Summary
In Hillman v. Maretta, 569 U.S. 483 (2013), the U.S. Supreme Court held that the Federal Employees’ Group Life Insurance Act (FEGLIA) conflict-pre-empts a Virginia statute (Va. Code §20-111.1(D)) that allowed a surviving spouse to recover FEGLI proceeds from a former spouse who remained the named beneficiary. The Court reasoned that FEGLIA’s order of precedence and its purpose to ensure that proceeds belong to the designated beneficiary and no other are obstructed by state laws that reallocate proceeds after payment, following Wissner v. Wissner and Ridgway v. Ridgway. The decision affirms that federal employees have an unfettered right to designate a beneficiary, and state domestic-relations laws cannot override that choice.
Topics
Practice areas
Questions Presented
- Whether Va. Code §20-111.1(D), which creates a cause of action against a former spouse to recover FEGLI proceeds, is pre-empted by the Federal Employees' Group Life Insurance Act (FEGLIA) under conflict pre-emption principles.
Holdings
- Section D is pre-empted because it stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress, which sought to ensure that FEGLI insurance proceeds belong to the named beneficiary and no other.
Key quotations
“Congress 'spok[e] with force and clarity in directing that the proceeds belong to the named beneficiary and no other.'” (at 10)
“FEGLIA's implementing regulations further underscore that the employee's 'right' of designation 'cannot be waived or restricted.'” (at 9-10)
“It makes no difference whether state law requires the transfer of the proceeds, as Section A does, or creates a cause of action, like Section D, that enables another person to receive the proceeds upon filing an action in state court. In either case, state law displaces the beneficiary selected by the insured in accordance with FEGLIA and places someone else in her stead.” (at 10)
“If States could make alternative distributions outside the clear procedure Congress established, that would transform this narrow exception into a general license for state law to override FEGLIA.” (at 13)
Factual background
Warren Hillman named his then-wife Judy Maretta as the beneficiary of his FEGLI life insurance policy. After their 1998 divorce, Warren married Jacqueline Hillman but never changed the beneficiary designation. Upon Warren's death in 2008, Maretta claimed and received the $124,558.03 in insurance proceeds. Jacqueline Hillman then sought to recover those proceeds under Virginia Code Section D, which imposes personal liability on a former spouse who receives benefits that Section A would have revoked but for federal pre-emption.
Procedural history
Jacqueline Hillman sued Judy Maretta in Virginia Circuit Court seeking recovery of FEGLI policy proceeds under Va. Code §20-111.1(D). The Circuit Court granted summary judgment for Hillman. The Virginia Supreme Court reversed, holding Section D pre-empted by FEGLIA. The U.S. Supreme Court granted certiorari to resolve a conflict among courts.