Court Opinion

ID: 9494299
Source: CourtListenerOpinion
Date Created: 2023-08-05 15:34:32.11371+00
Date Added: 2024-06-11T17:56:20.407597
License: Public Domain

DYK, Circuit Judge,
dissenting.
I respectfully dissent. The majority opinion holds that state court divorce decrees, if they dispose of any marital property, cannot effectively reserve for future decision the disposition of federal survivor annuities. This approach is inconsistent with this court’s decision in Newman v. Love, 962 F.2d 1008 (Fed.Cir.1992), with the language and purpose of the survivor annuity statute (5 U.S.C. § 8341(h)), and with federal preemption law.
In Love, the Office of Personnel and Management appealed two Board decisions concerning Ms. Love and Ms. Penn, and this court consolidated the cases for appeal. Love, 962 F.2d at 1009. In the case involving Ms. Love, an earlier state court order had dissolved her marriage to a federal retiree without making any disposition of survivor annuities. Id. at 1010. The divorce decree specifically “ordered that all matters relating to property division and alimony are hereby reserved by the court for future consideration and decision.” Two subsequent state court orders, entered on the same date, approved a property settlement between the parties and provided for a survivor annuity upon the death of Mr. Love, respectively. Id. at 1010. In the case involving Ms. Penn, the initial court order dissolving the divorce “retired this matter [i.e., the divorce] ..., except for the entry of such future orders as may be necessary concerning equitable distribution.” The state court later entered an order dividing the parties’ marital property and awarding a survivor annuity to Ms. Penn. We held that the subsequent state court orders in both cases awarding a survivor annuity to the former spouses were effective pursuant to 5 U.S.C. § 8341(h)(1) because the later orders were not a “modification” of the earlier court orders. Id. at 1011. The later court orders were not a modification of the earlier court orders because they did “not change, alter, or limit” the first order in each case. Id.
Here, as in Love, the initial court order made no disposition of the survivor annuity, but instead reserved resolution of the issue for the future. Thus this case is *1290controlled by Love. The 1997 order at issue on this appeal does not constitute a “modification” of the 1996 order, because it did not “change, alter, or limit” the first order with respect to the survivor annuity. Love, 962 F.2d at 1011. Nothing in Love suggests that the result turned on whether the original decrees made no disposition of any marital property (as in Love) or (as here) made a disposition of marital property other than the federal survivor annuity. Nor has the majority shown why such a rule would make sense.
Nothing in Hokanson v. Office of Personnel Management, 122 F.3d 1043 (Fed.Cir.1997), relied on extensively in the majority opinion, purported to change the decision in Love, nor could it do so. In Hokanson, the initial state court order precluded any award of a survivor annuity. Id. at 1044. The initial court order awarded Ms. Hokanson, “as her portion of said civil semce retirement benefits, ... the sum of $556 per month.” Id. at 1044-45 (emphasis added). It also stated that “[t]he balance of [the] civil service retirement benefits shall be paid to [Mr. Hokanson].” Id. at 1045 (first brackets added; second and third brackets in original). The initial order made no reservation of the survivor annuity issue. We held that a subsequent order awarding Ms. Hokanson a survivor annuity was a “modification” because the provision of a survivor annuity was inconsistent with the express terms of the initial order. Id. at 1048. This case is governed by Love, not Hokanson.
The decision today is also directly contrary to the language of the survivor annuity statute. Section 8341 provides that OPM must honor a state court order awarding a survivor annuity to a former spouse, except in one limited circumstance — where the order is a “modification” of a disposition of the survivor annuity in an earlier order. The statute provides in pertinent part that:
(h)(1) Subject to paragraphs (2) through (5) of this subsection, a former spouse of a deceased employee ... is entitled to a survivor annuity ... if and to the extent expressly provided for ... in the terms of any decree of divorce or annulment or any court order or court-approved property settlement incident to such decree.
(4) For the purposes of this subchapter, a modification in a decree, order, agreement, or election referred to in paragraph (1) of this subsection shall not be effective — •
(A) if such modification is made after the retirement or death of the employee or Member concerned, and
(B) to the extent that such modification involves an annuity under this subsection.
5 U.S.C. § 8341(h) (emphases added). It is clear from the language of the statute that a prohibited “modification” only exists “to the extent that such modification involves an annuity.” If the original decree did not resolve the annuity question, a subsequent order providing for an annuity is not a modification that “involves an annuity.” In this case, the initial order of August 9, 1996, made no disposition of the survivor annuity, either explicitly or implicitly. Thus the 1997 order cannot constitute a “modification” of the 1996 order “involving] an annuity,” and the statute requires OPM to honor the 1997 order by awarding Ms. Vaecaro the requested survivor annuity.
The most troubling aspect of today’s decision is that it forces state divorce courts to vary their approach to the disposition of marital property when federal survivor annuities are involved. As the Chairman noted in his dissent at the Board, Vaccaro v. Office of Personnel Management, 85 M.S.P.R. 329, 332 (2000) (Chairman Erdreich, dissenting), it will of*1291ten be the case that some of the marital property requires immediate disposition, for example, a house or a car, and that the disposition of other property, particularly property having only future value, such as a survivor annuity, is less urgent. Under today’s majority decision, the state courts are precluded from deciding first things first. Instead, our decision requires them to always dispose of the federal survivor annuity in the first property decree or to forego the ordinary state prerogative of deciding the disposition of federal survivor annuity rights.
Nothing in the purpose of the statute or its legislative history requires such an intrusion. The overriding purpose of the statute was to protect former spouses. Prior to enactment of the Civil Service Retirement Spouse Equity Act of 1984, Pub.L. No. 98-615, 98 Stat. 3195, 3200-01 (“CSRSEA”), as codified at 5 U.S.C. § 8341 (1994), OPM would not honor a court order awarding a survivor annuity— payments that would be made after the death of the employee — to a former spouse of a federal employee. The report on CSRSEA by the Committee on Post Office and Civil Service indicates that the House of Representatives intended CSRSEA to address this “major gap” in existing law, i.e., that “survivor benefits are voided if a marriage is dissolved.” H.R.Rep. No. 98-1054, at 12 (1984), reprinted in 1984 U.S.C.C.A.N. 5540, 5542. The report discusses the hardships of divorced spouses lacking a survivor annuity, many of whom became impoverished once their former spouse died. Id. As discussed above, section 8341 addressed this problem by providing that OPM must honor a state court order awarding a survivor annuity to a former spouse unless the order is a “modification” of a disposition of the survivor annuity in an earlier order. 5 U.S.C. § 8341(h)(4).
The committee report indicates that the purpose of denying effect to a “modification” was to resolve any conflict between successive state court orders disposing of property by directing OPM to always hon- or the earliest dated order. H.R.Rep. No. 98-1054, at 15, reprinted in 1984 U.S.C.C.A.N. at 5545 (“In the event that more than one court order is filed with OPM and there is a conflict between the court orders, OPM will honor the earliest dated court order.”). Thus, Congress made it unnecessary for OPM to choose between conflicting court orders disposing of the annuity. If there was a conflict between the court orders’ disposition of annuity rights, the disposition in the earlier dated order always controlled. OPM faces no “choice of awards” problem where, as here, the first order made no disposition of survivor annuity. The committee report makes crystal clear that this is the rule. For example, the committee report discusses a later state court order in the context of “establishing or otherwise modifying that former spouse’s rights to survivor benefits.” H.R.Rep. No. 98-1054, at 14, reprinted in 1984 U.S.C.C.A.N. at 5545 (emphases added).
The committee further made clear that when there was no conflict between two court orders, i.e., when the later order awarding a survivor annuity could be honored by OPM without negating any disposition of the survivor annuity in the earlier order, then, under § 8341(h)(1), OPM was required to honor both orders even if the first order expressly dealt with a portion of the survivor annuity. H.R.Rep. No. 98-1054, at 15, reprinted in 1984 U.S.C.C.A.N. at 5545 (“If there is no conflict between the court orders [each awarding a portion of the annuity to a former spouse] then OPM will honor each one that has been filed as long as the total of survivor annuities payable to the former *1292spouses does not exceed 55 percent of the employee’s annuity.”).
Thus, instead of implementing the overriding Congressional purpose — to protect former spouses — the majority fastens on a subsidiary purpose — the choice of awards problem — to deny the annuity here, even though the subsidiary purpose is not even implicated.
The majority decision is also inconsistent with the Supreme Court’s established law concerning federal preemption of state law. Under today’s decision, any reservation of the disposition of survivor annuities in a state court order denies the state court the power to award survivor annuities in a future decree. The effect of the federal statute is to preempt state law governing the division of marital property. Particularly in areas of historic state concern, such as the disposition of marital property in divorce proceedings, federal preemption of state law requires a showing of clear congressional intent to preempt. See, e.g., Egelhoff v. Egelhoff, 532 U.S. 141, 121 S.Ct. 1322, 1330, 149 L.Ed.2d 264 (2001) (discussing the presumption against preemption of state family law); Hisquierdo v. Hisquierdo, 439 U.S. 572, 581, 99 S.Ct. 802, 59 L.Ed.2d 1 (1979) (“State family and family-property law must do ‘major damage’ to ‘clear and substantial’ federal interests before the Supremacy Clause will demand that state law be overridden.”) (quoting United States v. Yazell, 382 U.S. 341, 352, 86 S.Ct. 500, 15 L.Ed.2d 404 (1966)). Such a clear congressional intent is entirely lacking here.
Because the 1997 court order here was not a modification of any previous court order with respect to the survivor annuity, and the majority’s holding to the contrary is inconsistent with our decision in Love, with the language and purpose of the survivor annuity statute, and with federal preemption decisions, I respectfully dissent.1

. The Merit Systems Protection Board below relied on a regulation adopted by OPM, 5 C.F.R. § 838.1004, for its finding that if the original decree disposed of any marital property, a second decree constitutes a modification and would not be given any effect. For the reasons stated in the text, this regulation is inconsistent with the statute and our case law. Indeed in Love, this court recognized that the OPM's predecessor regulation to 5 C.F.R. § 838.1004 conflicts with the plain meaning of the statute. 962 F.2d at 1011-12. Therefore, in Love, this court ignored the regulation. I do not understand the majority opinion to rely on the regulation in resolving this case.