January 22, 2016
Authored by: benefitsbclp
Earlier this month, the U.S. District Court for the Northern District of California recognized the retroactive application of United States v. Windsor.
In Schuett v. FedEx Corporation, plaintiff and her long-time same-sex partner, Lesly Taboada-Hall were married in a civil ceremony on June 19, 2013. Taboada-Hall, a fully-vested participant in the FedEx Pension Plan, passed away the following day from cancer. As of the date of Taboada-Hall’s death, marriage licenses for same-sex couples were not available in California due to enforcement of Proposition 8, a voter-enacted ban on same-sex marriage. Six days later, the U.S. Supreme Court issued its landmark Windsor decision declaring Section 3 of the Defense of Marriage Act (DOMA) unconstitutional.
Here’s where this gets interesting. On August 6, 2013, plaintiff filed a Petition to Establish the Fact, Date, and Place of Marriage, as permitted by California Health & Safety Code Section 103450. The Sonoma County Superior Court issued a delayed certificate of marriage that showed the marriage occurred June 19, 2013 — yes, June 19, 2013, a week before the Windsor decision. So, according to the Superior Court, the plaintiff actually became Taboada-Hall’s spouse on June 19, 2013, a day before Taboada-Hall’s death, rather than June 26, 2013, a week after her death.
Plaintiff then sought a qualified pre-retirement survivor annuity under the FedEx Pension Plan as a surviving spouse. Defendant denied the claim, asserting that at the time of Taboada-Hall’s death the plan had defined “spouse” in accordance with DOMA as a person of the opposite sex who has entered into a legal union between one man and one woman as husband and wife. In denying the plaintiff’s claim on appeal, the FedEx Retirement Appeals Committee stated that for purposes of the plan, Taboada-Hall was unmarried at the time of her death and had no surviving spouse.
Plaintiff filed suit arguing that since California recognized her as being married on June 19, 2013, the date prior to Taboada-Hall’s death, she should be considered a surviving spouse for purposes of applying ERISA’s mandatory benefit provisions. ERISA requires defined benefit plans, such as the FedEx Pension Plan, to provide a qualified preretirement survivor annuity to all married participants who are vested and die prior to their annuity starting date, unless the participant has waived the benefit and the spouse has consented to such waiver. Citing Department of Labor guidance following Windsor, the court noted that ERISA’s mandatory benefits provisions clearly apply to all spouses, including same-sex spouses. Here, the plaintiff argued the plan’s terms conflict with federal law (meaning, Windsor, applied retroactively), and as a result, the plan’s terms should be overruled. In denying FedEx’s motion for judgment on the pleadings, the court found that plaintiff had adequately alleged that defendant had violated ERISA by acting contrary to applicable federal law and failing to provide a benefit mandated under ERISA. The court appeared to rely heavily on the Superior Court’s issuance of the delayed marriage certificate and the fact that plaintiff and Taboada-Hall had been registered domestic partners in California and had done everything possible to legally marry while Taboada-Hall was still alive. In reaching its conclusion, that Windsor could apply retroactively to the FedEx Pension Plan, the court pointed to the fact that Windsor itself applied retroactively to invalidate DOMA back to its 1995 enactment.
It is worth taking note of this case because of the California Superior Court’s issuance of a retroactive same-sex marriage certificate dated a week before Windsor and the District Court’s acceptance of the marriage certificate as valid. If the court’s retroactive application of Windsor stands, it is a potential game changer.