Sykes v. Bank of Am.

Decision Date24 July 2013
Docket NumberDocket No. 12–110–cv.
Citation723 F.3d 399
PartiesDerry SYKES, Plaintiff–Appellant, v. BANK OF AMERICA, New York City Human Resources Administration, Office of Child Support Enforcement, Defendants–Appellees, State of New York, New York State Child Support Processing Center, Defendants.
CourtU.S. Court of Appeals — Second Circuit

OPINION TEXT STARTS HERE

Derry Sykes, pro se, Binghamton, NY.

David L. Tillem, Wilson, Elser, Moskowitz, Edelman & Dicker LLP, White Plains, NY, for DefendantAppellee Bank of America.

Before: SACK, HALL, and LIVINGSTON, Circuit Judges.

PER CURIAM:

This appeal presents the issue of whether 42 U.S.C. § 659(a) authorizes levy against Supplemental Security Income (“SSI”) benefits provided under the Social Security Act to satisfy the benefits recipient's child support obligations. PlaintiffAppellant Derry Sykes, a recipient of SSI benefits, appeals from a judgment of the United States District Court for the Southern District of New York (Preska, C.J.) sua sponte dismissing Sykes's amended complaint pursuant to 28 U.S.C. § 1915(e)(2)(B).1 Sykes sought an Order to Show Cause, a temporary restraining order, and a preliminary injunction enjoining the New York City Office of Child Support Enforcement (OCSE), New York City Human Resources Administration (HRA) (collectively, the “agency defendants), and Bank of America from levying against his SSI benefits to enforce a child support order entered by a New York court. The amended complaint asserted claims under 42 U.S.C. § 1983, alleging violations of Sykes's due process and equal protection rights under the Fourteenth Amendment, his right to be free from unlawful seizures under the Fourth Amendment, and his rights under the Eighth Amendment and the Fair Debt Collection Practices Act.

The district court concluded that SSI benefits are subject to levy, relying on, inter alia,42 U.S.C. § 659(a), which subjects certain government benefits to withholding to satisfy outstanding child support obligations, provided “the entitlement to [those benefits] is based upon remuneration for employment.” We conclude that SSI benefits are not based upon remuneration for employment within the meaning of § 659(a), and that the section therefore does not preclude Sykes's claim. We also hold that the RookerFeldman doctrine and the exception to federal jurisdiction for divorce matters do not preclude the district court from exercising jurisdiction over the matter. We therefore VACATE the judgment to the extent the district court dismissed Sykes's claims against the agency defendants and REMAND for further proceedings. Because Sykes's complaint has not alleged facts establishing that defendant Bank of America is a state actor for purposes of § 1983, we AFFIRM that portion of the judgment dismissing Sykes's claims against Bank of America.

BACKGROUND

By letter dated June 24, 2011, Sykes received notice from the New York State Child Support Processing Center that monies belonging to him had been restrained in order to satisfy outstanding child support obligations. Enclosed with the letter was a copy of a restraining notice issued by OCSE. Pursuant to N.Y. C.P.L.R. § 5222, the notice informed Bank of America that Sykes owed a total child support debt of $27,590.

Sykes, acting pro se, sought leave to proceed in forma pauperis and filed an amended complaint against OCSE, HRA, and Bank of America, seeking relief under 42 U.S.C. § 1983 and alleging that, by placing an unlawful restraining order on his SSI direct deposit account at Bank of America, OCSE had violated 42 U.S.C. §§ 407 and 659 and the Fair Debt Collection Practices Act, deprived him of due process of law and equal protection, and violated his rights under the Eighth Amendment by rendering Sykes, a cancer survivor, unable to afford the nutrition he needed. The amended complaint further alleged that Bank of America had denied him his constitutional and statutory rights by “allowing the placing of an unlawful Restraining Order for a Judgment of Debt on [his] SSI direct deposit accounts,” Am. Compl. ¶ 5, ECF No. 13, despite the fact it “fully knew that [SSI] monies and accounts[,] unlike Social Security Disability (SSD)[, are] immune from garnishment,” id. at ¶ 6. Sykes sought both compensatory and punitive damages.

In November 2011, the district court sua sponte dismissed Sykes's complaint pursuant to 28 U.S.C. § 1915(e)(2)(B). The court held that SSI benefits were subject to withholding in accordance with State law to satisfy the obligation of an SSI recipient to provide child support or alimony. The court relied primarily on 42 U.S.C. § 659(a), which subjects certain social security benefits to withholding “to enforce the legal obligation of the [recipient] to provide child support.” As to Sykes's claims against Bank of America, the court held that he had not established that Bank of America was acting under color of state law for purposes of § 1983.

Moreover, according to the court, even if Sykes had established that his SSI benefits were not subject to levy to satisfy an outstanding child support obligation, any challenge to a state court child support order had to be dismissed pursuant to the “domestic relations exception to federal court jurisdiction,” see Ankenbrandt v. Richards, 504 U.S. 689, 703, 112 S.Ct. 2206, 119 L.Ed.2d 468 (1992), and the RookerFeldman doctrine, see Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005), divesting federal courts of jurisdiction to consider suits which seek to overturn a state court judgment. The district court also determined that Sykes had failed to allege a claim under the Fair Debt Collection Practices Act, because child support obligations did not qualify as “debts” under that statute. The court reasoned that child support obligations were not incurred to receive consumer goods or services but were imposed on parents to force them to fulfill their duty to support their children.

After filing his notice of appeal, Sykes moved for in forma pauperis status before this Court. A motions panel of this Court granted the motion in part with respect to Sykes's § 1983 claim that Defendants had violated 42 U.S.C. § 407(a) by levying against his SSI benefits to enforce a child support order. The Court denied the motion as to Sykes's claims under the Equal Protection Clause, the Eighth Amendment, and the Fair Debt Collection Practices Act, and dismissed his appeal as to those claims on the ground that they lacked an arguable basis in law or fact. See28 U.S.C. § 1915(e). Remaining before us is Sykes's claim that Defendants violated 42 U.S.C. § 407(a) by levying against his SSI benefits.

DISCUSSION

This Court reviews de novo a district court's sua sponte dismissal of a complaint for failure to state a claim. Giano v. Goord, 250 F.3d 146, 149–50 (2d Cir.2001). Pro se complaints “must be construed liberally and interpreted to raise the strongest arguments that they suggest.” Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 474 (2d Cir.2006) (internal quotation marks omitted). The complaint must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim will have “facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

A

We initially address the district court's holding that it lacked jurisdiction to consider Sykes's complaint based on the RookerFeldman2 doctrine and the domestic relations exception to federal jurisdiction. To the extent the court relied on RookerFeldman in dismissing the amended complaint, this was error. The doctrine “is confined to cases of the kind from which the doctrine acquired its name: cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments.” Exxon Mobil, 544 U.S. at 284, 125 S.Ct. 1517. Sykes does not complain of injuries caused by a state court judgment, nor does he challenge the validity or enforcement of the child support order itself. See id. Rather, he challenges only Defendants' levying against his SSI assets in his bank account in order to enforce the child support order—conduct which is wholly separate from the validity of the underlying order. Sykes's complaint does not fall within the scope of the doctrine.

The district court also erred in holding that the domestic relations exception to federal jurisdiction barred Sykes's suit. Federal courts have long abstained from exercising jurisdiction over matters involving divorce or alimony. See Ankenbrandt v. Richards, 504 U.S. 689, 693, 112 S.Ct. 2206, 119 L.Ed.2d 468 (1992). The Supreme Court in Ankenbrandt clarified this doctrine, and limited its scope to “divest[ ] the federal courts of power to issue divorce, alimony, and child custody decrees.” Id. at 703, 112 S.Ct. 2206. The Court specifically noted that despite this doctrine, it had long “sanctioned the exercise of federal jurisdiction over the enforcement of an alimony decree that had been properly obtained in a state court of competent jurisdiction.” Id. at 702, 112 S.Ct. 2206 (citing Barber v. Barber, 62 U.S. (21 How.) 582, 590–91, 16 L.Ed. 226 (1858)). Sykes does not ask us to issue a new child support decree in this case. Instead, we are tasked only with determining the lawfulness of Defendants' actions, pursuant to a state court's child support order, requiring Sykes to pay portions of his SSI benefits toward his child support arrearage. The domestic relations exception, therefore, does not bar our jurisdiction to decide this issue.

We therefore conclude that the district court did not...

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