Boggs v. Boggs, 520 U.S. 833 (1997)

Boggs v. Boggs

No. 96-79

Argued January 15, 1997
Decided June 2, 1997
520 U.S. 833

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Syllabus

Respondents are the sons of Isaac and Dorothy Boggs. After Dorothy’s death in 1979, Isaac married petitioner Sandra Boggs. When Isaac retired in 1985, he received various benefits from his employer’s retirement plans, including a lump sum savings plan distribution, which he rolled over into an individual retirement account (IRA); shares of stock from the company’s employee stock ownership plan (ESOP); and a monthly annuity payment. Following his death in 1989, this dispute over ownership of the benefits arose between Sandra and the sons. The sons’ claim is based on Dorothy’s purported testamentary transfer to them, under Louisiana law, of a portion of her community property interest in Isaac’s undistributed pension plan benefits. Sandra contested the validity of that transfer, arguing that the sons’ claim is preempted by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. The Federal District Court disagreed and granted summary judgment against Sandra, and the Fifth Circuit affirmed.

Held: ERISA preempts a state law allowing a nonparticipant spouse to transfer by testamentary instrument an interest in undistributed pension plan benefits. Pp. 839-854.

(a) In order to resolve this case, the Court need not interpret ERISA’s preemption clause, § 1144(a), but can simply apply conventional conflict preemption principles, asking whether Louisiana’s community property law conflicts with ERISA and frustrates its purposes. Pp. 839-841.

(b) To the extent Louisiana law provides the sons with a right to a portion of Sandra’s survivor’s annuity, it is preempted. That annuity is a qualified joint and survivor annuity mandated by § 1055, the object of which is to ensure a stream of income to surviving spouses. ERISA’s solicitude for the economic security of such spouses would be undermined by allowing a predeceasing spouse’s heirs and legatees to have a community property interest in the survivor’s annuity. Even a plan participant cannot defeat a nonparticipant surviving spouse’s statutory entitlement to such an annuity. See § 1055(c)(2). Nothing in ERISA’s language supports the conclusion that Congress decided to permit a predeceasing nonparticipant spouse to do so. Testamentary transfers such as the one at issue could reduce the annuity below the ERISA minimum. See § 1055(d)(1). Perhaps even more troubling, the recipient of the transfer need not be a family member; e.g., the annuity might be substantially reduced so that funds could be diverted to support an unrelated stranger. In the face of this direct clash between state law and ERISA’s provisions and objectives, the state law cannot stand. See Gade v. National Solid Wastes Management Assn., 505 U.S. 88, 98. Pp. 841-844.

(c) The sons’ state law claim to a portion of Isaac’s monthly annuity payments, IRA, and ESOP shares is also preempted. ERISA’s principal object is to protect plan participants and beneficiaries. See, e.g., §§ 1001(b), (c), 1103(c)(1), 1104(a)(1), 1108(a)(2), 1132(a)(1)(B). The Act confers pension plan beneficiary status on a nonparticipant spouse or dependent only to the extent that a survivor’s annuity is required in covered plans, § 1055(a), or a "qualified domestic relations order" (QDRO) awards the spouse or dependent an interest in a participant’s benefits, §§ 1056(d)(3)(K) and (J). These provisions, which acknowledge and protect specific pension plan community property interests, give rise to the strong implication that other community property claims are not consistent with the statutory scheme. ERISA’s silence with respect to the right of a nonparticipant spouse to control pension plan benefits by testamentary transfer provides powerful support for the conclusion that the right does not exist. Cf. Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 147-148. The sons have no claim to a share of the benefits at issue, because they are neither participants nor beneficiaries under §§ 1002(7) and (8), but base their claims on Dorothy’s attempted testamentary transfer. It would be inimical to ERISA’s purposes to permit them to prevail. Early cases holding that ERISA did not preempt spousal community property interests in pension benefits, regardless of who was the plan participant or beneficiary, are not applicable here in light of subsequent amendments to ERISA. Reading ERISA to permit nonbeneficiary interests, even if not enforced against the plan, would result in troubling anomalies that do not accord with the statutory scheme. That Congress intended to preempt respondents’ interests is given specific and powerful reinforcement by § 1056(d)(1), which requires pension plans to specify that benefits "may not be assigned or alienated." Dorothy’s testamentary transfer to her sons is such a prohibited "assignment or alienation" under the applicable regulations. Community property laws have, in the past, been preempted in order to prevent the diversion of retirement benefits. See, e.g., Free v. Bland, 369 U.S. 663, 669. It does not matter that respondents have sought to enforce their purported rights only after Isaac’s benefits were distributed, since those rights are based on the flawed theory that they had an interest in the undistributed benefits. Pp. 844-854.

82 F.3d 90, reversed.

KENNEDY, J., delivered the opinion of the Court, in which STEVENS, SCALIA, SOUTER, and THOMAS, JJ., joined, and in which REHNQUIST, C.J., and GINSBURG, J., joined as to Part III. BREYER, J., filed a dissenting opinion, in which O’CONNOR, J., joined, and in which REHNQUIST, C.J., and GINSBURG, J., joined except as to Part II-B-3, post, p. 854.