GOVERNOR PROPOSED SUBSTITUTE INSTEAD OF APPROVING:
APPROVED BY GOVERNOR:
GOVERNOR PROPOSED SUBSTITUTE INSTEAD OF APPROVING:
APPROVED BY GOVERNOR:
A thorough and informative story on the Hamm divorce trial in Oklahoma raises questions about the degree of involvement of a lawyer for Continental Resources, of which Mr. Hamm is the founder, CEO and major shareholder. But I can't see any one thing in the story that is unique or wrong; it is just the size of the company and the personal fortune at stake that make it a story.
It is very common for employers and their in-house counsel to get concerned about their information coming out in a divorce trial, or other things that could affect the employer or fellow employees. Here in the Washington area, that is true of federal agencies as well as private employers. And it applies to many middle-class litigants, not just CEOs. In-house counsel generally try to do this by working with the parties and their lawyers, but I have seen them formally intervene and appear in the courtroom.
As for where the lawyer sat in the courtroom and his role in arguments and in informal conversation, that is a matter of local custom and usage and nothing in the story sounds particularly unusual. Just like the court-appointed lawyers or "guardians ad litem" for children, whom I deal with routinely in my cases, he had to find a place to sit in a courtroom designed for a two-sided case. Nearly everywhere you choose to sit or stand is freighted with meaning. Would it look better, or worse, to sit at one side's counsel table? The bailiff's chair? The judge's bench? The witness stand? Family law cases don't have juries except in a couple states, so the jury box often is used for overflow seating.
Judges rightly resent the implication that they are so weak-willed that they would be influenced or "intimidated" by anyone, especially a lawyer, no matter how accomplished or well-heeled.
The reporters got several commentators to speculate about the lawyer's involvement posing a conflict with other shareholders' interests, but all the comments are just that: speculation. Or, as we say in law school at exam time, "issue-spotting". Flagging problems that could come up in theory and in practice, but which might not be actual problems. To some extent, that is a lawyer's job. But because it is so highly prized in our law school exams, we often forget that it is not our main job, but only the first step in what clients and society need us to do.
Postscript: On Nov. 10 the court issued its ruling. It awarded Mrs. Hamm $999.5 million out of a fortune of over $14 billion. It sounds like the disparity is mostly because his ownership of his company, which he held before marriage, appreciated "400-fold", but more from market conditions and the work of other executives and employees, and only partly from his own efforts during the marriage.
I'm posting this because family law attorneys need to know about it, or more to the point, need to THINK about it even though we already know it. But it's something that everyone should be concerned about.
"Problem gambling among vulnerable older women is strongly linked to the proliferation of the modern slot-machine-dominated casino.
"Simply put, the new slot machine is engineered to addict people. It produces a mesmerizing experience of sound, lights and repetitive motion that makes both time and money vanish. Players talk of disappearing into the machine and getting into a zone.
"Seniors, who may suffer from physical, mental and emotional health problems, are especially at risk of succumbing to computerized slots. Medication, cognitive impairment, depression and just plain sadness can interfere with judgment and decision-making. And the casino itself dark, smoky, and filled with incessant noise, pulsating light and dizzying carpet patterns and layout can contribute to mental confusion and disorientation. It is not uncommon for older people to suffer sudden heart attacks while playing the slots."
"The Social Security Administration won't let divorcées have access to their ex spouses' earnings records. Nor will it let widows and widowers have access to their late spouses' earnings records.", according to Larry Kotlikoff, quoted on PBS's "The Newshour". Despite the fact that ex's earnings can determine how much one can expect to receive in social security benefits, and are the key factor in choosing whether to receive benefits based on one's own earnings or those of a particular spouse or former spouse.
"Six in 10 women describe themselves as the primary breadwinners in their households, and 54% manage the family finances, according to the poll by Allianz Life Insurance Company of North America. Even so, 49% fear becoming a bag lady ..." This includes 27% of women earning more than $200,000 a year"and 43% of married women.
By Janet Novack, 3/16/2012
Divorced federal employees, retirees, servicemembers, and veterans need to check their beneficiary designations in the wake of a recently overturned Virginia law.
The Virginia Supreme Court has overturned as unconstitutional a long-standing Virginia law that automatically changed beneficiary designations for life insurance policies after divorce (Va. Code Sec. 20-111.1). The Court’s decision applies to life insurance benefits for federal employees, veterans and military personnel.
The reason the law is unconstitutional is the doctrine of federal preemption of state laws under the United States Constitution’s Supremacy Clause. Also, the federal government has “sovereign immunity”, so that a state court can only make an order affecting federal benefits if Congress has specifically made a law allowing the states to do something with that benefit in a certain prescribed way. For federal and military pension Survivor Benefits, Congress has authorized states to do this in divorces, but when it comes to insurance, it has not. In fact, the federal statute creating and governing Federal Employees’ Group Life Insurance (FEGLI), in its section on designated beneficiaries, has a provision expressly preempting state legislation that conflicts with it.
The Virginia statute’s drafters anticipated the possibility of federal preemption of it, and so the statute specifically provides that if it is inoperable as to a particular kind of insurance because of federal preemption of the state statute, then the same net result between dueling insurance beneficiaries shall be achieved by using a “constructive trust” on the insurance proceeds, so that the person named as beneficiary must turn around and pay them to the person who otherwise would be the beneficiary. If you think that doesn’t exactly pass the smell test, and the state seems to be deliberately nullifying and undoing the actions of the federal government, the Virginia Supreme Court agrees with you. It points out, however, that it is joining a small minority position on this question: most states’ courts that have addressed the issue think such statutes are just fine. [NEWS FLASH: The latest is Hardy v. Hardy from Indiana's Supreme Court, March 14, 2012.]
The Virginia statute also applies to any kind of “death benefit”, such as designated beneficiaries of accumulated retirement contributions for employees and servicemembers who die before retirement. The court decision does not say anything about those other kinds of benefits. But federal employees and servicemembers would be wise to check and correct those beneficiary designations, too.
Two dissenting justices argued that the provisions of the FEGLI Act were designed to protect the federal government from getting entangled in disputes between rival beneficiaries, and NOT for the purpose of actually giving more benefits to divorced spouses instead of new spouses; and that therefore Virginia’s “preemption workaround” provision was perfectly constitutional, because it makes the divorced widows pay the benefits to the new spouses while keeping the federal government uninvolved.
On a practical level, unfortunately, neither way of deciding this issue is workable, fair or convenient for everybody. The Virginia statute is one of those laws that is designed to do for people by default what most people would choose to do if they attended to their affairs – to remove a divorced spouse from being the beneficiary except in cases where the separation agreement or divorce decree specifically says that they will stay the beneficiary. Many of our clients have rightly been told over the years that the law does this automatically, and have probably relied on it. On the other hand, many servicemembers, veterans, and federal employees have been told by the federal government over the years that they must change their beneficiary designation upon divorce if they want their insurance beneficiary to change. We have had people come to us whose deceased exes deliberately chose to do nothing about the beneficiary designation because they logically inferred, from all those federal warnings, that the beneficiary designation would change only if they changed it, and they wanted the ex-spouse to stay covered. So this is a case where either result would predictably lead to some injustice for quite a few people. But this is certainly the right result constitutionally.
And what we need to do about it is very clear: all federal employees, retirees, servicemembers or veterans who ever got divorced in Virginia or now live in Virginia should make sure that their beneficiary designations reflect their wishes, or their obligations under divorce decrees or agreements.
For more of the legal details see Richard Crouch’s case note about this case.
This article by St. Louis lawyer Joseph Cordell, brought to our attention by Bay Area lawyer Mark Ressa, describes in memorable, colorful detail exactly how much you should tell your divorce lawyer about facts that might make you look bad. We agree with every word of it. It's what we always try to tell clients, but frankly, this article tells it far better.
"...My feeling about marriage is that once you enter into it, you are no longer doing anything alone. The sum is greater than the two parts and so it's not a husband who earns money and then shares it with his wife. Rather, the marriage is earning the money all along. Once married, the breadwinner is not earning that money by himself. He is enabled by the other spouse. ..."