The Michigan Court of Appeals recently issued an interesting decision in a case called In re Robby Lampart about the right of a state agency to go after a claimant’s Social Security disability to enforce a criminal restitution order.  In a tightly written opinion which you can read here, the Michigan appellate judges held that a trial court could not use its power of contempt (i.e., putting a defendant in jail) to coerce that defendant to use Social Security funds to pay his obligations.

Usually, of course, the payment dispute involves child support rather than criminal restitution. My sense is that if other courts adopt the Lampart court’s reasoning in child support cases, custodial parents would not be able to use contempt actions to incarcerate disabled non-custodial parents although they could use contempt actions to find out what other assets that non-custodial parent might have.

Here’s what happened in the Lampart case.

Lampart’s mother, Diana Alexandroni, was ordered to pay criminal restitution of $28,210 at rate of $250 per month. The trial judge ordered Ms. Alexandroni to submit to a wage garnishment of $62.50 per week from her job with the funds payable to the State of Michigan.

Approximately two years into her payments, Ms. Alexandroni had a heart attack and was unable to continue working.  She filed for SSDI benefits and was approved, with a benefit payment of $730 per month. Because the money stopped flowing, the State of Michigan asked the trial judge to hold a hearing regarding Ms. Alexandroni’s obligations under the restitution order.

Defendant Alexandroni argued to the trial judge that federal law – 42 USC 407(a) – prohibited the court from directly attaching or using the threat of contempt (incarceration) to go after her SSDI money.

42 USC 407(a) says: the right of any person to any future payment under this subchapter shall not be transferable or assignable, in law or in equity, and 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, or to the operation of any bankruptcy or insolvency law.

The trial court concluded that enforcing a restitution order did not constitute “execution, levy, attachment, garnishment or other legal process.”  Defendant’s SSDI benefits were “income” and thus the restitution order could be enforced, through the power of contempt, after the income was in her possession.

The trial court judge reasoned as follows: “how can a Social Security Disability recipient be exempt when often his/her income is greater than the working poor who are subject to enforcement?”  Michigan state law guidelines specifically mention Social Security Disability benefits as income that can be considered. These guidelines also allow collection of some amount on incomes as low as $100 per week. To exempt SSDI would mean that individual with any court obligation – including drunk drivers, felons, etc. – would never have to pay restitution, court costs or fines because he was on SSDI. “That result simply does not make sense.”

Defendant Alexandroni appealed to the State of Michigan Court of Appeals which agreed to consider her appeal.

In its decision, the Court of Appeals noted that federal law (42 USC 407(a)) protects Social Security benefits even after deposited into a claimant’s bank account.  To the extent that a state court order seeks to attach Social Security benefits, that attachments amounts to a conflict with federal law and such a conflict is one “that the state cannot win.”

The Court further found that because the State of Michigan was using the judicial process to exercise control over the Defendant’s property, it was using an “other legal process” to enforce the restitution order. Thus the trial court’s order that Defendant use her SSDI money to pay the restitution was in violation of the federal anti-assignment law.

Further, the Appeals Court warned the state court judge not to use the court’s power of contempt to try to enforce the restitution order against her SSDI money as that would constitute a back door method to get at money the court was otherwise not permitted to reach.

Interestingly the Appeals Court did not preclude the trial court from using a contempt hearing to find out if the defendant had other assets or income as the trial court’s contempt powers remain a valid tool in enforcing a restitution order. Assuming the defendant had no other resources, however, the trial court should not issue a contempt order to enforce the restitution order against protected SSDI funds.

The case was then remanded (sent back) to the trial judge for proceedings consistent with the Court of Appeals decision.

We do not know what happened after that although presumably, if the trial judge found that Ms. Alexandroni’s only source of income was SSDI and if she has no other income or resource to satisfy the restitution order, there would be nothing that the State of Michigan could do to enforce its restitution order.

Presumably, as well, the Michigan state attorney could regularly file contempt actions against Ms. Alexandroni as a means to find out about any new sources of income or assets. I wonder if excessive “fishing expeditions” of this sort might themselves be deemed a violation of the text or spirit of the federal law.

Finally, recognize that a decision issued by the Michigan Court of Appeals may or may not apply to your case. This decision may or may not become a model for other states considering enforcement actions against SSDI recipients.