In United States v. Windsor, 133 S. Ct. 2675 (2013), the Supreme Court held that federal law must defer to state law on the validity of same-sex marriages. After Windsor, when a valid marriage exists for purposes of state law, it exists for purposes of federal law.
Is federal law likewise required to recognize a civil union as a valid marriage? A split in authority seems to be developing. One view of the issue is taken by the leading IRS Revenue Ruling on same-sex marriage:
For Federal tax purposes, the term "marriage" does not include registered domestic partnerships, civil unions, or other similar formal relationships recognized under state law that are not denominated as a marriage under that state's law, and the terms "spouse," "husband and wife," "husband," and "wife" do not include individuals who have entered into such a formal relationship. This conclusion applies regardless of whether individuals who have entered into such relationships are of the opposite sex or the same sex.
Rev. Rul. 2013-17, § 4, 2013-38 I.R.B. 201. Thus, for tax purposes, the IRS will not recognize any state civil union as a valid marriage.
But a recent Ninth Circuit decision takes a conflicting view. In In re Fonberg, No. 13-002, 2013 WL 6153265 (9th Cir. Nov. 25, 2013), a female law clerk in the District of Oregon filed a petition to review an employment dispute. The plaintiff was a party to a same-sex civil union that was valid under Oregon law. She had attempted to enroll herself and her partner in a family health insurance plan offered to married employees of federal courts. The Office of Personnel Management ("OPM") denied her claim, reasoning that an Oregon civil union is not a marriage. OPM relied on a formal opinion letter somewhat similar to Revenue Ruling 2013-17:
The Supreme Court's decision addressed the constitutionality of a statute that defined "marriage" and "spouse" for purposes of federal law to include only opposite‑sex couples. Therefore, same‑sex couples who are in a civil union or other forms of domestic partnership other than marriage will remain ineligible for most Federal benefits programs.
OPM Ben. Admin. Ltr. No. 13-203 (July 17, 2013).
After mediation failed, the plaintiff filed a formal employment complaint alleging discrimination. The district court held that the federal government was required to recognize the plaintiff's civil union as a marriage but held that there was no authority for granting reimbursement for insurance payments made before the date of the order.
On appeal, the Ninth Circuit agreed that the federal government was required to recognize
the Oregon civil union as a marriage. Oregon's civil union statute provides:
Any privilege, immunity, right or benefit granted by statute, administrative or court rule, policy, common law or any other law to an individual because the individual is or was married, or because the individual is or was an in-law in a specified way to another individual, is granted on equivalent terms, substantive and procedural, to an individual
because the individual is or was in a domestic partnership [civil union] or because the individual is or was, based on a domestic partnership, related in a specified way to another individual.
Or. Rev. Stat. § 106.340(1) (Westlaw current with 2013 Reg. & Sp. Sess. legis. eff. through 10/8/13) (emphasis added). Thus, Oregon state law expressly provides that partners to civil unions are entitled to all of the privileges and benefits of marriage. A civil union under Oregon law essentially is a marriage in all aspects except the name.
The Ninth Circuit held that the federal government is required to defer to Oregon law and
recognize an Oregon civil union as a marriage:
Fonberg and her partner are treated differently in two ways. First, they are treated differently from opposite-sex partners who are allowed to marry and thereby gain spousal benefits under federal law. This is plainly discrimination based on sexual orientation, which
the District of Oregon's EDR Plan prohibits. They are also treated unequally vis-à-vis same-sex couples in other states in the circuit, who may marry and thus gain benefits under Windsor. This violates the principle that federal employees must not be treated unequally in the entitlements and benefits of federal employment based on the vagaries of state law. Here, Oregon law suffers from precisely the same deficiency that the Supreme Court identified in Windsor with respect to the Defense of Marriage Act. Both these forms of discrimination are prohibited under the Oregon EDR Plan.
Fonberg, 2013 WL 6153265, at *2. The Ninth Circuit also held that the plaintiff was entitled to reimbursement, reversing the district court's decision on that issue.
Fonberg does not directly hold that the position taken by OPM violates the federal Constitution. The narrow holding of the case is that the position taken by OPM violated a specific plan for federal employees (the Oregon EDR plan) that prohibited discrimination based upon sexual orientation. But given the court's express statement that "Oregon law suffers from precisely the same deficiency that the Supreme Court identified in Windsor," and given that Windsor construed the federal Constitution, there is a high degree of likelihood that the court would reach the same result in a case that directly presented the constitutional issue.
At a minimum, Fonberg suggests that the IRS's position on civil unions is likely to be contested by taxpayers who are partners to civil unions. The IRS seems to be reasoning that when a state describes a relationship as a civil union, it is expressly refusing to describe the relationship as a marriage and that, therefore, the federal government is not required to recognize the relationship as a marriage.
But many civil union statutes, including the Oregon statute at issue in Fonberg, are intended to give the partners literally all of the benefits of matrimony except for the label "marriage." Fonberg holds that when federal law looks to state law on same-sex relationships, it must look to the substance of that law—the rights actually granted to partners in civil unions—and not to the mere label.
It is possible, of course, that other courts will reach a different result and uphold the IRS's position. It is also possible that even the Ninth Circuit might distinguish Fonberg and reach a different result under the law of a state that does not define civil unions so broadly and does not award to partners in civil unions literally all of the benefits of marriage. But Fonberg certainly suggests that in some situations, Windsor may require the federal government to treat a civil union as a marriage.