395 U.S. 337 (1969), 130, Sniadach v. Family Finance Corp.

Docket Nº:No. 130
Citation:395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349
Party Name:Sniadach v. Family Finance Corp.
Case Date:June 09, 1969
Court:United States Supreme Court
 
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Page 337

395 U.S. 337 (1969)

89 S.Ct. 1820, 23 L.Ed.2d 349

Sniadach

v.

Family Finance Corp.

No. 130

United States Supreme Court

June 9, 1969

Argued April 21, 1969

CERTIORARI TO THE SUPREME COURT OF WISCONSIN

Syllabus

Under Wisconsin's garnishment procedure the clerk of the court issues a summons at the request of the creditor's lawyer, and the latter, by serving the garnishee (here the employer) sets in motion the machinery whereby wages (here one-half those due the employee) are frozen. The creditor has 10 days in which to serve the summons and complaint on the debtor after service on the garnishee, although here petitioner was served the same day as the employer. The wages may be unfrozen if the wage earner wins on the merits in the suit on the debt. Petitioner moved that the garnishment proceedings be dismissed for failure to meet the Fourteenth Amendment's procedural due process requirements, but the Wisconsin courts approved the procedure.

Held: Wisconsin's prejudgment garnishment of wages procedure, with its obvious taking of property without notice and prior hearing, violates the fundamental principles of procedural due process. Pp. 339-342.

37 Wis.2d 163, 154 N.W.2d 259, reversed.

DOUGLAS, J., lead opinion

MR. JUSTICE DOUGLAS delivered the opinion of the Court.

Respondents instituted a garnishment action against petitioner as defendant [89 S.Ct. 1821] and Miller Harris Instrument Co., her employer, as garnishee. The complaint alleged

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a claim of $420 on a promissory note. The garnishee filed its answer stating it had wages of $63.18 under its control earned by petitioner and unpaid, and that it would pay one-half to petitioner as a subsistence allowance1 and hold the other half subject to the order of the court.

Petitioner moved that the garnishment proceedings be dismissed for failure to satisfy the due process requirements of the Fourteenth Amendment. The Wisconsin Supreme Court sustained the lower state court in approving the procedure. 37 Wis.2d 163, 154 N.W.2d 259. The case is here on a petition for a writ of certiorari. 393 U.S. 1078.

The Wisconsin statute gives a plaintiff 10 days in which to serve the summons and complaint on the defendant after service on the garnishee.2 In this case, petitioner was served the same day as the garnishee. She nonetheless claims that the Wisconsin garnishment procedure violates that due process required by the Fourteenth Amendment in that notice and an opportunity to be heard are not given before the in rem seizure of the wages. What happens in Wisconsin is that the clerk of the court issues the summons at the request of the creditor's lawyer, and it is the latter who, by serving the garnishee, sets in motion the machinery whereby the

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wages are frozen.3 They may, it is true, be unfrozen if the trial of the main suit is ever had and the wage earner wins on the merits. But, in the interim, the wage earner is deprived of his enjoyment of earned wages without any opportunity to be heard and to tender any defense he may have, whether it be fraud or otherwise.

Such summary procedure may well meet the requirements of due process in extraordinary situations. Cf. Fahey v. Mallonee, 332 U.S. 245, 253-254; Ewing v. Mytinger & Casselberry Inc., 339 U.S. 594, 598-600; Ownbey v. Morgan, 256 U.S. 94, 110-112; Coffin Bros. v. Bennett, 277 U.S. 29, 31. But, in the present case, no situation requiring special protection to a state or creditor interest is presented by the facts; nor is the Wisconsin statute narrowly drawn to meet any such unusual condition. Petitioner was a resident of this Wisconsin community, and in personam jurisdiction was readily obtainable.

The question is not whether the Wisconsin law is a wise law or unwise law. Our concern is not what philosophy Wisconsin should or should not embrace. See Green v. Frazier, 253 U.S. 233. We do not sit as a super-legislative body. In this case, the sole question is whether there has been a taking of property without that procedural due process that is required by the Fourteenth Amendment. We have dealt over and over again with the question of what constitutes "the right to be heard" (Schroeder v. New York, 371 U.S. 208, 212) within the meaning of procedural due process. See Mullane v. Central Hanover Trust Co., 339 U.S. 306, 314. In the latter case, we said that the [89 S.Ct. 1822] right to be heard

has little reality or worth unless one is informed that the matter is pending and can choose for himself whether

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to appear or default, acquiesce or contest.

339 U.S. at 314. In the context of this case, the question is whether the interim freezing of the ages without a chance to be heard violates procedural due process.

A procedural rule that may satisfy due process for attachments in general, see McKay v. McInnes, 279 U.S. 820, does not necessarily satisfy procedural due process in every case. The fact that a procedure would pass muster under a feudal regime does not mean it gives necessary protection to all property in its modern forms. We deal here with wages -- a specialized type of property presenting distinct problems in our economic system. We turn then to the nature of that property and problems of procedural due process.

A prejudgment garnishment of the Wisconsin type is a taking which may impose tremendous hardship on wage earners with families to support. Until a recent Act of Congress,4 § 304 of which forbids discharge of employees on the ground that their wages have been garnished, garnishment often meant the loss of a job. Over and beyond that was the great drain on family income. As stated by Congressman Reuss:5

The idea of wage garnishment in advance of judgment, of trustee process, of wage attachment, or whatever it is called is a most inhuman doctrine It compels the wage earner, trying to keep his family together, to be driven below the poverty level.

Recent investigations of the problem have disclosed the grave injustices made possible by prejudgment garnishment whereby the sole opportunity to be heard comes after the taking. Congressman Sullivan, Chairman of

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the House Subcommittee on Consumer Affairs who held extensive hearings on this and related problems stated:

What we know from our study of this problem is that, in a vast number of cases, the debt is a fraudulent one, saddled on a poor ignorant person who is trapped in an easy credit nightmare, in which he is charged double for something he could not pay for even if the proper price was called for, and then hounded into giving up his pound of flesh, and being fired besides.

114 Cong.Rec. 1832.

The leverage of the creditor on the wage earner is enormous. The creditor tenders not only the original debt, but the "collection fees" incurred by his attorneys in the garnishment proceedings:

The debtor whose wages are tied up by a writ of garnishment, and who is usually in need of money, is in no position to resist demands for collection fees. If the debt is small, the debtor will be...

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