Second Circuit Finds DOMA Unconstitutional

Executive Summary:  On October 18, 2012, the U.S. Court of Appeals for the Second Circuit ruled that section 3 of the federal Defense of Marriage Act ("DOMA"), which defines marriage as "a legal union between one man and one woman," is unconstitutional under the Equal Protection Clause.  The Second Circuit (Connecticut, New York, and Vermont) joins the First Circuit (Maine, Massachusetts, New Hampshire, Puerto Rico, and Rhode Island) in holding that DOMA's definition of marriage unconstitutional.[1]  The ruling sets the stage for the U.S. Supreme Court potentially to hear the issue in the coming months.

On October 29, 2012, the Supreme Court announced that it has now scheduled all same-sex marriage cases currently pending before the Court for consideration at its November 20, 2012 scheduling conference.  Those cases include eight petitions dealing directly with DOMA, one petition dealing with California's "Proposition 8" ban on same-sex marriage, and one petition dealing with an Arizona law similar to DOMA that restricts marital benefits for state workers solely to opposite-sex married couples.  If the Supreme Court decides to consider the constitutionality of DOMA, it would likely do so sometime in 2013.

The federal definition of spouse affects a variety of employee benefit and tax-related issues.  For instance, certain retirement plans are required to provide Qualified Joint and Survivor Annuities or Qualified Pre-retirement Survivor Annuities to spouses (as defined under federal law).  And while a non-federal government employer can extend coverage of a same-sex spouse under its group health plan, benefits may be taxable income to the employee because tax preferred status is only given to the participant's spouse (as defined by federal law), and the participant's dependent.