In February 2006, Jean Tobits and Sarah Ellyn Farley were married in Toronto, Canada, as authorized under Canadian law. Shortly after her wedding, Ms. Farley was diagnosed with cancer, and on September 13, 2010 she passed away. Prior to her death, Ms. Farley had been employed by the Cozen O’Connor law firm and had participated in the firm’s profit sharing plan. The profit sharing plan requires that, upon the death of a participant in the plan, the plan administrator must pay death benefits in the form of a qualified pre-retirement survivor annuity in accordance with ERISA and the IRC.
Both Ms. Tobits and Ms. Farley’s parents requested payment of the pre-retirement survivor annuity after Ms. Farley’s death. (Note: Ms. Farley had not completed a beneficiary designation form listing Ms. Tobits as her beneficiary. Had she done so, there would have been no case. In addition, had Ms. Farley completed a beneficiary designation form listing her parents as beneficiaries without Ms. Tobits consent, a spousal consent issue may have arisen). In response to these competing claims, Cozen O’Connor filed an action in the federal district court for the Eastern District of Pennsylvania to determine whether Ms. Tobits or Ms. Farley’s parents should receive the benefits.
On September 26, 2012, the district court ordered that the case be put temporarily on hold given the likelihood of the United States Supreme Court issuing a ruling on the Constitutionality of DOMA Section 3 in its then-upcoming term. On June 26, 2013, the United States Supreme Court rendered its decision in United States v. Windsor, declaring unconstitutional Section 3 of DOMA which defines "marriage" for purposes of all federal laws as the marriage between one man and one woman.
On July 29, 2013, the district court recognized Ms. Tobits as Ms. Farley’s surviving spouse and awarded Ms. Tobits the surviving spouse benefit under Cozen O’Connor’s retirement plan. According to the district court, “[t]here can be no doubt that Ms. Tobits is Ms. Farley’s ‘surviving Spouse’ under the Plan in light of the Supreme Court’s decision in Windsor.” The district court cited evidence of a valid Canadian Marriage Certificate solemnizing the marriage between Ms. Tobits and Ms. Farley, and a ceremony in Illinois where the couple lived together until Ms. Farley’s death. Illinois recognizes same-sex unions in the form of civil unions that provide same-sex couples the rights of marriage under state law. Such rights include the right of a civil union partner to be treated as a surviving spouse when the other partner dies. The district court stated that, “[p]ost-Windsor, where a state recognizes a party as a ‘Surviving Spouse,’ the federal government must do the same with respect to ERISA benefits…”