Howell v. Howell is a statutory interpretation case in which the United States Supreme Court held that the Uniformed Services Former Spouses’ Protection Act (USFSPA) preempts a state court from ordering a retired servicemember to indemnify a former spouse for a reduction in their share of the retiree’s military pension when the retiree elects to receive disability compensation from the Department of Veterans Affairs (VA), resulting in the waiver of an equal amount of military retired pay. The veteran’s reimbursement to the former spouse of monies waived for VA disability compensation is known as indemnification. By way of background, a retired servicemember may only receive VA disability compensation if he or she waives an equal amount of military retired pay. This is referred to as a VA waiver. Military retired pay is taxable, whereas VA disability compensation is not. The waived retired pay is restored (and thus, indemnification is not necessary) when the veteran has a VA disability rating of 50% or more and is receiving Concurrent Retirement and Disability Pay (CRDP)—unless the veteran also elects Combat-Related Special Compensation (CRSC), as one cannot receive both.
Howell overruled the way many state courts have analyzed indemnification. This Note serves as an analytical and practical resource for family law practitioners nationwide, as the cost of military divorce and malpractice claims are both on the rise. This Note begins by exploring the history of the relevant Supreme Court precedent, explaining the statutory framework of the USFSPA, and examining the historic split among the states. Following are the facts and procedural history of Howell. Next, this Note examines post-Howell interpretation lenses—including how the Minnesota Court of Appeals has overstated the impact and application of the Howell decision—and discusses potential remedies to address the impact of Howell going forward. Finally, this Note concludes that Howell has an extremely narrow holding: federal law prevents a state court from adjudicating indemnification. Although the Howell ruling precludes a state court from ordering a retired servicemember to indemnify a former spouse in certain situations, the Supreme Court previously ruled that res judicata is a defense to federal preemption regarding the division of military service benefits. The Court has yet to address whether an agreement that divides a preempted benefit (i.e., VA disability compensation) is enforceable.