WASHINGTON (CN) - The Supreme Court appeared unlikely Monday to strike down a Minnesota law that keeps people from collecting on their exes’ life-insurance policies.
Minnesota enacted the statute at issue in 2002 to address the tendency of couples unintentionally failing to update such documents after a divorce.
At a hearing on the law Monday, the Supreme Court noted that some people very well may prefer to keep former spouses as the beneficiaries of their life insurance policies, even after getting divorced. Justice Elena Kagan noted, however, that the Minnesota Legislature might be owed deference after using its judgment to finding that isn't typically the case.
"If you're saying really we look to the broad class of people, why shouldn't we make the same judgment that the Legislature made, or at least accept that judgment, that if we look to the broad class of people, most of them would rather give their life insurance policy to their children than to their divorced spouse?" Kagan asked on Monday.
The case before the court stems from the MetLife policy of Mark Sveen, who died in 2011.
Though Sveen and his wife Kaye Melin had divorced four years earlier, Melin was in line to receive the proceeds from the policy because he never updated the policy.
MetLife asked a federal court to determine who should receive his policy benefits in light of the 2002 law, however, and the court eventually awarded the benefits to Sveen's children.
The children appealed to the U.S. Supreme Court last year after the Eighth Circuit reversed, finding that the Minnesota law violates the Constitution's contracts clause, which prevents states from passing laws "impairing the obligation of contracts."
Arguing for the children Monday, Jenner Block attorney Adam Unikowsky defended the Minnesota law as putting wills and life insurance policies on equal footing.
"I don't mean to fight the hypothetical, but in this case, I think the Legislature made the empirical determination that the typical person designates a spouse as a beneficiary because it's the spouse and when the divorce happens, the calculus changes," Unikowsky said.
Unikowsky offered the court several routes to uphold the law, prompting Kagan to request that he narrow his argument.
"When we have to decide this case, we presumably have to pick one," Kagan said. "And if we were to go with you, I mean, where do you really think that the question is here?"
Unikowsky encouraged the court to treat the law as a default rule, noting that anyone who wanted to keep their ex-spouse as their beneficiary could simply submit the paperwork to achieve this.
Justice Neil Gorsuch wondered meanwhile whether there is any evidence Sveen wanted to remove Melin as his beneficiary. When Unikowsky said there is not, Gorsuch asked why the state or courts should say otherwise.
"Does anyone pay life insurance for the joy of paying life insurance?" the Trump appointee asked.
Melin’s attorney Shay Dvoretzky mirrored Gorsuch's skepticism, saying the state Legislature should not assume that everyone who gets divorced wants to remove their ex-spouse as a beneficiary.
Dvoretzky argued the Minnesota law went back in time to alter an insurance policy Sveen never said he wanted to change, the exact type of law the contracts clause was meant to prevent.
"What the contracts clause is concerned with is making sure, even under this court's modern jurisprudence, that the Legislature doesn't abrogate the rights of some, even if it's intending to benefit others by effectuating their intent," said Dvoretzky, of the firm Jones Day.
But Justice Stephen Breyer noted that ruling for Melin could have far-reaching implications for people who divorced in the decade and a half between when Minnesota passed its law and this morning’s hearing.
That led Breyer, Gorsuch and Justice Anthony Kennedy to bat about the question of how the court's ruling in the case would affect this group of people. Gorsuch noted anyone who wanted to change their beneficiary would simply need to write a letter, but Breyer raised they would also need to find out about Sveen's case.
"Maybe they just read Supreme Court cases," Breyer said, to laughter.
Kennedy then jumped in to note they would also have to read the contracts clause and its resulting court cases.