s rights and benefits based on the vagaries of
the federal common law, rather than the plan documents
themselves.

Plan participants (and many plan administrators) are
unaware of how the federal common law operates and how
it can significantly impact ERISA plan benefits. It is
reasonable to conclude that plan participants expect their
entitlement to benefits to remain the same regardless of the
state in which they reside. While the reasonableness of this
expectation is manifest, it reflects a lack of understanding

12

regarding the current conflict in this area of the law. As a
result of the split in the circuits, a plan participant can not be
certain of his rights and obligations under an ERISA plan
until a court analyzes the plan and the law, makes the
determination by court order, and the order becomes final.
Conversely, plan participants could easily determine their
rights and obligations under an ERISA plan quickly and
without reliance on legal counsel or judicial interpretation if
those rights and obligations were defined by the plan
documents themselves. Adopting this approach, as the Sixth
Circuit has, would not only enable a plan participant to easily
determine his benefits, but would promote Congress’
fundamental goal that ERISA plans be efficiently and
uniformly administered.

Because the circuits are deeply divided regarding whether
plan documents or federal common law (as shaped by pre-
empted state iaw) should determine beneficiary status under
an ERISA plan, plan administrators are heavily burdened by
the necessity to administer plans differently depending upon
the state in which a participant resides. “Requiring ERISA
administrators to master the relevant laws of 50 States and
to contend with litigation would undermine the congressional
goal of ‘minimizing the administrative and financial burdens’
on plan administrators — burdens ultimately borne by the
beneficiaries.” Egelhoff, 532 U.S. at 149-50 (quoting
Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 142 (1990)).
Since it is often unclear as to how benefits should be
distributed under the federal common law approach, “the
potential for double liability if the plan administrator
inadvertently, but in good faith, pays the incorrect
beneficiary” is quite high. Norwood, supra, 33 Gonz. L. Rev.
at 80. If it is determined that a plan administrator
misconstrued the federal common law and paid benefits to
the wrong party, “the plan administrator must pay the correct

13

beneficiary and, at the same time, recover payment from the
incorrect beneficiary, further miring the plan and its assets
in legal costs.*” Jd.

Since a uniform system for determining beneficiary
status under an ERISA plan has not been adopted, contrary
to Congress’ stated intentions, plan administrators are forced
to retain the services of legal counsel to assist with plan
administration. However, “given the uncertainty in this area
of the law, it is less than prudent for counsel to provide an
unqualified opinion as to the proper beneficiary, unless the
facts or property settlement agreement [in the divorce decree]
are in direct alignment with recent circuit precedent.”
Norwood, supra, 33 Gonz. L. Rev. at 79. To minimize the
potential for double liability, plan administrators and their
counsel often resort to filing interpleader actions and
depositing the plan proceeds with an already overburdened
court to resolve the entitlement dispute.‘ Previously, the Court
expressed its concern with this problem and noted that the
filing of interpleader actions to resolve these disputes
“presents an example of how the costs of delay and
uncertainty can be passed on to beneficiaries, thereby
thwarting ERISA’s objective of efficient plan administration.”
Egelhoff, 532 U.S. at 150 n.3 (citing Fort Halifax Packing
Co., 482 U.S. at 9).

3. Amicus directs the Court to Kennedy v. E.1. Dupont De
Nemours and Co., Civil Action No. 1:01-C V-904, in the United States
District Court for the Eastern District of Texas Beaumont Division,
in which the plan administrator, Dupont, paid the benefits of an
ERISA plan according to the plan documents. The court in that case
held that Dupont wrongly paid the benefits, that Dupont was liable
to the proper beneficiary for these benefits, and that Dupont was not
entitled to restitution.

4. See Appendix for a survey of recent interpleader actions filed
by plan administrators.

14

Unfortunately, filing interpleader actions is often the only
way to ensure that the proper beneficiaries are paid in a
particular case, thereby eliminating a plan administrator’s
exposure to double liability, but adding to the overall cost
and burden of administering the plan. Moreover, because of
the fact-specific nature of the determination of such actions
and the differing federal common law as applied by the
various circuits, the resulting decisions lack significant
precedential value. Thus, even though many such
interpleaders have been filed, the decisions of lower courts
have not and will not generate a clear and uniform rule for
plan administrators to follow. Only a decision by this Court
resolving the conflict among the circuits will implement the
congressional intent to have a uniform system of plan
administration under ERISA.

The burden on plan participants resulting from the
present uncertainty is of paramount importance. As the Court
reasoned in Ege/lhoff, plan administrators and the courts are
not the only parties burdened by the filing of interpleader
actions; these court proceedings significantly add to the delay
beneficiaries experience while awaiting the benefits to which
they are entitled. Jd. As an example, the still-unresoived final
disposition of the ERISA plan proceeds in this case has been
argued in the courts for almost two years. Surely, the state of
today’s administrative scheme and the practical effect that it
has on plan administrators, plan participants, and the courts
is not what Congress had in mind when it contemplated
uniform administration of plans and benefits and simple
application of administrative procedures.

The only way that the Court can ensure that Congress’
goals of uniformity and simplicity in plan administration are
achieved is to adopt the minority rule among the circuits and
rule that the plan documents themselves control beneficiary
status. If plan administrators are no longer required to analyze

15

extraneous documents and interpret the ever-changing federal
common law, beneficiary status would be determined quickly
and accurately without legal guidance and proceeds disbursed
to plan beneficiaries in a timely fashion. If plan administrators
‘are no longer required to retain counsel to assist with plan
administration, it will significantly conserve both plan and
judicial resources. Specifically, plan administrators will no
longer be forced to incur such significant legal costs in
administering benefits to their plan participants, reducing a
primary cost factor that leads to increasing premiums.
Moreover, fewer interpleader actions filed with the courts
will conserve the resources of an already overburdened
judicial system.

Additionally, and most significantly, plan participants
will be able to easily determine their rights and obligations
under their plan solely by reviewing the plan documents.
In essence, the aspirational statement that “(a] participant
is master of his own ERISA plan” will become a reality.
See McMillan, 913 F.2d at 312. As a true master of his plan,
the participant will be able to review his beneficiary
designations, change those designations if he wishes, and
know that his intentions as expressed in the beneficiary
designation form in his plan documents will be followed by
the plan administrator. Plan administrators would no longer
be required to disregard a. participant’s last known wishes
for the beneficiaries under a particular ERISA plan or guess,
between two or more competing claims, which should be
honored. If the Court holds that plan documents are the only
consideration in identifying beneficiaries under an ERISA
plan, this issue will be resolved once and for all.

16

CONCLUSION

The division among the circuit courts is long standing
and acknowledged by the courts themselves. Amidst this
confusion among the courts, the concerns of upholding
uniform administrative schemes that were espoused in
Egelhoff have not been addressed. Accordingly, the contrary
views of the circuit courts concerning the application of
federal common law or whether plan documents themselves
should govern when determining competing claims to
benefits warrant review by this Court to resolve the conflict.
For the foregoing reasons, the writ of certiorari should be
granted.

Respectfully submitted,

ResBecca M. ALCANTAR
Counsel of Record

WILson, ELSER, Moskowi!Tz
EDELMAN & DickKER LLP
5000 Renaissance Tower
1201 Elm Street

Dallas, Texas 75270

(214) 698-8000

(214) 698-1101

ALEXANDER H. WHITEAKER

THE GUARDIAN LIFE INSURANCE
COMPANY OF AMERICA

7 Hanover Square, Law — H23F

New York, NY 10004-2616

(212) 598-8441

(212) 919-2711

Attorneys for Amicus Curiae
The Guardian Life Insurance
Company of America

APPENDIX

la

APPENDIX

Guardian Life Ins. Co. v. Finch,
393 F.3d 238 (Sth Cir. 2004).

Manning v. Hayes,
212 F.3d 866 (Sth Cir. 2000).

Clift v. Clift,
210 F.3d 268 (Sth Cir. 2000).

Metro. Life Ins. Co. v. Palmer,
238 F.Supp. 2d 831 (E.D. Tex. 2002).

Connecticut Gen. Life Ins. Co. v. Thomas,
910 F.Supp. 297 (S.D. Tex. 1995).

Lester v. Reagan Equip. Co. Profit Sharing Plan, etc.
(E.D. La. 1992).

Central States, Southeast & Southwest Areas
Health & Welfare Fund v. Boyd,
762 F.Supp. 1263 (S.D. Miss. 1992).

Keen v. Weaver,
121 S.W.3d 721; (Tex. 2003), cert. denied,
Keen v. Weaver,
124 S.Ct. 808 (2003).

Heggy v. Am. Trading Employee Ret. Account Plan,
56 S.W.3d 280 (Tex. App. — Houston
[14th Dist.] 2001).

2a
Appendix

Emmens v. Johnson,
923 S.W.2d 705 (Tex. App. — Houston
[1st Dist.] 1995).

Prudential Ins. Co. of Am. v. Schmid,
337 F.Supp. 2d 325 (D. Mass. 2004).

Metro. Life Ins. Co. v. Flinkstrom,
303 F.Supp. 2d 34 (D. Mass. 2004).

Metro. Life Ins. Co. v. Bigelow,
283 F.3d 436 (2nd Cir. 2002).

Grabois v. Jones,
89 F.3d 97 (2nd Cir. 1996).

Krishna v. Colgate Palmolive Co.,
7 F.3d 11 (2nd Cir. 1993).

Am. Int’! Life Assurance Co. v. Vazquez,
2003 U.S. Dist. LEXIS 2675 (S.D.N.Y. 2003).

Croskey v. Ford Motor Co.-UAW,
2002 U.S. Dist. LEXIS 8824 (S.D.N.Y. 2002).

Connecticut v. Patricia A. Mitchell,
195 U.S. Dist. LEXIS 11222 (S.D.N.Y. 1995).

Metro. Life Ins. Co. v. Benevent,
1993 U.S. Dist. LEXIS 14875 (S.D.N.Y. 1993).

3a
Appendix

Mendez v. Teachers Ins. & Indem. & Annuity Ass’n,
789 F. Supp. 139 (S.D.N.Y. 1992).

Estate of Zienowicz v. Metro. Life Ins. Co.,
205 F.Supp. 2d 339 (D.N.J. 2002).

John Hancock Mut. Life Ins. Co. v. Timbo,
67 F.Supp. 2d 413 (D.N.J. 1999).

Metro. Life Ins. Co. v. Reick,
1994 U.S. Dist. LEXIS 12995 (E.D. Pa. 1994).

Phoenix Mut. Life Ins. Co. v. Adams,
30 F.3d 554 (4th Cir. 1994).

Conneticut Gen. Life Ins. Co. v. Riner,
351 F. Supp. 2d 492 (W.D. Va. 2005).

Estate of Altobelli v. IBM,
849 F. Supp. 1079 (D. Md. 1994).

Brown v. Brown,
422 S.E.2d 375 (Va. 1993).

Metro. Life Ins. Co. v. Mulligan,
210 F. Supp. 2d 894 (E.D. Mich. 2002).

Metro. Life Ins. Co. v. Biggs,
2001 U.S. Dist. LEXIS 25280 (E.D. Mich. 2001).

4a
Appendix

Ford Motor Co. v. Ross,
129 F.Supp. 2d 1070 (E.D. Mich. 2001).

Metro. Life Ins. Co. v. Gibbs,
89 F.Supp. 2d 877 (E.D. Mich. 2000).

Metro. Life Ins. Co. v. Barlow,
884 F.Supp. 1118 (E.D. Mich. 1995).

Metro. Life Ins. Co. v. Pearson,
848 F.Supp. 1326 (E.D. Mich. 1994).

MaclInnes v. MaclInnes,
677 N.W.2d 889 (Mich. Ct. App. 2004).

Metro. Life Ins. Co. v. Johnson,
297 F.3d 558 (7th Cir. 2002).

Davis v. Combes,
294 F.3d 931 (7th Cir. 2002).

Metro. Life Ins. Co. v. Wheaton,
42 F.3d 1080 (7th Cir. 1994).

Fox Valley v. Vicinity Constr. Workers
Pension Fund v. Brown,

879 F.2d 249 (7th Cir. 1989).

Metro. Life Ins. Co. v. Johnson,
2001 U.S. Dist. LEXIS 10304 (N.D. Ill. 2001).

Sa
Appendix

In re Grogg,
2003 Bankr. LEXIS 582 (Bankr. C.D. Ill. 2003).

In re Pulley,
1989 Bankr. LEXIS 2305 (Bankr. N.D. Ind. 1989).

United States v. Taylor,
338 F.3d 947 (8th Cir. 2003).

Nat’l Auto. Dealers & Assocs. Ret. Trust v. Arbeitman,
89 F.3d 496 (8th Cir. 1996).

Equitable Life Assurance Soc’y of the
United States v. Chrysler,
66 F.3d 944 (8th Cir. 1995).

Mohamed v. Kerr,
53 F.3d 911 (8th Cir. 1995).

TCI Group Life Ins. Plan v. Knoebber,
244 F.3d 691 (9th Cir. 2001).

Boston Mut. Ins. v. Murphree,
242 F.3d 899 (9th Cir. 2001).

BankAmerica Pension Plan v. McMath,
2000 U.S. Dist. LEXIS 17740 (N.D. Cal. 2000).

Araiza-Klier v. Teachers Ins. & Annuity Ass'n,
2001 Cal. App. Unpub. LEXIS 1160
(Cal. App. 4th 2001).

28.8 A OOO ee

6a
Appendix

Torres v. Torres,
60 P.3d 798 (Haw. 2003).

Anderson v. Marshall,
856 F. Supp. 604 (D. Kan. 1994).

In re Marriage of Rahn,
914 P.2d 463 (Colo. Ct. App. 1995).

Liberty Life Assurance Co. v. Kennedy,
228 F.Supp. 2d 1367 (N.D. Ga. 2002).

8 este Ne Crem 2 a “tos

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386007_0675%3A5. Public record. Not legal advice.