State Courts Cannot Determine if DRO is Qualified under ERISA

January 23, 2009 ( - The Minnesota Court of Appeals has overturned a lower court's decision that a domestic relations order (DRO) was a qualified domestic relations order (QDRO), saying the lower court did not have the jurisdiction to make that determination.

According to EBIA, the court cited the Department of Labor’s view that federal courts have exclusive jurisdiction to determine whether a DRO is a QDRO. The court said that, although state and federal courts have concurrent jurisdiction over lawsuits for plan benefits or similar relief brought under Employee Retirement Income Security Act (ERISA) Section 502(a)(1)(B), federal courts have exclusive jurisdiction over all other lawsuits brought under ERISA, including those that involve interpretations of the benefits law.

The case involved the first spouse of an ERISA plan participant who, years after the couple’s divorce presented a DRO for a portion of the participant’s plan benefits, EBIA said. The plan administrator determined the DRO was not a QDRO and informed the first spouse that she could submit a revised DRO, which she never did. However, once the participant died, the first spouse appealed the plan administrator’s decision by filing a lawsuit in state court.

The state court ruled the DRO was a QDRO, but the appellate court overturned that decision.

The opinion in Langston v. Wilson McShane Corp., is available  here .