Opinion ID: 175595
Heading Depth: 2
Heading Rank: 2

Heading: The CCPA's Limitation on Garnishment of Disposable Earnings

Text: The LSPRF and Barre assert that, even if Barre's retirement benefits are subject to garnishment, the United States cannot garnish more than twenty-five percent of Barre's monthly pension benefits under § 303 of the CCPA. Section 3613(a)(3) of the MVRA states that the protections of the CCPA shall apply to enforcement of the judgment under either federal or state law. The CCPA provides that the maximum part of the aggregate disposable earnings of an individual for any workweek which is subjected to garnishment may not exceed (1) 25 per centum of his disposable earnings for that week, or (2) the amount by which his disposable earnings for that week exceed thirty times the Federal minimum hourly wage prescribed by section 206(a)(1) of Title 29 in effect at the time the earnings are payable, whichever is less. In the case of earnings for any pay period other than a week, the Secretary of Labor shall by regulation prescribe a multiple of the Federal minimum hourly wage equivalent in effect to that set forth in paragraph (2). 15 U.S.C. § 1673(a). The parties dispute whether Barre's monthly benefit payments constitute earnings under the CCPA. The CCPA defines earnings as compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and includes periodic payments pursuant to a pension or retirement program. 15 U.S.C. § 1672(a) (emphasis added). The Supreme Court has cautioned that the terms earnings and disposable earnings under the CCPA are limited to `periodic payments of compensation and (do) not pertain to every asset that is traceable in some way to such compensation.' Kokoszka v. Belford, 417 U.S. 642, 651, 94 S.Ct. 2431, 41 L.Ed.2d 374 (1974) (citation omitted). Here, the question is whether payments made from an employer's retirement program to an employee are too attenuated to be considered earnings under the CCPA. The district courts around the country have divided over whether monthly pension-benefit payments constitute earnings under the CCPA. Several district courts have concluded that once passed to a retirement account or annuity in the hands of the employee, the funds in the account or annuity are not `earnings' under the CCPA, and thus not subject to the 25% cap, even if they are distributed in periodic paymentsin other words, the distributions from the fund to the defendant are not `disposable earnings' under § 303. United States v. Belan, No. 2:07-x-50979, 2008 WL 2444496, at  (E.D.Mich. June 13, 2008); see also United States v. Crawford, F-04-0200, 2006 WL 2458710, at -3 (E.D.Cal. Aug. 22, 2006); United States v. Laws, 352 F.Supp.2d 707, 713-14 (E.D.Va. 2004). However, at least one district court has reached the opposite conclusion and held that periodic payments of retirement benefits are earnings under the CCPA. McClanahan, 2006 WL 1455698, at  (holding that under clear statutory language, it appears that the Government may garnish only 25% of the Defendant's pension). We find the statutory language unambiguous and hold that the United States may garnish only twenty-five percent of Barre's monthly pension benefits. The statute explicitly defines earnings to include periodic payments made pursuant to a pension or retirement program. 15 U.S.C. § 1672(a) (emphasis added). The term pursuant to is generally defined as in compliance with; in accordance with; under [or] ... as authorized by ... [or] in carrying out. BLACK'S LAW DICTIONARY (8th ed.2004). [9] The parties do not dispute the terms of the pension plan or that the plan entitles Barre to monthly pension-benefit payments. Because the United States does not dispute that the terms of the pension plan authorize Barre to receive monthly pension benefits, we conclude that the payments are being made pursuant to the pension fund and therefore constitute earnings under the CCPA. [10] Accordingly, we conclude that the United States may not garnish more than twenty-five percent of Barre's monthly pension benefits under the CCPA.