On May 31, 2012, in Gill, et al., v. Office of Personnel Management, et al., Case Nos. 10-2207 & 10-2214, a three-judge panel of the U.S. Court of Appeals for the First Circuit unanimously declared unconstitutional Section 3 of the Defense of Marriage Act (“DOMA”). Section 3 of DOMA provides that for all purposes under federal law “‘marriage’ refers only to a legal union between one man and one woman, and the word ‘spouse’ refers only to a person of the opposite sex who is a husband or a wife.” The effect of Section 3 of DOMA is that even where a state recognizes same sex marriage, such marriages are not recognized for federal law purposes. This provision of DOMA has a wide-ranging impact on employee benefits, which are almost entirely subject to federal regulation. A separate provision of DOMA, not at issue in Gill, provides that states are not required to recognize same sex marriages that are performed in states where they are permitted.

When Congress passed DOMA in 1996 same-sex marriage were not legal anywhere in the United States. Same-sex marriages are now legal in 8 states (Connecticut, Maryland, Massachusetts, Iowa, Vermont, New Hampshire, New York, Washington) and the District of Columbia. Other states have instituted their own state-level versions of DOMA. Following an earlier district court ruling, the Obama administration determined that the Department of Justice would no longer defend the constitutionality of DOMA. As a result, Speaker John Boehner put together the Bipartisan Legal Advisory Group to defend the legislation in court.

Due to DOMA, the roughly 1,000 Federal laws that address marriage do not cover legally married same-sex couples. Plaintiffs in Gill sought to enjoin federal agencies from enforcing DOMA to deprive legally married same-sex couples living in Massachusetts (a states that recognizes same-sex marriage) of the same federal benefits available to opposite-sex couples.

The plaintiffs in Gill challenged Section 3 of DOMA under the Equal Protection Clause of the U.S. Constitution, as well as the Tenth Amendment and the Spending Clause. Ultimately, the First Circuit relied upon a hybrid analysis that increased the level of scrutiny of DOMA under an equal protection analysis because of the law’s selective impact upon a historically disadvantaged group and its conflict with principles of federalism (under which the states ordinarily have sole power over matters of domestic relations). The court thus agreed with plaintiffs that Section 3 of DOMA violates the Equal Protection Clause of the Constitution by precluding legally married same-sex couples living in Massachusetts from receiving the same Federal benefits as opposite-sex couples. The court held that the impact of DOMA on legally married same-sex couples in Massachusetts is significant as “[l]oss of survivor’s social security, spouse-based medical care and tax benefits are major detriments on any reckoning; provision for retirement and medical care are, in practice, the main components of the social safety net for vast numbers of Americans.” The court also found that Section 3 of DOMA violated the 10th Amendment, because while federalism “permits this diversity of governance based on local choice,” under Section 3 of DOMA, Congress, absent “any permissible federal interest” denied federal benefits to same-sex couples lawfully married in Massachusetts. The court specifically analyzed each rationale Congress had offered for passage of Section 3 of DOMA and found that none of them provided adequate support for the law given its impact on a minority group and its interference with traditional state regulation of marriage.

Recognizing that its decision was controversial and would have a widespread impact, the First Circuit stayed enforcement of its mandate pending further order of the court to allow time for Supreme Court review. As a result, Gill will have no immediate impact.  If upheld, however, Gill would have a significant impact upon employee benefit plans, plan sponsors, and plan administrators because it would impact established procedures for addressing what is a “marriage” and who is a “spouse” under ERISA and the Internal Revenue Code.

The constitutional validity of same-sex marriages and the resulting impact on benefits, employment, and tax matters, likely will remain in flux until the Supreme Court weighs in on the issue.  The case that may first reach the Supreme Court is the Ninth Circuit Court of Appeals’ February 7, 2012 ruling in Perry v. Brown, Case No 10-16696.  In Perry, the three-judge panel of the Ninth Circuit held that a state constitutional amendment banning same-sex marriages violated the equal protection and due process clauses of the United States Constitution.  On June 5, 2012, the Ninth Circuit declined the request for the entire court to review this decision en banc. The proponents of the amendment are expected to file a petition for certiorari to the Supreme Court. The issues in Gill and Perry are different, but both cases would offer the Supreme Court the opportunity to address fundamental constitutional issues surrounding same-sex marriages.  In addition, a number of cases are currently being litigated that address constitutional issues surrounding DOMA and same-sex marriages more generally.