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SUPREME COURT OF THE UNITED STATES
_________________
No. 15–1031
_________________
JOHN HOWELL, PETITIONER v. SANDRA
HOWELL
on writ of certiorari to the supreme court of
arizona
[May 15, 2017]
Justice Breyer delivered the opinion of the
Court.
A federal statute provides that a State may
treat as community property, and divide at divorce, a military
veteran’s retirement pay. See 10 U. S. C. §1408(c)(1). The statute,
however, exempts from this grant of permission any amount that the
Government deducts “as a result of a waiver” that the veteran must
make “in order to receive” disability benefits. §1408(a)(4)(B). We
have held that a State cannot treat as community property, and
divide at divorce, this portion (the waived portion) of the
veteran’s retirement pay. See Mansell v. Mansell, 490
U. S. 581 –595 (1989).
In this case a State treated as community
property and awarded to a veteran’s spouse upon divorce a portion
of the veteran’s total retirement pay. Long after the divorce, the
veteran waived a share of the retirement pay in order to receive
nontaxable disability benefits from the Federal Government instead.
Can the State subsequently increase, pro rata, the amount the
divorced spouse receives each month from the veteran’s retirement
pay in order to indemnify the divorced spouse for the loss caused
by the veteran’s waiver? The question is complicated, but the
answer is not. Our cases and the statute make clear that the answer
to the indemnification question is “no.”
I
A
The Federal Government has long provided
retirement pay to those veterans who have retired from the Armed
Forces after serving, e.g., 20 years or more. It also
provides disabled members of the Armed Forces with disability
benefits. In order to prevent double counting, however, federal law
typically insists that, to receive disability benefits, a retired
veteran must give up an equivalent amount of retirement pay. And,
since retirement pay is taxable while disability benefits are not,
the veteran often elects to waive retirement pay in order to
receive disability benefits. See 10 U. S. C. §3911 et
seq. (Army retirement benefits); §6321 et seq. (Navy and
Marines retirement benefits); §8911 et seq. (Air Force
retirement benefits); 38 U. S. C. §5305 (requiring a
waiver to receive disability benefits); §5301(a)(1) (exempting
disability benefits from taxation). See generally McCarty v.
McCarty, 453 U. S. 210 –215 (1981) (describing the
military’s nondisability retirement system).
In 1981 we considered federal military
retirement pay alone, i.e., not in the context of pay waived
to receive disability benefits. The question was whether a State
could consider any of a veteran’s retirement pay to be a form of
community property, divisible at divorce. The Court concluded that
the States could not. See McCarty, supra. We noted
that the relevant legislative history referred to military
retirement pay as a “ ‘personal entitlement.’ ”
Id., at 224. We added that other language in the statute as
well as its history made “clear that Congress intended that
military retired pay ‘actually reach the beneficiary.’ ”
Id., at 228. We found a “conflict between the terms of the
federal retirement statutes and the [state-conferred] community
property right.” Id., at 232. And we concluded that the
division of military retirement pay by the States threatened to
harm clear and substantial federal interests. Hence federal law
pre-empted the state law. Id., at 235.
In 1982 Congress responded by passing the
Uniformed Services Former Spouses’ Protection Act, 10
U. S. C. §1408. Congress wrote that a State may treat
veterans’ “disposable retired pay” as divisible property,
i.e., community property divisible upon divorce.
§1408(c)(1). But the new Act expressly excluded from its definition
of “dispos-able retired pay” amounts deducted from that pay “as a
result of a waiver . . . required by law in order to
receive” disability benefits. §1408(a)(4)(B). (A recent amendment
to the statute renumbered the waiver provision. It now appears at
§1408(a)(4)(A)(ii). See Pub. L. 114–328, §641(a), 130Stat.
2164.)
In 1989 we interpreted the new federal language
in Mansell, 490 U. S. 581 . Major Gerald E. Mansell and
his wife had divorced in California. At the time of the divorce,
they entered into a “property settlement which provided, in part,
that Major Mansell would pay Mrs. Mansell 50 percent of his total
military retirement pay, including that portion of retirement pay
waived so that Major Mansell could receive disability benefits.”
Id., at 586. The divorce decree incorporated this settlement
and permitted the division. Major Mansell later moved to modify the
decree so that it would omit the portion of the retirement pay that
he had waived. The California courts refused to do so. But this
Court reversed. It held that federal law forbade California from
treating the waived portion as community property divisible at
divorce.
Justice Thurgood Marshall, writing for the
Court, pointed out that federal law, as construed in
McCarty, “completely pre-empted the application of state
community property law to military retirement pay.” 490 U. S.,
at 588. He noted that Congress could “overcome” this pre-emption
“by enacting an affirmative grant of authority giving the States
the power to treat military retirement pay as community property.”
Ibid. He recognized that Congress, with its new Act, had
done that, but only to a limited extent. The Act provided a
“precise and limited” grant of the power to divide federal military
retirement pay. Ibid. It did not “gran[t]” the States “the
authority to treattotal retired pay as community property.”
Id., at 589. Rather, Congress excluded from its grant of
authority the disability-related waived portion of military
retirement pay. Hence, in respect to the waived portion of
retirement pay, McCarty, with its rule of federal
pre-emption, still applies. Ibid.
B
John Howell, the petitioner, and Sandra
Howell, the respondent, were divorced in 1991, while John was
serving in the Air Force. Anticipating John’s eventual retirement,
the divorce decree treated John’s future retirement pay as
community property. It awarded Sandra “as her sole and separate
property FIFTY PERCENT (50%) of [John’s] military retirement when
it begins.” App. to Pet. for Cert. 41a. It also ordered John to pay
child support of $585 per month and spousal maintenance of $150 per
month until the time of John’s retirement.
In 1992 John retired from the Air Force and
began to receive military retirement pay, half of which went to
Sandra. About 13 years later the Department of Veterans Affairs
found that John was 20% disabled due to a service-related shoulder
injury. John elected to receive disability benefits and
consequently had to waive about $250 per month of the roughly
$1,500 of military retirement pay he shared with Sandra. Doing so
reduced the amount of retirement pay that he and Sandra received by
about $125 per month each. In re Marriage of Howell,
238 Ariz. 407, 408, 361 P. 3d 936, 937 (2015)
Sandra then asked the Arizona family court to
enforce the original decree, in effect restoring the value of her
share of John’s total retirement pay. The court held that the
original divorce decree had given Sandra a “vested” interest in the
prewaiver amount of that pay, and ordered John to ensure that
Sandra “receive her full 50% of the military retirement without
regard for the disability.” App. to Pet. for Cert. 28a.
The Arizona Supreme Court affirmed the family
court’s decision. See 238 Ariz. 407, 361 P. 3d 936. It asked
whether the family court could “order John to indemnify Sandra for
the reduction” of her share of John’s military retirement pay.
Id., at 409, 361 P. 3d, at 938. It wrote that the
family court order did not “divide” John’s waived military
retirement pay, the order did not require John “to rescind” his
waiver, nor did the order “direct him to pay any amount to Sandra
from his disability pay.” Id., at 410, 361
P. 3d, at 939. Rather the family court simply ordered
John to “reimburse” Sandra for “reducing . . . her share”
of military retirement pay. Ibid. The high court concluded
that because John had made his waiver after, rather than before,
the family court divided his military retirement pay, our decision
in Mansell did not control the case, and thus federal law
did not preempt the family court’s reimbursement order. 238 Ariz.,
at 410, 361 P. 3d, at 939.
Because different state courts have come to
different conclusions on the matter, we granted John Howell’s
petition for certiorari. Compare Glover v. Ranney,
314 P. 3d 535, 539–540 (Alaska 2013); Krapf v. Krapf,
439 Mass. 97, 106–107, 786 N. E. 2d 318, 325–326 (2003); and
Johnson v. Johnson, 37 S. W. 3d 892, 897–898 (Tenn.
2001), with Mallard v. Burkhart, 95 So. 3d 1264,
1269–1272 (Miss. 2012); and Youngbluth v. Youngbluth,
2010 VT 40, 188 Vt. 53, 62–65, 6 A. 3d 677, 682–685.
II
This Court’s decision in Mansell
determines the outcome here. In Mansell, the Court held that
federal law completely pre-empts the States from treating waived
military retirement pay as divisible community property. 490
U. S., at 594–595. Yet that which federal law pre-empts is
just what the Arizona family court did here. App. to Pet. for Cert.
28a, 35a (finding that the divorce decree gave Sandra a “vested”
interest in John’s retirement pay and ordering that Sandra receive
her share “without regard for the disability”).
The Arizona Supreme Court, the respondent, and
the Solicitor General try to distinguish Mansell. But we do
not find their efforts convincing. The Arizona Supreme Court, like
several other state courts, emphasized the fact that the veteran’s
waiver in Mansell took place before the divorce proceeding;
the waiver here took place several years after the divorce
proceedings. See 238 Ariz., at 410, 361 P. 3d, at 939; see
also Abernethy v. Fishkin, 699 So. 2d 235, 240
(Fla. 1997) (noting that a veteran had not yet waived retirement
pay at the time of the divorce and permitting indemnification in
light of the parties’ “intent to maintain level monthly payments
pursuant to their property settlement agreement”). Hence here, as
the Solicitor General emphasizes, the nonmilitary spouse and the
family court were likely to have assumed that a full share of the
veteran’s retirement pay would remain available after the assets
were distributed.
Nonetheless, the temporal difference highlights
only that John’s military retirement pay at the time it came to
Sandra was subject to later reduction (should John exercise a
waiver to receive disability benefits to which he is entitled). The
state court did not extinguish (and most likely would not have had
the legal power to extinguish) that future contingency. The
existence of that contingency meant that the value of Sandra’s
share of military retirement pay was possibly worth less—perhaps
less than Sandra and others thought—at the time of the divorce. So
too is an ownership interest in property (say, A’s property
interest in Blackacre) worth less if it is subject to defeasance or
termination upon the occurrence of a later event (say, B’s death).
See generally Restatement (Third) of Property §24.3 (2010)
(describing property interests that are defeasible); id.,
§25.3, and Comment a (describing contingent future interests
subject to divestment).
We see nothing in this circumstance that makes
the reimbursement award to Sandra any the less an award of the
portion of military retirement pay that John waived in order to
obtain disability benefits. And that is the portion that Congress
omitted from the Act’s definition of “disposable retired pay,”
namely, the portion that federal law prohibits state courts from
awarding to a divorced veteran’s former spouse. Mansell,
supra, at 589. That the Arizona courts referred to Sandra’s
interest in the waiv-able portion as having “vested” does not help.
Statecourts cannot “vest” that which (under governing federal law)
they lack the authority to give. Cf. 38 U. S. C.
§5301(a)(1) (providing that disability benefits are gener-ally
nonassignable). Accordingly, while the divorce decree might be said
to “vest” Sandra with an immediate right to half of John’s military
retirement pay, that interest is, at most, contingent, depending
for its amount on a subsequent condition: John’s possible waiver of
that pay.
Neither can the State avoid Mansell by
describing the family court order as an order requiring John to
“reimburse” or to “indemnify” Sandra, rather than an order that
divides property. The difference is semantic and nothing more. The
principal reason the state courts have given for ordering
reimbursement or indemnification is that they wish to restore the
amount previously awarded as community property, i.e., to
restore that portion of retirement pay lost due to the postdivorce
waiver. And we note that here, the amount of indemnification
mirrors the waived retirement pay, dollar for dollar. Regardless of
their form, such reimbursement and indemnification orders displace
the federal rule and stand as an obstacle to the accomplishment and
execution of the purposes and objectives of Congress. All such
orders are thus pre-empted.
The basic reasons McCarty gave for
believing that Congress intended to exempt military retirement pay
from state community property laws apply a fortiori to
disability pay. See 453 U. S., at 232–235 (describing the
federal interests in attracting and retaining military personnel).
And those reasons apply with equal force to a veteran’s postdivorce
waiver to receive disability benefits to which he or she has become
entitled.
We recognize, as we recognized in
Mansell, the hardship that congressional pre-emption can
sometimes work on divorcing spouses. See 490 U. S., at 594.
But we note that a family court, when it first determines the value
of a family’s assets, remains free to take account of the
contingency that some military retirement pay might be waived, or,
as the petitioner himself recognizes, take account of reductions in
value when it calculates or recalculates the need for spousal
support. See Rose v. Rose, 481 U. S. 619 –634,
and n. 6 (1987); 10 U. S. C. §1408(e)(6).
We need not and do not decide these matters, for
here the state courts made clear that the original divorce decree
divided the whole of John’s military retirement pay, and their
decisions rested entirely upon the need to restore Sandra’s lost
portion. Consequently, the determination of the Supreme Court of
Arizona must be reversed. See Mansell, supra, at
594.
III
The judgment of the Supreme Court of Arizona
is reversed, and the case is remanded for further proceedings not
inconsistent with this opinion.
It is so ordered.
Justice Gorsuch took no part in the
consideration or decision of this case.
SUPREME COURT OF THE UNITED STATES
_________________
No. 15–1031
_________________
JOHN HOWELL, PETITIONER v. SANDRA
HOWELL
on writ of certiorari to the supreme court of
arizona
[May 15, 2017]
Justice Thomas, concurring in part and
concurring in the judgment.
I join all of the opinion of the Court except
its brief discussion of “purposes and objectives” pre-emption.
Ante, at 8. As I have previously explained, “[t]hat
framework is an illegitimate basis for finding the pre-emption of
state law.” Hillman v. Maretta, 569 U. S. ___,
___ (2013) (Thomas, J., concurring in judgment) (slip op., at 1);
see also Wyeth v. Levine, 555 U. S. 555, 583
(2009) (same). In any event, that framework is not necessary to
support the Court’s judgment in this case.
