HILLMAN v. MARETTA
In December 1996, Warren Hillman made his wife, Judy Maretta, the beneficiary of his Federal Employees’ Group Life Insurance (“FEGLI”) policy. In 1998, the two divorced and Mr. Hillman remarried. Despite the divorce, Mr. Hillman never changed the beneficiary designation on his policy to his new wife, Jacqueline Hillman. In 2008, Warren died and Jacqueline Hillman attempted to claim the death benefits under his policy. Her claim was denied because she was not the named beneficiary on her husband's policy; Ms Maretta received the death benefits instead. Mrs Hillman sued Ms Maretta for the full amount of death benefits under the policy.
When a divorce is finalized in Virginia, state law revokes any beneficiary designations between former spouses. State law also creates a cause of action against anyone who wrongfully receives FEGLI policy proceeds. However, federal law under the Federal Employees' Group Life Insurance Act dictates that death benefits from FEGLI policies shall go to the designated beneficiary, regardless of state regulation to the contrary. The trial court applied state law and granted summary judgment to Mrs. Hillman, but Ms Maretta appealed. The Supreme Court of Virginia reversed the lower court’s decision and held that federal law preempted the state law; therefore Mr. Hillman's beneficiary designation was not revoked. Mrs. Hillman appealed to the Supreme Court of the United States.
Does federal law preempt a Virginia state law that revokes a spouse’s beneficiary designation in a Federal Employees’ Group Life Insurance policy upon divorce?
Legal provision: Federal Employees’ Group Life Insurance Act of 1954
Yes. Justice Sonia Sotomayor delivered the opinion for the 9-0 majority. The Supreme Court held that the Federal Employees’ Group Life Insurance Act (FEGLIA) preempts the Virginia law. By passing FEGLIA, Congress clearly intended that the insurance proceeds go to the named beneficiary. The state law, which allows a deceased employee’s family to sue a designated beneficiary for the proceeds of a FEGLI life insurance policy, conflicts with Congress’ intent.
Justice Thomas filed an opinion concurring in the judgment. He stated that he cannot join with the majority’s conclusion because the consideration is unnecessary. The Supremacy Clause effectively repeals state laws that directly conflict with federal law as the Virginia law does with FEGLIA. In his separate opinion concurring in the judgment, Justice Samuel A. Alito Jr. stated that one of the purposes of FEGLIA is to implement the expressed wishes of the insured. Since the Virginia law has the effect of overriding an insured’s choice of beneficiary, FEGLIA preempts it.
NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
JACQUELINE HILLMAN, PETITIONER v. JUDY A. MARETTA
on writ of certiorari to the supreme court of virginia
[June 3, 2013]
Justice Sotomayor delivered the opinion of the Court.*
The Federal Employees’ Group Life Insurance Act of 1954 (FEGLIA), 5 U. S. C. §8701 et seq., establishes a life insurance program for federal employees. FEGLIA provides that an employee may designate a beneficiary to receive the proceeds of his life insurance at the time of his death. §8705(a). Separately, a Virginia statute addresses the situation in which an employee’s marital status has changed, but he did not update his beneficiary designation before his death. Section 20–111.1(D) of the Virginia Code renders a former spouse liable for insurance proceeds to whoever would have received them under applicable law, usually a widow or widower, but for the beneficiary designation. Va. Code Ann. §20–111.1(D) (Lexis Supp. 2012). This case presents the question whether the remedy created by §20–111.1(D) is pre-empted by FEGLIA and its implementing regulations. We hold that it is.I A
In 1954, Congress enacted FEGLIA to “provide low-cost group life insurance to Federal employees.” H. R. Rep. No. 2579, 83d Cong., 2d Sess., 1 (1954). The program is administered by the federal Office of Personnel Management (OPM). 5 U. S. C. §8716. Pursuant to the authority granted to it by FEGLIA, OPM entered into a life insurance contract with the Metropolitan Life Insurance Company. See §8709; 5 CFR §870.102 (2013). Individual employees enrolled in the Federal Employees’ Group Life Insurance (FEGLI) Program receive coverage through this contract. The program is of substantial size. In 2010, the total amount of FEGLI insurance coverage in force was $824 billion. GAO, Federal Employees’ Group Life Insurance: Retirement Benefit and Retained Asset Account Disclosures Could Be Improved 1 (GAO–12–94, 2011).
FEGLIA provides that, upon an employee’s death, life insurance benefits are paid in accordance with a specified “order of precedence.” 5 U. S. C. §8705(a). The proceeds accrue “[f]irst, to the beneficiary or beneficiaries desig-nated by the employee in a signed and witnessed writing received before death.” Ibid. “[I]f there is no designated beneficiary,” the benefits are paid “to the widow or widower of the employee.” Ibid. Absent a widow or widower, the benefits accrue to “the child or children of the employee and descendants of [the] deceased children”; “the parents of the employee” or their survivors; the “executor or administrator of the estate of the employee”; and last, to “other next of kin.” Ibid.
To be effective, the beneficiary designation and any accompanying revisions to it must be in writing and duly filed with the Government. See ibid. (“[A] designation, change, or cancellation of beneficiary in a will or other document not so executed and filed has no force or effect”). An OPM regulation provides that an employee may “change [a] beneficiary at any time without the knowledge or consent of the previous beneficiary,” and makes clear that “[t]his right cannot be waived or restricted.” 5 CFR §870.802(f). Employees are informed of these requirements through materials that OPM disseminates in connection with the program. See, e.g., OPM, FEGLI Pro-gram Booklet 21–22 (rev. Aug. 2004) (setting forth the order of precedence and stating that OPM “will pay benefits” “[f]irst, to the beneficiary [the employee] designate[s]”). The order of precedence is also described on the form that employees use to designate a beneficiary. See Designation of Beneficiary, FEGLI Program, SF 2823 (rev. Mar. 2011) (Back of Part 2). And the enrollment form advises employees to update their designations if their “[i]ntentions [c]hange” as a result of, for example, “marriage [or] divorce.” Ibid.
In 1998, Congress amended FEGLIA to create a limited exception to an employee’s right of designation. The statute now provides that “[a]ny amount which would otherwise be paid to a person determined under the order of precedence . . . shall be paid (in whole or in part) by [OPM] to another person if and to the extent expressly provided for in the terms of any court decree of divorce, annulment, or legal separation” or related settlement, but only in the event the “decree, order, or agreement” is received by OPM or the employing agency before the employee’s death. 5 U. S. C. §§8705(e)(1)–(2).
FEGLIA also includes an express pre-emption provision. That provision states in relevant part that “[t]he provisions of any contract under [FEGLIA] 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 . . . , which relates to group life insurance to the extent that the law or regulation is inconsistent with the contractual provisions.” §8709(d)(1).
This case turns on the interaction between these provisions of FEGLIA and a Virginia statute. Section 20–111.1(A) (Section A) of the Virginia Code provides that a divorce or annulment “revoke[s]” a “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.” A “death benefit” includes “payments under a life insurance contract.” §20.111.1(B).
In the event that Section A is pre-empted by federal law, §20–111.1(D) (Section D) of the Virginia Code applies. Section D provides as follows:
“If [Va. Code Ann. §20–111.1] 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 [§20–111.1] is personally liable for the amount of the payment to the person who would have been entitled to it were [§20.111.1] not preempted.”
In other words, where Section A is pre-empted, Section D creates a cause of action rendering a former spouse liable for the principal amount of the insurance proceeds to the person who would have received them had Section A continued in effect.B
Warren Hillman (Warren) and respondent Judy Maretta were married. In 1996, Warren named Maretta as the beneficiary of his FEGLI policy. Warren and Maretta divorced in 1998 and, four years later, he married petitioner Jacqueline Hillman. Warren died unexpectedly in 2008. Because Warren had never changed the named beneficiary under his FEGLI policy, it continued to iden-tify Maretta as the beneficiary at the time of his death despite his divorce and subsequent remarriage to Hillman.
Hillman filed a claim for the proceeds of Warren’s life insurance, but the FEGLI administrator informed her that the proceeds would accrue to Maretta, because she had been named as the beneficiary. Maretta filed a claim for the benefits with OPM and collected the FEGLI proceeds in the amount of $124,558.03. App. to Pet. for Cert. 37a.
Hillman then filed a lawsuit in Virginia Circuit Court, arguing that Maretta was liable to her under Section D for the proceeds of her deceased husband’s FEGLI policy. The parties agreed that Section A, which directly reallocates the benefits, is pre-empted by FEGLIA. Id., at 36a. Maretta contended that Section D is also pre-empted by federal law and that she should keep the insurance proceeds. The Circuit Court rejected Maretta’s argument and granted summary judgment to Hillman, finding Maretta liable to Hillman under Section D for the proceeds of Warren’s policy. Id., at 58a.
The Virginia Supreme Court reversed and entered judgment for Maretta. 283 Va. 34, 46, 722 S. E. 2d 32, 38 (2012). The court found that FEGLIA clearly instructed that the insurance proceeds should be paid to a named beneficiary. Id., at 44–46, 722 S. E. 2d, at 36–38. The court reasoned that “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.” Id., at 44, 722 S. E. 2d, at 37. It therefore concluded that Section D is pre-empted by FEGLIA, because it “stand[s] as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Id., at 45, 722 S. E. 2d, at 37 (internal quotation marks omitted).
We granted certiorari, 568 U. S. ___ (2013), to resolve a conflict among the state and federal courts over whether FEGLIA pre-empts a rule of state law that automatically assigns an interest in the proceeds of a FEGLI policy to a person other than the named beneficiary or grants that person a right to recover such proceeds. 2 We now affirm.II
Under the Supremacy Clause, Congress has the power to pre-empt state law expressly. See Brown v. Hotel Employees, 468 U. S. 491 –501 (1984). Although FEGLIA contains an express pre-emption provision, see §8709(d)(1), the court below considered only whether Section D is pre-empted under conflict pre-emption principles. We limit our analysis here to that holding. State law is pre-empted “to the extent of any conflict with a federal statute.” Crosby v. National Foreign Trade Council, 530 U. S. 363, 372 (2000) (citing Hines v. Davidowitz, 312 U. S. 52 –67 (1941)). Such a conflict occurs when compliance with both federal and state regulations is impossible, Florida Lime & Avocado Growers, Inc. v. Paul, 373 U. S. 132 –143 (1963), or when the state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress,” Hines, 312 U. S., at 67. This case raises a question of purposes and objectives pre-emption.
The regulation of domestic relations is traditionally the domain of state law. See In re Burrus, 136 U. S. 586 –594 (1890). There is therefore a “presumption against pre-emption” of state laws governing domestic relations, Egelhoff v. Egelhoff, 532 U. S. 141, 151 (2001) , and “family and family-property law must do ‘major damage’ to ‘clear and substantial’ federal interests before the Supremacy Clause will demand that state law will be overridden,” Hisquierdo v. Hisquierdo, 439 U. S. 572, 581 (1979) . But family law is not entirely insulated from conflict pre-emption principles, and so we have recognized that state laws “governing the economic aspects of domestic relations . . . must give way to clearly conflicting federal enactments.” Ridgway v. Ridgway, 454 U. S. 46, 55 (1981) .A
To determine whether a state law conflicts with Congress’ purposes and objectives, we must first ascertain the nature of the federal interest. Crosby, 530 U. S., at 372–373.
Hillman contends that Congress’ purpose in enacting FEGLIA was to advance administrative convenience by establishing a clear rule to dictate where the Government should direct insurance proceeds. See Brief for Petitioner 25. There is some force to Hillman’s argument that a significant legislative interest in a large federal program like FEGLIA is to enable its efficient administration. If Hillman is correct that administrative convenience was Congress’ only purpose, then there might be no conflict between Section D and FEGLIA: Section D’s cause of action takes effect only after benefits have been paid, and so would not necessarily impact the Government’s distribution of insurance proceeds. Cf. Hardy v. Hardy, 963 N. E. 2d 470, 477–478 (Ind. 2012).
For her part, Maretta insists that Congress had a more substantial purpose in enacting FEGLIA: to ensure that a duly named beneficiary will receive the insurance proceeds and be able to make use of them. Brief for Respondent 21–22. If Maretta is correct, then Section D would directly conflict with that objective, because its cause of action would take the insurance proceeds away from the named beneficiary and reallocate them to someone else. We must therefore determine which understanding of FEGLIA’s purpose is correct.
We do not write on a clean slate. In two previous cases, we considered federal insurance statutes requiring that insurance proceeds be paid to a named beneficiary and held they pre-empted state laws that mandated a different distribution of benefits. The statutes we addressed in these cases are similar to FEGLIA. And the impediments to the federal interests in these prior cases are analogous to the one created by Section D of the Virginia statute. These precedents accordingly govern our analysis of the relationship between Section D and FEGLIA in this case.
In Wissner v. Wissner, 338 U. S. 655 (1950) , we considered whether the National Service Life Insurance Act of 1940 (NSLIA), 54Stat. 1008, pre-empted a rule of state marital property law. Congress had enacted NSLIA to “affor[d] a uniform and comprehensive system of life insurance for members and veterans of the armed forces of the United States.” Wissner, 338 U. S., at 658. A California court granted the decedent’s widow, who was not the named beneficiary, an interest in the insurance proceeds as community property under state law. Id., at 657.
We reversed, holding that NSLIA pre-empted the widow’s state-law action to recover the proceeds. Id., at 658. In pertinent part, NSLIA provided that the insured “ ‘shall have the right to designate the beneficiary or beneficiaries of the insurance [within a designated class], . . . and shall . . . at all times have the right to change the beneficiary or beneficiaries.’ ” Ibid. (quoting 38 U. S. C. §802(g) (1946 ed.)). We reasoned that “Congress has spoken with force and clarity in directing that the proceeds belong to the named beneficiary and no other.” 338 U. S., at 658. The California court’s decision could not stand, we found, because it “substitute[d] the widow for the mother, who was the beneficiary Congress directed shall receive the insurance money.” Id., at 659.
In Ridgway, we considered a similar question regarding the federal Servicemen’s Group Life Insurance Act of 1965 (SGLIA), Pub. L. 89–214, 79Stat. 880, another insurance scheme for members of the armed services. 454 U. S., at 50–53. A Maine court imposed a constructive trust on insurance proceeds paid to a servicemember’s widow, who was the named beneficiary, and ordered they be paid to the decedent’s first wife as required by the terms of a divorce decree. Id., at 49–50.
In holding the constructive trust pre-empted, we explained that the issue was “controlled by Wissner.” Id., at 55. As in Wissner, the applicable provisions of SGLIA made clear that “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.” 454 U. S., at 56 (citing Wissner, 338 U. S., at 658). We also noted that SGLIA established an “ ‘order of precedence,’ ” which provided that the benefits would be first paid to “ such ‘beneficiary or bene-ficiaries as the member . . . may have designated by [an appropriately filed] writing received prior to death.’ ” 454 U. S., at 52 (quoting 38 U. S. C. §770(a) (1976 ed.)). Notwithstanding “some small differences” between SGLIA and NSLIA, we concluded that SGLIA’s “unqualified direc-tive to pay the proceeds to the properly designated bene-ficiary clearly suggest[ed] that no different result was intended by Congress.” 454 U. S., at 57.B
Our reasoning in Wissner and Ridgway applies with equal force here. The statutes we considered in these earlier cases are strikingly similar to FEGLIA. Like NSLIA and SGLIA, FEGLIA creates a scheme that gives highest priority to an insured’s designated beneficiary. 5 U. S. C. §8705(a). Indeed, FEGLIA includes an “order of precedence” that is nearly identical to the one in SGLIA: Both require that the insurance proceeds be paid first to the named beneficiary ahead of any other potential recipient. Compare ibid. with 38 U. S. C. §770(a) (1976 ed.) (now §1970(a) (2006 ed.)). FEGLIA’s implementing regulations further underscore that the employee’s “right” of designation “cannot be waived or restricted.” 5 CFR §843.205(e). In FEGLIA, as in these other statutes, Congress “ ‘spok[e] with force and clarity in directing that the proceeds belong to the named beneficiary and no other.’ ” Ridgway, 454 U. S., at 55 (quoting Wissner, 338 U. S., at 658; emphasis added). 3
Section D interferes with Congress’ scheme, because it directs that the proceeds actually “belong” to someone other than the named beneficiary by creating a cause of action for their recovery by a third party. Ridgway, 454 U. S., at 55; see Va. Code Ann. §20–111.1(D). It makes no difference whether state law requires the transfer of the proceeds, as Section A does, or creates a cause of action, like Section D, that enables another person to receive the proceeds upon filing an action in state court. In either case, state law displaces the beneficiary selected by the insured in accordance with FEGLIA and places someone else in her stead. As in Wissner, applicable state law “substitutes the widow” for the “beneficiary Congress directed shall receive the insurance money,” 338 U. S., at 659, and thereby “frustrates the deliberate purpose of Congress” to ensure that a federal employee’s named beneficiary receives the proceeds. Ibid.
One can imagine plausible reasons to favor a different policy. Many employees perhaps neglect to update their beneficiary designations after a change in marital status. As a result, a legislature could have thought that a default rule providing that insurance proceeds accrue to a widow or widower, and not a named beneficiary, would be more likely to align with most people’s intentions. Or, similarly, a legislature might have reasonably believed that an employee’s will is more reliable evidence of his intent than a beneficiary designation form executed years earlier.
But that is not the judgment Congress made. 4 Rather than draw an inference about an employee’s probable intent from a range of sources, Congress established a clear and predictable procedure for an employee to indicate who the intended beneficiary of his life insurance shall be. Like the statutes at issue in Ridgway and Wissner, FEGLIA evinces Congress’ decision to accord federal employees an unfettered “freedom of choice” in selecting the beneficiary of the insurance proceeds and to ensure the proceeds would actually “belong” to that beneficiary. Ridgway, 454 U. S., at 56. An employee’s ability to name a beneficiary acts as a “guarantee of the complete and full performance of the contract to the exclusion of conflicting claims.” Wissner, 338 U. S., at 660. With that promise comes the expectation that the insurance proceeds will be paid to the named beneficiary and that the beneficiary can use them.
There is further confirmation that Congress intended the insurance proceeds be paid in accordance with FEGLIA’s procedures. Section 8705(e)(1) of FEGLIA provides that “[a]ny amount which would otherwise be paid . . . under the order of precedence” shall be paid to another person “if and to the extent expressly provided for in the terms of any court decree of divorce, annulment, or legal separation.” This exception, however, only applies if the “decree, order, or agreement . . . is received, before the date of the covered employee’s death, by the employing agency.” §8705(e)(2). This provision allows the proceeds to be paid to someone other than the named beneficiary, but if and only if the requisite documentation is filed with the Government, so that any departure from the beneficiary designation is managed within, not outside, the federal system. 5
We have explained that “[w]here Congress explicitly enumerates certain exceptions to a general prohibition, additional exceptions are not to be implied, in the absence of evidence of a contrary legislative intent.” Andrus v. Glover Constr. Co., 446 U. S. 608 –617 (1980). Section 8705(e) creates a limited exception to the order of precedence. If States could make alternative distributions outside the clear procedure Congress established, that would transform this narrow exception into a general license for state law to override FEGLIA. See TRW Inc. v. Andrews, 534 U. S. 19 –29 (2001). 6
In short, where a beneficiary has been duly named, the insurance proceeds she is owed under FEGLIA cannot be allocated to another person by operation of state law. Section D does exactly that. We therefore agree with the Virginia Supreme Court that it is pre-empted.III
We are not persuaded by Hillman’s additional arguments in support of a different result.
Hillman contends that Ridgway and Wissner can be distinguished because, unlike the statutes we considered in those cases, FEGLIA does not include an “anti-attachment provision.” Brief for Petitioner 38–41. The anti-attachment provisions in NSLIA and SGLIA were identical, and each broadly prohibited the “attachment, levy, or seizure” of insurance proceeds by any legal process. 38 U. S. C. §454a (1946 ed.) (incorporated by reference in §816); §770(g) (1976 ed.). In Wissner and Ridgway, we found that the relevant state laws violated these provisions and that this further conflict supported our conclusion that the state laws were pre-empted.
These discussions of the anti-attachment provisions, however, were alternative grounds to support the judgment in each case, and not necessary components of the holdings. See Ridgway, 454 U. S., at 60–61 (describing separately the anti-attachment provision and noting that the state law “also” conflicted with it); id., at 60 (noting that in Wissner we found an “anti-attachment provision . . . as an independent ground for the result reached in that case” (emphasis added)); see also Rose v. Rose, 481 U. S. 619, 631 (1987) (describing Wissner’s treatment of the anti-attachment provision as “clearly an alternative holding”). The absence of an anti-attachment provision in FEGLIA does not render Ridgway’s and Wissner’s primary holdings any less applicable here.
Next, Hillman suggests that Wissner and Ridgway can be set aside because FEGLIA contains an express pre-emption provision and that conflict pre-emption principles ordinarily do not apply when that is so. Brief for Petitioner 45–47. As noted, the court below did not pass on the parties’ express pre-emption arguments, and thus we sim-ilarly address only conflict pre-emption. See supra, at 7. And we need not consider whether Section D is expressly pre-empted, because Hillman is incorrect to suggest that FEGLIA’s express pre-emption provision renders conflict pre-emption inapplicable. Rather, we have made clear that the existence of a separate pre-emption provision “ ‘does not bar the ordinary working of conflict pre-emption principles.’ ” Sprietsma v. Mercury Marine, 537 U. S. 51, 65 (2002) (internal quotation marks omitted); see Arizona v. United States, 567 U. S. ___, ___ (2012) (slip op., at 14).
Hillman further argues that Ridgway is not controlling because a provision of FEGLIA specifically authorizes an employee to assign a FEGLI policy, whereas SGLIA’s implementing regulations prohibit such an assignment. See 5 U. S. C. §8706(f)(1) (2006 ed., Supp. V); 38 CFR §9.6 (2012). The premise of Hillman’s argument is that FEGLIA’s assignment provision suggests that an employee has a less substantial interest in who ultimately receives the proceeds. But an employee’s ability to assign a FEGLI policy in fact highlights Congress’ intent to allow an employee wide latitude to determine how the proceeds should be paid, whether that is to a named beneficiary that he selects, or indirectly through the assignment of the policy itself to someone else.
Finally, Hillman attempts to distinguish Ridgway and Wissner because Congress enacted the statutes at issue in those cases with the goal of improving military morale. Brief for Petitioner 47–51. Congress’ aim of increasing the morale of the armed services, however, was not the basis of our pre-emption analysis in either case. See Wissner, 338 U. S., at 658–659; Ridgway, 454 U. S., at 53–56.* * *
Section D is in direct conflict with FEGLIA because it interferes with Congress’ objective that insurance proceeds belong to the named beneficiary. Accordingly, we hold that Section D is pre-empted by federal law. The judgment of the Virginia Supreme Court is affirmed.
It is so ordered.
1 * Justice Scalia joins all but footnote 4 of this opinion.
2 Compare, e.g., Metropolitan Life Ins. Co. v. Zaldivar, 413 F. 3d 119 (CA1 2005) (FEGLIA pre-empted state-law rule); Metropolitan Life Ins. Co. v. Sullivan, 96 F. 3d 18 (CA2 1996) (per curiam) (same); Metropolitan Life Ins. Co. v. McMorris, 786 F. 2d 379 (CA10 1986) (same); O’Neal v. Gonzalez, 839 F. 2d 1437 (CA11 1988), with Hardy v. Hardy, 963 N. E. 2d 470 (Ind. 2012) (not pre-empted); McCord v. Spradling, 830 So. 2d 1188 (Miss. 2002) (same); Kidd v. Pritzel, 821 S. W. 2d 566 (Mo. App. 1991) (same).
3 Hillman points to some textual differences among NSLIA, SGLIA, and FEGLIA. She suggests, for example, that the provision of NSLIA enabling the appointment of a beneficiary does not use precisely the “ ‘same language’ ” as FEGLIA’s order of precedence. Reply Brief 21. Even if there are “some small differences” in the statutory language, however, they do not diminish the critical similarity shared by the three statutes: Each reflects Congress’ “unqualified directive” that the proceeds accrue to a named beneficiary. Ridgway, 454 U. S., at 57.
4 In his concurrence, Justice Alito argues that one of FEGLIA’s purposes is to “effectuat[e] . . . the insured’s expressed intent” and that evidence beyond an employee’s named beneficiary could therefore be relevant in some circumstances to determining that intent. Post, at 2–3 (opinion concurring in judgment) (emphasis in original). For the reasons explained, however, that statement of Congress’ purpose is incomplete. See supra, at 9–10. Congress sought to ensure that an employee’s intent would be given effect only through the designation of a beneficiary or through the narrow exceptions specifically provided in the statute, see infra, at 12–13.
5 Congress enacted 5 U. S. C. §8705(e) following federal-court decisions that found FEGLIA to pre-empt state-court constructive trust actions predicated upon divorce decrees. See, e.g., Gonzalez, 839 F. 2d, at 1439–1440. Reflecting this backdrop, the House Report noted that “Under current law, . . . divorce decrees . . . do not affect the payment of life insurance proceeds. Instead, when the policyholder dies, the proceeds are paid to the beneficiary designated by the policyholder, if any, or to other individuals as specified by statute.” H. R. Rep. No. 105–134, p. 2 (1997). To address the issue raised by these lower court cases, Congress could have amended FEGLIA to allow state law to take precedence over the named beneficiary when there is any conflict with a divorce decree or annulment. But Congress did not do so, and instead described the precise conditions under which a divorce decree could displace an employee’s named beneficiary.
6 Hillman contends that §8705(e) of FEGLIA indicates that Congress contemplated that the proceeds could be paid to someone other than the named beneficiary and that Section D is consistent with that broad principle. Brief for Petitioner 43. As noted, however, §8705(e) has the opposite implication, because it is framed as a specific exception to the rule that the proceeds accrue in all cases to the named beneficiary. It is not, as Hillman suggests, a general rule authorizing state law to supersede FEGLIA.
SUPREME COURT OF THE UNITED STATES
JACQUELINE HILLMAN, PETITIONER v. JUDY A. MARETTA
on writ of certiorari to the supreme court of virginia
[June 3, 2013]
Justice Alito, concurring in the judgment.
I concur in the judgment. Because one of the purposes of the Federal Employees’ Group Life Insurance Act of 1954 (FEGLIA) is to implement the expressed wishes of the insured, I would hold that a state law is pre-empted if it effectively overrides an insured’s actual, articulated choice of beneficiary. The challenged provision of Virginia law has that effect.
By way of background, Va. Code Ann. §20–111.1(A) (Lexis Supp. 2012) provides that the entry of a divorce de-cree automatically revokes an insured’s prior designation of his or her former spouse as the beneficiary of the policy. And where, as in this case, the insured remarries after the divorce and dies before making a new FEGLIA designation, the proceeds, under 5 U. S. C. §8705(a), are automatically paid to the insured’s former spouse. Under the provision of Virginia law at issue here, the surviving spouse is entitled to recover those proceeds from the former spouse. See Va. Code Ann. §20–111.1(D). Section 20–111.1(D) apparently requires this result even if the in-sured manifests a clear contrary intent, such as by providing specifically in a recent will that the proceeds are to go to another party—for example, the insured’s children by the former marriage. Because §20–111.1(D) overrides the insured’s express intent (whether that intent is expressed via a beneficiary designation or through other reliable means), I agree that it is pre-empted by FEGLIA.
Interpreted in light of our prior decisions in Wissner v. Wissner, 338 U. S. 655 (1950) , and Ridgway v. Ridgway, 454 U. S. 46 (1981) , FEGLIA seems to me to have two primary purposes or objectives.
The first is administrative convenience. It is easier for an insurance administrator to pay insurance proceeds to the person whom the insured has designated on a specified form without having to consider claims made by others based on some other ground. But §20–111.1(D) does not affect the initial payment of proceeds. It operates after the funds are received by the designated beneficiary, and it thus causes no inconvenience for those who administer the payment of FEGLIA proceeds.
The second purpose or objective is the effectuation of the insured’s expressed intent above all other considerations. That was the basis for the decisions in Wissner and Ridgway, as I understand them. In both cases, there was a conflict between a person whom the insured had desig-nated as his beneficiary and another person whose claim to the proceeds was not based on the insured’s expressed intent, and in both cases, the Court held in favor of the designated beneficiary.
The present case bears a similarity to Wissner and Ridgway in that petitioner’s claim depends upon a state stat-ute that automatically alters the ultimate recipient of a divorced employee’s insurance proceeds. To be sure, Virginia’s provision may well reflect the unexpressed preferences of the majority of insureds whose situations are similar to that of the insured in this case—that is, individuals who, after divorce and remarriage, fail to change a prior designation of a former spouse as the beneficiary of the policy. But FEGLIA prioritizes the insured’s expressed intent. And it is telling that, on petitioner’s theory, she would still be entitled to the insurance proceeds even if, for example, the insured had died shortly after executing a new will leaving those proceeds to someone else. This shows that her claim is based on something other than a manifestation of the insured’s intent. Because §20–111.1(D) operates as a blunt tool to override the insured’s express declaration of his or her intent, it conflicts with FEGLIA’s purpose of prioritizing an insured’s articulated wishes above all other considerations.
In affirming the decision below, the Court goes well beyond what is necessary and opines that the party designated as the beneficiary under a FEGLIA policy must be allowed to keep the insurance proceeds even if the in-sured’s contrary and expressed intent is indisputable—for example, when the insured writes a postdivorce will specifically leaving the proceeds to someone else. See ante, at 11. The Court’s explanation is as follows: “Congress sought to ensure that an employee’s intent would be given effect only through the designation of a beneficiary or through the narrow exceptions specifically provided in the statute.” Ibid., n. 3. In other words, Congress wanted the designated beneficiary—rather than the person named in a later will—to keep the proceeds because Congress wanted the named beneficiary to keep the proceeds. Needless the say, this circular reasoning does not explain why Congress might have wanted the designated beneficiary to keep the proceeds even when that is indisputably contrary to the insured’s expressed wishes at the time of death. I am doubtful that any purpose or objective of FEGLIA would be honored by such a holding, but it is not necessary to resolve that question in this case.
For these reasons, I concur in the judgment.
SUPREME COURT OF THE UNITED STATES
JACQUELINE HILLMAN, PETITIONER v. JUDY A. MARETTA
on writ of certiorari to the supreme court of virginia
[June 3, 2013]
Justice Thomas, concurring in the judgment.
The Court correctly concludes that §20–111.1(D) of the Virginia Code (Section D) is pre-empted by the Federal Employees’ Group Life Insurance Act of 1954 (FEGLIA), 5 U. S. C. §8701 et seq. But I cannot join the “purposes and objectives” framework that the majority uses to reach this conclusion. Ante, at 6. That framework is an illegitimate basis for finding the pre-emption of state law, see Wyeth v. Levine, 555 U. S. 555, 583 (2009) (Thomas, J., concurring in judgment), and is entirely unnecessary to the result in this case, because the ordinary meanings of FEGLIA and Section D directly conflict. Accordingly, I concur only in the judgment.
The Supremacy Clause establishes that federal law “shall be the supreme Law of the Land . . . any Thing in the Constitution or Laws of any state to the Contrary nothwithstanding.” Art. VI, cl. 2. “Where state and fed-eral law ‘directly conflict,’ state law must give way.” PLIVA, Inc. v. Mensing, 564 U. S. ___, ___ (2011) (slip op., at 11) (quoting Wyeth, 555 U. S., at 583). As I have noted before, courts assessing whether state and federal law conflict should not engage in a freewheeling inquiry into whether state law undermines supposed federal purposes and ob-jectives. Id., at 588. Such an approach looks beyond the text of enacted federal law and thereby permits the Federal Government to displace state law without satisfying an essential precondition to pre-emption, namely, the Bi-cameral and Presentment Clause. Id., at 586–587. Pre-emption analysis should, therefore, instead hew closely to the text and structure of the provisions at issue, and a court should find pre-emption only when the “ ‘ordinary meaning’ ” of duly enacted federal law “effectively repeal[s] contrary state law.” PLIVA, supra, at ___–___ (slip op., at 14–15, 17).
Applying these principles, it is clear that the ordinary meaning of FEGLIA directly conflicts with Section D. FEGLIA provides that life insurance benefits are paid according to a particular “order of precedence.” 5 U. S. C. §8705(a); see also 5 CFR §870.801(a) (2013). The benefits are distributed first to “the beneficiary or beneficiaries designated by the employee in a signed and witnessed writing received before death.” 5 U. S. C. §8705(a). If the insured fails to designate a beneficiary, FEGLIA provides a specific order in which benefits must be distributed: next to “the widow or widower of the employee”; absent a widow or widower, to “the child or children of the employee and descendants of [the] deceased children”; and so on. Ibid.; ante, at 2. The insured has the right to change his beneficiary designation “at any time without the knowledge or consent of the previous beneficiary,” and “[t]his right cannot be waived or restricted.” 5 CFR §870.802(f).
Section D directly conflicts with this statutory scheme, because it nullifies the insured’s statutory right to designate a beneficiary. The right to designate a beneficiary encompasses a corresponding right in the named beneficiary not only to receive the proceeds, but also to retain them. Indeed, the “right” to designate a beneficiary—as well as the term “beneficiary” itself—would be meaningless if the only effect of a designation were to saddle the nominal beneficiary with liability under state law for the full value of the proceeds. But Section D accomplishes exactly that: It transforms the designated beneficiary into a defendant in state court, a defendant who is now liable to the individual the State has designated as the true beneficiary. While Hillman does not insist that the in-surer should have mailed the check to her (as opposed to Maretta, the designated beneficiary), Section D requires, in effect, this very result. See ante, at 10 (“[Section D] displaces the beneficiary selected by the insured in accordance with FEGLIA and places someone else in her stead”). If the right to designate a beneficiary means anything, we must conclude that Section D directly conflicts with FEGLIA’s order of precedence.
The direct conflict between Section D and FEGLIA is also evident in the fact that Section D’s only function is to accomplish what Section A would have achieved, had Section A not been pre-empted. Section A provides that,
“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 passing to a former spouse by this section shall be paid as if the former spouse had predeceased the decedent.” Va. Code Ann. §20–111.1(A) (Lexis Cum. Supp. 2012).
Both parties agree that FEGLIA pre-empts this provision. Brief for Petitioner 4–5; Brief for Respondent 2; see also 283 Va. 34, 52, 722 S. E. 2d 32, 35 (2012). And for good reason: if an insured has designated his former spouse as the beneficiary of his life insurance policy, Section A purports to “revok[e]” that designation in the event of divorce or annulment. By purporting to so alter FEGLIA’s statutory order of precedence, Section A is clearly pre-empted by federal law. Tellingly, it is precisely in this context—and only in this context—that Section D operates. See §20–111.1(D). Of course, Section D does not preclude the direct payment of benefits to the designated beneficiary; however, it accomplishes the same prohibited result by transforming the designated party into little more than a passthrough for the true beneficiary. This cannot be squared with FEGLIA. Consequently, Section D must yield.* * *
For these reasons, I agree with the Court’s conclusion that Section D is pre-empted and, therefore, concur in the judgment.
ORAL ARGUMENT OF DANIEL H. RUTTENBERG ON BEHALF OF THE PETITIONER
Chief Justice John G. Roberts: We'll hear argument first this morning in Case 11-1221, Hillman v. Maretta.
Daniel H. Ruttenberg: Mr. Chief Justice, and may it please the Court:
Congress intentionally designed FEGLIA so that the Federal interest ends once the insurance proceeds are paid out.
FEGLIA was established to enable Federal employees to carry out their responsibilities to their families.
And Congress knew that some of its employees would get divorced, and it was depending upon State laws to help make sure that these family duties and obligations were carried out, because Congress doesn't want to get into the -- the business of regulating the divorce.
Justice Antonin Scalia: Why did it make an exception then only for divorce decrees?
Daniel H. Ruttenberg: Justice--
Justice Antonin Scalia: I mean, there is an express exception in the statute that the beneficiary can be changed by a decree of divorce.
Daniel H. Ruttenberg: --Yes.
Justice Antonin Scalia: Now, why would Congress say that while at the same time believing that the beneficiary can effectively be changed without a decree of divorce?
Daniel H. Ruttenberg: Justice Scalia, because Congress knew that one of the main purposes behind FEGLIA was to help the insureds or enable the insureds to carry out responsibilities to their families.
And that is a mechanism to help do that, but it wasn't--
Justice Ruth Bader Ginsburg: But it's written -- but it's written in such precise terms, it must be incorporated in a divorce decree, and the decree must be filed with the employee agency pre-death.
What you're saying is this specific exception, rightly cabined, is generalized so that in all cases, the second wife will prevail over the first.
Daniel H. Ruttenberg: --Justice Ginsburg, I believe that the requirements that it get filed in -- it being a divorce decree and it get filed before death, are an example of Congress intending to preempt the field of interference with the FEGLI plan.
It -- Congress did this in several occasions.
If you wanted to do a beneficiary designation, you have to do it before -- in order for it to be honored, it's got to be filed before death.
The same thing with an assignment.
An irrevocable assignment has to be done before death.
These are all examples of Congress saying we don't want States interfering with the administration of FEGLIA plans, but I don't think it is a statement that Congress is saying we don't want States to regulate domestic relations when it comes to FEGLI benefits.
The -- the intent of Congress with regard to FEGLI benefits needs to be gained from a review of the entire statute of FEGLIA.
Justice Ruth Bader Ginsburg: Why should it be different than the outcome in Wissner and Ridgway and one -- one case that you cite quite often is the Hisquierdo case for -- you -- you cite it for deference to State domestic relations law, but what was the outcome in that case?
Daniel H. Ruttenberg: The outcome in that case was the preemption prevailed in that case.
I -- I was citing the -- the case of Hisquierdo because I think it very well lays out the presumption against preemption of family law.
And -- and while that presumption can be overcome, as it was in Ridgway, and as it was in Hisquierdo, it -- it still is there.
And it's -- it's a statement that Congress generally is not looking to regulate divorce.
Not that Congress can't do it when it wants to, but that this Court normally starts its analysis assuming that Congress didn't intend to do that, unless they find direct -- a direct enactment saying this is -- we want to preempt all other State laws.
That -- that was the -- the purpose behind citing Hisquierdo.
But to answer your first question--
Justice Antonin Scalia: But, you know, the -- the exception suggests another thing besides the fact that it suggests that the only way the second spouse prevails is by a divorce decree.
It also suggests that Congress's sole purpose -- that Congress did not have the sole purpose in this statute to make it easy for the insurance company that has to pay out the proceeds to know whom the -- who the beneficiary will be.
If that were the case, there wouldn't be this exception for a divorce decree, because the insurance company is going to have to look to see if there's a divorce decree on the books, blah, blah, blah, blah, blah.
That obviously shows that Congress in this statute not only had a concern about efficiency of payment, but also had a concern about who gets the payment, right?
There's no other way to explain the -- the exception for divorce decrees.
Daniel H. Ruttenberg: --Well, the exception for divorce decrees I would analogize to the Rose case, when this case was -- when this Court was addressing veterans' benefits.
And in the Rose case, this Court distinguished Ridgway and Wissner, because the purpose behind the Veterans' Benefits Statute this Court determined was in part to take care of the veterans' families and it looked at -- it looked at the text.
It looked at the Senate report that said that, but it also looked at the text.
And the text had in Rose a -- a provision which said the Veterans Administration can apportion a part of those benefits for the benefit of the noncustodial children.
And it was argued in that case that that's Congress's statement that this is the only exception and further exceptions shouldn't be applied and Congress was trying to regulate this area.
But this Court said that's not what Congress was doing there.
That was Congress showing that they cared about -- that those benefits were there to help take care of the family members.
And FEGLIA is the same way.
Justice Ruth Bader Ginsburg: What -- what was the issue?
What was the issue in Rose?
Daniel H. Ruttenberg: In Rose, there was veterans' benefits and those -- he was being sued in State court for enforcement of child support and those were his only assets.
Justice Ruth Bader Ginsburg: Now, they were taking them from him to support his family.
Daniel H. Ruttenberg: Correct.
Justice Ruth Bader Ginsburg: Which is quite something different.
This is taking it from the designated beneficiary and giving it to somebody who isn't designated.
Daniel H. Ruttenberg: That's correct, Your Honor.
But I -- I think when you look at the purpose, the stated purpose of FEGLIA, which is to help insureds carry out their responsibilities to their families--
Justice Antonin Scalia: And you think that's the -- that's the purpose of this exception for divorce decrees?
Daniel H. Ruttenberg: --I think that--
Justice Antonin Scalia: In your experience, a man usually has more children or children in his second marriage than he did in his first?
Daniel H. Ruttenberg: --No, Your Honor.
Justice Antonin Scalia: No, I don't think so, either.
I -- I think if Congress was concerned about money for the kids, it would have left the money with the first wife.
Daniel H. Ruttenberg: I think what Congress was doing is Congress was making a statement -- I don't think they were trying to say they were looking at this divorce law in particular.
I think what Congress was saying is that: We're just going to look to the States and let the States use their benefit and wisdom to determine which divorce laws should apply and which shouldn't apply.
So that in this case in particular, there -- there are benefits and detriments possibly to section D, but what this Court I think would be appropriate to do would to -- to pass a bright-line rule that said State laws that interfere with the administration of a plan are preempted, but after that, after the money has been paid out, laws that affect the benefits are not preempted, and that -- that allows the States to be--
Justice Anthony Kennedy: In other words, they're preempted, but the whole purpose of the preemption can be thwarted.
Daniel H. Ruttenberg: --Justice Kennedy, it's not the purpose of the preemption.
Section D was a response to this Court's opinion in Egelhoff.
And at first blush it looks like, especially with the language, that that's what the States are trying to do, trying to end run preemption.
But that -- when you look at it closely, that's not what was going on.
In -- in Egelhoff, this Court found that Congress intended to preempt a Washington statute very similar to section A, but what Congress was preempting was a State interfering with the administration of the plan.
It wasn't preempting a State domestic relations equitable remedy designed to protect the people to whom the Federal employee owed a duty of support.
It wasn't that -- that the States were not listening to Congress or this Court, and they're not sticking their fingers in their ears going la, la, la, I can't hear you.
A good example of this would be if a State had a estimated tax payment law that said when you get insurance, you've got to pay 10 percent into the court or into the State, that wouldn't be preempted.
But if the State thereafter had a law, enacted a law that said we want a withholding requirement and if that money is withheld then you don't have to do the estimated tax payment, well, that would clearly be preempted because it interferes with the administration of the plan.
But the first law would still be fine.
It shouldn't per se be preempted because it enacted the second law that is preempted because it's interfering with the administration--
Justice Antonin Scalia: Once again, the divorce exemption blows away that -- that explanation, that all Congress is concerned about is efficient administration of the plan so long as the insurer will know.
You know, just look at the -- look at the -- at the contract, the named beneficiary, pay the money to the named beneficiary, and you're home free.
That -- that is blown away by the exception for divorce decrees.
The insurer is going to have to check that there hasn't been a divorce since the contract was signed, right?
Daniel H. Ruttenberg: --Well, they're -- they're not going to have to check unless it's been properly filed, but--
Justice Antonin Scalia: Okay.
They have to check to see if it has been properly filed, right?
Daniel H. Ruttenberg: --Yes, yes.
But the Federal Government has no -- it -- there is no interest that the Federal Government would have in saying that a divorce decree that was properly filed has -- should be -- should be honored, but one that hasn't been properly filed shouldn't be.
They want State laws there.
Justice Anthony Kennedy: But -- but quite apart from -- from that, it -- it seems to me that under your proposal the Congress would actually have accepted a situation where one spouse sues a former spouse.
In other words, you have a -- that's the whole design of this statute.
Would the insurance company -- if you were representing the insurance company, would you tell the insurance company that they were completely safe in paying the benefits to the first spouse even if there's going to be a suit afterwards.
Daniel H. Ruttenberg: Absolutely, Your Honor.
Justice Anthony Kennedy: Or would the insurance company itself be under some liability?
Daniel H. Ruttenberg: Justice Kennedy, that's the -- the whole point, is that the insurance company isn't--
Justice Anthony Kennedy: That's the design of the statute.
Daniel H. Ruttenberg: --That's the design of the statute.
Justice Anthony Kennedy: But I'm just wondering whether under State law the insurance company, if it -- if it knows this doesn't have some duty to refrain from making the payment or to put it in escrow or to interplead.
Daniel H. Ruttenberg: Not at all.
The statute's specifically written so that the former spouse becomes personally liable to the widow or whoever was entitled to it.
It's designed to make the--
Justice Anthony Kennedy: And if you're representing the insurance company, you wouldn't say you better interplead to be on the safe side?
Daniel H. Ruttenberg: --I think this Court can establish the -- I think they have established under the Kennedy case that they have a duty to pay the designated beneficiary.
In Kennedy, with regards to ERISA and whether or -- it was very clear that the insurance -- the plan administrator has to pay.
So I think that there is no concern at all for the insurance company.
Justice Ruth Bader Ginsburg: Mr. Ruttenberg, how do you get to this notion that administrative convenience is all that is involved?
After all, this is an employee's life insurance and the Government is saying to the employee: The beneficiary is your free choice; you can pick anyone, your spouse, a charity; it's your choice; but we want you to know that, although you make it and you can change it any time you want, if you don't change it that will be it.
That -- so it's giving, the employee, control over the proceeds of his or her life insurance.
Why isn't that a purpose along with administrative convenience?
Daniel H. Ruttenberg: I believe that the.
Purpose of FEGLIA was -- the other main stated purpose was that Congress was trying to offer life insurance similar to what was being offered by private companies, and they're acting as an employer in this regard.
And just like with private group life insurance, most people think that the beneficiary designations are going to control where that money goes and -- and the same with FEGLIA.
But also, most everyone expects when they get divorced that their assets are going to be subject to State divorce law.
And I'm not suggesting that Congress wasn't concerned with employees carrying out their responsibilities to their families.
I'm suggesting Congress is using the State law.
Congress doesn't want to be the one that makes sure that those responsibilities are carried out.
They're relying on State law and they've developed a scheme that allows State law to help make sure those duties are carried out.
Justice Samuel Alito: If an insured, after making a designation of a beneficiary, writes a will and leaves the insurance proceeds to a different person, the Federal law would still, as interpreted by the State Supreme Court, require the money to be paid to the designated beneficiary, wouldn't it?
Daniel H. Ruttenberg: Yes, Your Honor.
Justice Samuel Alito: And what does that say about Congress's supposed desire to ensure that the money goes to the person that the insured wants it to go to?
Daniel H. Ruttenberg: Well, Justice Alito, after the money has been paid out in a case like that, it is possible that there are State laws involved that -- that would allow someone to have a suit, institute a suit against who received that.
But Congress doesn't want OPM or MetLife to have anything to do with that.
They just want OPM and MetLife to be able to do the job of paying out.
Justice Samuel Alito: Well, the point is if Congress's objective, if one of its objectives in addition to administrative convenience was to effectuate the will of the insured, then I don't see why it would provide for Federal law to override a subsequent will which directly expresses the desire of the insured.
Daniel H. Ruttenberg: I don't think FEGLIA says that.
What it says is--
Justice Ruth Bader Ginsburg: You would agree with that?
I assume you would agree with what Justice Alito just said?
Daniel H. Ruttenberg: --Yes.
Justice Ruth Bader Ginsburg: That it has only to do with administrative convenience?
Daniel H. Ruttenberg: Well, I don't want to say that it has only to do with that.
That's one of the -- the -- that's the reason, though, that everything ends once the benefits are paid out.
Justice Ruth Bader Ginsburg: Why should this scheme be treated differently than the National Service Life Insurance and the successor law in Wissner and Ridgway?
Those operated the same way.
They said the person who designates says who gets it and if you -- the only way you can change it is to have a change of beneficiary form filed with your employer; if you don't do that, whatever you've said is where the money goes.
Daniel H. Ruttenberg: There's -- there's a -- you have to compare the FEGLIA and the SGLIA to get the intent of Congress.
You want to -- this Court should look at the text of FEGLIA and it should look at the legislative history, and there's five main differences I can point to which suggest that Congress intended something different.
The first is that FEGLIA doesn't have an anti-attachment provision.
Justice Ruth Bader Ginsburg: But the two decisions that dealt with the anti-attachment, they gave that as an alternative ground of decision.
It was quite separate and discrete from saying what's on the beneficiary, the designation that controls.
And they say, and also there's this anti-attachment.
Daniel H. Ruttenberg: Absolutely, Your Honor.
But when it did the holding regarding the order of precedence, it didn't just look at the order of precedence.
It looked at all of SGLIA and it looked at the differing provisions, and one of the provisions I think that indicates Congress's intent in SGLIA is the anti-attachment provision.
So if the second holding was not there at all with regards strictly to the anti-attachment provision, Ridgway still would have held the way it held because it was looking at all of SGLIA.
But that's not the only difference.
There's also the divorce provision which they have in Federal group life insurance and they -- they didn't put that into the servicemen's group life.
They let FEGLIA people assign their benefits.
There's a limited express preemption provision in FEGLIA which they didn't feel was needed in SGLIA.
And when you--
Justice Ruth Bader Ginsburg: In -- in your briefs in this case, you put in the assignment provision as -- as an afterthought.
I think you did not put it in your main brief.
It came up only in your reply brief, and you didn't put it in the appendix to your main brief.
Daniel H. Ruttenberg: --That's correct, Your Honor.
Justice Ruth Bader Ginsburg: So you -- you seem to assign lesser importance to it.
Daniel H. Ruttenberg: I do assign less importance to the assignment provision than I would to the -- the lack of an anti-attachment provision or the -- the divorce provision or the express preemption provision or even the legislative history.
But I do still think that it is a factor to be looked at.
And in this case, again pointing to the Rose case, in the Rose case, they were dealing with the same anti-attachment provision in Rose and even there determined that Congress did not intend that those dollars should be kept away from the -- the family members in that case.
So I would again analogize that to this case, because in the Rose case, they specifically distinguished those two cases on those grounds.
Justice Antonin Scalia: I keep -- I keep coming back to the explicit divorce provision, which says when there's a divorce decree, only properly filed, it, without a change by the beneficiary, goes to the new wife, okay.
And you're telling us that even without a divorce decree, the new wife will effectively get the money so long as there is a State law that says all -- all proceeds from insurance companies for policies entered into before the -- before the -- the decedent was divorced will go to the new wife.
It seems to me that is such a -- such a blatant frustration of the -- not just the purpose of -- of the very text of the divorce provision in the law, which says only if there is a decree properly filed will it go to the new wife.
And you're saying, well, it doesn't really matter so long as there's a State law which says it will go to the new wife without a -- you know.
Daniel H. Ruttenberg: There -- there are two -- two points I'd like to make there.
One, I don't think Congress was trying to get involved in the field of divorce.
I don't think Congress with that law was saying all other domestic relations laws don't apply, we only want to apply these laws.
There's so many other domestic relations laws like community property rights and waivers.
And children even in these divorce decrease can't file it, and then children would lose out if their parents didn't know enough to file those things.
So, the first point is that I don't think that that's what Congress was trying to do there with that provision.
And the second point is that it's not a superfluous provision.
If I had a divorce decree, I would much rather file it with the court so that I knew it would get paid directly to me than have to deal with it after it's been paid out.
So I think it is -- it absolutely serves a purpose, but it doesn't serve the purpose of trying to -- to get -- I think Congress was trying to make a statement, we want these benefits to be subject to State laws, not that we want these benefits--
Justice Sonia Sotomayor: So why not just say that?
If that was Congress's intent, why limit it to a specific form of State borders involving divorce, annulment, et cetera?
Why not just simply say in 80 -- 80705(e) that any court order could change the order of precedence, if that was Congress's intent?
Daniel H. Ruttenberg: --I believe that's basically what they did, because the other type of court orders such as a waiver wouldn't make sense to put in there.
You -- you would not -- if I was paying attention if I -- if I had filed -- if I had a divorce decree that said my ex-wife waived a right to my insurance, it doesn't make sense that I'd do that additional filing because that wouldn't add anything to it.
So Congress was saying that court orders can -- that direct where money goes does that.
And the other types of laws, like community property laws or waivers or this type of law, they would have to have a separate section for each of them to draft it in such a way that it wouldn't interfere -- it would make it easy on OPM to know where to pay the money.
And I think what they were doing is they weren't saying any types of State laws can come in, because they didn't -- they wanted to deal with the ones that were clear, that were easy for them to deal with, so that they -- so that OPM and MetLife knows where to pay the money.
Justice Ruth Bader Ginsburg: Mr. Ruttenberg, what about the interest, which was an interest in Wissner and in Ridgway, of uniformity under this Federal insurance scheme?
That is, one of the hypotheticals in the briefs was: The deceased dies domiciled in Virginia.
Wife No. 1 comes from X State, not Virginia, Wife No. 2 two from Y State, and they all have different -- different rules.
The employee, in the course of her career, may move around from here or there.
But if you follow the Federal law, then it's going to be the same for every employee.
These are the rules for every employee no matter where he or she lives, no matter the location of the spouse.
And then we don't have these messy problems with choice of law.
Daniel H. Ruttenberg: Congress was definitely concerned with -- and -- and as, again, I keep referring to the Rose case because I think it worded it well -- it was concerned with the uniformity of the administration of the policy.
And they wanted OPM and MetLife to uniformly, no matter where anyone lived, be able to pay those out.
But just like a private employee, people expect their assets to be subject to divorce laws after they're paid out.
And OPM is not involved in anything messy, MetLife is not involved in anything messy after it's paid out.
They're treating them just like any other employee in a private company.
And -- and Congress stated that the purpose, the other -- there are two main purposes.
The other main purpose of FEGLIA was to create an insurance plan that was on par with, not the special kind of insurance that we're offering to servicemen.
Congress with Servicemen's Group Life took out a magic wand and said, we're going to make these insurance proceeds special, and gave special characteristic -- characteristics to the Servicemen's Group Life Insurance proceeds.
But they did not do that -- well, the reason they did that with Servicemen's Group Life Insurance is because they wanted servicemen, no matter how much they messed up their finances, to know that they could leave some asset to whoever they wanted to regardless of--
Justice Antonin Scalia: Why don't they just say, look, if the -- if the State law says so, the -- the new wife gets it?
Why didn't they just say that instead of -- you're telling me they set up this -- this sick system in which the -- the former wife or the new wife has to sue the former wife to get the money that was paid to the former wife.
I mean, my goodness.
What -- our courts are crowded with -- with suits between, you know -- why -- why don't they just say, if the State law says it, it goes to the new wife.
Daniel H. Ruttenberg: --The -- the first reason is because I don't think they wanted to try and come up with every permutation of divorce law.
The second reason, you -- you characterize this as a -- a “ sick law ”, but 48 States incorporate laws which have this concept.
They say: In your will, reference to your former spouse are deemed -- they just haven't because the nature of asset transfers in probate has developed over time -- not all the States have caught up; only 18 have.
But if I may reserve the rest of my time for rebuttal.
Chief Justice John G. Roberts: Thank you, counsel.
ORAL ARGUMENT OF MR. STEFFEN N. JOHNSON ON BEHALF OF THE RESPONDENT
Steffen N Johnson: Thank you, Mr. Chief Justice, and may it please the Court:
On two separate occasions, this Court has held that order of precedence provisions like those found in FEGLIA grant the insured an absolute personal right to, quote,
"direct that the proceeds belong to the named beneficiary and no other. "
In fact, Congress enacted FEGLIA just 4 years after this Court's decision in Wissner, where this Court held that the MISLA order of precedence was the controlling section of the Act, was forceful and clear in defining the scope of this Federal right, preempted post-distribution efforts to nullify the insured's choice, quote,
"whether directed at the very money it received from the Government or an equivalent amount. "
And Ridgway, of course, extended Wissner to SGLIA, which contained the very same text at issue here.
Now, for a number of reasons we think that this case is even easier than Wissner and Ridgway.
First of all, we are not dealing with the generally applicable body of law; we are dealing with something that is quite openly an attempt to do an end run on preemption.
The only thing that triggers section D is being a former spouse and receiving the proceeds.
The statute doesn't make any inquiry into intent, into whether there has been a tort or an independent contract.
It simply reallocates the proceeds.
It substitutes a new beneficiary.
Chief Justice John G. Roberts: Of course, if the ex-wife were in bankruptcy proceedings this money would not necessarily go to her, right; it would go to the bankruptcy estate?
Steffen N Johnson: It -- it might, Your Honor.
Chief Justice John G. Roberts: So -- so why is the State law any different--
Steffen N Johnson: Well, Congress--
Chief Justice John G. Roberts: --with respect to divorces?
Steffen N Johnson: --Well, one reason, Your Honor, is 8705(e).
Congress has spoken specifically to the question of divorce in this context, and I think, as Justice Scalia's and Justice Sotomayor's questions indicate, it didn't simply say that the existence of a decree or the fact of divorce would result in a change in who receives the proceeds.
It said a very specific type of divorce decree would change the result.
Justice Samuel Alito: Well, my problem with this case is, other than administrative convenience, I don't see what purpose Congress could have thought that this provision serves.
Steffen N Johnson: Your Honor, there is certainly elements of administrative convenience in the statute.
Justice Samuel Alito: What else -- what other -- what other objective do you think Congress was trying to achieve?
Steffen N Johnson: It was trying to provide a benefit to Federal employees, and that benefit was to be able to provide benefits, life insurance proceeds, to the person of their choice.
Justice Samuel Alito: Why would it override the expressed will of an insured in -- the express desire of an insured in, for example, a will that's executed after the time of the assignment--
Steffen N Johnson: In the case of--
Justice Samuel Alito: --and the designation of the beneficiary.
Steffen N Johnson: --In the case of a will, Your Honor, 8705(a) makes specific provision for the filing of a will with the employing officer, OPM.
And so Congress has taken account of wills and it's rejected the idea of just a free-floating inquiry into intent.
There were -- I should add that the will language of 8705(a) was added to the statute in 1966.
There had been some lower court cases that had sort of taken this approach to wills contrary to the regulations that existed that said the designated beneficiary provision should govern.
Congress rejected a free-floating inquiry into intent.
Justice Samuel Alito: But why?
You've got a -- you've got a designation of the beneficiary in 1975, let's say, and then you have a will that's executed in 2005.
Why would Congress want the -- the designation of the beneficiary so far in the past to override the expression of the desire of the insured in the subsequent will?
Steffen N Johnson: Congress wanted a simple rule, and it determined that the best evidence of intent is the actual naming of the beneficiary.
Section D doesn't make--
Justice Samuel Alito: How can that be the best designation of intent?
You have a designation long in the past, then you have a will that says that: The insurance proceeds I'm leaving to a different person.
How is the earlier designation of a beneficiary a better expression of intent?
Steffen N Johnson: --Well, I think you can debate what the better policy default is, but when you have a long-standing policy that says to Federal employees, This is what we take account of and we give top -- top billing, top priority to the naming of the beneficiary--
Justice Ruth Bader Ginsburg: Mr. Johnson, that -- that is in the OPM manual, but I think Mr. Ruttenberg pointed out that it's 106-some-odd pages.
How are employees covered by this insurance, how are they informed about what the beneficiary designation means?
Steffen N Johnson: --The simplest answer, Justice Ginsburg, is the form itself.
It's Form SF-2823.
This form says:
"Keep your designation current. "
"Submit a new one if your intentions change, for example, due to a change in family status such as marriage, divorce, etcetera. "
So it's not simply the OPM handbook.
It's the form itself.
And this form is publicly available, of course, on -- on OPM's website, but also was substantially the same and contained this language at the time of Warren Hillman's designation in this case.
Justice Stephen G. Breyer: Well, why do you resist -- I'm just curious.
I -- I would have thought that to answer Justice Scalia you were going to say the answer is it isn't more accurate.
If you write a will and say I want these proceeds now to go to my second wife, that is a better expression of the person's intent.
But if you open that door, you'll get other wills that aren't quite so clear, and that's the problem that Congress faced.
Steffen N Johnson: That's exactly right, Your Honor.
And of course there is an--
Justice Stephen G. Breyer: Is that right?
Steffen N Johnson: --Well -- well, it is true that if you open the door you'll have this be problem.
Congress wanted a clear, simple, and certain rule, and -- and it spoke both to the issues of wills in 8705(a) and to the issues of divorce decrees in 8705(e).
Justice Samuel Alito: Well, that provides a simple -- that provides a -- a simple rule for the people who are affected by this dispute, and those are the people who are -- who stand to benefit either under the designation of the beneficiary or under the will.
But what -- why does Congress care about that?
There are a lot of messy domestic relations issues out there in the States.
That's what Congress was doing?
They said, you know, these -- that State domestic relations law leads to a lot of nasty and difficult disputes -- you know, Bleak House.
Let's intervene and let's simplify this with a simple rule.
Do you think that's what was involved here.
Steffen N Johnson: I think that's part of what was involved here.
I think -- I think they wanted to ensure uniformity for Federal employees who might work in different jurisdictions or move around.
I think, you know, you have a situation where wills are addressed in the statute, divorce decrees are addressed in the statute, and I would note that section D does not make any inquiry into intent.
It's simply -- it's just an automatic blunt rule that the divorce itself has the effect of rerouting the proceeds.
This Court has taken a very practical and realistic approach to issues of preemption in a -- in a wide variety of context, just this term in the Wos case, we said, the Court said, that -- that it's not simply a matter of semantics.
In Free v. Bland, one of this Court's precedents involving U.S. savings bonds, there was a dispute between the husband of the decedent, who had an absolute right of survivorship under Federal laws governing the U.S. savings bond, and a son who would have taken under a will, and the -- the Texas Supreme Court, as the case came to it, said: We can simply honor title by saying, yes, the husband does have an absolute right of survivorship, but we'll order the husband to reimburse the -- the estate.
And this is what this Court said in reversing:
"Viewed realistically, the State has rendered the award of title meaningless. "
"If the State can frustrate the party's attempt to use the bond's survivorship provision through the simple expedient of requiring the survivor to reimburse the estate, the State has interfered directly with the legitimate exercise of the power of the Federal Government. "
Justice Stephen G. Breyer: If he is right, if the only consideration that led Congress to make this absolute rule and so forth the underlying the previous holdings, if the only consideration were ease of administration by the Federal administrator, this statute wouldn't undermine it.
So -- so isn't that true?
I mean, the Federal administrator writes the check to the person that's on the list.
This is a matter after the check gets mailed, or this doesn't undermine it at all; there is no problem.
Steffen N Johnson: If the question is whether it's possible to comply with the mandate to pay the named beneficiary--
Justice Stephen G. Breyer: Yes.
And if that were the only consideration, administration, this doesn't interfere with Federal administration.
So in order to find something to -- to interfere with, we have to figure that they are trying to protect an interest like the following: The person is married twice.
He secretly wants to leave the insurance in the name of his first wife while pretending to the second wife it was just an oversight.
I mean, that's what we have to make up in order to--
Chief Justice John G. Roberts: He's -- by the time the issue comes up.
Justice Stephen G. Breyer: --Is there anything else?
Steffen N Johnson: --In -- in many cases, Your Honor, the former spouse will have the care of children.
There are lots of reasons why one might want to leave benefits to a former spouse.
Justice Stephen G. Breyer: Well, maybe we should say, look, this is a statute that is absolute.
There is no interest.
All this does is run around, without being too pejorative, it runs around the earlier cases, which is your basic point.
Steffen N Johnson: And that would be -- and that would be a short route to affirmance, Your Honor.
Justice Stephen G. Breyer: Right.
Steffen N Johnson: This Court has spoken to the -- the nature of language like this.
SGLIA is essentially identical.
Wissner in fact predates the adoption of FEGLIA, and so Congress had the benefit of that ruling when it was deciding to enact an -- an order of precedence in this statute.
The only real difference between the order of precedence here and the order of precedence in Wissner is that the range of choice is even broader.
Justice Elena Kagan: But I guess the question, Mr. Johnson, is whether we just got it wrong there.
Because if you look at this statute, it seems -- you know, if you were just doing it as a matter of first impression, that what Congress wanted was a clear and uniform rule to allow it to pay benefits quickly and easily without any discussion or investigation of a person's true intent.
But that after that, why does Congress have an interest any further?
And if a State has a law that says, really, we think the better measure of intent is something else, then we should let the States go ahead with their law.
Steffen N Johnson: --It's conceivable, Your Honor, but at a minimum, I think this -- this Court has said repeatedly that when this Court's ruled on the meaning of language and -- and a similar language is adopted in a new statute, it's given the judicial interpretation unless Congress says otherwise.
Justice Antonin Scalia: Yes, I guess -- I guess you might -- you might respond also that, you know, it's characterized by -- by your -- your friend as a -- a State law having to do with -- with marriage and -- and so forth.
But maybe it's just a State law having to do with discernment of intent.
And here you have a Federal statute and I guess the Federal Congress's assertion of what's the best discernment of intent, in the natural order of things, ought to prevail over the State's assessment of what's -- what's the clearest expression of intent, right.
I don't know why it's a family law provision as much as it is a provision of what the presumed intent of -- of a decedent is.
And here the -- the Federal Government has spoken to it with respect to a Federal statute, and I don't know why it isn't intruding upon State family law for -- for the Federal Government to -- to assert, in its own right, intent under this statute is -- is determined this way.
Steffen N Johnson: --Either way, it's preemptive, Your Honor.
If that is the purpose behind it, Congress has a very different means of determining intent.
And as the Court's repeatedly said, where you have conflicting means, you have preemption.
But Section D doesn't call for any inquiry into intent.
It makes an assumption about intent, and then based on that assumption, the rule is automatic.
So whether it's a statute about intent, it's preempted, because Congress says the best evidence of intent is what you do on the beneficiary form; or whether it's about -- about divorce, it's preempted, because Congress has spoken to when divorce will affect the enjoyment of proceeds by the beneficiary.
Justice Ruth Bader Ginsburg: Mr. Johnson, there are at least one case where the State law would override the beneficiary designation and that's obviously if the beneficiary murdered the -- the insured.
So how does this scheme to displace the beneficiary designated in the policy in the Slayer case requires State law?
Steffen N Johnson: Your Honor, I believe -- I do agree with the premise of your question was that the -- which is that the Slayer would not be paid.
The path to that is, I think, as follows.
I think if the Slayer Statute looks like a typical Slayer Statute, then it's going to speak to -- it's going to relate to life insurance and the express preemption provision would probably kick in and it would call for a different result; it would be preempted.
But there's a longstanding Federal common law rule, and the lower courts addressing this situation have also held that -- that that informs the Federal statute here.
The leading case from this Court is an 1886 decision, National Mutual Life Insurance v. Armstrong, and it is such a well-established rule that I think Congress can be viewed as having incorporated that rule under the statute by not having specifically overridden it.
Justice Ruth Bader Ginsburg: --So you get there by a Federal common law rule, but then who would get the proceeds?
If the designated beneficiary is out because of the Federal common law that excludes a Slayer, where would you go next?
You'd go to State law, right?
Steffen N Johnson: No, it would go to the order of precedence.
Justice Ruth Bader Ginsburg: The next one is -- it would be--
Steffen N Johnson: --It would be the widow or the -- then the children and so forth, in that scenario.
If I may speak to Petitioner's argument about the Rose v. Rose case, I think that that case is really doubly inapposite.
First of all, as this Court acknowledged in Rose, the statute there was designed to benefit dependents as well as the veteran.
And it distinguished Wissner and Ridgway as cases involving a situation where Congress wanted to give an absolute right to the -- the insured to ensure that they would enjoy the benefits.
Second of all, at the -- at the State law level, again, there's no guarantee that -- that the operation of Section D will result in the proceeds going to one's family.
It could end up going to a perfect stranger under the next of kin provision.
And in many cases, of course, the former spouse would be the one caring for children.
So it's really, I think, doubly inapposite.
Justice Anthony Kennedy: In the -- in the Wissner case, there was a community property State.
Do you know, under the statute we're dealing with here, is community property in those States also preempted so that the -- the insured is the sole owner of the policy?
Steffen N Johnson: I think that would be right, Your Honor.
I mean, that is the holding of--
Justice Anthony Kennedy: Because it was a specific provision on that point in Wissner, and I -- or the Court so read it.
And I take it the same provision applies -- exists in this statute?
Steffen N Johnson: --Yes.
The Wissner court said that the order of precedence there was the controlling provision of the Act, and it said the same thing again in Wissner concerning SGLIA's order of precedence and it said it displaces inconsistent State law.
Wissner, of course, in that case, it was community property law; in Ridgway, it was State constructive trust law.
I would like to speak to the anti-attachment provision.
As Justice Ginsburg noted, that was an alternative holding of the Court in these earlier cases, and the Court referred to the order of precedence provision as controlling.
Rose v. Rose itself acknowledged that the anti-attachment provision was an alternative holding of the Court, and we think that that is sufficient to -- the order of precedence provision is sufficient to resolve this issue.
Certainly, Congress, looking at the Court's opinion in 1954 when it enacted FEGLIA, would have been likely to conclude that.
In -- in summary, Your Honors, this case is not a difficult case for a finding of preemption under this Court's precedence.
It's really a much easier case.
It's not dealing with generally applicable law.
It's governed squarely by precedent, and the statute at issue here, Section D, is effectively an attempt to do an end run on the will of Congress.
If there are no further questions, I'll defer to Ms. Goldenberg.
Chief Justice John G. Roberts: Thank you, counsel.
ORAL ARGUMENT OF ELAINE J. GOLDENBERG, FOR UNITED STATES, AS AMICUS CURIAE, SUPPORTING RESPONDENT
Elaine J. Goldenberg: Mr. Chief Justice, and may it please the Court:
Section D seeks to substitute a new beneficiary in place of the one that Federal law mandates, and it does that through an attempted end run around Federal preemption.
I'd like to start off by talking about the purpose of the Federal law, which several of the Court's prior questions spoke to.
The purpose here is to get benefits to the designated beneficiary for that person's beneficial enjoyment.
That's the purpose that the Court found in very similar language in Ridgway and Wissner.
Chief Justice John G. Roberts: Well, how far -- how far does that go?
Obviously, the benefit becomes the property of the named beneficiary, but it's not like to her enjoyment.
She may want to spend it on something, but it's going to be -- have to go through bankruptcy, it's going to have to go through other claims like any other property under State law.
Elaine J. Goldenberg: --That's true, Your Honor, but the designated beneficiary is benefiting in a sense when that money is used to pay that person's obligations.
So we don't deny that because there's no anti-attachment provision here, the designated beneficiary could be subject to a contracts judgment, a tort judgment, it could have to pay other outstanding obligations that that person has.
But that is extremely different than a law like the one we have here that says, in effect, to the designated beneficiary, you know what, we don't really think you're entitled to this money.
We don't really think you deserve it.
We don't think you have, in effect, equitable title to it.
We think that belongs to somebody else and so we're just going to transfer the proceeds to that other person.
That's an extremely different situation.
Justice Samuel Alito: Well, why would Congress want to make sure that the money goes to the designated beneficiary where there is a very clear expression of intent on the part of the insured that the money go someplace else.
Elaine J. Goldenberg: Well, I think there are a number of purposes served by that, and that speaks to the will question that Your Honor asked earlier.
For one thing, it creates certainty in the process, not only for the insured, but also for the beneficiary, who's not going to have to face some kind of long legal contest over the money that may eat up the proceeds in attorney's fees and costs.
And that was a purpose that Congress specifically articulated when it made the 1966 amendment to the statute.
Justice Samuel Alito: These arguments seem to be circular.
You're saying that the -- the reason for making sure that the designated beneficiary gets the money instead of the person whom the insured has subsequently and very clearly said he or she wants to get the money is to make sure that the designated beneficiary gets the money, and gets it without any hassle.
Elaine J. Goldenberg: --Well, it creates a clear and uniform set of rules that everyone can abide by.
And also, I think in the case of a will, it protects the insured from fraud.
That was another purpose that Congress gave in 1966.
They don't want a situation where someone is going to find a will after the fact and say: Look, this shows what this person really thought.
The designated beneficiary form is the expression of -- of the person's intent, and that's particularly true here, where you have a very clear network of rules set up by the Federal Government that tells insureds what they must do if they want to change their beneficiary designation, and tells them that their beneficiary designation is going to--
Justice Anthony Kennedy: But your -- your concern is there might be fraudulent wills?
Elaine J. Goldenberg: --It's possible that if you are looking outside the designated -- the beneficiary designation form, that you may have people trying to come up with some other expressions of intent.
It could be a will, it could be a letter, it could be other things.
Justice Anthony Kennedy: Well, it seems to me that's grasping at straws.
Elaine J. Goldenberg: Well, Your Honor, that's, as I say, one of the purposes that Congress gave when it passed that amendment in 1966 that said you don't conduct this free-floating inquiry into the insured's intent.
You don't ask, what would the insured have said if someone had asked them in the last moment of their life what they had -- what would they want.
You look at the designated beneficiary, you look at the beneficiary designation form.
And as I was saying, in -- in part, that's because it's so easy to change.
It's a one-page form.
It's very simple.
And insureds are told over and over again: You have to keep your beneficiary designation up to date; divorce doesn't--
Justice Samuel Alito: When are they told -- when are they told over and over again?
Elaine J. Goldenberg: --Well, they--
Justice Samuel Alito: They -- they get the form when they -- when they sign up for the life insurance, so they periodically get notices from OPM saying, now, remember, you've designated so-and-so as your beneficiary, you know, annually, like in the open season?
Do you really want to keep this person as your beneficiary?
Elaine J. Goldenberg: --OPM actually does instruct agencies to periodically remind employees that they must keep their beneficiary designations up to date.
Obviously, there is no way to know exactly what Mr. Hillman was told here--
Justice Samuel Alito: Nobody has told me that in many years.
Elaine J. Goldenberg: --I hope it's clear at this point.
Chief Justice John G. Roberts: Well, but I mean, we do get these cases over and over again.
I mean, it is the sort of thing that -- it may be very easy to do, but it is the sort of thing that people often overlook.
Elaine J. Goldenberg: That may be, but, nevertheless, Federal law sets up the rules and expects people to abide by them.
And what you can't have is the opposite rule, because that just creates tremendous confusion.
And I think the conflict here is very starkly illustrated when you think about what somebody who designated their spouse and got divorced and then wanted to keep that person as their beneficiary would hear from the Federal Government if they went and said, what should I do?
I really want my ex-spouse to keep being the beneficiary.
What ought I to do?
And if they were to consult the FEGLIA handbook, if they were to ask OPM, they would be told: Do nothing; that beneficiary designation is valid; it's going to remain valid until you change it yourself.
Now, that person's intent would be overridden by section D, which would essentially pluck the benefits right out of the hand of the ex-spouse that that person meant them to go to and transfer them over to somebody else.
And that makes essentially the focus of the Federal law on the designated beneficiary meaningless.
It makes the award of the proceeds to that person a meaningless gesture.
That's the language that this Court used in Free v. Bland, which was a case about ownership of Federal bonds.
And that can't be what Congress intended.
And you can't have these two different default rules operating together and -- and have a system that works.
Justice Samuel Alito: Do you think that situation comes up a lot, where an -- an insured wants to make sure that a former spouse gets more money than the spouse is entitled to under the divorce decree?
Elaine J. Goldenberg: I certainly think it's possible, Your Honor.
I think every person is different, every divorce is different.
Justice Samuel Alito: Well, everything is possible.
Do you think that's a common situation; that's what Congress was--
Elaine J. Goldenberg: I don't know--
Justice Samuel Alito: --was concerned about?
Elaine J. Goldenberg: --I don't know if I can speak to how common it is, but, as we said in our brief, there may be many reasons why somebody would want to give their ex-spouse the insurance proceeds.
And I think what Congress was concerned with was effectuating the intent of the insured as expressed in their designated -- in their designation form -- so that there would be a clear system, a uniform system; and again, so that the beneficiary would be protected against actions much like this one, that create all this confusion over who is actually entitled to the proceeds, and may -- may eat them up in -- in legal fees.
In addition, I'd point out that if Petitioner is correct, then you could have other State laws that are like this one that try to rewrite the order of precedence.
And essentially, the Federal order of precedence could be completely undone by State law.
You'd also have a situation in which Federal employees attempting to figure out where their benefits are really going to go would have to make themselves familiar with State law.
As Justice Ginsburg pointed out earlier, there may be serious choice of law problems there.
The vast majority of these employees are not attorneys and this is a tremendous burden to place on them.
It's much simpler and clearer to have the system that we have under Federal law, and that's why that system was set up.
If there are no further questions--
Chief Justice John G. Roberts: Thank you, counsel.
Mr. Ruttenberg, you have 3 minutes remaining.
REBUTTAL ARGUMENT OF DANIEL H. RUTTENBERG ON BEHALF OF THE PETITIONER
Daniel H. Ruttenberg: Thank you, Your Honor.
First, a quick point about the -- the FEGLI handbook.
The FEGLI handbook came out in July 2008.
Warren Hillman died in July 2008.
So what the FEGLI handbook said -- I don't know that it applies in this case.
But even if it did, what it says is a recitation of the Egelhoff holding.
All it says is:
"A divorce does not invalidate a designation that means your former spouse is a beneficiary. "
It says nothing about domestic relations laws not applying after that, and that's exactly what -- this Court found in Egelhoff.
Another -- another point that my friend made was with regard to Servicemen's Group Life Insurance and the holding in Ridgway was based on the fact that these insurance proceeds belong to the designated beneficiary to the exclusion of all others.
That was one of the main purposes this Court depended upon in ruling that the -- the State law was preempted.
And you can't say that in this case, because those proceeds can belong to -- there's express enactments which allow to you assign it, and allow a Federal -- a divorce decree to direct where those go.
So it can't be said in -- with FEGLIA that those proceeds belong to the designated beneficiary to the exclusion of all others.
And the example that Mr. Chief Justice gave with regard to bankruptcy, the -- in the case of a bankruptcy, that's not benefiting the designated beneficiary because all their debts are being discharged anyways.
So in that situation, it's solely benefiting the creditors.
I also wanted to address one of Justice Scalia's comments.
Justice Scalia was suggesting that this is not a divorce law and is not subject to the preemption.
But the preemption analysis with regards -- there were I think two reasons he suggested that.
One was it's a Federal act, and they applied in Ridgway, which was dealing with the Federal Act, the Servicemen's Group Life Insurance, they did apply the preemption analysis there.
It was overcome, but they applied it.
And this Court's case in Egelhoff also recognized that the statute, very similar section A, the Washington version of section A, was a divorce/probate type of law, both of which are historical police powers.
The -- the only other comment I would like to make is with regard to the Slayer statutes.
Many State Slayer statutes are drafted with the identical language of section D, which says if preempted then there can be a State law cause of action.
They're -- they're based on the same uniform code, and they use the same language.
And if there are no other questions, I just would like to say what an honor it's been today and cede the rest of my time.
Chief Justice John G. Roberts: Thank you, counsel.
The case is submitted.
Chief Justice John G. Roberts: Justice Sotomayor has our opinion this morning in case 11-1221, Hillman versus Maretta.
Justice Sonia Sotomayor: The Federal Employees' Group Life Insurance Act of 1954 FEGLIA establishes a life insurance program for federal employees.
FEGLIA provides an employee, may appoint a beneficiary to receive insurance proceeds after his death. This case turns on the relationship between FEGLIA and a Virginia statute.
Section 20-111.1(A) of the Virginia Code, Section A revokes a beneficiary designation in any contract that provides a death benefit to a former spouse when there has been a change in the decedent's marital status.
In the event that this provision is preempted by federal law, a different provision, Section 20-111.1(D) of the Virginia Code, Section D creates a cause of action rendering a former spouse liable for the proceeds to whoever could have received them if Section 8 were not preempted.
This case presents a -- the question whether Section D is itself preempted by FEGLIA.
Warren Hillman and respondent Judy Maretta were married.
In 1996, Warren named Maretta as a beneficiary of his FEGLIA policy.
Warren and Maretta divorced in 1998 and Warren subsequently married petitioner Jacqueline Hillman.
Warren died in 2008.
At that time, Warren had never changed his beneficiary designation and Maretta collected the proceeds of his life insurance as the named beneficiary.
Hillman, then, brought an action in Virginia Circuit Court arguing that Maretta was liable to her under Section D for the proceeds.
Maretta argued in response that Section D is preempted by federal law and that she should keep the proceeds.
The Virginia Court rejected that argument and found her liable to Hillman for the proceeds.
The Virginia Supreme Court in turn reversed holding that Section D is preempted by federal law.
We granted certiorari and now affirm.
Under our precedents, state law is preempted when it stands as an impediment to Congress' purposes and objectives.
In ascertaining Congress' purposes here, we do not write on a clean slate.
In two previous cases, we found that federal statutes similar to FEGLIA preempted laws -- rules of state law requiring that insurance proceeds be paid to a person other than a named beneficiary.
In Wissner versus Wissner, we considered whether the National Service Life Insurance Act of 1940 preempted as rule of state marital property law.
There, a California court granted a decedent's widow who was not the named beneficiary an interest in the insurance proceeds.
We reverse holding that the federal statute preempted the state law action.
We explained that Congress had made clear that the proceeds paid under the federal statute belonged to the named beneficiary and no other.
And we found that the California trust conflicted with that purpose.
Then in Ridgway versus Ridgway, we considered a similar question regarding the federal Servicemen's Group Life Insurance, SEGLIA.
A Maine court imposed a constructive trust on insurance proceeds paid to a named beneficiary, an order that they be transferred to the decedent's first wife under the terms of a divorce decree.
We found the trust preempted.
We reasoned that the statute was similar to the one we considered in Wissner in a critical respect.
Both statutes reflect that Congress' purpose in requiring that the proceeds belong to a named beneficiary and that she be able to use them.
And we concluded that the Maine trust conflicted with that purpose by taking the proceeds from the named beneficiary and reallocating them to someone else.
The same reasoning applies here.
The statutes we considered in Ridgway and Wissner are similar to FEGLIA.
Like these statutes, FEGLIA plainly gives highest priority to a named beneficiary.
And FEGLIA includes an order of precedents nearly identical to the one Congress enacted in SEGLIA.
FEGLIA accordingly reflects Congress' clear purpose that the proceeds should actually belong to the beneficiary.
As in Ridgway and Wissner, Section D conflicts with that purpose by allocating the proceeds to another person.
We, therefore, hold that Section D is preempted by federal law.
The judgment of the Virginia Supreme Court is affirmed.
Justice Thomas and Justice Alito have filed opinions concurring in the judgment.