82 F.3d 90 (5th Cir. 1996), 94-30178, Boggs v. Boggs
|Citation:||82 F.3d 90|
|Party Name:||Sandra Jean Dale BOGGS, Plaintiff-Appellant, v. Thomas F. BOGGS, Harry P. Boggs and David B. Boggs, Defendants-Appellees.|
|Case Date:||April 17, 1996|
|Court:||United States Courts of Appeals, Court of Appeals for the Fifth Circuit|
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Marian M. Livaudais, Livaudais & Livaudais, Mandeville, LA, James F. Willeford, New Orleans, for appellant.
Susan Rees, Plan Benefits Security Division, N-4611, Office of Solicitor, U.S. Dept. of Labor., Washington, DC, amicus curiae.
Thomas F. Boggs, Monroe, LA, pro se.
Guy L. Deano, Jr., Deano & Deano, Mandeville, LA, for Harry Boggs & David Boggs.
Appeal from the United States District Court for the Eastern District of Louisiana.
Before WISDOM, KING and DUHE, Circuit Judges.
WISDOM, Circuit Judge.
Sandra Boggs, the plaintiff/appellant, seeks a declaratory judgment that the Employee Retirement Income Act of 1974 (ERISA) preempts Louisiana community property law and, thereby, prevents the creation of a community property interest in ERISA-qualified retirement benefit plans. The district court rejected the plaintiff's contention and denied her request for a declaratory judgment. We agree with the district court's decision. We AFFIRM.
Isaac Boggs was employed by South Central Bell from June 18, 1949 until his retirement on September 1, 1985. As an employee, he participated in an ERISA-qualified pension plan. Isaac Boggs was married to his first wife, Dorothy Boggs, when he began employment with South Central Bell in 1949 and their marriage continued until her death
on August 14, 1979. Dorothy and Isaac Boggs had three sons, David Bruce Boggs, Thomas Frank Boggs, and Harry Maurice Boggs, the defendant/appellees. Isaac Boggs married again in April of 1980. His second wife, Sandra Boggs, the plaintiff/appellant, survived her husband who died in 1989.
The South Central Bell plan provided for several types of retirement benefits. Upon his retirement, Isaac Boggs received a lump sum payment of $151,628.94 which was rolled over into an IRA account valued at $180,778.05 at his death. He was also paid a monthly annuity of $1,777.67. This benefit was converted into a survivor's annuity when Isaac Boggs died and is currently paid to Sandra Boggs. Isaac Boggs also received 96 shares of AT & T stock and a life insurance policy that names Sandra Boggs as beneficiary.
In her will, the first Mrs. Boggs bequeathed one-third of her estate and a lifetime usufruct in the remaining two-thirds to her husband. She designated her three sons as the owners of the naked or revisionary interest in the portion of her estate over which Isaac Boggs held a usufruct. Among the assets listed in the succession of Dorothy Boggs was her community property interest in her husband's pension valued at $42,388.57 in 1979. The succession documents valued Dorothy Boggs' interest at $21,194.29.
The Boggs' sons, the defendants in this case, filed an action in Louisiana state court seeking an accounting of their father's usufruct and an award of some portion of the retirement benefits. Sandra Boggs then filed this case seeking a declaratory judgment that ERISA preempts the application of Louisiana community property law to this qualified plan. Specifically, the plaintiff, the second wife, argued that ERISA controls the disbursement of benefits and, under those rules, she is the designated beneficiary. The defendants responded by arguing that this case was not governed by ERISA and, therefore, the court lacked jurisdiction. In addition, the defendants argued that ERISA does not preempt Louisiana community property law. The district court responded by determining first that it had jurisdiction over the case under 29 U.S.C. section 1132. Further, the district court rejected the plaintiff's contention that ERISA preempts Louisiana community property law. The plaintiff asks us to review that decision. 1
Before we review the district court's determination regarding ERISA preemption, we must address the defendant's continuing contention that the district court lacked jurisdiction to decide this case. 29 U.S.C. section 1132(a) creates ERISA jurisdiction and provides that:
a civil action may be brought by a participant or beneficiary ... to recover benefits due to him under the plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the plan ...".
In this case, Sandra Boggs, the plaintiff, is a beneficiary of the benefits plan; she is currently receiving a survivor's annuity. Further, she seeks to clarify her right to pension benefits under the South Central Bell plan. This type of action is expressly authorized by the jurisdictional provisions of section 1132 and the district court properly concluded that it had jurisdiction to resolve this case.
The plaintiff, Sandra Boggs, seeks a declaratory judgment that ERISA preempts Louisiana community property law and, thereby, prevents the Boggs' children from receiving any portion of their father's pension benefits. The district court rejected the plaintiff's arguments and, on appeal, she asks us to reconsider the preemption issue. We
review the district court's preemption analysis de novo. 2
ERISA was enacted to protect the interests of the beneficiaries of employee benefit plans. 3 The Act "imposes participation, funding, and vesting requirements on pension plans" and also regulates issues such as "reporting, disclosure, and fiduciary responsibility". 4 One important goal of ERISA is to impose uniform standards on plan administrators. Congress attempted to guarantee uniformity when it included ERISA's broad preemption provision. 5 29 U.S.C. section 1144(a) provides that the provisions of ERISA "shall supersede any and all state laws insofar as they may now or hereafter relate to any employee benefit plan described in section 4(a) and not exempt under section 4(b)".
This provision has been interpreted broadly. Courts recognize the " 'deliberately expansive' language chosen by Congress". 6 Thus, any state law which "relates to" an ERISA-qualified employee benefits plan is preempted. A state law "relates to" an ERISA plan "in the normal sense of the phrase, if it has connection with or reference to such a plan". 7 A state law can relate to an employee benefit plan even if it is not designed to regulate in the area of employee benefits or if its effect is indirect. 8
The broad sweep of the ERISA preemption provision, however, is not without limits. 9 The language of the statute indicates that it preempts only state laws which relate to a benefit plan. Further, we must recognize the general presumption "that Congress does not intend to preempt areas of traditional state regulation". 10 The Supreme Court has warned that, in determining the scope of ERISA's preemption provision, we must be mindful of traditional principles of federalism. 11 "[W]e must be guided by respect for the separate spheres of governmental authority preserved in our federalist system." 12 For example, in Mackey v. Lanier Collection Agency, the Supreme Court held that a Georgia statute governing garnishment procedures in that state was not preempted by ERISA even when it was used to garnish benefits received under an ERISA plan. 13
To determine whether ERISA preempts state law, this Court engages in a two-part analysis. First, we are less likely to find preemption when the state law at issue "involves an exercise of traditional state authority". 14 Second, we consider whether the
state law "affects relations among the principal ERISA entities--the employer, the plan, the plan fiduciaries, and the beneficiaries" or whether it only "affects relations between one of these entities and an outside party" or "two outside parties with only an incidental effect on the plan". 15
In this case, the plaintiff asks us to conclude that ERISA preempts Louisiana community property law. The area of domestic relations has long been the domain of the states. As this Court has noted:
Federal respect for state domestic relations law has a long and venerable history. When courts face a potential conflict between state domestic relations law and federal law, the strong presumption is that state law should be given precedence.... The law of family relations has been a sacrosanct enclave, carefully protected against federal intrusion. One way our federalist system maintains the integrity of the folkways and mores of localities is through the conservation of state control over the creation and separation of families. 16
A community property system governing the acquisition and ownership of property during marriage goes back to the earliest days of Louisiana as a French colony, and was carried on under the Spanish regime, and was embedded in the first Louisiana Constitution. It is an honored civilian institution, not the belated effort of a common law state to seek a tax advantage. The use of a community property system represents Louisiana's recognition of the value a spouse, though non-employed, contributes to a marriage. The system conceives of marriage as a partnership in which each partner is entitled to an equal share.
Under Louisiana community property law, each spouse owns "a present undivided one-half interest" in all community assets, which vests from the moment of acquisition. 17 Pension benefits, if acquired during the marriage, are generally considered a community asset. 18 Thus, if one spouse receives benefits from a pension plan, he or she must account to the other spouse for this benefit which vests equally in both spouses from the instant of acquisition.
The plaintiff contends that the broad sweep...
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