Argument Report: Does the Income Withholding for Support Act Require Strict Compliance?

Our reports on the oral arguments from the September term of the Illinois Supreme Court continue with last week's argument in Schultz v. Performance Lighting, Inc. Our detailed summary of the underlying facts and lower court rulings in Schultz is here. Our preview of the oral argument is here

The plaintiff obtained a divorce in 2009 and was awarded $600 every two weeks in child support. The plaintiff's attorney served what purported to be a notice under the Income Withholding for Support Act. However, the notice didn't contain the ex-husband's Social Security number or the termination date for the support obligation. The ex-husband's employer didn't withhold under the notice, so the ex-wife sued the employer under the Act, seeking the statutory $100 per day penalty. The trial court dismissed the plaintiff's complaint, holding that strict compliance with the statute was necessary for a notice to be valid, and the Second District affirmed.

Counsel for the plaintiff argued that a mistake in a withholding notice is nearly always merely an error, but a recipient's failure to pay is nearly always purposeful. Justice Thomas asked whether the language of the statute suggested that the legislature didn't intend to penalize employers served with a faulty notice. Counsel noted that while penalties for non-payment can be harsh, the legislature has capped the total penalty. Nevertheless, counsel argued that the legislature certainly didn't intend that an omission or error in the notice not affecting the ability to pay would entirely excuse the duty to pay. Justice Thomas asked if plaintiff's position was that the errors in the notice was de minimis, and counsel argued that invalidating the notice was exalting form over substance. Justice Thomas pointed out that one of the errors in plaintiff's purported notice was the lack of a social security number. Justice Thomas asked whether plaintiff's argument was that the employer has the employee's social security number, making the omission unimportant. Counsel agreed that the omission didn't affect the employer's ability to pay. Justice Thomas posited the hypothetical of a large employer with two employees with the same name receiving a notice with no social security number. Counsel pointed out that social security numbers aren't mandatory anymore according to the statute. Justice Burke asked whether it should make a difference that the plaintiff's attorney, rather than the plaintiff herself, sent the notice, and counsel argued that the standard was the same. Justice Garman asked whether the penalty should be strictly construed in favor of the employer, and counsel responded that given that the penalty was civil, certain errors weren't fundamental. Counsel argued that payment of child support was nearly sacrosanct in Illinois law; the recipient of a notice has a duty to either abide by the notice, ask the sender for clarification, or file a declaratory judgment action. Chief Justice Kilbride asked whether the recipient of the notice had failed entirely to withhold, or had withheld the sums and simply not turned the money over. Counsel responded that the answer was not in the record.

Counsel for the defendant argued that it was undisputed that the purported notice didn't comply with the Act. Justice Karmeier asked counsel whether he agreed that because of recent statutory changes, the Social Security number was no longer crucial. Counsel responded that he did not, pointing out that there was no risk that Social Security numbers would inadvertently become part of a public court file. Justice Burke asked why employers should be permitted to disregard a notice, and whether they had a duty to obtain missing information. Counsel argued that even if the employer had the ex-husband's Social Security number, it could not have determined the missing termination date for the support obligation. Justice Garman asked whether the Court should be concerned that the purpose of the statute was to promote prompt payment, but requiring strict compliance might have the opposite effect. Counsel responded that the statute has now been amended, but even before the amendment, there was nothing keeping plaintiffs from correcting an error and filing a second notice. Therefore, a perverse effect was unlikely. Counsel pointed out that the statute provided specifically that omitting a signature didn't affect the validity of the notice, thus implying that other omissions did affect validity. Counsel argued that rules of statutory construction support the view that the statute should be strictly construed, as do subsequent amendments which have softened the impact of the statute. Chief Justice Kilbride pointed out that Federal regulations during the relevant period didn't allow employers to dispute a notice, and wondered what the authority was for the proposition that an employer could disregard the notice. Counsel responded that the defendant was not prosecuting an affirmative claim.

On rebuttal, Justice Thomas asked whether the missing child support was ever paid. Counsel responded that it was, but the record did not reveal whether or not the defendant had withheld the required sums and not turned the money over.  Counsel disputed the defendant's claim that the employer had a defense based on faulty service of the notice. Counsel argued that the exception for missing signatures was intended to differentiate the statute from other statutes for which signatures are mandatory, not to distinguish missing signatures from other flaws in the notice. Counsel agreed that requiring strict compliance would promote non-compliance with the statute.

We expect Schultz to be decided in two to four months.

Trackbacks (0) Links to blogs that reference this article Trackback URL
http://www.appellatestrategist.com/admin/trackback/306071
Comments (0) Read through and enter the discussion with the form at the end
Post A Comment / Question Use this form to add a comment to this entry.







Remember personal info?