1 IN THE SUPREME COURT OF THE UNITED STATES 2 - - - - - - - - - - - - - - - - X 3 DONNA RAE EGELHOFF, : 4 Petitioner : 5 v. : No. 99-1529 6 SAMANTHA EGELHOFF, A MINOR, BY : 7 AND THROUGH HER NATURAL : 8 PARENT KATE BREINER, AND DAVID : 9 EGELHOFF : 10 - - - - - - - - - - - - - - - - X 11 Washington, D.C. 12 Wednesday, November 8, 2000 13 The above-entitled matter came on for oral 14 argument before the Supreme Court of the United States at 15 11:02 a.m. 16 APPEARANCES: 17 WILLIAM J. KILBERG, ESQ., Washington, D.C.; on behalf of 18 the Petitioner. 19 BARBARA J. McDOWELL, ESQ., Assistant to the Solicitor 20 General, Department of Justice, Washington, D.C.; on 21 behalf of the United States, as amicus curiae, 22 supporting the Petitioner. 23 THOMAS C. GOLDSTEIN, ESQ., Washington, D.C.; on behalf of 24 the Respondents. 25 1 1 C O N T E N T S 2 ORAL ARGUMENT OF PAGE 3 WILLIAM J. KILBERG, ESQ. 4 On behalf of the Petitioner 3 5 ORAL ARGUMENT OF 6 BARBARA B. McDOWELL, ESQ. 7 On behalf of the United States, as amicus curiae, 8 supporting the Petitioner 16 9 ORAL ARGUMENT OF 10 THOMAS C. GOLDSTEIN, ESQ. 11 On behalf of the Respondents 26 12 REBUTTAL ARGUMENT OF 13 WILLIAM J. KILBERG, ESQ. 14 On behalf of the Petitioner 51 15 16 17 18 19 20 21 22 23 24 25 2 1 P R O C E E D I N G S 2 (11:02 a.m.) 3 CHIEF JUSTICE REHNQUIST: We'll hear argument 4 next in Number 99-1529, Donna Rae Egelhoff v. Samantha 5 Egelhoff. 6 Mr. Kilberg. 7 ORAL ARGUMENT OF WILLIAM J. KILBERG 8 ON BEHALF OF THE PETITIONER 9 MR. KILBERG: Mr. Chief Justice, and may it 10 please the Court: 11 Washington State's divorce revocation law 12 strikes at the very heart of ERISA's comprehensive 13 regulatory scheme for employee benefit plans. It does so 14 by purporting to revoke ERISA plan beneficiary 15 designations upon divorce. 16 We submit that the Washington statute is 17 preempted by ERISA on two independent grounds. First, 18 because it relates to an ERISA plan within the meaning of 19 ERISA's express preemption provision, section 514(a) and 20 second, because it conflicts with ERISA's other 21 provisions. 22 Turning first to section 514, this Court has 23 made clear that a State law relates to an employee benefit 24 plan if it mandates employee benefit structures or their 25 administration or binds plan administrators to particular 3 1 choices. Washington's divorce revocation statute has 2 precisely that forbidden effect. 3 As applied by the courts below, the statute 4 invalidates the beneficiary determination and benefit 5 payment scheme provided for by the terms of the ERISA 6 plans here and instead mandates payment according to a 7 different State-imposed scheme. Moreover, the 8 determination of beneficiary status, and the payment of 9 plan benefits, lie at the very heart of ERISA's concerns. 10 Indeed, the determination whether particular 11 alleged beneficiaries are entitled to obtain plan benefits 12 is so crucial to the entire Federal scheme created by 13 ERISA that such benefits claims are deemed to arise under 14 Federal law under this Court's decision in Metropolitan 15 Life v. Taylor even if they purport to raise only State 16 law claims. 17 QUESTION: Of course, what you say applies 18 exactly similarly, I take it, to a State statute that 19 would say, if A murders B, A shall be treated as having 20 predeceased B for purposes of inheriting from B, or in a 21 word, A can't inherit from B. All that you've said would 22 apply to that similarly, so what's the difference? 23 MR. KILBERG: If that were a State law, then it 24 would be preempted. 25 QUESTION: In other words, you're saying that 4 1 basically this ERISA preempts all of what you call the 2 slayer statutes, I guess, that traditionally have said you 3 can't inherit from a person you murder. 4 MR. KILBERG: It preempts the slayer statutes. 5 However, the slayer rule may very well be incorporated 6 into ERISA, because the slayer rule was extant at the time 7 of ERISA's passage in 1974, was a common law rule, and had 8 been applied in numerous cases, Federal cases with regard 9 to a death benefit statute, so it was a gloss on the law. 10 QUESTION: All right. So does it also 11 incorporate statutes where people die simultaneously? 12 There are a complicated set of State rules as to how you 13 treat what assets for purposes of inheritance. 14 MR. KILBERG: It may encompass simultaneous 15 death, a simultaneous death rule. 16 QUESTION: All right, so if it -- now we have it 17 interpreting a considerable area of State probate law. Is 18 there any reason why Congress would have wanted ERISA to 19 preempt a traditionally State-regulated subject like 20 probate and -- you know, at least where it doesn't 21 interfere with some important policy, or -- I don't know. 22 I mean, you see the -- that's what I want you to address. 23 MR. KILBERG: I can imagine where you're headed, 24 Justice Breyer. Yes, the answer, of course it preempts 25 those laws. There's no reason to believe that it doesn't. 5 1 We're talking about employee benefit plans. There's 2 nothing more central to an employee benefit plan than 3 benefits, how it pays them, to whom it pays them, and 4 ERISA has specific provisions with regard to the exception 5 for State law with -- in the context of the payment 6 employee benefit plans in a divorce situation. 7 QUESTION: I'm not sure about you -- how you 8 distinguish the slayer statute. You say it's been around, 9 it's part of the common law, it's part of the background. 10 Why -- suppose the case we have here has been around a 11 long time. 12 MR. KILBERG: Well, the difference, Justice 13 Kennedy, is that the slayer -- the slayer rule was part of 14 the common law, was part of the common law of trust at the 15 time that ERISA was enacted, and it may be presumed that 16 the Congress, seeing that as a backdrop, incorporated, 17 impliedly incorporated the slayer rule into ERISA. 18 QUESTION: But not simultaneous death statutes, 19 because they vary from State to State, or -- 20 MR. KILBERG: Well, I'm not sure about 21 simultaneous death statutes, quite frankly. They may, 22 too, have been incorporated, but with regard to a divorce 23 revocation rule, that was not the state of the common law 24 in 1974. Indeed, it's not the state of the law now. Very 25 few States, fewer than a third of the States have any sort 6 1 of divorce revocation rule. Only 10 States have 2 developed -- 3 QUESTION: May I just -- is your point that it 4 was the law before ERISA was passed, or that it's part of 5 the common law. 6 MR. KILBERG: That's correct. 7 QUESTION: I mean, which is true? In other 8 words, supposing this statute had been passed before 9 ERISA. Would that make a difference? 10 MR. KILBERG: No, not the statute. If -- if the 11 divorce revocation rule had been commonly accepted in the 12 common law at the time ERISA was passed and had been used 13 as a gloss -- 14 QUESTION: So your point is that -- 15 MR. KILBERG: -- on similar Federal statutes -- 16 QUESTION: Your point is, the other was a common 17 law rule, not the timing. The timing is -- 18 MR. KILBERG: That's correct. Well, it's really 19 both, Justice Stevens. It is that it is a common law rule 20 and it was a common law rule at the time of ERISA's 21 passage in 1974. 22 QUESTION: Yes, but you've said that if there 23 had been a statute which is in effect that wouldn't have 24 done the trick. 25 MR. KILBERG: That's correct. 7 1 QUESTION: Well, when you say a common law rule, 2 we're dealing with a country with 50 different States. I 3 mean, don't you think the law might have been different in 4 some of those States? 5 MR. KILBERG: Not with regard to the slayer 6 rule, in fact, and indeed what is important here is that 7 the slayer rule had been applied in Federal cases as a 8 gloss to death benefit statutes, and so one can assume 9 that the Congress, or one can rule that the Congress had 10 impliedly incorporated that common law rule into ERISA. 11 QUESTION: Even in the face of a provision in 12 ERISA that says benefits have to be paid to the named 13 beneficiary? 14 MR. KILBERG: With regard to the slayer rule, if 15 it had been incorporated into ERISA, then it would be 16 incorporated as an implied exception. 17 QUESTION: What is the mechanics of the working 18 of a plan? Supposing that you have a designated 19 beneficiary, and the insurance company or whoever goes and 20 pays -- goes on and pays out to the beneficiary. In fact, 21 the beneficiary killed someone and he's disqualified from 22 inheriting. If he's still the named beneficiary, is the 23 insurance company responsible for that sort of an error? 24 MR. KILBERG: Yes, they would be responsible 25 under those circumstances. The plan administrator has to 8 1 make a decision as to whether a benefit is to be paid out. 2 The plan administrator does so by looking both to ERISA 3 and to the terms of the plan. 4 QUESTION: Well, does he have to look into a 5 whole bunch of factual matters like, you know, whether 6 this beneficiary might be disqualified by some State, 7 State statute like the slayer's -- 8 MR. KILBERG: No. No. He would not look at 9 State law. He would not have to look at State rules 10 unless, not finding the answer in his plan, and not 11 finding the answer in ERISA he may choose to look to State 12 law, but -- 13 QUESTION: It seems to me that would be a much 14 narrower ground for ruling in your favor here, rather than 15 these general assertions about the incorporation in the 16 common law, that perhaps if a State statute actually 17 directly affects the designation of a beneficiary, the way 18 the Washington statute does, it may be different than the 19 slayer statute. 20 MR. KILBERG: But we believe that State law, Mr. 21 Chief Justice, that a State law like this, which is 22 essentially a rule of decision for employee benefit plan, 23 is preempted both as a matter of express preemption and as 24 a matter of conflict preemption under ERISA. 25 QUESTION: But you agree that your argument is 9 1 stronger -- let's assume that the statute does not 2 incorporate slayer statutes, or simultaneous death 3 statutes -- 4 MR. KILBERG: Yes. 5 QUESTION: -- or simultaneous death rules. 6 Would you agree that your argument is much stronger than 7 if you rely on conflict preemption than if you rely on 8 statutory relating-to preemption? 9 MR. KILBERG: I believe it's equally strong. 10 QUESTION: Well, if it's a flat conflict 11 preemption, it seems to me relatively easy for us to say, 12 look, the statute says, beneficiaries or plans designate 13 the -- 14 MR. KILBERG: Participants. 15 QUESTION: -- participants or plans designate 16 beneficiaries. This says they don't. Clear conflict. 17 But if you get to relating-to preemption, which 18 we do not find it easy to understand, then it seems to me 19 the force of the argument for anomalous results which my 20 colleagues were making is simply a stronger argument, 21 because the concept of preemption is a comparatively 22 weaker concept. 23 MR. KILBERG: Well, obviously, we believe that 24 there is both conflict preemption and express preemption 25 here, and the Court can certainly, as it did in Boggs, not 10 1 reach the question of express preemption and go off on 2 conflict preemption, but -- 3 QUESTION: Well, except your -- I think the 4 point being made is that your preemption is stronger if 5 you're willing to swallow the bitter pill of not including 6 the slayer statutes, but once you say the slayer statutes 7 don't pose any conflict, it's hard to see why they pose 8 any more of a conflict than -- or, excuse me, any less of 9 a conflict than the statute here. 10 MR. KILBERG: In Ridgeway v. Ridgeway, which was 11 a decision of this Court involving the Servicemen's Group 12 Life Insurance Act, the Court noted the slayer rule and 13 determined that it did not have to deal with it in the 14 context of that case and that it was an extreme example. 15 The Court certainly is free to do the same in this context 16 and that, I believe, was also an express preemption. 17 QUESTION: Mr. Kilberg -- 18 QUESTION: But is -- is the answer that you gave 19 in talking about the administrative burden -- my 20 understanding, and correct me if I'm not right, that this 21 statute says that if a trustee of a plan doesn't know 22 about this problem, he doesn't have to pay, and if he does 23 know about the problem, he doesn't have to pay until the 24 State courts resolve it, and if that isn't good enough, he 25 can opt out of the whole thing just by putting a sentence 11 1 in the plan that says, I opt out, in effect. 2 So where is the administrative burden, and is it 3 the same -- they also say there are 47 other States that 4 have similar statutes, and so I'm trying to get an idea 5 for what this administrative burden is. 6 MR. KILBERG: Oh, indeed, as we point out in our 7 brief, I believe it's at footnote 8 on page 20 of 8 petitioner's brief. 9 QUESTION: Yes. 10 MR. KILBERG: It's also described in amicus 11 briefs for the National Coordinating Committee and in the 12 Western Conference of Teamsters. In fact, the State rules 13 vary dramatically. Most States do not have a divorce 14 revocation rule at all. 15 Most States, more than two-thirds of the States, 16 the rule is simply that you go with the main beneficiary. 17 It is in a handful of States that you have divorce 18 revocation rules, and they vary among themselves, so there 19 is that burden that plaintiffs would have to deal with. 20 Moreover, the opt-out provision that you're 21 referring to in this State l