Lesbian Widow’s Claim for Pension Helped Twice by Retroactive Findings

Stacey Schuett and Lesly Taboada-Hall, with their children. | NCLRIGHTS.ORG

Stacey Schuett and Lesly Taboada-Hall, with their children. | NCLRIGHTS.ORG

BY ARTHUR S. LEONARD | US District Judge Phyllis J. Hamilton ruled on January 4 that the Supreme Court’s 2013 decision striking down a key provision of the Defense of Marriage Act (DOMA) could be applied retroactively to allow Stacey Schuett, a lesbian widow, to sue her late spouse’s employer for a survivor annuity. The facts in this complex case are spelled out in the allegations contained in Schuett’s complaint, as summarized by Hamilton.

Schuett lived together in a committed relationship for 27 years with Lesly Taboada-Hall, who died of cancer on June 20, 2013, just a week before the Supreme Court’s momentous June 26 decisions that let stand a lower court ruling that struck down California’s Proposition 8 and threw out the federal Defense of Marriage Act’s bar on federal recognition of legal same-sex marriages. Taboada-Hall had long been employed by Federal Express and was a fully-vested participant in its pension plan.

Under the federal Employee Retirement Income Security Act (ERISA), the plan was required to provide the surviving spouse of an employee with a vested pension who dies before retiring a “qualified joint and survivor annuity” for the rest of their life. The FedEx plan used the federal definition of spouse, directly referring to Section 3 of DOMA, which defined a spouse as “a person of the opposite sex who is a husband or wife” — the definition the Supreme Court declared unconstitutional in its June 26, 2013 ruling.

In FedEx case, US, California judges side with couple married without license pre-DOMA, Prop 8 SCOTUS rulings

Taboada-Hall was diagnosed with cancer in February 2010, and as her condition worsened she took a medical leave of absence in late 2012. In February 2013, recognizing she would not be able to resume working, she contacted a FedEx human resources representative about her pension and other employee benefits since she was eligible for early retirement under the pension plan’s terms. The representative advised her not to retire, since she could continue on medical leave and keep her health coverage under the company’s plan. The representative also advised her to name Schuett as her sole beneficiary. When Taboada-Hall asked whether Schuett would get the “defined pension benefit” if she died before retiring, the representative said he did not know the answer to that and suggested she “ask someone else.”

When a doctor advised Taboada-Hall in early June 2013 that she did not have long to live, the couple once again looked through the FedEx benefits package and noticed that the plan defined “spouse” with reference to DOMA. After several conversations with company human resources personnel, they were told Schuett would not receive a surviving spouse benefit because only opposite-sex partners were recognized under the plan.

They women then quickly arranged with a Sonoma County Supervisor to come to their home and perform a civil marriage ceremony, even though they could not get a marriage license because Prop 8 was still in effect. The ceremony, witnessed by friends and family members, took place on June 19, and the next day Taboada-Hall died, six days before Prop 8 and DOMA were declared unconstitutional.

On August 6, Schuett went into Sonoma County Superior Court, filing a petition contending that her June 19 marriage to Taboada-Hall should be retroactively validated. That court agreed, ruling that the marriage was valid as of the date it took place, which meant that Schuett was a surviving widow when Taboada-Hall died on June 20 and so should be entitled to be treated as a surviving spouse by FedEx.

FedEx, however, turned her down for the benefit, arguing that eligibility depended on the terms of the written plan, which was limited to surviving different-sex spouses.

In Schuett’s federal lawsuit against FedEx, Judge Hamilton agreed with the company that it had not violated the written terms of its plan nor had the plan administrators violated their fiduciary responsibility. However, the judge noted, “ERISA requires a fiduciary to follow plan documents insofar as such documents are consistent with Title I of ERISA,” which requires defined benefit plans to provide a survivor annuity to all married participants who are vested and die before their retirement.

Hamilton found that for purposes of qualifying under the terms of ERISA, Taboada-Hall and Schuett were married at the time of Taboada-Hall’s death and Schuett qualified as her late spouse’s survivor. Since the high court awarded DOMA plaintiff Edie Windsor a refund of the taxes on the estate of her late spouse, Thea Spyer, it intended the ruling to be retroactive. And, since the Sonoma County court made the couple’s marriage retroactive to the date it occurred, Schuett was Taboada-Hall’s spouse under California law as of June 19 and therefore their marriage qualified on the day it took place for federal recognition.

“The court finds that plaintiff has adequately alleged that FedEx has violated Title I of ERISA by acting contrary to applicable federal law and failing to provide plaintiff with a benefit mandated by ERISA, and that she is entitled to pursue equitable relief to remedy that violation,” Hamilton concluded.

Schuett is represented by Amy Whelan, Christopher Francis Stoll, and Shannon Minter of the National Center for Lesbian Rights in San Francisco, Julie Wilensky of the Civil Rights Education & Enforcement Center in Berkeley, Nina Rachel Wasow, an attorney with Feinberg, Jackson, Worthman & Wasow in Oakland, and Tate A. Birnie in Sebastopol.

FedEx used in-house counsel to litigate its motion to dismiss Schuett’s case, but would probably retain outside counsel if it seeks to appeal this ruling to the Ninth Circuit. Since the FedEx plan administrators are under a fiduciary duty not to pay out any benefits not required by the plan or by law, they might conclude, pragmatism aside, that they have to appeal.