Next week the justices will hear oral argument in Howell v. Howell, a dispute between a divorced couple over the wife’s share of the husband’s military retirement pay. The former spouses, John and Sandra Howell, divorced in 1991. As part of the divorce, John – who served in the U.S. Air Force for 20 years – and Sandra agreed that she would receive half of John’s military retirement pay, which began the following year. In 2005, John opted to waive part of his retirement pay in favor of disability benefits – a common choice when it is available because, unlike retirement pay, disability benefits are not taxable. However, that decision also reduced, by approximately $125 per month, the amount of money that went to Sandra as her share of John’s retirement pay; by contrast, John received both the additional money that would otherwise have gone to Sandra and the savings from his disability benefits being tax-free.
Sandra went to court, asking to have her monthly payments restored to the amount that she had received before John’s waiver and to be reimbursed for the amount she believed that she was owed for the lower payments in the past. After the Arizona courts agreed with her, John asked the U.S. Supreme Court to review the Arizona Supreme Court’s decision in Sandra’s favor, which it agreed to do late last year.
The Uniformed Services Former Spouses’ Protection Act is a 1982 federal law that authorizes state courts to divide up military retirement pay in a divorce. Specifically, the law allows state courts to treat “disposable retired pay” as either the service member’s property or the property of both the service member and the member’s spouse, depending on state law. The term “disposable retired pay” is in turn defined as the service member’s retired pay, minus any portion of that pay waived in favor of disability benefits. This means, John argues, that he can’t be required to pay Sandra her share of the retirement pay that he now receives as a disability benefit. Sandra counters that the state court’s order doesn’t divide John’s disability pay or require John to pay Sandra from it; it simply orders John to ensure that Sandra gets half of his full retirement pay.
John points to Mansell v. Mansell, a 1989 Supreme Court decision holding that the USFSPA does not authorize state courts to treat retirement pay that has been waived to receive veterans’ disability benefits as something that can be divided. Sandra and the federal government, which filed a brief supporting her, respond that timing is the key difference between this case and Mansell. The retirement pay in Mansell, Sandra emphasizes, had already been waived at the time of the divorce. The court’s holding in Mansell was therefore narrow: It only barred states from treating retirement pay that has been waived in favor of disability pay as something that can be divided when a couple divorces. The court did not address what happens to retirement pay that has been waived in favor of disability pay when, as here, the waiver happens after the divorce.
In this case, the United States stresses, Sandra and John’s divorce decree did not divide up any retirement pay that had been waived in favor of disability pay. And although the state court’s order requiring John to reimburse Sandra for the money that she lost as a result of his waiver may have much the same effect on John’s finances, it is not same, from a legal perspective, as a court order dividing his waived retirement pay. John insists that it doesn’t matter under the USFSPA that John waived a portion of his retirement benefits after John and Sandra’s divorce. The law doesn’t distinguish between the two scenarios, he argues; courts are barred from dividing retirement pay that has been waived no matter when the couple gets a divorce.
Sandra also contends that the court should operate under the presumption that the USFSPA does not pre-empt, or trump, the Arizona state court’s order because states have traditionally taken the lead in family law.
John suggests, however, that no presumption against pre-emption applies to his case because the state court’s order so clearly conflicts with the USFSPA by instructing him to pay half of the military retirement pay that he waived to Sandra.
For her part, Sandra sees no conflict with the text, reasoning that because Congress authorized courts to treat retirement pay as community property and divide it between divorcing spouses, it also “implicitly authorized” the divorcing spouses to agree on how the pay should be divided and, by extension, “authorized state courts to enforce or modify other ensuing decrees.” Sandra characterizes her right to receive half of John’s retirement pay, before the waiver, as “critical” because she also agreed to receive alimony for only a short time, until John retired and started receiving retirement pay. Had she “known that John would later unilaterally reduce her interest,” she contends, no doubt she “would have made a different bargain.”
John argues that the presumption against pre-emption does not apply for a second reason: The state court’s order also frustrates Congress’ purpose in enacting the USFSPA, which was intended to make sure that divorced, disabled veterans get to keep all of their disability pay, even if they opt to waive some of their retirement pay to get it.
For Sandra, there is no conflict between the court’s order and the purposes of the USFSPA. As its title suggests, she argues, the USFSPA was intended to protect former spouses of veterans. The state court’s order in this case does precisely that by allowing her, as the former spouse, to continue to receive the money that she and her ex-husband agreed she would receive. Given Congress’ concern for ex-spouses, she concludes, it could not have possibly intended that John could agree to divide his retirement pay as part of his divorce, but then – without consulting Sandra – apply for and receive disability benefits that reduce Sandra’s payments, leaving Sandra without either the money that John had agreed to pay her or a remedy for her loss.
John counters that the history (or lack thereof) of the provision barring courts from dividing up retirement pay actually weighs in his favor. Congress, he emphasizes, has paid “scrupulous attention” to the interaction between family law and military benefits, and has “repeatedly” revised the USFSPA, but it has not changed the act’s bar on dividing retirement pay that has been waived – which strongly suggests that Congress wanted the bar to stay in place.
The question before the court in the Howells’ case may not have broad implications beyond family law, but it is nonetheless an important one for many divorced military couples. We’ll know more about how the justices may be likely to rule after next Monday’s oral argument.