The McCarty v. McCarty case in 1980 revolved around the division of military retirement pay in a divorce settlement. The Supreme Court ruled that federal law does not permit state courts to divide military retired pay as community property during a divorce. Robert McCarty, an Air Force officer, and his wife divorced after over 20 years of marriage while he was still on active duty but nearing retirement eligibility. His ex-wife sought half of his future pension benefits as part of their community property split under California law, which Mr. McCarty contested arguing it should be considered separate personal income post-divorce rather than shared marital assets earned during the marriage period.

In the dissenting opinion for McCarty v. McCarty, Justice Blackmun argued that federal law did not preclude a state from treating military retirement pay as community property in a divorce proceeding. He contended that Congress had never explicitly stated such an intention and it was inappropriate for the Court to infer one. Furthermore, he pointed out inconsistencies in how different types of federal retirement benefits were treated under state law, suggesting this indicated a lack of clear Congressional intent on the matter. He also emphasized that states have traditionally been given wide latitude to regulate domestic relations issues like marriage and divorce without interference from federal legislation or courts. Therefore, he believed it was improper for the Supreme Court to step into what should be primarily a domain of state jurisdiction.