Sveen v. Melin

Whether divorce-upon-revocation statutes applied retroactively violate the Contract Clause of U.S. Const. art. I, § 10, cl. 1.

In 1998, decedent named Respondent, his former spouse, as the beneficiary of his life insurance policy and Petitioners, their children, as the contingent beneficiaries. In 2002, the state of Minnesota adopted a statute that revokes any revocable life insurance benefit upon divorce or annulment. In 2007, decedent and Respondent divorced, and in 2011, Petitioner died without modifying the policy. The insurance company filed this interpleader action in federal district court to determine whether the revocation statute applied. Petitioners were granted summary judgment, based on application of the revocation statute. The Ninth Circuit reversed, holding that revocation-upon-divorce statutes violate the Contract Clause of U.S. Const. art. I, § 10, cl. 1, if they are applied retroactively, because the decedent’s wishes are protected by the law existing at the time the insurance policy was entered. On appeal to the U.S. Supreme Court, Petitioners argue that revocation-upon-divorce statutes are automatic and retroactive. Petitioners argue the Contracts Clause is not violated, because the decedent’s contractual rights, to payout his insurance policy, were not interfered with by enforcing the statute. Alternatively, Petitioners assert that requiring a policyholder to re-designate a former spouse upon their divorce is only a minimal interference with the policyholder's contractual rights, which does not violate the Contracts Clause.