Hillman v. Maretta

Whether the Federal Employees’ Group Life Insurance Act (FEGLIA) preempts Virginia’s omitted spouse statute that allows a third party to recover death benefits from the named beneficiary.

Decedent named his then-wife (Respondent), as beneficiary of his Federal Employees Group Life Insurance (FEGLI) policy. He later divorced and married Petitioner without changing his beneficiary designation. After decedent’s death, Respondent received the death benefits and Petitioner filed action claiming that Respondent was liable to her for those benefits pursuant to Virginia’s omitted spouse statute.

The Supreme Court of Virginia relied on the United States Supreme Court’s decision in Ridgway v. Ridgway, 454 U.S. 46 (1981) to conclude that Congress’ intent in passing the Federal Employees Group Life Insurance Act (FEGLIA) was that the insured should have an unrestricted and non-waivable right to name or change a beneficiary, and that the FEGLI benefits belonged to the named beneficiary—here Respondent.
On appeal, Petitioner argues that FEGLIA does not preempt Virginia code because (1) Congressional intent of FEGLIA is to avoid administrative difficulties and delays; (2) Congress’s decision to exclude an anti-attachment provision in FEGLIA illustrates intent to allow state equitable remedies; and (3) the 1998 amendment to FEGLIA requiring proceeds to be paid in accordance with a properly filed divorce decree shows intent to not preempt all state equitable remedies.