The slip opinion is the first version of an opinion released by the Chief Clerk of the Supreme Court. Once an opinion is selected for publication by the Court, it is assigned a vendor-neutral citation by the Chief Clerk for compliance with Rule 23- 112 NMRA, authenticated and formally published. The slip opinion may contain deviations from the formal authenticated opinion.
IN THE SUPREME COURT OF THE STATE OF NEW MEXICO
Opinion Number: __________________
Filing Date: April 1, 2021
NO. S-1-SC-37962 ANGELA RUSS, Petitioner-Respondent, v.
JEFFERY L. RUSS, Respondent-Petitioner,
NEW MEXICO HUMAN SERVICES DEPARTMENT,
Intervenor.
ORIGINAL PROCEEDING ON CERTIORARI Debra Ramirez, District Judge
L. Helen Bennett, P.C. Linda Helen Bennett Albuquerque, NM Cortez & Hoskovec, LLC M. Michelle Cortez Albuquerque, NM
for Respondent-Petitioner
New Mexico Family Law, P.C. Amanda Ann Aragon Albuquerque, NM for Petitioner-Respondent OPINION
THOMSON, Justice {1} The Uniformed Services Former Spouses’ Protection Act, 10 U.S.C. § 1408
(2018), establishes that states “may treat veterans’ disposable retired pay as divisible
property, i.e., community property divisible upon divorce.” Howell v. Howell, ___
U.S. ___, 137 S. Ct. 1400, 1403 (2017) (internal quotation marks and citation
omitted). However, 10 U.S.C. § 1408(a)(4)(A)(ii) “expressly exclude[s] from its
definition of ‘disposable retired pay’ amounts deducted from that pay ‘as a result of
a waiver . . . required by law in order to receive’ disability benefits.” Howell, 137 S.
Ct. at 1403 (alteration in original) (quoting 10 U.S.C. § 1408(a)(4)(A)).
{2} The United States Supreme Court announced this rule in Mansell v. Mansell,
490 U.S. 581 (1989), and “held that federal law forbade [a state] from treating the
waived portion as community property divisible at divorce.” Howell, 137 S. Ct. at
1403. The Howell Court applied the Mansell rule and clarified that even if the waiver
“of the retirement pay in order to receive nontaxable disability benefits” occurs
“[l]ong after the divorce,” a state may not “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.” Howell, 137 S. Ct. at 1402. {3} When Angela Russ (Spouse) and Jeffery Russ (Veteran) divorced, they agreed
to divide Veteran’s military retirement pay as part of the community property.
Nonetheless, about eight years after their divorce, Veteran waived his retirement pay
in order to receive a disability benefit from the federal government. His waiver
occurred after Mansell was issued, but before Howell was issued. The question
presented to this Court is whether the Court of Appeals correctly determined that
Howell does not apply to this case.
{4} If the Howell Court’s application of the Mansell rule applies, Veteran may
unilaterally change his federal benefit as he did. This change precludes Spouse from
receiving any of his retirement benefit from the federal government, regardless of
what he agreed to when they divorced. If the Howell Court’s application of the
Mansell rule does not apply, then Veteran must indemnify Spouse for her share of
his waived retirement benefit. Although equitable principles may suggest that we
should determine that Howell does not apply in this case, the Supremacy Clause of
the federal constitution, U.S. Const. art. VI, cl. 2, precludes that application of
equity.
{5} “The Supremacy Clause, U.S. Const., Art. VI, cl. 2, does not allow federal
retroactivity doctrine to be supplanted by the invocation of a contrary approach to
retroactivity under state law.” Harper v. Virginia Dep’t of Tax’n, 509 U.S. 86, 100
2 (1993). In other words, a New Mexico court must apply federal law, not state law,
to determine the retroactivity of a federal rule announced by the United States
Supreme Court. Nonetheless, the Court of Appeals determined that Howell, 137 S.
Ct. 1400, “does not apply retroactively in New Mexico.” Russ v. Russ, 2020-NMCA-
008, ¶ 20, 456 P.3d 1100. Therefore, we reverse the Court of Appeals because that
court based its decision on New Mexico law instead of the applicable, controlling
federal law.
I. BACKGROUND {6} Veteran and Spouse married in 1993. They separated in 2006, and in May of
that year, they entered into a Marriage Settlement Agreement (Agreement), which
became part of the district court’s Final Decree of Dissolution of Marriage. The
Agreement provided that (1) Veteran had an interest in his “retired military pay”
which “is divisible in divorce proceedings”; and (2) “as a compromise division of
community assets [the parties] have stipulated and agreed that [Spouse] shall receive
50% of [Veteran’s] disposable retired pay which was earned during the term of [the
parties’] marriage.”
{7} In 2014, Veteran waived his entitlement to retired military pay in order to
instead receive Combat Related Special Compensation (CRSC), a disability benefit.
See 10 U.S.C. §1408(a)(4)(A)(ii) (excluding from the definition of “disposable
3 retired pay” that amount of retired pay waived as “required by law in order to receive
compensation” for a veteran’s disability benefit); 10 U.S.C. § 1413a(b)(2) (2018)
(establishing criteria for determining the amount of compensation due to an “eligible
combat-related disabled uniformed services retiree” who elects such benefits in lieu
of receiving “retired pay”).
{8} The Defense Finance Accounting Service notified Spouse that Veteran
waived all of his retirement benefits to instead receive CRSC, which meant that she
would no longer receive a portion of his retired pay. Spouse filed an emergency
motion to enforce the Agreement with the district court and argued that Veteran’s
election to receive a disability benefit in lieu of military retired pay and effectively
reducing Spouse’s benefits was prohibited under New Mexico law. Spouse asked
the district court to order Veteran “to reimburse [her] for underpayment of her
portion of his military retirement pay with interest.”
{9} Following a trial on the matter, the district court entered a judgment in favor
of Spouse and determined, relevant to this appeal:
(1) on “May 1, 2011, [Veteran] applied for and elected to receive the Veteran’s Administration Waiver . . . and Concurrent Retirement and Disability Pay . . . or [CRSC]”; (2) on “May 1, 2014, [Veteran] began receiving the military disability pay referred to as [CRSC]”;
4 (3) “military disability pay is not divisible as community property upon divorce”;
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The slip opinion is the first version of an opinion released by the Chief Clerk of the Supreme Court. Once an opinion is selected for publication by the Court, it is assigned a vendor-neutral citation by the Chief Clerk for compliance with Rule 23- 112 NMRA, authenticated and formally published. The slip opinion may contain deviations from the formal authenticated opinion.
IN THE SUPREME COURT OF THE STATE OF NEW MEXICO
Opinion Number: __________________
Filing Date: April 1, 2021
NO. S-1-SC-37962 ANGELA RUSS, Petitioner-Respondent, v.
JEFFERY L. RUSS, Respondent-Petitioner,
NEW MEXICO HUMAN SERVICES DEPARTMENT,
Intervenor.
ORIGINAL PROCEEDING ON CERTIORARI Debra Ramirez, District Judge
L. Helen Bennett, P.C. Linda Helen Bennett Albuquerque, NM Cortez & Hoskovec, LLC M. Michelle Cortez Albuquerque, NM
for Respondent-Petitioner
New Mexico Family Law, P.C. Amanda Ann Aragon Albuquerque, NM for Petitioner-Respondent OPINION
THOMSON, Justice {1} The Uniformed Services Former Spouses’ Protection Act, 10 U.S.C. § 1408
(2018), establishes that states “may treat veterans’ disposable retired pay as divisible
property, i.e., community property divisible upon divorce.” Howell v. Howell, ___
U.S. ___, 137 S. Ct. 1400, 1403 (2017) (internal quotation marks and citation
omitted). However, 10 U.S.C. § 1408(a)(4)(A)(ii) “expressly exclude[s] from its
definition of ‘disposable retired pay’ amounts deducted from that pay ‘as a result of
a waiver . . . required by law in order to receive’ disability benefits.” Howell, 137 S.
Ct. at 1403 (alteration in original) (quoting 10 U.S.C. § 1408(a)(4)(A)).
{2} The United States Supreme Court announced this rule in Mansell v. Mansell,
490 U.S. 581 (1989), and “held that federal law forbade [a state] from treating the
waived portion as community property divisible at divorce.” Howell, 137 S. Ct. at
1403. The Howell Court applied the Mansell rule and clarified that even if the waiver
“of the retirement pay in order to receive nontaxable disability benefits” occurs
“[l]ong after the divorce,” a state may not “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.” Howell, 137 S. Ct. at 1402. {3} When Angela Russ (Spouse) and Jeffery Russ (Veteran) divorced, they agreed
to divide Veteran’s military retirement pay as part of the community property.
Nonetheless, about eight years after their divorce, Veteran waived his retirement pay
in order to receive a disability benefit from the federal government. His waiver
occurred after Mansell was issued, but before Howell was issued. The question
presented to this Court is whether the Court of Appeals correctly determined that
Howell does not apply to this case.
{4} If the Howell Court’s application of the Mansell rule applies, Veteran may
unilaterally change his federal benefit as he did. This change precludes Spouse from
receiving any of his retirement benefit from the federal government, regardless of
what he agreed to when they divorced. If the Howell Court’s application of the
Mansell rule does not apply, then Veteran must indemnify Spouse for her share of
his waived retirement benefit. Although equitable principles may suggest that we
should determine that Howell does not apply in this case, the Supremacy Clause of
the federal constitution, U.S. Const. art. VI, cl. 2, precludes that application of
equity.
{5} “The Supremacy Clause, U.S. Const., Art. VI, cl. 2, does not allow federal
retroactivity doctrine to be supplanted by the invocation of a contrary approach to
retroactivity under state law.” Harper v. Virginia Dep’t of Tax’n, 509 U.S. 86, 100
2 (1993). In other words, a New Mexico court must apply federal law, not state law,
to determine the retroactivity of a federal rule announced by the United States
Supreme Court. Nonetheless, the Court of Appeals determined that Howell, 137 S.
Ct. 1400, “does not apply retroactively in New Mexico.” Russ v. Russ, 2020-NMCA-
008, ¶ 20, 456 P.3d 1100. Therefore, we reverse the Court of Appeals because that
court based its decision on New Mexico law instead of the applicable, controlling
federal law.
I. BACKGROUND {6} Veteran and Spouse married in 1993. They separated in 2006, and in May of
that year, they entered into a Marriage Settlement Agreement (Agreement), which
became part of the district court’s Final Decree of Dissolution of Marriage. The
Agreement provided that (1) Veteran had an interest in his “retired military pay”
which “is divisible in divorce proceedings”; and (2) “as a compromise division of
community assets [the parties] have stipulated and agreed that [Spouse] shall receive
50% of [Veteran’s] disposable retired pay which was earned during the term of [the
parties’] marriage.”
{7} In 2014, Veteran waived his entitlement to retired military pay in order to
instead receive Combat Related Special Compensation (CRSC), a disability benefit.
See 10 U.S.C. §1408(a)(4)(A)(ii) (excluding from the definition of “disposable
3 retired pay” that amount of retired pay waived as “required by law in order to receive
compensation” for a veteran’s disability benefit); 10 U.S.C. § 1413a(b)(2) (2018)
(establishing criteria for determining the amount of compensation due to an “eligible
combat-related disabled uniformed services retiree” who elects such benefits in lieu
of receiving “retired pay”).
{8} The Defense Finance Accounting Service notified Spouse that Veteran
waived all of his retirement benefits to instead receive CRSC, which meant that she
would no longer receive a portion of his retired pay. Spouse filed an emergency
motion to enforce the Agreement with the district court and argued that Veteran’s
election to receive a disability benefit in lieu of military retired pay and effectively
reducing Spouse’s benefits was prohibited under New Mexico law. Spouse asked
the district court to order Veteran “to reimburse [her] for underpayment of her
portion of his military retirement pay with interest.”
{9} Following a trial on the matter, the district court entered a judgment in favor
of Spouse and determined, relevant to this appeal:
(1) on “May 1, 2011, [Veteran] applied for and elected to receive the Veteran’s Administration Waiver . . . and Concurrent Retirement and Disability Pay . . . or [CRSC]”; (2) on “May 1, 2014, [Veteran] began receiving the military disability pay referred to as [CRSC]”;
4 (3) “military disability pay is not divisible as community property upon divorce”;
(4) Veteran “cannot escape the responsibility of paying [Spouse] what the parties agreed she earned during the time that he served in the military, no matter what name is attributed to that compensation or the source from which he pays her”; and therefore,
(5) Veteran “owes [Spouse] a total in military retirement arrears of $22,243.09.” Veteran appealed the determination that he must indemnify Spouse for the waived
amounts of retired military pay; Spouse cross-appealed other determinations that do
not concern the issue on appeal to this Court.
{10} The Court of Appeals sought a solution in equity, framing the question as:
“what remains owed to [Spouse] after [Veteran] waived his [military retirement pay]
in exchange for receiving disability-based Combat Related Special Compensation
(CRSC).” Russ, 2020-NMCA-008, ¶ 1. The Court of Appeals determined that the
United States Supreme Court in Howell permitted Veteran’s unilateral election to
receive CRSC in lieu of a retired pay and prohibited a district court from ordering a
veteran who elects to receive CRSC to reimburse the veteran’s spouse for waived
retired pay. Id. ¶ 9. However, the Court of Appeals determined that the Howell Court
announced a new rule of federal law, id. ¶ 17, and that there was “sufficient reason
under still-applicable New Mexico precedent to deny retroactive application of
Howell,” id. ¶ 1. The Court of Appeals therefore affirmed the district court’s
5 judgment that ordered Veteran to reimburse Spouse. Id. ¶ 21. Veteran petitioned this
Court for a writ of certiorari, which we granted.
II. ANALYSIS {11} The Court of Appeals applied New Mexico law to determine that Howell does
not apply retroactively in New Mexico. Id. ¶¶ 15, 20. But federal law does not allow
states to apply their own law to supplant a rule of federal law in this instance. U.S.
Const., art. VI, cl. 2; Harper, 509 U.S. at 100.
A. Standard of Review {12} This Court reviews legal questions, for example, whether federal law
preempts state law, de novo. See Self v. United Parcel Serv., Inc., 1998-NMSC-046,
¶ 6, 126 N.M. 396, 970 P.2d 582 (stating that “[w]e review . . . legal questions de
novo”).
B. Howell Must Be Applied Retroactively {13} New Mexico generally presumes that a rule of law announced in a civil case
applies retroactively. Beavers v. Johnson Controls World Servs, Inc., 1994-NMSC-
094, ¶ 21, 118 N.M. 391, 881 P.2d 1376. This presumption applies unless there is
“an express declaration, in the case announcing the new rule,” that clarifies whether
the rule is intended to operate retroactively or “intended to operate with modified or
6 selective (or even, perhaps pure) prospectivity.” Id. ¶ 22. “Absent such a declaration,
the presumption may be overcome by a sufficiently weighty combination of one or
more . . . factors.” Id. (recognizing the three-factor test adopted from Chevron Oil
Co. v. Huson, 404 U.S. 97, 106-107 (1971)).
{14} However, Howell was issued by the United States Supreme Court and
announced or applied a rule of federal law. See 137 S. Ct. at 1405-06. In contrast to
New Mexico law, the United States Supreme Court abandoned the practice of
presuming retroactivity and of the applicability of the Chevron Oil three-factor test.
Specifically, the United States Supreme Court stated:
When [the United States Supreme Court] applies a rule of federal law to the parties before it, that rule is the controlling interpretation of federal law and must be given full retroactive effect in all cases still open on direct review and as to all events, regardless of whether such events predate or postdate [the Court’s] announcement of the rule.
Harper, 509 U.S. at 97; see also Beavers, 1994-NMSC-094, ¶ 22 (acknowledging
the new “hard-and-fast rule” that applies to federal cases). In other words, when a
new federal rule of law is announced by the United States Supreme Court in a civil
case it always applies retroactively. Harper, 509 U.S. at 97.
{15} The rule announced by the Harper Court governs the retroactive effect of
Howell and clearly establishes that Howell must be given full retroactive effect. Id.
The Court of Appeals observed that “[t]he United States Supreme Court did not
7 explicitly state whether its opinion in Howell should apply retroactively or
prospectively” and applied “the three-factor Beavers test” to conclude that “Howell
does not apply retroactively in New Mexico.” Russ, 2020-NMCA-008, ¶¶ 14-20.
The Court of Appeals conclusion ignores the federal rule announced in Harper.
{16} The fact that the United States Supreme Court did not explicitly state that
Howell applies retroactively is irrelevant to the analysis here. See Harper, 509 U.S.
at 97; accord Beavers, 1994-NMSC-094, ¶ 22. The United States Supreme Court
has expressly stated that when it applies a rule of federal law it is the “controlling
interpretation of federal law and must be given full retroactive effect.” Harper, 509
U.S. at 97, 100 (“The Supremacy Clause, U.S. Const., Art. VI, cl. 2, does not allow
federal retroactivity doctrine to be supplanted by the invocation of a contrary
approach to retroactivity under state law.”). Howell must be given retroactive
application.
C. Howell Does Not Prohibit a District Court From Considering Deeply Rooted Moral Obligations Such as Familial Obligations {17} Federal law preempts any state from treating “as property divisible upon
divorce military retirement pay that has been waived to receive veterans’ disability
benefits.” Mansell, 490 U.S. at 594-595. Federal law also preempts states from
“increas[ing], pro rata, the amount the divorced spouse receives each month from
8 the veteran’s retirement pay in order to indemnify the divorced spouse for the loss
caused by the veteran’s waiver,” even when that waiver occurs “[l]ong after the
divorce.” Howell, 137 S. Ct. at 1402.
{18} The rule applied in Howell may seem inequitable. It allows a veteran to
unilaterally decide to convert a divisible community asset into a nondivisible
personal asset long after an agreement was reached or an initial division of property
rights was determined. See, e.g., In re Marriage of Cassinelli, 229 Cal. Rptr. 3d 801,
808 (2018) (“Because CRSC is not retired pay—just as veteran’s disability benefits
are not retired pay—under [USFSPA] as construed in Mansell, a state court does not
have jurisdiction to treat CRSC as community property.”). The Howell Court
“recognize[d] . . . the hardship that congressional pre-emption can sometimes work
on divorcing spouses.” 137 S. Ct. at 1406. Nevertheless, Howell is federal law, and
our courts are bound by Harper, the Supremacy Clause, and the principles of
federalism.
{19} Yet, New Mexico courts are not powerless to seek a just result. “[A] family
court . . . remains free to take account of . . . reductions in value when it calculates
or recalculates the need for spousal support.” Howell, 137 S. Ct. at 1406. The United
States Supreme Court has stated that “[v]eterans’ disability benefits compensate for
impaired earning capacity . . . and are intended to provide reasonable and adequate
9 compensation for disabled veterans and their families.” Rose v. Rose, 481 U.S. 619,
630 (1987) (internal quotation marks and citation omitted). In general, the amount
of disability benefits “belies . . . that Congress intended these amounts alone to
provide for the support of the children of disabled veterans.” See id. at 630-31
(discussing veterans’ benefits under another section of the United States Code).
{20} Thus, the district court may address Spouse’s contention that additional
contribution is required from Veteran depending on the circumstances presented.
See Howell, 137 S. Ct. at 1406; see also Rule 1-060(B) NMRA (providing
circumstances under which, “[o]n motion and on such terms as are just, the court
may relieve a party or the party’s legal representative from a final judgment, order,
or proceeding”). The district court should not rest its decision on the need to
indemnify Spouse or replace her portion of Veteran’s retirement benefit. Instead, the
district court should direct its attention toward the “family support obligations
[which] are deeply rooted moral responsibilities” rather than an agreement
10 concerning the division of community property.1 Rose, 481 U.S. at 631-32
(identifying an exception for additional contribution when the determination is based
on moral obligations rather than a “business relationship” between spouses for their
mutual financial benefit).
III. CONCLUSION {21} Based on the foregoing, we reverse the Court of Appeals determination that
Howell is not given full retroactive effect in New Mexico and remand for further
proceedings consistent with this opinion.
{22} IT IS SO ORDERED.
DAVID K. THOMSON, Justice
1 See, e.g., Alwan v. Alwan, 830 S.E.2d 45, 48 (Va. Ct. App. 2019) (distinguishing Howell by concluding that “it said nothing about the propriety of a state court’s consideration of military disability benefits as a source of funds in making a child support award” (emphasis added)); Matter of Braunstein, 236 A.3d 870, 876 (N.H. 2020) (same) cert. denied, No. 20-267, ___ S. Ct. ___, 2020 WL 6551782 (Nov. 9, 2020); Lesh v. Lesh, 809 S.E.2d 890, 899 (N.C. Ct. App. 2018) (same); Phillips v. Phillips, 820 S.E.2d 158, 163-164 (Ga. Ct. App. 2018) (vacating the trial court’s order in part because it “overstepped its authority” by ordering the husband to indemnify the wife if he elected to convert military retired pay to disability pay, but remanding and noting that “the trial court has a broad discretion to make an equitable division of [the marital property] upon consideration of all the relevant evidence”) (alteration in original) (internal quotation marks and citation omitted).
11 WE CONCUR:
MICHAEL E. VIGIL, Chief Justice
BARBARA J. VIGIL, Justice
C. SHANNON BACON, Justice