Court Opinion

ID: 6974121
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:07:56.080567+00
Date Added: 2024-06-11T16:08:54.660535
License: Public Domain

CYNTHIA HOLCOMB HALL, Circuit Judge,
concurring in part and dissenting in part.
I agree with the majority that ERISA would not prevent imposition of a constructive trust in the circumstances of this case. I write separately, however, to express my disagreement with its treatment of California’s law of community property. Because the application of community property law would require the ERISA plan administrator to distribute the proceeds of Ginger’s life insurance policy to someone other than the named beneficiary, ERISA preemption should apply.
The preemption question raised in this case has implications well beyond the community property context. It is not infrequently alleged, for instance, that beneficiary designations under ERISA welfare plans are altered by state laws governing domestic relations, wills, trusts, or estates. In almost every such case, our sister circuits have held that ERISA preempts state law. See, e.g., Mattei v. Mattei, 126 F.3d 794, 796 n. 2, 809 (6th Cir.1997), cert. denied, — U.S. -, 118 S.Ct. 1799, 140 L.Ed.2d 939 (1998); Brandon v. Travelers Ins. Co., 18 F.3d 1321, 1325 (5th Cir.1994); Krishna v. Colgate Palmolive Co., 7 F.3d 11, 15 (2nd Cir.1993); Metropolitan Life Ins. Co. v. Hanslip, 939 F.2d 904, 906 (10th Cir.1991); MacLean v. Ford Motor Co., 831 F.2d 723, 727 (7th Cir.1987).1 These cases might be distinguishable in light of recent Supreme Court precedent if the courts had simply speculated that state laws that alter beneficiary designations, “relate to” ERISA in some intangible fashion. However, the conflict between such state laws and ERISA is much more tangible and direct.
Most importantly, state laws that alter beneficiary designations impose obligations *963on plan administrators that are inconsistent with the obligations imposed by ERISA. Under 29 U.S.C. § 1104(a)(1)(D), plan administrators must discharge their duties “in accordance with the documents and instruments governing the plan.” Only the Eighth Circuit has suggested that beneficiary designations are not among the documents and instruments governing a plan. See Crysler, 66 F.3d at 948 (holding that § 1104(a)(1)(D) provides no more than “important guidance” in settling beneficiary disputes). The majority of courts to consider the issue have held or assumed that § 1104(a)(1)(D) established a “clear mandate” that plan administrators follow plan documents, including beneficiary designations, in identifying the proper beneficiary. Metropolitan Life Ins. Co. v. Marsh, 119 F.3d 415, 420 (6th Cir.1997). I agree.2
Even if there were no direct conflict between California’s law of community property and a specific ERISA provision, a somewhat lesser conflict exists between the application of state law and “the intent of Congress that ERISA plans be uniform in their interpretation and simple in their application.” McMillan v. Parrott, 913 F.2d 310, 312 (6th Cir.1990). Requiring plan administrators to look not only to formal beneficiary designations, but also to state law, before disbursing benefits would undermine the efficient functioning of ERISA plans and the certainty of both plan administrators and designated beneficiaries as to who is entitled to benefits. The burden on plan administrators is not so onerous if plan administrators are required to do no more than initiate interpleader proceedings in the event of conflicting claims. Yet, even this burden might, in the aggregate, discourage the use of interpleader or similar procedural devices, disrupt the uniform administration of ERISA plans, and perhaps lead employers to reduce plan benefits or eliminate some benefits altogether. See Krishna, 7 F.3d at 16.
I am not persuaded by the majority’s slayer statute analogy. While no circuit has decided whether state slayer statutes are preempted by ERISA, I would not hesitate to find preemption in the bulk of cases in which a slayer statute would require an ERISA plan administrator to distribute benefits to someone other than the named beneficiary. Moreover, neither of the district court cases that the majority cites for the proposition that slayer statutes are not preempted supports a similar ruling in the community property context. In New Orleans Elec. Pension Fund v. DeRocha, 779 F.Supp. 845, 850 (E.D.La.1991), the court’s ruling that ERISA does not preempt Louisiana’s slayer statute hinged on application of ERISA’s savings clause for state insurance law. Id.; see 29 U.S.C. § 1144(b)(2)(A). Unlike Louisiana’s slayer statute, which was expressly limited to the insurance context, see DeRocha, 779 F.Supp. at 850, California’s law of community property cannot avoid preemption under ERISA’s savings clause.
In Mendez-Bellido v. Board of Trustees of Div. 1181, A.T.U. New York Employees Pension Fund and Plan, 709 F.Supp. 329 (E.D.N.Y.1989), the court found no preemption of New York’s slayer statute, this time without resorting to ERISA’s savings clause. Id. at 331. It was important to this court’s decision, however, that “state laws prohibiting murderers from receiving death benefits are relatively uniform [such that] there is little threat of creating a ‘patchwork scheme of regulation.’” Id. at 332 (footnote and citation omitted). Because state laws governing domestic relations and testamentary transfers are far more varied, and would thus undermine Congress’ intent that ERISA plans be uniform in their interpretation and *964simple in their application, Mendez-Bellido, like DeRocha, actually supports finding preemption in the present community property context.3
Because application of California’s law of community property would create a conflict with a specific provision of ERISA and with Congress’ objectives in enacting ERISA, the district court did not err in deeming it preempted.4

, At least one district court has disagreed. See Metropolitan Life Ins. Co. v. Pearson, 848 F.Supp. 1326, 1333 (E.D.Mich.1994). While the Eighth Circuit, in Equitable Life Assurance Society v. Crysler, 66 F.3d 944 (8th Cir.1995), found no conflict between a state divorce law and ERISA, it recognized that "ERISA preemption makes the designation of plan. beneficiaries- ... [a] question[] of federal law,” and the court ultimately utilized the state law only in fashioning federal common law. Id. at 948-49.

. In Crysler, the Eighth Circuit reasoned that because "no ... ERISA provision ... expressly governs th[e] dispute between benefit claimants," state law may be used to resolve conflicting claims. 66 F.3d at 948. Yet, the very fact that § 1104(a)(1) includes a blanket requirement that plan administrators distribute benefits to the named beneficiary and says nothing about conflicting claims should make an administrator's obligations when conflicting claims arise abundantly clear — distribute benefits to the named beneficiary. The absence of any express provision dealing with conflicting claims thus bolsters, rather than weakens, the majority position that the beneficiary designation on file is controlling.
It is also worth noting that ERISA defines a "beneficiary" as "a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder." 29 U.S.C. § 1002(8). This definition does not reference state laws governing domestic relations, wills, trusts, or estates.

. When ERISA preempts a state statute, we generally resort to federal common law in place of the preempted state law. See McClure v. Life Ins. Co. of North America, 84 F.3d 1129, 1133 (9th Cir.1996). Both the DeRocha and Mendez-Belli-do courts looked to federal common law as an alternative basis for denying benefits to a slayer in the event ERISA did preempt state law. DeRocha, 779 F.Supp. at 850; Mendez-Bellido, 709 F.Supp. at 332-33. While federal common law may preclude a murderer from recovering under his victim’s insurance policy or will, there is no federal common law that would require the plan administrator in the present case to distribute benefits to anyone other than the named beneficiary.

. Because ERISA preempts the application of California community property law, federal subject matter jurisdiction exists. See Buster v. Greisen, 104 F.3d 1186, 1188 (9th Cir.)(finding "complete preemption” of a state law claim, and thus a basis for federal jurisdiction, "only when [ERISA] both preempts the claim ... and displaces the claim with its civil enforcement provision, 29 U.S.C. § 1132(a)”), cert. denied, - U.S. -, 118 S.Ct. 441, 139 L.Ed.2d 378 (1997); Cripps v. Life Ins. Co. of North America, 980 F.2d 1261, 1266-67 (9th Cir.1992)(holding that a plaintiff’s claim that she is a beneficiary by virtue of state law presents a federal question under § 1132(a)).