Dear Colleagues:

We hope you have had a chance to review the “Legal Handbook for Tennessee Seniors,” which was published by the Tennessee Bar Association (TBA) earlier this year and has already won prestigious state and national awards, as well as acclaim from groups and individuals in the community. More importantly, I hope you have had the opportunity to share it with your clients and those in your community who could benefit from the information.

The response to the Handbook has been tremendous. Since the launch, the TBA has fulfilled over 1,500 individual requests for the Handbook, in printed or electronic form. We have had over 8,000 visits to the TBA website, including downloads of electronic copies. Thousands of seniors, caretakers and professionals have attended a presentation or received the Handbook through outreach by TBA members. The demand continues to grow.

We provided a single, hard copy of the Handbook to seniors and organizations that serve seniors, free of charge upon their request, while our printed supplies lasted. The Handbook itself is over 300 pages and the cost of printing and mailing for one Handbook is approximately $15. We have covered costs to date through the Public Education budget at the TBA. Because of the incredible demand for the publication, the budget for publishing has now been exhausted. Although we are seeking grants from other organizations, those decisions take time. We feel very strongly that it is important to continue to offer a printed handbook to any senior or service provider who requests it, as so many seniors are not comfortable with accessing and/or efficiently using the materials online.  

Accordingly, we are asking for your help to defray the cost of printing and mailing. Individuals and firms can make contributions to the Tennessee Legal Community Foundation, which is a 501(c)(3) charitable organization, to assist with those costs. Your tax-deductible contribution will be recognized in the online version of the Handbook, as well as in upcoming printed versions.

We would also like to remind you that as a TBA Member, you are welcome to brand the covers of the Handbook with your firm’s logo and contact information and print and distribute it to clients, potential clients and others in the community that would benefit from it. Not only will you be contributing to a very worthy cause, your donation or assistance with promotion of the handbook will also serve as an excellent advertising opportunity for you and your firm.

To make a contribution or for more information about ways your firm can brand and promote the Handbook, please contact TBA Sections & Committees Coordinator Jenny Jones at jjones@tnbar.org or (615) 383-7421 or complete and return the enclosed form. We are also in the process of updating the Handbook for 2016 and welcome additional volunteers to help with revisions and outreach. 

Our goal is to continue to provide this very valuable resource to our senior adults, those approaching retirement and those who care for our seniors without charge. We appreciate your assistance in serving our Tennessee senior adult population.

Many thanks,

Angelia M. Nystrom                       

TBA Estate Planning & Probate Section Chair

 

Cynthia R. Wyrick                                           

Immediate Past TBA President

 

CLICK HERE FOR A LEGAL HANDBOOK SUPPORT FORM

CLICK HERE TO DOWNLOAD A COPY OF THE LEGAL HANDBOOK

CLE opportunities:

There is a three-part webinar series on the basics of Social Security practice currently available through the TBA online. Each one-hour webinar is only $35 for section members!

1) Client Selection: https://cle.tba.org/catalog/course/3198

2) Representation and Application: https://cle.tba.org/catalog/course/3207

3) Disability Hearings: https://cle.tba.org/catalog/course/3199

Section member Eric Buchanan also has a webinar on Federal Court practice available here: https://cle.tba.org/catalog/course/3025

2015 COLAs:  In other news, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 1.7 percent Cost of Living Adjustment or COLA for 2015.  The SSA Fact Sheet regarding 2015 SSA changes is found at:http://www.ssa.gov/news/press/factsheets/colafacts2015.html

The Health Insurance Marketplace (healthcare.gov) opens for enrollment on November 15, 2014 through February 15, 2015.

Most Title II recipients have a two-year waiting period for Medicare benefits. Sometimes their claims are adjudicated and approved before that time is up. For those individuals in the waiting period, you should know that they may be eligible for help paying for private health insurance through the new Marketplace. As long as their household income is over 100% of the federal poverty level, they can qualify for a subsidy to help pay for this insurance. For example, a one-person household who received Title II benefits in the amount of $1000 per month could pay as little as $20 per month for private health insurance until they are eligible for Medicare coverage. They can apply at www.healthcare.gov or by calling 1-800-318-2596. To find out the approximate amount of the subsidy they may be eligible for before applying, they can go to http://kff.org/interactive/subsidy-calculator/ or http://www.valuepenguin.com/ppaca/exchanges/tn

Help with Medicare Premiums, Deductibles and Co-Pays - Medicare Savings Plan applications (for QMB, SLMB, QDWI, or QI1) are now processed through TennCare and not DHS. To get an application, call the Tennessee Health Connection at 1-855-259-0701. An application for LIS (Extra Help) through SSA serves as a filing for MSP’s as well pursuant to the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008 (PL 110-275).

MIPPA establishes that effective January 1, 2010, a LIS application will initiate an application for the Medicare Savings Programs (MSP). The Social Security Administration (SSA) will team with the state Medicaid agencies to auto-initiate applications for MSP for LIS applicants. SSA will transmit specific LIS data to SSA Beneficiary Earnings and Data Exchange (BENDEX) on a daily basis to states beginning January 1, 2010. SSA will also transmit daily data on initial determination of LIS ‘Approvals and Denials’ only. Therefore effective 1/1/2010 DHS (now TennCare) will begin to process MSP applications using the information on the LIS applications. ‘Changes’ reported on LIS active cases will not be sent.

Application Filing Date

Section 1935 (a) of the Social Security Act established the MSP application date as the date the LIS application was filed with SSA. For tracking purposes, DHS (now TennCare) will begin the 45 day timeliness count from the first day the application is transmitted to DHS (now TennCare) . If the application is approved for SLMB or QI, the benefits will begin the date the LIS application was filed at the SSA office . If approved for QMB, the benefits will begin the month after the approval is authorized.

SSL Discussion List:  Non-government lawyers may sign up for the Social Security Law for Non-Government Lawyers (“SSL”) private mail discussion list with online archives and wiki by going to the following link:  https://sympa.theombudsman.com/sympa/info/ssl.  The discussion list is run by Georgia attorney Charles L. Martin, who concentrates his practice in Appeals Council and court briefs in Social Security disability claims.  Information about the discussion list, membership requirements and instructions for how non-government Social Security lawyers can apply for membership is available at the above-linked page. 

NOSSCR:  The National Organization of Social Security Claimants’ Representatives (NOSSCR) website is another excellent resource, with coverage of Social Security Basics and up-to date information about Social Security News, Policy Updates and numerous Legal Resources:  www.nosscr.org

We welcome suggestions for ways to improve the Section, enhance our Section website, news articles to distribute and ideas about how to increase opportunities for communications among Section members.

Our Section is proud to present an upcoming CLE program, “Disability Law Forum 2015” to be held on April 23, 2015 at the TBA Bar Center in Nashville (221 4^th Avenue North, Suite 200).  As a TBA member, you can use your 3 prepaid CLE credits to reduce the cost of this program.  Your section membership also provides a discount to attend this 5 hour seminar, which offers 4 hours of general credit and 1 hour of dual ethics and professionalism credit.  Save the date now! More information about registration will be sent out soon.

This annual CLE will include a session on hearing do’s and don’ts by an Administrative Law Judge from Social Security; a discussion about how to be successful at the Appeals Council;  a troubleshooting session including how to resolve problems with fee claims; and, an important discussion about the February 2014 regulations outlining the ethical obligations of disclosing adverse evidence.  This program is designed to give you practical and interesting information to improve your practice while you connect and exchange ideas with Social Security lawyers, judges and practitioners from all over this State.  We hope to see you there. 

Katie Evans Moss

kmoss@las.org

TBA Federal Law Section Annual Forum CLE Videos'

Did you miss the TBA Federal Law Section CLE this past summer?  If so, you are in luck!  Check out what you missed through our online videos'!

Click on any and/or all of the following three (3) videos' to purchase and watch from the convenience of your office:

Federal Practice: Local eDiscovery Rules and Default Standards in Tennessee

Federal Practice: Revisions to the Federal rules of Civil Procedure

Federal Practice: Developments in Federal Evidence 

 

Other TBA Federal Law Section CLE Video's

Updates in Retaliatory Discharge

By: Erik Fuqua[1]

Last June, the United States Supreme Court decided defined the term “supervisor” for the purposes of Title VII liability in Vance v. Ball State Univ., 133 S. Ct. 2434 (2013). In the months since Vance was decided, the District Courts and Circuit Courts have had several opportunities to apply Vance, shedding light on the extent of Vance’s impact on employment litigation in the federal courts.

A. Vance itself

The issue in Vance was, “Who qualifies as a ‘supervisor’ in a case in which an employee asserts a Title VII claim for workplace harassment.” 133 S. Ct. at 2439. The Court explained the importance of the supervisor label as follows:

Under Title VII, an employer’s liability for such harassment may depend on the status of the harasser. If the harassing employee is the victim’s co-worker, the employer is liable only if it was negligent in controlling working conditions. In cases in which the harasser is a “supervisor,” however, different rules apply. If the supervisor’s harassment culminates in a tangible employment action, the employer is strictly liable. But if no tangible employment action is taken, the employer may escape liability by establishing, as an affirmative defense, that (1) the employer exercised reasonable care to prevent and correct any harassing behavior and (2) that the plaintiff unreasonably failed to take advantage of the preventive or corrective opportunities that the employer provided.

Id.Maetta Vance began working for Ball State University (BSU) in 1989 and continued working there throughout the time period at issue in the lawsuit. Id. In 2005 and 2006, Ms. Vance filed various internal complaints with BSU as well as charges with the Equal Employment Opportunity Commission (EEOC). Id. These complaints and charges alleged racial harassment and discrimination, and many of them pertained to interactions with Saundra Davis, a fellow BSU employee. Id. While the precise nature and scope of Davis’ duties was heavily disputed throughout the litigation, the parties agreed that “Davis did not have the power to hire, fire, demote, promote, transfer, or discipline Vance.” Id. Vance then filed her lawsuit in 2006 in the United States District Court for the Southern District of Indiana, claiming that she had been subjected to a racially hostile work environment in violation of Title VII. Id. at 2440. She alleged in her complaint that Davis was her supervisor and that BSU was liable for Davis’ creation of a racially hostile work environment. Id. However, the District Court granted summary judgment for BSU, explaining that BSU could not be held vicariously liable for Davis’ alleged racial harassment because Davis could not “hire, fire, demote, promote, transfer, or discipline” Vance and therefore was not her supervisor for the purposes of Title VII. Id. The Seventh Circuit affirmed, holding that supervisor status requires the power to hire, fire, demote, promote, transfer, or discipline an employee. Id.

The Court noted the split of authority among the Circuit Courts as to the definition of the term “supervisor.” Courts such as the Seventh Circuit has held that an employee is not a supervisor unless he or she has the power to hire, fire, demote, promote, transfer, or discipline the victim. Id. at 2443. Other courts had taken a more open-ended approach by tying supervisor status to the ability to exercise significant direction over another’s daily work. Id. This more open-ended approach was the position advocated by the EEOC’s Enforcement Guidance. Id. The Court sided with the Seventh Circuit approach, holding that “an employer may be vicariously liable for an employee's unlawful harassment only when the employer has empowered that employee to take tangible employment actions against the victim.’ Id.

The Court stressed the ease with which the tangible employment action standard could be applied. It noted that this standard is “easily workable” and capable of being “applied without undue difficulty at both the summary judgment stage and at trial.” Id. It noted that the other standard would more frequently “frustrate judges and confound jurors.” Id. Writing for the majority, Justice Alito predicted,

Under the definition of “supervisor” that we adopt today, the question of supervisor status, when contested, can very often be resolved as a matter of law before trial. The elimination of this issue from the trial will focus the efforts of the parties, who will be able to present their cases in a way that conforms to the framework that the jury will apply. The plaintiff will know whether he or she must prove that the employer was negligent or whether the employer will have the burden of proving the elements of the Ellerth/Faragher affirmative defense. Perhaps even more important, the work of the jury, which is inevitably complicated in employment discrimination cases, will be simplified. The jurors can be given preliminary instructions that allow them to understand, as the evidence comes in, how each item of proof fits into the framework that they will ultimately be required to apply. And even where the issue of supervisor status cannot be eliminated from the trial (because there are genuine factual disputes about an alleged harasser’s authority to take tangible employment actions), this preliminary question is relatively straightforward.

Id.at 2450. Finally, responding to the plaintiff’s argument that this standard would encourage employers to attempt to insulate themselves from liability for workplace harassment by empowering only a handful of individuals to take tangible employment actions, the Court explained,

If an employer does attempt to confine decisionmaking power to a small number of individuals, those individuals will have a limited ability to exercise independent discretion when making decisions and will likely rely on other workers who actually interact with the affected employee…Under those circumstances, the employer may be held to have effectively delegated the power to take tangible employment actions to the employees on whose recommendations it relies.

Id.at 2452. Thus, despite the narrow definition of supervisor given by the Court, this final “effectively delegated” argument has given some plaintiffs a handhold in cases where the bad actor does not necessarily fit the narrow supervisor definition.

B. Application of Vance to defeat supervisor liability

King v. North Carolina Dept. of Public Safety

King v. North Carolina Dept. of Public Safety has a helpful analysis of the application of Vance, and it lends credence to Justice Alito’s prediction that “the question of supervisor status, when contested, can very often be resolved as a matter of law before trial.” In King, a former correctional officer claimed that she had been subjected to a hostile work environment due to the alleged sexual advances of a correction sergeant. See No. 5:12-CV-152-F, 2014 WL 69601, at *1 (E.D.N.C. Jan. 8, 2014). During the relevant time period, the plaintiff was assigned to the Operations Unit at the North Carolina Correctional Institution for Women (NCCIW). Id. at *5. As part of this unit, the plaintiff had an assigned shift time but rotated to various positions within the NCCIW based on the facility’s needs. Id. Plaintiff reported to two sergeants, who in turn reported to lieutenants. Id. The lieutenants reported to a captain, who in turn reported to an assistant superintendent. Id. One of these sergeants to whom the plaintiff reported was Correction Sergeant Gardner, the person to whom the plaintiff’s sexual advances allegations applied. Id.

In its Motion for Summary Judgment, the defendant challenged plaintiff’s claim that Sergeant Gardner’s alleged conduct was imputable to the defendant. Id. at *11. Whether the conduct was imputable to her employer was one of the elements the plaintiff had to prove to support her hostile work environment claim. Id. The court acknowledged that the standard under which an employer may be held liable in this situation depends on whether the alleged harasser was a supervisor or merely a co-worker. Id. The court began its analysis with this issue. Id. at *12. In doing so, it turned to Vance, noting that an employee is a supervisor, “only when the employer has empowered that employee to take tangible employment actions against the victim.” Id. (citing Vance, 133 S. Ct. at 2434).

The plaintiff put forth three pieces of evidence in support of her contention that Sergeant Gardner was her supervisor within the meaning of Title VII:

1. Warden Bianca Harris’ affidavit stating that the plaintiff was under the “partial supervision” of Gardner when she was working on the OPS unit;

2. An organization chart, attached to Harris’ affidavit, showing that correctional officers reported to sergeants; and

3. The defendant’s sexual harassment policy, which provides a “warning” to “supervisory level employees.”

Despite this evidence, the court concluded, as a matter of law, that Sergeant Gardner was not the plaintiff’s supervisor for the purposes of a Title VII harassment claim, noting that none of the plaintiff’s evidence showed that Sergeant Gardner was empowered by the defendant to take tangible employment actions against the plaintiff. Id. at *12.

With regard to Warden Harris’ affidavit, the court noted Vance’s clarification that an employer’s colloquial use of the term “supervisor” is not controlling for purposes of Title VII. Id. Nowhere in the affidavit did the Warden state that as part of being the plaintiff’s supervisor, Sergeant Gardner has the authority to hire, fire, promote, or reassign the plaintiff. Id. In fact, in her affidavit, the Warden specifically stated that while Gardner would be responsible for supervising the plaintiff’s “day-to-day activities when she was assigned to a post falling under his supervision,” he did not have “broader management responsibilities” with regards to her supervision “such as making her post assignments, shift assignments, issuing written warnings or other adverse employment action.” Id. With regard to the organization chart showing that correctional officers report to sergeants, the court explained that, at most, the chart suggests that Sergeant Gardner was responsible for merely supervising the plaintiff’s daily activities. Id. at 13. Finally, the “warning” in the defendant’s sexual harassment policy stated that

Any individual who is or reasonably appears to be in a position of workplace authority or control over another may be held to be a supervisor for purposes of determining liability for harassment or discrimination, (e.g. correctional sergeants over correctional officers).

Id.The court explained that this language was merely a summarization of the Fourth Circuit’s pre-Vance law as to who could be considered a supervisor under Title VII. Id. Therefore, the court determined that the warning did not constitute evidence as to what tangible employment actions, if any, Sergeant Gardner was empowered to take against the plaintiff. Id.

Nevertheless, while the court concluded, as a matter of law, that Sergeant Gardner was not the plaintiff’s supervisor within the meaning of Title VII, it denied the defendant’s Motion for Summary Judgment on the plaintiff’s Title VII hostile work environment claim on the grounds that the plaintiff had presented sufficient evidence under the co-worker standard to survive summary judgment. Id. at 14. Thus, while Vance did not dispose of the case entirely, it did allow the parties and the court to narrow the issues for trial. As a final note, the plaintiff’s evidence likely would have been sufficient to survive summary judgment under the Fourth Circuit’s pre-Vance case law and under the Vance dissent’s proposal of tying supervisor status to the ability to exercise significant direction over another’s daily work.

O’Connell v. Peppino’s Catering Co., LLC

O’Connell v. Peppino’s Catering Co., LLC is a helpful example of a case where a plaintiff has attempted to use the “effectively delegated” argument to survive summary judgment. In O’Connell, the plaintiff worked for Peppino’s in various capacities from January 2010 until May 2012. See No. 1:13–CV–384, 2014 WL 794657, at *1 (W.D. Mich. Feb. 27, 2014). In her complaint, the plaintiff alleged that on two occasions in January 2012, while she was working as catering coordinator, she was subjected to sexual harassment by Nick Marino, the Head Chef for Peppino’s Catering. Id. She further claimed that Marino was her immediate supervisor. Id. The plaintiff asserted numerous claims against the defendants, including claims for sexual harassment under Title VII and Michigan state law. Id.

In its Motion for Summary Judgment Defendant Peppino’s argued that it could not be held vicariously liable for any alleged harassment by Marino because Marino was not a supervisor. Id. at *5. Applying Vance, the court held that Marino was not empowered to take tangible employment actions against the plaintiff or to effect a significant change in her employment status. Id. at *6. Peppino’s presented evidence that Marino was merely a part-time consulting chef for its downtown restaurant and the catering company, that he reported to Peppino’s owner and director of operations, and that he did not have authority to fire employees. Id. at 5. Nevertheless, the plaintiff argued that Peppino’s effectively delegated the power to take tangible employment actions to Marino. Id. at 6. Specifically, the plaintiff argued that neither the owner nor the director of operations attended the catering events and that Marino was the head chef of the catering events. Id. She also argued that Marino had a history of making recommendations on hiring and firing that were followed by Peppino’s owner. Id. The court refused to find that Peppino’s had effectively delegated to Marino the power to take tangible employment action with respect to the plaintiff. Id. In so holding, the court found that the unrebutted evidence reflected that Peppino’s director of operations worked daily with the plaintiff at the office to discuss issues relating to food, volume, and invoicing for catering events  and that he received input on the plaintiff’s performance at catering events not only from Marino, but also from the catering clients. Id. The court explained that the evidence did not support a finding that Peppino’s had such limited interaction with the plaintiff that it had to rely on Marino and effectively delegate to Marino the power to take tangible employment action with respect to the plaintiff. Id.

Despite finding that Marino was not the plaintiff’s supervisor for the purposes of Title VII, the court allows the case to proceed in regards to co-worker liability, much like the court in King.

C. Cases where courts still recognized a fact question despite Vance

Lindquist v. Tanner

In Lindquist v. Tanner, the court held that a fact question remained as to an individual’s supervisory status despite the defendant’s arguing and labeling to the contrary. See No. 2:11–3181–RMG, 2013 WL 4441946, at *3 (D.S.C. Aug. 15, 2013). In Lindquist, the plaintiff sued her employer, the Charleston County Parks and Recreation Commission, and Ray Tanner, a Commission employee, asserting several state law causes of action and federal employment discrimination claims under Title VII. Id. at *1. The Commission filed a Motion for Summary Judgment arguing, among other things, that Tanner was not a supervisor under Title VII and relying on Vance. Id. at *2—3. Specifically, the Commission argued that Tanner was not the plaintiff’s direct supervisor under the Commission’s chain of command. Id. at *3.

In beginning its analysis, the court explained,

Though in Vance the Supreme Court did reject a “more open-ended approach…which ties supervisor status to the ability to exercise significant direction over another's daily work,” it nonetheless recognized that supervisor status is not conferred solely by formal designations but, rather, can also come about where an alleged harasser amounts to a de facto supervisor based on the “tangible actions” that individual has in fact been empowered by the employer to take “against the victim.”

Id.In recognized that a fact question existed as to Tanner’s supervisory status, the court pointed to the following facts: (1) when it came to hiring for the position ultimately filled by Plaintiff, it was Tanner who actively sought Plaintiff's name because he thought she might be a good fit for the job, (2) statements from multiple sources that Tanner said he “owned” the plaintiff, where one listener interpreted this statement to mean that Tanner would decide whether the plaintiff would go full time or not work out, and (3) Tanner was the most senior employee on-site, and could therefore at times direct the plaintiff’s work activities even though she technically fell under the supervision of an off-site employee. Id. at *4. From these facts, the court concluded that it would be reasonable to infer that Tanner would have had significant, possibly determinative, say over the plaintiff’s performance reviews, hours, and potential for promotion. Id. Although the court recognized that these facts were not conclusive as to Tanner’s supervisory status, it found that these facts render reasonable a finding that Tanner was delegated authority allowing him to make effectively determinative decisions with respect to Plaintiff’s hiring, promotion and discipline, and firing. Id.

Terry v. Laurel Oaks Behavioral Health Center, Inc.

In Terry v. Laurel Oaks Behavioral Health Center, Inc., the court needed very little to find the existence of a fact question as to an individual’s supervisory status. Among other claims, the plaintiff in Terry alleged that she was subjected to a sexually hostile work environment in violation of Title VII. No. 1:12–CV–905–WKW, 2014 WL 805477, at *1 (M.D. Ala. Feb. 28, 2014). The plaintiff worked for the defendant as a mental health technician for several years beginning in February 2004. Id. at *2. She transferred to the DYS unit in March or April 2010 and alleged that her new unit director, Mr. Robinson, began sexually harassing her a few months into her transfer. Id.

On Motion for Summary Judgment, the defendant disputed that the unit director was the plaintiff’s supervisor within the meaning of Title VII. Despite Mr. Robinson’s title of unit director, the defendant argued that there was no dispute that he could not hire, fire, fail to promote, or reassign significantly different responsibilities to or make decisions causing a significant change in benefits to employees. Id. at *10. While the defendant admitted that Mr. Robinson issued a counseling form to the plaintiff as a disciplinary action, it presented evidence that Mr. Robinson and all unit directors had to consult with the human resources department prior to taking disciplinary actions against an employee. Id. On the other hand, the plaintiff offered little analysis and merely argued that it was undisputed that she was harassed by her supervisor. Id. Despite the lack of evidence or analysis presented by the plaintiff as to Mr. Robinson’s supervisory status, the court found significant weight in the Position Description of a DYS Unit Director signed by Mr. Robinson and took issue with the defendant’s failure to offer an explanation as to the language of the job description. Id. at *11. Specifically, the position description included in the enumeration of a unit director’s duties that he or she will “conduct interviews, hire, terminate and coordinate corrective action processes.” Id. The court found that this job description contradicted the defendant’s evidence that unit directors have no authority in personnel matters such as hiring and firing and held that it was sufficient evidence to create a genuine dispute of material fact as to whether Mr. Robinson qualified as a Title VII supervisor. Id. While the court granted the defendant summary judgment on other grounds, Terry helps shed light on the types of evidence courts will find important in conducting the Vance analysis.

In Daimler AG v. Bauman, 134 S. Ct. 746 (2014), decided on January 14, 2014, the U.S. Supreme Court severely limited the states in which a corporation can be subject to general personal jurisdiction. Now a foreign corporation is subject to general jurisdiction only in a state in which it has sufficient contacts, compared to its contacts with all other states, that the forum state is equivalent to its principal place of business. A domestic corporation is subject to general personal jurisdiction in only two places: its state of incorporation and the state in which it has its headquarters.

The majority opinion was authored by Justice Ginsburg and joined by seven other Justices. Justice Sotomayor concurred in the judgment on different grounds. The case arose when a number of Argentine citizens sued Daimler AG, a German corporation headquartered in Germany, in California state court. The plaintiffs alleged that Daimler AG, which operated factories in Argentina, connived with the Government of Argentina to kidnap, torture, and kill their family members during the “Dirty War” of the late 1970's. The plaintiffs brought claims under both state and federal law. Daimler AG, the only defendant, moved to dismiss for lack of personal jurisdiction.

Because none of the alleged wrongful conduct had occurred in California, the plaintiffs invoked general jurisdiction over Daimler, pointing to the substantial contacts of Daimler’s U.S. subsidiary, Mercedes-Benz USA (MBUSA), with California.  MBUSA is a Delaware corporation with its principal place of business in New Jersey. However, it has  “multiple California-based facilities, including a regional office in Costa Mesa, a Vehicle Preparation Center in Carson, and a Classic Center in Irvine.” MBUSA is “the largest supplier of luxury vehicles to the California market,” with its sales accounting for “2.4% of Daimler’s worldwide sales.”¹

The District Court dismissed the Complaint, holding that the contacts of MBUSA should not be imputed to Daimler AG and that Daimler AG’s own contacts with California were insufficient to grant general jurisdiction. The Ninth Circuit panel, after initially affirming the District Court, reversed itself and reversed the dismissal. The Ninth Circuit held that MBUSA’s contacts, which the parties conceded were sufficient to grant general jurisdiction over MBUSA, should be imputed to the parent compnay, Daimler AG.

The U.S. Supreme Court granted cert on the issue of whether the Ninth Circuit correctly imputed MBUSA’s contacts to Daimler AG. The Court addressed this question by holding that MBUSA’s contacts should not be imputed to Daimler AG, but went on to exceed the scope of the issue presented by holding that “[e]ven if we were to assume that MBUSA is at home in California, and further to assume MBUSA's contacts are imputable to Daimler, there would still be no basis to subject Daimler to general jurisdiction in California, for Daimler's slim contacts with the State hardly render it at home there.”²                           

By invoking the “at home” test, Justice Ginsburg refers to the holding in Goodyear Dunlop Tires Operations S.A. v. Brown, 131 S. Ct. 2846 (2011) that created a new test for general jurisdiction – the “essentially at home” test. There, the Supreme Court held that a parent corporation’s contacts with the forum state could not be imputed to foreign subsidiaries for the purpose of granting general personal jurisdiction. Daimler AG presented the converse situation, in which a subsidiary’s contacts were sought to be imputed to the foreign parent.

Scholars had argued about the meaning of Goodyear’s “essentially at home” test, with some arguing that the test merely restated the traditional “continuous and systematic contacts” test for general jurisdiction, and others contending that the test was more revolutionary, limiting general jurisdiction to a corporation’s state of incorporation or principal place of business.

Daimler AG resolved that argument in favor of the more restrictive view of general jurisdiction. In a departure from what law students have learned for generations, the Supreme Court held that the plaintiffs’ argument that Daimler is subject to general jurisdiction “in every State in which a corporation ‘engages in a substantial, continuous, and systematic course of business’ . . . is unacceptably grasping.”³ The Court insists that the Goodyear test controls: “the inquiry under Goodyear is not whether a foreign corporation's in-forum contacts can be said to be in some sense ‘continuous and systematic,’ it is whether that corporation's ‘affiliations with the State are so ‘continuous and systematic’ as to render [it] essentially at home in the forum State.’”⁴ Applying the Goodyear test to the case at bar, the Court finds that “neither Daimler nor MBUSA is incorporated in California, nor does either entity have its principal place of business there.”⁵  Thus, the Court’s use of the “essentially at home” test demonstrates that a corporation is subject to general jurisdiction only in those two states.

The Court’s rationale for this restrictive view of general jurisdiction is as follows:

If Daimler's California activities sufficed to allow adjudication of this Argentina-rooted case in California, the same global reach would presumably be available in every other State in which MBUSA's sales are sizable. Such exorbitant exercises of all-purpose jurisdiction would scarcely permit out-of-state defendants “to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.”⁶

Justice Sotomayor concurred in the judgment on the ground that it would be unreasonable for the California court to exercise general personal jurisdiction over Daimler AG. She would leave intact the “continuous and systematic contacts” test, even if it would result in general jurisdiction in several (or all) states. She believed that the Argentine citizenship of the plaintiffs and the foreign setting of the wrongful conduct were relevant to reasonableness, but did not warrant adopting a totally new restrictive test for general jurisdiction.

Justice Sotomayor identifies four specific ways in which the decision will lead to “grave injustice.”⁷  First, the decision impugns state sovereignty by debarring states from adjudicating cases in which the defendant has substantial contacts in the state..⁸ Second, the decision discriminates against small businesses who have significant contacts with only one state and would therefore be subject to general jurisdiction there whereas a large corporation with significant contacts with many states would not.⁹ Third, the decision restricting general jurisdiction over corporations is inconsistent with the rule that an individual can be subject to general jurisdiction on the basis of a one-time visit.¹⁰ Finally, “the ultimate effect of the majority’s approach will be to shift the risk of loss from multinational corporations to the individuals harmed by their actions.”¹¹

The upshot of Daimler AG is that giant multi-national corporations are “too big for personal jurisdiction.”¹² Of course, both foreign and domestic corporations can still be subject to specific personal jurisdiction if they have minimum contacts with the forum state. However, if you represent a foreign corporation that has continuous and systematic contacts with a number of states, it will not be subject to general jurisdiction in any of them. If you represent a domestic corporation, it will be subject to general jurisdiction only in its state of incorporation and its principal place of business, which the Daimler AG Court identified as its “nerve center.”¹³

Conversely, if you represent a plaintiff who needs to sue a corporation in a state other than the one in which the harmful conduct occurred, you will have a limited choice of fora. Here are a few hypotheticals illustrating this new restriction on general jurisdiction. Justice Sotomayor points out that a Michigan resident who retired from GM and moved to Florida could previously sue GM in Florida over a dispute regarding her retirement benefits. Now, however, because Florida is neither GM’s state or incorporation or principal place of business, the retiree will have to sue in one of those states.¹⁴ Similarly, a dog owner living in New Mexico whose dog was poisoned by the melanine in a major manufacturer’s dog food would not be able to sue the major manufacturer in Tennessee if the dog owner moved to Tennessee from New Mexico before filing suit. The dog owner would either have to return to New Mexico to achieve specific jurisdiction or would have to sue in the manufacturer’s state of incorporation or headquarters state, even if the manufacturer did millions of dollars in business in Tennessee.

The Court’s severe restriction on general personal jurisdiction over corporations will change the way lawsuits are brought and the way corporations respond. Plaintiffs will be forced to choose specific jurisdiction even when general jurisdiction would be more efficient. Corporate defendants will have a personal jurisdiction defense any time they are sued in a state other than the state where the wrongful conduct occurred, the state of their incorporation, or their headquarters state.¹⁵

Dear Colleagues:

We hope you have had a chance to review the “Legal Handbook for Tennessee Seniors,” which was published by the Tennessee Bar Association (TBA) earlier this year and has already won prestigious state and national awards, as well as acclaim from groups and individuals in the community. More importantly, I hope you have had the opportunity to share it with your clients and those in your community who could benefit from the information.

The response to the Handbook has been tremendous. Since the launch, the TBA has fulfilled over 1,500 individual requests for the Handbook, in printed or electronic form. We have had over 8,000 visits to the TBA website, including downloads of electronic copies. Thousands of seniors, caretakers and professionals have attended a presentation or received the Handbook through outreach by TBA members. The demand continues to grow.

We provided a single, hard copy of the Handbook to seniors and organizations that serve seniors, free of charge upon their request, while our printed supplies lasted. The Handbook itself is over 300 pages and the cost of printing and mailing for one Handbook is approximately $15. We have covered costs to date through the Public Education budget at the TBA. Because of the incredible demand for the publication, the budget for publishing has now been exhausted. Although we are seeking grants from other organizations, those decisions take time. We feel very strongly that it is important to continue to offer a printed handbook to any senior or service provider who requests it, as so many seniors are not comfortable with accessing and/or efficiently using the materials online.  

Accordingly, we are asking for your help to defray the cost of printing and mailing. Individuals and firms can make contributions to the Tennessee Legal Community Foundation, which is a 501(c)(3) charitable organization, to assist with those costs. Your tax-deductible contribution will be recognized in the online version of the Handbook, as well as in upcoming printed versions.

We would also like to remind you that as a TBA Member, you are welcome to brand the covers of the Handbook with your firm’s logo and contact information and print and distribute it to clients, potential clients and others in the community that would benefit from it. Not only will you be contributing to a very worthy cause, your donation or assistance with promotion of the handbook will also serve as an excellent advertising opportunity for you and your firm.

To make a contribution or for more information about ways your firm can brand and promote the Handbook, please contact TBA Sections & Committees Coordinator Jenny Jones at jjones@tnbar.org or (615) 383-7421 or complete and return the enclosed form. We are also in the process of updating the Handbook for 2016 and welcome additional volunteers to help with revisions and outreach. 

Our goal is to continue to provide this very valuable resource to our senior adults, those approaching retirement and those who care for our seniors without charge. We appreciate your assistance in serving our Tennessee senior adult population.

Many thanks,

Angelia M. Nystrom                       

TBA Estate Planning & Probate Section Chair

 

Cynthia R. Wyrick                                           

Immediate Past TBA President

 

CLICK HERE FOR A LEGAL HANDBOOK SUPPORT FORM

November 3, 2014 Webcast

Practical Tips for Mediating Family Law Cases

Description

This session will cover the following topics to provide practical tips for mediating family law cases:

1. Effective use of joint meeting
2. Managing participants’ expectations (earning their trust)
3. Balance with letting litigants blow off steam while focusing on obtaining a settlement
4. Step parent/”significant others” involvement in post divorce mediations

Click here to register today!

_________________________

November 5, 2014 Live CLE Program

Retooling Mediating Skills for Family Lawyers

Speakers/Producers

by Mark E. Sullivan*

When you’re doing a military divorce case and it comes time to deal with the military retirement benefits, you should know in advance what documents need to be reviewed.  This rule applies whether you’re the attorney for the servicemember (SM) or retiree, or you represent the spouse or former spouse.  You need to have a certain number of “docs” in order to understand the process, the current or prospective retired pay of the member or retiree, and what benefits are available or at risk for the spouse/former spouse.

Active Duty and Reserve Service

When the individual (“John Doe” in this example) is currently on active duty, you’ll need the Thrift Savings Plan statement (see below) and the Leave and Earnings Statement, or LES.  The latter provides information on the pay grade of John, his date of initial entry into service, his current pay, his Social Security number and other data which will help in preparation of a military pension division order.  The specifics which the LES gives include the following:

1)    NAME: The member’s name in last, first, middle initial format.

2)    SOC. SEC. NO.: The member’s Social Security Number.

3)    GRADE: The member’s current pay grade.

4)    PAY DATE: The date the member entered active duty for pay purposes in YYMMDD format. This is synonymous with the Pay Entry Base Date (PEBD).

5)    YRS SVC: In two digits, the actual years of creditable service.

6)    ETS: The Expiration Term of Service in YYMMDD format. This is synonymous with the Expiration of Active Obligated Service (EAOS).

The LES is issued electronically twice a month to active military personnel.  The first LES shows all pay and entitlements for the month.  The second LES of the month will not have all required information; if the SM elects to be paid twice a month, the second LES will only show the amount paid along with the basic information.  Practitioners should request more than just one LES to ensure they receive all the information.

RC personnel (the RC stands for Reserve Component, which means National Guard and Reserve) will have an annual form called RPAS, or Retirement Points Annual Statement, which shows how many retirement points they have accumulated in that year and in previous years.  The RPAS should, but does not always, reflect periods spent on active duty, both annual training, and prior active duty service.  Practitioners sometimes get confused when SMs have service in both the active and reserve component.  SMs can obtain this from their branch of service – it’s not a public record.  You can also get valuable information on what rank the RC member is, when he or she entered military service, and what the monthly pay is for periods of active duty (such as the Annual Training that each RC member serves once a year) by obtaining his or her most recent LES.

Active-Duty Retirement

If John Doe has already retired from active duty from the armed forces (Army, Navy, Air Force, Marine Corps or Coast Guard), here are the documents which should be available for analysis.  They may be obtained either from the retiree or from the federal government:

1)    Letter from DFAS showing expected amount of pay and calculations

2)    All Retiree Account Statements (RAS) issued since date of retirement

3)    Retirement orders

4)    All disability rating decision letters from the Department of Veterans Affairs (VA)

5)    DD Form 214, (Member Service Record, issued upon discharge).  If SM was on active duty in the National Guard, he or she will have an NGB 22, not a DD Form 214

6)    Survivor Benefit Plan (SBP) Election Statement for Former Spouse Coverage, DD Form 2656-1

7)    Data of Payment for Retired Personnel, DD Form 2656

8)    Forms 1099-R

9)    Thrift Savings Plan statements

Letter from DFAS.  Several months before John Doe retires, he’ll get a letter from the retired pay center that shows him exactly how his retired pay is computed, how many years of creditable service were counted, and what amounts are deducted from his total retired pay (such as taxes and SBP premium).  Don’t expect to find VA waiver information here; John hasn’t gotten that if he has not yet retired.

Retiree Account Statement.  This is the retiree’s “pay statement.”  It is issued electronically and a new one is generated on a monthly basis, and always when there is any change in regard to one’s retired pay – whether it’s reduced tax withholding, a change in allotments, or an increase in the VA waiver.  Every retiree can access the RAS by using the secure website of the retired pay center.  For DFAS (Defense Finance and Accounting Service), which handles all of the armed services except the Coast Guard, the “MYPAY” secure website address is https://mypay.dfas.mil.  Signing up for service is easy.  Once John Doe is signed up and is looking at the web page, all that is needed is his login ID and password.  It takes less than a minute to log in, select the form involved, click on “Printer-Friendly Version,” and then print it.  See ATCH 1 for an example.

You can find on the RAS the total amount of monthly retired pay, any mandatory deductions from it (e.g., VA waiver, Survivor Benefit Plan premium) to arrive at taxable retired pay, and the taxes which are withheld from retired pay.  It will also show the type of SBP election and the birthdate of the beneficiary.  The RAS also shows voluntary allotments and any waiver of retired pay that exists due to receipt of disability compensation from the Department of Veterans Affairs.  If the individual cannot or will not produce it, then obtain it from the retired pay center using a release signed by the individual (see ATCH 2 below) or, if he’s uncooperative, a court order or subpoena signed by a judge.

Retirement Orders.  This is a document, usually one sheet of paper, which specifies the facts regarding retirement.  It might state, for example, that Major John Q. Doe, SSN 123-45-6789, was retired from the U.S. Army on May 31, 2012.  Retirements always take place on the last day of the month, and the first payment arrives a little over a month later – in this case, on July 1, 2012.  That’s because you have to survive for the month in order to be entitled to retired pay for it.  This document is helpful in tracking down retroactive payments.  If the individual retired on 5/31/12 and started receiving retired pay on 7/1/12, then you will be able to determine how many months (or years) he’s been collecting it without sharing any portion with your client, Mrs. John Doe!

Disability Rating Decision Letters.  Upon retirement, John Doe can visit the nearest VA hospital for a physical.  This may result in a notification that he has one or more service-connected disabilities (wounds, illnesses or other medical conditions).  The notification is in the form of a letter.  The decision letter from the regional office of the Department of Veterans Affairs will tell you what his disability rating is.  If it’s less than 50%, then there’s a dollar-for-dollar reduction in John Doe’s retired pay, which means a similar lowering of the share apportioned to Mrs. Doe by the court.  This will show up on the RAS as a “VA Waiver,” which is entered as a deduction from John Doe’s total retired pay before you get to “taxable income.”

DD Form 214.  This is the discharge certificate for John Doe.  It shows all dates of his service for his entire career.

DD Form 2656-1.  This form is used for election of coverage under the Survivor Benefit Plan (SBP), and it shows what the SM/retiree has chosen.  If the divorce is about to occur or has already been granted, this should reflect former spouse coverage so as to protect the flow of funds for Jane Doe, the ex-wife, after the death of the SM/retiree.  If John Doe dies first, Jane can receive 55% of his retired pay for the rest of her life if she has “former spouse coverage” and does not remarry before age 55.  A former spouse election must be made by John on this form and it must be sent to the retired pay center within one year of the divorce.

DD Form 2656.  This form covers the information which the retired pay center, usually DFAS, needs to process continuous payments of retired pay and former spouse payments from the pension.

Form 1099-R.  This is the retiree’s equivalent of a W-2 form.  The retired pay center issues this at the end of January of each year, covering retired pay for the previous year.  John can get this from the secure DFAS website.  If he’s not signed up, it comes by mail (just like a W-2 form).

Thrift Savings Plan (TSP) statements.  This tax-deferred retirement account is similar to a 401(k) plan.  Individuals who participate get a “Thrift Savings Plan Participant Statement,” which can either be an Annual Account Summary or a Quarterly Account Summary.  On the bottom of the second page on the right side will be found “Form TSP-8” and you can tell if it’s a uniformed services TSP statement (i.e., a military TSP as opposed to a federal civil service TSP statement) by checking on the first page under the account number and individual’s date of birth.  You should find “Retirement Coverage: Active Duty.”

Guard or Reserve Retirement

When John Doe has served in the National Guard or the Reserves, then you’re dealing with an “RC retirement.”  As mentioned above, RC stands for “Reserve Component,” which means Guard or Reserve service leading to retired pay.

Be careful in using the verb “retire” when referring to RC personnel, since it can have two meanings.  One meaning is when John begins to receive retired pay.  This is “pay status” for him; it’s usually at age 60.  Another meaning is the point in time when John stops drilling and applies for retirement.  Once this occurs, he’s in what is called the “gray area,” since the ID cards for these former RC personnel used to be gray.

If John Doe is or was an RC member, then you have a different list to cover.  Here are the documents which should be available.  You can get them either from John Doe or from the federal government:

1)    All Retirement Points Annual Statements (RPAS)

2)    Notice of Eligibility (NOE or “20-Year Letter”), sent upon attainment of 20 creditable years of Guard or Reserve service

3)    Reserve Component Survivor Benefit Plan (RCSBP) Election Certificate, DD Form 2656-5

4)    Application for retirement

5)    Retirement orders

6)    All disability rating decision letters from the Department of Veterans Affairs (VA)

7)    Thrift Savings Plan statements

RPAS statements- These are issued once a year by the Reserves.  They show how many AD (active duty), ADT (active duty for training) and IDT (inactive duty for training) points have been accumulated for the year by John Doe.  For an explanation on how this works (which is way beyond the scope of this article!), go to: https://www.hrc.army.mil/tagd/retirement%20points%20accounting%20system%20rpas

or visit the Human Resources Command (HRC) of the Army at www.hrc.army.mil, type “AR 140-185” into the search window, then click on “Retirement Points Accounting System.”  If you want to estimate John Doe’s retired pay based on the number of points he acquired (and other factors), go to the above HRC website and type into the search window “retirement points calculator.”

HRC no longer mails the annual or revised AHRC Form 249-2-E to Reserve soldiers.  Soldiers must visit the “My Record Portal” at the secure HRC website to view and print their own personal copy of the annual points statement, AHRC Form 249-2-E.  For additional assistance, soldiers may contact the Human Resource Service Center at 1-888-276-9472.  HRC does not maintain a record of National Guard Retirement points.  NG soldiers maintain their own personal copy of NGB 23, and they submit it along with their retired pay packet when applying for retired pay to ensure that the NGB 23 is placed in their records.

AR 140-185 governs the awarding and crediting of retirement points.  Additionally, Department of Defense Instructions 1215.7 and 1215.9, as well as Department of Defense Financial Management Regulation Volume 7A, Chapter 1, and AR 140-1 provide retirement point regulatory guidance for the military services.

National Guard soldiers have their retirement points recorded in a separate retirement point accounting system.  Upon retirement, NG soldier points are not automatically fed into RPAS.  NGB Form 23 is used as a record of the NG duty performed by a soldier.  Before a former or retired member of the National Guard can start to draw retired pay, he or she must submit a retired pay certification packet (including a summary of all retirement points earned while in the NG) to the HRC Retired Pay Office.  Upon certification of retired pay, HRC forwards the certification to DFAS.

NOE-   The “20-Year Letter,” as this form letter is commonly called by those in the Guard or Reserve, signifies the milestone of 20 creditable years of service.  In addition, it requests a decision on what a married SM will do regarding a survivor annuity, known as the Survivor Benefit Plan (see below).

DD Form 2656-5- This form is where John Doe makes the decision on his survivor annuity.  There are three options for Survivor Benefit Plan coverage for married RC members: Option A - John can choose deferred decision (meaning he wants to wait until he attains pay status to decide); Option B - John can select deferred coverage (payments to Jane would start at “pay status,” usually age 60); or Option C - John can select immediate coverage.  The first two options require Jane Doe’s written consent.

Application for Retirement-   This is John’s request to stop drilling and be transferred to the Retired Reserve.  It means that he will no longer be accumulating points toward retirement.  Unless John decides to take a discharge (which is infrequent), which would mean that he’s not subject to recall and his pay grade and years of service are frozen, he’ll be paid – upon attainment of pay status – according to his pay grade at that time, not at the time he applies for retirement.

Retirement Orders- See above under “Active-Duty Retirement.”

Disability Rating Decision Letters- See above.

Thrift Savings Plan (TSP) statements- See above.

(Note: If John is already in pay status, then you would want to obtain the RAS and Form 1099-R, as with an active-duty retiree).

Concluding Comments

Forget your umbrella?  Don’t let the “paper tiger” rain on your parade!  All these papers can be your next “Excedrin headache!”  If you don’t do this type of case often, you should consider associating co-counsel or a consultant.  Sometimes the “sidekick” you hire will be a Guard or Reserve judge advocate; sometimes you’ll want to reach out to a military retiree who used to be a JAG officer.  Wherever you go, remember that the duty to obtain competent co-counsel is an ethical requirement.  A consultant for your next military case will:

·       Know the statutes (the Uniformed Services Former Spouses’ Protection Act, or USFSPA, found at 10 U.S.C. 1408; the Survivor Benefit Plan, found at 10 U.S.C. 1447-1455; and the numerous military retirement sections in the U.S. Code);

·       Understand the rules (the DODFMR, or Department of Defense Financial Management Regulation, and the parallel regulations for Coast Guard, Public Health Service and National Oceanographic and Atmospheric Administration, or NOAA);

·       Know the law in other states (some states have NO cases or statutes on such issues as who pays for SBP, what the SBP benefit level is, and division of accrued leave; knowing what other states are doing in these areas can provide useful guidance for your trial judge);

·       Have examples (samples of such documents as the Leave and Earnings Statement, the Retiree Account Statement or the TSP Quarterly Statement, so you can provide these to the other side when the opposing party professes ignorance about what document you’re talking about); and

·       Know the ropes (have contact points within DFAS and other federal agencies who can answer questions).

Retiree Account Statement

Privacy Account Release Form

________________________

*Mr. Sullivan is a retired Army Reserve JAG colonel.  He practices family law in Raleigh, North Carolina and is the author of The Military Divorce Handbook (Am. Bar Assn., 2^nd Ed. 2011) and many internet resources on military family law issues.  A Fellow of the American Academy of Matrimonial Lawyers, Mr. Sullivan has been a board-certified specialist in family law since 1989.  He works with attorneys and judges nationwide as a consultant and an expert witness on military divorce issues in drafting military pension division orders.  He can be reached at 919-832-8507 and mark.sullivan@ncfamilylaw.com.

by Mark E. Sullivan* and Amy M. Privette**

Military retirement benefits are not handled in the same manner as private pension plans, which are governed by ERISA (Employee Retirement Income Security Act).  Allocating and dividing military retirement benefits as part of a divorce case is not easy.  The best advice is to find someone “in the know” who can help you and your client navigate the minefield of military pension division, Survivor Benefit Plan (SBP) coverage, medical care before and after divorce, and other retirement benefits.  Still, for those bold enough to take on the challenge, here are some tips to help you get started:

1.     Get the docs!  There are numerous documents that you need to request from the servicemember (SM) to evaluate what retirement benefits are available.  This could include a Leave and Earnings Statement (for active duty members), Retirement Points Statement (for Reserve and Guard members), Retiree Account Statement (for retirees), SBP election forms, retirement orders and discharge papers, as well as Officer or Enlisted Record Briefs.

2.     Know the rules!  The division of military retired pay is authorized by the Uniformed Services Former Spouses’ Protection Act (USFSPA), 10 U.S.C. § 1408.  It is an enabling act which allows states to divide military retired pay but leaves the specifics of how to do it up to each state.  The Survivor Benefit Plan (SBP) is the survivor annuity program which allows the former spouse to continue receiving a stream of payments after the servicemember/retiree dies.  SBP is provided for under 10 U.S.C. § 1447 et seq.  Volume 7B of the Department of Defense Financial Management Regulation, DoD 7000.14-R (DoDFMR) expands upon the federal statutes to provide more detailed guidance as to the division of military retirement benefits.  See also 10 U.S.C. § 1408 (c)(4) for specific rules regarding which courts have jurisdiction to divide military retirements.

3.     Identify the system!  Active duty retirement occurs under one of 3 systems: a) Final retired pay b) High-3 c) CSB/Redux - http://militarypay.defense.gov/retirement/ad/01_whichsystem.html.  Reserve/National Guard retirements are based on retirement points, NOT time, and the servicemember must have at least 20 “good years” of service (50 points are required to have a good year) to be retirement-eligible.  Active duty retirements pay out immediately upon retirement whereas Reserve or Guard retirements generally do not pay out until the retiree reaches age 60.  The cost of providing SBP coverage to a former spouse can also differ, depending on whether it is an active-duty or reserve retirement.

4.     Use the right lingo!  SCRA – When the SM has not yet retired, the pension division order must state that the SM’S rights under the Servicemembers Civil Relief Act, 50 U.S.C. Appx. 501 et seq., have been honored.  DFAS is the retired pay center for Army, Navy, Air Force, Marine Corps (as well as Reserve units and Air and Army National Guard).  There are separate pay centers for retirees of the Coast Guard, Public Health Service, and National Oceanographic and Atmospheric Administration.  Disposable Retired Pay (DRP) is gross retired pay less any VA disability waiver, the premium for SBP (if coverage is for former spouse of this divorce), and any other money owed to Uncle Sam.  DRP (Disposable Retired Pay) is what the pay center divides, regardless of what the court order says.  COLAs (cost-of-living adjustments) are usually applied to retired pay in January and are automatically included in the share received by the former spouse unless the court order awards the spouse a flat dollar amount.  The pension is not a “fund,” so you cannot refer to the account balance or the part of the fund acquired during the marriage or vested at the date of divorce.  Use an MPDO (Military Pension Division Order) to divide the retirement benefits, not a QDRO, since this is not a “qualified plan” under federal law; it is a statutory retirement program.

5.     Choose wisely!  When the pension is based on retirement from active duty, there are four acceptable methods for dividing it:  a) fixed dollar amount; b) percentage; c) formula clause; and d) hypothetical award.  There are pro’s and cons for each method, so make sure you evaluate which would be best for your case.  A full explanation of the four methods can be found in the Attorney Instruction Guide available at the DFAS website:  http://www.dfas.mil/garnishment/usfspa/attorneyinstructions.html

6.     Don’t forget the SBP!  SBP is a unitary benefit and cannot be divided between a present and former spouse.  Without SBP, the stream of pension payments to the former spouse ceases upon the death of the servicemember/retiree.  The benefit paid out is 55% of the selected base amount.   The maximum base amount is the full retired paycheck; the minimum base amount is $300.  The cost for coverage is generally 6.5% of the selected base amount, paid upon retirement by deduction from the pension check.  If the former spouse predeceases the retiree, then the spouse’s share of the retired pay automatically reverts back to the retiree – at NO cost.  If the former spouse gets remarried before age 55, then her coverage under SBP is halted.

7.     Watch the clock!  There must be ten years of marriage overlapping ten years of military service for the former spouse to get pension payments directly from the pay center.  Even with an overlap of less than ten years, the former spouse is still eligible to claim a share of the retired pay, but the retiree will have to make the payments.  There are two deadlines for setting up SBP coverage for the former spouse.  When the SM makes the election, it must be done within one year of divorce; when the former spouse sends in a “deemed election,” it must be done within one year of the order requiring the other party to elect SBP coverage.

8.     Beware of disabilities!  Certain types of disability compensation can reduce the retired pay that is divisible with a former spouse.  The primary types of disability payments are military disability retired pay, VA disability compensation, and Combat-Related Special Compensation (CRSC).  The court cannot divide VA disability compensation (see 1989 Mansell decision by the U.S. Supreme Court), and only a small part of military disability retired pay is subject to pension division (although disability benefits ARE subject to consideration in support cases, in general).  When the military retiree has a VA disability rating of less than 50%, election of VA payments means a dollar-for-dollar reduction of retired pay; thus, the retired pay share for the former spouse gets reduced due to the unilateral action of retiree.  Courts and agreements often employ indemnification language to guard against this and to protect the property share awarded to a former spouse.

9.     (Don’t) Get a Life!  When representing the former spouse, don’t rely on Servicemembers Group Life Insurance to secure benefits; a 1981 Supreme Court decision says courts cannot enforce orders or agreements that require SGLI.  Ridgway v. Ridgway, 454 U.S. 46 (1981). 

10.  “Medic!”  If there have been 20 years of marriage overlapping 20 years of military service, then an un-remarried former spouse may qualify for full medical benefits as a 20/20/20 spouse.  For shorter term marriages, look in to CHCBP (Continued Health Care Benefit Program) as a means of providing health insurance coverage.

_________________________

*Mr. Sullivan is a retired Army Reserve JAG colonel.  He practices family law in Raleigh, North Carolina and is the author of The Military Divorce Handbook (Am. Bar Assn., 2^nd Ed. 2011) and many internet resources on military family law issues.  A Fellow of the American Academy of Matrimonial Lawyers, Mr. Sullivan has been a board-certified specialist in family law since 1989.  He works with attorneys and judges nationwide as a consultant and an expert witness on military divorce issues in drafting military pension division orders.  He can be reached at 919-832-8507 and mark.sullivan@ncfamilylaw.com.

**Amy Privette, a North Carolina State Bar Certified Paralegal, wrote this when employed by the Law Offices of Mark E. Sullivan, P.A., where her primary responsibility was family law, with a special focus in the area of military divorce and federal pension division issues.  Ms. Privette is now in law school at Regent University.