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BOGGS v. BOGGS ET AL. (1997)
OCTOBER TERM, 1996
BOGGS v. BOGGS ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
No. 96-79. Argued January 15, 1997-Decided June 2, 1997
Respondents are the sons of Isaac and Dorothy Boggs. Mter 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 pre-empted 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 pre-empts 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 pre-emption clause, § 1144(a), but can simply apply conventional conflict pre-emption 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 pre-empted. 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 pre-empted. ERISA's principal object is to protect plan participants and beneficiaries. See, e. g., §§ 1001(b), (c), 1l03(c)(1), 1l04(a)(1), 1l08(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" 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 pre-empt 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 pre-empted 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
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