Jacob Kahn
The year: 1963. The day: Tuesday, January 1. South Carolina takes Wisconsin in the Rose Bowl; “I Want to Hold Your Hand” is at the top of the charts; and, Michigan’s MCL 600.4011 et. seq (Revised Judicature Act of 1961) becomes effective.
The law provides for the manner in which a plaintiff may garnish funds of a judgment-debtor. The act, which was amended once in 1994, makes no mention of direct deposit, despite the fact that the ACH Network (direct deposit) was brought to fruition roughly around 1978. Presently, there exists a debate as to whether the advent of new technology ought to interplay with the letter of this law, which remains largely unchanged since it was drafted over half a century ago.
In Michigan (and pursuant to federal law), a plaintiff in a civil matter who has obtained a money judgment against a debtor may garnish the individual’s payroll at a rate of 25 percent of their net pay. If an individual brings home $1,000 per pay period after deductions, plaintiff’s garnishment cannot capture an amount greater than $250. This is done, presumably, to allow a defendant sufficient income to remain solvent, and so as to discourage the defendant from immediately seeking alternative employment. When the law was passed, folks used to receive a paper check, rather than direct deposit into their designated checking account. For better or worse, this would allow a defendant the opportunity to shield funds from a subsequent bank garnishment, by cashing their check rather than depositing it into their account. Today, however, upwards of 4 out of 5 workers in the United States receive their payroll via direct deposit, according to the National Automated Clearing House Association. As of 2011, Michigan employers have had the option to force mandatory direct deposit payroll — in essence, an employer can dictate that employees must set themselves up to receive direct deposit in order to get a job. It is that key word, “force,” which leads to the issue at hand.
Some months ago I witnessed a hearing in the courtroom of the Judge Herman Marable, Jr. in Flint’s 67th District Court. What I thought would play out as a routine hearing on a defendant’s motion objecting to a non-periodic bank garnishment turned into a performance I shall not soon forget. The defendant testified (without evidence) that his payroll was being garnished in excess of 25 percent due to a combination of a child support order and a secondary garnishment order, neither of which had been levied by the plaintiff. He further testified that plaintiff’s non-periodic bank garnishment had emptied his checking account and left him completely destitute. The defendant attempted to express that this series of events amounted to him being garnished in excess of the 25 percent limiting figure. Plaintiff’s attorney objected strenuously to this contention and repeatedly raised the point of fact that a non-periodic garnishment of an individual’s bank account is not subject to the same 25 percent cap imposed on a typical periodic payroll garnishment.
Nevertheless, Judge Marable gave a passionate and impromptu oration on his view that since the defendant stated (upon inquiry from the court) that he was forced by his employer to accept direct deposit payments, he was in essence subject to a payroll garnishment at a rate of 100 percent. The defendant further testified (again upon inquiry from the court) that no other funds were intermingled in his checking account other than those deposited by his employer. The hearing continued over a course of several hours, with other motions being heard intermittently. Unfortunately, I was bound by time constraints, and could not stay to see the final outcome. When last we left our heroes, Judge Marable was informing the plaintiff that he wished to adjourn the hearing to a later date, to allow both sides the opportunity to brief the court on why the 25 percent exemption should or should not apply to a defendant’s direct deposit payroll once the funds hit a bank account.
Notwithstanding whatever outcome may have been reached between the parties, of two things we can all be certain; first, there is absolutely no statute or dicta stating that a defendant’s bank account funds are exempt from garnishment due to the fact that his payroll is simultaneously subjected to a garnishment. Second, the advent of new technology and processes (the likes of which lawmakers could not possibly have conceived in the early 1960s) have altered the playing field, and the government needs to catch up. Whether that catching up comes in the form of a Michigan Supreme Court opinion or an act of clarification by the legislature, it is clear that the aforementioned objection has raised a gray area that ought not to be adjudicated on a groundbreaking case-by-case basis throughout Michigan’s 105 individual district courts.
It is worth noting that Judge Marable’s departure from a strict, letter-of-the-law interpretation of the relevant statutes in this case undoubtedly drew the ire of a number of plaintiff’s attorneys, who perhaps felt that a mandate had been overstepped. However, Judge Marable is bound by oath to faithfully discharge the duties of his office according to the best of his ability. Whether those duties include enforcing a strict adherence to the plain text of the law, or a deeper interpretation of the legislature’s intent, is a greater philosophical debate that runs the gamut from traffic court magistrates to Chief Justice John Roberts himself. Prior to any discussion of a judge’s individual prerogative, there should be a thoughtful discussion of the legislature’s intractability when it comes to amending the law to reflect today’s technology and best practices.
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Jacob Kahn is an incoming L1 student at Wayne State University Law School. He received his bachelor’s in political science at the University of Michigan-Dearborn. Jacob works as a process server and law clerk at the Law Office of Anthony Wayne Kahn. His primary interest in the legal field is the continuing coevolution of law and technology. Outside the legal realm, Jacob’s interests include fishing, traveling, and building his Jeep.
