Court Opinion

ID: 2708558
Source: CourtListenerOpinion
Date Created: 2014-08-05 15:01:32.955604+00
Date Added: 2024-06-11T12:31:45.863893
License: Public Domain

In the

      United States Court of Appeals
                      For the Seventh Circuit
                          ____________________  

Nos.  05-­‐‑1362  &  05-­‐‑4075  
NATIONAL  LABOR  RELATIONS  BOARD,  
                                                                 Petitioner,  
                                        v.  

HH3   TRUCKING,   INC.,   GRETCHEN   HUDSON,   and   WILLIAM  
HUDSON,  
                                                 Respondents.  
                          ____________________  

                          On  Motion  to  Set  a  Remedy  
                          for  Civil  Contempt  of  Court  
                          ____________________  

          ARGUED  JUNE  3,  2014  —  DECIDED  JUNE  13,  2014  
                    ____________________  

   Before   BAUER,   EASTERBROOK,   and   HAMILTON,   Circuit  
Judges.  
      EASTERBROOK,  Circuit  Judge.  The  National  Labor  Relations  
Board  found  that  HH3  Trucking  had  committed  unfair  labor  
practices   and   ordered   a   remedy   that   included   back   pay   for  
its   workers.   HH3   failed   to   comply,   which   led   the   Board   to  
petition   for   judicial   enforcement.   HH3   did   not   reply   to   the  
petitions,   so   we   enforced   the   orders   summarily.   NLRB   v.  
2                                                   Nos.  05-­‐‑1362  &  05-­‐‑4075  

HH3  Trucking,  Inc.,  Nos.  05-­‐‑1362  (7th  Cir.  June  1,  2005),  and  
05-­‐‑4075  (7th  Cir.  Feb.  14,  2006).  HH3’s  total  financial  liability  
is   approximately   $190,000   plus   interest.   After   HH3   ignored  
our   orders,   the   Board   asked   us   to   hold   its   owner-­‐‑managers  
(Gretchen   and   William   Hudson)   in   contempt   of   court.   We  
appointed   Magistrate   Judge   Young   Kim,   of   the   Northern  
District   of   Illinois,   to   take   evidence   as   a   special   master.   He  
found   that   the   Hudsons   could   comply   with   the   Board’s   or-­‐‑
ders  but  had  chosen  not  to  do  so  and  recommended  that  we  
direct   them   to   pay   no   less   than   $600   a   month.   We   accepted  
that   recommendation,   held   the   Hudsons   in   civil   contempt,  
and  ordered  them  to  pay  at  least  $600  a  month  until  the  full  
financial  judgment  had  been  satisfied.  
     Nothing   happened.   We   directed   the   Marshals   Service   to  
place  the  Hudsons  in  custody  until  they  paid.  That  at  last  led  
to  a  promise  of  compliance,  so  we  released  them.  They  paid  
$600,  then  stopped.  We  put  them  back  in  jail.  After  they  as-­‐‑
serted   that   they   are   no   longer   able   to   comply,   we   allowed  
them   to   be   transferred   to   home   confinement   and   asked  
Judge   Kim   to   hold   another   hearing.   He   concluded   that,   al-­‐‑
though  Gretchen  Hudson  considers  herself  retired  and  Wil-­‐‑
liam   Hudson   has   (recently)   become   medically   unable   to  
work,   they   remain   able   to   pay   something   by   drawing   on  
savings   and   sources   of   current   income   that   include   benefits  
from   a   retirement   plan.   Judge   Kim   recommended   that   we  
order  the  Hudsons  to  resume  paying  at  least  $100  a  month.  
      Represented  by  counsel  who  have  volunteered  their  ser-­‐‑
vices,  the  Hudsons  ask  us  to  reject  this  recommendation  and  
to   find   that   they   need   not   pay.   They   are   able   to   pay   some-­‐‑
thing,   they   concede,   but   they   maintain   that   they   are   legally  
privileged  not  to  pay.  The  core  of  this  argument  is  the  prop-­‐‑
Nos.  05-­‐‑1362  &  05-­‐‑4075                                                         3  

osition  that  money  received  from  a  pension  plan  covered  by  
the   Employee   Retirement   Income   Security   Act   (ERISA),   as  
their   plan   is,   is   forever   free   of   all   legal   claims   by   third   par-­‐‑
ties.   Section   206(d)(1)   of   ERISA,   29   U.S.C.   §1056(d)(1),   pro-­‐‑
vides   that   “[e]ach   pension   plan   shall   provide   that   benefits  
provided  under  the  plan  may  not  be  assigned  or  alienated.”  
Guidry  v.  Sheet  Metal  Workers  National  Pension  Fund,  493  U.S.  
365  (1990),  holds  that  a  constructive  trust  on  benefits,  under  
which   the   pension   plan   must   pay   someone   other   than   the  
plan’s   participant,   violates   this   rule,   even   when   the   trust  
would   be   a   remedy   for   the   participant’s   violation   of   some  
other  part  of  ERISA.  (Guidry,  a  trustee  of  a  union-­‐‑sponsored  
ERISA   plan,   embezzled   some   of   its   money;   the   Court   held  
that  the  plan  could  not  recoup  from  Guidry’s  personal  pen-­‐‑
sion  account.)  
    Section   206(d)(1),   and   the   Supreme   Court’s   decision   in  
Guidry,   concern   assets   in   a   plan’s   hands.   The   Tenth   Circuit  
later  concluded  that  §206(d)(1)  does  not  prohibit  the  attach-­‐‑
ment  or  garnishment  of  funds  after  the  plan  had  distributed  
them   to   the   retiree.   Guidry   v.   Sheet   Metal   Workers   National  
Pension   Fund,   39   F.3d   1078,   1081–83   (10th   Cir.   1994)   (en  
banc).   Judge   Kim   recommended   that   we   follow   the   Tenth  
Circuit;  the  Hudsons  ask  us  not  to.  
    It   is   not   clear   that   we   need   to   choose.   Anti-­‐‑assignment  
provisions   such   as   §206(d)(1)   are   concerned   with   legal   pro-­‐‑
cess.  We  held  in  Townsel  v.  DISH  Network  L.L.C.,  668  F.3d  967  
(7th  Cir.  2012),  that  the  anti-­‐‑assignment  rule  in  the  Social  Se-­‐‑
curity  Act  covers  only  garnishment,  writs  of  attachment,  and  
similar  devices,  and  does  not  prevent  the  collection  of  debts  
through  other  means—in  Townsel,  by  use  of  a  debit  card  that  
the   retiree   had   linked   to   a   checking   account   containing   re-­‐‑
4                                                  Nos.  05-­‐‑1362  &  05-­‐‑4075  

tirement  funds.  See  also  Washington  State  Department  of  Social  
&   Health   Services   v.   Guardianship   Estate   of   Keffeler,   537   U.S.  
371,   383–86   (2003).   The   NLRB   has   not   asked   us   to   issue   a  
writ   of   garnishment   or   other   legal   process   that   will   divert  
the   Hudsons’   income   to   it   automatically.   Instead   the   Board  
wants  an  in  personam  judgment  against  the  Hudsons,  which  
would   not   bind   either   the   pension   plan   or   the   Hudsons’  
bank.   The   Board   does   not   want   to   attach   pension   benefits;  
instead   it   wants   them   taken   into   account   when   considering  
the  Hudsons’  ability  to  pay.  The  Hudsons  have  not  cited  any  
authority   for   the   proposition   that   §206(d)(1)   precludes   such  
an  assessment.  But  the  Board  makes  nothing  of  the  fact  that  
legal   process   has   not   attached   the   pension   funds,   so   we   do  
not  pursue  the  subject.  
     Five  courts  of  appeals  have  agreed  with  the  Tenth  Circuit  
that   §206(d)(1)   does   not   prevent   the   attachment   or   garnish-­‐‑
ment  of  funds  after  a  pension  plan  has  paid  them  to  retirees.  
See  Hoult  v.  Hoult,  373  F.3d  47,  53–55  (1st  Cir.  2004);  Central  
States   Pension   Fund   v.   Howell,   227   F.3d   672,   678–79   (6th   Cir.  
2000);  Wright  v.  Riveland,  219  F.3d  905,  919–21  (9th  Cir.  2000);  
Robbins  v.  DeBuono,  218  F.3d  197,  203  (2d  Cir.  2000);  Trucking  
Employees  of  North  Jersey  Welfare  Fund,  Inc.  v.  Colville,  16  F.3d  
52,  54–56  (3d  Cir.  1994).  One  has  held  that  §206(d)(1)  shields  
pensions  from  creditors  even  after  distribution.  United  States  
v.  Smith,  47  F.3d  681  (4th  Cir.  1995).  We  agree  with  the  ma-­‐‑
jority—and   because   we   are   the   seventh   court   of   appeals   to  
reach  this  conclusion  we  can  be  brief.  
     Section  206(d)(1)  says:  “[e]ach  pension  plan  shall  provide  
that   benefits   provided   under   the   plan   may   not   be   assigned  
or   alienated.”   This   statute   deals   with   how   pension   plans  
administer   the   funds   in   their   charge.   It   does   not   say   any-­‐‑
Nos.  05-­‐‑1362  &  05-­‐‑4075                                                5  

thing   about   what   happens   to   the   money   after   the   plan   dis-­‐‑
tributes  it  to  beneficiaries.  
     ERISA  differs  from  statutes  that  do  cover  who  can  access  
funds  after  payment.  For  example,  the  Veterans  Benefits  Act,  
38   U.S.C.   §5301(a),   prohibits   attachment   of   benefits   “either  
before  or  after  receipt  by  the  beneficiary.”  And  the  Social  Se-­‐‑
curity   Act,   42   U.S.C.   §407(a),   provides   that   “none   of   the  
moneys   paid   or   payable   or   rights   existing   under   this   sub-­‐‑
chapter   shall   be   subject   to   execution,   levy,   attachment,   gar-­‐‑
nishment,   or   other   legal   process,   or   to   the   operation   of   any  
bankruptcy   or   insolvency   law.”   Because   that   language   co-­‐‑
vers  funds  “paid”  as  well  as  money  “payable”,  the  Supreme  
Court  concluded  that  it  applies  to  funds  that  can  be  traced  to  
Social   Security   benefits.   Philpott   v.   Essex   County   Welfare  
Board,  409  U.S.  413  (1973).  Likewise  45  U.S.C.  §231m(a),  part  
of  the  Railroad  Retirement  Act  and  the  subject  of  Hisquierdo  
v.  Hisquierdo,  439  U.S.  572  (1979),  has  a  broad  temporal  reach.  
The   Fourth   Circuit   in   Smith   relied   on   Hisquierdo   but   missed  
the   point   that   ERISA   is   worded   differently   from   the   Social  
Security  Act  and  the  Railroad  Retirement  Act.  
    Different   language   leads   to   different   effects.   It   would  
stymie   the   process   of   legislation   for   the   judiciary   to   an-­‐‑
nounce   that   all   clauses   addressing   the   same   general   subject  
(such  as  the  alienation  of  retirement  benefits)  must  mean  the  
same  thing,  no  matter  how  different  the  statutory  texts.  Leg-­‐‑
islation  is  compromise,  and  not  all  compromises  produce  the  
same   resolution   even   though   the   problem   at   hand   seems  
similar.   To   preserve   the   scope   of   legislative   choice,   courts  
must  recognize  that  similar  problems  can  be  resolved  in  dif-­‐‑
ferent  ways  using  different  language.  
6                                                           Nos.  05-­‐‑1362  &  05-­‐‑4075  

      [T]his  Court  does  not  revise  legislation  …  just  because  the  text  as  
      written   creates   an   apparent   anomaly   as   to   some   subject   it   does  
      not  address.  Truth  be  told,  such  anomalies  often  arise  from  stat-­‐‑
      utes,  if  for  no  other  reason  than  that  Congress  typically  legislates  
      by   parts—addressing   one   thing   without   examining   all   others  
      that  might  merit  comparable  treatment.  Rejecting  [an]  argument  
      that   a   statutory   anomaly   (between   property   and   non-­‐‑property  
      taxes)   made   “not   a   whit   of   sense,”   we   explained   in   one   recent  
      case   that   “Congress   wrote   the   statute   it   wrote”—meaning,   a  
      statute  going  so  far  and  no  further.  See  CSX  Transportation,  Inc.  v.  
      Alabama   Department   of   Revenue,   [131   S.   Ct.   1101,   1114   (2011)].   …  
      This  Court  has  no  roving  license,  in  even  ordinary  cases  of  statu-­‐‑
      tory   interpretation,   to   disregard   clear   language   simply   on   the  
      view  that  …  Congress  “must  have  intended”  something  broader.  

Michigan   v.   Bay   Mills   Indian   Community,   No.   12–515   (U.S.  
May   27,   2014),   slip   op.   10–11.   The   Hudsons   make   the   very  
sort   of   argument   that   the   Justices   deprecated   in   Bay   Mills.  
They   insist   that   the   goal   of   preserving   funds   for   enjoyment  
in   retirement   can’t   be   completely   fulfilled   unless   funds   are  
sheltered  after  they  reach  beneficiaries’  hands.   That  may  be  
true,  but  it  does  not  follow  that  ERISA  blocks  third-­‐‑party  ac-­‐‑
cess  to  distributed  pensions;  statutes  have  stopping  points  as  
well   as   general   objectives,   and   how   far   to   go   in   pursuit   of  
those   objectives   is   integral   to   the   legislative   choice.   See   Ro-­‐‑
driguez  v.  United  States,  480  U.S.  522,  525–26  (1987).  
    The   Supreme   Court’s   opinion   in   Guidry   makes   this   very  
point.   The   union   contended   that   no   sensible   public   policy  
allows   an   embezzler   to   keep   the   fruits   of   his   crime   by   put-­‐‑
ting  some  or  all  of  it  into  a  pension  plan.  Guidry  stole  from  
the  plan;  elementary  justice  entitled  the  plan  to  recoup  from  
the  pot  of  money  it  held  for  the  thief’s  benefit—or  so  the  un-­‐‑
ion  and  the  plan  argued.  But  the  Supreme  Court  concluded  
that   §206(d)(1)   is   not   about   elementary   justice,   and   that   it  
would   substantially   modify   the   text   to   treat   it   as   if   it   read  
Nos.  05-­‐‑1362  &  05-­‐‑4075                                                   7  

(new  language  in  italics):  “[e]ach  pension  plan  shall  provide  
that   benefits   provided   under   the   plan   may   not   be   assigned  
or   alienated   except   for   good   reason.”   Just   as   Guidry   held   that  
equitable  arguments  cannot  contract  the  scope  of  §206(d)(1),  
so   the   Hudsons’   equitable   arguments   cannot   enlarge   the  
statute’s   scope.   “Congress   wrote   the   statute   it   wrote”   (CSX  
Transportation,  131  S.  Ct.  at  1114).  The  judiciary’s  job  is  to  en-­‐‑
force  rather  than  change  that  statute.  
    The   Hudsons   contend   that   pension   funds   are   protected  
after   distribution   under   state   law   even   if   not   under   federal  
law.  If  the  Board  were  relying  on  the  Federal  Debt  Collection  
Practices  Act,  28  U.S.C.  §§  3001–15,  that  might  matter  to  the  
extent  that  state  exemptions  are  respected  in  bankruptcy,  see  
§3014(a)(1),  but  this  is  a  proceeding  to  remedy  a  contempt  of  
court,   and   the   Act   therefore   does   not   apply.   28   U.S.C.  
§3003(c)(8)(C).  Civil  contempt  is  a  common-­‐‑law  procedure—
and   no   state   is   entitled   to   prevent   a   federal   court   from   en-­‐‑
forcing  its  decrees.  
    All   that   remains   is   fixing   the   amount   of   the   monthly  
payments.   Although   an   earlier   order   set   $600   a   month   as   a  
minimum  (remember  that  the  Hudsons  continue  to  owe  the  
entire  financial  award,  covering  back  pay  and  fringe  benefits  
plus   interest,   and   must   satisfy   it   eventually),   Judge   Kim’s  
most   recent   recommendation   concluded   that   the   Hudsons  
could  not  spare  more  than  $100  a  month  after  meeting  their  
reasonable   living   expenses.   Since   that   recommendation,  
however,  the  Hudsons  have  begun  to  receive  Social  Security  
benefits,   which   themselves   exceed   $600   monthly.   It   follows  
that  the  Hudsons  now  can  afford  at  least  $600  a  month.  Al-­‐‑
though   Social   Security   benefits,   unlike   private   pensions,  
cannot  be  garnished  or  otherwise  attached  after  receipt,  they  
8                                                  Nos.  05-­‐‑1362  &  05-­‐‑4075  

can   be   considered   when   determining   how   much   a   debtor  
can  afford  to  pay  from  other  sources.  United  States  v.  Eggen,  
984  F.2d  848,  850  (7th  Cir.  1993).  The  Hudsons’  income  from  
sources  other  than  Social  Security  exceeds  $600  a  month,  so  
we  conclude  that  they  must  pay  at  least  that  much  to  purge  
their  contempt  of  court.  We  order  them  to  do  so.  
      The  Hudsons  are  scofflaws  who  for  a  decade  have  failed  
to   comply   with   the   Board’s   decisions,   which   this   court   has  
enforced.   They   have   preferred   their   own   comfort   over   the  
welfare   of   their   former   employees.   They   must   understand  
that   failure   to   keep   up   with   these   payments   will   lead   to   an  
order  returning  them  to  custody  until  they  comply.