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Sniadach v. Family Finance Corp. of Bay View

Supreme Court of the United States · 1969 · Civil Procedure

Civil ProcedureDue ProcessPrejudgment GarnishmentFourteenth Amendmentprocedural due processprejudgment garnishmentwagesnotice

Facts

Respondents alleged that petitioner owed $420 on a promissory note and commenced garnishment proceedings against her employer under Wisconsin law. The employer answered that it held $63.18 in earned but unpaid wages, would pay one-half to petitioner as a subsistence allowance, and would hold the other half subject to court order. Under the Wisconsin procedure, the clerk issued the summons at the creditor lawyer's request, and service on the garnishee froze the wages before any hearing on the debtor's defenses. Although petitioner was served the same day as the garnishee, she had no opportunity to be heard before the wages were frozen.

Issue

Whether Wisconsin's prejudgment garnishment procedure, which allows a creditor to freeze a wage earner's wages before notice and an opportunity to be heard on the underlying claim, deprives the debtor of property without procedural due process in violation of the Fourteenth Amendment.

Rule

Absent extraordinary situations requiring special protection of a state or creditor interest, procedural due process forbids prejudgment garnishment of wages without notice and a prior opportunity to be heard. A procedure that may satisfy due process for attachments generally does not necessarily satisfy due process when the property seized is wages, because wages are a specialized form of property whose interim freezing can work severe hardship.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Milwaukee, Nora Vega disputes a $900 store-credit debt claimed by Lakefront Retail Funding, a fictional finance company. Under a Wisconsin-style statute, the company’s lawyer obtains a clerk-issued summons and serves Nora’s employer, which must immediately hold back 40% of her earned but unpaid wages until trial; Nora receives notice later that day and may challenge the debt only afterward.

If Nora argues that the statute violates procedural due process, how should a court rule under the majority’s reasoning?

Explanation. The majority held that prejudgment garnishment of wages is a taking of property that may cause severe hardship, so due process requires notice and a prior opportunity to be heard unless an extraordinary situation requiring special protection of a state or creditor interest exists. Same-day or later notice does not cure the lack of a prior hearing once wages are already frozen.