U.S. Supreme Court SNIADACH v. FAMILY FINANCE CORP., 395 U.S. 337 (1969) 395 U.S. 337

[Page 395 U.S. 337, 338]

a claim of $420 on a promissory note. The garnishee filed its answer stating it had wages of $63.18 under its control earned by petitioner and unpaid, and that it would pay one-half to petitioner as a subsistence allowance[Footnote 1] and hold the other half subject to the order of the court.

Petitioner moved that the garnishment proceedings be dismissed for failure to satisfy the due process requirements of the Fourteenth Amendment. The Wisconsin Supreme Court sustained the lower state court in approving the procedure. 37 Wis. 2d 163, 154 N. W. 2d 259. The case is here on a petition for a writ of certiorari. 393 U.S. 1078.

The Wisconsin statute gives a plaintiff 10 days in which to serve the summons and complaint on the defendant after service on the garnishee.[Footnote 2] In this case petitioner was served the same day as the garnishee. She nonetheless claims that the Wisconsin garnishment procedure violates that due process required by the Fourteenth Amendment, in that notice and an opportunity to be heard are not given before the in rem seizure of the wages. What happens in Wisconsin is that the clerk of the court issues the summons at the request of the creditor's lawyer; and it is the latter who by serving the garnishee sets in motion the machinery whereby the

[Page 395 U.S. 337, 339]

wages are frozen.[Footnote 3] They may, it is true, be unfrozen if the trial of the main suit is ever had and the wage earner wins on the merits. But in the interim the wage earner is deprived of his enjoyment of earned wages without any opportunity to be heard and to tender any defense he may have, whether it be fraud or otherwise.

[Page 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,[Footnote 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:[Footnote 5]

[Page 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."[Footnote 6]

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

[Page 395 U.S. 337, 342]

family to the wall.[Footnote 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.

[Page 395 U.S. 337, 344]

quite unwilling to take the unexplicated per curiam in McKay v. McInnes, 279 U.S. 820 (1929), as vitiating or diluting these essential elements of due process.

[Footnote *] There are other decisions to the effect that one may be deprived of property by summary administrative action taken before hearing when such action is essential to protect a vital governmental interest. See, e. g., Ewing v. Mytinger & Casselberry, Inc., (1950); Fahey v. Mallonee, 332 U.S. 245 (1947); Bowles v. Willingham, 321 U.S. 503 (1944); North Amer. Cold Storage Co. v. City of Chicago, 211 U.S. 306 (1908). However, no such justification has been advanced in behalf of Wisconsin's garnishment law.

[Page 395 U.S. 337, 348]

The state court then pointed out that the garnishment proceedings did not involve "any final determination of the title to a defendant's property, but merely preserve[d] the status quo thereof pending determination of the principal action." 37 Wis. 2d, at 169, 154 N. W. 2d, at 262. The court then relied on McInnes v. McKay, 127 Me. 110, 141 A. 699. That suit related to a Maine attachment law which, of course, is governed by the same rule as garnishment law. See "garnishment," Bouvier's Law Dictionary; see also Pennoyer v. Neff, 95 U.S. 714. The Maine law was subjected to practically the same challenges that Brother HARLAN and the Court raise against this Wisconsin law. About that law the Supreme Court of Maine said:

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