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Schwartz v. Bogen

United States Court of Appeals, Eighth Circuit

January 16, 2019

Bruce G. Schwartz Plaintiff - Appellant
Ardis Bogen, formerly known as Ardis Schwartz Defendant-Appellee

          Submitted: November 14, 2018

          Appeal from United States District Court for the District of Minnesota - Minneapolis

          Before COLLOTON, SHEPHERD, and STRAS, Circuit Judges.


         Bruce Schwartz filed an action against Ardis Bogen, his ex-wife, alleging violations of the anti-alienation provisions of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., that arose from payments he made to her for almost three decades. Bogen moved for dismissal on the ground of res judicata, and the district court[1] dismissed the matter with prejudice. On appeal, Schwartz argues the district court erred in granting Bogen's motion. Having jurisdiction pursuant to 28 U.S.C. § 1291, we affirm.


         Schwartz and Bogen entered into a marital property settlement agreement (Agreement) in New Jersey. The Agreement was incorporated into their final judgment of divorce (Judgment), which was entered in 1983, and provided, in relevant part, that if Bogen remarried after January 1, 1986, but in or before 1990, Schwartz would pay Bogen, "as equitable distribution, a yearly sum equal to Twenty (20%) percent of [Schwartz]'s Basic Bell System Management Pension Plan . . . ." Schwartz retired in 1985, and Bogen remarried in 1989. Neither Schwartz nor Bogen made a request for a qualified domestic relations order (QDRO) at either time. From 1989 through 2016, Schwartz made payments to Bogen using personal checks. Bogen never received distribution or payment from the pension plan itself. Both reported the payments as alimony on their federal tax returns.

         In 2016, Schwartz contacted Bogen and told her he realized that, under the terms of the Agreement, he should have stopped making the alimony payments in 1995 because she had remarried. Bogen, through her attorney, responded that the payments were not alimony but rather were an equitable distribution of the pension plan. According to Schwartz's complaint, Bogen's attorney stated in a letter that because the Judgment was entered before the effective date of the Retirement Equity Act of 1984 (REA), Pub. L. No. 98-397, 98 Stat. 1426 (1984), "the division of the pension was done without a QDRO."

         Bogen commenced an action for enforcement of her rights in New Jersey state court, requesting, among other things, that Schwartz be compelled to pay her 20% of his pension plan in monthly installments. Schwartz argued that the relief Bogen sought was "contrary to Federal law." Specifically, he argued that the anti-alienation provisions of ERISA prohibited sharing his pension and entitled him to a refund of money already paid to Bogen. He also argued that there was no QDRO to divide his pension and, without a QDRO, the pension plan could not be divided. He did not argue that the state court was without subject-matter jurisdiction to entertain the alleged ERISA violations.

         The state court made several rulings. First, it found that the doctrine of laches barred Schwartz's request for a refund of the money paid to Bogen since 1995. "Notwithstanding" this ruling, the state court then explained that "the issue of whether these payments were alimony or intended as equitable distribution and the arguments [Schwartz] asserts regarding ERISA must be addressed, as [he] may have an ongoing obligation to pay [Bogen]." The court further found that the payments were an equitable distribution, not alimony. The court also found that while ERISA prohibits the assignment or alienation of pension-plan benefits, it "was not intended to prevent the assignment to a spouse or former spouse that is entitled to support," citing New Jersey case law. Schwartz did not appeal the state court's judgment.

         Instead, Schwartz filed a complaint against Bogen in United States District Court for the District of Minnesota, asserting two counts: recovery of payments in violation of ERISA and the REA, and a declaration of federal preemption under the aforementioned federal laws. Bogen moved, in relevant part, for dismissal on the ground of res judicata. The district court granted Bogen's motion. It concluded that res judicata applied because, among other things, the state court determined Bogen was entitled to a portion of Schwartz's pension, notwithstanding ERISA. The district court rejected Schwartz's argument that res judicata did not apply because the state court was without jurisdiction to determine whether Bogen was entitled to a portion of his pension. It concluded that state and federal courts have concurrent jurisdiction to determine whether a divorce decree, judgment, or order qualifies as a QDRO. Whether the state court "correctly determined that the prior order was an enforceable QDRO," the district court explained, is irrelevant to the application of res judicata. Accordingly, the district court dismissed the matter with prejudice. This appeal followed.


         For the first time at oral argument, the parties addressed whether the Rooker-Feldman doctrine, not res judicata, more appropriately applied to this case. Under the doctrine, "lower federal courts are precluded from exercising appellate jurisdiction over final state-court judgments." Lance v. Dennis, 546 U.S. 459, 463 (2006) (per curiam). Because the doctrine "is jurisdictional, it may be addressed for the first time on appeal and may be raised sua sponte." Lemonds v. St. Louis Cnty., 222 F.3d 488, 492 (8th Cir. 2000), abrogated on other grounds by Shelby Cnty. Health Care Corp. v. S. Farm Bureau Cas. Ins. Co., 855 F.3d 836, 840-41 (8th Cir.), cert. denied sub nom. Ford v. Shelby Cnty. Health Care Corp., 138 S.Ct. 473 (2017). However, we need not address the application of the Rooker-Feldman doctrine in this case because it is "permissible to bypass Rooker-Feldma ...

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