Summary order marks limitation on use of garnishment to enforce restitution orders
on Dec 7, 2015 at 10:30 pm
The Monday order list included a brief notation that the Court granted the petition in France v. United States, vacated the decision of the Seventh Circuit, and remanded the case “for further consideration in light of the confession of error by the Solicitor General in his brief for the United States.” The mundane order effected a voluntary limitation on the power of the federal government to use garnishment to enforce criminal restitution orders.
The case involves the criminal conviction of petitioner Gary France for mail fraud and making a false declaration in a bankruptcy case. The conviction arose from a successful scheme to defraud the city of Chicago and its insurance companies of about $800,000, followed by a bankruptcy filing in which France failed to disclose $300,000 of the assets he had obtained in the original fraud. As part of the punishment for the conviction, the district court obligated France to pay $800,000 in restitution. During the first ten years, France repaid only $11,000 of the restitution obligation, although he has for some period of time been receiving disability payments of almost $200,000 per year under a private insurance policy.
When the government learned of the disability payments, it successfully asked the district court to “garnish” the disability payments – resulting in an order to the insurance company to forward the payment directly to the government to satisfy the restitution obligation. France argued, to no avail, that the government could garnish only twenty-five percent of the payments, pointing to the provision in the Consumer Credit Protection Act (the CCPA) limiting garnishment to twenty-five percent of a defendant’s “earnings.” After the district court rejected the argument, the court of appeals affirmed.
When the case reached the Supreme Court, though, the government filed a brief in which it agreed that France was correct. There is no doubt that the CCPA applies to the restitution order; the only question is whether the proceeds of the disability insurance policy amount to “earnings” for purposes of the CCPA. The government argued, contrary to the argument it presented successfully to the courts below, that the insurance proceeds are “earnings” for purposes of the CCPA restriction. Without regard to the merits of the (admittedly technical) question, it is fair to say that the government’s argument applies to a substantial amount of income.
It is remarkable, I think, that the government managed to proceed so quickly on this matter. Between the July 6 petition for review and the government’s November 6 response to the petition, the government decided to change its position after “consultations with the Department of Labor,” the agency responsible for enforcing the CCPA. Presumably those consultations were substantially adversary, as it is fair to expect that the Office for Victims of Crime in the Department of Justice (a component of the Department of Justice for which broad enforcement of restitution orders is a foundational purpose) argued strongly for the validity of the garnishment order. The resolution of those “consultations” – persuading the Justice Department to surrender a victory already won in the court of appeals — in time to file a brief so quickly is remarkable.
The other interesting attribute of the order is its unanimity. Justices Clarence Thomas and Antonin Scalia, from time to time at least, have suggested that it is inappropriate to rely on a confession of error as a basis for reversing the decision below without some intervening event, a legal occurrence (such as a Supreme Court decision or statutory enactment) postdating the decision of the court of appeals. In this case, the only relevant event is the Department of Labor’s determination that the decision below was incorrect. The brief by the Solicitor General argues that the department’s ruling on the question is enough, under Skidmore deference, to amount to an intervening event. That seems a fairly narrow view of an intervening event to me. But the unanimity of the ruling suggests that it was enough to persuade Thomas and Scalia to accede to the views of the other Justices. Or that Thomas and Scalia have tired of pressing the point.
For what little it might be worth, a quick search suggests that this might be the first time Scalia has acquiesced in the Court’s affirmative response to a confession in the last five years. I welcome input from readers of this post who can provide relevant counterexamples!
