The District Court for the Eastern District of Pennsylvania just handed down one of the first of what will be many decisions reflecting the impact of the Supreme Court’s recent Windsor decision striking down Section 3 of the Defense of Marriage Act (DOMA). Section 3 had prohibited the recognition of same-sex marriages for purposes of administering federal laws, including the ERISA statute that governs most employee benefit plans.
The new case, Cozen O’Connor v. Tobits, involved a question as to who was entitled to receive the survivor benefit under an ERISA retirement plan earned by a deceased lawyer of the law firm Cozen O'Connor. The couple lived in Illinois, and they had been married in Canada in a marriage recognized as valid under Canadian law. The surviving spouse of the couple claimed a right to the survivor benefit under the retirement plan, and so did the parents of the deceased.
The terms of the governing document for the ERISA plan in Tobits required that the survivor benefit be paid to the deceased participant's "Spouse," but did not specifically define the term “Spouse.” Although the decision in the case does not expound upon it in depth, presumably the governing theory of the parents was that the survivor of the couple did not qualify as the “Spouse” under the plan and therefore was not entitled to the benefit.
The Tobits court stated that, following the Supreme Court’s decision in Windsor, the term "Spouse" for ERISA plan purposes now includes a same-sex spouse in an otherwise valid marriage. Interestingly, the Tobits court looked to the law of the State of Illinois, the place of the couple's domicile, and noted that although Illinois law does not permit same-sex marriages, it does recognize same-sex marriages solemnized in other jurisdictions. Accordingly, because Illinois recognized the couple’s marriage as valid, the court held that the surviving same-sex spouse was a “Spouse” for purposes of the ERISA plan and was therefore entitled to receive the survivor benefits.
The treatment of same-sex marriage under Illinois law eliminated the need to address a tougher issue involving the rights of same-sex spouses under ERISA plans: how to decide who is entitled to benefits where a same-sex couple has entered into a valid marriage in one state, but lives in a state that does not permit same-sex marriages or does not recognize out-of-state same-sex marriages. The result in that scenario is still open under the Windsor decision, and we will have to await future guidance from the Internal Revenue Service and/or Department of Labor or future litigation for a more definitive rule.