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KANN CORP. v. MONROE

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA


January 14, 1977

KANN CORPORATION, Plaintiff,
v.
GRACE EVE MONROE, Defendant, and UNITED STATES POSTAL SERVICE, Garnishee Defendant

The opinion of the court was delivered by: PRATT

MEMORANDUM OPINION

 PRATT, District Judge.

 This case is here on removal from the Superior Court for the District of Columbia. Plaintiff has filed a post-judgment writ of garnishment against the wages of defendant, an employee of the United States Postal Service. The Postal Service has moved to quash the writ, arguing that it is immune from such garnishments by reason of governmental immunity.

 The question to be decided is: In enacting the Postal Reorganization Act, did Congress intend that the Postal Service be immune from garnishment of its employees' wages for their private debts? The question is one of statutory construction. Keifer & Keifer v. Reconstruction Fin. Corp., 306 U.S. 381, 389, 83 L. Ed. 784, 59 S. Ct. 516 (1939).

 The authorities are in conflict on this precise question. There are five reported decisions. In one, the United States Court of Appeals for the Seventh Circuit held that the Postal Service is not immune. Standard Oil Div., Am. Oil Co. v. Starks, 528 F.2d 201, 202 (7th Cir. 1975). *fn1" A federal district court held likewise in another reported decision. Colonial Bank v. Broussard, 403 F. Supp. 686, 687 (E.D. La. 1975). Three other reported decisions of federal district courts, including one from this District, held that the Postal Service is immune. Nolan v. Woodruff, 68 F.R.D. 660 (D.D.C. 1975); Drs. Macht, Podore & Assocs. Inc. v. Girton, 392 F. Supp. 66 (S.D. Ohio 1975); Lawhorn v. Lawhorn, 351 F. Supp. 1399 (S.D.W. Va. 1972). *fn2" The parties have also cited us to 21 unreported decisions that they allege addressed the issue at bar. Of these 21 decisions, 14 allegedly held that the Postal Service is immune from garnishment of its employees' wages for their private debts, while 7 allegedly held to the contrary.

 One member of this Court has written that the rule in this District is that the Postal Service is not subject to garnishment for the private debts of its employees, notwithstanding the contrary holding of the Seventh Circuit in Starks. McLachlen Nat'l Bank v. Johnson, Civil No. 76-2065 (D.D.C. Nov. 30, 1976) (Gesell, J.). After reviewing the Postal Reorganization Act and its legislative history, we are inclined to agree with the members of this Court who announced and adhere to that rule.

 In FHA v. Burr, 309 U.S. 242, 60 S. Ct. 488, 84 L. Ed. 724 (1940), the Supreme Court announced the rule that appears to be controlling here. The Court wrote that "when Congress establishes [a government corporation], *fn3" authorizes it to engage in commercial and business transactions with the public, and permits it to 'sue or be sued,'" implied exceptions to the general authority to "sue or be sued" can only be found if certain specified circumstances are "clearly shown."

 This Court need not determine whether the immunity claimed for the Postal Service satisfies one or more of the circumstances specified in Burr, for we are of the opinion that the Postal Service does not meet the standard necessary for those circumstances to be applicable. This Court does not believe the Postal Reorganization Act authorizes the Postal Service "to engage in commercial and business transactions with the public" as that phrase was used in Burr.

 In another portion of the Burr opinion, the Court articulated the standard in different words: when Congress "[launches] a governmental agency into the commercial world." 309 U.S. at 245. We do not believe the Postal Service was "launched into the commercial world" in the sense that the Supreme Court used that phrase. As another Judge of this Court has written, "Application of the Burr doctrine ignores the economic realities of the postal situation." Commerce Investment Co., Inc. v. Davis, Civil No. 76-1832 (D.D.C. Dec. 7, 1976) (Smith, J.).

 Unlike the agency at issue in Burr and the other cases cited by plaintiff, the Postal Service was not established to perform functions historically performed by private enterprise. Nor did Congress establish the Postal Service to compete with private enterprise. That the Postal Service may compete with private enterprise in limited products and services or in isolated areas of the country makes no difference. The dispositive question is the intent of Congress. The Postal Reorganization Act and its legislative history make it clear that the "basic function" of the Service is "to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people." 39 U.S.C. § 101(a). The structure chosen to execute that function, i.e., an "independent establishment of the executive branch of the Government," id. § 201, is similarly not dispositive. The legislative history of the Act makes it clear that Congress chose this structure merely to allow the Postal Service to adopt "modern management and business practices," H.R. Rep. No. 1104, 91st Cong., 2d Sess. 2 (1970), not to "launch an agency into the commercial world."

 Having concluded that the Postal Service is not an agency "launched into the commercial world" in the sense of FHA v. Burr, this Court need not determine the precise limits of the immunity waived by Congress when it authorized the Postal Service to "sue or be sued." It is sufficient to decide that Congress did not intend that the Service be subject to garnishment for the private debts of its employees, just like other agencies within the executive branch of Government. Garnishment proceedings of this type do not relate to the purpose or function of the agency established by the Postal Reorganization Act.

 An Order consistent with this Memorandum Opinion has been entered this date.

 John H. Pratt / United States District Judge

 ORDER

 Upon consideration of defendant's motion to quash the writ of attachment and plaintiff's opposition thereto, and it appearing that defendant's motion has merit, it is this 14th day of January, 1977,

 ORDERED, that the motion to quash the writ of attachment is granted and the case remanded to the Superior Court for the District of Columbia.

 John H. Pratt / United States District Judge


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