By a 5-4 vote, the Supreme Court ruled yesterday that Section 3 of the federal Defense of Marriage Act (DOMA) is unconstitutional insofar as it purports to limit the terms "marriage" and "spouse" to opposite-gender couples for all purposes of federal law. This means that couples who are married in states that recognize same-sex marriage will generally be considered married for purposes of federal law. United States v. Windsor, No. 12-307 (June 26, 2013). For example, such individuals will be treated as married for purposes of federal tax laws and for employment laws such as the Family and Medical Leave Act. The decision does not mean that state laws limiting marriage to opposite gender couples are unlawful, however. A full understanding of the implications of the Windsor decision will require further analysis.
In 1996, in response to a ruling by the Hawaii Supreme Court which suggested that there might be a constitutional right to same-sex marriage, Congress passed the federal Defense of Marriage Act (DOMA). DOMA amended the federal Dictionary Act — a law providing definitions for more than 1,000 federal laws and the whole realm of federal regulations — to define "marriage" and "spouse" as limited to a union between one man and one woman and excluding same-sex partners.
Not surprisingly, numerous plaintiffs have challenged DOMA as violating the rights of same-gender couples. The Obama administration initially defended the law against challenges in federal court. But in February 2011, Attorney General Eric Holder announced that the president regarded the law as unconstitutional and had instructed the Department of Justice not to defend the statute. Several House Republican leaders, in their role as part of the House’s Bipartisan Legal Advisory Group (BLAG), stepped in to defend DOMA in court.
Even though the Obama administration refused to defend DOMA against challenges in court, however, it stated its intention to continue to enforce DOMA — for example, by refusing to grant same-sex couples who are treated as married in their state of residence the tax exemptions generally available to married couples.
In 2012, two federal courts of appeals struck down DOMA as unconstitutional, setting up the challenge in the Supreme Court.
The Windsor Case
Edith Windsor and Dr. Thea Speyer had been same-gender partners for nearly 40 years, living in New York. In 2007, the two married in Canada. Two years later, Dr. Speyer died, leaving Ms. Windsor her entire estate — along with a federal estate tax bill of $363,000, which Ms. Windsor would not have had to pay if she had been married to a man. Ms. Windsor first sought a tax refund, which the IRS refused. Ms. Windsor sued, and both a federal district court and the U.S. Court of Appeals for the Second Circuit ruled that DOMA is unconstitutional and Ms. Windsor is entitled to an income tax refund.
This left the case in a curious position. Federal courts can only decide genuine disputes; they can't just give advisory opinions. But here, the Obama administration agreed with Ms. Windsor that DOMA was unconstitutional, so it was not clear that a true dispute remained. Also, generally speaking, the losing party in the court of appeals asked the Supreme Court to hear the case because it seeks a different outcome. The United States asked the Supreme Court to hear the case even though it agreed both with Ms. Windsor's legal position and with the decision of the Second Circuit.
In agreeing to hear Windsor, the Supreme Court asked the parties to address not only whether the DOMA is constitutional, but also whether the Supreme Court even had the authority to hear the case. The Court wanted the parties to address whether the Obama administration's failure to defend DOMA robbed it of jurisdiction to hear Windsor, and whether the defense of DOMA by BLAG solved that problem. Because neither party challenged the Court's jurisdiction, the Court appointed an amicus curiae to argue that position.
The Supreme Court's Decision
The Court first ruled that it has jurisdiction to consider the merits, saying that the case clearly presented a concrete disagreement between opposing parties that was suitable for judicial resolution as initially filed. The federal government's decision not to defend the constitutionality of DOMA did not eliminate the dispute because the tax refund the federal government was ordered to pay Ms. Windsor is "a real and immediate economic injury," even if the Executive Branch disagrees with the constitutionality of DOMA. Windsor’s ongoing claim for a tax refund that the United States refuses to pay establishes a controversy sufficient for Article III jurisdiction, the majority ruled.
Furthermore, the Court concluded that BLAG's participation in the case ensured the adversarial presentation of issues necessary for the court to exercise jurisdiction as a prudential matter. The Court cautioned that this conclusion does not mean that it is appropriate for the Executive Branch to routinely challenge statutes in court instead of making the case to Congress for amendment or repeal. But it found that the immediate importance of the issue presented to the federal government and to hundreds of thousands of persons, coupled with BLAG's able defense of the statute, supported the decision to hear the case.
DOMA Violates Equal Protection
The Court then ruled that DOMA is unconstitutional because it deprives individuals of the equal protection of the laws guaranteed by the Fifth Amendment. Specifically, it determined that states traditionally have defined who is married within a state, and New York validly exercised that power in deciding that same-gender couples could be married under New York law. In extending marriage to same-gender couples, New York and other states have conferred upon those individuals a "dignity and status of immense import," the Court said.
DOMA ignores and interferes with the state's decision to recognize same-sex marriages without a sufficient federal justification, the majority stated. First, by refusing to recognize same-gender marriages in all circumstances, DOMA essentially stigmatizes some marriages recognized by the state — and the individuals in those marriages — as second-class. Second, DOMA creates two contradictory marriage regimes within the same state, and forces same-sex couples to live as married for the purpose of state law but unmarried for the purpose of federal law, thus diminishing the stability and predictability of basic personal relations the state has found it proper to acknowledge and protect.
Four dissenting justices believed that the Obama administration's failure to defend the statute meant that the court lacked jurisdiction to hear the case. They also would have found that DOMA is constitutional.
It should be noted that the Windsor decision does not address whether state laws limiting marriage to individuals of opposite genders are unconstitutional.
What It Means
The Windsor decision means that the federal law that defines marriage as limited to opposite gender couples for federal law purposes is invalid. Now, couples who are married in states that recognize same-sex marriage will generally be considered married for purposes of more than 1,000 federal laws. As a result, married same-gender couples will be entitled to the same federal tax treatment as married couples generally. The decision will also impact many practical questions, such as whether such same-gender couples will be entitled to social security benefits based on the earnings and status of a same-gender spouse.
Windsor also has implications for labor and employment and benefits laws. For example, the Family and Medical Leave Act (FMLA) entitles many employees to take unpaid leave to care for a spouse with a serious health condition. In states that recognize same-sex marriage, employees may now have a right to FMLA leave to care for a same gender spouse. The decision also may affect employee benefit plans. The decision will also affect employee benefit plans.
Holland & Knight will provide updates concerning the impact of Windsor on federal laws and employers.
To ensure compliance with Treasury Regulations (31 CFR Part 10, §10.35), we inform you that any tax advice contained in this correspondence was not intended or written by us to be used, and cannot be used by you or anyone else, for the purpose of avoiding penalties imposed by the Internal Revenue Code.