Tuesday, October 20, 2009

Working Around Preemption of Community Property Rules

When spouses in a community property regime hold certain federal assets, the doctrine of preemption often results in the inability of state community property law to step in to regulate their classification.  The United States Supreme Court's decision in Boggs v. Boggs is a classic example in the pension context, though there are countless other such assets (intellectual property, IRAs, social security benefits, just to name a few).

Louisiana has an interesting 2001 statute clearly designed to work around preemption (La. Rev. Stat. 9:2801.1).  It provides:

When federal law or the provisions of a statutory pension or retirement plan, state or federal, preempt or preclude community classification of property that would have been classified as community property under the principles of the Civil Code, the spouse of the person entitled to such property shall be allocated or assigned the ownership of community property equal in value to such property prior to the division of the rest of the community property...

A Louisiana appellate court, in the first decision directly applying the statute, recently approved use of the statute to allocate more community property to wife because preemption required that her husband's social security benefits, earned through effort expended during the marriage, be classified as husband's separate property.  The opinion includes no discussion of the constitutional implications of so blatantly undermining the result of the preemption doctrine.

Are there other examples of state law which so clearly undermine federal preemption?

AC

http://lawprofessors.typepad.com/family_law/2009/10/working-around-preemption-of-community-property-rules.html

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