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New Hampshire Supreme Court Ruling on Gay Divorce Property Distribution

Posted on: August 24th, 2016 by Art Leonard No Comments

The New Hampshire Supreme Court ruled on August 19 that a judge deciding a divorce case for a lesbian couple could take into account the couple’s many years of cohabitation before the state made it possible for them to become civil union partners and then spouses, in deciding how to divide up their “marital assets.” The decision in Matter of Deborah Munson and Coralee Beal, 2016 N.H. LEXIS 180, 2016 WL 4411308, adopts a creative interpretation of the divorce statute in order to get around the limiting concept of “marital property” usually applied in such cases.

The ruling follows the lead of several other states in confronting what is likely to be a recurring issue during this transitional period following the adoption of marriage equality in the United States. Divorce statutes normally include “the length of the marriage” as a factor to take into account when the court decides how to divide up assets as part of a divorce proceeding following a brief marriage.  Many long-term same-sex couples married over the past few years after lengthy periods of non-marital cohabitation, and spouses of unequal income within a relationship could be seriously disadvantaged if the court could not take account of the entire length of their relationship in deciding on a fair asset distribution.

In this case, Deborah Munson and Coralee Beal lived together as a couple for fifteen years before they were able to become civil union partners as a result of new legislation in New Hampshire in 2008. When the state subsequently passed a marriage equality bill that took effect on January 1, 2011, their civil union was automatically converted into a marriage.  On March 28, 2012, Munson filed a petition for divorce.  At trial, she took the position that this was a short-term marriage, a factor that would cut against Beal’s potential distribution of assets.

Beal countered by arguing that prior to the legalization of “gay marriage” the couple “did what the law allowed them to do as any other married couple to provide for each other, including, but not limited to executing estate plans that left respective estates to the other, [Munson] providing life and health insurance for her partner’s benefit, having joint accounts, sharing duties within the home and finally joining together in a civil union and legal marriage.” Beal argued that the court “must consider the parties’ lengthy twenty-one year relationship when ordering a distribution of the marital property in this matter.”

However, the court marked October 8, 2008 (the date of their civil union) as the start of their marriage for purposes of this case, holding that “the issues in their divorce will be determined using that as the start date.” As a result, the court departed from the usual presumption of equal distribution of assets and ordered distribution of only about 12% of the marital estate to Beal in addition to ordering Munson to pay her alimony of $500 per month for five years.  Beal appealed.

Justice Gary Hicks, writing for the court, quoted the statute’s definition of the “marital estate” as including “all tangible and intangible property and assets, real or personal, belonging to either or both parties, whether title to the property is held in the name of either or both parties,” and the statute “assumes that all property is susceptible to division.” Normally, an equitable distribution involves a relatively equal distribution of the assets.  However, the statute permits a court to find that an equal distribution “would not be appropriate or equitable after considering one or more of” fifteen factors listed in the statute, including “the length of the marriage.”

In the case of a “short-term marriage” where one spouse brings substantially greater assets than the other to the marriage, a court may decide that it is inappropriate to redistribute to the spouse who brought much less to the marriage a significant share of what the wealthier spouse brought to the marriage. This seems quite logical.  If a rich person marries a poor person and the marriage quickly breaks down, would it be proper to total up all their assets and divide them in half?  Such an approach might lend itself to undesirable fortune-hunting schemes.  Pointing to the court’s past rulings on this issue, Hicks wrote, “We have observed that in a short-term marriage, it is easier to give back property brought to the marriage and still leave the parties in no worse position than they were in prior to it.”  However, he pointed out, duration of the marriage is only one of many factors to consider, and “marital property is not to be divided by some mechanical formula but in a manner deemed ‘just’ based upon the evidence presented and the equities of the case.”

In this case, the trial court applied the “short-term marriage” approach and specifically stated in its ruling that it “declined Beal’s invitation to declare the parties married upon their cohabitation in the 1990s.” On appeal, Beal argued that the court’s approach erred in failing to consider the “commingling of assets before 2008,” and that by focusing on the shortness of their legal marriage, “the trial court ignored the substantial and uncontroverted evidence developed at trial that the parties had a committed romantic and financial partnership long before 2008.”

After referring to decisions taking into account pre-marital cohabitation from courts in Oregon, Michigan, Hawaii, Indiana, Montana, and Connecticut, the New Hampshire court decided that it could not totally ignore the statutory factor of “length of the marriage” and explicitly treat this marriage as having been 21 years long. However, the list of factors in the statute includes a final catch-all category: “any other factor” that the court “deems relevant.”  As courts in those other states had recognized, “premarital cohabitation may be relevant to the distribution of marital property” in cases where a couple had commingled their assets.

“The couple may have become depend upon the assets that they shared prior to marriage,” wrote Hicks, “such that it may not be just for a court in divorce proceedings to ignore their cohabitation period when determining what constitutes an equitable property distribution.” He specifically noted arguments submitted in support of Beal’s appeal by the ACLU of New Hampshire and Gay & Lesbian Advocates & Defenders, contending that “when a divorcing couple’s relationship has included ‘years of economically interdependent cohabitation followed by a “short” marriage, the notion of returning the parties to their original premarital position is unrealistic’ because ‘the relationship was not, in any relevant way, short-term.’”

Thus, the New Hampshire Supreme Court could see “no reason” why the statute, “which broadly permits the trial court to consider ‘any other factor that it deems relevant,’ would not permit the court to consider premarital cohabitation. We therefore hold that premarital cohabitation is a factor that the court may consider in divorce proceedings when determining whether to depart from the presumption that ‘an equal division is an equitable division of property.’”

In this case, the trial court made detailed factual findings relevant to this issue, and then apparently ignored them in declaring that it would treat this as a “short-term marriage” as to which it would depart from the equal division presumption. “We conclude,” Hicks wrote, “that, by not taking these findings into account, the court did not exercise the full breadth of its discretion under the statute.”  Thus, the case would have to be remanded for a reconsideration of the property division.

Furthermore, in making the alimony award, a trial court is supposed to take into account whatever property division it has made. Since the property division will have to be reconsidered, so will the alimony award.

The court rejected Munson’s argument that because the couple could have married early than 2008 as same-sex marriage was available in a few other states and Canada prior to that date, Beal’s argument that civil unions were not available prior to 2008 should be rejected. “Whether Munson and Beal could have entered into a civil union or married earlier does not affect our analysis,” wrote Hicks.  “Had they done so, their period of premarital cohabitation would have been shorter, but, for the reasons previously discussed, it would have still remained a relevant factor in the determination of an equitable property division.”

The court also noted that the logic of its ruling would apply as well to different-sex couples who divorce shortly after marrying but after cohabiting for a long time, pointing out that long-term cohabitation has become much more common, and quoting one study showing that in 2008, “6.2 million households were headed by people in cohabiting relationships. . . They included 565,000 same-sex couples.” Thus, this holding applies in all divorce proceedings.

The court rejected Munson’s argument that its ruling would violate a New Hampshire constitutional provision barring “retroactive enforcement of laws that affect substantive rights or impose new duties or obligations,” finding this argument “unavailing” because it was not in any way changing the definition of “marital assets” or deeming the cohabitation to consist of a “marital status,” but merely giving a reasonable interpretation to the “other factors” provision in the statute.

Beal is represented by Kysa M. Crusco of Bedford. Paul R. Kfoury, Sr., Andrea Q. Labonte and Courtney M. Hart of Manchester and Saco, Maine, represented Munson.  The amicus brief was filed by Gilles R. Bissonette of the ACLU of New Hampshire and Mary Bonauto of GLAD, based in Boston.  Bonauto argued on behalf of the plaintiffs in the Supreme Court’s 2015 marriage equality case, Obergefell v. Hodges.

LGBT Legal Organizations Call for Decriminalization of Sex Work as Federal Government Initiates Prosecution of Rentboy.com’s Owner and Employees

Posted on: August 26th, 2015 by Art Leonard No Comments

On August 20, leading LGBT rights legal organizations in the United States issued a joint statement supporting Amnesty International’s August 11 Resolution that advocates for the human rights of sex workers, including repeal of laws against prostitution. Just days later, on August 25, the U.S. Department of Homeland Security (DHS) raided the New York City offices of Rentboy.com, the world’s largest on-line escorting website, carted away boxes of business records and computers, and arrested the company’s chief executive officer, Jeffrey Hurant, and six employees.

Amnesty International (AI), a non-governmental organization concerned with human rights issues worldwide, called on governments to repeal laws criminalizing sex work, while asking them to move to prevent and combat sex trafficking, to ensure that sex workers are protected from exploitation, and to enforce laws against the sexual exploitation of children. In short, AI suggests that adults should be able to freely consent to engage in sexual activity for compensation without criminal penalty, and that continued maintenance of criminalization exposes all sex workers, whether children or adults, to exploitation, violence, and severe health risks.

Sex work for pay is presently legal in some countries (e.g., Canada, United Kingdom), but outlawed in most. Even those countries that don’t criminalize prostitution as such generally maintain laws against promotion and public solicitation of prostitution. In the United States, every jurisdiction except some counties in Nevada treats all sexual activity for monetary compensation as unlawful, although they differ as to the classification of the offense and potential penalties. The Model Penal Code as adopted in the states decriminalized private consensual sexual activity between adults, but not when such activity involves a commercial transaction, and courts have been unanimous in holding that the Supreme Court’s 2003 decision striking down sodomy laws, Lawrence v. Texas, does not create a protected liberty interest extending to commercial sex or sex between adults and minors.

The LGBT organizations that joined in the statement endorsing AI’s resolution are Transgender Law Center, Gay & Lesbian Advocates & Defenders, Lambda Legal, National Center for Lesbian Rights, and National Center for Transgender Equality.

The Joint Statement explains, “For many LGBT people, participation in street economies is often critical to survival, particularly for LGBT youth and transgender women of color who face all-too-common family rejection and vastly disproportionate rates of violence, homelessness, and discrimination in employment, housing, and education.”

The Joint Statement goes on to describe the various hazards faced by sex workers that are amplified by the criminalization of their activities, with a particular emphasis on the difficulties experienced by transgender sex workers. “Laws criminalizing sexual exchange – whether by the seller or the buyer – impede sex workers’ ability to negotiate condom use and other boundaries, and force many to work in hidden or remote places where they are move vulnerable to violence. Research and experience have shown that these laws serve only to drive the industry further underground, make workers less able to negotiate with customers on their own terms, and put those who engage in criminalized sex work at higher risk for abduction and sex trafficking,” says the Joint Statement. “And as UNAIDS and the World Health Organization have recognized, criminalization also seriously hampers efforts to prevent and treat HIV/AIDS – efforts in which people involved in the sex trades are crucial partners.”

Just days before the Joint Statement was issued, the U.S. Department of Homeland Security (DHS) submitted a Complaint and Affidavit in Support of Arrest Warrants to the U.S. District Court for the Eastern District of New York (Brooklyn) on August 18, seeking to arrest the owner and employees of Rentboy.com, described in the complaint as “a commercial male escort advertising site that promotes prostitution.” The complaint quotes Rentboy.com advertising itself as the “original and largest male escort service online.” The Complaint was submitted under oath by DHS Special Agent Susan Ruiz, who led the investigation leading to the prosecution. The Complaint requested that its supporting affidavit and warrants be kept under seal until they were executed to prevent the defendants from fleeing the jurisdiction.

On August 25, Homeland Security agents accompanied by NYC Police Department officers appeared at Rentboy.com’s offices on West 14th Street in Manhattan to conduct their raid.  They also arrested the employees there and arrested others at their homes, effectively shutting down operation of the website. The defendants were listed in the complaint as Jeffrey Hurant (the owner) and employees Michael Sean Belman, Clint Calero, Edward Lorenz Estanol, Shane Lukas, Diana Milagros Mattos, and Marco Soto Decker. The title of the case on the Complaint is United States of America v. Hurant.

The complaint sets out a detailed description of the Rentboy.com website, defining terms, providing graphic descriptions of the activities advertised, and asserting repeatedly that the disclaimers on the site were meaningless and that the entire operation was set up to connect customers with prostitutes.

Anyone seeking a detailed description of the on-line male escort business will find it in this complaint, which became public upon serving of the arrest warrants and was posted later on August 25th on various news websites. The complaint describes each of the defendants (including aliases used by many of them) and their role in the Rentboy.com business, including past or present escorting activity by some of them.

The complaint asserts that the term “escort” is a euphemism for a prostitute. The complaint describes and quotes from various escort listings on Rentboy.com, including the quotation of rates for services and the listing of specific sexual activity that an escort is willing to engage in. The complaint also notes cross-references in some of the advertisements to another website, daddysreviews.com, at which can be found detailed accounts by customers of their experiences with the escorts in the form of reviews, including reports on the amount of money charged by the escort.

It is unclear whether this action taken against Rentboy.com was a precursor to actions against similar websites operated from the United States as part of a more general crackdown on the use of the Internet for commercial sexual assignations, whether Homeland Security is also targeting heterosexual escort sites, or whether Rentboy.com was singled out for prosecution because of the brazenness of its owner, who is quoted in the complaint as having made clear in published interviews that the purpose of the website was to assist escorts in marketing their sexual services.

According to the complaint, Hurant uses as an email address cyberpimp@rentboy.com, which is hardly subtle. The complaint quotes Hurant telling one interviewer, “There is no place in this website where somebody says I’ll have sex for money because that is against the law. We can talk about what you look like, what you are, what you like to do, what people say about you in bed. . . People say I’m a great top, people say I fuck like nobody’s business, but you can’t say I’ll fuck you for two hundred bucks.” The website includes a disclaimer that rates quoted by the escorts on the site are only for their time, and that any sexual activity that takes place is a private matter between consenting adults.

In justifying the arrest of the employees as well as the owner, the complaint states, “There is probable cause to believe that anyone employed by the organization was aware that its aim was the promotion of prostitution, based on its publicly-disseminated advertising and promotional material and the content of the site itself.” Illustrating the openness with which Rentboy.com went about its business, the complaint describes how the company applied to the Department of Homeland Security for an occupational visa for one of its employees. It also describes an annual public event held by Rentboy.com, the “Hookies,” at which awards were bestowed on escorts listed on the site as the “best” in particular categories of sexual performance, and at which Hurant gave his business card to an undercover agent.

The prosecution is premised on 18 U.S.C. Section 1952, a federal statute that provides, in relevant part: “(a) Whoever travels in interstate or foreign commerce or uses the mail or any facility in interstate or foreign commerce, with intent to. . . (3) otherwise promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on, of any unlawful activity, and thereafter performs or attempts to perform – (A) an act described in paragraph . . . (3) shall be fined under this title, imprisoned not more than 5 years, or both. . . (b) As used in this section (i) “unlawful activity” means (1) any business enterprise involving . . . prostitution offenses in violation of the laws of the State in which they are committed or of the United States.”

The complaint cites provisions of New York law criminalizing “promoting prostitution” and engaging in prostitution activity, thus satisfying the federal statutory requirement that the proposed defendants are using a “facility in interstate or foreign commerce” with the intent to “promote” an “unlawful activity.” News reports indicated that the prosecution may also involve charges of “money-laundering,” but that is not specified in the complaint submitted to the federal court to get the arrest warrants.  Of course, the complaint submitted to get the warrant does not limit the scope of the ultimate prosecution. In a footnote, it states that because the complaint was submitted “for the limited purpose of establishing probable cause,” Agent Ruiz did not “set forth each and every fact learned during the course of this investigation.” One might expect that the investigation would include rigorous tax auditing of Rentboy.com and its parent corporation, as well as the seven individuals arrested, and that the U.S. Attorney, acting as a prosecutor on behalf of DHS, is likely to assert as broad a range of charges as the results of the DHS investigation may support.

Supreme Court: Clearing Up the Cert Backlog After the DOMA and Prop 8 Decisions

Posted on: June 27th, 2013 by Art Leonard No Comments

Yesterday the Supreme Court decided U.S. v. Windsor, affirming the 2nd Circuit and holding that Section 3 of the Defense of Marriage Act violates the 5th Amendment, and Hollingsworth v. Perry, holding that the initiative proponents of Proposition 8, who had been allowed to intervene in its defense at trial, lacked standing to appeal the district court’s ruling.   The decisions will go into effect after the Court issues its mandate, which is normally 25 days after decision day, in order to give the losing party a shot at filing a motion for rehearing. 

One could argue that there is no “losing party” in Windsor, since neither Edie Windsor nor the U.S. Government has any beef with the Court’s ruling.  The Bipartisan Legal Advisory Group of the House of Representatives (BLAG) may have a beef with it, but I think any motion for rehearing that they might file would be quickly dismissed, inasmuch as Justice Kennedy’s opinion does not rule on whether they had standing to participate in the case as a full party, and none of the dissenters argued that they have standing, either.  In Hollingsworth, the mandate would send the case back to the 9th Circuit, which would then lift its stay of Judge Vaughn Walker’s Order, which enjoins California officials from enforcing Proposition 8.  At that point, same-sex marriages would resume in California.  Governor Brown has already authorized a memorandum that was sent out to County Clerks instructing them the state believes that Walker’s Order is binding throughout the state, and that they are to begin issuing licenses to same-sex couples as soon as the stay is lifted.

Today, June 27, the Supreme Court addressed the backlog of cert petitions that have piled up in the wake of the same-sex marriage cases, so here is the rundown from the Court’s announcements this morning:

1 – The Windsor case.  The court had three cert petitions in the Windsor case, one filed by Robbie Kaplan and the ACLU on behalf of Edith Windsor, the others filed by the U.S. Goverment and BLAG.  The Court granted the government’s petition, which is why the case is called U.S. v. Windsor in the Supreme Court.  This morning, the Court denied certiorari in the petitions filed by Windsor, No. 12-63, and BLAG, No. 12-785.  (BLAG didn’t file its petition until after the 2nd Circuit had ruled, and in fact the Court granted the government’s petition before BLAG filed its petition.)

2 – The 1st Circuit Gill/Massachusetts case.  The 1st Circuit Court of Appeals issued a decision holding Section 3 of DOMA unconstitutional under the 5th Amendment, but rejecting the state of Massachusetts’ argument that DOMA violated the 10th Amendment by overriding the prerogatives of the state.  BLAG filed a petition for certiorari from the ruling against the private plaintiffs, represented by Gay & Lesbian Advocates and Defenders, and that petition was denied this morning in No. 12-13.  The government also filed a petition for certiorari, in the name of the U.S. Department of Health & Human Services, which was the lead defendant in the case, and that petition was denied today, No. 12-15.  The state of Massachusetts also filed a petition, seeking to vindicate its federalism claim.  The Court denied that petition as well, No. 12-97. 

Justice Kennedy’s opinion in Windsor made something out of the federalism argument, although I think Chief Justice Roberts was strategically misrepresenting the majority opinion when he wrote in dissent that the main theme of the majority opinion was federalism.  It was not.  The ruling was premised on the 5th Amendment’s Due Process and Equal Protection requirements, although Kennedy did discuss the federalism aspects of the case as one of the factors that required the Court to give “careful consideration” to this constitutional challenge.  BLAG did not file a petition in this case. 

The Court noted that Justice Kagan did not participate in the consideration or decision on these petitions on the 1st Circuit case, presumably because as Solicitor General she had participated in the Justice Department’s internal discussions about the District Court proceedings and the appeal to the 1st Circuit.   It is likely that the reason the Court decided to take the Windsor case instead of this case was so that a full bench could participate, as both cases presented the identical issues under the 5th Amendment.  The original district court complaint in Windsor was filed after Justice Kagan took the bench, so she was not involved in the Justice Department’s conduct of the litigation and did not feel any need to recuse herself.

3 – The Golinski case.  Lambda Legal represents Karen Golinski, an employee of the 9th Circuit Court of Appeals who was denied health insurance coverage for her same-sex spouse after they married in California in 2008 prior to the passage of Proposition 8.  Golinski won a ruling from a federal district judge within the 9th Circuit that Section 3 is unconstitutional, and the government had filed a petition for certiorari, seeking to bypass the 9th Circuit and bring the case directly to the Supreme Court.  This morning, the Court denied the petition, No. 12-16.  In light of the ruling in Windsor, federal court employees legally married to their same-sex partners in California will clearly be eligible to participate in the group insurance plan for the federal courts on the same-basis as employees married to different-sex couples, since California recognizes the marriages that were performed in 2008 prior to the enactment of Prop 8, by virtue of a California Supreme Court decision issued in 2009 in response to a challenge to the passage of Prop 8.  Still to be sorted out, but likely, is that federal court employees who work in states that don’t recognize their same-sex marriages will be similarly-entitled, but stay tuned on that issue. 

5 – The Pedersen case.  After having won their DOMA case in Massachusetts, GLAD decided to venture into the New England portion of the 2nd Circuit by filing a similar case in Connecticut, where they won a ruling from the district court and then petitioned the Supreme Court to take the case directly, bypassing the 2nd Circuit.  This seemed to make sense, as the 2nd Circuit was focused on the Windsor case from New York, and it seemed likely that all the pending DOMA cases were in a position to contend for Supreme Court review.  The government also obliged by filing a petition shortly after GLAD had filed.  This morning, the Court dismissed the Pedersen (GLAD) petition, No. 12-231, and the government’s petition, which was filed on behalf of the Office of Personnel Management, No. 12-302.

6 – The Arizona Domestic Partnership Benefits Case.  The Supreme Court also received a petition last summer from Arizona Governor Jan Brewer, asking the Court to overturn a preliminary injunction that had been issued by a federal judge in Arizona requiring the state to continue providing health benefits to same-sex domestic partners of Arizona state employees while the court considered the merits of Lambda Legal’s claim that the government’s revocation of those benefits violated the 14th Amendment.  The 9th Circuit had affirmed the district court’s grant of preliminary injunctive relief, agreeing with the district judge that plaintiffs had adequately shown a likelihood of success on the merits and irreparable injury if they were to lose their insurance coverage while the case was being litigated.  This morning, the Court denied the petition in Brewer v. Diaz, No. 12-23.  I think it is most likely this one was denied because the Court would rarely get involved in an interlocutory appeal of a pre-trial order of this type unless it was overwhelmingly eager to get into the substantive legal issues in the case, and yesterday’s decision in Hollingsworth v. Perry, dismissing the Prop 8 appeal on standing grounds, seems to signal that the Court is determined to put off for now the question of how to analyze sexual orientation equal protection claims under the 14th Amendment. 

7 – The Nevada marriage case.   This is the strangest and most “long-shot” petition of those denied this morning.  In Nevada, Lambda Legal is suing for a ruling that the state’s anti-gay marriage amendment is unconstitutional and gay people should be entitled to marry.  The district court allowed the Coalition for the Protection of Marriage, which was behind the marriage amendment, to intervene as co-defendants with the state.  The district court ruled against the plaintiffs, finding that there is no right under the 14th Amendment for same-sex couples to marry (explicitly disagreeing with Judge Walker’s decision in the Prop 8 case), and the case would next logically go to the 9th Circuit.  But the Coalition filed a cert petition, asking the Supreme Court to take the case directly and affirm the district court.   (Now, this sounds odd in light of the arguments about the U.S. government’s standing in the Windsor case to appeal a ruling with which it agreed, doesn’t it?)  Yesterday’s ruling in Hollingsworth seems to dispose of this one quite easily on standing grounds.  Clearly, the Coalition does not have standing to bring this case to the Supreme Court under the majority opinion’s reasoning in Hollingsworth, especially since the state of Nevada is defending its marriage amendment in court, unlike the state of California in the Prop 8 case, and the state will presumably fight to defend the district court’s ruling in the 9th Circuit.  Anyway, the petition in Coalition v. Sevcik was dismissed this morning, No. 12-689.  The legislature in Nevada has given initial approval to a ballot measure that would repeal the anti-gay marriage amendment and replace it with a marriage amendment that institutes marriage equality in the state.  The proposed amendment will need to be approved again after a new legislature has been elected before it can be placed on the ballot.  

So that clears the decks at the Supreme Court on same-sex couple legal recognition cases for now, unless a motion for rehearing is filed in Windsor or Perry.  The Court rarely grants motions for rehearing, and the likelihood that such a motion would be granted in either of these cases is slight, so a mandate to put the opinions into effect should be issued by the fourth week in July (which has 4-1/2 weeks).