Opinion ID: 2973705
Heading Depth: 3
Heading Rank: 1

Heading: Michigan’s reimbursement laws

Text: In Michigan, inmates are permitted to receive mail only at the correctional facility where they are incarcerated. A directive issued by the MDOC also prohibits prisoners from possessing accounts at financial institutions, so prisoners must keep all of their assets in their institutional accounts. Dept. of Corrections Policy Directive No. 04.02.105. Funds credited to a prisoner’s account may be used only in accordance with this directive. Id. Michigan enacted SCFRA to reimburse the state for the costs of detaining and providing for its prisoners. Under SCFRA, the attorney general may seek reimbursement for expenses incurred during a prisoner’s incarceration by filing a complaint against the prisoner in the state trial court. Mich. Comp. Laws § 800.404(1). The court, after considering any legal or moral obligations of the prisoner to support any dependents, may order the prisoner to reimburse the state for the costs of incarceration in an amount up to 90% of the prisoner’s assets. Mich. Comp. Laws § 800.403(3). A prisoner’s assets include his pension benefits. Mich. Comp. Laws § 800.401a(a). SCFRA also provides mechanisms for ensuring that a prisoner’s assets are used to reimburse the state. Pursuant to § 800.404(3) of the Michigan Compiled Laws, the state court may order any person, corporation, or entity having custody of a prisoner’s assets to “appropriate and apply the assets or a portion thereof toward reimbursing the state.” But this specific provision of SCFRA is not applicable where, as in the present case, a prisoner’s assets are held by a private pension plan. Application of § 800.404(3) in those cases would violate ERISA’s anti-alienation provision, which states that each plan must “provide that benefits provided under the plan may not be assigned or alienated.” 29 U.S.C. § 1056(d)(1). Instead, in order to recover a prisoner’s benefits held by a private pension plan, the state utilizes SCFRA in conjunction with other Michigan laws and with MDOC’s prison directives. This combination of laws and directives is at issue in the present case. Under SCFRA, the attorney general first pursues a judgment against the prisoner and is awarded a percentage of the prisoner’s pension payments. See Mich. Comp. Laws §§ 800.403(3), 800.404. The court then orders the prisoner to inform his or her pension plan that any benefit payments should be sent to the institutional address. If the prisoner refuses to comply, the warden of the prisoner’s institution must send a copy of the order to the pension plan. The order serves to notify the pension plan of the prisoner’s institutional address. Once payments are received at the prison, they are automatically deposited into the prisoner’s institutional account. No. 05-1716 DaimlerChrysler Corp. et al. v. Cox et al. Page 3