RULES OF CONSTRUCTION

Issues

The Supreme Court will decide whether the application of a revocation-upon-divorce statute—a state law that automatically revokes the beneficiary status of a policyholder’s former spouse after a divorce—to a contract signed prior to the enactment of the statute violates the Contracts Clause. The Contracts Clause of the U.S. Constitution states that “[n]o State shall . . . pass any . . . Law impairing the Obligation of Contracts.” Petitioners Ashley Sveen and Antone Sveen (“the Sveens”) argue that the application of Minnesota’s revocation-upon-divorce statute to a life insurance policy that the decedent, Mark Sveen, purchased before the enactment of the statute is a valid exercise of the State’s authority to regulate divorce. The Sveens claim that the Minnesota statute does not violate the Contracts Clause because it serves a legitimate public interest and does not substantially impair contractual obligations. Respondent Kaye Melin counters that the original purpose of the Contracts Clause was to prevent legislative interference with private contracts and that modern courts should interpret it as such. Melin argues that the retroactive application of the Minnesota statute would not survive under the original meaning of the Contracts Clause and that the application also violates the Contracts Clause as it is currently understood. This case will provide clarity regarding courts’ disagreement as to the appropriate interpretation of the Contracts Clause and will affect the way in which estates are settled.

Questions as Framed for the Court by the Parties

Written by

Edited by

Additional Resources