A federal judge in Philadelphia has reinstated to an active docket a case involving whether the parents or former wife of a deceased female Cozen O'Connor partner are entitled to her profit-sharing plan benefits.
U.S. District Judge C. Darnell Jones II had placed Cozen O'Connor v. Tobits on the suspense docket in September 2012 to await decisions in relevant cases dealing with the constitutionality of the Defense of Marriage Act. The Tobits case has the potential to reach the issue of whether a pension plan regulated under a federal law can recognize a same-sex marriage for purposes of determining beneficiaries to the plan.
After the U.S. Supreme Court ruled last month that the Defense of Marriage Act's provision limiting marriage to between a man and a woman was unconstitutional, the attorneys in Tobits predicted their case would soon be revived. Jones' order doing just that did not include any information on future deadlines in the case.
Since the June 26 ruling from the Supreme Court in United States v. Windsor, the Tobits docket saw little movement other than a motion to withdraw by the U.S. House Bipartisan Legal Advisory Group (BLAG), which had come in as an intervenor to defend DOMA.
BLAG, represented by former U.S. Solicitor General Paul D. Clement and other attorneys at Bancroft PLLC, had intervened in suits across the country to argue in support of DOMA given the Department of Justice had declined to defend the law.
"The Supreme Court recently resolved the issue of DOMA Section 3's constitutionality," Clement said in the July 8 filing on behalf of BLAG. "Accordingly, the House no longer has a role to play in this litigation and now seeks to withdraw as a party defendant."
Jones granted that request July 11.
Cozen O'Connor partner H. Robert Fiebach said he didn't know what the next step in the case would be. He said many in the industry are expecting the Internal Revenue Service to issue regulations in the near future that expand on the high court's DOMA ruling.
Cozen O'Connor filed the interpleader action in January 2011, asking the court to decide whether the parents or wife of former partner Sarah Ellyn Farley are entitled to her Employee Retirement Income Security Act-regulated profit-sharing plan benefits. Farley, a Chicago-based partner, died in 2010. While both the parents and Farley's wife, Jennifer Tobits, have argued the court doesn't need to reach the issue of the constitutionality of DOMA, the parents argued their daughter's marriage is not recognized under any applicable law in the case.
The U.S. Supreme Court's ruling striking portions of DOMA doesn't automatically resolve the issue in Tobits' favor, however, attorneys have said.
Under the ruling in Windsor, DOMA's definition of marriage as between one man and one woman was deemed unconstitutional as a deprivation of equal liberty. That means federal benefits can no longer be denied to legally married same-sex couples. The issue, however, is the "legally married" caveat. The Supreme Court declined to rule last month on the merits of the so-called Prop 8 case, Hollingsworth v. Perry, regarding whether California's law banning same-sex marriage was constitutional.
A ruling that a same-sex marriage ban is unconstitutional could have forced all states to recognize same-sex marriage. The DOMA decision bars the federal government from discriminating against same-sex couples legally married in states that recognize same-sex marriage.
In Tobits, Farley married Tobits in Canada in 2006. The couple lived in Illinois, where civil unions were adopted after Farley's death in 2010. The retirement plan at issue "resides" in Pennsylvania where Cozen O'Connor is headquartered. While attorneys involved in the case as well as observers agree the Windsor decision removes the DOMA question from the Tobits case, there is some debate as to whether the couple can be considered legally married for the purpose of Tobits receiving the benefits.
Hangley Aronchick Segal Pudlin & Schiller family law attorney Helen Casale said when Windsor came down that "if I live in Pennsylvania with my partner but got married in New York, the Windsor case isn't going to necessarily impact the validity of my marriage. Pennsylvania still doesn't have to recognize my marriage."
Casale said Windsor would have an immediate impact on a dispute in a state that allows for same-sex marriage. But, given Pennsylvania and Illinois don't allow for same-sex marriage, or didn't at the time of Farley's death, Casale said she isn't sure this case would be impacted by the ruling.
Casale said the judge could recognize the Canadian marriage between Farley and Tobits considering they never lived in Pennsylvania and aren't looking for a remedy that violates the public policy of the state.
Temple University's Beasley School of Law professor Leonore F. Carpenter had said it would appear the Farleys' argument that ERISA-governed plans are bound by DOMA's definition of marriage is "not workable anymore." But the Farleys also argued that Pennsylvania's own version of DOMA defining marriage between a man and a woman would prevent recognition of the marriage because the plan was administered in the state.
"That argument seems intact," Carpenter had said.
Teresa S. Renaker of Lewis Feinberg Lee Renaker & Jackson in Oakland, Calif., represents Tobits in the matter. She said last month the court could get around the issue of Pennsylvania not recognizing same-sex marriages.
"From the point of view of administering a pension plan, the most sensible rule is what we would call a 'place of celebration' rule, meaning if the marriage is recognized where it was entered, it's a marriage," Renaker said.
Peter C. Breen of the Thomas More Society in Chicago is representing Farley's parents.
"There is no interpretation of federal or state law that makes Ms. Tobits a married spouse of Ms. Farley," Breen said. "First off because Ms. Farley died prior to any legal change in Illinois and second because this is a private contract and not a government benefit. So the terms of the contract and their plain meaning indicate that, because they were not married, Ms. Tobits has no right to these funds. Period."