Court Opinion

ID: 1057950
Source: CourtListenerOpinion
Date Created: 2013-10-09 18:28:10.205725+00
Date Added: 2024-06-11T13:02:01.834071
License: Public Domain

Present:   All the Justices

JUDY A. MARETTA
                                         OPINION BY
v.   Record No. 102042         CHIEF JUSTICE CYNTHIA D. KINSER
                                      January 13, 2012
JACQUELINE HILLMAN

             FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
                     Michael F. Devine, Judge

      Judy A. Maretta (Maretta), as the named beneficiary of a

Federal Employees' Group Life Insurance (FEGLI) policy, received

FEGLI benefits upon the death of her ex-husband.   The question

on appeal is whether federal law preempts Code § 20-111.1(D),

which otherwise would make Maretta liable to her ex-husband's

widow, Jacqueline Hillman (Hillman), for those benefits.

      In the event of a decree of annulment or divorce from the

bond of matrimony, Code § 20-111.1(A) revokes "any revocable

beneficiary designation contained in a then existing written

contract owned by one party that provides for the payment of any

death benefit to the other party."   However, Code § 20-111.1(D),

the subsection at issue, provides that

      [if Code § 20-111.1(A)] is preempted by federal
      law with respect to the payment of any death
      benefit, a former spouse who, not for value,
      receives the payment of any death benefit that
      the former spouse is not entitled to under this
      section is personally liable for the amount of
      the payment to the person who would have been
      entitled to it were this section not preempted.

      In contrast to these statutory provisions, the Federal

Employees' Group Life Insurance Act (FEGLIA), 5 U.S.C. § 8701 et
seq. (2006 & Supp. II 2008), contains an order of precedence

that directs to whom benefits under a FEGLI policy are paid:

     [T]he amount of group life insurance and group
     accidental death insurance in force on an
     employee at the date of his death shall be paid,
     on the establishment of a valid claim, to the
     person or persons surviving at the date of his
     death, in the following order of precedence:

          First, to the beneficiary or beneficiaries
     designated by the employee in a signed and
     witnessed writing received before death in the
     employing office . . . .

          Second, if there is no designated
     beneficiary, to the widow or widower of the
     employee.

5 U.S.C. § 8705(a).   FEGLIA also contains a preemption

provision, which states:

          The provisions of any contract under this
     chapter [5 U.S.C. § 8701 et seq.] which relate to
     the nature or extent of coverage or benefits
     (including payments with respect to benefits)
     shall supersede and preempt any law of any State
     or political subdivision thereof, or any
     regulation issued thereunder, which relates to
     group life insurance to the extent that the law
     or regulation is inconsistent with the
     contractual provisions.

5 U.S.C. § 8709(d)(1). 1

     1
       The "contractual provisions" referenced in 5 U.S.C.
§ 8709(d)(1) with which state law must be consistent are simply
the provisions of FEGLIA. See O'Neal v. Gonzalez, 839 F.2d
1437, 1440 (11th Cir. 1988) (noting that the insurance policy is
not a traditional contract between an insured and the insurer
but a federal policy governed by federal law). Section
8709(d)(1) "broadly preempts any state law that is inconsistent
with the FEGLIA master policy." Metropolitan Life Ins. Co. v.
Christ, 979 F.2d 575, 579 (7th Cir. 1992).

                                 2
     Because Congress intended for FEGLI benefits to be paid and

to belong to a designated beneficiary, we conclude that FEGLIA

preempts Code § 20-111.1(D).   Therefore, we will reverse the

circuit court's judgment.

                        FACTS AND PROCEEDINGS

     The relevant facts are not in dispute.     In December 1996,

Warren Hillman (Warren) named Maretta, his wife at the time, as

the beneficiary of his FEGLI policy.    The two divorced in

December 1998 and Warren married Hillman in October 2002.

Warren, however, never changed the beneficiary designation in

his FEGLI policy.   Hillman and Warren were still married when,

in July 2008, Warren died.   After her husband's death, Hillman

filed a claim for benefits under Warren's FEGLI policy but was

told the proceeds would be distributed to Warren's designated

beneficiary, Maretta.   Maretta filed a claim for and received

the death benefits under the FEGLI policy in the amount of

$124,558.03.

     Hillman then filed an action against Maretta, claiming that

pursuant to Code § 20-111.1(D), Maretta was liable to her for

the death benefits received as the beneficiary of Warren's FEGLI

policy.   Hillman sought an order directing Maretta to pay those

proceeds to Hillman or, alternatively, a judgment against

Maretta in the amount received from the FEGLI policy.    Maretta

filed a demurrer and plea in bar.     Citing numerous federal

                                  3
cases, Maretta claimed that Code §§ 20-111.1(A) and -111.1(D)

are preempted by 5 U.S.C. §§ 8705 and 8709 because the state

statutes grant FEGLI benefits to someone other than the named

beneficiary in violation of FEGLIA's terms.   In a letter

opinion, the circuit court overruled Maretta's demurrer and plea

in bar, concluding that Code § 20-111.1(D) is not preempted by

FEGLIA.   Hillman then moved for summary judgment.   Finding no

material facts in dispute, the circuit court granted Hillman's

motion and entered judgment against Maretta in the amount of

$124,558.03.

     We granted Maretta this appeal.    The sole issue is whether

the circuit court erred in determining that Hillman's claim

under Code § 20-111.1(D) is not preempted by FEGLIA.    That issue

is a question of law reviewed de novo on appeal.     See Johnson v.

Hart, 279 Va. 617, 623, 692 S.E.2d 239, 242 (2010).

                             ANALYSIS

                                 4
     The Supremacy Clause in the United States Constitution

provides that the laws of the United States "shall be the

supreme law of the land . . . any thing in the Constitution or

laws of any state to the contrary notwithstanding."   U.S. Const.

art. VI, cl. 2.   Accordingly, state laws in conflict with

federal law are "without effect."    Altria Group, Inc. v. Good,

555 U.S. 70, 76 (2008) (internal quotation marks omitted).    The

preemption doctrine "has its roots" in the Supremacy Clause and

"requires us to examine congressional intent."    Fidelity Fed.

Sav. & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 152 (1982).

" '[T]he purpose of Congress is the ultimate touchstone' in

every pre-emption case."   Altria Group, 555 U.S. at 76 (quoting

Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996)).

     "Pre-emption may be either express or implied, and is

compelled whether Congress' command is explicitly stated in the

statute's language or implicitly contained in its structure and

purpose."   de la Cuesta, 458 U.S. at 152-53 (internal quotation

marks omitted).   Even when Congress has stopped short of totally

displacing state law in a specific area, state law is

nevertheless preempted "to the extent that it actually conflicts

with federal law.   Such a conflict arises when compliance with

both federal and state regulations is a physical impossibility,

or when state law stands as an obstacle to the accomplishment

and execution of the full purposes and objectives of Congress."

                                 5
Id. at 153 (citations and internal quotation marks omitted); see

also, Dugan v. Childers, 261 Va. 3, 8, 539 S.E.2d 723, 725

(2001) (" 'The pertinent questions are whether the right as

asserted conflicts with the express terms of federal law and

whether its consequences sufficiently injure the objectives of

the federal program to require nonrecognition.' ") (quoting

Hisquierdo v. Hisquierdo, 439 U.S. 572, 583 (1979));

Metropolitan Life Ins. Co. v. Potter, 533 So. 2d 589, 591 (Ala.

1988) ("Preemption may occur from explicit preemptive language

in a statute, from implied congressional intent, or where state

law stands as an obstacle to the accomplishment of the full

purposes and objectives of Congress.").   While there is a

presumption against preemption "in areas of traditional state

regulation such as family law," Egelhoff v. Egelhoff, 532 U.S.
141, 151 (2001), "[the] relative importance to the State of its

own law is not material when there is a conflict with a valid

federal law, for the Framers of our Constitution provided that

the federal law must prevail."   Ridgway v. Ridgway, 454 U.S. 46,

54 (1981) (internal quotation marks omitted).

     In addition to the order of precedence set forth in 5

U.S.C. § 8705(a) and the preemption provision in 5 U.S.C.

§ 8709(d)(1), FEGLIA and the regulations promulgated thereunder

contain provisions relevant to the specific preemption question

before us.   Pursuant to 5 C.F.R. § 870.802(f), an insured under

                                 6
a FEGLI policy can change his or her beneficiary "at any time

without the knowledge or consent of the previous beneficiary.

This right cannot be waived or restricted." 2    Id.   The insured's

beneficiary designation takes precedence over any court order

for divorce, annulment, or separation unless that order has been

received by the appropriate office prior to the insured's death.

5 U.S.C. § 8705(e); 5 C.F.R. § 870.801(d).      In addition, any

"designation, change, or cancellation of beneficiary in a will

or any other document not witnessed and filed as required by [5

C.F.R. § 870.802] has no legal effect with respect to [FEGLI]

benefits."   5 C.F.R § 870.802(c).

     Contrary to these provisions, Code § 20-111.1(A) revokes a

beneficiary designation upon entry of a decree of annulment or

divorce from the bond of matrimony and thus alters the order of

precedence in 5 U.S.C. § 8705(a), which directs payment of FEGLI

benefits first to the designated beneficiary regardless of

marital status.   As the parties acknowledged before the circuit

court, FEGLIA preempts Code § 20-111.1(A).      See Metropolitan

Life Ins. Co. v. Bell, 924 F. Supp. 63, 65 (E.D. Tex. 1995)

(holding that 5 U.S.C. § 8709(d)(1) "certainly preempts any

direct payment to anyone other than a listed beneficiary when a

beneficiary is actually designated").
     2
       "Federal regulations have no less pre-emptive effect than
federal statutes." de la Cuesta, 458 U.S. at 153.

                                 7
     Unlike Code § 20-111.1(A), Code § 20-111.1(D) does not

alter the direct payment of FEGLI benefits to a designated

beneficiary.   Instead, it grants a third party the right to

recover those benefits from a designated beneficiary who is the

former spouse of the insured.    Code § 20-111.1(D).   If Congress

intended for FEGLI benefits to belong to the designated

beneficiary to the exclusion of all others, then Code § 20-

111.1(D) "stands as an obstacle to the accomplishment and

execution of the full power and objectives of Congress" and is

therefore preempted by FEGLIA.    de la Cuesta, 458 U.S. at 153.

     Hillman argues, and courts have generally agreed, that

FEGLIA manifests a congressional intent for administrative

convenience.   See, e.g., Kidd v. Pritzel, 821 S.W.2d 566, 569-70

(Mo. Ct. App. 1991) (holding that purpose of 5 U.S.C. § 8705 is

"to provide for the speedy and economical settlement of claims")

(citing cases); cf. Egelhoff, 532 U.S. at 148 (stating that the

principal goal of Employee Retirement Income Security Act is to

provide "a set of standard procedures to guide processing of

claims and disbursement of benefits") (internal quotation marks

omitted).   But many courts have concluded that Congress also

intended to grant an insured the right to name without

restriction, and to the exclusion of all others, the person who

will receive the benefits from a FEGLI policy.    See, e.g.,

Metropolitan Life Ins. Co. v. Zaldivar, 413 F.3d 119, 120-21

                                  8
(1st Cir. 2005) (FEGLIA preempts the imposition of a

constructive trust on FEGLI proceeds once paid); Metropolitan

Life Ins. Co. v. Christ, 979 F.2d 575, 578-79 (7th Cir. 1992)

(same); O'Neal v. Gonzalez, 839 F.2d 1437, 1440 (11th Cir. 1988)

("Congress intended to establish . . . for the benefit of

designated beneficiaries, an inflexible rule that the

beneficiary . . . would receive the policy proceeds, regardless

of other documents or the equities in a particular case.").

Most relevant is the decision of the Supreme Court of the United

States in Ridgway.   Although Ridgway involved the Servicemen's

Group Life Insurance Act (SGLIA), both FEGLIA and SGLIA contain

identical "order of precedence" provisions.     Compare 5 U.S.C.

§ 8705(a) with 38 U.S.C. § 1970(a).    Regulations promulgated

pursuant to SGLIA are also similar to those under FEGLIA.      See

38 C.F.R. § 9.4(3)(b) (change in beneficiary may be made at any

time).   We thus agree with those courts that have considered

Ridgway to be "highly persuasive, if not binding, in construing

[FEGLIA]."   See Zaldivar, 413 F.3d at 120 (citing cases in

support).

     In Ridgway, the insured serviceman named his wife as the

beneficiary of his SGLIA benefits.    454 U.S. at 48.   When the

parties subsequently obtained a divorce, the state-law judgment

ordered the insured to keep in force any existing life insurance

policies for the benefit of his children.     Id.   The insured

                                 9
remarried and, contrary to the command of the divorce order,

changed the policy's beneficiary designation so that the

proceeds would be paid pursuant to the statutory order of

precedence set forth in 38 U.S.C. § 770(a), i.e., to his widow.

Id.   Both the widow and ex-wife, the latter on behalf of the

insured's children, filed claims for the SGLIA policy proceeds.

Id. at 49.   The ex-wife also filed suit, asking that a

constructive trust be placed on any proceeds paid to the widow.

Id.   The Supreme Judicial Court of Maine concluded that the

widow should be named as the constructive trustee of the policy

benefits and directed that the benefits be paid to the ex-wife

on behalf of the insured's children.    Id. at 50 (citing Ridgway

v. Prudential Ins. Co. of America, 419 A.2d 1030, 1035 (Me.

1980)).

      On a writ of certiorari, the Supreme Court first described

the history and terms of SGLIA, including its specified order of

precedence for paying benefits, 38 U.S.C. § 770(a), and its

anti-attachment provision.   Id. at 52-53.   The latter shielded

policy payments from creditors' claims and from "'attachment,

levy, or seizure by or under any legal or equitable process

whatever, either before or after receipt by the beneficiary.' "

Id. (quoting 38 U.S.C. § 770(g)).    Noting that "a state divorce

decree, like other law governing the economic aspects of

domestic relations, must give way to clearly conflicting federal

                                10
enactments," the Court then turned to its previous decision in

Wissner v. Wissner, 338 U.S. 655 (1950).    Ridgway, 454 U.S. at

55.

      In Wissner, the trial court held that benefits paid under

the National Service Life Insurance Act (NSLIA), which allowed

an insured to designate and change a beneficiary and contained

an anti-attachment provision, were community property.     Wissner,

338 U.S. at 658-59.   Although the insured service member named

his parents as beneficiaries of his NSLIA policy, the trial

court nevertheless directed that proceeds be paid to the

insured's widow.   Id. at 657-58.    The Supreme Court in Wissner

reversed, finding that the trial court's judgment "nullifie[d]

the soldier's choice and frustrate[d] the deliberate purpose of

Congress."   Id. at 659.

      Quoting that language from Wissner, the majority in Ridgway

then held:

     The present case, we feel, is controlled by
     Wissner. [J]ust as . . . in Wissner, the insured
     service member possesses the right freely to
     designate the beneficiary and to alter that
     choice at any time by communicating the decision
     in writing to the proper office. Here, as there,
     it appropriately may be said: "Congress has
     spoken with force and clarity in directing that
     the proceeds belong to the named beneficiary and
     no other."
Ridgway, 454 U.S. at 55-56 (quoting Wissner, 338 U.S. at 658).

Finding that a state law imposing a constructive trust on SGLIA

benefits was preempted by SGLIA, the Court explained: "Federal

                                11
law and federal regulations bestow upon the service member an

absolute right to designate the policy beneficiary.    That right

is personal to the member alone.     [O]nly [the insured] had the

power to create and change a beneficiary interest in his SGLIA

insurance."   Id. at 59-60.

      Under a separate heading, the Supreme Court then held that

placing a constructive trust on the policy proceeds was also

inconsistent with SGLIA's anti-attachment provision.    Id. at 60-

62.   Notably, the Court pointed out that it had similarly

invoked NSLIA's identical anti-attachment provision as an

independent ground for the result reached in Wissner.     Id. at

60.

      In light of the virtually identical language used in FEGLIA

and SGLIA, we conclude pursuant to Ridgway that it is Congress'

intent that "only [the insured] [has] the power to create and

change a beneficiary interest," that the right to do so cannot

be waived or restricted, and that the FEGLI benefits belong to

the named beneficiary.   Ridgway, 454 U.S. at 60; see Christ, 979

F.2d at 579 (state's divorce decree and constructive trust

conflicted with the rights of the insured specified under

FEGLIA).   Just as with SGLIA, "Congress has spoken with force

and clarity in directing that the [FEGLI] proceeds belong to the

                                12
named beneficiary and no other." 3       See id. at 56 (emphasis

added).      That is, Congress did not intend merely for the named

beneficiary in a FEGLI policy to receive the proceeds, only then

to have them subject to recovery by a third party under state

law.       Simply put, "no persons other than [the beneficiary] have

an interest in the policy benefits pursuant to FEGLIA."

Metropolitan Life Ins. Co. v. Armstrong-Lofton, 19 F. Supp. 2d
1134, 1137 (C.D. Cal. 1998); see also O'Neal, 839 F.2d at 1440

(Congress' intent under FEGLIA was to establish an "inflexible

rule" that only the beneficiary would receive the policy

proceeds, "regardless of other documents or the equities in a

particular case.").      Code § 20-111.1(D), by making liable "a

former spouse who, not for value, receives the payment of any

death benefit that the former spouse is not entitled to under"

Code § 20-111.1(A), "create[s] a beneficiary interest" in the

policy proceeds for someone other than the named insured.

Ridgway, 454 U.S. at 60.      In other words, Code § 20-111.1(D)

"nullifies the [insured's] choice and frustrates the deliberate

purpose of Congress."       Wissner, 338 U.S. at 659.   Thus, Code

       3
       In fact, Congress' preemptive intent is more apparent in
FEGLIA than in SGLIA, which contains no provision similar to 5
U.S.C. § 8709(d)(1). See Potter, 533 So.2d at 594 (holding that
given FEGLIA's express preemption provision, it is even more
appropriate to conclude that Congress "'has spoken with force
and clarity in directing that the proceeds belong to the named
beneficiary and no other'") (quoting Ridgway, 454 U.S. at 55-
56).

                                    13
§ 20-111.1(D) "actually conflicts with federal law [by]

stand[ing] as an obstacle to the accomplishment and execution of

the full purposes and objectives of Congress."   de la Cuesta,

458 U.S. at 153 (internal quotation marks omitted).   Therefore,

we hold that Code § 20-111.1(D) is preempted by FEGLIA.

     We are aware, as Hillman argues on brief, that our decision

today stands in contrast to a majority of state court decisions.

Unlike federal courts, state courts have generally held that

FEGLIA does not preempt a state-law constructive trust on FEGLI

proceeds for the benefit of someone other than the named

beneficiary.   See generally McCord v. Spradling, 830 So. 2d 1188,

1202 (Miss. 2002) (citing cases and finding persuasive state

court holdings that the "distinction between beneficiary status

and ultimate equitable entitlement obviates any issue of federal

preemption of state-court action"); Fagan v. Chaisson, 179
S.W.3d 35, 42 (Ct. App. Tex. 2005) (citing cases); but see,

Potter, 533 So.2d at 593 (holding that FEGLIA preempted state

court divorce judgment ordering insured to maintain ex-wife as

beneficiary of existing life insurance policies).   In doing so,

however, these courts have misconstrued Ridgway, specifically

its reliance on Wissner, and the separate, independent

discussion of SGLIA's anti-attachment provision.    See Christ,

979 F.2d at 581 ("SGLIA's anti-attachment provision . . . was a

separate ground" for finding preemption); Metropolitan Life Ins.

                                14
Co. v. McShan, 577 F. Supp. 165, 169 (N.D. Cal. 1983) ("In both

Wissner and Ridgway the existence of an anti-attachment

provision was an independent basis upon which the Supreme Court

found preemption.").   In Fagan, for example, the court stated

that "Ridgway was decided on two points," the first being that

SGLIA's order of precedence for the payment of benefits merely

conferred a right on the insured to designate a beneficiary.

179 S.W.3d at 44; see also Kidd, 821 S.W.2d at 570 (same).      That

interpretation is incorrect.   The Court's first holding in

Ridgway, made in reliance on its decision in Wissner, emphasized

that the insured's right to designate a beneficiary and to alter

that choice at any time evinced Congress' intent for the policy

proceeds to "belong to the named beneficiary and no other." 4

Ridgway, 454 U.S. at 56 (internal quotation marks omitted).

Hillman, and the courts on which she relies, fail to account for

Ridgway's reliance on Wissner.   According to the Supreme Court,

Wissner controlled the outcome in Ridgway, id. at 55, and we

conclude that Ridgway, in turn, controls the result in the case

now before us.

     State courts distinguishing Ridgway also fail to

acknowledge what is apparent from a plain reading of the

decision, i.e., that its holding based on SGLIA's anti-
     4
       The court in Fagan also mistakenly referred to the second
holding in Ridgway based on SGLIA's anti-attachment provision as
the "most important[]." Fagan, 179 S.W.2d at 44.

                                 15
attachment provision was a separate, independent basis for the

result.   See, e.g., McCord, 830 So.2d at 1197 (distinguishing

Ridgway solely on the grounds that SGLIA contained an anti-

attachment provision).   Ridgway's discussion of SGLIA's anti-

attachment provision began with the statement: the "imposition

of a constructive trust is also inconsistent with the anti-

attachment provision."   Ridgway, 454 U.S. at 60 (emphasis

added).   In other words, Ridgway is not distinguishable on the

basis that FEGLIA does not contain an anti-attachment provision.

     In sum, the circuit court erred in concluding that Code

§ 20-111.1(D) is not preempted by FEGLIA.

                            CONCLUSION

     For these reasons, we will reverse the judgment of the

circuit court.   Because we conclude that FEGLIA preempts Code

§ 20-111.1(D), we will enter judgment for Maretta.

                                      Reversed and final judgment.

JUSTICE McCLANAHAN, with whom JUSTICE MILLETTE joins,
dissenting.

                                I.

     The constitutional standard governing preemption under the

Supremacy Clause, as contained in Article VI of the Constitution

of the United States, presents a "'high threshold'" for the

invalidation of a state statute alleged to conflict with federal

                                16
law.    Chamber of Commerce of the U.S. v. Whiting, 563 U.S. ___,

___, 131 S. Ct. 1968, 1985 (2011) (quoting Gade v. National Solid

Wastes Mgmt. Ass'n, 505 U.S. 88, 110 (1992) (Kennedy, J.,

concurring in part and concurring in judgment)).     Accordingly,

courts are to address preemption claims "with the starting

presumption that Congress does not intend to supplant state

law."     New York State Conf. of Blue Cross & Blue Shield Plans v.

Travelers Ins. Co., 514 U.S. 645, 654 (1995).     The threshold for

invoking preemption is even higher where, as here, the state

statute at issue represents a state legislature's exercise of

its police power in the area of domestic relations.     Rose v.

Rose, 481 U.S. 619, 625 (1987); Hisquierdo v. Hisquierdo, 439
U.S. 572, 581 (1979); United States v. Yazell, 382 U.S. 341, 352

(1966).    That is because " 'the whole subject of domestic

relations . . . belongs to the laws of the States and not to the

laws of the United States.' "     Rose, 481 U.S. at 625 (quoting In

re Burrus, 136 U.S. 586, 593-94 (1890)).

        Thus, as the United States Supreme Court has stated,

" 'when state family law has come into conflict with a federal

statute,' " courts should limit their Supremacy Clause review to

a determination of " 'whether Congress has "positively required

by direct enactment" that state law be pre-empted.' "     Id.

(quoting Hisquierdo, 439 U.S. at 581 (quoting Wetmore v. Markoe,

196 U.S. 68, 77 (1904))).     Indeed, "[b]efore a state law

                                  17
governing domestic relations will be overridden," the Supreme

Court has further explained, the state law " 'must do "major

damage" to "clear and substantial" federal interests.' "   Id.

(quoting Hisquierdo, 439 U.S. at 581 (quoting Yazell, 382 U.S.

at 352)) (emphasis added). 1

     In my opinion, this high threshold for imposing preemption

in the instant case has not been met.   That is, I do not believe

Code § 20-111.1(D) (triggered, itself, upon federal preemption

of subsection A of the statute) is preempted by the Federal

Employees' Group Life Insurance Act (FEGLIA), 5 U.S.C. § 8701 et

seq. (2006 & Supp. II 2008).

                                 II.

          Subsection A of Code § 20-111.1 provides, in relevant

part: "Upon the entry of a decree of annulment or divorce from

the bond of matrimony . . . any revocable beneficiary

designation contained in a then existing written contract owned

by one party that provides for the payment of any death benefit

to the other party is revoked. A death benefit prevented from

     1
       See Brandon v. Travelers Insur. Co., 18 F.3d 1321, 1326
(5th Cir. 1994) (observing in preemption case that "[f]ederal
respect for state domestic relations law has a long and
venerable history" and that "[w]hen courts face a potential
conflict between state domestic relations law and federal law,
the strong presumption is that state law should be given
precedence" because "family relations [law] has been a
sacrosanct enclave" (emphasis added)).

                               18
passing to a former spouse by this section shall be paid as if

the former spouse had predeceased the decedent. . . ." 2

     In revoking the beneficiary designation of a former spouse

to a life insurance policy upon divorce, Code § 20-111.1(A)

operates as a companion to the revocation-by-divorce statute in

Virginia applicable to wills of former spouses, Code § 64.1-59. 3

Addressing the latter statute, this Court has explained that its

passage was "a statutory declaration of public policy concerning

wills of divorced testators, which provided . . . that a

divorced spouse is to be denied any benefits under a will

executed prior to divorce" based on the testator's presumed

change of intent upon divorce.   Papen v. Papen, 216 Va. 879,

882-83, 224 S.E.2d 153, 155 (1976).   "The General Assembly, in

evaluating the advisability of [enacting Code § 64.1-59],

undoubtedly concluded that the number of forgetful testators who

would be benefited by the statute far exceeded the number of

careful testators who might be inconvenienced by its enactment."

     2
       The terms of Code § 20-111.1(A) are expressly inapplicable
"(i) to the extent a decree of annulment or divorce from the
bond of matrimony, or a written agreement of the parties
provides for a contrary result as to specific death benefits, or
(ii) to any trust or any death benefit payable to or under any
trust," none of which is presented in this case. Code § 20-
111.1(C).
     3
       Code § 64.1-59 provides, in relevant part: "If, after
making a will, the testator is divorced a vinculo matrimonii or
his marriage is annulled, the divorce or annulment revokes any
disposition or appointment of property made by the will to the
former spouse. . . ."

                                 19
Id. at 883, 224 S.E.2d at 155-56.        The General Assembly no doubt

adhered to a similar conclusion in subsequently enacting Code

§ 20-111.1(A) with its analogous revocation of a designation of

a former spouse as a beneficiary on a life insurance policy upon

divorce.   See generally Alan S. Wilmit, Note, Applying the

Doctrine of Revocation by Divorce to Life Insurance Policies, 73

Cornell L. Rev. 653 (1988).

     As appellant correctly asserts, however, Code § 20-

111.1(A), as applicable to the facts in this case, is

inconsistent with FEGLIA's directive as to whom life insurance

benefits under a FEGLIA policy "shall be paid," as set forth in

5 U.S.C. § 8705(a).    Under the 5 U.S.C. § 8705(a) statutory

"order of precedence," the first payee of the life insurance is

"the beneficiary or beneficiaries designated by the employee in

a signed and witnessed writing received before death in the

employing office . . . ." 4   Id.    Consequently, in this case,

pursuant to 5 U.S.C. § 8705(a), the FEGLI policy holder's former

spouse, appellant, as the designated beneficiary on the policy,

received payment of the insurance proceeds through the federal

Office of Personnel Management (the federal agency that

administers FEGLIA).   Under Code § 20-111.1(A), the policy

     4
       Several other alternative payees are then listed under 5
U.S.C. § 8705(a) in order of priority in the event there is no
designated beneficiary, the first of these being the widow or
widower of the deceased policy holder.

                                    20
holder's widow, appellee, would have received the insurance

proceeds from her deceased husband's FEGLI policy.

     Addressing such conflicts with state law, FEGLIA provides

under 5 U.S.C. § 8709(d)(1) that "[t]he provisions of any

contract under this chapter [5 USCS §§ 8701 et seq.] which

relate to the nature or extent of coverage or benefits

(including payments with respect to benefits) shall supersede

and preempt any law of any State or political subdivision

thereof, or any regulation issued thereunder, which relates to

group life insurance to the extent that the law or regulation is

inconsistent with the contractual provisions."

     The majority thus concludes, and I agree, that Code § 20-

111.1(A) is therefore preempted under the express terms of 5

U.S.C. § 8709(d)(1), as Code § 20-111.1(A) would otherwise

negate the payment dictated by 5 U.S.C. § 8705(a) where, as

here, the designated beneficiary was a former spouse, and the

designation was made prior to the divorce of the former spouse

and the federal employee policy holder.

                              III.

     The issue on appeal is thus whether Code § 20-111.1(D),

which is triggered upon the federal preemption of subsection A

of the statute, is itself preempted under FEGLIA.

     The General Assembly amended Code § 20-111.1 in 2007 by

adding subsection D to the statute, which provides as follows:

                               21
"If this section is preempted by federal law with respect to the

payment of any death benefit, a former spouse who, not for

value, receives the payment of any death benefit that the former

spouse is not entitled to under this section is personally

liable for the amount of the payment to the person who would

have been entitled to it were this section not preempted."     See

2007 Acts ch. 306.

     Passage of this amendment no doubt reflects the General

Assembly's recognition that subsection A of Code § 20-111.1 was

preempted by FEGLIA pursuant to 5 U.S.C. § 8709(d)(1).   The

General Assembly dealt with this impediment to implementation of

its public policy embodied in subsection A's revocation-by-

divorce provision for life insurance policies by establishing,

in subsection D of Code § 20-111.1, an equitable remedy in favor

of a third party who otherwise would have been entitled to

receive the insurance proceeds pursuant to subsection A –- in

this case, the decedent's widow.    Under the new provision, the

former spouse, as the designated beneficiary, is made personally

liable to the third party for an amount equal to the insurance

proceeds paid to the former spouse upon the death of the federal

employee policy holder.

     Thus, as the majority acknowledges, unlike subsection A,

subsection D "does not alter the direct payment of FEGLI

benefits to a designated beneficiary" in establishing the

                               22
equitable remedy against the former spouse.   After assessing

this key factor against the limited federal interest implicated

under 5 U.S.C. § 8705(a)'s payment provision for FEGLI benefits,

I believe that Code § 20-111.1(D) does no "major damage" to that

federal interest.    Rose, 481 U.S. at 625 (citations and internal

quotation marks omitted).

     Viewed through the prism of our governing standard of

review, FEGLIA simply does not evince congressional intent to

shield a former spouse from liability against a third party

claim involving FEGLI proceeds that have already been paid to

the former spouse.   Rather, as the majority also acknowledges, 5

U.S.C. § 8705(a)'s "order of precedence" for the payment of

FEGLI benefits was enacted for the purpose of providing

"administrative convenience" for the federal Office of Personnel

Management (OPM) and the insurer in processing claims and

distributing benefits.   See Kidd v. Pritzel, 821 S.W.2d 566,

568-70 (Mo. Ct. App. 1991) (detailing the legislative history of

5 U.S.C. § 8705 and cited by the majority).   Addressing this

point, the Missouri Court of Appeals in Kidd aptly explains that

     [section] 8705 serves a valuable and worthwhile
     purpose by keeping the OPM and the insurance company
     out of legal entanglements. It fulfills the
     congressional intention by reducing their
     administrative and legal hassles. Regardless of what
     claims are brought to recover the proceeds once they
     are paid out to the designated beneficiary, the
     purpose of § 8705 has been served. Neither the
     insurance carrier nor the government can be burdened

                                 23
     by participation in a state judicial proceeding to
     recover the proceeds.

Id. at 572 (emphasis added).    And this administrative

convenience – the ability of the OPM and the insurer to simply

pay the life insurance proceeds to the named beneficiary as

directed by 5 U.S.C. § 8705, close the file, and move on to the

next claim, as they did in this case – remains completely intact

with the application of Code § 20-111.1(D).    Accordingly, FEGLIA

should not be held to preempt Code § 20-111.1(D).

     I thus agree with the majority of state courts in other

jurisdictions that have addressed the issue of preemption under

FEGLIA and have similarly concluded that their state domestic

relations laws, in creating an equitable claim for an amount

equal to the FEGLI insurance proceeds that have been paid to the

named beneficiary, are not preempted by FEGLIA.    See, e.g.,

Fagan v. Chaisson, 179 S.W.3d 35, 42 (Tex. App. 2005); McCord v.

Spradling, 830 So. 2d 1188, 1203 (Miss. 2002); Sedarous v.

Sedarous, 666 A.2d 1362, 1363 (N.J. Super. Ct. App. Div. 1995);

Eonda v. Affinito, 629 A.2d 119, 123 (Pa. Super. Ct. 1993);

Kidd, 821 S.W.2d at 575; In re Estate of Anderson, 552 N.E.2d
429, 434-35 (Ill. App. Ct. 1990); Roberts v. Roberts, 560 S.W.2d
438, 439-40 (Tex. App. 1977).

     Unlike my colleagues, my view of congressional intent

reflected in FEGLIA is not altered by Ridgway v. Ridgway, 454

                                 24
U.S. 46 (1981), or Wissner v. Wissner, 338 U.S. 655 (1950) (the

case that the United States Supreme Court relied upon in

deciding Ridgway), where the Court imposed post-payment

protection for the life insurance proceeds paid to the

respective armed services member's designated beneficiary in

each of those cases.      I believe Ridgway, a Servicemen's Group

Life Insurance Act (SGLIA) case, and Wissner, a National Service

Life Insurance Act (NSLIA) case, are distinguishable from the

instant FEGLIA case.

      NSLIA, as the predecessor to SGLIA, placed into effect a

system of life insurance benefits specifically designed for our

armed services members shortly before the beginning of World War

II.   It then lapsed at the end of the Korean War, when private

commercial insurance generally became available for service

members.   Ridgway, 454 U.S. at 50-51.      SGLIA was subsequently

enacted in response to private carriers' restrictions on

coverage for service members as a result of the escalating

Vietnam conflict.       Id. at 50.   Like federal employees under

FEGLIA, armed services members possessed the right under both

NSLIA and SGLIA to designate the beneficiaries of their choice.

Id. at 55-56.   Both NSLIA and SGLIA, however, contained an

identical anti-attachment provision that was not included in

FEGLIA.    Id. at 60.    Under the anti-attachment provision,

"[p]ayments to the named beneficiary 'shall be exempt from the

                                     25
claims of creditors, and shall not be liable to attachment,

levy, or seizure by or under any legal or equitable process

whatever, either before or after receipt by the beneficiary

. . . .' "    Wissner, 338 U.S. at 659 (quoting 38 U.S.C. § 816)

(emphasis added).

     Assessing the beneficiary designation and anti-attachment

provisions together, the Supreme Court in Ridgway explained:

" 'Possession of government insurance, payable to the relative

of his choice, might well directly enhance the morale of the

serviceman.   The exemption provision is his guarantee of the

complete and full performance of the contract to the exclusion

of conflicting claims.    The end is a legitimate one within the

congressional powers over national defense, and the means are

adapted to the chosen end.' "    Ridgway, 454 U.S. at 56-57

(quoting Wissner, 338 U.S. at 660-61 (emphasis added)).     The

Supreme Court then concluded its analysis by explaining that,

with the anti-attachment clause, "Congress has insulated the

proceeds of SGLIA insurance from attack or seizure by any

claimant other than the beneficiary designated by the insured or

the one first in line under the statutory order of precedence.

That is Congress' choice. It remains effective until legislation

providing otherwise is enacted."      Id. at 63.

     FEGLIA, by contrast, simply made group life insurance

available to federal employees so as to " 'appl[y] to Government

                                 26
service the best practices of progressive, private employers.' "

Fagan, 179 S.W.3d at 45 (quoting Kidd, 821 S.W.2d at 568; some

internal quotation marks omitted).   Manifestly, its passage was

"not attended by the exigenc[ies] that motivated" Congress when

passing NSLIA and SGLIA in the context of national defense.      Id.

The omission of an anti-attachment clause in FEGLIA should thus

be viewed as answering in the negative the question of whether

Congress intended to preempt a state law like Code § 20-111.1(D)

– one that impacts FEGLI benefits, if at all, only after the

benefits have been paid to the designated beneficiary.    With a

comprehensive statutory scheme like FEGLIA, such an "omission[]"

is a "significant one[]."   Mackey v. Lanier Collection Agency &

Serv., Inc., 486 U.S. 825, 837 (1988) (addressing absence of

anti-alienation provisions under ERISA as to welfare benefit

plans).   As the Texas Court of Appeals stated in an analogous

FEGLIA case, " '[i]f Congress had desired to totally pre-empt

all state law claims[,] it would have included an anti-

attachment provision [in] FEGLIA.    Ridgway expressly stated that

if Congress chose to avoid the result in that case, it could do

so by enacting legislation which did not include an anti-

attachment provision. That is precisely what Congress did when

it enacted FEGLIA.' "   Fagan, 179 S.W.3d at 45 (quoting Kidd,

821 S.W.2d at 571); see Sedarous, 666 A.2d at 1367 ("[I]f

Congress had intended the same immunity of proceeds from state

                                27
court action in FEGLIA as it provided for in SGLIA, it could

easily have done so by the simple expedient of including SGLIA's

anti-attachment provision in FEGLIA.").

     I also find support for my position in both federal and

state court decisions addressing preemption under the federal

Employee Retirement Income Security Act of 1974 (ERISA), 29

U.S.C. § 1001 et seq., a statutory scheme more analogous to

FEGLIA than either NSLIA or SGLIA.

     Like FEGLIA's "order of precedence" under 5 U.S.C.

§ 8705(a) dictating payment of the insurance proceeds to the

designated beneficiary, ERISA requires payment of life insurance

benefits provided under an ERISA employee welfare benefit plan

to the designated beneficiary.   Central States Se. & Sw. Areas

Pension Fund, Inc. v. Howell, 227 F.3d 672, 677 (6th Cir. 2000);

see Kennedy v. Plan Adm'r for DuPont Sav. & Inv. Plan, 555 U.S.
285, 300 (2009) (holding that the plan administrator must

distribute benefits according to the plan documents pursuant to

29 U.S.C. § 1104(a)(1)(D), in order to satisfy ERISA's goal of

establishing efficiency in benefit administration).   Also like

FEGLIA, ERISA expressly preempts "all State laws" that "relate

to" an ERISA plan.   29 U.S.C. § 1144(a).   And, like FEGLIA,

ERISA contains no anti-attachment or anti-alienation provision

as to welfare benefit plans, which are the plans under ERISA

that govern life insurance benefits.   See Mackey, 486 U.S. at

                                 28
836-37.    Furthermore, while ERISA does contain an anti-

alienation provision for pension plans under 29 U.S.C.

§ 1056(d)(1), this provision simply requires each pension plan

to "provide that benefits provided under the plan may not be

assigned or alienated."    As such, section 1056(d)(1) is much

more limited in scope than the anti-attachment provision

contained in both NSLIA and SGLIA (which, again, is absent from

FEGLIA).

     Addressing this statutory framework under ERISA, the Sixth

Circuit held in Central States that ERISA did not preempt the

imposition of a constructive trust, under state law, on the life

insurance benefits provided under an ERISA employee welfare

benefit plan once those benefits had been distributed to the

designated beneficiary according to the plan documents.     Central

States, 227 F.3d at 678-79.    More specifically, as the Sixth

Circuit explained:

     In this case, [appellee] seeks to impose a
     constructive trust on [her former husband's] ERISA
     welfare benefit plan benefits. [He] changed the
     beneficiary designation in accordance with the plan
     documents [thereby removing appellee as the
     beneficiary]. On this issue, our precedents are clear
     – the beneficiary card controls the person to whom the
     plan administrator must pay the benefits. However, we
     hold today that once the benefits have been released
     to the properly designated beneficiary, the district
     court has the discretion to impose a constructive
     trust upon those benefits in accordance with
     applicable state law if equity so requires.

Id. at 679.

                                 29
     The Supreme Court of Michigan reached the same conclusion

in Sweebe v. Sweebe, 712 N.W.2d 708 (Mich. 2006).        There, the

appellant/former wife and the decedent/former husband entered

into an agreement at the time of their divorce giving up any

interest in any insurance policy of the other.      The decedent had

a life insurance policy governed by ERISA on which he had

designated appellant as the beneficiary several years before

their divorce, and never changed the designation after the

divorce.    Id. at 710.   Appellee, decedent's subsequent

wife/widow, acting on behalf of the decedent's estate,

instituted an action under state law seeking to enforce the

former wife's waiver to any claim to the proceeds from the

decedent's life insurance policy.      Id.   The Michigan Supreme

Court held that ERISA did not preempt the estate's state law

claim to the insurance proceeds, and affirmed the lower court's

order directing the former wife "to pay an amount equal to the

insurance proceeds to the decedent's estate."      Id.    In reaching

its decision, the Court recognized that, "under ERISA

preemption, Michigan law cannot affect ERISA's determination of

the proper beneficiary," and "ERISA provides that a plan

administrator must distribute the proceeds of the insurance

policy to the named beneficiary."      Id. at 711 (citations

omitted).   The Court concluded, however, that after the benefits

are properly distributed under ERISA, as they were there, the

                                  30
issue of whether the former wife could "lawfully retain them"

was an issue "governed exclusively by Michigan law."     Id.

     In Guidry v. Sheet Metal Workers Nat'l Pension Fund, 39
F.3d 1078 (10th Cir. 1994), the Tenth Circuit reached a similar

conclusion even as to ERISA pension benefits.   There, the Court

held that, while the anti-alienation provision of ERISA

precluded a state claim for garnishment against pension benefits

before their distribution to a plan participant or beneficiary,

nothing in the legislative scheme protected the benefits

following their distribution to such participant or beneficiary.

Id. at 1082-83.   That is, a creditor could "collect directly

from the participant or beneficiary or, as [there], initiate an

enforce[ment] procedure against a third-party bank [that held]

the funds paid to the participant or beneficiary."     Id.; see

Pardee v. Pardee, 112 P.3d 308, 315-16 (Okla. Civ. App. 2005)

(holding that ERISA did not preempt allocation of a percentage

of the pension plan funds to appellee pursuant to state law

following distribution of the funds, as the funds "were no

longer entitled to ERISA protection once [they] were

distributed"); Hoult v. Hoult, 373 F.3d 47, 54-55 (1st Cir.

2004) (holding that the anti-alienation provision under ERISA

applies to pension funds "only while held by the plan

administrator and not after they reach the hands of the

beneficiary"); Wright v. Riveland, 219 F.3d 905, 919-21 (9th

                                31
Cir. 2000) (same); Trucking Employees of North Jersey Welfare

Fund, Inc. v. Colville, 16 F.3d 52, 54-56 (3rd Cir. 1994)

(same); see also DaimlerChrysler Corp. v. Cox, 447 F.3d 967, 974

(6th Cir. 2006) (recognizing principle).

                               IV.

     For the above-stated reasons, I would affirm the judgment

of the circuit court in this case.   In my opinion, the circuit

court, in a thorough and well-reasoned opinion, correctly

concluded that Code § 20-111.1(D) is not preempted by FEGLIA.

Therefore, I dissent from the majority's decision reversing the

circuit court's judgment.

                               32