FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CAROLYN LAZAR, a citizen of 

Arizona,

Plaintiff-Counter-Defendant-CrossDefendant-Appellant,

v.

MARK G. KRONCKE, in his capacity 

as Administrator of the Estate of 

George Thomas Kroncke, a citizen 

of California,

Defendant-Counter-DefendantAppellee,

and

CHARLES SCHWAB & CO., INC., a 

California corporation,

Defendant-Counter-Claimant-CrossClaimant.

No. 15-15078

D.C. No.

2:14-cv-01511-

DLR

OPINION

Appeal from the United States District Court

for the District of Arizona

Douglas L. Rayes, District Judge, Presiding

Argued and Submitted February 14, 2017

San Francisco, California
2 LAZAR V. KRONCKE

Filed July 14, 2017

Before: Eugene E. Siler, Jr.,* A. Wallace Tashima,

and Andrew D. Hurwitz, Circuit Judges.

Opinion by Judge Siler

SUMMARY**

Revocation-on-Divorce Statute / Contracts Clause

The panel affirmed the district court’s dismissal of a 

constitutional challenge to the application of Arizona’s 

revocation-on-divorce statute in the allocation of the 

proceeds of the plaintiff’s ex-husband’s individual 

retirement account following his death.

The panel affirmed the district court’s conclusion that an 

Arizona state court would disregard the IRA’s choice of law 

provision and instead apply Arizona’s revocation-ondivorce statute. 

The panel held that the application of the Arizona statute 

was not preempted by the Employee Retirement Income 

Security Act or other federal statutes and regulations 

governing IRAs.

 *The Honorable Eugene E. Siler, Jr., United States Circuit Judge for 

the U.S. Court of Appeals for the Sixth Circuit, sitting by designation.

** This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.
LAZAR V. KRONCKE 3

The panel reversed the district court’s ruling that the 

plaintiff lacked standing to bring her constitutional challenge 

under the Contracts Clause because, as a designated 

beneficiary, she possessed only an expectation interest in the 

IRA. The panel held that the plaintiff had standing because 

Arizona’s revocation-on-divorce statute operated to 

extinguish her valid expectancy interest in the IRA. This 

injury was actual, concrete, and particularized, and a ruling 

in the plaintiff’s favor would redress her injury.

The panel held that the Contracts Clause challenge 

nonetheless failed on the merits. The revocation-on-divorce 

statute was enacted after the IRA was established. Agreeing 

with the Tenth Circuit, the panel concluded that this change 

in state law did not operate as a substantial impairment of a 

contractual relationship because the plaintiff never 

possessed a vested contractual right.

The panel held that the California district court in which 

the action was filed did not abuse its discretion in 

transferring the case to Arizona based on a lack of personal 

jurisdiction over the estate of the plaintiff’s ex-husband. The 

panel also concluded that the plaintiff waived a dormant 

Commerce Clause claim, and the district court did not abuse 

its discretion in staying discovery.

COUNSEL

Josh A. Lazar (argued), The Geraci Law Firm, Irvine, 

California, for Plaintiff-Counter-Defendant-CrossDefendant-Appellant.

Timothy James Ryan (argued), Frazer Ryan Goldberg & 

Arnold LLP, Phoenix, Arizona; Jared M. Toffer, Finlayson 
4 LAZAR V. KRONCKE

Toffer Roosevelt & Lilly LLP, Irvine, California; Charles 

W. Wirken, Gust Rosenfeld PLC, Phoenix, Arizona; for 

Defendant-Counter-Defendant-Appellee.

OPINION

SILER, Senior Circuit Judge:

Plaintiff Carolyn Lazar appeals the district court’s grant 

of Defendant Mark G. Kroncke’s motion to dismiss her 

second amended answer and cross-claim (“SAACC”). For 

the reasons set forth below, we reverse the district court’s 

ruling that Lazar lacks standing to bring her constitutional 

challenge under the Contracts Clause, but nonetheless affirm 

the judgment finding that Lazar’s constitutional challenge 

fails and affirming the district court’s other rulings.

FACTUAL AND PROCEDURAL BACKGROUND

Lazar was married to George Thomas Kroncke 

(“Decedent”) when he established an individual retirement 

account (“IRA”) in 1992 with Charles Schwab & Co., Inc. 

(“Schwab”). The Decedent named Lazar as the IRA 

beneficiary. Lazar and the Decedent divorced in 2008 while 

domiciled in Arizona. Before Decedent’s death in 2012, he 

neither removed nor reaffirmed Lazar as the IRA 

beneficiary. After the Decedent’s death, Kroncke, as 

administrator of his father’s estate (the “Estate”), made a 

demand on Schwab for the IRA proceeds on the basis of 

Arizona’s revocation-on-divorce (“ROD”) statute, A.R.S. 

§ 14-2804. Schwab froze the IRA pending judicial 

resolution.

Lazar filed this action in the Central District of 

California against Schwab for breach of contract and against 
LAZAR V. KRONCKE 5

the Estate for declaratory relief. In her first amended 

complaint (“FAC”), Lazar challenged the constitutionality 

under the Contracts Clause of applying Arizona’s ROD 

statute retroactively because the IRA was established in 

1992 and the ROD statute was enacted in 1995.

Schwab filed a counterclaim against both parties under 

Federal Rule of Civil Procedure 22 seeking to liquidate the 

securities held by the IRA and interplead those funds into the 

district court. The California district court granted Schwab’s

motion to be dismissed as an interpleader but ordered it to 

continue to hold and not liquidate the securities in the IRA.

The district court dismissed Lazar’s FAC on the basis 

that it did not state a claim under the Contracts Clause 

because Lazar had no vested interest in the IRA. The district 

court permitted Lazar to file her SAACC. The SAACC 

added a claim that the IRA statute and the regulations 

promulgated thereunder preempted Arizona’s ROD statute 

to the extent it retroactively revokes IRA beneficiary 

designations. The district court dismissed Lazar’s SAACC 

on the grounds that it lacked personal jurisdiction over the 

Estate and ordered the case transferred to the District of 

Arizona pursuant to 28 U.S.C. § 1406(a).

After the case was transferred to the District of Arizona, 

the district court granted the Estate’s renewed motion to 

dismiss, holding that the pertinent IRA statutes and 

regulations did not preempt the operation of Arizona’s ROD 

statute, that the prior decision on the Contracts Clause was 

the law of the case and the court would have reached the 

same outcome for the same reasons, and that the Commerce 

Clause argument need not be considered since it was not 

included in the SAACC. The district court stayed the 

distribution of IRA proceeds pending appeal.
6 LAZAR V. KRONCKE

STANDARD OF REVIEW

We review the dismissal of the SAACC de novo. See 

Syed v. M-I, LLC, 853 F.3d 492, 499 (9th Cir. 2017). A 

dismissal for lack of personal jurisdiction is reviewed de 

novo. Harris Rutsky & Co. Ins. Servs. v. Bell & Clements 

Ltd., 328 F.3d 1122, 1128 (9th Cir. 2003). Transfer orders 

pursuant to 28 U.S.C. § 1406(a) are reviewed for an abuse of 

discretion. King v. Russell, 963 F.2d 1301, 1304 (9th 

Cir.1992). Stays of discovery pending resolution of the 

motion to dismiss are also reviewed for an abuse of 

discretion. Alaska Cargo Transp., Inc. v. Alaska R.R. Corp., 

5 F.3d 378, 383 (9th Cir. 1993). 

DISCUSSION

Enforceability of the IRA’s Choice of Law Provision 

under Arizona Law

Two documents govern the IRA: the Schwab Individual 

Retirement Plan (“the Plan”) and the Schwab IRA 

Application (“the Adoption Agreement”). The Plan sets 

forth the rights and responsibilities of the account holder and 

Schwab, and the Adoption Agreement designates 

beneficiaries. The Plan contains a choice-of-law provision 

specifying that:

The Plan is intended to qualify as an 

individual retirement account plan under 

[Internal Revenue] Code Section 408. 

Accordingly, the Plan shall be governed by 

and interpreted under the laws of the United 

States, and, to the extent such laws do not 

apply, shall be governed by and interpreted 

under the laws of the State of California.
LAZAR V. KRONCKE 7

The Adoption Agreement does not itself contain a choice-oflaw provision but does state “I hereby adopt the Charles 

Schwab & Co., Inc., INDIVIDUAL RETIREMENT PLAN 

(‘the Plan’) which is made part of this Agreement . . . .” The 

district court did not resolve whether the choice-of-law 

provision governed both the Plan and the Adoption 

Agreement, instead concluding that the choice-of-law 

provision was unenforceable under Arizona law.

The district court began from the proposition that “[a] 

federal court sitting in diversity must look to the forum 

state’s choice of law rules to determine the controlling 

substantive law.” Zinser v. Accufix Research Inst., Inc., 

253 F.3d 1180, 1187 (9th Cir. 2001). Arizona generally 

follows the Restatement (Second) of Conflict of Laws 

(“Restatement”) to assess the validity of choice-of-law 

provisions. See Swanson v. Image Bank, Inc., 77 P.3d 439, 

441 (Ariz. 2003). The relevant Restatement section provides 

that the choice-of-law provision in a contract governs “if the 

particular issue is one which the parties could have resolved 

by an explicit provision in their agreement directed to that 

issue.” Restatement (Second) of Conflict of Laws § 187 

(1971). But, the same section also provides a caveat—the 

law of the state chosen by the contracting parties will not be 

applied if “application of the law of the chosen state would 

be contrary to a fundamental policy of a state which has a 

materially greater interest than the chosen state in the 

determination of the particular issue and which . . . would be 

the state of the applicable law in the absence of an effective 

choice of law by the parties.” Ibid.

For instruments governing donative transfers, Arizona 

has deviated from the Restatement’s choice-of-law analysis 

as set forth at Arizona Revised Statute § 14-2703: “The 

meaning and legal effect of a governing instrument is 
8 LAZAR V. KRONCKE

determined by the local law of the state selected in the

governing instrument unless the application of that law . . . 

is contrary to any other public policy of this state otherwise 

applicable to the disposition.” An IRA is a “governing 

instrument” under the statute. A.R.S. § 14-1201(22).

Lazar contends that the district court erred by not 

conducting a Swanson Restatement analysis and instead 

basing its decision on the Arizona statute. She argues that 

because the parties could have resolved this issue by 

contract, subsection 187(1) of the Restatement is satisfied 

and that concludes the analysis. But the Restatement 

expressly recognizes that “[t]he chosen law should not be 

applied without regard for the interests of the state which 

would be the state of the applicable law with respect to the 

particular issue involved in the absence of an effective 

choice by the parties.” § 187 cmt. g. We cannot conclude 

that an Arizona court would ignore an Arizona statute 

directly on point in favor of a Restatement analysis, so 

Lazar’s argument to that effect is unavailing.

The purpose of Arizona’s ROD statute is to “achiev[e] 

the social goal of implementing [a person’s] probable 

intention in the wake of a divorce.” In re Estate of Dobert, 

963 P.2d 327, 333 (Ariz. Ct. App. 1998). To effectuate this 

purpose, Arizona automatically revokes all dispositions to a 

former spouse upon divorce and requires a person intending 

to retain such dispositions to re-designate the former spouse 

in writing and in compliance with the instrument’s 

formalities. A.R.S. § 14-2804; In re Estate of Lamparella, 

109 P.3d 959, 965–66 (Ariz. Ct. App. 2005). This contrasts 

with California’s approach, under which divorce establishes 

a presumption of intent to revoke which can be rebutted by 

clear and convincing evidence. Cal. Prob. Code § 5600. 

Thus, California allows inquiry into the very extrinsic 
LAZAR V. KRONCKE 9

manifestations of contrary intent which Arizona seeks to 

foreclose. Arizona’s interest in its ROD statute is not merely 

to effectuate a donor’s probable intent, but also to provide 

clarity and avoid litigation. Even the statutory exception 

demonstrates this desire for clarity, because doing so 

requires either an express provision ex-ante that the 

designation will apply in the event of divorce or an ex-post 

reaffirmation. A.R.S. § 14-2804(A).

Lazar challenges the strength of Arizona’s interest 

because a donor can override the operation of Arizona’s 

ROD statute. She draws an analogy to Cardon v. Cotton 

Lane Holdings, Inc., where the Arizona Supreme Court 

allowed California law to govern a deed of trust and preclude 

a deficiency judgment which would have been available 

under Arizona law because in both states it was legal to 

contract away the availability of a deficiency judgment. 

841 P.2d 198, 202–04 (Ariz. 1992). However, Cardon did 

not involve an Arizona statute specifying Arizona’s intent to 

deviate from the Restatement and apply its own law to cases 

involving donative transfers. Lazar also stresses that 

Arizona’s ROD statute allows for parties to avoid its effects, 

but this can occur only with affirmative and written evidence 

of intent without recourse to extrinsic evidence.

The Plan’s choice-of-law provision is not an “express 

term” for the purposes of Arizona’s ROD statute. A.R.S. 

§ 14-2804(A). The reference to “express terms” in the ROD 

statute pertains only to the effect on an instrument wrought 

by divorce, so any “express terms” removing an instrument 

from the scope of the ROD statute must address the effect of 

divorce. Ibid. (“Except as provided by the express terms of 

a . . . contract relating to the division of the marital estate 

made between a divorced couple . . .”). The Plan’s choiceof-law provision was silent in this regard. The district court 
10 LAZAR V. KRONCKE

thus correctly determined that an Arizona state court would 

disregard the choice-of-law provision in the Plan and instead 

apply Arizona’s ROD statute.

Conflict Preemption

Lazar claims that application of Arizona’s ROD statute 

is preempted by federal statutes and regulations governing 

IRAs. None of these statutes or regulations contains an 

express preemption clause, but state law must nevertheless 

yield to federal law to the extent the laws conflict. See 

Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363, 372 

(2000). Federal regulations have the same preemptive effect 

as federal statutes. See Fid. Fed. Sav. & Loan Ass’n v. de la 

Cuesta, 458 U.S. 141, 153 (1982). Because domestic 

relations and probate are areas of traditional state control, 

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

(domestic relations); Zschernig v. Miller, 389 U.S. 429, 440 

(1968) (probate), there is a presumption against preemption 

in such areas. Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 

141, 151 (2001). 

The Plan states that it “is intended to qualify as an 

individual retirement account under Code Section 408,” 

referring to 26 U.S.C. § 408—the section of the Internal 

Revenue Code creating IRAs. It is undisputed that IRAs are 

governed by federal law. The dispute is between Lazar’s 

position that IRA regulations compel distribution to her even 

in the face of the ROD statute and the Estate’s position that 

the regulations do not govern who must be paid the IRA 

proceeds but instead only dictate how those funds must be 

paid out for taxation purposes. 
LAZAR V. KRONCKE 11

a. Lazar’s Definitional Argument Fails

In arguing that she is entitled to the IRA, Lazar first relies 

upon the Employee Retirement Income Security Act’s 

(“ERISA’s”) definition of beneficiary: “[A] person 

designated by a participant, or by the terms of the employee 

benefit plan, who is or may become entitled to a benefit 

thereunder.” 29 U.S.C. § 1002(8). The second provision on 

which she relies is the IRA distribution rule:

[A]n IRA is subject to the required minimum 

distribution rules provided in section 

401(a)(9) [applicable to ERISA plans]. In 

order to satisfy section 401(a)(9) for purposes 

of determining required minimum 

distributions . . . the rules of [26 C.F.R.] 

§§ 1.401(a)(9)-1 through 1.401(a)(9)-9 and 

1.401(a)(9)-6 for defined contribution plans 

must be applied, except as otherwise 

provided in this section.

26 C.F.R. § 1.408-8, Q&A-1(a). Lazar argues that this IRA 

distribution rule necessarily incorporates ERISA’s definition 

of “beneficiary” any time it is used in the term “designated 

beneficiary.”

Building upon this asserted equivalence, Lazar argues 

that IRA distribution rules demarcate the only two methods 

whereby someone can become a beneficiary: “[a]n 

individual may be designated as a beneficiary under the plan 

either by the terms of the [IRA] plan or, if the plan so 

provides, by an affirmative election by the [IRA’s owner]. . . 

specifying the beneficiary.” 26 C.F.R. § 1.401(a)(9)-4, 

Q&A-1(a). As provided in 26 C.F.R. § 1.408-8, Q&A-1(b), 

the ERISA language reading “employee” can be altered to 

read “IRA owner.” Since the regulation describing the 
12 LAZAR V. KRONCKE

procedures for making someone a designated beneficiary 

does not contemplate the operation of ROD statutes and she 

was designated as the beneficiary on the Plan documents, 

Lazar argues that this combination of statutes and 

regulations compels distribution to her.

The terms “beneficiary” and “designated beneficiary” 

cannot be conflated in this manner. Otherwise it would have 

been redundant to have a separate definition of designated 

beneficiary:

A designated beneficiary is an individual 

who is designated as a beneficiary under the 

plan. An individual may be designated as a 

beneficiary under the plan either by the terms 

of the plan or, if the plan so provides, by an 

affirmative election by the [IRA owner] . . . 

specifying the beneficiary. . . . A designated 

beneficiary need not be specified by name in 

the plan or by the [IRA owner] to the plan in 

order to be a designated beneficiary so long 

as the individual who is to be the beneficiary 

is identifiable under the plan. . . . The fact 

that an [IRA owner’s] interest under the plan 

passes to a certain individual under a will or 

otherwise under applicable state law does 

not make that individual a designated 

beneficiary unless the individual is 

designated as a beneficiary under the plan.

26 C.F.R. § 1.401(a)(9)-4, Q&A-1 (emphasis added). This 

definition contemplates that “designated beneficiary” 

demarcates a smaller class than does “beneficiary” for two 

reasons. First, only an individual can be a designated 

beneficiary, excluding any trust or estate from the status. 
LAZAR V. KRONCKE 13

Second, an interest is allowed to pass under a will or through 

the operation of otherwise applicable state law to someone 

who is not a designated beneficiary, but such passage does 

not confer designated beneficiary status upon the recipient.

We thus find it clear that “beneficiary” and “designated 

beneficiary” are not interchangeable, a conclusion consistent 

with the preferential tax treatment provided to designated 

beneficiaries, such as avoiding application of the IRS’s fiveyear distribution rule. See 26 C.F.R. § 1.401(a)(9)-8, Q&A11; IRS Publication 590-B, Distributions from Individual 

Retirement Arrangements (IRAs) (available at

http://www.irs.gov/pub/irs-pdf/p590b.pdf) at 10 (“The 5-

year rule applies in all cases . . . where any beneficiary is not 

an individual (for example, the owner named his or her estate 

the beneficiary).”). Thus, the regulation Lazar cites as 

setting out the only ways an individual can become a 

“beneficiary” actually sets forth the ways someone can 

become a “designated beneficiary” eligible for preferential 

tax treatment. See 26 C.F.R. § 1.401(a)(9)-4 Q&A 1 

(beginning by saying “an individual may be designated as 

the beneficiary”) (emphasis added). This means the district 

court correctly concluded that “designated beneficiary” is a 

term-of-art and that the IRA distribution rules govern only 

how distributions will be treated for tax purposes and does 

not determine who is entitled to them.

Further support for our conclusion is found in the 

regulation listing as possible IRA beneficiaries “(except 

where the context indicates otherwise) the estate of the 

individual, dependents of the individual, and any person 

designated by the individual to share in the benefits of the 

account after the death of the individual.” 26 C.F.R. 1.408-

2(b)(8). Because an estate is a potential IRA beneficiary, an 
14 LAZAR V. KRONCKE

IRA beneficiary need not be someone who qualifies as a 

“designated beneficiary” under ERISA.

Lazar argues that the district court erred by failing to 

consider the parenthetical “except where the context 

indicates otherwise” in § 1.408.2(b)(8) as a clear reference 

to the IRA Plan. She asserts that the terms of the Plan 

exclude the Estate as a beneficiary by defining beneficiary 

as “the person or persons designated from time to time by a 

Participant . . . to receive benefits by reason of the death of 

the Participant. . . .” It is difficult to see how the 

parenthetical “except where the context indicates otherwise” 

is a clear reference to the Plan when the word “plan” appears 

numerous times elsewhere in the same regulation. In any 

event, the terms of the Plan list the Estate as the default 

beneficiary in the absence of a valid beneficiary designation 

and so do not exclude it.

b. Lazar’s Reliance on ERISA and FEGLIA Cases 

Is Misplaced

In support of her preemption claim, Lazar cites Egelhoff, 

where the Supreme Court ruled that Washington’s ROD 

statute could not be applied to ERISA-qualified plans. 

Egelhoff, 532 U.S. at 150. The Court held that the ROD 

statute was preempted since it had a “connection with” 

ERISA plans by interfering with the statutory requirements 

that ERISA “plans be administered, and benefits be paid, in 

accordance with plan documents.” Ibid. The Court has also 

held that a divorce decree is ineffective to revoke an exwife’s interest as the named beneficiary of an ERISA plan. 

See Kennedy v. Plan Adm’r for DuPont Sav. & Inv. Plan, 

555 U.S. 285, 288 (2009). It also conducted a similar 

analysis when it considered a Federal Employee Group Life 

Insurance (“FEGLIA”) policy, ruling that a Virginia statute 

permitting a current wife to recover funds distributed to an 
LAZAR V. KRONCKE 15

ex-wife was preempted as an obstacle to Congress’s intent 

to establish a clear procedure for designating a beneficiary. 

See Hillman v. Maretta, 133 S. Ct. 1943, 1953 (2013). Free 

v. Bland, another case upon which Lazar relies, is inapposite 

since the federal savings bonds at issue there involved 

regulations establishing a right of survivorship, which is not 

the case for IRAs. See 369 U.S. 663, 667–68 (1962).

It does not follow from these cases that IRA plans should 

be treated in the same manner. Both ERISA and FEGLIA 

include express preemption clauses, see 29 U.S.C. § 1144(a) 

(ERISA) and 5 U.S.C. § 8709(d) (FEGLIA), while IRA 

statutes do not. Although the absence of an express 

preemption clause is not dispositive, see de la Cuesta, 

458 U.S. at 153, the contrast between ERISA’s expansive 

preemption language and the absence of such language in the 

IRA statutes is persuasive as “pre-emption claims turn on 

Congress’s intent.” Gobeille v. Liberty Mut. Ins. Co., 136 S. 

Ct. 936, 946 (2016) (alteration and citation omitted).

Despite conceding that the ERISA preemption provision 

does not govern IRAs, Lazar nonetheless claims that policies 

underlying IRAs—avoiding probate proceedings, avoiding 

uncertainty and potential resulting losses, and avoiding the 

siphoning off of funds to pay administrative, legal, and tax 

fees—dictate that preemption should be coextensive. Even 

assuming the validity of these policies, they offer no 

justification to preempt the ROD statute because there is no 

underlying conflict between the ROD statute addressing who

receives benefits and the IRA regulations mandating how

those benefits are distributed.
16 LAZAR V. KRONCKE

c. Debickero Does Not Mandate Distribution to 

Lazar 

Lazar additionally relies on Charles Schwab & Co. v. 

Debickero, 593 F.3d 916 (9th Cir. 2010), to assert that 

federal regulations mandate distribution of the IRA to her. 

This over-reads Debickero. In Debickero, the IRA custodian 

filed an interpleader action to determine whether the 

surviving spouse or the adult children designated as 

beneficiaries were entitled to the IRA. Id. at 917–18. The 

surviving spouse claimed that ERISA regulations mandating 

distribution to a surviving spouse should apply to IRAs, but 

we rejected that argument, holding the regulations 

insufficient to overcome the beneficiary designation made 

on an IRA by the decedent. Id. at 917–22. Contrary to 

Lazar’s assertion that federal law mandates any particular 

distribution outcome, we made clear that IRA regulations 

“leave the designation of beneficiaries to the individual 

account holder.” Id. at 922. 

Contracts Clause Challenge 

a. The District Courts Erred When They Denied 

Lazar Had Standing

The Contracts Clause prevents any state from passing a 

law impairing the obligation of contracts. See U.S. Const. 

art. I, § 10. The crux of Lazar’s claim is that Arizona’s ROD 

statute violates this constitutional provision by interfering 

with her contractual rights. 

The Arizona district court cited the California district 

court’s prior order denying standing to raise the Contracts 

Clause challenge as the law of the case and stated that it 

would have reached the same conclusion for the same 

reasons. The California district court held that Lazar lacks 
LAZAR V. KRONCKE 17

standing to challenge the application of the ROD statutes 

because she possessed only an expectation interest in IRA. 

This conflated standing with the merits. To have standing, a 

party must have suffered an injury “concrete, particularized, 

and actual or imminent; fairly traceable to the challenged 

action; and redressable by a favorable ruling.” Monsanto 

Co. v. Geertson Seed Farms, 561 U.S. 139, 149 (2010). 

Arizona’s ROD statute operated to extinguish Lazar’s valid 

expectancy interest in the IRA—an injury which is actual, 

concrete, and particularized. She challenges the 

constitutionality of the ROD statute, and a ruling in her favor 

would redress her injury because invalidation of Arizona’s 

ROD statute would entitle her to the IRA funds. This is 

sufficient to confer standing.

b. Lazar’s Contracts Clause Challenge Fails on the 

Merits

Because the lower courts addressed the merits and the 

issue was fully briefed, we too proceed to the merits of 

Lazar’s Contracts Clause challenge. The question of 

whether the operation of an ROD statute violates the 

Contracts Clause is an issue of first impression in this circuit. 

In conducting a Contracts Clause analysis, we first ask if the 

change in state law has “operated as a substantial impairment 

of a contractual relationship.” Gen. Motors Corp. v. Romein,

503 U.S. 181, 186 (1992) (internal quotation marks omitted). 

“This inquiry has three components: whether there is a 

contractual relationship, whether a change in law impairs 

that contractual relationship, and whether the impairment is 

substantial.” Ibid. If a substantial impairment is found, we 

then assess the significance of the State’s justification and 

the legitimacy of the public purpose behind the law, such as 

“the remedying of a broad and general social or economic 

problem.” Energy Reserves Grp. v. Kan. Power & Light Co.,
18 LAZAR V. KRONCKE

459 U.S. 400, 411–12 (1983). We then look to whether the 

change in applicable law is based on reasonable conditions 

and is appropriate to achieve the stated public purpose. Id. 

at 412. Courts generally defer to the judgment of state 

legislatures as to both necessity and reasonableness so long 

as the state itself is not a contracting party. Id. at 412–13.

(1) Divergent Authority: Whirlpool and Stillman

The Eighth Circuit has held Oklahoma’s ROD statute 

unconstitutional as applied to a life insurance policy. 

Whirlpool Corp. v. Ritter, 929 F.2d 1318, 1323 (8th Cir. 

1991). The Eighth Circuit construed the life insurance 

contract to contain a term that the insurance company would 

pay the decedent’s chosen beneficiary. Id. at 1322. The 

court therefore determined that when operation of the ROD 

statute amended the beneficiary, Oklahoma substantially 

impaired the decedent’s contract with the insurance 

company. Ibid. In its reasonableness analysis, the Eighth 

Circuit found Oklahoma’s justification legitimate but 

insufficient for retroactive application, citing the possibility 

that the decedent did not desire to revoke his ex-wife’s 

beneficiary status as evidence of constitutional infirmity. Id.

at 1323. The Eighth Circuit reasoned that the possibility of 

the decedent’s reaffirming his ex-wife as beneficiary after 

divorce bolstered its conclusion—just as an individual could 

not be presumed to know he must change beneficiary status 

after a change in family arrangements (the rationale behind 

ROD statutes), it is also unreasonable for people to be 

required to investigate positive changes in the law enacted 

after they make beneficiary designations. Ibid. On that 

basis, the court found it inappropriate and unreasonable to 

apply the ROD statute retroactively in light of the statutory 

purpose of effectuating donor intent. Ibid.
LAZAR V. KRONCKE 19

In contrast, the Tenth Circuit has upheld the 

constitutionality of Utah’s ROD to an annuity, finding no 

contractual impairment had occurred. Stillman v. Teachers 

Ins. & Annuity Ass’n Coll. Ret. Equities Fund, 343 F.3d 

1311, 1322 (10th Cir. 2003). The Tenth Circuit 

conceptualized the annuity as having both contractual and 

donative transfer elements. Ibid. The contractual elements 

were those between the annuity company and the 

annuitant—to fund the annuity and pay as directed by the 

annuitant—and the Contracts Clause would only be violated 

if the state statute interfered with those elements. The 

donative transfer element was naming the beneficiary. Ibid. 

The Tenth Circuit characterized the annuity company as an 

escrow-agent, and because its obligation to pay the proceeds 

of the annuity was not impacted by the operation of Utah’s 

ROD statute, there was no violation of the Contracts Clause. 

Ibid. Because it found no significant contractual 

impairment, the Tenth Circuit did not address the state’s 

justification for enacting the legislation.

(2) Lazar’s Interest Never Vested so Her 

Contracts Clause Challenge Fails

We agree with the Stillman court and conclude that no 

substantial contractual impairment occurred through 

application of Arizona’s ROD statute to the IRA, and we 

find there was no violation of the Contracts Clause. Because 

Lazar never possessed a vested contractual right, she 

suffered no contractual impairment. See Dodge v. Bd. of 

Educ. of City of Chicago, 302 U.S. 74, 80 (1937) (holding 

that Contracts Clause challenge failed in the absence of 

vested contractual rights). The Decedent’s contract with 

Schwab specified that Schwab would pay his chosen 

beneficiary in the event of his death. The beneficiary 

designation itself was not a contractual term. The IRA 
20 LAZAR V. KRONCKE

specifically provided that the Decedent could alter his 

beneficiary designation at any time and for any reason, so no 

third-party rights to the IRA could vest until his death. And, 

as a citizen of Arizona, the Decedent was governed by its 

law mandating the automatic revocation of any designation 

of a former spouse through operation of the ROD statute. 

The Decedent was free to reaffirm Lazar as his designated 

beneficiary but chose not to do so. Thus, Lazar’s expectancy 

interest, which could not vest until the death of the Decedent, 

was extinguished upon divorce and never vested. Finding 

no substantial impairment to have occurred, we need not 

assess the legitimacy of Arizona’s justification for its ROD 

statute.

Venue Transfer Based on a Lack of Personal 

Jurisdiction

The California district court transferred this action to the 

District of Arizona under 28 U.S.C. § 1406(a) on the 

grounds that it lacked personal jurisdiction over the Estate. 

Lazar argues that the Estate waived any objection to personal 

jurisdiction in California by moving to dismiss Lazar’s 

cross-claim and not Schwab’s counterclaim, and that in any 

event, the Estate’s contacts with California were sufficient 

to establish personal jurisdiction in California. We conclude 

that the California district court did not abuse its discretion 

in transferring the case to Arizona.

a. Potential Waiver of the Personal Jurisdiction 

Defense

Lazar posits that the Estate waived any personal 

jurisdiction defense because it did not move to dismiss 

Lazar’s cross-claim until after Schwab’s counterclaim had 

already been dismissed, arguing that the Estate should have 

challenged Schwab’s counterclaim under Federal Rule of 
LAZAR V. KRONCKE 21

Civil Procedure 12(b)(2) and not in response to Lazar’s 

cross-claim. Because Schwab was dismissed from the case 

before the Estate filed its renewed motion to dismiss, Lazar 

argues, the Estate waived any personal jurisdiction defense.

Generally, waiver of the defense of personal jurisdiction 

requires a showing of conduct inconsistent with raising or 

maintaining the defense. See, e.g., Peterson v. Highland 

Music, Inc., 140 F.3d 1313, 1318–19 (9th Cir. 1998). The 

California district court found that there were five occasions 

when the Estate could have waived its personal jurisdiction 

defense and upon each of those occasions the defense was 

expressly preserved. It therefore found the Estate had 

complied with its obligation under Federal Rule of Civil 

Procedure 12(h)(1) to raise a personal jurisdiction defense at 

the earliest stage possible.

The cases upon which Lazar relies do not demonstrate 

that the California district court abused its discretion.1 One 

case even expressly recognized that a personal jurisdiction 

defense remains viable when the cross-claim defendant (here 

the Estate) has not waived personal jurisdiction. See United 

States v. All Right, Title & Interest in Contents of Following 

Accounts at Morgan Guar. Trust Co. of N.Y., No. 95 CIV. 

10929 HB THK, 1996 WL 695671, at *13 (S.D.N.Y. Dec. 

5, 1996). In sum, these cases provide more support to the 

Estate than to Lazar.

 1 Lesnik v. Public Industrial Corp. involved a challenge to improper 

venue and not to personal jurisdiction. 144 F.2d 968, 977 (2d Cir. 1944). 

Peterson v. Highland Music Inc. focused on the possibility of 

“sandbagging” by not raising the issue of personal jurisdiction until later 

stages of proceedings and was concerned with preventing a litigant from 

engaging in strategic behavior to test the waters of litigation, something 

which did not occur here. 140 F.3d 1313, 1318 (9th Cir, 1998).
22 LAZAR V. KRONCKE

b. California Cannot Properly Exercise Jurisdiction 

over the Estate

Lazar contends that the Estate’s contacts with California 

were sufficient to confer specific personal jurisdiction. 

Lazar cites four different contacts with California: (1) the 

Decedent opened the IRA with Schwab, a California 

corporation; (2) the Decedent made an average of 124 trades 

per year in the account from 1992 to 2012; (3) the Decedent 

made Schwab his “agent and attorney-in-fact” for purposes 

of buying and selling on the account; and (4) the Estate sent 

a letter to Schwab from California. The California district 

court found that the first three contacts were not sufficiently 

“substantial” or “continuous and systematic” to confer 

general personal jurisdiction, see Helicopteros Nacionales 

de Colombia, S.A. v. Hall, 466 U.S. 408, 414–16 (1984), and 

found that the fourth contact insufficient to confer specific 

personal jurisdiction.

Lazar does not assert on appeal that there was general 

personal jurisdiction. She argues only that the California 

contacts established specific personal jurisdiction. We 

utilize a three-part test when making specific personal 

jurisdiction determinations:

(1) The non-resident defendant must 

purposefully direct his activities or 

consummate some transaction with the forum 

or resident thereof; or perform some act by 

which he purposefully avails himself of the 

privilege of conducting activities in the 

forum, thereby invoking the benefits and 

protections of its laws; (2) the claim must be 

one which arises out of or relates to the 

defendant’s forum-related activities; and
LAZAR V. KRONCKE 23

(3) the exercise of jurisdiction must comport 

with fair play and substantial justice, i.e. it 

must be reasonable.

Schwarzenegger v. Fred Martin Motor Co. 374 F.3d 797, 

802 (9th Cir. 2004). Purposeful availment and purposeful 

direction are distinct inquiries. The personal availment 

inquiry asks if the defendant “purposefully avail[ed] 

[himself] of the privilege of conducting activities in the 

forum State, thus invoking the benefits and protections of its 

laws.” Ibid. The purposeful direction inquiry asks if the 

defendant directed an action at the forum state such that 

personal jurisdiction could be exercised even without 

physical contacts with the forum. Id. at 803.

In its transfer order, the California district court focused 

on the purposeful direction test. Purposeful direction 

requires a defendant to have “(1) committed an intentional 

act, (2) expressly aimed at the forum state, [and] (3) causing 

harm that the defendant knows is likely to be suffered in the 

forum state.” Yahoo! Inc. v. La Ligue Contre Le Racisme Et 

L’Antisemitisme, 433 F.3d 1199, 1206 (9th Cir. 2006) 

(quoting Schwarzenegger, 347 F.3d at 803). The first three 

contacts are insufficient to constitute purposeful direction, as 

none of them was expressly aimed at California and any 

harm to the IRA would be felt in Arizona where the decedent 

and Lazar were domiciled.

The Estate’s sending of a demand letter to Schwab was 

an intentional act. See, e.g., Bancroft & Masters, Inc. v. 

Augusta Nat’l Inc., 223 F.3d 1082, 1088 (9th Cir. 2000) 

(finding that sending a letter constituted an intentional act). 

But, as the California district court found, the act of sending 

the letter was aimed at Arizona and not California. We look 

to who would suffer the harm and where the harm would be 
24 LAZAR V. KRONCKE

felt when determining whether a defendant expressly aimed 

his activities at the forum state. See Metro. Life Ins. Co. v. 

Neaves, 912 F.2d 1062, 1065 (9th Cir. 1990) (holding that 

the place of incorporation of the letter’s recipient is not 

dispositive but instead the focus is on where the letter’s 

effects would be felt). The letter was sent to a Schwab 

address in Arizona, and any harm which Lazar would suffer 

would occur in Arizona, where she resides, and not in

California.

The California district court also did not abuse its 

discretion when it conducted a purposeful availment analysis 

in assessing two additional contacts with California which 

Lazar claimed conferred specific personal jurisdiction over 

the Estate. The first contact is the choice-of-law provision 

in the IRA stipulating that California law governs in the 

absence of applicable federal law. Because it is not essential 

that the state whose law will be applied to a lawsuit exercise 

jurisdiction over the litigation, this contact did not confer

specific personal jurisdiction. See Shaffer v. Heitner, 

433 U.S. 186, 215 (1977). The second contact is Kroncke’s 

domicile in California, but this is immaterial as the Estate in 

located in Arizona. It is the Estate which is the party to this 

lawsuit, so Kroncke’s domicile does not impact the 

jurisdictional analysis. See Religious Tech. Ctr. v. Liebreich, 

339 F.3d 369, 374 (5th Cir. 2003). 

Lazar’s Dormant Commerce Clause Claim Was 

Waived 

Lazar concedes that she failed to specifically allege a 

violation of the dormant Commerce Clause in her SAACC. 

In seeking to bring this challenge on appeal, she relies on her 

general allegation below that ROD statutes are 

unconstitutional for reasons “including but not limited to” a 

violation of the Contracts Clause and conflict preemption. 
LAZAR V. KRONCKE 25 

But, Federal Rule of Civil Procedure 5.1 requires a party 

challenging the constitutionality of a state statute to “file a 

notice of constitutional question stating the question and 

identifying the paper that raises it” so that a state attorney 

general can intervene if desired to defend the statute. Lazar 

filed such a notice, but specified only the Contracts Clause 

and conflict preemption as grounds for her constitutional 

challenge. 

Lazar now asserts before this court that her Commerce 

Clause argument should be considered anyway because it 

was briefed and alternatively addressed on the merits by the 

district court, meeting the standard that an “argument must 

be raised sufficiently for the trial court to rule on it.” In re 

E.R. Fegert, Inc., 887 F.2d 955, 957 (9th Cir.1989). But in 

In re E.R. Fegert, Inc. we determined that the bankruptcy 

court “could have” ruled on the applicability of a relevant 

Supreme Court decision because a party had actually argued 

its applicability. See ibid. Lazar also cites Cmty. House, Inc. 

v. City of Boise, where we considered an Establishment 

Clause challenge when it was disputed whether the claim 

had been properly raised before the district court but the 

district court considered and resolved the issue. 490 F.3d 

1041, 1054 (9th Cir. 2007). In that case, the district court 

did not find waiver; instead it considered and resolved the 

issue. Ibid. Here, by contrast, the district court expressly 

found Lazar’s Commerce Clause claim to have been waived. 

Neither of those precedents rescues Lazar.

Stay of Discovery 

The district court stayed discovery pending resolution of 

the Estate’s motion to dismiss the SAACC. District courts 

orders controlling discovery are reviewed for an abuse of 

discretion. Alaska Cargo, 5 F.3d at 383. Lazar argues that 

she should have been allowed discovery into whether the 
26 LAZAR V. KRONCKE

Decedent redesignated her as the IRA beneficiary after their 

divorce. No discovery was necessary, however, as Arizona 

law is clear that there cannot be substantial compliance with 

the redesignation requirement, Lamparella, 109 P.3d at 967, 

and there is no dispute that the Decedent failed to change the 

designation.

Lazar also argues that discovery should have proceeded 

because of a purported 2001 designation which made the 

Marital Trust the contingent beneficiary of the IRA. Lazar 

did not argue below either that the Estate is not the default 

beneficiary of the IRA or that she has title to the IRA through 

some other post-divorce instrument, and Schwab identified 

only Lazar’s and the Estate’s claims in its interpleader. The 

district court therefore did not abuse its discretion in denying 

discovery on this issue pending resolution of the Estate’s 

motion to dismiss.

CONCLUSION

For the foregoing reasons, although we disagree with the 

district court’s holding that Lazar lacks standing to raise her 

Contracts Clause challenge, we affirm the judgment below.

AFFIRMED.