February 09, 2016 Practice Points

Windsor Retroactive: Litigant Wins Right to Benefits

By Nick Kacprowski

The U.S. District Court for the Northern District of California recently issued a ruling in a procedurally and factually complex case that provides that the invalidation of the Defense of Marriage Act in U.S. v. Windsor, 133 S.Ct. 2675, is retroactive, at least in California. The case is Schuett v. FedEx Corp., __ F. Supp. 3d __, 2016 WL 104267 (N.D. Cal. Jan. 4, 2016).

The plaintiff, Stacey Schuett, lived in a committed relationship with her partner Lesly Taboada-Hall for 27 years. They married on June 19, 2013, just a week before the Supreme Court issued the decisions in the Windsor and Hollingsworth v. Perry cases. Ms. Schuett's wife died from cancer the next day. At the time they married, they were not able to obtain a marriage license because California's Proposition 8 was still in effect. Prior to the federal case being filed, however, the California Courts had certified that the marriage occurred and was valid as of June 19, 2013.

Ms. Taboada-Hall was a longtime employee of FedEx and was fully vested in the FedEx pension plan. ERISA requires that pension plans provide that if an employee dies before retiring, the surviving spouse is entitled to an annuity for life. The FedEx pension plan incorporated the federal definition of "spouse," which under DOMA only included a spouse of the opposite sex. Based on the definition of "spouse" in the plan, FedEx rejected Ms. Schuett's request for spousal survivor benefits.

Ms. Schuett brought a number of claims against FedEx, including breach of the terms of the pension plan. The decision at issue is the court's ruling on the motion to dismiss those claims. The court found that FedEx did not breach the terms of the plan based on the claims alleged. However, the court allowed Ms. Schuett claims to proceed on another legal theory: that the pension plan itself violated ERISA and, thus, the plaintiff was entitled to relief under ERISA itself, which provides a cause of action against pension plans that violate ERISA.

To reach this result, the court first had to hold that the invalidation of DOMA was retroactive. The court reasoned that the Windsor case invalidated DOMA retroactively as to the date of its enactment based on the fact that the court had held not only that DOMA was invalid but that the U.S. had to refund with interest the estate taxes that Windsor had paid, and thus because the Windsor court granted retroactive relief it clearly intended for the case to apply retroactively. The court then reasoned that given that DOMA was invalid as of the date of its enactment, the definition of "spouse" in the plan violated ERISA to the extent that the definition of "spouse" only included opposite sex spouses, because without DOMA, ERISA would require survivor benefits to be provided to any legal spouse. Because the plaintiff and Ms. Taboada-Hall were spouses pursuant to California law, to deny a lawful spouse ERISA-required benefits would violate ERISA.

 

Key Words: solo and small firm, litigation, Windsor, DOMA, retroactive, Prop 8, ERISA

Nick Kacprowski is with Alston Hunt Floyd & Ing in Honolulu, Hawaii.


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