Hillman v. Maretta
133 S. Ct. 1943, 186 L. Ed. 2d 43, 2013 U.S. LEXIS 4167 (2013)
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Rule of Law:
Under the Supremacy Clause, the Federal Employees' Group Life Insurance Act (FEGLIA) pre-empts any state law that creates a cause of action to divert life insurance proceeds from the federally designated beneficiary to another person. The federal statute's purpose is not just to direct payment, but to ensure the proceeds 'belong' to the named beneficiary.
Facts:
- Warren Hillman, a federal employee, was married to Judy Maretta.
- In 1996, Warren Hillman named Maretta as the beneficiary of his life insurance policy under the Federal Employees' Group Life Insurance Act (FEGLIA).
- In 1998, Warren Hillman and Maretta divorced.
- In 2002, Warren Hillman married Jacqueline Hillman.
- Warren Hillman died in 2008 without ever changing the beneficiary designation on his FEGLIA policy.
- At the time of his death, Judy Maretta remained the designated beneficiary on the policy.
- The federal insurance administrator paid the policy proceeds, totaling $124,558.03, to Maretta as the named beneficiary.
Procedural Posture:
- Jacqueline Hillman sued Judy Maretta in Virginia Circuit Court (a state trial court) to recover the insurance proceeds under Virginia Code § 20-111.1(D).
- The Virginia Circuit Court granted summary judgment to Hillman.
- Maretta, as the appellant, appealed the decision to the Supreme Court of Virginia (the state's highest court).
- The Supreme Court of Virginia reversed the trial court's judgment and entered judgment for Maretta, holding that the Virginia statute was pre-empted by FEGLIA.
- The United States Supreme Court granted certiorari to resolve a split among state and federal courts on the issue.
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Issue:
Does the Federal Employees' Group Life Insurance Act (FEGLIA) pre-empt a Virginia state law that makes a former spouse, who is the named beneficiary on a FEGLI policy, liable for the proceeds to the person who would have received them under state law?
Opinions:
Majority - Justice Sotomayor
Yes, FEGLIA pre-empts the Virginia state law. The state law stands as an obstacle to the full purposes and objectives of Congress. Citing the precedents of Wissner v. Wissner and Ridgway v. Ridgway, which dealt with similar federal insurance statutes, the Court reasoned that Congress's intent in FEGLIA was not merely administrative convenience. Instead, Congress intended to establish a clear and predictable system where the named beneficiary has the right to both receive and keep the insurance proceeds. The Virginia statute frustrates this purpose by creating a cause of action that effectively redirects the proceeds to someone other than the designated beneficiary, undermining the 'unfettered freedom of choice' Congress granted to federal employees.
Concurring - Justice Thomas
Yes, the Virginia law is pre-empted, but the majority's 'purposes and objectives' pre-emption analysis is illegitimate. The correct basis for pre-emption is a direct conflict between the ordinary meanings of the federal and state laws. FEGLIA grants an employee the right to designate a beneficiary, which would be meaningless if the designated beneficiary could be immediately sued to recover the proceeds. The Virginia law nullifies this right by transforming the designated beneficiary into a mere passthrough for the person the state has chosen, directly conflicting with FEGLIA's statutory scheme.
Concurring - Justice Alito
Yes, the Virginia law is pre-empted because one of FEGLIA's primary purposes is to effectuate the insured's expressed intent. The Virginia statute overrides the insured's last articulated choice—the beneficiary designation form—with a legal presumption about what a divorced person would have wanted. Because the state law substitutes a statutory default for the insured's actual, expressed wishes, it conflicts with a core objective of FEGLIA. This analysis, however, should not foreclose the possibility of considering other evidence of an insured's expressed intent, such as a will, in different circumstances.
Analysis:
This decision solidifies the supremacy of federal beneficiary designation schemes over conflicting state domestic relations laws. It confirms that the right to designate a beneficiary under a federal statute like FEGLIA includes the right for that beneficiary to retain the proceeds, free from state-law claims that would redirect the funds. The ruling provides certainty for federal program administrators and beneficiaries but highlights the critical importance for individuals to update their beneficiary designations after significant life events, as courts will enforce the designation on file regardless of presumed intent or fairness arguments rooted in state law.
