Court Opinion

ID: 6928497
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:42:39.74713+00
Date Added: 2024-06-11T16:07:01.949097
License: Public Domain

WALKER, Circuit Judge,
dissenting:
While the record here indicates that EDP Medical has indeed engaged in reprehensible conduct towards its employees and adopted tactics designed to avoid paying the NLRB back-pay award against it, Congress never intended that the FDCPA be used other than in connection with a civil action for collection of a debt “owing to the United States.” An NLRB back-pay award is not such a debt. This becomes obvious when provisions of the FDCPA are sought to be applied not to a civil action as contemplated by Congress but to the sole method for enforcing an NLRB back-pay award, a contempt proceeding in the court of appeals.
In order to reach the result it desires, the majoi’ity cites a snippet of legislative history from Congressman Brooks in which he states that the FDCPA “will not apply to obligations which begin as purely private loan or contract obligations.” 136 Cong.Ree. H13288 (daily ed. October 27, 1990). From this, the majority reasons that if the obligation is not “purely private,” it can be a debt “owing to the United States.” Yet it seems evident from the passage quoted by the majority that Congressman Brooks was merely giving but one example of the kind of debt not covered by the FDCPA — a purely private one — and in no way meant to indicate that all non-purely private debts would be subject to the new procedures.
In any event, the Congressman’s pronouncement is no substitute for the plain meaning of the statute. See, e.g., Pennsylvania Dep’t of Pub. Welfare v. Davenport, 495 U.S. 552, 557-58, 110 S.Ct. 2126, 2130, 109 L.Ed.2d 588 (1990) (“Our construction of the term “debt” is guided by the fundamental canon that statutory interpretation begins with the language of the statute itself.”) (interpreting the term “debt” as it appears in the Bankruptcy Code). Section 3002(3) defines “debt” as “an amount that is owing to the United States on account of a direct loan” (subsection (A)) or “on account of a fee, duty, lease, rent, service, sale of real or personal property, overpayment, fine, assessment, penalty, restitution, damages, interest, tax, bail bond forfeiture, reimbursement, recovery of a cost incurred by the United States, or other source of indebtedness to the United States” (subsection (B)). An NLRB back-pay award to private employees is simply neither an amount owing to the United States nor an indebtedness to the United States. While the analysis might be different if the United States had previously satisfied the employees’ claims and was itself looking to recover by way of subrogation, those circumstances are not presented here.
The majority’s holding that NLRB back-pay awards can be considered debts “owing to the United States” that would trigger the FDCPA’s debt-collection procedures also conflicts with the Supreme Court’s holding in Nathanson v. NLRB, 344 U.S. 25, 73 S.Ct. 80, 97 L.Ed. 23 (1952), that back-pay awards are not debts owing to the United States government. Nathanson held that Bankruptcy Act provisions giving priority to debts owed to the United States did not apply to NLRB back-pay awards, despite the fact that the Board is an agency of the United States and has the exclusive power to pursue back-pay awards on behalf of workers. The Court stated: “We cannot ... give priority to a claim which the United States is collecting for the benefit of a private party.... The beneficiaries here are not wards of the Federal Government; they are wage claimants who were discriminated against by their employer.” 344 U.S. at 28, 73 S.Ct. at 82 (citation omitted).
The majority says Nathanson supports its decision because the Supreme Court still held that since “Congress has made the Board the only party entitled to enforce the Act,” id. at 27, 73 S.Ct. at 82, the Board could be a claimant in the bankruptcy court on behalf of the workers owed back-pay awards. However, it is quite natural that the Court in Nathanson held that the Board may be a claimant in bankruptcy court, considering that the Board is the only entity empowered by Congress to enforce back-pay awards. Nonetheless, even though the Board may claim back-pay awards in the bankruptcy court, and even though the Board is an agency of the United States, “[it] does not follow that ... any debt owed is a debt owing to the United States.” Id. at 27, 73 S.Ct. at 82. The Board is merely the *959vehicle by which the claimants can obtain their individual awards; the claimants themselves are not “wards of the Federal Government.” Id. at 28, 73 S.Ct. at 82.
Applying Nathanson’s holding that NLRB back-pay awards are not debts of the United States is more consistent with the FDCPA’s legislative purpose than the course chosen by the majority. According to the House report, the FDCPA was intended to address the growing problem of delinquent debts owed the United States, in great measure due to defaults in various government loan programs, with the goal of “lessening the effect of delinquent debts on the massive federal budget deficit now undermining the economic well-being of the Nation.” 1990 U.S.C.C.A.N. at 6631. As compared with the recovery of defaulted loans and other true “debts,” NLRB awards have absolutely no impact on government revenues. As the Na-tkanson court astutely recognized with respect to NLRB back-pay awards, “[tjhere is no function here of assuring the public revenue.” 344 U.S. at 28, 73 S.Ct. at 82. The enforcement of NLRB back-pay awards, while it could have been a valid public policy goal of Congress, simply was not among the concerns of Congress when it passed the FDCPA.
That the FDCPA was never designed as a vehicle for the enforcement of NLRB back-pay awards is made even more clear by the procedural snarl created by the Board’s enforcement proceedings in this case. The Board has shoe-horned its post-award action to attach assets in conjunction with a contempt petition into the FDCPA’s procedures for prejudgment writ of garnishment. The prejudgment garnishment provisions permit the government to apply for a writ of garnishment “in conjunction with the complaint or at any time after the filing of a civil action on a claim for a debt_” 28 U.S.C. § 3101. However, the Board sought a writ of garnishment after it filed a petition for civil contempt for non-compliance with the NLRB order. No civil action on a claim for a debt has been filed, nor could one be filed, since compliance with an NLRB order, after a court of appeals issues an order enforcing it, may only be obtained by means of a contempt petition in the court of appeals. 29 U.S.C. §§ 160(e), (f). See NLRB v. P*I*E Nationwide, Inc., 894 F.2d 887, 890 (7th Cir.1990). While it might have furthered a desirable policy for Congress to have provided a mechanism in the FDCPA for attachment of assets in conjunction with an NLRB contempt petition, Congress did not do so, and it is not this court’s place to effectively redraft the FDCPA to include NLRB back-pay enforcement proceedings.
To get the result it wants, the Board is forced to argue that we should not read the terms “complaint” and “civil action” literally. However, these are precise terms that Congress opted to use in the FDCPA rather than looser terms such as “action” or “proceeding.” According to the legislative history, the FDCPA was aimed at facilitating the recovery of sums owed the United States due to defaulted loans and other obligations owed the United States. It follows that use of the terms “complaint” and “civil action” — terms used to describe the specific debt collection procedures — was deliberate. Actions to recover debts such as defaulted loans fit neatly into the language and procedures of the FDCPA; contempt proceedings to enforce back-pay awards do not.
The misfit between the Board’s action and the FDCPA is illustrated by the way the Board commenced the proceedings. The Board failed to comply with the service-of-process requirements of the FDCPA, which require that service be made in accordance with the Federal Rules of Civil Procedure. Since it brought a contempt proceeding, the Board of course did not comply with Fed. R.Civ.P. 4, which deals with commencing actions. To this the Board replies that it only had to comply with Rule 5, which governs service of papers once an action has been commenced. The Board reasons that its contempt petition was in conjunction "with the earlier proceedings before the NLRB which resulted in the order, and that since proper service was made in that action, service in compliance with Rule 5 was sufficient. However, the Board brought this action under the FDCPA as a prejudgment writ of garnishment filed in conjunction with the contempt petition, which it argues out of the other side *960of its mouth is effectively the same as a complaint in a civil action on a claim for a debt. But if a contempt petition is really another form of a complaint in a civil action, then Rule 4, not Rule 5, would apply. In arguing that Rule 5 applies, the Board of course reveals the true nature of this proceeding: an attempt by the Board to enforce a back-pay award through the court of appeal’s contempt power, not a civil action. Such proceedings are wholly outside the provisions of 28 U.S.C. § 3101.
There is a difference between the Board’s action to enforce a back-pay award owed to private employees in a court of appeals contempt proceeding and a prejudgment writ of garnishment in conjunction with a civil action on a claim for a debt owed to the United States government. The FDCPA was designed to accommodate the latter only. Because I think the majority’s holding conflicts with the Supreme Court’s decision in Na-thanson as well as the language and purpose of the FDCPA, I respectfully dissent.