UNITED STATES COURT OF APPEALS

For the Fifth Circuit

No. 94-30178

SANDRA JEAN DALE BOGGS,

Plaintiff-Appellant,

VERSUS

THOMAS F. BOGGS, HARRY P. BOGGS

and DAVID B. BOGGS,

Defendants-Appellees.

Appeal from the United States District Court

for the Eastern District of Louisiana

April 17, 1996

Before WISDOM, KING, and DUHÉ, Circuit Judges.

WISDOM, Circuit Judge.

Sandra Boggs, the plaintiff/appellant, seeks a

declarato ry judgment that the Employee Retirement Income Act of

1974 (ERISA) preempts Louisiana c ommunity property law and,

thereby, prevents the creation of a community property interest in

ERISA-qualified retirem e nt benefit plans. The district court

rejected the plaintiff's contention and denied he r request for a

declaratory judgment. We agree with the district court's decision.

We AFFIRM.2 I.

Isaac Boggs was employed by South Central Bell from June

18, 1949 until his re t irement on September 1, 1985. As an

employee, he parti c ipated in an ERISA-qualified pension plan.

Isaac Boggs was married to his first wife, Dorothy Boggs, when he

began employment with South Central Bell in 1949 and their marriage

continued until h er death on August 14, 1979. Dorothy and Isaac

Boggs had three sons, David Bruce Boggs, Thomas Frank Boggs, and

Harry Maurice Boggs, the defendant/appellees. Isaac Boggs married

again in April of 1980. His second wife, Sandra Boggs, the

plaintiff/appellant, survived her husband who died in 1989.

The South Central Bell plan provided for several types of

retirement benefits. Upon his retirement, Isaac Boggs received a

lump sum payment of $151,628.94 which was rolled over into an IRA

account valued at $180,778.05 at his death. He was also paid a

monthly annuity of $1,777.67. This benefit was converted into a

survivor's annuity when Isaac Boggs died and is currently paid to

Sandra Boggs. Isaac Boggs also received 96 shares of AT&T stock

and a life insurance policy that names Sandra Boggs as beneficiary.

In her will, the first Mrs. Boggs bequeathed one-third of

her estate and a lifetime usufruct in the remaining two-thirds to

her husband. She designated her three sons as the owners of the

naked or revisionary interest in the portion of her estate over

which Isaac Boggs held a usufruct. Among the assets listed in the

succession of Dorothy Boggs was her community property interest in

her husband's pension valued at $42,388.57 in 1979. The successionThe plaintiff also requests attorney's fees under 29

U.S.C. section 1132(g) (1) which allows the court to award ERISA

beneficiaries, participants, and fiduciaries reasonable attorney's

fees and costs when they are the prevailing party. Since we affirm

t he district court's denial of Sandra Boggs' request for a

declaratory judgment, she is not entitled to attorney's fees.

3 documents valued Dorothy Boggs' interest at $21,194.29.

The Boggs' sons, the defendants in this case, filed an

action in Louisiana state court seeking an accounting of their

father's usufruct and an award of some portion of the retirement

benefits. Sandra Boggs then filed this case seeking a declaratory

judgment that ERISA preempts the application of Louisiana community

property law to this qualified plan. Specifically, the plaintiff,

the second wife, argued that ERISA controls the disbursement of

benefits and, under those rules, she is the designated beneficiary.

The defendants responded by arguing that this case was not governed

by ERISA and, therefore, the court lacked jurisdiction. In

addition, the defendan ts argued that ERISA does not preempt

Louisiana community property law. The district court responded by

determining first that it had jurisdiction over the case under 29

U.S.C. section 1132. Further, the district court rejected the

plaintiff's contention that ERISA preempts Louisiana community

property law. The plaintiff asks us to review that decision. 1

II.

Before we review the district court's determination

regarding ERISA preemption, we must address the defendant's

continuing contention that the district court lacked jurisdiction

to decide this case. 29 U.S.C. section 1132(a) creates ERISAHook v. Morrison Milling Co.

, 38 F.3d 776, 780 (5th Cir.

1994).

I ngersoll-Rand Company v. McClendon

, 498 U.S. 133, 137

(1990).

4 jurisdiction and provides that:

a civil action may be brought by a participant

or beneficiary

. . . to rec over benefits due

to him under the plan, to enforce his rights

under the terms of the plan, or to clarify his

rights to future benefits under the plan...".

In this case, Sandra Boggs, the plaintiff, is a

beneficiary of the benefits plan; she is currently receiving a

survivor's annuity. Further, she seeks to clarify her right to

pension benefits under the South Central Bell plan. This type of

action is expressly authorized by the jurisdictional provisions of

section 1132 and the district court properly concluded that it had

jurisdiction to resolve this case.

III.

The plaintiff, Sandra Boggs, seeks a declaratory judgment

that ERISA preempts Louisiana community property law and, thereby,

prevents the Boggs' children from receiving any p ortion of their

father's pension benefits. The district court rejected the

plaintiff's arguments and, on appeal, she asks us to reconsider the

preemption issue. We review the district court's preemption

analysis de novo. 2

ERISA was enacted to protect the i nterests of the

beneficiaries of employee benefit plans. 3 The Act "imposes

participation, funding, and vesting requirements on pension plans"

and also regulates issues such as "reporting, disclosure, andShaw v. Delta Airlines, Inc. , 463 U.S. 85, 91 (1983).

Ingersoll-Rand Company , 498 U.S. at 137.

Hook , 38 F.3d at 781.

Shaw , 463 U.S. at 96-97.

Rozzell v. Security Services, Inc.

, 38 F.3d 819, 821 (5th

Cir. 1994) (citing Pilot Life Insurance Co. v. Dedeaux

, 481 U.S. 41

(1987)).

Ingersoll-Rand Company

, 498 U.S. at 139; see e.g.

, Mackey

v. Lanier Collection Agency & Service, Inc. , 486 U.S. 825 (1988).

5 fiduciary res ponsibility". 4 One important goal of ERISA is to

impose uniform standards on plan administrators. Congress

a ttempted to guarantee uniformity when it included ERISA's broad

preemption provision. 5 29 U.S.C. section 1144(a) provides that the

provisions of ERISA "shall supersede any and all state laws insofar

as they may now or hereafter relate to any em ployee benefit plan

described in section 4(a) and not exempt under section 4(b)".

This pro vision has been interpreted broadly. Courts

recognize the "`deliberately expansive' language chosen by

Congress ". 6 Thus, any state law which "relates to" an ERISAqualified employee benefits plan is preempted. A state law

"relates to" an ERISA plan "in the normal sense of the phrase, if

it has connection with or reference to such a plan". 7 A state law

can relate to an employee benefit plan even if it is not designed

to regulate in the area of employee benefits or i f its effect is

indirect. 8

The broad sweep of the ERISA pree mption provision,

however, is not without limits. 9 The language of the statuteFMC Corporation v. Holliday , 498 U.S. 52, 62 (1990)

(citing Jones v. Rath Packing Co. , 430 U.S. 519 (1977)).

See Hook

, 38 F.3d at 781 (citing the Supreme Court's

warnings regarding placing some limit on the reach of the ERISA

preemption provision in Shaw v. Delta Airlines Inc.

, 463 U.S. 85

(19 83) and A lessi v. Raybestos-Manhattan, Inc.

, 451 U.S. 504

(1981)).

Alessi v. Raybestos-Manhattan, Inc. , 451 U.S. 504, 522

(1981).

486 U.S. 825 (1988).

Sommers Drug Stores v. Corrigan Enterprises, Inc.

, 793

F.2d 1456, 1467 (5th Cir. 1986), cert. denied

, 479 U.S. 1034

(1987), 479 U.S. 1089 (1987); see also

, Hook , 38 F.3d at 781;

Memorial Hospital System v. Northbrook Life Insurance Company

, 904

F.2d 236, 245 (5th Cir. 1990).

6 indicates that it preempts only state laws which relate to a

benefit plan. Further, we must recognize the general presumption

"that Congress does not intend to preempt areas of traditional

state regulation". 10 The Supreme Court has warned that, in

determining the scope of ERISA's preemption provision, we must be

mindful of traditional princ iples of federalism. 1 1 "[W]e must be

guided by respe ct for the separate spheres of governmental

authority preserved in our federa list system." 1 2 For example, in

Mackey v. Lanier Collection Agency , the Supreme Court held that a

Georgia statute governing garnishment procedures in that state was

not preempted by ERISA even when it was used to garnish benefits

received under an ERISA plan. 13

To determine whether ERISA preempts state law, this Court

engages in a two-part analysis. First, we are less likely to find

preemption when the state law at issue "involves an exercise of

traditional state aut hority". 1 4 Second, we consider whether theSommers Drug Stores

, 793 F.2d at 1467; see also

, Hook , 38

F.3d at 781; Memorial Hospital , 904 F.2d at 245.

B randon v

. Travelers Insurance Company , 18 F.3d 1321,

1326 (5th Cir. 1994), cert. denied

, 115 S.Ct. 732, 130 L.Ed. 2d 635

(1995) (engaging in the ERISA preemption analysis).

7 state law "affects relations among the principal ERISA entities--

the employer, the plan, the plan fiduciaries, and the

beneficiaries" or whether it only "affects relations between one of

these entities and an outside party" or "two outside parties with

only an incidental effect on the plan". 15

In this case, the plaintiff asks us to conclude that

ERISA preempt s Louisiana community property law. The area of

domestic relations has long been the domain of the states. As this

Court has noted:

Federal respect for state domestic relations

law has a long and venerable histo ry. When

courts face a potential conflict between state

domestic relations law and federal law, the

strong presumption is that state law should be

given precedence

. . . . The law of family

relations has been a sacrosanct enclave,

carefully protected against federal intrusion.

One way our federalist system maintains the

integrity of the folkways and mores of

localities is through the conservation of

state control over the creation and separation

of families. 16

A community property system governing the acquisition and ownership

of property during marriage goes back to the earliest days of

Louisiana as a French colony, and was carried on under the Spanish

regime, and was embedded in the first Louisiana Constitution. It

is an honored civilian institution, not the belated effort of a

common law state to seek a tax advantage. The use of a communityHare v. Hodgins , 586 So. 2d 118, 122 (La. 1991).

Id.

8 property system represents Louisiana's recognition of the value a

spouse, though non-employed, contributes to a marriage. The system

conceives of marriage as a partnership in which each partner is

entitled to an equal share.

Under Louisiana community property law, each spouse owns

"a present undivided one-half interest" in al l community assets,

which vests from the moment of acquisition. 17 Pension benefits, if

acquired during the marriage, are generally considered a community

asset. 18 Thus, if one spouse receives benefits from a pension plan,

he or she must account to the other spouse for this benefit which

vests equally in both spouses from the instant of acquisition.

The plaintiff contends that the broad sweep of ERISA acts

to prevent the operation of Louisiana's marital property system and

bans the enforcement of ownership rights granted by Louisiana law

if those rights include an interest in employee benefits under an

ERISA plan. We do not agree. A state community property system

that affects what a plan participant does with his benefits after

they are received does not im permissibly intrude on the mandates

ERISA imposes on plan administrators. The controversy in this case

is between successive spouses and their heirs. The focus of this

case is not the relationship between the administrator of this

ERISA plan and its beneficiary. "ERISA's preemptive scope may be

broad but it does not reach claims that do not in v olve the

administration of plans, even though the plan may be a party to aHook , 38 F.3d at 784.

Id. at 786. (citations omitted).

Shaw

, 463 U.S. at 100 n.21. The dissent suggests that

our decision today will create uncertainty regarding whether plan

participants will actually receive their anticipated retirement

income. The issue here, however, is not whether Isaac Boggs was

entitled to his benefits as against the plan administrators, but

whether, once received, he owed any of those benefits to the estate

of his deceased spouse based on their thirty year marriage.

9 suit or the claim relies on the details of the plan". 19 And, as we

noted in the Hook decision:

a preemption provision designed to prevent

state interference with federal control of

ERISA plans does not require the creation of a

fully insulated legal world that excludes

these plans from regulation of any purely

local transaction

. . . . In other words,

ERISA was not meant to co nsume everything in

its path. 20

This Court concludes that, under the facts of this case,

the Louisiana community property law is not sufficiently "related

to" an employee benefit plan to necessitate ERISA preemption.

Nothing is sought from the plan or its fiduciary. No duty will be

imposed on the plan or the administrator. Benefits will continue

to be paid to the beneficiary in the manner provided in the plan.

A spouse's accounting obligation under community prop e rty law

affects emp loyee benefit plans "in too tenuous, remote, or

peripheral a manner to warrant a finding that the law `relates to'

the plan". 21 Our decision relates not to the plan but to the

disposition of the proceeds only after paym ent to the designated

beneficiary. This is no greater effect than the state’s

garnishment laws. Mackey , 486 U.S. 825 (1988).29 U.S.C. section 1056(d)(1).

26 U.S.C. section 408 provides in pertinent part:

(a) . . . For purposes of this section, the

term "individual retirement account" means a

trust created or organized in the United

States for the exclusive benefit of an

individual or his beneficiaries . . .

(g)

. . . Thi s section shall be applied

without regard to any community property laws.

10 The plaintiff attempts to rely on two additional

statutory sources to support her contention that Louisiana

community property law has been displaced. First, she cites

ERISA's spendthrift provision which prohibits the a ssignment or

alienatio n of plan benefits. 2 2 She also cites 26 U.S.C. section

408, enacted as part of ERISA, which defines an IRA as a trust held

by the United States for the benefit of the employee "without

regard to any community property laws". 2 3 First, it is important

to note that neither provision can substitute for an analysis under

the general preemption provision. Section 1144(a) carries out the

power of Congress to preempt and it controls any determination of

the boundaries of ERISA preemption. With this in mind, we examine

the individual statutes cited and determi ne what impact, if any,

they have on the operation of Louisiana community property law.

The purpose of the spendthrift prov ision is to prevent

plan participants from re cklessly divesting themselves of plan

benefits before retirement. This provision was not intended to

affect support obligations among the members of a family.

Furthermore, a non-participant spouse's ownership of an interest inUnited Association of Journeymen v. Myers , 488 F. Supp.

704, 712 (M.D. La. 1980), affirmed by

, 645 F.2d 532 (5th Cir. 1981)

(reviewing the legislative history of ERISA).

937 F.2d 1450 (9th Cir. 1991).

Id.

11 the participant spouse's retirement benefits involves nei ther an

alienation no r an assignment. Under community property law,

ownership vests immediately in the non-earning spouse, and no

transaction is needed to convey owner ship. Thus, no transaction

prohibited by the ERISA spendthrift provision has occurred.

The plaintiff argues further that the bequest by Dorothy

Boggs of a portion of her interest in the retirement benefits was

an attempted alienation in violation of the spendthrift provision.

We disagree. Dorothy Boggs held an ownership right in the pension.

Her spouse, or his estate, owes her an obligation to account for

her share of the pension. Once her estate received this benefit,

her w ill operates to transfer ownership to her three sons. This

final alienation, two steps remov ed from the disbursement of

benefits, is not a violation of the provisions of ERISA. ERISA "is

concerned not so much with what the beneficiary does with his

pension checks or how the y are spent but with whether those in

charge actually deliver the benefits". 24

The plaintiff also relies on a Ninth Circuit Court case

interpreting the spendthrift provision, Albamis v. Roper

. 25 In that

case, the Ninth Circuit Court determined, based almost exclusively

on an ana lysis of this provision, that ERISA preempts California

community property law. 2 6 The plaintiff asks this Court to adopt12

the reasoning of the Albamis court and hold that ERISA preempts

Louisiana community property law. We cannot adopt the reasoning of

the Ninth Circuit Court because we feel their preemption analysis

places too much empha sis on a broad interpretation of the

spendthrift provision.

Finally, the plaintiff relies on 26 U.S.C. section 408.

This provision governs the trust rel ationship between the

government and the participant whose benefits are placed in an IRA

account. It does not affect that participant's later obligation to

his spouse to account for her por tion of the benefits. This

provision governing the disbursement of IRA funds cannot reasonably

be interpreted to intervene in the marital relationship and divest

one spouse of ownership rights.

IV.

The district court correctly concluded that ERISA,

despite its exclusive control of benefits law and its broad

preemption provision, does not preempt the community property laws

created by the State of Louisiana. Accordingly, we AFFIRM.

KING, Circuit Judge, dissenting:

I respectfully dissent from the majority's conclu sion that

ERISA does not preempt the provisions of the Louisian a community

property law that would operate here to divest a participant's

widow of a portion of the benefit s from pension plans that she13

would be entitled to receive under ERISA in favor of the heirs of

his predeceased spouse. It defies reality to say that the widow’s

rights under ERISA have only been ‘tenuously, remotely or

peripherally’ affected by Louisiana l aw. They have been gutted.

I recognize that the preemption issue is conceptually as difficult

as the bottom line is easy. But I am persuaded that the Ninth

Circuit in Ablamis v. Roper

, 937 F.2d 1450 (9th Cir. 1991), and the

Department of Labor in DOL Advisory Opinion # 90-46A (December 4,

1990) and in its excellent amicus brief submitted at our request

have the better arguments. ERISA was enacted to protect the living

- plan participants and their dep endents - and it was amended in

1984 to protect divorced spouses of plan participants. Key

objectives of the statute were to establish uniformity in the law

nationwide an d certainty in its application, objectives that are

implemented in part by its preemption provision. Today's decision

will create great uncertainty in the principal tenet of the statute

that Congress strived to make certain: that a plan participant and

his or her spouse will actually receive their anticipated

retirement income.