On June 26, 2015, the Supreme Court held in Obergefell v Hodges1 that “the right to marry is a fundamental right inherent in the liberty of the person [ ] under the Due Process and Equal Protection Clauses of the Fourteenth Amendment.”2 The Court also held that states cannot withhold legal recognition of same-sex marriages.3 The decision raises the following problem: Suppose that a couple was legally married before Obergefell in a state recognizing same-sex marriage (a former recognition state), either because they traveled to the recognition state for the sole purpose of getting married or resided there for a while before moving to a former nonrecognition state.4 For property rights purposes, at which date is the couple deemed married in the former nonrecognition state after Obergefell? If Obergefell applies retroactively, it should be from the actual date of marriage. If not, it should be from the date of the Obergefell decision.
To illustrate what is at stake, consider the following scenarios: Amy and Margaret were Texas residents. In 2010, they moved to Massachusetts and were lawfully married there. Two years later, they moved back to Texas, a nonrecognition and community property state.5 After arriving in Texas, Amy bought a piece of real property there with what would be considered community funds if they were an opposite-sex couple, and held it in her name. In 2014, Amy sold the property to Mark without Margaret’s consent.6 If the property were Amy and Margaret’s home, the transaction would be governed by Texas’s homestead law, which prohibits unilateral sales “without the joinder of the other spouse.”7 The validity of Mark’s title depends on when the couple is deemed to have wed: if in 2010, his title is void, but if after Obergefell, it is valid.
The issue of third-party reliance is not limited to states that were, prior to Obergefell, both nonrecognition and community property states.8 Imagine that a same-sex couple obtained property in a community property and former recognition state (for example, California).9 They then moved to a separate-property10 and former nonrecognition state (for example, Ohio).11 Generally, the recognition rule holds that moving across state lines does not change the community or separate status of a married couple’s property.12 But because the couple was not a “married couple” under Ohio law when they moved to Ohio, the recognition rule did not apply. As a result, the property lost its community property status. But if Obergefell applies retroactively, the property would retain its community property status, with all of the restrictions and rights attached to that status.
Here is an example of how these hypothetical scenarios might play out in real cases.13 Consider the facts of Hard v Attorney General, Alabama,14 a case that recently came before the Eleventh Circuit: In 2006, Alabama passed a constitutional amendment that defined marriage as “a unique relationship between a man and a woman.”15 Paul Hard and David Fancher, a gay couple married in Massachusetts in May 2011, returned to Alabama after their nuptials. Less than three months after the marriage, David died in an accident. In June 2012, the administrator of David’s estate filed a wrongful death action.16 Under Alabama law, wrongful death damages “must be distributed according to the statute of distributions,”17 with beneficiaries being determined at the time of death.18 At the time of David’s death, his only heir under Alabama law was his mother, Pat Fancher.19 At issue was whether Paul was entitled to a spousal share of the sizable settlement.20 A retroactive application of Obergefell would have entitled Paul to the spousal share. Otherwise, David’s surviving mother, as his only heir, would receive the entire settlement.21
Welfare and tax benefits assigned to one’s spouse may also be affected by the retroactivity of Obergefell.22 After the Court, in United States v Windsor,23 struck down the Defense of Marriage Act’s definition of “marriage” as between opposite sexes,24 some federal agencies have chosen to apply Windsor retroactively, despite the possible additional administrative costs.25 After Obergefell, similar voluntary retroactive efforts have materialized. For example, the Internal Revenue Service (IRS) issued guidance affirming the limited retroactive effects of Obergefell on various welfare plans.26 But even if more federal agencies choose to apply Obergefell retroactively in the future, it remains unclear whether they are legally required to do so.27
This Comment attempts to solve a problem arising from Obergefell—the significant disruption of settled property interests due to the retroactive application of the decision. Part I of this Comment summarizes the development of the Supreme Court’s jurisprudence on retroactivity, leading to a general rule of full retroactivity established in Harper v Virginia Department of Taxation.28 Part II synthesizes the current rules of retroactivity in the context of the Obergefell problem and suggests three theories for limiting Obergefell’s retroactivity. Part III proposes a framework for limiting the retroactive effects of Obergefell through nonconstitutional remedial exceptions to the Harper rule based on Reynoldsville Casket Co v Hyde.29 It then rebuts two theories that would provide stronger protection for reliance interests in property cases than the remedial exceptions framework, but are not viable under current Supreme Court jurisprudence.
- 1. 135 S Ct 2584 (2015).
- 2. Id at 2604.
- 3. Id at 2607–08. The Court did not address the possibility that a state might refuse to recognize marriages valid in another state on grounds other than the gender of the couple, such as incest or violations of age requirements. See generally id.
- 4. At the time Obergefell was decided, there were still fourteen nonrecognition states: Alabama, Arkansas, Georgia, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Tennessee, and Texas. Niraj Chokshi and Jeff Guo, Statements from Leaders in the 14 States That Previously Did Not Allow Gay Couples to Wed (Wash Post, June 26, 2015), archived at http://perma.cc/TK5L-BBYE.
- 5. In a community property state, spouses co-own the property that they obtain during marriage (with certain exceptions). See Black’s Law Dictionary 338 (West 10th ed 2014) (defining “community-property state” and “community property”). Currently there are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. See id.
- 6. The scenario is adapted from a short article written by Professor William P. LaPiana, who was among the first to flag the puzzle. See William P. LaPiana, Obergefell v. Hodges: Legal Bases, Clashing Views, Open Questions, 40 Tax Mgmt Estates, Gifts & Trusts J 206, 207 (2015).
- 7. Tex Fam Code Ann § 5.001.
- 8. Only two states were in both camps: Louisiana and Texas. Compare note 4 with note 5.
- 9. See notes 4–5.
- 10. These states are also called “common-law states,” referring to “[a]ny state that has not adopted a community-property regime.” Black’s Law Dictionary at 335 (cited in note 5). “The chief difference [ ] between [the two regimes] is that in a common-law state, a spouse has no vested interest in property held by the other spouse until (1) the filing of a divorce action, or (2) the death of the other spouse.” Id.
- 11. See notes 4–5.
- 12. See, for example, In re Estate of Kessler, 203 NE2d 221, 222–23 (Ohio 1964).
- 13. For an attempt to get the Supreme Court to judge the validity of pre-Obergefell legal agreements signed by one member of a same-sex couple and attempting to bind the other, see Petition for Writ of Certiorari, Guglielmelli v State Farm Insurance Co, Docket No 15-884, *i, 5–7 (US filed Dec 31, 2015) (available on Westlaw at 2015 WL 9697873), cert denied, 136 S Ct 1659 (2016).
- 14. 2016 WL 1579015 (11th Cir).
- 15. Ala Const Art I, § 36.03.
- 16. Hard, 2016 WL 1579015 at *1.
- 17. Ala Code § 6-5-410(c).
- 18. See, for example, Lowe v Fulford, 442 S2d 29, 31–32 (Ala 1983) (“Heirs are determined at the time of death.”).
- 19. Principal Brief of Appellant - Patricia Fancher, Hard v Fancher, Case No 15-13836, *3–4 (11th Cir filed Oct 6, 2015) (available on Westlaw at 2015 WL 5915495) (“Fancher Brief”).
- 20. Hard, 2016 WL 1579015 at *1.
- 21. The Eleventh Circuit did not end up addressing the issue of retroactive application because the particular controversy was held moot on unrelated grounds. See id at *2–3.
- 22. The question whether welfare and tax benefits are affected is a temporal choice-of-law question, because federal and state agencies have to decide whether a same-sex couple was married during a certain period before Obergefell in order to determine the allocation of certain benefits and duties. For a discussion of a similar choice-of-law issue across geographic lines, see generally William Baude, Beyond DOMA: Choice of State Law in Federal Statutes, 64 Stan L Rev 1371 (2012) (arguing that, given the diverse state law definitions of “marriage,” striking down the federal statutory definition of marriage as between one man and one woman in the Defense of Marriage Act (DOMA) would cause chaos unless Congress or the courts created a choice-of-law rule to replace it).
- 23. 133 S Ct 2675 (2013).
- 24. Id at 2682, 2695–96.
- 25. See, for example, LaPiana, 40 Tax Mgmt Estates, Gifts & Trusts J at 207 (cited in note 6) (explaining that the Social Security Administration uses the date that the couple was married, not the date that Windsor was decided, to ascertain their marriage date for purposes of Social Security benefits).
- 26. See generally IRS, Application of Obergefell to Qualified Retirement Plans and Health and Welfare Plans, Notice 2015–86, 2015-52 Int Reven Bull 887 (Dec 28, 2015).
- 27. For a challenge to Houston’s retroactive application of Obergefell, see Petitioners’ Reply, Pidgeon v Parker, No 15-0688, *5–9 (Tex filed Dec 11, 2015) (available on Westlaw at 2015 WL 9356986) (“The Court should grant the petition to declare that Obergefell is not (and cannot be) retroactive.”).
- 28. 509 US 86, 97 (1993).
- 29. 514 US 749 (1995).