## Facts

- Warren Hillman, a retired federal employee, had life insurance under the Federal Employees’ Group Life Insurance Act of 1954 (FEGLIA).
- During his marriage to Judy Maretta, Warren designated Maretta as the beneficiary of his FEGLI policy.
- Warren and Maretta later divorced; Warren subsequently married Jacqueline Hillman.
- Warren died without changing his FEGLI beneficiary designation.
- Under FEGLIA’s order of precedence, Maretta, as the named beneficiary, received approximately $124,558 in insurance proceeds.
- Hillman sued Maretta under a Virginia statute creating liability for a former spouse who receives death benefits when a revocation-on-divorce provision is preempted by federal law.
- A Virginia trial court awarded Hillman the proceeds, but the Supreme Court of Virginia reversed, holding the Virginia cause of action preempted by FEGLIA.

## Issues

1. Whether FEGLIA preempts a state statute that, after FEGLI proceeds are paid to the named beneficiary, permits another claimant to recover the same amount from that beneficiary.

## Decision

- The Supreme Court affirmed the Supreme Court of Virginia.
- FEGLIA preempts the Virginia statute’s post-payment cause of action against the former-spouse beneficiary.
- Although the state law did not alter the federal payment process, it conflicted with FEGLIA by shifting the ultimate economic benefit away from the named beneficiary.
- Concurring Justices agreed with the result but questioned reliance on broad obstacle-preemption reasoning.

## Legal Principles

- Federal law preempts state law to the extent state law conflicts with federal statutory objectives and operation.
- FEGLIA establishes a uniform federal scheme that prioritizes payment to, and retention by, the insured’s designated beneficiary under a federal order of precedence.
- A state rule that effectively redirects FEGLI proceeds—either directly through revocation rules or indirectly through post-payment restitution or liability mechanisms—conflicts with FEGLIA’s beneficiary designation framework and is preempted.
- The fact that a state remedy operates only after federal payment does not avoid preemption when it changes who ultimately receives and keeps the proceeds designated under federal law.

## Conclusion

FEGLIA gives the designated beneficiary a substantive entitlement to FEGLI proceeds, and a state statute that allows another party to recover those proceeds from the named beneficiary—even after proper federal payment—conflicts with FEGLIA’s scheme and is preempted.


Hillman v. Maretta, 569 U.S. 483 (2013)