Judges: Easterbrook
Filed: Jun. 13, 2014
Latest Update: Mar. 02, 2020
Summary: 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 o
Summary: 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 or..
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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.
