Congress has been providing for and regulating insurance for
members of the armed services since 1917. See Ridgway, 454 U.S.
at 50-51, 102 S.Ct. 49. The Supreme Court has described the SGLIA
as having "pervasive and detailed characteristics." Id. at 53,
102 S.Ct. 49. So that service members would have access to life
insurance at a reasonable and uniform rate, Congress subsidizes
the program. See id. at 52, 102 S.Ct. 49.
The United States plays an integral part in the organization
and administration of the program. As we observed above, the
United States chooses the insurer and is the policyholder.
Congress has established the maximum amount of coverage allowed
under the program. See 38 U.S.C. § 1967. The Secretary has the
right to discontinue any SGLIA policy "at any time."
38 U.S.C. § 1966(d). The Secretary determines the uniform amount which is to
be collected from service members in order to pay the cost of
coverage, as well as the amount of any additional contribution by
the federal government in order to make up for the "extra hazard
of duty in the uniformed services." 38 U.S.C. § 1969(b); see
also 38 U.S.C. § 1969(a)(3). The federal government, rather than
the insurer, issues the "certificate setting forth the benefits
to which the member is entitled thereunder, to whom such benefit
shall be payable, to whom claims should be submitted, and
summarizing the provisions of the policy principally affecting
the member." 38 U.S.C. § 1972. The Department of Veterans Affairs
makes "conclusive" determinations about who is eligible for
coverage, whether a person was covered at a specific point in
time, whether a person has forfeited coverage by committing an
offense listed in 38 U.S.C. § 1973, and a number of other
coverage issues. See 38 C.F.R. § 9.7.
The Supreme Court's description of the National Service Life
Insurance Act, the SGLIA's precursor, as "the congressional mode
of affording a uniform and comprehensive system of life insurance
for members and veterans of the armed forces of the United
States," Wissner, 338 U.S. at 658, 70 S.Ct. 398, is equally
applicable to the SGLIA. We do not believe that when it enacted
this comprehensive statutory program, Congress had in mind that
the rights of the beneficiaries would vary depending on what
state's law might be applied. If it did, the Secretary would have
a whole host of additional factors to consider when establishing
the premium rate, and we have found no evidence that Congress
intended this significant variable to be considered.
If defendants were subject to liability under the various state
laws for their actions in making policy determinations under the
SGLIA, the uniform life insurance program for the members of the
armed forces and their beneficiaries would no longer be uniform.
See Prudential, 178 F.3d at 475. Depending on what state law
may apply, some beneficiaries might not be able to collect all of
their rightful benefits as envisioned by Congress. Others might
be able to obtain more than the face amount of the policy because
of state bad faith or other causes of action. Some might be able
to collect counsel fees and others not. There might also be
inequities due to the vagaries of the various state conflict of
laws rules. We do not think that Congress intended such diverse
results, particularly because the United States is the
policyholder and is subsidizing the program. We conclude that
"Congress left no room for the States to supplement" in the field
of life insurance for members of the armed services, Cipollone,
505 U.S. at 516, 112 S.Ct. 2608, and that permitting state law
claims to be pursued in actions to collect on an SGLIA policy,
such as those alleged here, would conflict with Congressional
intent to provide a uniform system of life insurance coverage for
military personnel. In sum, "[i]t would be arbitrary to subject
issues arising under the policy to the law of a particular
state." Prudential, 178 F.3d at 475. If federal law governs the
designation of the beneficiary
to receive the policy proceeds, we see no reason why it should
not govern the issue of how much the policy proceeds should be.
See id. If the SGLIA preempts a state law domestic relations
order so as to prevent enforcement of an obligation a soldier had
to his children, it surely preempts state law here. See
Ridgway, 454 U.S. 46, 102 S.Ct. 49, 70 L.Ed.2d 39.
We need not decide, at this stage, the scope of plaintiff's
claim under the SGLIA.
In summary, we conclude that the SGLIA preempts plaintiff's
state law claims. Counts I, II, IV, and V of the complaint will