Langston v. Wilson McShane Corp.

776 N.W.2d 684, 48 Employee Benefits Cas. (BNA) 2179, 2009 Minn. LEXIS 886, 2009 WL 4670429
CourtSupreme Court of Minnesota
DecidedDecember 10, 2009
DocketA07-2034
StatusPublished
Cited by13 cases

This text of 776 N.W.2d 684 (Langston v. Wilson McShane Corp.) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Langston v. Wilson McShane Corp., 776 N.W.2d 684, 48 Employee Benefits Cas. (BNA) 2179, 2009 Minn. LEXIS 886, 2009 WL 4670429 (Mich. 2009).

Opinion

OPINION

GILDEA, Justice.

The question presented in this case is whether state courts have subject matter jurisdiction under the Employee Retirement Income Security Act (ERISA) to review a plan administrator’s determination that a proposed qualified domestic relations order (QDRO) is not “qualified” for purposes of ERISA. The district court held that state courts have concurrent jurisdiction with federal courts to review such decisions by plan administrators. The court of appeals reversed, holding that federal jurisdiction over such decisions is exclusive. Because we conclude that state and federal courts have concurrent jurisdiction to review a plan administrator’s determination of whether a proposed QDRO is “qualified,” we reverse.

This action arises from the dissolution of the marriage between Gary Langston and appellant Patricia Ann Langston. The Anoka County District Court dissolved the Langston marriage in a judgment and decree dated August 3, 1993. Gary Lang-ston (Gary) was a carpenter and was a participant in respondent Twin Cities Carpenters and Joiners Pension Fund (the Plan), which is administered by respondent Wilson-McShane Corporation. In the judgment and decree, the court awarded Patricia Langston (Langston) a one-half interest in the marital portion of all of Gary’s pension benefits. Gary was required to elect survivor benefits and name Langston as his survivor beneficiary. Langston’s attorney was responsible for drafting a domestic relations order (DRO) and submitting it for the court’s review, and then to the plan administrator to be qualified. Langston’s counsel did not submit the DRO to the district court for its consideration until 2005. 1

In July 2005, the district court issued a domestic relations order (2005 DRO) to implement the terms of the judgment and decree. Counsel submitted the 2005 DRO to the plan administrator, but the plan administrator refused to “qualify” the order because the benefits were already in “pay status.” The plan administrator further explained that Langston would not be eligible for survivor benefits because the benefits had already vested, but that Langston could receive some benefits during Gary’s lifetime under the “shared payment method” if she submitted a revised DRO. 2

Langston did not submit a revised DRO to the respondents. Instead, she brought a motion to enforce the 2005 DRO in her marital dissolution action in district court. In this motion, Langston sought to require *686 the Plan and Wilson-McShane to honor the 2005 DRO. The court denied the motion because neither the Plan nor Wilson-McShane were parties to the post-decree marital dissolution proceeding and therefore the court lacked personal jurisdiction over them.

Langston then commenced a new action by filing a complaint in district court seeking to obtain pension benefits pursuant to the 2005 DRO. Langston brought this action against the respondents, the Plan and Wilson-McShane, but neither appeared. Upon Langston’s motion, the court entered a default judgment in her favor on April 18, 2007.

The respondents thereafter moved to vacate the default judgment, arguing both that the state court did not have subject matter jurisdiction over Langston’s claim and that the default judgment should be vacated under the four-factor test announced in Hinz v. Northland Milk & Ice Cream Co., 237 Minn. 28, 28, 30, 53 N.W.2d 454, 456 (1952). The district court concluded that it had subject matter jurisdiction and denied the motion to vacate.

Respondents appealed, and the court of appeals reversed, holding that the district court lacked subject matter jurisdiction over Langston’s claim. Langston v. Wilson McShane Corp., 758 N.W.2d 583, 590 (Minn.App.2008). The court also held that the district court abused its discretion in balancing the Hinz factors and determined that the default judgment should have been vacated. Id. at 594. We granted Langston’s petition for review on the question of whether the district court had subject matter jurisdiction over Langston’s claim.

This action arises under ERISA, which was enacted in 1974 to provide a comprehensive system of federal regulation of private employee benefit plans. See Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, § 514(a), 88 Stat. 897 (codified at 29 U.S.C. § 1144(a) (2006)). Because ERISA provides that pension benefits are not assignable, 29 U.S.C. § 1056(d)(1) (2006), it was initially unclear whether such benefits could be divided between divorcing spouses, see Sa-maroo v. Samaroo, 193 F.3d 185, 187 (3d Cir.1999). In 1984, Congress passed the Retirement Equity Act (“REA”), which made clear that pension benefits could be divided if the division was provided for in a “qualified domestic relations order.” See Retirement Equity Act of 1984, Pub. L. No. 98-397, § 104(a), 98 Stat. 1433 (codified at 29 U.S.C. § 1056(d)(3)(A) (2006)). To secure benefits, a divorcing spouse must first obtain a DRO that assigns benefits to him or her and then the relevant plan administrator must find that the DRO is “qualified.” See 29 U.S.C. § 1056(d)(3)(G) (2006).

Congress provided that the plan administrator’s determination of whether a DRO is “qualified” under ERISA is judicially reviewable. 29 U.S.C. § 1056(d)(3)(H)(i) (2006). The issue in this case is whether ERISA permits state courts to exercise subject matter jurisdiction and review the plan administrator’s determination or whether ERISA vests jurisdiction exclusively in the federal courts. This question of statutory interpretation is subject to de novo review. See Bode v. Minn. Dep’t of Natural Res., 612 N.W.2d 862, 866 (Minn.2000).

I.

Langston contends, and the district court held, that in 29 U.S.C. § 1132(e)(1) (2006), ERISA vests concurrent jurisdiction in state courts. 3 Under section *687 1132(e)(1), federal courts have exclusive jurisdiction over most civil actions brought under ERISA.

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Bluebook (online)
776 N.W.2d 684, 48 Employee Benefits Cas. (BNA) 2179, 2009 Minn. LEXIS 886, 2009 WL 4670429, Counsel Stack Legal Research, https://law.counselstack.com/opinion/langston-v-wilson-mcshane-corp-minn-2009.