Court Opinion

ID: 9487616
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:21:56.44099+00
Date Added: 2024-06-11T17:52:23.317069
License: Public Domain

MANION, Circuit Judge,
concurring in the judgment.
I agree with the court’s judgment that Daniel and Douglas Wheaton should receive their father’s life insurance proceeds pursuant to the state divorce decree. However, this need not be a complicated analysis resolving perceived arbitrary distinctions between the assignability of pension plans versus welfare plan benefits via a QDRO. Nor, for that matter, is it even necessary to determine whether this divorce decree is a QDRO. Instead, if an assignment of welfare plan benefits is not governed by ERISA at all, the inquiry ends.
The court apparently assumes as a necessary premise to its analysis that the general preemption provision of ERISA, 29 U.S.C. § 1144(a), prohibits a state divorce decree from redesignating the beneficiary of welfare plan benefits. This assumption would be viable were we writing on a clean slate. However, the Supreme Court in Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S. 825, 108 S.Ct. 2182, 100 L.Ed.2d 836 *1086(1988), examined 29 U.S.C. §§ 1056(d) and 1144(a) and determined that an assignment of welfare plan benefits escapes the long arm of ERISA. There was never any question in Mackey whether Congress had barred the assignment of benefits under an employee welfare plan; as noted by the Supreme Court, Congress extended anti-alienation protection to the benefits of pension plans only. Id. at 836, 108 S.Ct. at 2189.
Instead, the chief concern in Mackey was whether ERISA preempted the application of a state’s general garnishment procedure to ERISA welfare plan benefits (in that case, accrued vacation benefits). The trustees of the plan raised an argument similar to that presumed by this court, that ERISA’s preemption provision trumps state laws that attempt to assign (technically, garnish, but the effect is the same) welfare plan benefits. The Supreme Court rejected this argument. First, the Court observed that ERISA’s preemption provision “deals with state laws as they relate to plans,” id. at 836, 108 S.Ct. at 2189 (emphasis in original), whereas the anti-alienation provision applies only to benefits, specifically, those of pension and not welfare plans. Id. at 836, 108 S.Ct. at 2189; see also Guidry v. Sheet Metal Workers Nat’l Pension Fund, 39 F.3d 1078, 1085-86 (10th Cir.1994) (en banc) (same). This was an important distinction, for to read the preemption provision as barring state laws that affect both plan benefits and plans would essentially render the anti-alienation clause of § 1056(d)(1) redundant. Id. 486 U.S. at 837, 108 S.Ct. at 2189; see also Sav. & Profit Sharing Fund of Sears Emp. v. Gago, 717 F.2d 1038, 1040-41 n. 5 (7th Cir.1983) (same). Second, the Court noted that when Congress adopted ERISA it had before it a provision to bar the alienation of both pension and welfare plans, but ultimately chose only to bar the alienation of the former. As noted by the Court:
In a comprehensive regulatory scheme like ERISA, such omissions are significant ones. Once Congress was sufficiently aware of the prospect that ERISA plan benefits could be attached and/or garnished — as evidenced by its adoption of [§ 1056(d)(1) ] — Congress’ failure to expressly bar the state-law alienation of welfare plan benefits meant that Congress’ decision to remain silent concerning [alienation] of ERISA welfare plan benefits “acknowledged and accepted the practice, rather than prohibiting it.”
Id. 486 U.S. at 837, 108 S.Ct. at 2189 (quoting Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 516, 101 S.Ct. 1895, 1902-03, 68 L.Ed.2d 402 (1981)). From this, the Court concluded that “Congress did not intend to preclude state-law attachment of ERISA welfare plan benefits.” Id. 486 U.S. at 838, 108 S.Ct. at 2190.
Moreover, the Court addressed the trustees’ back-up argument (also alluded to by this court). The trustees claimed that the 1984 Retirement Equity Act amendments to ERISA demonstrated that Congress thought that ERISA’s preemption provision, as originally enacted, generally preempted all state law assignments and alienations, pension and welfare plans alike. The Court, however, did not accept this proposed theory that was supposedly the driving force behind the 1984 amendments:
There is, however, another plausible construction of Congress’ action in 1984, namely, that Congress thought that some courts had erroneously construed [§ 1144(a)] as pre-empting such orders. In this view, the 1984 amendment served the purpose of correcting the error thus clarifying the original meaning of the section. Moreover, even if the United States is correct, and Congress in 1984 thought that [§ 1144(a) ] as originally enacted preempted domestic relations orders directed at ERISA plans — and other state-law attachments and garnishments as well — the opinion of this later Congress as to the meaning of a law enacted 10 years earlier does not control the issue.
Id. 486 U.S. at 839, 108 S.Ct. at 2190-91 (footnotes omitted) (citations omitted).
Clearly, then, ERISA preemption does not reach as far as the assignment of welfare plan benefits. This is made all the more important when we consider what is at stake here. Rose Marie Wheaton is launching this appeal in an attempt to undermine a provision of a state divorce decree. However, the *1087Supreme Court has made clear that matters of state family law traditionally lay outside the realm of federal review. Hisquierdo v. Hisquierdo, 439 U.S. 572, 581, 99 S.Ct. 802, 808, 59 L.Ed.2d 1 (1979). The only exception is where the state order frustrates clearly defined federal interests; only then does a federal court have limited review under the Supremacy Clause to determine if Congress has positively intended to preempt state law. Id. But as made clear by Mackey, Congress has not barred the assignment of welfare plan benefits, so there is nothing in this state law divorce decree designating the beneficiaries of Frank Wheaton’s life insurance proceeds that conflicts with federal law as codified in ERISA. Therefore, I would hold, that this case does not present a substantial federal question under the Supremacy Clause, and should be dismissed. Cf. Hisquierdo, 439 U.S. at 581, 99 S.Ct. at 808 (“Federal courts repeatedly have declined to assert jurisdiction over divorces that presented no federal question.”). With that, I would dismiss this case, leaving the proceeds of this life insurance policy to the Wheaton brothers according to the terms of the divorce decree.