## Facts

- Cozen O’Connor, P.C. sponsored an ERISA-qualified profit-sharing plan covering its employee, attorney Sarah (Ellyn) Farley.
- Farley married Jennifer J. Tobits in Toronto, Canada in 2006; the marriage was valid under Canadian law.
- Farley and Tobits lived in Illinois; Illinois treated their relationship as conferring surviving-spouse rights, and an Illinois probate court recognized Tobits as Farley’s spouse and sole heir.
- The plan required payment of a preretirement survivor annuity to a participant’s “surviving spouse” unless the spouse executed a written waiver; if no surviving spouse existed, benefits would pass to the participant’s parents or other beneficiary.
- Farley died in 2010 without executing a beneficiary designation, and Tobits did not waive any spousal rights.
- Competing claims arose between Tobits (as spouse) and Farley’s parents (as heirs), who argued federal law (including DOMA) barred treating Tobits as a spouse for plan purposes.
- Cozen filed an interpleader action to determine the proper recipient and to obtain discharge after depositing the disputed benefits.

## Issues

1. Whether, under ERISA and the plan terms, Tobits qualified as Farley’s “surviving spouse” entitled to preretirement survivor annuity death benefits.
2. Whether, after United States v. Windsor invalidated DOMA § 3, a same-sex spouse in an otherwise valid marriage must be recognized as a “spouse” for purposes of ERISA spousal protections and plan administration.
3. Whether Cozen, as a neutral stakeholder, was entitled to discharge from further liability after interpleader deposit and adjudication of the proper beneficiary.

## Decision

- The court held Tobits was Farley’s “surviving spouse” under ERISA and the plan and was entitled to the plan’s death benefits.
- The court relied on Windsor to reject limiting “spouse” to opposite-sex couples for federal-law purposes where the marriage was otherwise valid and recognized under applicable law.
- The court granted interpleader relief and discharged Cozen from future liability regarding distribution once the benefits were paid consistent with the ruling.

## Legal Principles

- ERISA-qualified retirement plans must provide preretirement survivor benefits to a participant’s surviving spouse unless the spouse validly waives the entitlement in writing.
- When a plan’s default beneficiary is the “surviving spouse,” and there is no beneficiary designation and no spousal waiver, the dispositive question is whether the claimant is a spouse as a matter of applicable law.
- After Windsor, federal-law references to “spouse” and “marriage” cannot be applied to categorically exclude same-sex spouses in otherwise valid marriages recognized by the relevant jurisdiction.
- Interpleader permits a stakeholder facing competing claims to deposit disputed funds, obtain an adjudication of entitlement, and receive discharge from further liability upon proper distribution.

## Conclusion

The court concluded that, in light of Windsor and the validity and recognition of the marriage, Tobits qualified as the participant’s surviving spouse under ERISA and the plan, required payment of the preretirement survivor benefits to her, and released the plan sponsor from further liability through interpleader.


Cozen O’Connor, P.C. v. Tobits, No. 11-45, 2013 WL 3878688 (E.D. Pa. July 29, 2013)