Court Opinion

ID: 9492545
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:43:50.550075+00
Date Added: 2024-06-11T17:55:21.726985
License: Public Domain

MANSMANN, Circuit Judge,
dissenting:
Today the majority holds, in effect, that a state court’s power to enter or modify a Qualified Domestic Relations Order (“QDRO”) with respect to a participant’s interest in a pension plan ends with the *192participant’s death. 1 Because I believe that this holding will work an unwarranted interference with the states’ ability to administer their domestic relations law and to effectuate equitable divisions of marital assets, I must respectfully dissent.
Initially, I note that the majority’s holding is not compelled by anything in the governing Act. The only statutory authority cited by the majority is 29 U.S.C. § 1056(d)(3)(D), which provides that a QDRO cannot require a plan to provide increased benefits. The majority approves the District Court’s holding to the effect that “a decree conferring survivors’ benefits on Robichaud after those benefits have lapsed would provide increased benefits and therefore cannot be a QDRO.” Supra at 190. By assuming that the benefits were conferred after they had lapsed (i.e., after Mr. Samaroo’s death), however, it begs the central question whether the state court’s entry of its order nunc pro tunc, as of a date before Mr. Samaroo’s death, is to be given effect.2
The majority’s holding also is not compelled by caselaw. The cases relied on by the District Court and .the majority both involved attempts to divest and transfer benefits already vested in a subsequent spouse. See Hopkins v. AT&T Global Information Solutions Co., 105 F.3d 153 (4th Cir.1997); Ross v. Ross, 308 N.J.Super. 132, 705 A.2d 784 (N.J.Super.App. Div.1998).3 The only case cited by the parties in which benefits had not vested in another holds that the retroactive decree must be given effect. See Payne v. GM/UAW Pension Plan, No. 95-CV-73554-DT, 1996 WL 943424, 1996 U.S. Dist. LEXIS 7966 (E.D.Mich. May 7, 1996).
The majority characterizes the state court’s retroactive amendment of a divorce decree in Payne as “abuse”, apparently because the husband had refused to grant the requested survivor designation in negotiations while he was alive.4 I am not so ready to presume that a state judge, fully apprised of the facts, possessed of expertise in domestic relations matters, and sworn to uphold the law, has participated in. or countenanced abuse. In any event, as discussed below, I believe that we are required to assume that such judicial acts are legitimate.
In rejecting the contention that the state court decree must be given retroactive effect because it stated that it was nunc pro tunc, the majority explains that the effect *193of the decree on the Plan is a matter of federal law over which the District Court had retained jurisdiction. While I agree that the effect was for the District Court to determine under federal law, I cannot agree with the implicit premise that federal law permits us to disregard the decree’s express retroactivity provision. On the contrary, federal law mandates that we give effect to the decree in accordance with-its terms.
In my view the question before us— whether to effectuate the state court’s nunc pro tunc order — is conclusively answered in the affirmative by the Full Faith and Credit Act, which provides that the judicial proceedings of a state court “shall have the same full faith and credit in every court within the United States ... as they have by law op usage in the courts of such State....” 28 U.S.C. § 1738. We have observed that this section “directs all courts to treat a state court judgment with the same respect that it would receive in the courts of the rendering state”, and that we may not “employ [our] own rules ... in determining the effect of state judgments, but must accept the rules chosen by the State from which the judgment is taken”. In re General Motors Corp. Pick-Up Truck Fuel Tank Products Liability Litigation, 134 F.3d 133, 141-42 (3d Cir.1998) (quoting Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 373, 116 S.Ct. 873, 134 L.Ed.2d 6 (1996)) (brackets and ellipsis in original; internal quotation marks and citation omitted). These principles apply in determining the effect of a state decree in a federal action. See American Sur. Co. v. Baldwin, 287 U.S. 156, 166, 53 S.Ct. 98, 77 L.Ed. 231 (1932) (“The full faith and credit clause, together with the legislation pursuant thereto, applies to judicial proceedings of a state court drawn into question in an independent proceeding in the federal courts.”); Grimes v. Vitalink Communications Corp., 17 F.3d 1553, 1562 (3d Cir.1994) (holding that Full Faith and Credit Act bars relitigation of issues decided by a state court even as applied to claims over which the state court lacked jurisdiction) (citing Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. 373, 380-81, 105 S.Ct. 1327, 84 L.Ed.2d 274 (1985)).
Because the courts of New Jersey would respect a nunc pro tunc provision in a final judgment, we are required to respect it as well. See, e.g., Fulton v. Fulton, 204 N.J.Super. 544, 549, 499 A.2d 542, 545 (Chanc.Div.1985) (holding that nunc pro tunc entry of divorce decree would determine surviving spouse status for purpose of intestate distribution); Olen v. Olen, 124 N.J.Super. 373, 307 A.2d 121 (App.Div.1973) (remanding for amendment of divorce judgment, nunc pro tunc as of original judgment before wife’s death).5
Although I believe the full faith and credit analysis is dispositive, giving effect to the state court’s decree also furthers the policy interests at stake. There is good reason to allow state courts some leeway in entering or modifying domestic relations orders even after a participant’s death, or retirement, or other status-altering event. The state courts are charged with administering the important, and often complex and volatile, area of domestic relations law.6 The evident purpose of the *194ERISA’s recognition of QDROs is to avoid undue interference with state courts’ fulfillment of that charge.7 Imposing a cut-off date by which a state court’s orders must be in prescribed form — a cut-off that does not appear anywhere in the text of ERISA- — would unnecessarily impede those courts’ efforts to provide for a just disposition of marital assets.8
There appears to be no strong countervailing policy reason to warrant such interference in this case. I agree that it is important not to upset the actuarial basis of pension plans, but it is hard to believe that the single survivor benefit at issue here is material to the actuarial soundness of a plan with 87,500 participants. Moreover, the Plan does not allege that it reduced funding levels or otherwise changed its position in reliance on a belief that it would not have to pay a surviving spouse benefit with respect to Mr. Samaroo.
Finally, I cannot agree with the majority’s contention that designation of Ms. Robichaud as surviving spouse after Mr. Samaroo died without remarrying would allow him to “have his cake and eat it, too”9 because Mr. Samaroo retained the right to confer surviving spouse status on a new wife so long as no QDRO designated his former wife as surviving spouse. If the state court’s nunc pro tunc order is credited, after its effective date Mr. Sa-maroo retained the right to accord a new wife surviving spouse status only to the extent of the 50% interest not already granted to Ms. Robichaud.10 Thus, Mr. *195Samaroo would not have been allowed to have Ms cake and eat it, too; instead, the law allows the state court to divide the cake equitably and mandates that ERISA plans give effect to that division.
For the foregoing reasons, I would reverse the decision of the District Court and remand with instructions to accord full faith and credit to the state court’s retroactive QDRO.

. The majority expressly forecloses a post-death modification of a QDRO which requires "increased benefits.” In addition, the Hopkins and Ross cases on which the majority's decision is premised foreclose any shifting of benefits once vested in a particular payee upon a participant's death.. See infra 191-92. I am therefore unable to conceive of circumstances in which, under the majority's reasoning, a meaningful alteration of a QDRO could be effected post-death.

. There appears to be no dispute that if the order had actually been entered on its stated effective date, Ms. Robichaud would be entitled to the survivor's benefit she seeks. There is also no dispute that the Plan did not appeal the state court’s decision, making it final.

. The Ross holding was premised in part on the Court’s observation that "[n]o federal case has allowed a QDRO to be entered after a participant’s death.’ 705 A.2d at 797. However, the (unpublished) Payne case was decided prior to Ross.

.See supra at 191. The majority's opinion reflects an implicit assumption that domestic relations orders merely reflect what the parties have agreed to. Cf. supra at 191-92 (stating that Mr. Samaroo — rather than the state court — could have entered a QDRO while he lived, and that his estate — rather than the state court — designated Ms. Robichaud as surviving spouse after his death). While it may often work that way in practice, I know of no rule that precludes a state court from ordering relief that one party has refused to accede to in negotiations. On the contrary, although courts in New Jersey will enforce consensual agreements for equitable distribution "if found to be fair and just”, they nevertheless retain "the utmost leeway and flexibility in determining what is just and equitable in making allocations of marital assets”. Smith v. Smith, 72 N.J. 350, 359-60, 371 A.2d 1 (1977).

. Cf. Ross, 705 A.2d at 797 (reasoning that due to ERISA preemption, "New Jersey's concepts of equity cannot be applied and a QDRO cannot be entered after the fact”).

. See, e.g. Hisquierdo v. Hisquierdo, 439 U.S. 572, 581, 99 S.Ct. 802, 59 L.Ed.2d 1 (1979) ("The whole subject of domestic relations of husband and wife ... belongs to the laws of the States and not to the laws of the United States.”) (quoting In re Burrus, 136 U.S. 586, 593-594, 10 S.Ct. 850, 34 L.Ed. 500 (1890)); Brandon v. Travelers Insur. Co., 18 F.3d 1321, 1326 (5th Cir.1994) (observing in ERISA preemption analysis that "[fjederal respect for state domestic relations law has a long and venerable history” and that "[w]hen courts face a potential conflict between state domestic relations law and federal law, the strong presumption is that state law should be given precedence” because "[t]he law of family relations has been a sacrosanct enclave”). Cf. American Telephone and Telegraph Co. v. Merry, 592 F.2d 118, 122 (2nd *194Cir.1979) (referring to the "fundamental principle of statutory interpretation (whereby) courts have presumed that the basic police powers of the States, particularly the regulation of domestic relations, are not superseded by federal legislation unless that was the clear and manifest purpose of Congress”).

. As the District Court acknowledged, "Congress” concern that the combination of ERISA preemption and the provisions of REA would lead to unnecessary federal involvement in state domestic relations laws prompted the statutory exemption of [QDROs] from ERISA preemption. Samaroo, 743 F.Supp. 309, 315 (D.N.J.1990) (citing 29 U.S.C. § 1144(b)(7)).

. Thus, for example, the court in Ross lamented that the "unfortunate result” of its holding (disallowing correction of a QDRO where benefits had vested in a subsequent spouse) was that "equity will not prevail.” 705 A.2d at 797.
Post-death (or post-retirement) entry or modification of a decree may reasonably occur in a variety of circumstances, including, e.g., clerical error, appeals, and delays attendant on the formulation of an appropriate order. This is an example of-the former: Mr. Samaroo's attorney, who drafted the domestic relations order, testified that, although .-they did not specifically discuss survivorship benefits, Mr. Samaroo indicated his intent that Ms. Robichaud receive half interest in "everything he had or was entitled to” and that it was only due to the attorney's unfamiliarity with ERISA that the survivor designation was erroneously omitted. See Joint Appendix at 553-54. Counsel also testified that he had no doubt that Mr. Samaroo would have wanted Ms. Robichaud to receive survivorship benefits, see Joint Appendix at 555, and confirmed in a submission to the state court that "the intent of [Mr. Samaroo] at that time was to give this 50 per cent [survivorship] right to his then wife unconditionally and without any contingencies thereto.” Joint Appendix at 583. Even if the evidence regarding the scrivener’s error is inconclusive, the state court’s acceptance of the attorney’s word should not be disregarded by a federal court bound to give the state court’s determination full faith and credit.

. Maj. Op. at 191.

. The majority cites 29 U.S.D.C. § 1056(d)(3)(F) for the proposition that "if QDRO designates former spouse as participant’s surviving spouse, current spouse shall not be treated as spouse for purposes of plan”. Id. I do not read the statute to provide such an all-or-nothing choice. Under the statute, a former spouse shall be treated as a surviving spouse, and a subsequent spouse shall not be so treated, only "[t]o the extent provided” in a QDRO. 29 U.S.C. § 1056(d)(3)(F). Here, the "extent provided” is 50%. The REA expressly recognizes the right to make such partial designations. See 29 U.S.C. § 1056(d)(3)(B)(i)(I) (defining QDRO as order which, inter alia, recognizes or assigns right to receive "all or a portion” of benefits under a plan). A natural reading would call for treating Ms. Robichaud as surviving spouse to the extent of 50% of the applicable benefit, and treating a new wife (if *195any) as spouse only to the extent of the remaining 50%.