Opinion ID: 1203073
Heading Depth: 3
Heading Rank: 1

Heading: Jousma's Appeal.[8]

Text: Federal social security law unequivocally states that none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process... . 42 U.S.C. § 407(a) (1983) (section 407(a)). Both Jousma and C.G.A. argue that, under the supremacy clause of the United States Constitution, section 407 preempts the state from appropriating C.G.A.'s SSA benefits. See U.S. Const. art. VI. Jousma's appeal is controlled by Bennett v. Arkansas, 485 U.S. 395, 108 S.Ct. 1204, 99 L.Ed.2d 455 (1988) (per curiam). That case involve[d] an attempt by the State of Arkansas to attach certain federal benefits paid to individuals who are incarcerated in Arkansas prisons, pursuant to an Arkansas statute which authorized the state to seize a prisoner's property in order to reimburse the state for the cost of maintaining the prisoner. Id. at 396, 108 S.Ct. at 1205. The Supreme Court of the United States held that section 407(a) unambiguously rules out any attempt to attach Social Security benefits. Id. at 397, 108 S.Ct. at 1206. The Court also rejected the argument that section 407 contained an implied exception when the state has provided the recipient with care and maintenance. Id. The child support order was a legal process which attached C.G.A.'s social security benefits. So long as someone other than the state was designated as payee for C.G.A., the state had no legal right to C.G.A.'s funds. See Brinkman v. Rahm, 878 F.2d 263 (9th Cir.1989) (section 407 preempts state from attaching involuntary mental patients' Social Security Old Age Survivor's and Disability Insurance benefits). [9] The state correctly notes that this interpretation would prevent the state from ordering a noncustodial payee to pay a child's social security benefits over to a custodial parent. This could lead to an inequitable result if the appointed payee was inappropriately spending the beneficiary's funds. However, federal law provides a remedy when the appointed payee abuses her fiduciary duty. See 42 U.S.C. § 408(a)(5) (1991 Supp.); [10] 20 C.F.R. § 404.2041 (1990). [11] The very existence of a federal remedy preempts state interference with an appointed payee's decision to spend the social security benefits. See Brevard v. Brevard, 74 N.C. App. 484, 328 S.E.2d 789, 792 (N.C. App. 1985). Therefore, the superior court's order requiring Jousma, as representative payee, to remit C.G.A.'s benefits to the state conflicts with federal law. Moreover, we disagree with the state's contention that survivor's benefits can be distinguished from other social security benefits. The state believes that C.G.A.'s survivors benefits were to replace the decedent's support, which has been lost through his death and that the state has merely stepped into the role of parens patriae. In making this argument, the state relies on Rose v. Rose, 481 U.S. 619, 107 S.Ct. 2029, 95 L.Ed.2d 599 (1987). In Rose, the United States Supreme Court upheld a state's contempt proceeding against a veteran for unpaid child support, even though the veteran's only source of income was federal veteran's benefits. Veterans' benefits are protected by 38 U.S.C. § 3101(a) which has an anti-attachment provision similar to section 407(a). Id. at 630, 107 S.Ct. at 2036. The Court found that state contempt proceedings would not impose on the policy against placing the Veterans' Administration in the position as a collection agency. Id. at 630, 635, 107 S.Ct. at 2036, 2038. More importantly, the Court distinguished other cases in which it had found preemption: in veterans' benefit cases, Congress clearly intended that the benefits support not only the veteran, but the veteran's family as well. Id. at 633-34, 107 S.Ct. at 2037-38. In Bennett, however, the Supreme Court limited Rose to cases where the state is acting on behalf of a beneficiary of the protected federal funds. 485 U.S. at 398, 108 S.Ct. at 1206. As the Court said in Bennett, [h]ere, in contrast, the State cannot be said to be a `beneficiary' of petitioner's Social Security benefits. Id.