Farrell v. Boeing Employees Credit Union et al, No. 5:2016cv02711 - Document 109 (N.D. Cal. 2019)
Court Description: ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT; DENYING PLAINTIFF'S CROSS-MOTION FOR SUMMARY JUDGMENT. Re: Dkt. Nos. 103 , 104 . Signed by Judge Nathanael Cousins. (lmh, COURT STAFF) (Filed on 5/3/2019)
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Farrell v. Boeing Employees Credit Union et al Doc. 109 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 10 United States District Court Northern District of California 11 12 13 14 15 16 DANIEL FARRELL, Plaintiff, v. BOEING EMPLOYEES CREDIT UNION and MOORE BREWER & WOLFE, Defendants. Case No. 16-cv-02711-NC ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT; DENYING PLAINTIFF’S CROSS-MOTION FOR SUMMARY JUDGMENT Re: Dkt. Nos. 103, 104 Plaintiff Daniel Farrell brought claims for unfair debt collection against defendants 17 Boeing Employees Credit Union and Moore Brewer & Wolfe for garnishing his wages 18 from federal employment when he moved from California to Indiana and then to 19 Texas. Dkt. No. 1. This Court granted summary judgment to the defendants. Dkt. No. 89. 20 Farrell appealed. Dkt. No. 92. The Ninth Circuit Court of Appeals affirmed in part, 21 vacated in part, and remanded this Court’s order granting summary judgment. Dkt. No. 22 95. The Court of Appeals directed this Court to conduct a complete analysis of the 23 question of whether 5 U.S.C. § 5520a requires compliance with the garnishment laws of 24 the state of the debtor’s residence as an issue of first impression. Id. at 4–5. Because the 25 Defense Finance and Accounting Service—rather than state agencies—facilitates 26 garnishment of federal employees’ wages, this Court FINDS that § 5220a does not require 27 this domestication. The defendants’ motion for summary judgment is GRANTED and the 28 plaintiff’s cross-motion for summary judgment is DENIED. Dockets.Justia.com 1 I. Background 2 A. Facts 3 Farrell failed to maintain a motor vehicle financing agreement and Boeing obtained 4 a default judgment against him in California state court for repossession of the vehicle and 5 the full amount on the contract. Dkt. No. 76 (Joint Stipulation Regarding Facts; and, 6 Questions of Law) at 1–2. Farrell, a Department of Defense employee, subsequently 7 moved to Indiana. Id. at 3. Moore, Boeing’s attorney, obtained an earnings withholding 8 order and garnished Farrell’s wages through the Defense Finance and Accounting 9 Service. Id. This garnishment continued when Farrell later moved to Texas. Id. The United States District Court Northern District of California 10 California judgment was not domesticated in Indiana or in Texas. Id. 11 B. Remand 12 On cross-motions for summary judgment, this Court held that § 5520a did not 13 require compliance with the garnishment laws of the state of the debtor’s residence based 14 on the lack of an explicit domestication requirement in § 5520a and 5 C.F.R. pt. 582. Dkt. 15 No. 92. The Ninth Circuit remanded that finding for this Court to conduct a complete 16 analysis of this issue of first impression. Dkt. No. 95. 17 18 On remand, the Ninth Circuit instructed this Court to consider the following: 1. The potential applicability of Indiana’s and Texas’s state garnishment laws, 19 “since, under § 5520a, the garnishment process is governed by state law.” 20 Dkt. No. 95 at 5. 21 2. The lack of clear statutory mandate allowing for interstate garnishment of 22 federal employees’ wages in the commercial debt context in contrast to the 23 family law context. 24 25 26 3. The amount of deference, if any, owed to the Office of Personnel Management’s view that domestication is not required. The Court discusses these questions in turn. The parties submitted renewed cross- 27 motions for summary judgment and a hearing was held on this matter. Dkt. Nos. 103, 104, 28 107. All parties consented to the jurisdiction of a magistrate judge. Dkt. Nos. 10, 18. 2 United States District Court Northern District of California 1 C. Statutory History 2 Congress enacted 5 U.S.C. § 5520a in 1993 to provide for garnishment of wages of 3 federal employees. Subsequently, President Bill Clinton issued Executive Order 12897 4 which designated the Office of Personnel Management “to promulgate regulations for the 5 implementation” of the statute “with respect to civilian employees and agencies in the 6 executive branch.” EO 12897. In 1995, OPM did so by promulgating 5 C.F.R. Part 582 7 “to implement the objectives of section 5520a.” 5 C.F.R. pt. 582.91. This regulation 8 designated the Defense Finance and Accounting Service as the agent to receive all legal 9 process for Department of Defense civilian employees whose wages were to be garnished. 10 5 C.F.R. pt. 581, App. A. 11 II. Legal Standard 12 Summary judgment may be granted when there exists no genuine dispute as to any 13 material fact. Fed. R. Civ. P. 56(a); Tolan v. Cotton, 134 S. Ct. 1861, 1863 (2014). Here, 14 the parties previously stipulated to all material facts so no disputes exist. Dkt. No. 76. 15 This Court may thus grant judgment as a matter of law. 16 Interpretation of a statute begins with the plain meaning of the statute itself, because 17 there is a “strong presumption that Congress expresses its intent through the language it 18 chooses.” INS v. Cardoza-Fonseca, 480 U.S. 421, 432 n.12 (1987). “Where Congress 19 explicitly enumerates certain exceptions to a general prohibition, additional exceptions are 20 not to be implied, in the absence of a contrary legislative intent.” Andrus v. Glover Const. 21 Co., 446 U.S. 608, 616–17 (1980). When language is missing in a statute, the doctrine of 22 expressio unius est exclusio alterius guides that “omissions are the equivalent of 23 exclusions.” Clark v. Capital Credit & Collection Srvs., 460 F.3d 112, 1169 (9th Cir. 24 2006). This doctrine is “a rule of interpretation, not a rule of law.” Broad v. Sealaska 25 Corp., 85 F.3d 422, 433 (9th Cir. 1996). 26 III. Discussion 27 A. Applicability of Indiana and Texas Statutes 28 The first issue before the Court is whether Indiana and Texas state laws should have 3 United States District Court Northern District of California 1 applied to Boeing’s garnishment of Farrell’s wages. Dkt. No. 95 at 5. In directing this 2 Court to consider this question, the Ninth Circuit noted that Indiana and Texas statutes 3 may be applicable “since, under § 5520a, the garnishment process is governed by state 4 law.” Id. The statute itself defines “process” as “any writ, order, summons, or similar 5 process in the nature of garnishment” that is “issued by a court of competent jurisdiction 6 within any State, territory, or possession of the United States, or an authorized official 7 pursuant to an order of such a court or pursuant to State or local law.” 5 U.S.C. § 8 5520a(3)(A). This definition indicates that the meaning of the word “process” as used in 9 the statute refers not generally to the mechanics of the garnishment but to legal process — 10 otherwise known as a writ, warrant, mandate, summons, or other order issued from a court. 11 The plain reading of the statute then provides that a state court must issue the writ that 12 allows for the wages to be garnished. 13 The system for facilitating the garnishment for Department of Defense employees is 14 conducted by DFAS. Indiana and Texas have statutes that allow the clerk of the court in 15 each state to facilitate the mechanics of wage garnishment once a court has ordered it. Ind. 16 Code Ann. 34-54-11-1; Tex. Civ. Prac. & Rem. Code Ann. § 35.005. This facilitation 17 occurs through state agencies. Id. These statutes have no logical applicability to the 18 instant situation, because DFAS facilitates the garnishment of wages for Department of 19 Defense employees like Farrell instead. 20 The Ninth Circuit cited First Virginia Bank v. Randolph in its framing of this 21 question. 110 F.3d 75, 79 (D.C. Cir. 1997). There, a judgment was obtained in the 22 Superior Court of the District of Columbia and a writ was issued by that same court against 23 an employee of the State Department. Id. at 75. The creditor moved to recover damages 24 against the United States for its failure to garnish the employees’ wages. Id. at 78. The 25 court there stated that “by subjecting the pay of federal employees to the legal process 26 applicable to private employers, § 5520a(b) incorporates the D.C. law” but that it did not 27 subject the United States to actions for damages. Id. at 79. 28 First Virginia Bank is not instructive here for two reasons. First, 5 U.S.C. § 5520a 4 United States District Court Northern District of California 1 does not provide that DFAS handles wage garnishment for State Department employees 2 like Randolph. Second, in First Virginia Bank, the judgment and writ were issued by the 3 same court. Domestication was not a question in that case. The District of Columbia 4 clerk’s office produced the writ and the District of Columbia judicial system enforced the 5 judgment. Here, Farrell moved from California to Indiana and then to Texas; our question 6 in this case is what effect, if any, those moves should have had on the garnishment of his 7 wages. First Virginia Bank sheds little light on this issue. 8 B. Lack of Statutory Mandate Allowing for Interstate Garnishment 9 Next, the Court addresses the lack of a clear statutory mandate allowing for 10 interstate garnishment of federal employees’ wages in the commercial debt context, in 11 contrast to the family law context. 42 U.S.C. § 666(b)(9)(B) provides that orders to 12 garnish wages for child support and alimony are entitled to “full faith and credit in such 13 state and in any other State,” so no domestication of those judgments is required when a 14 debtor moves from one state to another. This language is not present in 5 U.S.C. § 5520a. 15 Farrell argues that this omission constitutes an intentional exclusion under the 16 doctrine of expressio unius est exclusio alterius. Clark, 460 F.3d at 1169. This argument 17 requires drawing a connection between 42 U.S.C. § 666(b) and 5 U.S.C. § 5520a such that 18 language present or absent in one has bearing on the other. Farrell’s argument to this 19 effect is that § 666(b) was enacted in 1985, eight years before § 5520a. This supposed 20 connection is rather tenuous given that the statutes are located in entirely different sections 21 of the United States Code. Moreover, the statutes differ in that § 666 includes exhaustive 22 instructions on how states should enforce family law garnishment orders; § 5520a provides 23 no such direction. See 42 U.S.C. § 666(a) (titled “Types of Procedures Required” and 24 stating that “each State must have in effect laws requiring the use of the following 25 procedures . . .”). Most significantly, § 666(b) does not contain language instructing the 26 President to designate promulgations of implementing regulations, whereas § 5520a does. 27 See 5 U.S.C. § 5520a(j)(1)(A) (“Regulations implementing the provisions of this section 28 shall be promulgated by the President or his designee for each executive agency . . .”). 5 United States District Court Northern District of California 1 Furthermore, the doctrine of expressio unius est exclusio alterius “does not relieve 2 of us our duty to make sense of the statute.” Broad, 85 F.3d at 422. And the doctrine is 3 best “understood as a descriptive generalization about language rather than a prescriptive 4 rule of construction.” Id. Other evidence—such as the regulations promulgated by 5 OPM—makes clear the statutory intent: to process Department of Defense wage 6 garnishment through DFAS. If garnishment were to be handled by state agencies, OPM’s 7 regulation would be nonsensical. Because garnishment is not handled by state agencies, 8 domestication serves no purpose. To make sense of the statute, the Court infers that no 9 domestication requirement exists in § 5520a. 10 C. Deference Owed to OPM 11 Finally, the Court considers the amount of deference owed to the Office of 12 Personnel Management on this issue. At 60 Fed. Reg. 13028, OPM discussed the possible 13 Constitutional question that could arise from interstate enforcement of wage garnishment 14 under 5 C.F.R. pt. 582. However, as the parties stipulated at the hearing on this matter, 60 15 Fed. Reg. 13028 is not on point. There, OPM discusses the potential liability of the 16 government as an employer in the event that the garnisher does not comply with applicable 17 state garnishment laws, because some states subject employers to penalties for 18 noncompliance. 60 Fed. Reg. 13028 (stating that “the Federal Government’s 19 responsibilities as an employer are limited” and that the employing agency is not required 20 to “determine whether the court that issued the order has lawfully acquired jurisdiction 21 over the out-of-State obligor.”) This issue does not bear on the question of whether a 22 domestication requirement exists. OPM’s guidance here at least stands for the general 23 proposition that the federal government honors garnishment orders issued by state courts, 24 but is otherwise inapplicable. 25 IV. Conclusion 26 The plain reading of the statute, in context with its implementing regulations, 27 indicates that 5 U.S.C. § 5520a does not include a requirement that creditors domesticate 28 wage garnishment orders against federal employees if those debtors move from one state 6 1 to another. Because domestication was not required of Boeing and Moore Brewer & 2 Wolfe under § 5520a, the defendants’ motion for summary judgment is GRANTED and 3 the plaintiff’s cross-motion for summary judgment is DENIED. 4 5 IT IS SO ORDERED. 6 7 8 Dated: May 3, 2019 _____________________________________ NATHANAEL M. COUSINS United States Magistrate Judge 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7
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