CITES BY TOPIC:  garnishment

Sniadach v. Family Finance Corp., 395 U.S. 337 (1969)

The question is not whether the Wisconsin law is a wise law or unwise law. Our concern is not what philosophy Wisconsin should or should not embrace. See Green v. Frazier, 253 U.S. 233 . We do not sit as a super-legislative body. In this case the sole question is whether there has been a taking of property without that procedural due process that is required by the Fourteenth Amendment. We have dealt over and over again with the question of what constitutes "the right to be heard" (Schroeder v. New York, 371 U.S. 208, 212 ) within the meaning of procedural due process. See Mullane v. Central Hanover Trust Co., 339 U.S. 306, 314 . In the latter case we said that the right to be heard "has little reality or worth unless one is informed that the matter is pending and can choose for himself whether [395 U.S. 337, 340]   to appear or default, acquiesce or contest." 339 U.S., at 314 . In the context of this case the question is whether the interim freezing of the wages without a chance to be heard violates procedural due process.

A procedural rule that may satisfy due process for attachments in general, see McKay v. McInnes, 279 U.S. 820 , does not necessarily satisfy procedural due process in every case. The fact that a procedure would pass muster under a feudal regime does not mean it gives necessary protection to all property in its modern forms. We deal here with wages - a specialized type of property presenting distinct problems in our economic system. We turn then to the nature of that property and problems of procedural due process.

A prejudgment garnishment of the Wisconsin type is a taking which may impose tremendous hardship on wage earners with families to support. Until a recent Act of Congress, 4 304 of which forbids discharge of employees on the ground that their wages have been garnished, garnishment often meant the loss of a job. Over and beyond that was the great drain on family income. As stated by Congressman Reuss: 5    

"The idea of wage garnishment in advance of judgment, of trustee process, of wage attachment, or whatever it is called is a most inhuman doctrine. It compels the wage earner, trying to keep his family together, to be driven below the poverty level."

Recent investigations of the problem have disclosed the grave injustices made possible by prejudgment garnishment whereby the sole opportunity to be heard comes after the taking. Congressman Sullivan, Chairman of [395 U.S. 337, 341]   the House Subcommittee on Consumer Affairs who held extensive hearings on this and related problems stated:

"What we know from our study of this problem is that in a vast number of cases the debt is a fraudulent one, saddled on a poor ignorant person who is trapped in an easy credit nightmare, in which he is charged double for something he could not pay for even if the proper price was called for, and then hounded into giving up his pound of flesh, and being fired besides." 114 Cong. Rec. 1832.

The leverage of the creditor on the wage earner is enormous. The creditor tenders not only the original debt but the "collection fees" incurred by his attorneys in the garnishment proceedings:

"The debtor whose wages are tied up by a writ of garnishment, and who is usually in need of money, is in no position to resist demands for collection fees. If the debt is small, the debtor will be under considerable pressure to pay the debt and collection charges in order to get his wages back. If the debt is large, he will often sign a new contract of `payment schedule' which incorporates these additional charges." 6  

Apart from those collateral consequences, it appears that in Wisconsin the statutory exemption granted the wage earner 7 is "generally insufficient to support the debtor for any one week." 8  

The result is that a prejudgment garnishment of the Wisconsin type may as a practical matter drive a wage-earning [395 U.S. 337, 342]   family to the wall. 9 Where the taking of one's property is so obvious, it needs no extended argument to conclude that absent notice and a prior hearing (cf. Coe v. Armour Fertilizer Works, 237 U.S. 413, 423 ) this prejudgment garnishment procedure violates the fundamental principles of due process.

[Sniadach v. Family FInance Corp., 395 U.S. 337 (1969)]