Legal questions remain in N.C., despite SCOTUS same-sex marriage ruling

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Almost exactly one year ago, the U.S. Supreme Court handed down its watershed ruling in Obergefell v. Hodges, which made same-sex marriage the law of the land.
But since then, North Carolina has struggled to address a range of issues facing same-sex couples that were not resolved by the June 26, 2015 decision in Obergefell. That has left family law attorneys in the state with little to go on when clients come to them for advice.
While North Carolina has taken some steps to provide same-sex married couples with the same rights opposite-sex couples enjoy, many questions remain unanswered. State lawmakers have so far failed to adequately address things like adoption, how property should be divided following a divorce, who can receive workers’ compensation benefits if a spouse is killed on the job and whether a same-sex married couple can own real property together.
The North Carolina General Statutes Commission is reviewing state laws to determine what changes need to be made to account for the Obergefell ruling. But that effort remains a work in progress. The commission is not expected to release its recommendations until the General Assembly reconvenes next year.
The uncertainty facing same-sex married couples in North Carolina is also set against the backdrop of the battle over HB2, which has gripped the state since the law was adopted earlier this year. The so-called bathroom bill not only bars transgender individuals from using public restrooms that correspond with their gender identity—the provision that has drawn the most media attention—it also eliminated all local anti-discrimination measures for lesbian, gay, bisexual and transgender residents of the state. Additionally, HB2 effectively ended the right to sue for discrimination in state court, leaving federal court as the only option.
HB2 has resulted in business leaders canceling expansion projects or deciding to pull out of the state altogether. North Carolina has also seen a series of entertainers boycott the state because of HB2, including global superstars like Bruce Springsteen and Ringo Starr.
Sharon Thompson of NicholsonPham in Durham, whose practice focuses on LGBT family law, said securing the right for same-sex couples to marry was just one of many legal issues facing the LGBT community.
“In the family law arena, most of the concern for so long has been about marriage. Now that we have it, it’s wonderful,” Thompson said. “But we’re seeing a political and cultural backlash to the Supreme Court’s decision in Obergefell that’s making some of the remaining issues more difficult to get answers on.”

Certificate surprises
Policymakers in North Carolina have taken tentative steps to address issues facing same-sex couples in the wake of Obergefell.
In May 2015, the N.C. Department of Health and Human Services sent hospitals and health departments new guidelines for the registration of children whose mothers are married to female spouses. North Carolina Vital Records, the agency responsible for issuing birth certificates, said it would begin issuing parent/parent birth certificates, rather than mother/father certificates.
Prior to the new guidelines, NCVR would not list the non-biological parent in a lesbian marriage on a child’s birth certificate.  But after consulting with the American Civil Liberties Union of North Carolina, NCVR decided to adopt the same approach for lesbian married couples that the agency uses for birth certificates issued for children born to opposite-sex couples who conceive by way of a sperm donation. In those cases, NCVR allows a non-biological father to be listed on the birth certificate.
Thompson said the new NCVR policy does not apply to male same-sex married couples because the underlying statute has to do with artificial insemination, a procedure only females can undergo.
In order for two married men to be listed on a child’s birth certificate, they must obtain a pre-birth order from a district court that directs NCVR to make the change. That process is in line with how opposite-sex couples get their names on a child’s birth certificate when they use a surrogate.
“The end result is the same. But the way they get there is a little different,” Thompson said.
Chris Brook, legal director for the ACLU of North Carolina, said his organization was pleased with NCVR’s new policy. But he said it provided “incomplete relief.”
Brook was referring to the fact that the new policy adopted by NCVR only applies to couples who were married in North Carolina after Oct. 6, 2014, the date that the U.S. Supreme Court declined to review a 4th U.S Circuit Court of Appeals decision that struck down Virginia’s same-sex marriage ban. The 4th Circuit’s decision in Bostic v. Schaefer had the effect of legalizing same-sex marriage in North Carolina.
But for lesbian couples who married out of state and then returned to North Carolina prior to Oct. 6, 2014, the NCVR’s new guidelines do not apply—meaning only the woman who actually gives birth to the child can be listed on the birth certificate.
The ACLU, Lambda Legal and Kilpatrick Townsend & Stockton have teamed up on a lawsuit in the U.S. District Court for the Eastern District of North Carolina that seeks to have the NCVR’s guidelines apply to all same-sex married couples in the state.

Custody complexities
That said, a birth certificate only goes so far when it comes to a custody proceeding should same-sex couples decide to divorce.
Thompson said North Carolina’s custody laws tend to favor biology over who is listed on a birth certificate. But with same-sex married couples, where only one parent has a biological link to a child, custody questions can become particularly complicated.
For example, if a woman in a lesbian marriage has one of her eggs fertilized and implanted in her wife’s womb, how should the court approach custody if there’s only a birth certificate to go on? Thompson said that based on the way the state’s laws are currently written, the mother who donated the egg would likely be given deference over the woman who carried the baby to term.
It’s not just same-sex couples who have to worry. Thompson said North Carolina law is pretty vague when it comes to parental rights for opposite-sex couples that use assisted reproduction to have a child. She said North Carolina needs a “major overhaul” of its laws dealing with parentage.
“People feel they are totally protected by having their name on a birth certificate,” she said. “But that may not always be the case.”
Thompson said she advises her clients to adopt the child as a step-parent to ensure they have full parental rights in the event of a divorce.
“It’s really about protecting the child if one parent dies,” Thompson said. “It’s about ensuring Social Security benefits and everything else.”

Tricky taxes
The N.C. Department of Transportation has taken its own steps to clarify how state processes apply to same-sex couples.
In North Carolina, most vehicle title transfers require the new owner to pay a highway-use tax that is based on the value of the vehicle. Title transfers from husband to wife, or vise versa, are exempt from that tax.
However, some Department of Motor Vehicles locations were requiring same-sex married couples to pay the tax, which is often hundreds of dollars, because the standard form continued to rely on the terms “husband” and “wife.”
A directive issued by NCDOT in February ordered DMV locations across the state to apply the exemption to all “legally married spouses.”
But the husband/wife problem goes far beyond title transfers.
As Ward & Smith partner James Creekman noted in a March 31 blog on the firm’s website, North Carolina law permits a “husband and wife” to file a joint state income tax return. It’s not yet clear whether that phrase will have an impact on tax returns filed by same-sex couples.
Gender-specific terms could also create problems for same-sex couples under statutes dealing with workers’ compensation benefits for employees who die as a result of a work-related injuries. The relevant law defines a “widow” as the wife of a man and “widower” as the husband of a woman.

Tenancy tangles
And then there is the issue of whether same-sex married couples can own real property as tenants by the entirety. The applicable statutes currently use husband/wife language. Creekman said same-sex married couples would likely have a strong equal protection case, if ownership were called into question. But the remedy is far less certain.
A judge could extend the same property ownership rights to married same-sex couples that apply to “a husband and wife.” But just as conceivably, a court could strike down tenancy by the entirety as a form of concurrent ownership for everyone until it is made available to all legally married couples, Creekman said. That would wreak havoc on the state’s real estate market.
In May, Rep. Rob Ryan, R-Mecklenburg, introduced a bill to clarify that same-sex couples are entitled to own real property as tenants by the entirety. HB1061 has passed the House and is currently before the Senate Judiciary Committee.
These are just some of the statutory knots the General Statutes Commission is trying to untangle.
Former University of North Carolina Law School Dean Judith Wegner, who sits on the commission, said so far about 78 different statutes have been identified which use husband/wife language. The commission held its last meeting June 3 and will reconvene in September to discuss ways lawmakers can tweak state laws to ensure they apply to same-sex couples.
HB1061 grew out of recommendations made by the commission and was given priority status because “we felt it was the most pressing issue to deal with,” Wegner said. “We wanted to make sure that 90 percent of the property in the state, which families own as tenancy by the entirety, wasn’t facing a scenario where it was in jeopardy.”

Legislative long shot?
Given the tenor of the General Assembly in recent months, it’s anyone’s guess when, or even if, the commission’s recommendations will be adopted.
Wegner said she feels confident lawmakers will move quickly to make the necessary changes because “it’s really not a policy issue.” She said most of the proposed fixes will deal with “very technical matters.”
But advocates say lawmakers in the state have shown little interest in moving to address problems facing the LGBT community.
They point to the General Assembly’s vote last year to override Gov. Pat McCrory’s veto of SB2, which allows court officials to recuse themselves from having to perform same-sex marriages because of their religious beliefs.
Elliot Engstrom, lead counsel for the libertarian Civitas Institute, said SB2 was an attempt to balance religious freedom with the rights of LGBT individuals.
“I do not know if SB2 is necessarily the ideal law, but I do agree with the goal of finding a middle ground that allows LGBT individuals to enjoy their constitutional rights while also maximizing the range of religious free exercise by government officials,” Engstrom said.
That may be, but D’Arcy Kemnitz, executive director of the national LGBT Bar Association, said the swift adoption of HB2, which passed during a one-day special session earlier this year, was another signal that the General Assembly is not giving much weight to LGBT concerns.
“I’ve heard from some of our members that they are worried about having to try a case in North Carolina in light of HB2,” Kemnitz said. “There are plenty of lawyers who identify as transgender. How are they supposed to conduct themselves as officers of the court, when they aren’t allowed to go to the bathroom they identify with? Everybody poops, right?”
Kemnitz said safety is a key concern for transgender individuals, given the recent rise in attacks on transgender people. A report funded by the Human Rights Campaign found that at least 21 transgender people were killed across the country in 2015—more than any other year advocates have documented.
“If someone identifies as a man, and is by all appearances a man, what happens when that person walks into a women’s restroom? In today’s world of violent rhetoric, the fear of attack is very real,” Kemnitz said.
But supporters of HB2 argue that safety is the primary reason the law was adopted in the first place.
Tami Fitzgerald, executive director of the N.C. Values Coalition, said the law is designed to keep women and children from having to share a bathroom or locker room with someone of the opposite biological sex. Without the law, Fitzgerald said, “Those who want to harm women and children have a free pass to places where they can commit crimes.”
Fitzgerald, who sits on the N.C. Bar Association’s Constitutional Rights and Responsibilities Section, added, “I do have sympathy for people who are confused about their gender having to go to the bathroom. HB2 allows government agencies and private businesses to provide separate bathrooms if they want. It’s just not a government mandate.”

Locked in litigation
HB2 has touched off dueling lawsuits between the state and the federal government. In May, McCrory and leaders in the General Assembly sued the Obama administration over a directive requiring the state to allow transgender people to use public restrooms that correspond with their gender identity, and not just their birth sex. McCrory, Senate President Pro Tempore Phil Berger and House Speaker Tim Moore did not respond to requests for comment.
The U.S. Justice Department has filed its own lawsuit, seeking an injunction to block enforcement of HB2 while a judge determines whether it is discriminatory. U.S. Attorney General Loretta Lynch has compared HB2 to discriminatory laws passed during the Jim Crow era.
Regardless of what comes out of the HB2 debate, LGBT family law attorneys say there is a lot of work left to do, even with the U.S. Supreme Court’s decision in Obergefell.
As Thompson put it, “Same-sex marriage was just the tip of the iceberg. The related issues are far from settled.”
Follow Jeff Jeffrey on Twitter @NCLWJeffrey.