Hillman v. Maretta

PETITIONER: Jacqueline Hillman
RESPONDENT: Judy A. Maretta
LOCATION: State of Virginia Circuit Court, 19th Judicial Circuit

DOCKET NO.: 11-1221
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT: Supreme Court of Virginia

CITATION: 569 US (2013)
GRANTED: Jan 11, 2013
ARGUED: Apr 22, 2013
DECIDED: Jun 03, 2013

ADVOCATES:
Daniel H. Ruttenberg - for the petitioner
Elaine J. Goldenberg - Assistant to the Solicitor General, Department of Justice, for the United States as amicus curiae supporting the respondent
Steffen N. Johnson - for the respondent

Facts of the case

In December 1996, Warren Hillman made his wife, Judy Maretta, the beneficiary of his Federal Employees' Group Life Insurance ("FEGLI") policy. In 1998, the two divorced and Mr. Hillman remarried. Despite the divorce, Mr. Hillman never changed the beneficiary designation on his policy to his new wife, Jacqueline Hillman. In 2008, Warren died and Jacqueline Hillman attempted to claim the death benefits under his policy. Her claim was denied because she was not the named beneficiary on her husband's policy; Ms Maretta received the death benefits instead. Mrs Hillman sued Ms Maretta for the full amount of death benefits under the policy.

When a divorce is finalized in Virginia, state law revokes any beneficiary designations between former spouses. State law also creates a cause of action against anyone who wrongfully receives FEGLI policy proceeds. However, federal law under the Federal Employees' Group Life Insurance Act dictates that death benefits from FEGLI policies shall go to the designated beneficiary, regardless of state regulation to the contrary. The trial court applied state law and granted summary judgment to Mrs. Hillman, but Ms Maretta appealed. The Supreme Court of Virginia reversed the lower court's decision and held that federal law preempted the state law; therefore Mr. Hillman's beneficiary designation was not revoked. Mrs. Hillman appealed to the Supreme Court of the United States.

Question

Does federal law preempt a Virginia state law that revokes a spouse's beneficiary designation in a Federal Employees' Group Life Insurance policy upon divorce?

Media for Hillman v. Maretta

Audio Transcription for Oral Argument - April 22, 2013 in Hillman v. Maretta

Audio Transcription for Opinion Announcement - June 03, 2013 in Hillman v. Maretta

John G. Roberts, Jr.:

Justice Sotomayor has our opinion this morning in case 11-1221, Hillman versus Maretta.

Sonia Sotomayor:

The Federal Employees' Group Life Insurance Act of 1954 FEGLIA establishes a life insurance program for federal employees.

FEGLIA provides an employee, may appoint a beneficiary to receive insurance proceeds after his death. This case turns on the relationship between FEGLIA and a Virginia statute.

Section 20-111.1(A) of the Virginia Code, Section A revokes a beneficiary designation in any contract that provides a death benefit to a former spouse when there has been a change in the decedent's marital status.

In the event that this provision is preempted by federal law, a different provision, Section 20-111.1(D) of the Virginia Code, Section D creates a cause of action rendering a former spouse liable for the proceeds to whoever could have received them if Section 8 were not preempted.

This case presents a -- the question whether Section D is itself preempted by FEGLIA.

Warren Hillman and respondent Judy Maretta were married.

In 1996, Warren named Maretta as a beneficiary of his FEGLIA policy.

Warren and Maretta divorced in 1998 and Warren subsequently married petitioner Jacqueline Hillman.

Warren died in 2008.

At that time, Warren had never changed his beneficiary designation and Maretta collected the proceeds of his life insurance as the named beneficiary.

Hillman, then, brought an action in Virginia Circuit Court arguing that Maretta was liable to her under Section D for the proceeds.

Maretta argued in response that Section D is preempted by federal law and that she should keep the proceeds.

The Virginia Court rejected that argument and found her liable to Hillman for the proceeds.

The Virginia Supreme Court in turn reversed holding that Section D is preempted by federal law.

We granted certiorari and now affirm.

Under our precedents, state law is preempted when it stands as an impediment to Congress' purposes and objectives.

In ascertaining Congress' purposes here, we do not write on a clean slate.

In two previous cases, we found that federal statutes similar to FEGLIA preempted laws -- rules of state law requiring that insurance proceeds be paid to a person other than a named beneficiary.

In Wissner versus Wissner, we considered whether the National Service Life Insurance Act of 1940 preempted as rule of state marital property law.

There, a California court granted a decedent's widow who was not the named beneficiary an interest in the insurance proceeds.

We reverse holding that the federal statute preempted the state law action.

We explained that Congress had made clear that the proceeds paid under the federal statute belonged to the named beneficiary and no other.

And we found that the California trust conflicted with that purpose.

Then in Ridgway versus Ridgway, we considered a similar question regarding the federal Servicemen's Group Life Insurance, SEGLIA.

A Maine court imposed a constructive trust on insurance proceeds paid to a named beneficiary, an order that they be transferred to the decedent's first wife under the terms of a divorce decree.

We found the trust preempted.

We reasoned that the statute was similar to the one we considered in Wissner in a critical respect.

Both statutes reflect that Congress' purpose in requiring that the proceeds belong to a named beneficiary and that she be able to use them.

And we concluded that the Maine trust conflicted with that purpose by taking the proceeds from the named beneficiary and reallocating them to someone else.

Sarah from Law Aspect

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