Lydia made an important point about “rule of law” regarding how state officials and judges are treating same sex “marriage” in the aftermath of Windsor. They are basically treating the SC decision as a license to do whatever they want to upset traditional marriage laws, when the SC itself didn’t say that was the import of Windsor, in fact refused to say that. They appear to simply not care about following the law.
Here is another way that Windsor was basically an(other) axe to the concept of rule of law. The administration under Obama is going about seeing what Windsor implies for other purposes than just estate tax rules. One of the big areas is employee benefits, including health care and retirement benefits. Interestingly, the retirement benefits rules actually pose a richer area for dilemmas to develop, because of a general federal / state doctrine of law: when Congress writes a comprehensive law (usually under the Commerce Clause) to absorb a whole subject matter, that law overrides state law on the same subject rather than just implementing additional rules thereon. The Employees Retirement Income Security Act (ERISA) enacted in 1974 to put retirement law under a national footing did that.
Because of Windsor, the feds are giving effect to SSM for the purposes of federal pension law. ERISA is a comprehensive federal law that encompasses a number of married persons provisions. For instance, it requires that a pension plan that offers pensions to employees must include in the contract that the pension will also pay to the spouse of an employee. When the pension plan offers optional forms of benefits, the spouse must sign off on any form of benefit that would reduce her benefit.
Now enter the IRS and Dept of Labor (DOL), which jointly oversee pension law. They have decided to say that for federal purposes, a couple is married or not married based on the rules of the state of celebration of the event (or no such act, if none takes place), not the rules of the state of residence. Thus, if an SS couple in Texas “marries” in Massachusetts, it is irrelevant for federal purposes that Texas won’t recognize the marriage as valid. For federal pension law, they are married and must be granted spousal pension benefits and spousal consent rights.
OK, if you are a government agency forced to implement Windsor, that maybe is not a terrible way to proceed. It probably is less complex than a state-of-residence rule, for then the couple could go from being married, to being not married, to being married again when they move to different states. Kind of hard on the pension plan administrators, not to mention the couple.
But there is this little problem: what to do about retroactive application? If Windsor rightly struck down a 2009 IRS determination precluding a marital deduction as invalid, then presumably a person married in a ceremony in Canada in 2003 can argue for benefits applicable back to 2003. However, plans, plan administrators, and plan sponsors (the employers) have run for 11 years past 2003 thinking that their plans correctly – according to EXPLICIT federal law at the time – refused to acknowledge such couples as married. If they now have to go back 11 years (or more, maybe 18 years?) and reverse engineer their plans and benefits and consent forms etc., there is a huge backlog of impossible requirements to meet and really no new money with which to do it. Just for example, plans are required to value future obligations every year, and they fall out of qualified status if they don’t fund the plan accordingly, and then there are penalties and interest. If the plan has to reverse engineer 11 years of corrective valuations and finds that it was not operating properly as fully paid up, there are 11 years of filings and penalties to be sorted out, and other benefit errors that arise from qualified status errors or unfunded status. Such a holding would deny equitable knowledge of accepted liabilities for reasonable actions taken, both by employers who thought they had fully met qualification rules, and by other employers who decided to become plan sponsors of new plans during that time thinking that they knew what their plan language meant and what liabilities that implied. If, alternatively, the IRS and DOL decide that the rule is to be applied only prospectively, into the future, this is far more equitable but fails to account for the essence of the DOMA ruling – which is itself of retroactive effect. Neither approach is logically coherent for a fully consistent rule of law.
On the same coin, there is an even more complex problem: in detailing the taxation on such benefits, an allocation of an employee’s basis in the pension contract (between him and spouse) may depend on his marital status during his entire working career, if he lived in a community property state. Now, federal tax law theory says that state law controls the underlying property (and transaction) rights, federal law merely determines the taxation due to such property and transactions. State law says what it is and who owns it, federal laws applies taxes on that. The determination and allocation of community property is normally under state law, right? So now we have to ask: for federal purposes, will a SS couple residing in Texas who were “married” in 2006 in MA be recognized as having Texas community property for federal purposes, or will the federal tax law follow state law on the matter and deny an application of the community property status in determining taxes?
I suspect that there is no real solution to these and other conundrums, not one that is logical and coherent through and through, though the government agencies will attempt one anyway because they have to do something. And the reason is that the ENTIRE STRUCTURE of our social system relies on coherence of marital relationships, and this overturning of society’s own understanding of itself denies a basis for coherence. You cannot carry out “rule of law” when the rational underpinnings of law – which St. Thomas says is “is nothing else than an ordinance of reason for the common good” – are uprooted and denied.
I strongly suspect that Justice Kennedy will use this very incoherence to further strike down the rest of DOMA, and just say that all states must allow gays to marry. In a certain twisted way, he would even be right, once you accept his premise of striking down Article 3 of DOMA. That is, if I recall correctly, he originally argued down the federal claim that DOMA had a legitimate purpose in coherence and consistency over top of state law discrepancies as being groundless, and when push comes to shove and the attempt to enact federal policy that accommodates such discrepancies CAN’T WORK he will then go further and overturn ALL STATE LAW restrictions on the same subject. I am also pretty sure that he was perfectly capable of foreseeing this result from the start, so it will not be in the least bit innocent of him to suggest with a shrug of the shoulders “well, if that’s what coherence requires” of the second hatchet-blow to marriage. Such an extension of the anti-marriage ruling won’t actually solve all of the ills created (doesn’t solve retroactive application), but it will simplify some of them. It would take wisdom greater than Solomon to square the circle and get a coherent body of laws on marriage while trying to enforce a rule that gays can marry.
I think I am going to recommend to one of our state legislators that he put in a state law implementing a brand new category to be called xxxxxx (does anyone know the Hebrew word for marriage?), and define it in such a way that it can only be (a) between a man and woman, (b) for life, etc. Then, reserve JUST ONE of the panoply of marriage benefits to this new state category; a little, tiny, itty bitty prerogative, take it out of marriage law and put it in xxxxxx law. Then we can see whether the liberals get up in arms about “privileges of marriage” or some such nonsense, when it isn’t even called marriage.