Supreme Court strikes down Defense of Marriage Act in estate tax case

The Supreme Court on Wednesday, in a 5–4 decision written by Justice Anthony Kennedy, ruled that the Defense of Marriage Act (DOMA), P.L. 104-199, is unconstitutional because it violates the Fifth Amendment’s Due Process Clause by denying equal protection to same-sex couples who are lawfully married in their states (Windsor, No. 12-307 (U.S. 2013)).

The decision affirms two lower court rulings holding that DOMA unconstitutionally denied Edith Windsor, a resident of New York state, the right to take advantage of the exemption from federal estate taxes on her wife’s estate that she would have been entitled to had DOMA not prevented her marital status from being recognized federally. New York state recognizes full marriage rights for same-sex couples.

Kennedy found that DOMA burdened the lives of same-sex married couples “in visible and public ways,” by, for example, preventing them from obtaining government health care benefits and from being buried together in veteran’s cemeteries (slip op. at 23). Kennedy wrote that the states have, since the nation’s founding, possessed full power over the subject of marriage and divorce, subject to constitutional limitations (citing Loving v. Virginia, 388 U.S. 1 (1967)) (slip op. at 16). DOMA, which affects more than 1,000 federal statutes in which the definition of marriage is at issue, interferes with states’ power to regulate marriage by forcing “same-sex couples to live as married for the purpose of state law but unmarried for the purpose of federal law, thus diminishing the stability and predictability of basic personal relations the State has found it proper to acknowledge and protect” (slip op. at 22).

Before deciding that DOMA is unconstitutional, Kennedy addressed the question whether the Court had jurisdiction to hear the case once the Obama administration decided not to defend the law. Among other reasons to conclude that jurisdiction was warranted is that Windsor, who had been forced to pay the federal government $363,053 in estate taxes when her wife died, had not received a refund of the money even though the government was not defending the law.   

Justice Antonin Scalia, in a dissent joined by Justice Clarence Thomas (Chief Justice John Roberts joined the first part), objected to the majority’s conclusion that the Court had jurisdiction, arguing that because Windsor had won in the lower courts and the government did not support DOMA, there was no controversy to decide. He also criticized the majority’s constitutional analysis, noting that it was difficult to determine which constitutional provision the decision was based on. Justice Samuel Alito and Chief Justice John Roberts each wrote a separate dissent.      

Background  

DOMA, which was enacted in 1996, defines marriage for federal law purposes as the legal union of one man and one woman. Under Section 3 of DOMA, same-sex marriage is not recognized for any federal purposes including insurance benefits, Social Security benefits, the filing of joint tax returns, and the unlimited marital estate tax exemption available to opposite-sex married couples.

Before DOMA was enacted, the federal government had generally allowed states to determine marital status. After DOMA went into effect, for federal tax (and other) purposes, same-sex couples who are lawfully married under state law are not recognized as married under federal law.
 
Lower federal courts have found Section 3 of DOMA to be unconstitutional. The First Circuit declared Section 3 of DOMA unconstitutional last year, upholding a district court decision (Massachusetts v. United States Dep’t of Health and Human Servs., 682 F.3d 1 (1st Cir. 2012)). The First Circuit held that DOMA’s denial of federal benefits to same-sex couples lawfully married in Massachusetts violates the Equal Protection Clause of the U.S. Constitution.

In Windsor, the U.S. District Court for the Southern District of New York held that Section 3 of DOMA unconstitutionally discriminates against same-sex couples, and the Second Circuit affirmed the decision (Windsor, 833 F. Supp. 2d 394 (S.D.N.Y. 2012), aff’d., 699 F.3d 169 (2d Cir. 2012)). Today’s decision affirms these lower court rulings. 

In 2011, U.S. Attorney General Eric Holder stated that the Justice Department would no longer defend the constitutionality of Section 3 of DOMA. [In the Supreme Court, the law was defended by Paul Clement, a Bush administration solicitor general who was hired by House Republicans when the Obama administration declined to defend the law.]

—Alistair Nevius (anevius@aicpa.org) is the JofA’s editor-in-chief, tax, and Sally P. Schreiber (sschreiber@aicpa.org) is a JofA senior editor.