Source: https://supreme.justia.com/cases/federal/us/439/572/case.html
Timestamp: 2017-01-22 20:30:38
Document Index: 729919031

Matched Legal Cases: ['§ 231', '§ 231', '§ 231', '§ 231', '§ 459', '§ 659', '§ 462', '§ 459', '§ 231', '§ 231', '§ 462', '§ 231', '§ 459', '§ 462', '§ 231', '§ 459', '§ 462', '§ 512', '§ 231', '§ 231', '§ 231', '§ 1', '§ 5105', '§ 802', '§ 231', '§ 231', '§ 97', '§ 512', '§ 231', '§ 512', '§ 231', '§ 231']

Hisquierdo v. Hisquierdo (full text) :: 439 U.S. 572 (1979) :: Justia U.S. Supreme Court Center Log In
› Hisquierdo v. Hisquierdo
Hisquierdo v. Hisquierdo 439 U.S. 572 (1979)
U.S. Supreme CourtHisquierdo v. Hisquierdo, 439 U.S. 572 (1979)Hisquierdo v. HisquierdoNo. 77-533Argued November 1, 1978Decided January 22, 1979439 U.S. 572CERTIORARI TO THE SUPREME COURT OF CALIFORNIA
BLACKMUN, J., delivered the opinion of the Court, in which BURGER, C.J., and BRENNAN, WHITE, MARSHALL, POWELL, and STEVENS, JJ., Page 439 U. S. 573 joined. STEWART J., filed a dissenting opinion, in which REHNQUIST, J., joined, post, p. 439 U. S. 591.
The Railroad Retirement Act, first passed in 1934, 48 Stat. 1283, provides a system of retirement and disability benefits for persons who pursue careers in the railroad industry. Its sponsors felt that the Act would encourage older workers to retire by providing them with the means "to enjoy the closing days of their lives with peace of mind and physical comfort," and so would "assure more rapid advancement in the service" Page 439 U. S. 574 and also more jobs for younger workers. [Footnote 1] Both employees and carriers pay a federal tax [Footnote 2] which funds a Railroad Retirement Account. The Railroad Retirement Board, provided for by the Act, 45 U.S.C. § 231f, disburses benefits from the account to each eligible "individual," 45 U.S.C. § 231a.
In its modern form, [Footnote 3] the Act resembles both a private pension program and a social welfare plan. It provides two tiers of benefits. The upper tier, like a private pension, is tied to earnings and career service. An employee, to be eligible for benefits, must work in the industry 10 years. Absent disability, no benefit is paid, however, until the employee either reaches age 62 or is at least 60 years old and has completed 30 years of service. 45 U.S.C. § 231a(a)(1). Like a social welfare or insurance scheme, the taxes paid by Page 439 U. S. 575 and on behalf of an employee do not necessarily correlate with the benefits to which the employee may be entitled. Since 1950, the Railroad Retirement Account has received substantial transfers from the social security system, and legislative changes made in 1974 were expected to require a one-time infusion of $7 billion in general tax revenues. [Footnote 4]
Like Social Security, and unlike most private pension plans, railroad retirement benefits are not contractual. Congress may alter, and even eliminate, them at any time. [Footnote 6] This vulnerability to congressional edict contrasts strongly with the protection Congress has afforded recipients from creditors, Page 439 U. S. 576 tax-gatherers, and all those who would "anticipate" the receipt of benefits:
In 1975, Congress made an exception to § 231m and similar provisions in all other federal benefit plans. Concerned about recipients who were evading support obligations and thereby throwing children and divorced spouses on the public dole, Congress amended the Social Security Act by adding a new provision, § 459, to the effect that, notwithstanding any contrary law, federal benefits may be reached to satisfy a legal obligation for child support or alimony. 88 Stat. 2357, 42 U.S.C. § 659. [Footnote 8] In 1977, shortly before the issuance of the Supreme Court of California's opinion in this case, Congress added to the Social Security Act a definitional statute, § 462(c), which relates to § 459 and limits "alimony" to its traditional Page 439 U. S. 577 common law meaning of spousal support. That statute states specifically that "alimony"
"statute proceeds upon the theory that the marriage, in respect to property acquired during its existence, is a community of which each spouse is a member, equally contributing by his or her industry to its prosperity, and possessing an equal right to succeed to the property after Page 439 U. S. 578 dissolution, in case of surviving the other."
At the time, petitioner, a railroad machinist, was aged 65. He had worked from 1942 to 1975 for the Atchison, Topeka & Santa Fe Railway, and subsequently entered the employ of the Los Angeles Union Passenger Terminal. Both jobs fell within the Act. Because petitioner had 30 years' service, the statute would permit him to receive benefits if and when he attained age 60. Respondent calculated that she was entitled to half the benefits attributable to his labor during the 14 years of their marriage, or, by her estimates, 19.6% of the total benefits to be received. [Footnote 12] The couple has no children. Page 439 U. S. 579
The California Court of Appeal affirmed. In re Hisquierdo, 133 Cal.Rptr. 684 (2d Dist.1976). The court, noting that, under this Court's Supremacy Clause cases, Congress has the power to determine the character of a federally created benefit, rejected respondent's claim that petitioner's expectation of receiving Railroad Retirement Act benefits was community property. The court reasoned that, because federal pension programs may be terminated by Congress at any time, petitioner had no enforceable contract right. Respondent contended that the state court, under the decision in In re Milhan, 13 Cal.3d 129, 528 P.2d 1145 (1974), cert. denied, 421 U.S. 976 (1975), could determine the expected value of her interest and award her a compensating amount of other property available for distribution. The court held, however, that such a remedy would be contrary to § 231m, which provides that Page 439 U. S. 580 benefits are not to be "anticipated," and would frustrate the explicit and detailed terms of the Act that grant the employee a benefit separate and distinct from the nonemployee spouse's benefit that terminates upon absolute divorce. See also In re Nizenkoff, 65 Cal.App.3d 136, 135 Cal.Rptr. 189 (1st Dist.1976) (expectation of receiving benefits under the Social Security Act); In re Kelley, 64 Cal.App.3d , 134 Cal.Rptr. 259 (2d Dist.1976) (the same).
In a unanimous opinion, that court reversed the Court of Appeal. In re Hisquierdo, 19 Cal.3d 613, 566 P.2d 224 (1977). Relying on its recent case law, [Footnote 14] the Supreme Court of California held that, because the benefits would flow in part from petitioner's employment during marriage, they were community property even though, under federal law, petitioner had no enforceable contract right. Congress' decision to terminate benefits for divorced spouses, the court believed, was evidence that Congress intended to rely on traditional state law doctrines to protect them. The court rejected petitioner's contention that § 231m barred respondent's claim. The court reasoned that it was intended to bar creditors, and respondent was not a creditor, but a present owner. The then very recent 1977 amendment to the Social Security Act (mentioned above as the new Page 439 U. S. 581 § 462(c) of that Act) was not discussed. The question of remedy was left open for decision on remand. The court indicated that, by awarding respondent compensating property under the doctrine of In re Milhan, supra, a court could avoid any infringement on the Act's designation of petitioner as the "individual" recipient.
In re Burrus, 136 U. S. 586, 136 U. S. 593-594 (1890). Federal courts repeatedly have declined to assert jurisdiction over divorces that presented no federal question. See, e.g., Ohio ex rel. Popovici v. Agler, 280 U. S. 379 (1930). On the rare occasion when state family law has come into conflict with a federal statute, this Court has limited review under the Supremacy Clause to a determination whether Congress has "positively required by direct enactment" that state law be preempted. Wetmore v. Markoe, 196 U. S. 68, 196 U. S. 77(1904). A mere conflict in words is not sufficient. State family and family property law must do "major damage" to "clear and substantial" federal interests before the Supremacy Clause will demand that state law be overridden. United States v. Yazell, 382 U. S. 341, 382 U. S. 352 (1966). Page 439 U. S. 582
This case, like those four, has to do with a conflict between federal and state rules for the allocation of a federal entitlement. The manipulation problem that concerned the Court in Yiatchos v. Yiatchos and Free v. Bland, however, cases in which savings bonds were purchased with community property, is not present here. Railroad Retirement Act benefits, from their very inception, have federal overtones. Compulsory federal taxes finance them, and not just the taxes that fall on the employee. The benefits more closely parallel the land homesteaded in McCune v. Essig. Because the United States owned the land, title to it could not pass in a manner contrary to federal law, 199 U.S. at 199 U. S. 390, even though a matter of that kind normally is left to the States. Here, California must defer to the federal statutory scheme for allocating Railroad Retirement Act benefits insofar as the terms of federal law require. The critical terms here include a specified beneficiary protected by a flat prohibition against attachment and anticipation. In Wissner v. Wissner, supra, the Court interpreted a somewhat similar provision [Footnote 16] to preclude Page 439 U. S. 583 a division for community property purposes, 338 U.S. at 338 U. S. 659-660, even though Congress had not spoken with the specificity that characterizes the Social Security Act amendments that inform our decision here.
Section 231m plays a most important role in the statutory Page 439 U. S. 584 scheme. Like anti-attachment provisions generally, see Philpott v. Essex County Welfare Board, 409 U. S. 413 (1973); Wissner v. Wissner, supra, it ensures that the benefits actually reach the beneficiary. It preempts all state law that stands in its way. It protects the benefits from legal process "[n]otwithstanding any other law . . . of any State." Even state tax collection laws must bow to its command, for Congress added that phrase in an amendment designed in part to ensure that neither federal nor state tax collectors would encroach on the distribution of benefits. [Footnote 17] It prevents the vagaries of state law from disrupting the national scheme, and guarantees a national uniformity that enhances the effectiveness of congressional policy.
"The entitlement of a spouse of an individual to an annuity . . . shall end on the last day of the month preceding Page 439 U. S. 585 the month in which . . . the spouse and the individual are absolutely divorced."
Respondent contends that this interpretation of the Act is manifestly unjust, and could not have been intended by Page 439 U. S. 586 Congress. She suggests that her contribution to the marital community merits recompense, and she argues that, as a logical matter, Congress would not have terminated the spouse's benefit upon absolute divorce if it had thought that a divorced spouse would be totally unable to assert a state law claim against the benefits received by the employee spouse. She urges that, at least with respect to spousal claims, the Court should hold that § 231m does no more than restate the Government's sovereign immunity from burdensome garnishment suits, and so has no effect on her right to require petitioner to reimburse her as he receives benefits. She notes that several courts have adopted this construction in holding that an errant spouse could be forced to pay child and spousal support upon receipt of Railroad Retirement Act payments. [Footnote 19]
"Venerable and worthy as this community is, it is not, we think, as likely to justify an exception to the congressional language as specific judicial recognition of particular Page 439 U. S. 587 needs, in the alimony and support cases."
338 U.S. at 338 U. S. 660. Now Congress has written into law the same distinction Wissner drew as a matter of policy. The 1977 amendments to the Social Security Act, by way of amending the existing § 459 and adding a new § 462, expressly override § 231m, and even facilitate garnishment for claims based on spousal support. They decline to do so, however, for community property claims. The legislative history is sparse, and does not mention Wissner. [Footnote 20] We know, however, that the purpose of § 459 was to help children and divorced spouses get off welfare. It is therefore logical to conclude that Congress, in adopting § 462(c), thought that a family's need for support could justify garnishment, even though it deflected other federal benefit programs from their intended goals, but that community property claims, which are not based on need, could not do so. Page 439 U. S. 588
An offsetting award, however, would upset the statutory balance and impair petitioner's economic security just as surely as would a regular deduction from his benefit check. The harm might well be greater. Section 231m provides that payments are not to be "anticipated." Legislative history throws little light on the meaning of this word. [Footnote 21] In the law of trusts, however, a prohibition against anticipation is commonly understood to mean that "the interest of a sole beneficiary shall not be paid to him before a certain date." E. Griswold, Spendthrift Trusts § 512, p. 583 (2d ed.1947). [Footnote 22] The Page 439 U. S. 589 Railroad Retirement Act resembles a trust in certain respects. If that definition is applied here, then the offsetting award respondent seeks would improperly anticipate payment by allowing her to receive her interest before the date Congress has set for any interest to accrue.
Any such anticipation threatens harm to the employee, and corresponding frustration to federal policy, over and above the mere loss of wealth caused by the offset. If, for example, a nonemployee spouse receives offsetting property, and then the employee spouse dies before collecting any benefits, the employee's heirs or beneficiaries suffer to the extent that the offset exceeds the lump-sum death benefits the Act provides. See 45 U.S.C. § 231e. Similarly, if the employee leaves the industry before retirement, and so fails to meet the "current connection with the railroad industry" requirement for certain supplemental benefits, see 45 U.S.C. § 231a(b)(1)(iv), the employee never will fully regain the amount of the offset. A third possibility, of course, is that Congress might alter the terms of the Act. In 1974, Congress eliminated certain double benefits accruing after 1982. [Footnote 23] If past California property settlements had been based on those benefits, then the change in the Act would have worked a multiple penalty on future recipients. By barring lump-sum community property settlements based on mere expectations, the prohibition against anticipation prevents such an obvious frustration of congressional purpose. It also preserves congressional freedom to amend the Act, and so serves much the same function as the frequently stated understanding that programs of this nature convey no future rights, and so may be changed without Page 439 U. S. 590 taking property in violation of the Fifth Amendment. See Richardson v. Belcher, 404 U. S. 78, 404 U. S. 80-81 (1971); Flemming v. Nestor, 363 U. S. 603, 363 U. S. 608-611 (1960); Ruhl v. Railroad Retirement Board, 342 F.2d 662, 666 (CA7), cert. denied, 382 U.S. 836 (1965).
For the present, however, the community property interest that respondent seeks conflicts with § 231m, promises to diminish that portion of the benefit Congress has said should go to the retired worker alone, [Footnote 24] and threatens to penalize one whom Congress has sought to protect. It thus causes the kind of injury to federal interests that the Supremacy Clause forbids. It is not the province of state courts to strike a balance different from the one Congress has struck. Page 439 U. S. 591
Congress, when it acts, ordinarily does so "against the background of the total corpus juris of the states." Wallis v. Pan American Petroleum Corp., 384 U. S. 63, 384 U. S. 68 (citation Page 439 U. S. 592 omitted). In any case where it is claimed that a federal statute preempts state substantive law, therefore, it is essential to understand what the state law is. Perez v. Campbell, 402 U. S. 637, 402 U. S. 644; Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Ware, 414 U. S. 117. Although the question here arises in the context of a proceeding to dissolve a marriage, the state law at issue has to do with the ownership of property during marriage. Despite the Court's repeated suggestions to the contrary, community property law is simply not a body of law that is designed to provide a "benefit" for a divorced spouse.
Under the Spanish ganancial system followed in our community property States, property acquired before the marriage or after its termination is the separate property of the spouse who acquired it. Id. § 1, p. 1; Prager, The Persistence of Separate Property Concepts in California's Community Property Page 439 U. S. 593 System, 1849-1975, 24 UCLA L.Rev. 1, 6 (1976). All property acquired during the marriage, however, is presumed to be community property. See, e.g., Meyer v. Kinzer, 12 Cal.247, 251-252. The presumption is regarded as a rule of substantive property law, not one of procedure or evidence. Nilson v. Sarment, 153 Cal.524, 96 P. 315. Cf. Poe v. Seaborn, supra. In general, all property which stems from the labors of either spouse during the marriage, "irrespective of direct contributions to its acquisition or the condition of title" is, in the absence of an agreement between the spouses to the contrary, community property. Prager, supra, at 6. The spouses are deemed to have contributed equally to the acquisition of the property, regardless of the actual division of labor in the marriage and regardless of whether only one spouse formally "earned" it. Ibid. [Footnote 2/1]
The interests of the spouses in the assets of the marital community are, "during continuance of the marriage relation . . . present, existing and equal interests." Cal.Civ.Code Ann. § 5105 (West Supp. 1978). Upon dissolution of the marriage, each possesses an equal and absolute right to his or her one-half interest. Meyer v. Kinzer, supra, at 251-252; In re Marriage of Brown, 15 Cal.3d 838, 848, 544 P.2d 561, 567. The right of each spouse to his or her share of the community assets, then, is a substantive property right entirely distinct from the right that a spouse might have to the award of alimony upon dissolution of the marriage. A community property settlement merely distributes to the spouses property which, by virtue of the marital relationship, he or she already owns. An alimony award, by contrast, reflects a Page 439 U. S. 594 judgment that one spouse -- even after the termination of the marriage -- is entitled to continuing support by the other.
It is clear that Congress, when it established the railroad retirement system, did not purport to regulate the marital property rights of workers covered by the Act. Federal preemption, then, must be based on a perceived conflict between the provisions of the Act and the substantive law of California. Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Ware, supra at 414 U. S. 127; New York Dept. of Social Services v. Dublino, 413 U. S. 405, 413 U. S. 423 n. 29. When the state substantive law in Page 439 U. S. 595 question regulates family and family property arrangements -- matters that traditionally have been left to local law, see In re Burrus, 136 U. S. 586, 136 U. S. 588-594; De Sylva v. Ballentine, 351 U. S. 570, 351 U. S. 580 -- state interests
Consistently with this principle, the cases that have held that a State's community property law was preempted have depended upon specific provisions in the federal statute governing the ownership of the property involved and, as well, upon a finding that application of the state law would substantially disserve demonstrable federal policies. Wissner v. Wissner, 338 U. S. 655; Free v. Bland, 369 U. S. 663. In Wissner, for example, the Court held that California could not treat the proceeds of a National Service Life Insurance policy as community property even though it assumed that the policy had been purchased with community assets. The decedent soldier in that case had, without obtaining his wife's consent, designated his mother and father as the beneficiaries under his policy. The Court's conclusion was based primarily upon a section of the National Service Life Insurance Act that specifically gave the insured the "right to designate the beneficiary or beneficiaries of the insurance" and "at all times" the "right to change" that designation. See 38 U.S.C. § 802(g) (1946 ed.). From this explicit provision, the Court found that Congress had "spoken with force and clarity" in directing that the proceeds were to belong to the "named beneficiary and no other." 338 U.S. at 338 U. S. 658. California's judgment awarding one-half Page 439 U. S. 596 of the proceeds to the wife, the Court said, would nullify the choice Congress had expressly given to the soldier, id. at 338 U. S. 659, and frustrate the federal purpose of "enhanc[ing] the morale of the serviceman," id. at 338 U. S. 660. The Court also noted that the state court judgment, insofar as it ordered the "diversion of future payments" as soon as they were paid to the beneficiary, was contrary to a provision in the Act protecting such payments from "seizure . . . either before or after receipt by the beneficiary." Id. at 338 U. S. 659.
Essential to the finding of preemption in the Wissner and Bland cases was a determination that the ownership of the asset involved had, by express federal directive, been defined in a manner inconsistent with state community property law. In each case, explicit provisions of federal law not only conflicted with principles of state law, but also created property rights at variance with the rights that normally would have been created by local property law. [Footnote 2/2] Page 439 U. S. 597
The benefit structure of the Act is also neutral. To be sure, Congress has chosen to provide a separate and additional benefit for spouses of retired workers, 45 U.S.C. § 231a(c)(3)(i), and to terminate that benefit upon divorce. 45 U.S.C. § 231d(c)(3). These provisions, however, do not preclude a rule of state property law that treats an annuity payable to either spouse as an asset of the marital community. Page 439 U. S. 598 The congressional decision to terminate the separate spousal benefit upon divorce in no way conflicts with that rule, for the community property interest -- apart from the fact that it is an ownership interest, and not a "benefit" for a divorced spouse -- attaches only to that portion of an annuity attributable to labor performed during the marriage. And the provision of the separate and additional spousal benefit surely does not, itself, indicate an intent to displace community property law. The legislative history demonstrates quite clearly that Congress created this benefit in 1951 in order to respond to the greater financial needs of retired workers who are married. H.R.Rep. No. 976, 82d Cong., 1st Sess. (1951). The original Act afforded an annuity only for the individual employee. The amount of the benefit was tied to length of service and to salary, with no account taken of marital status upon retirement. See Report of the Commission on Railroad Retirement, H.R.Doc. No. 9350, p. 7 (1972). When Congress increased the amounts available to employees with families by providing benefits for spouses, its purpose was simply to increase the level of benefits for employees with families, not to ordain the ownership of property within the family.
Yet this language certainly does not speak to substantive ownership interests that may or may not exist in annuities or Page 439 U. S. 599 pension payments. Like similar language often included in spendthrift trusts, it seems to have been designed to protect the benefits from the reach of creditors. See generally E. Griswold, Spendthrift Trusts (2d ed.1947). The provision thus has no real relevance to the question whether the annuity is the property of the marital community. [Footnote 2/3] For, under community property law, the husband and wife are not one another's creditors; they are co-owners. Upon dissolution of the marital community, the community property is divided, not adjudicated as indebtedness.
Neither the prohibition against "garnishment" nor that against "attachment" bears on an action to enforce a community property decree. Both terms govern remedies, not ownership rights, and the remedies themselves traditionally have been unavailable in an action grounded upon the theory that the property at issue "belongs" to the claimant. See generally J. Rood, Law of Garnishment (1896); S. Kneeland, Law of Attachments (1885). [Footnote 2/4] The prohibition against "assignment" Page 439 U. S. 600 of pension payments is equally irrelevant to the question in this case. A determination that a particular asset is community property is clearly not an "assignment" of that property from one spouse to another. It is no more than a conclusion that the property interest -- from the moment it arose -- belonged equally to the two parties to the marriage. Principles § 97.
There is, as the Court acknowledges, no legislative history to explain the meaning of the "anticipation" restraint in the Page 439 U. S. 601 Railroad Retirement Act. It can only be assumed, therefore, that Congress intended that it was to operate, as at common law, [Footnote 2/5] to ensure that the trustees of the fund would not make or be compelled to make lump-sum payments inconsistent with the periodic benefits provided by statute. See Griswold, supra, § 512. Like the other terms of § 231m, its import is thus procedural, not substantive. Griswold, supra, § 512.
The Court suggests that the "anticipation" restraint conflicts with California community property law because state law permits a court, upon dissolution of a marriage, to consider the value of benefits that are not yet due, and then to make the actual award of community property out of other assets that are currently available. The reasoning seems to be that, if an employee cannot "anticipate" benefits by securing a lump-sum award, the employee's spouse is similarly prevented from "anticipating" a community property interest by receiving assets of equal value from the marital estate. This reasoning ignores the express wording of § 231m. The clause prohibits anticipation of "the payment" of a pension or annuity. A state judgment that considers the value of the pension interest acquired during marriage and satisfies that interest by ordering the transfer of other community assets does not anticipate a pension "payment." There is, accordingly, no conflict between such a judgment and § 231m, for it has no impact at all upon the timing of payments to the employee, Page 439 U. S. 602 and is therefore not at all incompatible with the distribution system established by Congress.
Finally, the Court suggests that "anticipation" would harm an employee who leaves the industry before retirement, and thus is unable to "regain" the amount of the offset. But this difficulty becomes wholly imaginary when the nature of the community property award is understood. A spouse receives only one-half the value of the pension interest attributable to work performed by the other spouse during the marriage. The "current connection with industry" requirement for supplemental benefits referred to by the Court obtains at the time the employee becomes eligible for current pension payments. If the employee is still working at the time the marriage is Page 439 U. S. 603 dissolved, a California court would be obligated to give heed to the benefit provisions of the Act in appraising the value of the interest acquired by the employee's spouse during the marriage. And surely occasional problems in assessing the precise value of the community property -- problems with which the courts of California routinely deal -- cannot provide a basis for the Court's finding of preemption. [Footnote 2/6]