See how the Supreme Court’s June 26, 2013 United States v. Windsor decision, which concluded the Defense of Marriage Act unconstitutionally restricted spousal benefits to members of the opposite sex, affects ERISA beneficiary decisions.

Here’s the case of Cozen O’Connor PC v. Jennifer Tobits, 2013 WL 3878688 (E.D. Pa July 29, 2013)(“Following the [Supreme Court’s ruling in Windsor], the term “’Spouse’ is no longer unconstitutionally restricted to members of the opposite sex, but now rightfully includes those same-sex spouses in ‘otherwise valid marriages.’”).

FACTS: Sarah Farley joined the Cozen law firm in 2004 and married Jennifer Tobits in Canada in 2006. The Cozen ERISA plan required that death benefits be paid “to the Participant’s ‘surviving Spouse’ upon the death of the Participant.” The Plan did not define “spouse” except to the extent that it required the “Spouse” to be married for a year period prior to receiving benefits. The Plan also allowed the Participant to designate a different beneficiary, but the Spouse first had to waive his or her rights to be the beneficiary before the designation of another beneficiary can be deemed valid.

After Ms. Farley died in 2010, the Plan interpleaded the death benefit funds and asked the court to determine whether Jennifer Tobits  qualified as the “spouse.” The District court suspended any decision, pending the Supreme Court’s decision in United States v. Windsor 1013 WL 3196928 (U.S. June 26, 2013), which was to address whether the Defense of Marriage Act, which restricted the term “Spouse” only to opposite sex couples, was constitutional.

HELD: Partner in Same Sex Marriage is Deemed “Spouse.”

RATIONALE:

  1. “For purposes of ERISA, the Defense of Marriage Act, by operation of its Section 3, restricted any reference to ‘Spouse’ to mean only opposite sex spouses.” Op. at 7 (Emphasis in Original)
  2. In United States v. Windsor, 1013 WL 3196928 (U.S. June 26, 2013), the Supreme Court held that because New York recognized same sex marriages as valid, the Defense of Marriage Act unlawfully deprived those couples of equal liberty of persons, a  protection established under the Fifth Amendment. Op. at 7.
  3.  “That ‘written inequality’ in the [Defense of Marriage Act] extended to the ERISA definition of ‘Spouse’.”  Op. at 7.
  4.  “Following the [Supreme Court’s ruling in Windsor], the term “’Spouse’ is no longer unconstitutionally restricted to members of the opposite sex, but now rightfully includes those same-sex spouses in ‘otherwise valid marriages.’”  Op. at 7.
  5. ERISA and the Code incorporate valid state law. Since Illinois law recognizes same sex marriage as valid, “the United States Constitution requires that federal laws and regulations of this country acknowledge that marriage.”  Op. at 8.

Key Take Away:  The death benefit issue in this case became ripe before the Supreme Court issued the Windsor decision. This court applied Windsor retroactively in deeming Ms. Tobits the “Spouse.”