Court Opinion

ID: 6957426
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:39:52.105665+00
Date Added: 2024-06-11T16:08:19.482701
License: Public Domain

MERRITT, Circuit Judge,
dissenting.
The Court holds that the anti-discrimination or anti-retaliation provision of § 1140 of ERISA preempts the State’s family and probate law governing prenuptial agreements. The Court expands the coverage of this provision to family disputes that reach far beyond retaliation in the workplace.
I disagree that Code § 1140 federalizes the distribution of the testator’s estate in this case or that it should be expanded beyond workplace discrimination. Here the surviving spouse in a prenuptial instrument expressly agreed to take only certain assets and income derived from her husband after his death, leaving the remainder for his children by a previous marriage. But when the time came to honor this agreement, according to the record before us, she claimed another significant asset created by her deceased husband, namely, the assets payable under an ERISA pension or savings plan.
The record before us is unclear about how the plan’s administrator arrived at the conclusion that the surviving spouse is the beneficiary of the pension. The record does not disclose that the husband himself consciously named her as his beneficiary. By claiming such ERISA benefits, the surviving spouse received more than she had previously agreed to accept under the prenuptial agreement with her deceased husband, and she therefore deprived her husband’s children of assets that they would have otherwise received had she complied with her contract. The trustee in return docked her trust income in order to recover money for the children.
Under these circumstances, I do not believe that there is a colorable argument that the trustee of the deceased husband’s trust estate unlawfully retaliated against the surviving wife under § 1140 of ERISA when the trustee withheld trust assets. The action, if there is one, should be under the state law of trusts and estates to determine the testator’s intention with respect to his assets and the meaning of the prenuptial agreement. If it was his intention to allow his wife to choose the trust assets or the nontrust ERISA assets, but not both, then the trustee’s action should be upheld, but if not, then it should be set aside by the state court. The issue should be treated under state law as a question of interpretation of the prenuptial agreement and the law of trusts in light of the family circumstances, the deceased husband’s intention and all of the facts surrounding the prenuptial agreement, as well as the deceased husband’s will and trust and the terms and conditions of his ERISA assets. The surviving wife’s action should be against the trustee in state court to enforce the trust, not an action in federal court under ERISA for retaliation.
A testator should be able to give a beneficiary of his estate a choice between ERISA pension or life insurance benefits and other non-ERISA assets of his estate without violating § 1140’s vague “discrimination” provision. To read ERISA so broadly as to deprive a testator of the right to choose how such assets should be distributed to his family and to condition the receipt of one form of assets upon choosing not to receive other assets raises serious due process questions. Testators for centuries have exercised such *811authority over their property, and executors and trustees are obliged to carry out their intentions. The record before us indicates that the testator did not intend for his surviving spouse to receive both ERISA and non-ERISA assets. .
In its lengthy opinion, the Court spends most of its time trying to get around the language of prior cases and legislative history limiting the operation of the anti-retaliatory provision to the workplace. I find no ease law that holds or even intimates that battles between family members and executors and trustees over the assets of a deceased husband and father should be treated as an issue to be decided in federal court under the “discrimination” language of § 1140. Section 1140 should be given a much more limited scope. The state law of trust and estates should not be federalized through the back door of ERISA “discrimination” law. Under the court’s broad, unlimited construction of § 1140, a federal claim would seem to arise each time a trust beneficiary is denied trust income or some asset or benefit as a result of choosing ERISA benefits.
If we continue to interpret vague terms of ERISA like “discrimination” broadly to federalize claims touching upon ERISA benefits, we will end up nationalizing much of the law of estates and trusts. When its provisions are unclear, ERISA’s thrust should be given a narrow scope under the canon of statutory construction advising a narrow construction of the broad language of vague statutes which are in derogation of the common law.
The operative language of the ERISA provision to be interpreted makes it unlawful “for any person to ... discriminate against a participant or beneficiary for exercising any right ... under ... an employee benefit plan____” It is true that, literally speaking, the trustee’s actions “discriminated” against plaintiff because she exercised rights under the plan. But discrimination would have occurred, literally speaking, if she had refused to marry the deceased husband until he made her a beneficiary under the plan, or if one of his children refused to speak to the father and stepmother until they agreed to give the ERISA money to the children, or if the stepmother refused to speak to the children until he agreed to give the money to her. (I do not understand why the court refers in its opinion to these examples as “lurid” — perhaps it intended to say “lucid.”)
The anti-discrimination provision of the ERISA statute should not be read to include economic or emotional retaliation by family members, family trustees and parties and beneficiaries of family contracts, wills and trusts. Such family matters should continue to be treated as traditional areas of state law.