United States of America v. Campbell

Filing 13

ORDER Denying 5 Defendant's Request for Hearing on Garnishment. Signed by District Judge Victoria A. Roberts. (LVer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

UNITED STATES OF AMERICA,
Plaintiff,

Case No: 16-51545
Hon. Victoria A. Roberts

v.
BEVERLY CAMPBELL,
Defendant.
___________________________________/
ORDER DENYING DEFENDANT’S REQUEST FOR HEARING ABOUT THE
GARNISHMENT (ECF NO. 5)
I. Procedural Posture
Beverly Campbell (“Campbell”) is a former Detroit Public School principal who
was sentenced for Conspiracy to Commit Federal Program Bribery under 18 U.S.C. §
371 and § 666(a)(1)(B) in September 2016.
The United States of America (“the U.S.”) filed a writ for continuing garnishment
as to Campbell with the Garnishee Office of Retirement Services (“ORS”). Campbell
filed a Request for a Hearing about the Garnishment and Claim for Exemptions and a
Request for Hearing about the Answer Filed by the Garnishee. Campbell raises no valid
objections to either the garnishment or the answer filed by the Garnishee. For the
reasons stated, Campbell’s requests are DENIED.

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II. Rule of Law and Application to Defendant
A. Preliminary Issue: Pension Benefits May Be Subject to Garnishment for Restitution
While Campbell does not directly challenge the legality of garnishment of her
pension benefits, she asks the Court not to garnish her pension because “it still has not
been determined whether forfeiture of [her] pensions will take place and if so how it
would impact [her] finances.” Based on this request, it is not quite clear whether
Campbell intends to challenge this Court’s ability to garnish her pension benefits. To the
extent it is a challenge, the Court denies it. The law is well-settled that pension benefits
may be subject to garnishment to satisfy a criminal restitution order.
Under the Mandatory Victims Restitution Act of 1996 (“MVRA”), criminal
defendants must pay full restitution to victims of their crimes, and the U.S. may enforce
orders of restitution pursuant to 18 U.S.C. § 3613. See 18 U.S.C. § 3664(m)(1)(A).
Section 3613(a) provides that “Notwithstanding any other Federal law… a judgment
imposing a fine may be enforced against all property or rights to property of the person
fined,” subject only to several very limited exceptions. None of the exceptions applies
here, so Campbell’s claim that her pension should not be garnished is moot.
Prior to the passage of the MVRA in 1996, the Supreme Court held that pension
plans could not be garnished under ERISA’s anti-alienation provision, absent specific
exceptions. Guidry v. Sheet Metal Workers National Pension Fund, 493 U.S. 365
(1990). Since then, however, federal courts have held that Congress, in passing the
MVRA, created an exception to laws prohibiting the alienation of pension benefits. Such
benefits may now be subject to garnishment for criminal restitution. See U.S. v. Irving,
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452 F.3d 110, 126 (2d Cir. 2003) (“it appears that Congress accepted the Supreme
Court's invitation in Guidry by enacting the [MVRA]”); U.S. v. Novak, 476 F.3d 1041,
1053 (9th Cir. 2007) (“[the] MVRA authorizes the enforcement of restitution orders
against retirement plan benefits”; U.S. v. DeCay, 620 F. 3d 534, 541 (5th Cir. 2010)
(holding that state-run pension plans are also subject to garnishment enforcing
restitution orders: “Congress exempted certain retirement plans from garnishment under
the MVRA...but did not include state-run pension plans in the list”). In general, pension
benefits can be garnished in order to satisfy a restitution order just like all other property
that doesn’t fall under an enumerated exemption. Any challenge Campbell makes to the
legality of the garnishment of her pension is denied.
B. Hearings About Garnishments: 28 U.S.C. § 3202
Campbell makes her request for a hearing under two different sections of the
Federal Debt Collection Procedures Act, under which the federal government has the
authority to enforce monetary judgments. 28 U.S.C. § 3202(a). The statute provides that
after receiving a notice of garnishment, a judgment debtor has 20 days to request a
hearing, and by doing so may move to quash the order granting the garnishment as
restitution. Where there is no default judgment at issue, “the issues at such hearing
shall be limited-- (1) to the probable validity of any claim of exemption by the judgment
debtor; [and] (2) to compliance with any statutory requirement for the issuance of the
postjudgment remedy granted.” 28 U.S.C. § 3202(d). No default judgment is at issue in
this case.

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While the statutory language requires that the court “shall hold a hearing…as
soon as practicable,” courts have denied requests for hearings “where the debtor did
not object based on one of the issues specified in 28 U.S.C. § 3202(d), where the
objection is plainly without merit, or where the objection was simply a matter of statutory
interpretation.” U.S. v. Miller, 588 F. Supp. 789, 797 (W.D. Mich. 2008) (denying a
hearing where debtor failed to identify any valid objections to the writ of garnishment). If
a defendant/debtor does not raise either of the statutorily permissible issues in her
request for a garnishment hearing, the request should be denied. See also U.S. v.
Mahar, 42 F.3d 1389 (6th Cir. 1994) (debtor’s claim of financial hardship was not a
permissible subject for a § 3202(d) hearing); U.S. v. Lawrence, 538 F. Supp. 3d 1188,
1194 (D.S.D. 2008) (“If Congress wanted to allow for the equities present in each case
to be delved into at a § 3202(d) hearing, then it most assuredly would have said so and
expanded the scope of the statute accordingly.”)
It is not clear whether Campbell intended to file a request for a hearing in
response to the Notice of Garnishment, to the Answer of Garnishee Office of Retirement
Services, or both. Her request includes a cover sheet for both and an attachment that
could be interpreted as an accompaniment to either. For the purposes of this opinion, it
is assumed that she intended to request both a §3202 and a §3205 hearing.
In addition to the Attachment explaining her reasons for opposing the
garnishment, Campbell’s Request includes an exemption form in which she checked off
Exemption #11 (Minimum Exemptions for Wage, Salary, and Other Income). Under
§3202(d), the probable validity of this exemption claim may permissibly be raised.
However, a hearing likely is not necessary to determine the validity of the claim at all.
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Exemption #11 provides that “[t]he aggregate disposable earning of an individual
for any workweek which is subject to garnishment may not exceed...25% of his
disposable earnings.” The Answer of the Garnishee states that Campbell’s monthly
disposable earnings (her pension benefits) total $4424.56, and that the amount to be
garnished is 25% of that number: $1106.14. The United States recognizes that
garnishment of these earnings is limited to 25%, and its mathematical calculation is
correct. Campbell provides no valid basis for claiming Exemption #11, and a hearing is
not necessary. See Miller, supra: a court may deny a hearing “where the objection is
plainly without merit.”
Campbell also does not raise §3202(d)’s other permissible issue of statutory
compliance. Her request, if it is in fact a request in response to the notice of
garnishment subject to §3202(d), is denied.
C. Hearings About Answers Filed By Garnishees: 28 U.S.C. § 3205
Campbell's cover sheet seems to include a request for a hearing under 28 U.S.C.
§ 3205, the “Garnishment” provision of the Federal Debt Collection Procedures Act, as
well. §3205(c)(5) provides that a judgment debtor may object to an Answer filed by a
Garnishee by filing a written request for a hearing.
Importantly, a §3205 hearing is not subject to the same limitations as a §3202(d)
hearing. §3205(c)(5) merely requires that “[t]he party objecting shall state the grounds
for the objection and bear the burden of proving such grounds.” “That statute [unlike
§3202(d)] does not limit the purposes for such a hearing.” Miller at 797 (see also U.S. v.
Crowther, 472 F. Supp. 2d 729 (E.D. Texas 2007).
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While a defendant/debtor requesting a hearing in response to a garnishee’s
answer under §3205 may raise any issue in her objection, the Court still has discretion
to decide whether or not the objections are worthy of a hearing. Id. §3205(c)(5), like
§3202(d), requires that the court “shall hold a hearing,” but a court may deny a request
where the objection lacks reason or merit. U.S. v. Menifield, 2016 WL 6395472, at *1
(E.D. Mich. 2016) (denying request for §3205 hearing where defendant merely
challenged the amount of the garnishment). If a debtor raises a valid objection to a
garnishee’s answer, this Court may grant her request for a hearing.
Under §3205, Campbell is required to state the grounds for the objection and
bear the burden of proving those grounds. In her Attachment, Campbell states that
“Garnishment would affect [her] ability to meet obligatory financial commitments.”
Courts within the Sixth Circuit have ruled that financial difficulties are not a
sufficient objection to a garnishment. See U.S. v. McGhee, 2007 WL 4326807, at *1
(E.D. Mich. 2007) (“poverty does not constitute a defense to a writ of garnishment”);
U.S. v. Mannarino, 2014 WL 2611831, at *3 (N.D. Ohio 2014) (denying debtor’s request
for a hearing after she argued that garnishment was unfair due to her personal financial
difficulties); see also U.S. v. Menifield, supra; U.S. v. Mahar, supra.
For the reasons stated, Campbell’s requests for a hearing under §3202(d) and
§3205(c)(5) are DENIED.

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IT IS ORDERED.
S/Victoria A. Roberts
Victoria A. Roberts
United States District Judge
Dated: December 21, 2016
The undersigned certifies that a copy of this
document was served on the attorneys of
record by electronic means or U.S. Mail on
December 21, 2016.
s/Linda Vertriest
Deputy Clerk

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