Court Opinion

ID: 9608027
Source: CourtListenerOpinion
Date Created: 2023-08-22 03:04:53.025546+00
Date Added: 2024-06-11T18:02:42.936606
License: Public Domain

Judge ROY
dissenting.
I respectfully dissent.
In my view, there is a federal preemption which precludes a state court from treating the Special Separation Benefit Program created and implemented by 10 U.S.C. § 1174a (1994) as marital property subject to division.
I.
Domestic relations are preeminently matters of state law, and therefore, Congress, when it passes general legislation, rarely intends to displace state authority in this area. Mansell v. Mansell, 490 U.S. 581, 109 S.Ct. 2023, 104 L.Ed.2d 675 (1989).
On the rare occasion when state family law has come into conflict with a federal statute, the United States Supreme Court has limited review under the Supremacy Clause to a determination whether Congress has “positively required by direct enactment” that state law be preempted. Rose v. Rose, 481 U.S. 619, 625, 107 S.Ct. 2029, 2033, 95 L.Ed.2d 599, 607 (1987). Before a state law governing domestic relations will be overridden, it “must do ‘major damage’ to ‘clear and substantial’ federal interests.” Hisquierdo v. Hisquierdo, 439 U.S. 572, 581, 99 S.Ct. 802, 808, 59 L.Ed.2d 1, 11 (1979). In my view, this test is met here.
Retirement is authorized for members of the United States Air Force based on years of service by 10 U.S.C. §§ 8911, 8914, 8917, 8918, 8920, 8924, 8925 & 8926 (1994); and retirement pay is computed in accordance with 10 U.S.C. §§ 8991 & 1401-1412 (1994). Most members of the armed forces who retire do so after twenty years of active service at which time they are entitled to, essentially, one-half of the pay for the highest rank or grade attained. There is no vesting, or partial vesting, of retirement benefits prior to completion of the prescribed term of service.
*1022My analysis of the preemption issue, as it relates to the military voluntary separation benefits, begins with McCarty v. McCarty, 453 U.S. 210, 101 S.Ct. 2728, 69 L.Ed.2d 589 (1981). In McCarty, the United States Supreme Court held that there was a conflict between the federal retirement statutes and the community property right created by state law which sufficiently injured the objectives of the federal program to require nonrecognition of the community property right, i.e., there was federal preemption pursuant to the Supremacy Clause. In its analysis as to the extent of the injury, the court stated, in part:
The interference with the goals of encouraging orderly promotion and a youthful military is no less direct.... But the reduction of retired pay by a community property award not only discourages retirement by reducing the retired pay available to the service member, but gives him a positive incentive to keep working, since current income after divorce is not divisible as community property.... Congress has determined that a youthful military is essential to the national defense; it is not for States to interfere with that goal by lessening the incentive to retire created by the military retirement system.
McCarty v. McCarty, supra, 453 U.S. at 235, 101 S.Ct. at 2742, 69 L.Ed.2d at 607.
In direct response to McCarty, Congress adopted the Uniformed Services Former Spouses’ Protection Act of 1982, Pub.L. No. 97-252, Title X, 96 Stat. 730 (1982) (Act), which is now primarily codified, with amendments, as 10 U.S.C. § 1408 (1994). While the Act is detailed, its scope is very limited. The Act applies to “disposable retired [or retainer] pay,” which is a defined term. 10 U.S.C. § 1408(a)(4) & (7) (1994). The operative language is:
Subject to the limitations of this section, a court may treat disposable retired [or retainer] pay payable to a member for pay periods beginning after June 25, 1981, either as property solely of the member or as property of the member and his spouse in accordance with the law of the jurisdiction of such court.
10 U.S.C. § 1408(c)(1) (1994) (emphasis added).
Subsequently, in Mansell v. Mansell, supra, the Supreme Court dealt with disability benefits which are specifically excluded from the definition of “disposable retired or retainer pay.” 10 U.S.C. § 1408(a)(4)(B) (1994). In response to the argument that Congress intended a complete rejection of McCarty, the court stated:
Where, as here, the question is one of statutory construction, we begin with the language of the statute_ [Wife’s] argument faces a formidable, obstacle in the language of the Former Spouses’ Protection Act. Section 1408(c)(1) of the Act affirmatively grants state courts the power to divide military retirement pay, yet its language is both precise and limited. It provides that ‘a court may treat disposable retired or retainer pay ... either as property solely of the member or as property of the member and his spouse in accordance with the law of the jurisdiction of such court.’ § 1408(c)(1). The Act’s definitional, section specifically defines the term ‘disposable retired or retainer pay’ to exclude, inter alia, military retirement pay waived in order to receive veterans’ disability payments. § 1408(a)(4)(B). Thus, under the Act’s plain and precise language, state courts have been granted the authority to treat disposable retired pay as community property; they have not been granted the authority to treat total retired pay as community property.
Mansell v. Mansell, 490 U.S. at 588-89, 109 S.Ct. at 2028-29, 104 L.Ed.2d at 685 (emphasis added).
The exclusion of disability pay (civil service and veteran’s benefits) from “disposable re-, tired or retainer pay” in 10 U.S.C. § 1408(a)(4)(B), and the manner of the exclusion, are important to the analysis. Disability pay is not, and would not normally be linked or confused with, “retired or retainer pay.” The exclusion takes the form of deducting from “gross” retired or retainer pay the amount of any disability benefit received in lieu of retired or retainer pay.
The reason for the “exclusion,” and its form, in my view, is that a retired service *1023member eligible for disability benefits may voluntarily elect the disability benefit. There is an incentive to elect disability benefits as they are free from income taxation. Because the retired service member may voluntarily elect disability benefits, state courts might, and probably would, include disability pay in retired or retainer pay to preclude any detrimental impact on the former spouse. The exclusion precludes this logical, if not compelling, conclusion which is precisely what the majority is doing in this instance with respect to voluntary separation pay.
The Act does not expressly exclude disability pay, which may be received by former members of the armed forces who are not eligible for retired or retainer pay, from being considered community or marital property. However, the impact of the exclusion of disability benefits from retired or retainer pay under the Act has been a series of cases holding that disability pay is excluded from the Act and may not be considered as marital or community property subject to division upon dissolution of marriage based primarily on federal preemption. McHugh v. McHugh, 124 Idaho 543, 861 P.2d 113 (Idaho App.1993); Hapney v. Hapney, 37 Ark.App. 100, 824 S.W.2d 408 (1992); Wallace v. Fuller, 832 S.W.2d 714 (Tex.App.1992); Inzinna v. Inzinna, 456 So.2d 691 (La.App.1984); but see Campbell v. Campbell, 474 So.2d 1339 (La.App.1985).
In my view, the United States Supreme Court has recognized that preemption with respect to a servicemember’s pay and benefits is broad and pervasive. See McCarty v. McCarty, supra.
I recognize that other preemptions are not as pervasive. In re Marriage of Rahn, 1995 WL 478464, — P.2d - (Colo.App. No. 94CA0106, August 10, 1995) (ERISA preemption with respect to the regulation of retirement plans and waiver of surviving spouse benefits does not preclude the recognition and implementation of an otherwise valid prenuptial agreement waiving any interest in a dissolution of marriage proceeding).
The distinction, in my view, relates to both the source of the federal preemption and its purpose. Federal preemption in the regulation of retirement plans is predicated on congressional intent, arises under Article VI of the United States Constitution, and relates to a subject which would otherwise be legitimate state interest and regulation. The powers to raise and support an army; to provide and maintain a navy; to make rules for the government and regulation of land and naval forces; to declare war; and to provide for the organizing, arming, and disciplining of the militia are vested in Congress and are of independent constitutional dimension. U.S. Const, art. I, § 8. See McCarty v. McCarty, supra.
Therefore, federal preemption with respect to military pay and benefits is broad and pervasive. The Act is, in my view, narrow by its terms and should be so construed.
II.
The benefit received by husband in this matter was authorized by 10 U.S.C. § 1174a which was adopted by Congress in 1991. See Elzie v. Aspin, 841 F.Supp. 439 (D.D.C.1993). The fact that the court in Elzie referred to the voluntary separation benefit as “retirement” is, for me, neither binding nor persuasive. With respect to the purpose of the voluntary separation program, the conference committee stated:
The conferees take this action because of their concern over the effect of strength reductions during the next few years on our men and women in uniform and their families. The conferees especially recognize that this drawdown in strength is different from previous drawdowns because it affects people who are a product of an all volunteer force. Therefore, the conferees would provide these temporary authorities as tools to assist the military Services in selectively reducing, on a voluntary basis, that portion of the career personnel inventory that is not retirement eligible. The conferees believe that these authorities would give a reasonable, fair choice to personnel who would otherwise have no option but to face selection for involuntary separation, and to risk being separated at a point not of their own choosing.
*1024With regard to the first of the two provisions, the conferees agree that the ‘voluntary’ separation pay benefit would be calculated at 15 percent of basic pay multiplied by the number of years of service of the separating member. Current involuntary separation pay is calculated on 10 percent of basic pay multiplied by the number of years of service of the separating member. The conferees believe that this enhancement will provide an equitable, up-front incentive for personnel to choose in lieu of facing the prospect of involuntary separation.
H.R.Conf.Rep. No. 311,102d Cong., 1st Sess. 556, reprinted in 1991 U.S. Code Cong. & Admin. News 1042, 1112.
The purposes announced by the Conference Committee for the adoption of voluntary separation pay clearly fall well within the federal interests relied upon by the Supreme Court for finding preemption in the first instance. See McCarty v. McCarty, supra.
Significantly, in my view, Congress did not amend the Act to include voluntary separation benefits when such benefits were initially authorized in 1991, and did not separately provide that voluntary separation benefits could be treated by state courts as community or marital property and therefore subject to division.
For the reasons expressed above, I do not believe state courts are accorded authority by the Act to treat any benefit similar to, or arguably in lieu of, retirement or retainer pay as marital or community property subject to division in state dissolution of marriage proceedings. See In re Marriage of Kuzmiak, 176 Cal.App.3d 1152, 222 Cal.Rptr. 644, cert. denied, 479 U.S. 885, 107 S.Ct. 276, 93 L.Ed.2d 252 (1986) (involuntary separation benefit not community property subject to division); Baer v. Baer, 657 So.2d 899 (Fla.Dist.Ct.App.1995); Kelson v. Kelson, 647 So.2d 959 (Fla.Dist.Ct.App.1994); McClure v. McClure, 98 Ohio App.3d 27, 647 N.E.2d 832 (1994).
I would, therefore, affirm the trial court.