On May 31, 2012, a federal appeals court in Boston (U.S. Court of Appeals for the 1st Circuit) unanimously ruled that the Defense of Marriage Act (“DOMA”) was unconstitutional, thereby paving the way for this controversial issue to be decided by the United States Supreme Court. Less than one week later, on June 6, 2012, the U.S. District Court for the Southern District of New York (a lower court, and thus not as significant a ruling as the 1st Circuit Appellate Court decision), also ruled DOMA unconstitutional.
DOMA was passed in 1996 and signed into law by President Clinton. In pertinent part, it defines marriage for federal purposes as a “legal union between one man and one woman as husband and wife” and specifically states that “spouse” can refer only to a person of the opposite sex of a husband or wife. It also provides that no state is required to recognize a same-sex marriage authorized by another state.
However, last year the Obama administration stated that it would no longer defend the law. (President Obama has since stated that he supports gay marriage). That task has since been taken up by Speaker John Boehner and the United States House of Representatives, enlisting the help of private attorney Paul D. Clement.
As the 1st Circuit Appellate Court noted in its decision, the issue before it concerned “appeals [that] contest the right of Congress to undercut the choices made by same-sex couples and by individual states in deciding who can be married to whom.” The Appellate Court determined that DOMA violated the equal protection clause of the Constitution, as it applies to same-sex married couples.
The Appellate Court noted that the significance of DOMA is that it prevents same-sex married couples from filing joint federal tax returns (which can lessen tax burdens), prevents the surviving spouse of a same-sex marriage from collecting Social Security survivor benefits, and even prevents federal employees from sharing their health insurance and certain other medical benefits with same-sex spouses.
Although not specifically mentioned in the opinion, DOMA also impacts same-sex couples that decide to dissolve their marriage or civil union. In those situations, DOMA prevents a payor spouse from deducting the alimony/maintenance payments to a recipient spouse on a personal tax return. Typically in a divorce, a payor spouse is allowed to deduct the alimony/maintenance payment made to their former spouse from their gross income, which is an obvious tax advantage to the payor. The recipient spouse is then required to pay tax on the alimony/maintenance received, as it is treated as taxable income. Thus, the IRS collects tax on the income only one time. Under DOMA, divorced same sex couples would not enjoy this benefit. While the recipient spouse would still have to pay tax on the alimony/maintenance received, the payor spouse would no longer be allowed a deduction on that income. This effectively means that the IRS is collecting tax twice on the same income. If DOMA were to be held unconstitutional, such double taxation would very likely change.
So far, several federal courts have held DOMA unconstitutional in one form or another, with the most recent decision coming down from the U.S. District Court for the Southern District of New York on June 6, 2012. In that case a same-sex spouse was required to pay more than $363,000 in estate taxes on property she received from her deceased same-sex spouse. Typically, married couples are allowed to pass their estate on to their spouse without any estate tax. Since DOMA effectively prevents this estate tax-free transfer, it was held unconstitutional.
The June 6th decision is the fifth such ruling on the matter. While same-sex marriage is legal in only a small number of states, other states, like Illinois, recognize civil unions, which are not technically marriages, but allow couples many of the same state benefits granted to married couples.
While many legal commentators focus on the rights DOMA allows couples who are married, it also impacts the rights of same-sex couples that have divorced. The issue is far from settled, and it will be interesting to see how it unfolds.