Court Opinion

ID: 9492934
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:53:42.408801+00
Date Added: 2024-06-11T17:55:33.590903
License: Public Domain

O’SCANNLAIN, Circuit Judge,
dissenting:
The Employee Retirement Income Security Act (“ERISA”) sets forth with specificity the standing requirements that must be satisfied by a party seeking to bring suit under the statute. Finding these requirements unmet, the district court properly dismissed Shirley Stewart’s action for lack of standing. This court now reverses. Because the majority interprets ERISA in a manner inconsistent with the statute’s plain meaning, I must respectfully dissent.
I
In her action against the Thorpe Holding Company Profit Sharing Plan (“the Plan”), Stewart brought ERISA claims for (1) a declaration of her rights against the Plan, (2) an award of her claimed share in her ex-husband’s interest in the Plan, and (3) appropriate relief for the Plan’s breach of fiduciary duties. The threshold question, and the only question raised in this appeal, is whether Stewart has standing to bring these claims. Answering this question requires determining whether Stewart’s marital dissolution order constitutes a “Qualified Domestic Relations Order” (“QDRO”) within the meaning of ERISA.
A
In order to have standing to bring ERISA claims of the type brought by Stewart, a person must be a “participant” or “beneficiary” of a covered plan. 29 U.S.C. § 1132(a)(1).1 ERISA explicitly prohibits the assignment or alienation of pension benefits by requiring plans to include anti-assignment provisions, see id. § 1056(d)(1), and it preempts state law to the extent that state law calls for such assignment or alienation, see id. § 1144(a). See also John H. Langbein & Bruce A. Wolk, Pension and Employee Benefit Law 545-48 (2d ed.1995) (describing the antial-ienation rule as “[t]he bedrock principle *1159that underlies ERISA’s treatment of third party claims,” and noting that “ERISA’s preemption clause strongly reinforces the antialienation rule”).
An exception to ERISA’s rules regarding standing and anti-alienation exists in cases involving a QDRO. “A person who is an alternate payee [e.g., a former spouse] under a qualified domestic relations order shall be considered for purposes of any provision of [ERISA] a beneficiary under the plan.” 29 U.S.C. § 1056(d)(3)(J); id. § 1056(d)(3)(E) (defining “alternate payee”). As a plan beneficiary, an alternate payee under a valid QDRO has standing to sue to enforce ERISA provisions. Furthermore, the payment of pension benefits to an alternate payee is permitted as authorized under a proper QDRO. See id. § 1056(d)(3)(A).
Not every domestic relations order is a “Qualified Domestic Relations Order” under ERISA. While this proposition is obvious, it bears repeating in the instant case. A domestic relations order constitutes a QDRO if and only if it “clearly specifies” each of the following pieces of information:
(i) the name and the last known mailing address (if any) of the [plan] participant and the name and mailing address of each alternate payee; r
(ii) the amount or percentage of the participant’s benefits to be paid by the plan to each such alternate payee, or the manner in which such amount or percentage is to be determined;
(iii) the number of payments or period to which such order applies; and
(iv) each plan to which such order applies.
Id. § 1056(d)(3)(C). In this case, it is undisputed that Stewart is neither a participant in nor beneficiary of the Plan. Thus, Stewart’s claim rests entirely upon the QDRO exception to ERISA’s standing and anti-alienation rules. The issue then becomes whether Stewart’s martial dissolution order complies with all four QDRO requirements.
B
Review of the Marital Dissolution Order dissolving the marriage of Shirley Stewart and Richard Nielsen (“the MDO”) establishes that the MDO is not a proper QDRO; multiple defects prevent it from being so. Any one of these deficiencies, taken by itself, would be sufficient to defeat QDRO qualification; taken together, they clearly preclude any possibility of QDRO treatment.
Indeed, in another action, Stewart has vigorously argued that the MDO is inadequate as a QDRO. In a legal malpractice suit against her former attorneys, Stewart has alleged that they “failed to prepare a ‘Qualified Domestic Relations Order’ instructing the pension plan on the [marital property] division provided for in the Judgment of Dissolution of Marriage.” Complaint for Damages for Attorney Malpractice at 4, Stewart v. Bernal, No. B.C150341 (Cal.Super. Ct. filed May 20, 1996). Appearing before this court, Stewart now seeks QDRO treatment for the same order that, because of its defects as a QDRO, is serving as the basis for her malpractice complaint. For the reasons set forth below, it appears to me that Stewart’s malpractice suit has more merit than her ERISA action.
1
The MDO’s first inadequacy as a QDRO is its failure to specify the last known mailing address of Nielsen as plan participant.2 Stewart attempts to cover this ob*1160vious defect with two arguments: (1) because Nielsen was a committee member authorized to administer the Plan, the MDO should not be required to contain his address; and (2) the MDO, by specifying the mailing address of Nielsen’s attorney, satisfied the statutory requirement.
These arguments are unsustainable in the face of contrary statutory text. A domestic relations order, in order to constitute a QDRO, must “clearly speciffy] ... the name and the last known mailing address (if any) of the participant.” 29 U.S.C. § 1066(d)(3)(C)(i) (emphases added). The statute’s pellucid language does not contain an exception for cases in which the participant is a plan trustee or administrator, nor does it permit substitution of the mailing address of the participant’s attorney for the mailing address of the participant. While the rules suggested by Stewart might make good public policy, they are not the rules contained in ERISA, and courts are without authority to revise the statute as it was enacted by Congress. See Hawkins v. Commissioner, 86 F.3d 982, 992-93 (10th Cir.1996) (concluding that § 1056 “should be accorded its plain meaning, and not interpreted so as to allow the parties to omit the requested information whenever it is convenient or perhaps even logical to do so”).
2
The MDO is defective as a QDRO for failing to specify with clarity the mailing address of Stewart as alternate payee. See 29 U.S.C. § 1056(d)(3)(C). Never without a ready response to the patent defects in her supposed QDRO, Stewart asserts — and the majority agrees — that the MDO specifies her address by awarding her “ft]he real property at 8109 Michigan Ave., Whittier, legally described as Parcel 1, City of Whittier as shown on Parcel 1, Map 5724 filed book 60, page 94 of the parcel maps in the office of the County Recorder.” Stewart and the majority also point to evidence extrinsic to the MDO to argue that the Plan was independently aware of her mailing address. Such evidence is significant, they argue, because ERISA’s legislative history states that “an [otherwise qualified domestic relations order] will not be treated as failing to be a qualified order merely because the order does not specify the current mailing address of the participant and alternate payee if the plan administrator has reason to know that address independently of the order.” S.Rep. No. 98-575 (1984), reprinted in 1984 U.S.C.C.A.N. 2547, 2566.
These arguments are unpersuasive. By its terms, the language in the MDO relied upon by Stewart merely awards her a piece of property; it never specifies that the property address is Stewart’s mailing address. Simply because someone is awarded property does not mean that she will reside or continue to reside at the property. Quite tellingly, the MDO does not contain the zip code for the Michigan Avenue address — a fairly important part of a mailing address — even though it does contain the parcel number for the address. This fact further supports the conclusion that the MDO’s reference to the Michigan Avenue address is a property award, not a clearly specified mailing address.
The majority’s adoption of Stewart’s reasoning makes surplusage of statutory language requiring a domestic relations order to “clearly speciffy]” an alternate payee’s “mailing address,” 29 U.S.C. § 1056(d)(3)(C)(i). There are real differences between (1) mere specification and clear specification and (2) a legal address and a mailing address. These differences are explicitly recognized in ERISA’s text, and they deserve to be recognized by courts charged with interpreting and applying that language. The legislative history cited by Stewart cannot override clear statutory language to the contrary. See Hawkins, 86 F.3d at 992-93 (rejecting a party’s attempt to rely upon the same legislative history).
In sum, the majority’s lengthy discussion belies the simplicity of this issue. By statute, a QDRO must “clearly speciffy] ... the name and mailing address of each *1161alternate payee”; the MDO does not. Accordingly, the MDO is not a QDRO.
3
Perhaps the MDO’s most serious defect is its failure to satisfy the requirement that a QDRO clearly specify “the amount or percentage of the participant’s benefits to be paid by the plan to each such alternate payee, or the manner in which such amount or percentage is to be determined,” 29 U.S.C. § 1056(d)(3)(C)®. The MDO provides as follows:
The holder of the pension Thorpe Holding Company PS Plan is ordered to pay to Shirley Nielsen as and for the non-holder’s share of the community interest in said pension plan one-half of the community interest therein at such times as are ordered below.
Pursuant to the terms of In re Brown, the date of separation is stipulated to be 1-1-88. Amount of shares in Investment Portfolio, Inc., the profit sharing plan investment co. is stipulated to be 17,295.47 as the community portion. Each party is awarded one-half the amount of said shares. The parties stipulate that the value of said shares as of 3-15-89 is $9.70 per share.
As the Plan correctly points out, the MDO does not speak to the important issue of dividends and accruals. The MDO never indicates when (if ever) the 17,295.47 shares are to cease accruing value. Although the order gives a stipulated value per share as of March 15, 1989, it does not state whether the shares claimed by Stewart are to cease appreciating as of that date — or as of January 1, 1988, “the date of separation” — or as of July 24, 1989, the date of judgment in Stewart’s divorce proceeding.
Furthermore, the MDO fails to “clearly speciffy] ... the number of payments or period to which such order applies,” 29 U.S.C. § 1056(d)(3)(C)(iii); although the MDO requires payment “at such times as are ordered below,” the rest of the order is silent as to the time of payment.3 Stewart responds, somewhat lamely, that “[t]he obscurity of the math” should not affect her entitlement. This argument must fail. Under the QDRO requirements, domestic relations orders plagued by “obscur[e] math” cannot be enforced against ERISA-covered pension plans.4
C
Conceding the MDO’s lack of specificity, Stewart and the majority place significant weight upon Metropolitan Life Insurance Co. v. Wheaton, 42 F.3d 1080 (7th Cir. 1994), and Metropolitan Life Insurance *1162Co. v. Marsh, 119 F.3d 415, 421-22 (6th Cir.1997), which simply followed the Whea-ton analysis. Stewart and the majority place particular emphasis upon the following dicta5 from Wheaton: “It is asking too much of domestic relations lawyers and judges to expect them to dot every i and cross every t in formulating divorce decrees that have ERISA implications.” 42 F.3d at 1085.
With respect to the Wheaton dicta regarding the dotting of i’s and crossing of t’s in the ERISA context, I am persuaded by the careful discussion and analysis of Wheaton offered by the Tenth Circuit in Hawkins v. Commissioner of Internal Revenue, 86 F.3d 982 (10th Cir.1996). In Hawkins, the Tenth Circuit had to determine, for purposes of allocating tax liability between two ex-spouses, whether the Hawkins’s marital settlement agreement was a QDRO. Arthur Hawkins, seeking to have the agreement treated as a QDRO, relied upon the same legislative history invoked by Stewart to argue “that the requirements of [29 U.S.C. § 1056(d)(3)(C) ] need not be strictly complied with.” Id at 992. “In essence, Arthur’s argument is that a QDRO need not clearly specify the information required by [§ 1056(d)(3)(C)] when the plan administrator, by virtue of his independent knowledge, is already cognizant of that information.” Id. Arthur cited the Seventh Circuit’s Wheaton opinion as support for his position.
The Hawkins court rejected Arthur’s argument and his reliance upon Wheaton. “While we are mindful of the Seventh Circuit’s concerns, we do not agree that the QDRO specificity requirements should be construed this liberally. [Rjelaxing the requirements of [the statute] — or, as Whea-ton seems to suggest, eliminating them altogether in some cases — does violence to the plain meaning of the statute.” Id. The Tenth Circuit drew support for its position from a time-honored principle, reiterated with regularity by the Supreme Court: “[C]ourts must not read language out of a statute.” Id. (citing Supreme Court cases). Because of its greater fidelity to the statutory text, I find the rigorous Hawkins analysis more persuasive than Wheaton and Marsh.6 When viewed in light of Hawkins, it is clear that Stewart’s MDO fails to satisfy ERISA’s rather specific QDRO requirements.
II
Stewart argues that she has standing to bring the instant action independent of the MDO’s status as a QDRO. Stewart points out that ERISA requires pension plans to establish and to follow specific procedures *1163for determining whether a domestic relations order is a QDRO. Plans must, inter alia, (1) promptly notify alternate payees of plan procedures for qualifying domestic relations orders as QDROs, (2) determine whether a domestic relations order is a QDRO “within a reasonable period after receipt of such order,” and (3) segregate any funds due to the alternate payee during the period in which a QDRO determination is being made. 29 U.S.C. § 1056(d)(3)(G), (H). Stewart argues that the Plan’s alleged failure to follow these procedures denied her the opportunity to obtain a QDRO and that these ERISA violations confer upon her standing to sue under ERISA.7
Stewart bases her argument for ERISA standing outside the QDRO framework on Gendreau v. Gendreau, 122 F.3d 815 (9th Cir.1997). In Gendreau, we held that an ex-husband’s Chapter 7 bankruptcy could not discharge his ex-wife’s claim against his pension plan because her claim was against the 'plan, not against him. See id. at 818. Thus Gendreau’s central holding, a bankruptcy holding rather than an ERISA holding, lacks relevance to the case at bar.
The Gendreau court also stated, however, that the ex-wife's domestic relations order gave her “a right to obtain a proper QDRO that could not be discharged in William’s bankruptcy proceeding.” The Gendreau court explained that “[t]he QDRO provisions of ERISA do not suggest that Colleen has no interest in the plans until she obtains a QDRO, they merely prevent her from enforcing her interest until the QDRO is obtained.” Id. at 819.
Stewart argues, and the majority holds, that the above language gives her ERISA standing by giving her “a right to obtain a proper QDRO.” Id. Careful examination of Gendreau indicates, however, that our opinion cannot bear the weight that Stewart seeks to place upon it. We did not hold in Gendreau that Colleen Gendreau’s defective domestic relations order by itself gave her a right that could be enforced against William Gendreau’s pension plans. Rather, we held that (1) Colleen’s non-QDRO gave her an “interest” in William’s pension plans that was nondischargeable in bankruptcy, and (2) Colleen would have to convert her non-QDRO into a QDRO before she could vindicate her interest in William’s pension plans. See id. at 819. These two narrow holdings of Gendreau cannot serve as the basis for some broad doctrine of extra-statutory, open-ended ERISA standing. If anything, our decision in Gendreau undermines the position of Stewart in this case. Just as the QDRO provisions “prevent[ed] [Colleen] from enforcing her interest until the QDRO is obtained," id. at 819, they similarly prevent Stewart from enforcing any interest in the Plan without a valid QDRO.
The majority points out that under § 1056(d)(3)(H), Stewart may have the right to obtain a determination of whether the MDO is a QDRO from a court of competent jurisdiction. Here, Stewart obtained such a determination: The district court held that the MDO is not a QDRO. The fact that Stewart may be entitled to an adjudication of QDRO status, however, does not give her any right to sue under ERISA for violations of its QDRO provisions once it is determined that her MDO is not a QDRO. In other words, the district court’s determination that the MDO is not a QDRO deprived Stewart of standing to sue for any violations of ERISA — including violations of provisions relating to the proper evaluation of domestic relations orders by plan administrators. Thus, regardless of whether the Plan violated ERISA provisions regarding the establish-*1164merit of proper procedures for qualifying domestic relations orders as QDROs, Stewart lacks standing to sue for any such violations.8
Ill
Both Stewart and the Plan make arguments based upon the various policy concerns underlying the QDRO provisions. Stewart relies upon the QDRO legislation’s goal of “protect[ing] the financial security of divorcees.” Gendreau, 122 F.3d at 817. The Plan points to the goal of protecting pension plan administrators from “litigation-fomenting ambiguities” by requiring that domestic relations orders, in order to be enforceable against plans, must give the clearest of guidance in terms of distributing plan assets. Wheaton, 42 F.3d at 1084.
Both of these concerns undoubtedly played an important role in the drafting and passage of the Retirement Equity Act of 1984, which amended ERISA through addition of the QDRO provisions. See Langbein & Wolk, supra, at 557-59. Regardless of the importance of these policy considerations to Congress, however, they possess very limited significance for courts. We can consider policy considerations insofar as they are manifested in clear statutory language. The task of striking a balance between conflicting policy goals has been left to the legislative, not the judicial, branch. We as judges cannot ignore the dictates of Congress in order to produce what we deem to be, from a policy perspective, a desirable result in an individual case.
Stewart is a sympathetic plaintiff, and the majority’s rewriting of the QDRO requirements is, no doubt, motivated by the best of intentions. What the majority fails to realize, however, is that the days of Chancery are over.9 We must decide cases based on the law, not on our subjective view of the equities. Our decision will affect not just Stewart’s case, but many future cases brought under ERISA. I fear that the majority’s judicial expansion of ERISA standing, in order to save the case of one sympathetic plaintiff, may have serious and unforeseen consequences for this extremely important area of law.
IV
In light of the Marital Dissolution Order’s many defects, the district court did not err in holding that the MDO is not a QDRO under ERISA. Stewart therefore lacked standing to sue the Plan. Any argument that the QDRO requirements are too stringent or in need of modification must be directed to Congress, not the courts. I would affirm the judgment of the district court.

. Although not relevant here, the Secretary of Labor and plan fiduciaries also can bring suits under ERISA for breaches of fiduciary duty. See 29 U.S.C. § 1132(a)(1)(B)(2).

. The MDO is deficient as a QDRO in many respects, and the district court chose to rely upon some of the MDO’s other infirmities in finding that it failed to constitute a QDRO. The majority’s observation that the district court rested its decision on different defects of the MDO, see maj. op. at 1150 n. 5, is a non-sequitur. It is well-established that we may affirm on any basis supported by the record. See Henry v. Gill Industries, Inc., 983 F.2d 943, 950 (9th Cir. 1993). Furthermore, as the majority correctly points out, ‘‘[wjhether the Marital Dissolution Order in this case constitutes a valid QDRO under ERISA is a question of law for this court to determine de novo.” Maj. op. at 1149 n. 4.

. The majority claims that the dissolution decree upheld as a valid QDRO in Hawkins similarly failed "to spell out in detail 'the number of payments or period to which the order applies.’” Maj. op. at 1155. This is simply inaccurate. The decree in Hawkins provided for "immediatef ]” payment, 86 F.3d at 993, which is far more definite than an order that provides for payment "at such times as are ordered below” but never orders the payment times.

. The MDO appears to be defective as a QDRO on yet another ground. A QDRO must specify "the amount or percentage of the participant's benefits to be paid by the plan to each such alternate payee,” 29 U.S.C. § 1056(d)(3)(C)(ii) (emphasis added), indicating that a domestic relations order, to be a QDRO, must require the payment of benefits by the plan (rather than the plan participant) to an alternate payee. The MDO in this case orders only Nielsen, the plan participant, to make a payment to his ex-wife. In light of the MDO's many other deficiencies, detailed discussion of this additional QDRO defect is not necessary, but its existence is worth noting.
The majority claims that the Hawkins court held a divorce decree to be a valid QDRO even though the decree in that case "provided for the participant to pay the ex-spouse her share in his pension, not the plan itself.” Maj. op. at 1155. The majority mischaracter-izes the facts of Hawkins, in which the divorce decree expressly awarded Glenda Hawkins $1 million " ‘from’ the Plan,” 86 F.3d at 990 (quoting paragraph 6(a) of the divorce decree). Indeed, the Hawkins court explicitly rejected Glenda’s argument that the decree gave rise to personal liability to her on the part of her husband (as opposed to liability on the part of his pension plan). See id. at 990 n. 7.

. Notwithstanding the majority’s views to the contrary, see maj. op. at 1153 n. 7, if this language — situated in a patch of florid prose at the very end of the opinion, well after the Seventh Circuit had completed its analysis — is not dicta, then there is no such thing as dicta at all.

. In Hawkins, 86 F.3d at 989, the-Tenth Circuit rejected as "unduly narrow” the Tax Court's interpretation of the QDRO requirements of the Internal Revenue Code (which are substantively the same as the QDRO requirements of ERISA). Citing this discussion, the majority attempts to make it appear that the Tenth Circuit in Hawkins took a view of the QDRO requirements as relaxed as the one it now adopts. See maj. op. at 1155-56. Close examination of Hawkins shows that the Tenth Circuit did no such thing.
In Hawkins, the Tax Court had effectively held that (1) "to create a QDRO, the parties to an agreement must express their intent to reallocate the tax burden of a pension distribution,” and (2) "the parties [must] incorporate the exact statutory terminology when drafting a domestic relations order.” 86 F.3d at 989. The Tenth Circuit reversed these holdings: “Because [the QDRO requirements of the I.R.C.] require neither of these things, we believe the Tax Court’s interpretation runs counter to the plain meaning of the statute.’’ Id. (emphasis added).
Thus, contrary to the majority’s suggestion, the Tenth Circuit’s conclusion that the Tax Court adopted an overly narrow reading of the QDRO requirements of the Internal Revenue Code was not based on the court’s desire to reach a certain equitable result. Rather, it was rooted firmly in the commitment of the Hawkins court to enforcing "the plain meaning of the statute.”

. The Plan denies violating ERISA's provisions regarding QDRO procedures, arguing that it did not owe Stewart any of the duties set forth in the statute. The Plan points to record evidence indicating that it never received her MDO.
Resolving this factual dispute over receipt of the MDO is not necessary. Even if the Plan did violate ERISA provisions regarding proper QDRO determination, Stewart lacks standing to bring suit for such violations in the absence of a valid QDRO.

. Denying standing to sue under these circumstances makes perfect sense. If a plan violates ERISA rules regarding the proper evaluation of domestic relations orders as QDROs, but the alternate payee does not have a valid QDRO, the alternate payee has sustained no harm as a result of the plan’s violations.

. As aptly stated by Justice Frankfurter, "[tjhis is a court of review, not a tribunal unbounded by rules. We do not sit like a kadi under a tree dispensing justice according to considerations of individual expediency.” Terminiello v. City of Chicago, 337 U.S. 1, 69 S.Ct. 894, 93 L.Ed. 1131 (1949) (Frankfurter, J., dissenting).