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No. 05-1076

In the Supreme Court of the United States

KEVIN Y. PADOT, PETITIONER

v.

BRENDA G. PADOT

ON PETITION FOR A WRIT OF CERTIORARI
TO THE DISTRICT COURT OF APPEAL OF FLORIDA,
SECOND DISTRICT

BRIEF FOR THE UNITED STATES
AS AMICUS CURIAE

PAUL D. CLEMENT
Solicitor General

PETER D. KEISLER
Assistant Attorney General

EDWIN S. KNEEDLER
Deputy Solicitor General

DAN HIMMELFARB
Assistant to the Solicitor General

MICHAEL S. RAAB
JOSHUA WALDMAN
Attorneys
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217

PAUL J. HUTTER
Acting General Counsel
Department of Veterans
Affairs
Washington, D.C. 20420

QUESTIONS PRESENTED

When the parties divorced and their property was divided, petitioner agreed, and the trial court ordered, that respondent was entitled to 33.96% of petitioner's military retirement pay. Petitioner later waived a portion of his retirement pay in favor of veterans' disability benefits. The trial court ordered that respondent was entitled to 33.96% of what petitioner's retirement benefits would have been had there been no waiver. The questions presented are:

1. Whether the trial court's order violates the Uniformed Services Former Spouses' Protection Act, 10 U.S.C. 1408 (2000 & Supp. IV 2004), which was interpreted in Mansell v. Mansell, 490 U.S. 581 (1989), to authorize the division of retirement pay but not the portion of retirement pay waived in favor of disability benefits.

2. Whether the trial court's order violates the anti- attachment provision applicable to disability benefits, 38 U.S.C. 5301(a)(1) (Supp. III 2003).

In the Supreme Court of the United States

No. 05-1076

KEVIN Y. PADOT, PETITIONER

v.

BRENDA G. PADOT

ON PETITION FOR A WRIT OF CERTIORARI
TO THE DISTRICT COURT OF APPEAL OF FLORIDA,
SECOND DISTRICT

BRIEF FOR THE UNITED STATES
AS AMICUS CURIAE

This brief is submitted in response to the Court's order inviting the Solicitor General to express the views of the United States. In the view of the United States, the petition should be denied.

STATEMENT

1. a. Members of the military services who have served for the requisite period may retire from active duty and receive retirement pay. 10 U.S.C. 3911 et seq. (Army); 10 U.S.C. 6321 et seq. (Navy and Marine Corps); 10 U.S.C. 8911 et seq. (Air Force). In addition, veterans who become partially or totally disabled as a result of military service may be eligible for disability benefits. 38 U.S.C. 1110 (wartime disability); 38 U.S.C. 1131 (peacetime disability). In general, however, a military retiree may receive disability benefits only to the extent that he or she waives a corresponding amount of retirement pay. 38 U.S.C. 5305. Because disability benefits, unlike retirement pay, are exempt from taxation, 38 U.S.C. 5301(a), such waivers are common. See Mansell v. Mansell, 490 U.S. 581, 583-584 (1989).

b. In McCarty v. McCarty, 453 U.S. 210 (1981), this Court held that state courts are preempted by federal law from treating a service member's retirement pay as commu nity property divisible between the service member and for mer spouse upon divorce. Congress responded to McCarty by enacting the Uniformed Services Former Spouses' Protection Act (USFSPA), 10 U.S.C. 1408 (2000 & Supp. IV 2004), which, in its current form, authorizes a state court to treat "dispos able retired pay" either "as property solely of the [former service] member or as property of the [former service] mem ber and his spouse in accordance with the law of the jurisdic tion of such court," 10 U.S.C. 1408(c)(1). "Disposable retired pay" is defined in the statute as "the total monthly retired pay to which a member is entitled," less certain amounts. 10 U.S.C. 1408(a)(4). Among the amounts to be "deducted from the retired pay" are those waived "to receive compensation under * * * title 38"-i.e., amounts waived to receive dis ability benefits. 10 U.S.C. 1408(a)(4)(B).

In Mansell, supra, this Court construed the USFSPA to reject the McCarty rule, but only in part. The Court held that, under the statute's "plain and precise language," state courts "have been granted the authority to treat disposable retired pay as community property," but "have not been granted the authority to treat total retired pay as community property." 490 U.S. at 589 (emphasis added). Because the USFSPA excludes disability benefits from the definition of disposable retired pay, the Court concluded that state courts are preempted by federal law from treating as divisible prop erty retirement pay waived in favor of disability benefits.

c. The veteran in Mansell argued that the state court's division of his total retired pay violated, not only the USFSPA, but also the anti-attachment provision applicable to veterans' disability benefits. Under that provision, 38 U.S.C. 5301(a)(1) (Supp. III 2003) (formerly 38 U.S.C. 3101(a) (1988)), disability benefits "shall not be assignable except to the extent specifically authorized by law, and * * * shall be exempt from the claim of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the benefi ciary." In light of its holding that the USFSPA precludes the division of retirement pay waived in favor of disability bene fits, however, the Court found it unnecessary in Mansell to address whether the anti-attachment provision would inde pendently afford such protection. See 490 U.S. at 587 n.6.1

2. Petitioner entered the military in April 1980 and mar ried respondent in September 1980. The parties were divorced in 1995. At the time of the final divorce judgment, petitioner was still on active duty. Pet. App. 2a, 16a.

The parties agreed to a division of "military retirement * * * pay," Pet. App. 2a, with respondent entitled to 33.96% of the payments, id. at 2a, 17a. The order incorporating the agreement provided that "[n]either party shall take any action which shall alter or otherwise reduce the interest of the other party in the * * * retired pay." Ibid.

Petitioner retired from active military duty in May 2000 and began receiving retirement pay in June 2000. He applied for disability benefits and was subsequently found to be 30% disabled. In December 2000, petitioner waived a portion of his retirement pay in favor of disability benefits. Approxi mately four months later, petitioner began working for the federal government as a civilian air-traffic controller. Pet. App. 2a-3a, 16a-17a.

In July 2002, respondent filed a "Motion to Enforce Final Judgment" in the Circuit Court for Pinellas County, Florida. She argued, among other things, that petitioner's waiver of a portion of his retirement pay in order to obtain disability ben efits operated to reduce the amount she would receive under the final divorce judgment. Pet. App. 3a, 16a.

3. The Circuit Court ruled that, by reducing respondent's share of his retirement pay, petitioner violated the final di vorce judgment. Pet. App. 16a-20a. The court reasoned that the "overall plan" of the judgment was that "the former wife's share of the military retirement would stand in the place of alimony," and that petitioner's waiver of retirement pay "al tered" that plan and violated the judgment's prohibition on taking any action that altered or reduced respondent's inter est in the retirement pay. Id. at 18a. The court found that result particularly "inequitable" because petitioner was re ceiving additional income from his job as an air-traffic con troller. Id. at 18a-19a. In so holding, the court noted that, in Abernethy v. Fishkin, 699 So. 2d 235 (1997), the Florida Su preme Court had found that trial courts "are not powerless to enforce the original agreement so long as no funds from the disability pool are drawn upon to fulfill the obligations of the former husband to the former wife." Pet. App. 19a. The Cir cuit Court therefore ordered petitioner to pay respondent 33.96% of "the amount that the former spouse's military re tirement would have been absent his voluntary reduction of those retirement dollars in favor of disability payments," but specifically directed that no portion of petitioner's disability benefits be used to satisfy that obligation. Id. at 19a-20a.2

4. The Second District Court of Appeal of Florida af firmed in relevant part. Pet. App. 1a-14a.

Rejecting petitioner's contention that the "principles of federal preemption" in Mansell "prohibit[ed] the result or dered by the trial court," the appellate court found Mansell "materially distinguishable from * * * the present case." Pet. App. 4a-5a. The court explained that, unlike in Mansell, the parties in this case agreed that respondent was entitled to a percentage of petitioner's retirement pay and were ordered not to "take any action to reduce the other party's interest in the * * * retire[ment] pay." Id. at 5a. The court also ex plained that, unlike in Mansell, petitioner's remaining retire ment pay and civilian income would enable him to comply with his obligations under the divorce judgment and that his dis ability benefits were shielded from respondent by the trial court. Id. at 5a-6a.

The District Court of Appeal also rejected petitioner's contention that the Florida Supreme Court's decision in Aber nethy was distinguishable because the agreement in that case, but not in this one, explicitly required indemnification in the event that either party took an action that defeated the other party's right to receive a portion of the retirement pay. Pet. App. 7a-9a. The court explained that the order at issue here prohibited any action that would reduce the other party's interest in the retirement pay and that, although the order "does not specifically state that the Former Husband must indemnify the Former Wife if he takes action that reduces her interest," the order "gives the [trial] court continuing juris diction 'to enforce the former spouse's rights to her share of the * * * benefits.'" Id. at 8a.

In concluding its opinion, the District Court of Appeal stated that "the Former Wife obtained a vested interest in a percentage of the Former Husband's military retirement * * * pay * * * when the trial court entered the * * * [o]rder" dividing property, and that, "when years later the Former Husband took the voluntary action of waiving [re- tirement] pay in order to receive disability benefits, the For mer Wife's vested interest in his military retirement * * * pay was reduced." Pet. App. 9a. The court therefore "f[ou]nd no error" in the trial court's ruling that petitioner must "make whole the retirement benefits contemplated in the Final Judgment in favor of the former wife." Ibid.3

5. The Supreme Court of Florida denied petitioner's peti tion for review. Pet. App. 15a.

DISCUSSION

Petitioner contends (Pet. 10-25) that the Circuit Court's order, which required him to pay respondent an amount equal to the percentage of what his retirement pay would have been had he not waived a portion of that pay in favor of disability benefits after the final divorce judgment was entered, violates both the USFSPA as interpreted in Mansell and the anti-at tachment provision applicable to disability benefits. Peti tioner's USFSPA claim was correctly rejected by the District Court of Appeal, and its decision does not conflict with any decision of any state court of last resort. Petitioner's anti- attachment claim was not pressed or passed upon below, is in any event without merit, and has been uniformly rejected by state courts of last resort. The petition for a writ of certiorari should therefore be denied.4

A. Certiorari Is Not Warranted On The Question Whether The Trial Court's Order Violates The USFSPA As Inter preted In Mansell

1. The decision below does not conflict with the deci sion of any state court of last resort

a. The District Court of Appeal approved the Circuit Court's order, and held that it did not conflict with Mansell, because petitioner had agreed, and the Circuit Court had di rected, that he would pay respondent a percentage of his re tirement pay and take no action to reduce respondent's inter est in it. Pet. App. 4a-9a. The District Court of Appeal relied, in part, see id. at 6a-8a, on the Supreme Court of Florida's decision in Abernethy v. Fishkin, 699 So. 2d 235 (1997). That case held that, "while federal law prohibits the division of disability benefits," it "does not prohibit spouses from enter ing into a property settlement agreement that awards the non-military spouse a set portion of the military spouse's re tirement pay" and includes an "indemnification provision[] ensuring such payments." Id. at 240.

The highest courts of at least six other States-Maine, Massachusetts, Nevada, Rhode Island, South Dakota, and Tennessee-have approved orders similar to the one entered by the Circuit Court on the basis of a contract-law theory similar to the one on which the District Court of Appeal re lied.5 And, as far as we are aware, no state court of last resort has rejected such a theory. There is therefore no conflict on that issue.

The highest courts of at least seven other States-Alaska, Arkansas, Nebraska, Mississippi, Montana, North Dakota, and Washington-have approved relief of the type at issue here, and found it consistent with Mansell, on a different the ory. Those courts have held that, in making an equitable dis tribution of property or an award of alimony, trial courts may consider the economic consequences of the veteran's waiver of retirement pay in favor of disability benefits and rely upon them as a basis for increasing the former spouse's share of the remaining property or the size of the alimony award.6 The highest court of one state-Alabama-has rejected this the ory. In Ex parte Billeck, 777 So. 2d 105 (2000), the Supreme Court of Alabama held that, "[w]hen a trial court makes an alimony award based upon its consideration of the amount of veteran's disability benefits," the trial court "essentially is awarding the wife a portion of those veteran's disability bene fits[,] and in doing so * * * is violating federal law." Id. at 109.

There thus does appear to be a conflict on whether federal law permits a divorce court to consider a veteran's waiver of retirement benefits in making an equitable distribution of property or award of alimony. That question is not presented in this case, however, because the court below did not address it. Instead, consistent with the Florida Supreme Court's deci sion in Abernethy, the District Court of Appeal relied on a contract-law theory in affirming the order challenged by peti tioner. Indeed, the Supreme Court of Alabama distinguished Abernethy on the ground that the agreement incorporated into the divorce judgment in Billeck, unlike the one in Aber nethy, did not contain a provision that "protect[ed] the monthly sum the wife would receive should the husband's military retirement benefits be reduced." 777 So. 2d at 109. Insofar as it was suggesting that Billeck would have been decided differently if the agreement had contained such a provision, therefore, the Supreme Court of Alabama appears to agree with the rationale for the decision below (and with the uniform view of the state courts of last resort to consider the question)-namely, that a veteran can be contractually bound not to take action that reduces the former spouse's share of retirement benefits.7

b. Petitioner contends that "at least six state supreme courts (Alabama, Alaska, Arkansas, Kansas, Montana, and Nebraska) * * * have taken diametrically the opposite posi tion of that held below by Florida's courts." Pet. 18; accord Reply Br. 2. That is not correct.

As explained above, see pp. 9-10, supra, the theory re jected in the Alabama decision cited by petitioner, Billeck, supra, is one on which the decision below did not rely. And the Alabama decision arguably endorses the theory on which the decision below did rely.

The Alaska and Montana decisions cited by petitioner, Clauson v. Clauson, 831 P.2d 1257 (Alaska 1992), and In re Marriage of Strong, 8 P.3d 763 (Mont. 2000), did not address the contract-law theory on which the decision below relied. And, as noted above, see note 6, supra, they held that relief of the type at issue here is available-albeit on the theory that courts may consider the economic consequences of a veteran's waiver of retirement payments in making an equitable distri bution of property. The Arkansas decision cited by petitioner, Ashley v. Ashley, 990 S.W.2d 507 (1999), likewise did not ad dress the contract-law theory, and it likewise recognized that, when a veteran waives retirement payments in favor of dis ability benefits, the trial court may order "an increase in ali mony." Id. at 509 (citing Womack v. Womack, 818 S.W.2d 958, 959 (Ark. 1991)). Moreover, a subsequent decision of the Court of Appeals of Arkansas did adopt the contract-law the ory, and, in doing so, explicitly stated that Ashley did not foreclose its adoption. Surratt v. Surratt, 148 S.W.3d 761, 766 (2004).

As for the Kansas and Nebraska decisions cited by peti tioner, neither In re Marriage of Wherrell, 58 P.3d 734 (Kan. 2002), nor Ryan v. Ryan, 600 N.W.2d 739 (Neb. 1999), ad dressed whether relief of the type at issue here is available under either of the theories described above. Wherrell ad dressed the distinct question whether a particular payment to the veteran was "divisible retirement or indivisible military disability." 58 P.3d at 736. And Ryan held that "th[e] portion of the [divorce] decree purporting to divide [the veteran's] disability income" was "void for want of jurisdiction," because "federal law precludes a state court, in a dissolution proceed ing, from exercising subject matter jurisdiction over * * * disability benefits." 600 N.W.2d at 745. As noted above, moreover, see note 6, supra, a prior decision of the Supreme Court of Nebraska, Kramer v. Kramer, 567 N.W.2d 100 (1997), held that relief of the type at issue here is available, on the theory that courts may consider the consequences of a waiver of retirement payments in making an award of ali mony. Any tension between the "jurisdictional" approach of Ryan and the decision in Kramer should be resolved by the Nebraska courts.

Petitioner also contends that the principle applied by the court below has been rejected by "the intermediate courts of appeals of an additional four jurisdictions (Louisiana, North Carolina, Texas, and Virginia)." Pet. 18. That contention would not support certiorari even if it were true, because this Court ordinarily grants certiorari in state cases only to re solve a conflict between "state court[s] of last resort" (or be tween a state court of last resort and a federal court of ap peals). Sup. Ct. R. 10(b). In any event, there is no such con flict.

The Louisiana decision cited by petitioner, Wright v. Wright, 594 So. 2d 1139 (Ct. App. 1992), applied the principle that was applied in the decision below, but simply found that there was no breach of the agreement in that case. Id. at 1142. The same court applied the same principle in a subse quent decision and came to the opposite conclusion on the facts of that case. See Poullard v. Poullard, 780 So. 2d 498, 500 (La. Ct. App.) ("We agree with the trial court that 'the re- designation of pay cannot defeat the prior agreement of the parties.'"), writ denied, 790 So. 2d 641 (La. 2001). Similarly, the unpublished Virginia decision cited by petitioner, Keough v. Keough, No. 2140-96-4, 1997 WL 242559 (Ct. App. May 13, 1997), held that the veteran's former spouse was not entitled to a portion of his disability payments because the particular agreement in that case "unambiguously require[d] a reduction of the gross retirement pay by the disability payments re ceived." Id. at *2. In published decisions issued both before and after Keough, the same court held, consistent with the decision below, that "parties may use a property settlement agreement to guarantee a certain level of income by providing for alternative payments" to compensate for a waiver of re tirement pay. McLellan v. McLellan, 533 S.E.2d 635, 638 (Va. Ct. App. 2000); Owen v. Owen, 419 S.E.2d 267, 269 (Va. Ct. App. 1992).

The North Carolina decision cited by petitioner, Halstead v. Halstead, 596 S.E.2d 353 (Ct. App. 2004), did not address the theory on which the decision below relied. And it explic itly endorsed the other theory on which relief of the type at issue here has been approved: that "federal law d[oes] not preclude the consideration of the economic consequences of a decision to waive military retirement pay in order to receive disability pay in determining the equitable distribution of marital assets." Id. at 356.

As for the Texas decisions cited by petitioner, neither In re Marriage of Reinauer, 946 S.W.2d 853 (App. 1997), nor Loria v. Loria, 189 S.W.3d 797 (App. 2006), addressed whether relief of the type at issue here is available under ei ther theory.

2. The decision below is correct

Mansell held that the USFSPA prohibits state courts from "treat[ing] as property divisible upon divorce military retirement pay that has been waived to receive veterans' dis ability benefits." 490 U.S. at 595. It does not follow from that holding, however, that the USFSPA prohibits state courts from interpreting settlement agreements that divide retire ment pay to require the veteran to make the former spouse whole if the veteran takes an action that reduces the former spouse's proportion of the pay. Indeed, in at least two re spects, the principle applied by the court below not only is consistent with Mansell, but finds affirmative support in it.

First, the Court recognized in Mansell that "domestic relations are preeminently matters of state law," that Con gress "rarely intends to displace state authority in this area" when it passes general legislation, and that this Court there fore "will not find pre-emption absent evidence that it is 'posi tively required by direct enactment.'" 490 U.S. at 587 (quot ing Hisquierdo v. Hisquierdo, 439 U.S. 572, 581 (1979), in turn quoting Wetmore v. Markoe, 196 U.S. 68, 77 (1904)). The Court concluded that Mansell "present[ed] one of those rare instances where Congress has directly and specifically legis lated in the area of domestic relations," ibid., because, in "plain and precise language," the USFSPA provides that a state may treat "disposable retired * * * pay" as divisible property and "specifically defines" that term to exclude re tirement pay waived in favor of disability benefits, id. at 588- 589 (quoting 10 U.S.C. 1408(a)(4)(B) and (c)(1) (1988)). In contrast, the USFSPA does not "directly and specifically" address the interpretation and enforcement of property-set tlement agreements that guarantee the former spouse a fixed proportion of retirement pay. Indeed, the statute does not address that subject at all.

Second, the property-settlement agreement incorporated into the divorce decree in Mansell divided the total amount of the veteran's retirement pay, including the amount he had waived in favor of disability benefits, and the veteran re quested modification of the decree to remove the provision requiring him to share the waived portion of his retirement pay. 490 U.S. at 585-586 & n.5. In this Court, the former wife argued that "the doctrine of res judicata should have pre vented this pre-McCarty property settlement from being re opened," but the Court held that "[w]hether the doctrine of res judicata, as applied in California, should have barred the reopening of pre-McCarty settlements is a matter of state law over which we have no jurisdiction." Id. at 586 n.5. On re mand, the state appellate court ruled against the veteran on the ground that state law precluded the reopening of the set tlement agreement, In re Marriage of Mansell, 265 Cal. Rptr. 227 (Ct. App. 1989), and this Court denied certiorari, 498 U.S. 806 (1990). So, too, the question whether a particular settle ment agreement obligates a veteran to make his or her former spouse whole in the event that the veteran subsequently waives retirement pay in favor of disability benefits is a mat ter of state contract law that-like the state law of judg ments-is not preempted by the USFSPA. Indeed, insofar as the USFSPA's preemptive effect is concerned, there is little difference between a state-law rule prohibiting a veteran from challenging a divorce decree that divides disability benefits if he agreed to the division when the decree was entered (the rule at issue on remand in Mansell) and a state-law rule pro hibiting a veteran from reducing a former spouse's share of retirement benefits if he agreed not to take any action that would have that effect (the rule at issue here).

Petitioner places considerable emphasis (Pet. i, 7-10, 12- 13, 15-16 & n.6, 21; Reply Br. 3) on the fact that there is no express indemnification provision in the settlement agree ment. As the court below explained, however, the order in corporating the agreement prohibited petitioner from taking any action that would reduce respondent's interest in the re tirement pay and gave the trial court continuing jurisdiction "to enforce [respondent's] rights to her share of the * * * benefits." Pet. App. 8a. Adjusting petitioner's payment obli gations to make respondent whole for such a reduction in re tirement pay would appear to be a legitimate enforcement mechanism. In any event, the question of what specific lan guage is necessary to give a party an enforceable right under a contract or a court order incorporating a contract is one of state law, and any disagreement that may exist among state courts on that question is therefore not a basis for certiorari.8

B. Certiorari Is Not Warranted On The Question Whether The Trial Court's Order Violates The Anti-Attachment Provision Applicable To Veterans' Benefits

Petitioner invokes this Court's jurisdiction (Pet. 1) under 28 U.S.C. 1257(a). Under that statute, "this Court has almost unfailingly refused to consider any federal-law challenge to a state-court decision unless the federal claim 'was either ad dressed by or properly presented to the state court that ren dered the decision [the Court has] been asked to review.'" Howell v. Mississippi, 543 U.S. 440, 443 (2005) (per curiam) (quoting Adams v. Robertson, 520 U.S. 83, 86 (1997) (per curiam)). Petitioner's contention that the Circuit Court's order violates the anti-attachment provision applicable to vet erans' benefits, 38 U.S.C. 5301(a)(1) (Supp. III 2003), was not addressed by the District Court of Appeal. See Pet. App. 3a- 10a. When a state court "is silent on a federal question," this Court "assume[s] that the issue was not properly presented, and the aggrieved party bears the burden of defeating this assumption." Adams, 520 U.S. at 86-87 (citation omitted). Petitioner makes no attempt to discharge that burden, and it appears that any such attempt would be unsuccessful.9 That is a sufficient basis for denying certiorari on the second ques tion in the petition.10

In any event, the anti-attachment provision affords peti tioner no basis for relief. Under that provision, it is only "[p]ayments of benefits due or to become due under any law administered by the Secretary [of Veterans Affairs]" (which include disability benefits) that are non-assignable, exempt from the claim of creditors, and not liable to attachment, levy, or seizure. 38 U.S.C. 5301(a)(1) (Supp. III 2003). Whatever applicability that provision might have in a case in which the veteran is ordered to pay the former spouse a portion of his disability benefits, this is not such a case. Petitioner is receiv ing civilian income and retirement pay in addition to disability benefits, and the trial court's order explicitly provides that nothing in its order "should be read to require the former husband to pay any portion of his disability * * * income * * * over to the former wife" and that "no portion of that pool of funds in whatever amount that pool may be from time to time [may] be payable over to the former wife." Pet. App. 19a. Far from having violated the anti-attachment provision, the trial court took pains to comply with it.

Nor is there any conflict among state courts of last resort on the second question in the petition. Some of the decisions that reject the contention that relief of the type at issue here violates the USFSPA as interpreted in Mansell also reject the contention that such relief violates the anti-attachment provi sion applicable to veterans' benefits. See Krapf, 786 N.E.2d at 326 n.12 (contract-law theory); Clauson, 831 P.2d at 1263 & n.9 (theory that disability payments may be considered in dividing property); Strong, 8 P.3d at 769-771 (same). But petitioner cites no decision of any state court of last resort that has reached a contrary conclusion, and we are not aware of any.11

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

PAUL D. CLEMENT
Solicitor General

PETER D. KEISLER
Assistant Attorney General

EDWIN S. KNEEDLER
Deputy Solicitor General

DAN HIMMELFARB
Assistant to the Solicitor General

MICHAEL S. RAAB
JOSHUA WALDMAN
Attorneys
Department of Justice

PAUL J. HUTTER
Acting General Counsel
Department of Veterans
Affairs

NOVEMBER 2006

1 In Rose v. Rose, 481 U.S. 619 (1987), the Court addressed the applicability of the anti-attachment provision to child support, holding that the provision "does not extend to protect a veteran's disability benefits from seizure where the veteran invokes that provision to avoid an otherwise valid order of child support." Id. at 634.

2 In a subsequent order, Pet. App. 21a-23a, the Circuit Court denied petitioner's motion for rehearing on a number of issues, including "the military pay question," id. at 22a, but modified its earlier decision to provide that petitioner's obligations to respondent be retroactive to the initial date of petitioner's employment as an air-traffic controller rather than the date of his retirement from active military service, ibid.

3 In the same opinion, the District Court of Appeal reversed the trial court's decision insofar as it provided for payment by "income deduction order" (because Florida law limits the use of such an order to alimony or child support), Pet. App. 9a-10a; vacated a "clarification order" concerning retroactivity (because the order was not authorized by Florida's procedural rules), id. at 10a-12a; and reversed another order issued by the trial court insofar as it required petitioner to cooperate with respondent in obtaining and paying for a portion of a replacement survivor benefit plan, id. at 12a-13a. Those aspects of the appellate court's decision are not at issue here.

4 This Court has previously denied certiorari in a case presenting the same USFSPA claim that is presented here, see Seddio v. Michaels, 529 U.S. 1068 (2000), and in a case presenting the same USFSPA and anti-attachment claims that are presented here, see Shelton v. Shelton, 541 U.S. 960 (2004).

5 See Hisgen v. Hisgen, 554 N.W.2d 494, 498 (S.D. 1996) (Mansell "does not preclude state courts from interpreting divorce settlements to allow a spouse to receive property or money equivalent to [the agreed-upon percentage of] a veteran's retirement entitlement[s]" if the veteran subsequently waives a portion of the entitlements in favor of disability pay.); Johnson v. Johnson, 37 S.W.3d 892, 897-898 (Tenn. 2001) ("[W]hen a[] [marital dissolution agreement] divides military retirement benefits, the non-military spouse has a vested interest in his or her portion of those benefits as of the date of the court's decree. * * * [A]n act of the military spouse [that unilaterally diminishes the vested interest] * * * constitutes an impermissible modifica tion of a division of marital property and a violation of the court decree incorporating the [marital dissolution agreement].") (footnote omitted); Krapf v. Krapf, 786 N.E.2d 318, 326 (Mass. 2003) ("The judgment in this case does not divide the defendant's * * * disability benefits in contravention of the Mansell decision; the judgment merely enforced the defendant's contractual obligation to his former wife, which he may satisfy from any of his resources."); Shelton v. Shelton, 78 P.3d 507, 509 (Nev. 2003) ("Although states cannot divide disability payments as community property, states are not preempted * * * from enforcing contracts [that divide retirement benefits] * * * , even when disability pay is involved."), cert. denied, 541 U.S. 960 (2004); Black v. Black, 842 A.2d 1280, 1285 (Me. 2004) ("the USFSPA does not limit the authority of a state court to grant post-judgment relief when military retirement pay previously divided by a divorce judgment is converted to disability pay"); Resare v. Resare, 908 A.2d 1006, 1010 (R.I. 2006) ("[T]he Family Court did not in any way divide [the veteran's] disability benefit in contravention of Mansell, but simply held [him] to the terms of the original [property settlement agreement] and ordered payment of an amount calculated in accordance with the agreed upon [property settlement agreement].").

6 See Womack v. Womack, 818 S.W.2d 958, 959 (Ark. 1991) (trial court may "t[ake] note of the disability benefits" in making an award of alimony); Clauson v. Clauson, 831 P.2d 1257, 1264 (Alaska 1992) ("federal law does not preclude our courts from considering, when equitably allocating property upon divorce, the economic consequences of a decision to waive military retirement pay in order to receive disability pay"); In re Marriage of Kraft, 832 P.2d 871, 875 (Wash. 1992) ("when making property distributions or awarding spousal support in a dissolution proceeding, * * * the court may consider the [disability] pay as a basis for awarding the nonretiree spouse a proportionately larger share of the community property where equity so requires"); Vitko v. Vitko, 524 N.W.2d 102, 104 (N.D. 1994) (trial court may "consider[] the disability income 'so as to determine the financial circumstances of each party to the divorce'"); Kramer v. Kramer, 567 N.W.2d 100, 113 (Neb. 1997) (trial court "may consider [disability] benefits and the corresponding waiver of retirement pension benefits" in "determining whether there has been a material change in circumstances which would justify modification of an alimony award to a former spouse who was previously awarded a fixed percentage of the retirement pension benefits"); In re Marriage of Strong, 8 P.3d 763, 769 (Mont. 2000) ("a [trial] court may consider * * * disability benefits in the same way it considers each party's ability to earn income post- dissolution as an important factor in achieving an equitable property division"); Steiner v. Steiner, 788 So. 2d 771, 779 (Miss. 2001) ("Military disability benefits were properly considered by the chancellor in the award of alimony."). Unlike the contract-law theory, this theory is an available ground for decision not only when the waiver of retirement pay postdates the divorce decree and the trial court is ruling on a request for enforcement or modifica tion, but also when the waiver predates the divorce decree and the court is making an initial property distribution or alimony award.

7 At least three of the courts that allow consideration of a veteran's waiver of retirement benefits in distributing property or awarding alimony do so on the condition that the increase in the amount of property or alimony awarded to the former spouse not simply match dollar for dollar the amount of retirement pay waived by the veteran, but instead be based on an overall assessment of what is just and reasonable. See Clauson, 831 P.2d at 1264; Kraft, 832 P.2d at 875-876, 877; Strong, 8 P.3d at 769. It is not clear whether that is the rule in other jurisdictions. Even if it is not, however, this case is not a suitable one for resolving any conflict that may exist on the issue, because the court below did not address the question whether a waiver of retirement benefits may be considered in making an equitable distribution of property, and thus necessarily did not address the subsidiary issue of dollar-for-dollar matches.

8 This case does not present the quite different question whether a state court could enter an injunction or other order barring a veteran from waiving a portion of his retirement pay so as to receive tax-free disability benefits. This case, and the other cases discussed in this brief, concern only the consequences of such a waiver when the veteran has made a contractual commitment, embodied in a court decree, to provide the spouse with a certain level of alimony or division of property.

9 An anti-attachment claim was not raised either in petitioner's initial brief or in his reply brief in the District Court of Appeal. See Pet. Dist. C.A. Br. 13- 26; Pet. Dist. C.A. Reply Br. 3-7. And although petitioner's motion for re- hearing in that court quoted a subparagraph of 38 U.S.C. 5301, see Pet. Mot. For Reh'g 7 (quoting Section 5301(a)(3)(A)), it did not quote the anti-attach ment provision (Section 5301(a)(1)). Moreover, this Court has "generally refused to consider issues raised * * * for the first time in a petition for rehearing when the state court is silent on the question." Adams, 520 U.S. at 89 n.3.

10 Since the court below did not cite or mention-much less discuss-the anti-attachment provision, it is hard to know what petitioner means when he says that the court was "clearly cognizant" of it. Pet. 24. In any event, it is not enough that a lower court be "cognizant" of the statutory provision on which the petitioner is relying in this Court; the actual legal claim that is based on the provision must have been pressed by the petitioner or passed upon by the lower court.

11 Under Section 641 of the National Defense Authorization Act for Fiscal Year 2004, Pub. L. No. 108-136, 117 Stat. 1511 (codified primarily at 10 U.S.C. 1414 (Supp. IV 2004)), which is being phased in over ten years, a service member who did not retire based on a determination of medical unfitness and is at least 50% disabled will be entitled to receive both retirement pay and disability benefits without waiving any portion of the retirement pay. We are informed by the Department of Defense that those who benefit from that law constitute approximately one fourth of the total number of service members who are eligible for both retirement pay and disability benefits. Accordingly, while the law is likely to cause a decrease in the number of cases in which the retirement pay divided upon divorce is later reduced as a result of the veteran's receipt of disability benefits, and thus in the number of cases in which the questions presented here may arise, such cases will not be eliminated entirely.