Opinion ID: 4556842
Heading Depth: 3
Heading Rank: 1

Heading: Idaho law: a presumption of community

Text: property. In Idaho, “all property acquired after marriage” is presumed to be community property that the government can or rights, so created, shall be taxed.”); Fourth Inv. LP, 720 F.3d at 1067 (“The federal . . . statute itself ‘creates no property rights but merely attaches consequences, federally defined, to rights created under state law.’” (quoting United States v. Craft, 535 U.S. 274, 278 (2002))). UNITED STATES V. SWENSON 23 garnish. 6 See Hoskinson v. Hoskinson, 80 P.3d 1049, 1062 (Idaho 2003) (holding that the baseline presumption under Idaho state law is that “property acquired after marriage is community property”); see also Action Collection Serv., Inc. v. Seele, 69 P.3d 173, 178 (Idaho Ct. App. 2003) (noting that a judgment creditor can garnish the non-debtor spouse’s community property to satisfy a debt). Because Mrs. Swenson earned the right to her Social Security benefits while working during her marriage to Mr. Swenson, see United States v. Swenson, No. 1:13-cr-00091-BLW, 2018 WL 4701783, at  2 (D. Idaho Oct. 1, 2018), the moneys resulting from these benefits are presumed to be community property to which Mr. Swenson has a legal interest, see Estate of Hull v. Williams, 885 P.2d 1153, 1157 (Idaho Ct. App. 1994). Therefore, Mr. Swenson has a legal interest in the Account. B. Sherry’s recognition of the preemption of Idaho law does not support the majority’s conclusion or analysis. In holding that the government may not garnish the Account, the majority erroneously claims that Idaho law supports its conclusion that Mr. Swenson has no rights in Mrs. Swenson’s Social Security benefits. Maj. Op. 13–14. 6 Mrs. Swenson argues that the Account consisting of Social Security benefits is not garnishable, because Idaho law exempts certain retirement property from attachment or levy. See Idaho Code § 11604A. However, Mrs. Swenson ignores the fact that Idaho Code section 11-604A(2) expressly provides that its exemption from attachment is only applicable “[u]nless otherwise provided by federal law.” In this case, the MVRA renders inapplicable these Idaho state law limitations on the attachment of Mrs. Swenson’s retirement accounts. See 18 U.S.C. § 3613(a) (noting that “a judgment imposing a fine may be enforced against all property or rights to property of the person fined”). 24 UNITED STATES V. SWENSON Not so. It is true that the Idaho Court of Appeals has declared that Social Security benefits “are not a divisible community asset” in divorce proceedings. See Maj. Op. 14 (quoting Sherry v. Sherry, 701 P.2d 265, 270 (Idaho Ct. App. 1985)). But, context is king. In Sherry, the Idaho Court of Appeals did not declare that Social Security benefits are separate property as a matter of Idaho law. 701 P.2d at 270. Instead, and as the majority recognizes, see Maj. Op. 13–14, the Sherry court reached its conclusion only because that is the result federal law demanded in that particular instance, Sherry, 701 P.2d at 270 (recognizing “the supremacy clause of the United States Constitution requires that the federal law be given effect over the state law” in that context). Thus, in Sherry, the Idaho Court of Appeals never claimed to be interpreting—much less actually changing or replacing— Idaho’s long-standing community property regime; it merely found that the Social Security Act—presumably, through that Act’s anti-alienation provision 7—required preemption 7 It should be noted that the precise basis for the Social Security Act’s preemption of Idaho’s community property law in Sherry is unclear. Indeed, the Sherry court never explained the exact statutory basis for preemption, instead quoting broad language from California courts, noting that those courts’ opinions were “well reasoned,” and concluding that “a ruling that [S]ocial [S]ecurity benefits are divisible community assets would seriously interfere with the express statutory scheme of the Social Security Act and is forbidden by the supremacy clause of the United States Constitution.” 701 P.2d at 270 (alteration adopted) (quoting In re Marriage of Nizenkoff, 135 Cal. Rptr. 189, 192 (Ct. App. 1976)). One case Sherry cites in its preemption discussion— In re Marriage of Cohen—found preemption of California’s community property regime based on § 207’s anti-alienation provision. 164 Cal. Rptr. 672, 675–76 (Ct. App. 1980). The other two cases cited by Sherry in support of preemption, In re Marriage of Hillerman and In re Marriage of Nizenkoff, found preemption based on other pieces of the Social Security Act’s framework—pieces that do not appear to be applicable to the present situation. See In re Marriage of UNITED STATES V. SWENSON 25 of Idaho’s community property regime in the context of the division of Social Security benefits in divorce proceedings. 701 P.2d at 270. This distinction between a court interpreting state law and giving effect to federal law over state law is critical here, where we are seeking to understand under step one of the framework—what rights Mr. Swenson had under state law. We recently recognized that a federal law’s preemption of state laws does not fundamentally change, eliminate, or replace the underlying state law: Holding that a state law is preempted by federal law does not . . . render the entire state law “nonexistent” in the way that plaintiffs argue. The state law continues to exist until the legislature that enacted it repeals it. At the same time, any portion of the law that is preempted is unenforceable in court until Congress removes the preemptive federal law or the courts reverse course on the effect of the federal law. See Jonathan F. Mitchell, The Writ-of-Erasure Fallacy, 104 Va. L. Hillerman, 167 Cal. Rptr. 240, 244–46 (Ct. App. 1980) (highlighting conflict between California’s community property regime and the Social Security Act’s family benefit plans—conflicts that don’t appear to be present in this case); In re Marriage of Nizenkoff, 135 Cal. Rptr. at 191– 92 (discussing the fact that the Social Security Act has set up protections for divorced spouses—similarly inapplicable here—that creates conflict with California’s community property law). Therefore, though it appears that § 207’s anti-alienation provision is the only reasonable basis for the Social Security Act’s preemption of Idaho’s community property law in Sherry, I cannot say for sure that this is the case. To the extent this distinction matters, it provides yet another reason (in addition to those noted in note 8, see infra at 26 n.8) for us to certify this question to the Idaho Supreme Court. 26 UNITED STATES V. SWENSON Rev. 933, 953 (2018) (“State statutes that contradict ‘supreme’ federal law continue to exist as ‘laws,’ even as they go unenforced, and they would become enforceable if federal law were amended or reinterpreted to remove the conflict.”). Close v. Sotheby’s, Inc., 909 F.3d 1204, 1209–10 (9th Cir. 2018) (alteration adopted); see also Armstrong v. Exceptional Child Ctr., Inc., 575 U.S. 320, 325 (2015) (noting that the Supremacy Clause merely “instructs courts what to do when state and federal law clash”); Saikrishna B. Prakash & John C. Yoo, The Origins of Judicial Review, 70 U. Chi. L. Rev. 887, 903 (2003) (noting that “the Supremacy Clause establishes that the Constitution is superior to unconstitutional federal statutes” and that “[w]hen there is a conflict between the supreme law and state . . . laws, state judges are to enforce the supreme law of the land” (emphasis added)). Thus, the Idaho Court of Appeals’ conclusion that Social Security benefits “are not a divisible community asset” did not change Idaho law; it merely reflects that court giving federal law effect over Idaho’s community property law in that specific context. 8 Sherry, 701 P.2d at 270. 8 To the extent my good colleagues disagree with me and believe that Sherry actually changed Idaho’s community property law in the context of Social Security benefits, they should have let the Idaho Supreme Court decide this important question of Idaho law; the esteemed justices on that court are, after all, the experts and authority on Idaho law. And aside from the fact that they are unquestionably better positioned to say what Idaho law is, I am sure they would be happy to help this court out with the determination of this question. Moreover, our speculation about the meaning of the state law would thus be “particularly gratuitous” in these circumstances. Arizonans for Official UNITED STATES V. SWENSON 27 In ignoring Idaho law, the majority summarily states that “state law does not control when federal law preempts state law.” Maj. Op. 14 n.5. This is undoubtedly true. However, the two-step framework set forth above takes preemption into account in step two of the analysis. Put differently, the determination of whether Idaho’s law—that all property obtained during marriage is community property, Hoskinson, 80 P.3d at 1062—is enforceable (i.e. preempted or not) should not be conflated with the threshold question that must be answered in step one: What is Idaho law? Only after this step-one question has been answered should we ask whether federal law nevertheless limits the defendant’s rights under step two of the analysis. Indeed, whether Idaho law has been (or, here, remains) preempted in this specific context turns on federal law, Close, 909 F.3d at 1209–10, and is therefore a question distinctly reserved for step two of the analysis—determining whether, notwithstanding an individual’s state law rights, the government can reach the property, see 18 U.S.C. § 3613(a). But the majority conveniently casts aside Idaho’s law at step one, thereby ridding it of the burden of explaining precisely how or why state law is preempted in this specific context. At bottom, the general principles of Idaho community property law provides the answer. Under Idaho law, Mr. Swenson does have rights to the Account, even assuming it consists solely of Mrs. Swenson’s Social Security benefits. See Hoskinson, 80 P.3d at 1062. The next question is English v. Arizona, 520 U.S. 43, 79 (1997) (“Speculation by a federal court about the meaning of [state law] in the absence of prior state court adjudication” reaching that specific issue “is particularly gratuitous when the state courts stand willing to address questions of state law on certification from a federal court.” (alteration adopted) (quoting Brockett v. Spokane Arcades, Inc., 472 U.S. 491, 510 (1985))). 28 UNITED STATES V. SWENSON whether the government may garnish the property—i.e., whether federal law preempts state law or otherwise limits the government’s ability to reach the property. C. Novak’s context-specific analysis does not control. The majority also states, albeit briefly, that this reliance on federal law (through preemption) is justified, because the Social Security Act affects the scope of Mr. Swenson’s property rights. See Maj. Op. 15 n.6. But Novak, the lone case upon which the majority relies for this proposition, does not support the majority’s conclusion. See 476 F.3d 1041. In Novak, the “key question” was whether a participant’s contingency “interest in a retirement plan [was] ‘property or a right to property’ under 18 U.S.C. § 3613(a).” Id. at 1060 (alterations adopted). In that case, we were trying to determine whether the criminal defendant’s contingency interests in an ERISA-covered retirement plan even amounted to “property” in the first instance. Because the nature and extent of an individual’s interests in such a plan are “governed exclusively by federal law,” we looked to federal law instead of state law to determine the nature and extent of any existing property rights. Id. at 1061 (citing 29 U.S.C. § 1144(a)). In other words, in Novak, there quite simply was no state law upon which we could rely to inform the nature of the unique “species of property rights that [t]here concern[ed] us.” Id. Federal law controlled whether the defendant in Novak had a property interest in the retirement benefits at issue through his contingent interests in an ERISA retirement plan. Id. at 1060–62. However, Novak does not control here. We expressly noted in Novak that our reliance on federal law in delineating the property rights in that case was context specific. Id. at 1061 (relying exclusively on federal law “in the current UNITED STATES V. SWENSON 29 context,” while acknowledging that “state law ordinarily informs the delineation of ‘property’” (emphasis added)). Our analysis here is different, because the context of this case is different. For example, unlike the property at issue in Novak, there is no question that the property at issue in this case—moneys received solely through Mrs. Swenson’s Social Security benefits—is “property” within the meaning of the MVRA; it undoubtedly is. Additionally, there are no complex, exclusively government-defined contingency interests at stake here. The only question is whether Mr. Swenson has a right to the moneys sitting in the Account. Further, also distinct from the ERISA-covered retirement plans at issue in Novak, whether an individual has an interest in Social Security benefits is not governed exclusively by federal law; the Social Security Act often looks to and relies on state law to determine whether an individual has rights or access to Social Security benefits. 9 See, e.g., Vernoff v. Astrue, 568 F.3d 1102, 1104–12 (9th Cir. 2009) (analyzing state law to determine whether an individual qualified for child survivor benefits under the Social Security Act); Woodward v. Comm’r of Soc. Sec., 760 N.E.2d 257 (Mass. 2002) (looking to state law principles to determine whether a wife was eligible for Social Security survivor benefits). Thus, because Mr. Swenson’s interests in the property at issue are not controlled exclusively by 9 The majority claims that the cases cited in support of this assertion are inapposite, because “no party disputes that Mr. and Mrs. Swenson are legally married.” Maj. Op. 14 n.5. The majority misses the point. I do not cite these cases for to show factual similarity. I cite these cases to show that, as a purely legal matter, the majority’s reliance on Novak is misplaced, because the Social Security Act context is fundamentally different than the ERISA context. While ERISA completely controls whether someone has rights to ERISA-controlled retirement accounts; the Social Security Act often looks to state law to delineate one’s rights to benefits. 30 UNITED STATES V. SWENSON federal law like the Novak defendant’s contingency interests in ERISA-covered retirement plans in Novak, the majority errs in bypassing state law in determining Mr. Swenson’s rights to Mrs. Swenson’s Social Security benefits. 10 Thus, because (1) our analysis in Novak was context specific and (2) unlike in Novak, federal law does not exclusively govern the extent to which an individual has rights to the property at issue, Novak does not support the assertion that “the [Social Security Act] is relevant to the delineation of property in this case.” Maj. Op. 15 n. 6. In this case, Idaho law—not federal law—delineates the rights Mr. Swenson has in the Account.