HEISNER v. HOLLAND, (S.D.Ill. 2002)

J. PHIL GILBERT, District Judge

This matter comes before the Court on the motion to dismiss (Doc. 6) filed by defendants Michael H. Holland, Marty D. Hudson, B.V. Hyler and Joseph P. Brennan (collectively, "Trustees"). They ask the Court to dismiss this case pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Plaintiff Lois Heisner ("Lois"), in her individual capacity and in her capacity as executor of the estate of Karl Kirwan Heisner ("Karl"), has responded to the motion (Doc. 8).

All parties agree on the essential facts of this case as pled in the complaint. In 1957, Karl married Carol Heisner ("Carol"). During their marriage, Karl participated in the United Mine Workers of America 1974 Pension Trust ("the Plan"). Carol and Karl divorced in 1988, and the Franklin County Circuit Court entered a "Judgment of Dissolution of Marriage" and a "Qualified Domestic Relations Order." The two orders conflict with each other as to the survivor benefit to which Carol was entitled under the Plan when Karl died.

Later in 1988, Karl married Lois. He was still married to Lois when he retired, began receiving pension benefits and died. After Karl's death, Lois attempted unsuccessfully to claim survivor benefits from the Plan. The Trustees rejected Lois's claim because the "Qualified Domestic Relations Order" entered by the Franklin County Circuit Court called for payment of survivor benefits to Carol, Karl's prior wife.

Lois sued the Trustees and Carol in the Perry County Circuit Court asking the court to declare that the Franklin County Circuit Court's "Qualified Domestic Relations Order" is void and that Lois is entitled to survivor benefits under the Plan. Lois does not dispute that the benefits are being distributed in accordance with the "Qualified Domestic Relations Order." Noting that Lois was seeking benefits from an employee benefit plan, a cause of action over which federal courts have exclusive jurisdiction, the Trustees removed the case to this Court.

The Trustees now ask the Court to dismiss this action on the grounds that Lois has failed to state a claim against them. They argue that the law requires them to distribute survivor benefits according to the "Qualified Domestic Relations Order," and, since Lois does not contest that they have done so, she has failed to state a claim. They disavow any obligation to delve into the "Qualified Domestic Relations Order" to determine if it conflicts with the "Judgment of Dissolution of Marriage" before distributing Karl's survivor benefits.

Lois, on the other hand, claims that she sued the Trustees in this action simply so that they would be bound to abide by a court decision which, she hopes, will void the "Qualified Domestic Relations Order."

A complete understanding of this case requires a brief overview of the interaction between the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq., and state domestic relations law. Generally, ERISA requires that all benefits must be distributed strictly according to the terms of the benefit plan regardless of state law that may require other distributions. 29 U.S.C. § 1144(a); see Blue v. UAL Corp., 160 F.3d 383, 384 (7th Cir. 1998). One exception to this general rule is for qualified domestic relations orders ("QDROs") that require payment to or for the benefit of a plan participant's family. 29 U.S.C. § 1056(d)(3)(A); Boggs v. Boggs, 520 U.S. 833, 839 (1997). To be a QDRO, a state domestic relations order must meet certain administrative, ministerial requirements. For example, a QDRO must identify the name and address of the payee and must specify the amount or percentage of benefit to be paid to the payee. 29 U.S.C. § 1056(d)(3)(C)(1) (2). If a benefit plan determines that a state domestic relations order meets the administrative, ministerial requirements necessary to be a QDRO, it has no choice but to comply with the QDRO. 29 U.S.C. § 1056(d)(3)(A); Blue, 160 F.3d at 385 ("Compliance with a QDRO is obligatory."); Trustees of Dir. Guild of Am.-Producer Pension Ben. Plans v. Tise, 234 F.3d 415, 424 (9th Cir.), amended by 255 F.3d 661 (9th Cir. 2000); Matassarin v. Lynch, 174 F.3d 549, 568 (5th Cir. 1999), cert. denied, 528 U.S. 1116 (2000). The plan need not look beneath the surface of the QDRO to inquire into the propriety of the QDRO under state law. Blue, 160 F.3d at 385-86; Matassarin, 174 F.3d at 568.

Both sides cite Blue in support of their respective positions. In Blue, a pension plan participant sued the pension plan and its administrators for violating ERISA's anti-forfeiture and anti-alienation provisions, 29 U.S.C. § 1056(c) (d)(1). Id. at 385. The pension plan had distributed more than $200,000 in child support and attorneys' fees pursuant to state court domestic relations orders that it had determined were QDROs. Id. The participant believed that the QDROs' awards of attorneys' fees, and the fund's subsequent distributions of money for those fees, were invalid because Illinois law did not allow attorneys' fees under the particular circumstances of the case. Id. The Court of Appeals held that the district court had jurisdiction to hear the case despite the Rooker-Feldman doctrine. Id.; see Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923); District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983). The Rooker-Feldman doctrine "bars federal jurisdiction when the federal plaintiff alleges that [his] injury was caused by a state court judgment." Remer v. Burlington Area Sch. Dist., 205 F.3d 990, 996 (7th Cir. 2000). The Blue Court of Appeals reasoned that the participant was not challenging the propriety of the state court's order to pay child support, a claim over which the district could would not have jurisdiction under the Rooker-Feldman doctrine, because he was not asking the district court to say that he did not owe child support. Blue, 160 F.3d at 385.

After determining that the district court had jurisdiction to hear the participant's claim, the Court of Appeals then held that the participant's claim should be dismissed for failure to state a claim. Id. at 386. The Court of Appeals noted that the fund was required to comply with the QDROs once it determined they were indeed QDROs, and that is exactly what it did. Id. at 385. "ERISA does not require, or even permit, a pension fund to look beneath the surface of the order. Compliance with a QDRO is obligatory. . . . Any domestic-relations order that satisfies the statutory conditions [of being a QDRO] `shall' be paid." Id. at 385-86. Thus, the fund had no obligation to inquire as to whether the QDRO complied with Illinois law regarding awards of attorneys' fees before paying the award. Id. at 386.

This case is like and unlike Blue in its various aspects. It is like Blue in that it seeks a determination about whether a benefit plan complied with ERISA; it is unlike Blue because in this case Lois brings a frontal assault on the "Qualified Domestic Relations Order" as a means to obtain the benefits she wants. The Court will examine each aspect of this case in turn.

First, the Court considers Lois's claim that the Plan did not comply with ERISA. When reviewing a Rule 12(b)(6) motion to dismiss, the Court accepts all allegations as true and draws all reasonable inferences in favor of the plaintiff. Holman v. Indiana, 211 F.3d 399, 402 (7th Cir.), cert. denied, 531 U.S. 880 (2000). The Court should not grant a motion to dismiss unless it appears beyond doubt that the plaintiff cannot prove his claim under any set of facts consistent with the complaint. Id. at 405.

In light of Blue, it is clear that Lois has not alleged anything that does not comply with ERISA. She does not challenge the Plan's decision that the "Qualified Domestic Relations Order" was a QDRO, and she does not contest that the Plan complied with the "Qualified Domestic Relations Order." In sum, Lois has not alleged that the Plan has done anything wrong under ERISA.

Lois admits as much in her response to the motion to remand in which she states that she has sued the Trustees "to insure that the Trustees, who are mere stakeholders in this matter, are on notice and bound by the court's determination of legality under Illinois law of the challenged domestic relations order." Pl. Resp. at 5. In a footnote, she adds:

The Plaintiffs concede that the Defendant Trustees may be entitled under Blue v. UAL Corp., to be protected from a claim dating from Karl Heisner's death based on reliance on the Illinois DRO until the court finds the DRO to be void and unenforceable. Once a court declares the challenged DRO void and without legal effect, the Defendant Trustees should not be permitted to further rely on the voided Order and Plaintiff Lois Heisner should not be denied benefits due to her under the Defendant Trustees' plan as Karl Kirwan Heisner's surviving spouse.

Pl. Resp. at 5 n. 1. However, any claim about what the Trustees may or may not do after the "Qualified Domestic Relations Order" is found invalid is not ripe and therefore does not present a live case or controversy over which the Court can exercise its limited jurisdiction.

Thus, to the extent that Lois is challenging the Plan's compliance with ERISA to date, she has failed to state a claim. Accordingly, the Court will dismiss that claim with prejudice pursuant to Rule 12(b)(6). If the "Qualified Domestic Relations Order" is eventually found void and if the Trustees refuse to acknowledge its invalidity at that time, Lois may bring another, new claim. The Court further finds that there is no just reason for delaying entry of judgment on Lois's ERISA compliance claim and will direct the Clerk of Court to enter judgment immediately on that claim pursuant to Federal Rule of Civil Procedure 54(b).

Next, the Court considers Lois's claim that the "Qualified Domestic Relations Order" is void because it conflicts with the "Judgment of Dissolution of Marriage." Under the Rooker-Feldman doctrine, the Court does not have subject matter jurisdiction over such a frontal assault on a state court order. As noted earlier, the Rooker-Feldman doctrine prevents a party from attempting to relitigate in federal district court a judgment entered in state court. District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 486 (1983); Remer v. Burlington Area Sch. Dist., 205 F.3d 990, 996 (7th Cir. 2000). "In its most straight-forward presentment, the Rooker-Feldman doctrine bars federal jurisdiction when the federal plaintiff alleges that her injury was caused by a state court judgment." Remer, 205 F.3d at 996. "The fundamental and appropriate question to ask is whether the injury alleged by the federal plaintiff resulted from the state court judgment itself or is distinct from that judgment." Young v. Murphy, 90 F.3d 1225, 1231 (7th Cir. 1996) (internal quotations omitted). Litigants who object to a state court judgment may appeal that judgment through the state appeals process, and may ultimately petition the Supreme Court of the United States for a writ of certiorari. A litigant may not, however, attempt to collaterally attack a state court judgment by filing suit in a federal district court. GASH Assocs. v. Village of Rosemont, 995 F.2d 726, 727 (7th Cir. 1993). Only the Supreme Court of the United States has jurisdiction to review a state court judgment, no matter how erroneous or unconstitutional that judgment is. Remer, 205 F.3d at 996.

Unlike Blue, in which the participant did not ask the Court to countermand a state court order, Lois explicitly asks this Court to inquire into the validity of the "Qualified Domestic Relations Order" and find it invalid. This the Court cannot do. For this reason, the Court will remand the remainder of this case to the Circuit Court of the Twentieth Judicial Circuit, Perry County, Illinois.

For the foregoing reasons, the Court hereby:

• DISMISSES with prejudice Lois's claim that the Trustees have not complied with ERISA;

• DIRECTS the Clerk of Court to enter judgment immediately pursuant to Federal Rule of Civil Procedure 54(b) on Lois's claim that the Trustees have not complied with ERISA; and

• REMANDS the remainder of this case to the Circuit Court of the Twentieth Judicial Circuit, Perry County, Illinois.

IT IS SO ORDERED.