U.S. v. Lawrence, CR 96-30016.

• Decision Date: 19 February 2008
• Docket Number: No. CR 96-30016.,CR 96-30016.
• Citation: 538 F.Supp.2d 1188
• Parties: UNITED STATES of America, Plaintiff, v. Kelvin James LAWRENCE, Defendant, and Leadership Training Institute, Inc., Sioux Falls, SD, and its successors and assigns, Garnishee.
• Court: U.S. District Court — District of South Dakota

538 F.Supp.2d 1188

UNITED STATES of America, Plaintiff, v. Kelvin James LAWRENCE, Defendant, and Leadership Training Institute, Inc., Sioux Falls, SD, and its successors and assigns, Garnishee.

No. CR 96-30016.

United States District Court, D. South Dakota, Central Division.

February 19, 2008.

Jan Leslie Holmgren, Assistant United States Attorney, Sioux Falls, SD, for Plaintiff.

Aloysius J. Arendt, Arendt Law Office, Pierre, SD, for Defendant.

ORDER ADOPTING REPORT AND RECOMMENDATION

CHARLES B. KORNMANN, District Judge.

Defendant was sentenced on October 16, 1996, to 24 months custody, three years supervised release, a $5,000 fine, and $115,000 restitution for false statement to a Government Department or Agency. The government has repeatedly undertaken to collect the monetary debt through garnishment pursuant to the Federal Debt Collection Procedures Act, 28 U.S.C. § 3205.

On May 22, 2007, the government filed an application for a writ of continuing garnishment as to the above garnishee. The application was granted. On July 23, 2003, the garnishee answered. The government filed an objection to the answer and requested a hearing, Doc. 124. Garnishee filed a motion to quash garnishment, Doc. 125.

This matter was referred to United States Magistrate Judge Mark A. Moreno. Judge Moreno conducted an evidentiary hearing on September 24, 2007, and issued his report and recommendation, Doc. 137, on November 29, 2007. No objections to the report were Med.

The Court has conducted a review of the report and recommendation and the file herein and finds that the report and recommendation of the magistrate judge should be adopted.

Now, therefore,

IT IS ORDERED:

1. The report and recommendation of the U.S. Magistrate Judge filed November 29, 2007, Doc. 137, shall be and is hereby adopted.

2. The government's objection to the garnishee's answer. Doc. 124, is sustained.

3. The motion to quash garnishment, Doc. 125, is denied.

Dated this 15th day of February, 2008.

2008 DSD 6

REPORT AND RECOMMENDATIONS CONCERNING OBJECTIONS TO GARNISHEE'S ANSWER AND DEFENDANT'S MOTION TO QUASH GARNISHMENT

MARK A. MORENO, United States Magistrate Judge.

[¶ 1] After pleading guilty to the offense of making a false statement to a government department or agency, Defendant, Kelvin James Lawrence, was sentenced on October 16, 1996, to 24 months of custody and three years of supervised release, and to pay a fine of $5,000, a $50 special assessment and restitution in the amount of $115,000. Since then, Plaintiff, United States of America (Government), has repeatedly undertaken to collect the debt under the Fair Debt Collection Procedures Act (FDCPA), 28 U.S.C. § 3001 et seq., and in particular, the garnishment provisions thereof found in 28 U.S.C. § 3205.

[¶ 2] On May 24, 2007, the Government served Garnishee, Leadership Training Institute, Inc., with an application for writ of continuing garnishment. On July 23, 2007, Garnishee filed an answer to the application. The Government then filed an objection to the answer and requested a hearing. Subsequently, Defendant moved to quash the garnishment and the Government submitted a response to the motion, resisting the same.

[¶ 3] On September 5, 2007, the District Court¹ referred the case to this Court pursuant to 28 U.S.C. § 3008. Later that same month, a hearing was held in accordance with § 3205(c)(5) at which Defendant and his counsel, and counsel for the Government appeared.

I.

[¶ 4] In June, 2006, The Government made written demand of Defendant for payments toward his debt in the amount of $300 per month, to begin on July 15, 2006, and for financial information to determine his ability to pay. Defendant's counsel responded by letter indicating that Defendant was unemployed, was mowing yards, trying to sell an occasional computer and doing fishing guide work, but would agree to pay $300 per month because that was probably all he could afford. Defendant did not make his July 15th payment, but did submit a $300 payment on August 11, 2006 and a $600 payment the following month.

[¶ 5] On November 9, 2006, Defendant's counsel wrote a letter requesting that his payments remain at $300, regardless of his employment. The Government agreed to accept $300 per month payments until Defendant secured full-time employment. The Government made it clear, however, that once Defendant became employed on a full-time basis, it expected Defendant to make regular monthly payments of 20 percent of his net disposable income², and if he failed or refused to do so, the Government would proceed, as before, to garnish his wages.

[¶ 6] Upon learning that Defendant was again employed, the Government made application in May, 2006, for another writ of continuing garnishment. Defendant had, from August, 2006 through April, 2007, continued to pay $300 per month, but had not disclosed his new job or provided a financial statement to the Government.

[¶ 7] Garnishee answered the Government's garnishment writ and the Government objected to the answer, asserting that Garnishee had failed to include the date on which Garnishee was served with the writ, and had incorrectly stated the beginning and ending dates for the withholding time period. Thereafter, Defendant filed a motion seeking to quash the garnishment on the ground that the garnishment violated the District Court's October 16, 1996 Judgment and the parties' November, 2006 "agreement." The Government filed a response to the motion. A hearing was later held at which oral arguments were made and additional correspondence was received into evidence. Garnishee did not appear at the hearing, either by counsel or otherwise.

II.

[¶ 8] During the hearing, the Court raised the question of whether it was authorized under § 3008 to enter a final, appealable order, or whether it could only decide the objection and motion to quash on a report and recommendation basis. The Government submitted a post-hearing memorandum on this question, wherein it concluded that there was no definitive answer to the same.

[¶ 9] § 3008 states as follows:

A district court of the United States may assign its duties in proceedings under this chapter [28 U.S.C. §§ 3001 et seq.] to a United States magistrate to the extent not inconsistent with the Constitution and laws of the United States.

[¶ 10] The plain language of the statute itself appears to allow a magistrate judge to exercise whatever duties a district court has in proceedings under the FDCPA so long as the magistrate judge does so in a manner that is consistent with both the Constitution and federal law. In addition, because collection actions brought by the Government under the FDCPA, even in connection with the enforcement of a criminal judgment, are civil in nature, a magistrate judge would presumably be authorized by 28 U.S.C. § 636(c) and Fed R. Civ. P. 73 to preside over such actions and to decide issues raised in them like s/he would do in any civil consent case. See Orsini v. Wallace, 913 F.2d 474, 476-79 (8th Cir.1990), cert. denied, 498 U.S. 1128, 111 S.Ct. 1093, 112 L.Ed.2d 1197 (1991); see also Peretz v. United States, 501 U.S. 923, 927-40, 111 S.Ct. 2661, 115 L.Ed.2d 808 (1991). Some FDCPA decisions rendered by magistrate judges, while not making reference to the authority for doing so, have seemingly been by final appealable orders, see United States v. Himebaugh, No. 02-CR-0077-002-CVE, 2007 WL 1462430 at **1-2 (N.D.Okla. May 7, 2007); United States v. Cap Quality Care, Inc., 400 F.Supp.2d 295, 296-97, 300 (D.Me.2005); Chao v. Vidtape, Inc., No. CV-98-3359 (ETB), 2004 WL 203008 at **1, 6 (E.D.N.Y. Jan. 30, 2004); United States v. Rice, 196 F.Supp.2d 1196, 1197-98, 1202 (N.D.Okla.2002); N.L.R.B. M and V Painting, Inc., No. CIV.A. 97-C75019, 2001 WL 1005579 at **1-2 (E.D.Mich. Oct. 29, 2001), while others have been on a report and recommendation basis, see United States v. Pugh, 445 F.3d 1066, 1067-68 (8th Cir.2006); United States v. Benford, No. 05-74755, 2007 WL 1500104 at **1-2 (E.D.Mich. May 22, 2007); United States v. Ahmed, No. 98-cr-00456-RPM-CBS, 2007 WL 1430095 at **1-2 (D.Colo. May 14, 2007); United States v. Texas Mun. Retirement System, No. 4:06MC14, 2006 WL 3839165 at *1 (E.D.Tex. Dec. 29, 2006); United States v. Ekpenyong, No. CV00-116-TUC-FRZ (GEE), 2006 WL 3496857 at **1-2 (D.Ariz. Nov. 30, 2006); United States v. Wells, No. 06-10589, 2006 WL 3203905 at **1, 3 & n; 1 (E.D.Mich. Nov. 3, 2006); United States v. Cooper, No. 02-40069-SAC, 2006 WL 3512936 at **1-2, 6 (D.Kan. Nov. 1, 2006); United States v. Kemp, No. 3-96-CR-300-P, 2002 WL 31548868 at **1-3 (N.D.Tex. Nov. 12, 2002); United States v. George, 144 F.Supp.2d 161, 162, 166-67 (E.D.N.Y. 2001).

[¶ 11] The Court need not tarry here over the issue of whether or not it can rule on the objection and motion outright because it concludes that the safer and more appropriate course of action, consistent with 28 U.S.C. § 636(b)(1), is to simply issue a report and recommendation. See Wells, 2006 WL 3203905 at **1, 3 & n. 1. While the Government and Defendant have consented to the Court making a final, appealable decision in this case, Garnishee, also a party to the case, has not done so, thereby depriving the Court of § 636(c) jurisdiction. See Fed.R.Civ.P. 73(a) (requiring the consent of "all parties" before a magistrate judge may exercise the authority provided in § 636(c)).

III.

[¶ 12] Garnishee did not appear at the hearing or otherwise challenge the objections to its answer. Notwithstanding this, the Court, has independently reviewed the objections, finds that they are well taken and should be sustained. Garnishee failed to disclose the date on which it was served with the writ of continuing garnishment. The Government's return receipt, attached as Exhibit 1 to its objections, reflects that Garnishee acknowledged receipt of the writ on May 30, 2007.

[¶ 13] Moreover, inasmuch as service was effectuated on May 30th, the relevant pay period could...