The Case. In United States v. Windsor, Executor of the Estate of Spyer, No. 12-307 (S.Ct. 2013), the U.S. Supreme Court struck down §3 of DOMA as being unconstitutional. The case may be summarized as follows.
The State of New York recognizes the marriage of New York residents Edith Windsor and Thea Spyer, who wed in Ontario, Canada, in 2007. When Spyer died in 2009, she left her entire estate to Windsor. Windsor sought to claim the federal estate tax exemption for surviving spouses, but was barred from doing so by §3 of the federal Defense of Marriage Act (“DOMA”). That section-which provides rules of construction for over 1,000 federal laws and the whole realm of federal regulations–defines “marriage” and “spouse” as excluding same-sex partners. Windsor paid $363,053 in estate taxes and sought a refund, which the Internal Revenue Service denied. Windsor brought this refund suit, contending that DOMA violates the principles of equal protection incorporated in the Fifth Amendment. The district court ruled against the United States, finding §3 unconstitutional and ordering the Treasury to refund Windsor’s tax with interest. The Second Circuit affirmed. The United States has not complied with the judgment.
Upon reviewing the case, the U.S. Supreme Court first held that it had jurisdiction to consider the case’s merits. It then held that §3 of DOMA is unconstitutional as a deprivation of the equal liberty of persons that is protected by the Fifth Amendment. As such, the Supreme Court affirmed the Second Circuit’s decision. Presumably, the Treasury will be required to refund Windsor’s tax with interest.
Implications For Employee Benefits. Federal laws and regulations provide numerous tax-advantages for and rights to benefits under employee benefits plans which are dependent on an individual being married to or being the spouse of an employee. Individuals, whose marriages could not be recognized for federal law purposes due to§3 of DOMA (such as same-sex marriage partners), were deprived of these advantages and rights. Now that §3 of DOMA has been struck down, these individuals may now enjoy these previously denied advantages and rights, and employers must now consider the effects that this will have on their employee benefits plans. The implications for employee benefit plans from §3 of DOMA being struck will be discussed in future blogs.