STATE OF MINN. EX REL. DAGGETT v. Barr

315 N.W.2d 805, 1982 Iowa Sup. LEXIS 1320
CourtSupreme Court of Iowa
DecidedFebruary 17, 1982
Docket65876
StatusPublished
Cited by1 cases

This text of 315 N.W.2d 805 (STATE OF MINN. EX REL. DAGGETT v. Barr) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
STATE OF MINN. EX REL. DAGGETT v. Barr, 315 N.W.2d 805, 1982 Iowa Sup. LEXIS 1320 (iowa 1982).

Opinion

McCORMICK, Justice.

The question here concerns the discharge-ability in bankruptcy of a child support obligation assigned to the state. Plaintiff State of Minnesota brought this declaratory judgment action challenging the constitutionality of a now-amended provision of the Bankruptcy Reform Act of 1978 which authorized discharge of defendant Dennis K. Barr’s assigned child support obligation. The trial court upheld the constitutionality of the statute. We affirm.

Section 523(a)(5)(A) of the Bankruptcy Reform Act of 1978, effective October 1, 1979, contained the provision involved in this case:

§ 523. Exceptions to Discharge.
(a) A discharge under section 727,1141 or 1328(b) of this title does not discharge an individual debtor from any debt—
(5) to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child in connection with a separation agreement, but not to the extent that
(A) such debt is assigned to another entity, voluntarily, by operation of law, or otherwise....

11 U.S.C. § 523(a)(5)(A). An amendment effective August 13, 1981, excepted from debts dischargeable under subsection A “debts assigned pursuant to section 402(a)(26) of the Social Security Act.” Omnibus Budget Reconciliation Act of 1981, Pub.L.No. 97-35, § 2334(b), 95 Stat. 863 (1981). Although the debt in the present case was assigned pursuant to section 402(a)(26) of the Social Security Act, the amendment is inapplicable to defendant’s 1979 bankruptcy.

Defendant is obligated to pay child support to his former wife Rosa Lee Daggett under a 1969 Iowa dissolution decree. Rosa subsequently moved to Minnesota. In 1977 she began receiving benefits under Minnesota’s Aid to Families with Dependent Children (AFDC) program. As required by state and federal law, she assigned her right to child support to the Scott County Human Services Accounting Department. See 42 U.S.C. § 602(a)(26)(A). In 1979 defendant petitioned for and received a discharge in bankruptcy. His obligation to pay the assigned child support to the Minnesota welfare agency was among the debts purportedly discharged. The State of Minnesota brought the present action seeking a declaratory judgment that the debt was not discharged.

Plaintiff contends 11 U.S.C. section 523(a)(5)(A), as applied here, violates U.S. Const, amends. X, XI, and XIV. Plaintiff alternatively contends the statute should be construed to affect only the assigned child support obligation which had accrued on the date the bankruptcy petition was filed.

I. The tenth amendment issue. Under the tenth amendment, the states reserve powers not delegated to the United States. In contending this provision is violated by section 523(a)(5)(A), plaintiff relies on National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976). The Supreme Court held in Usery that the tenth amendment barred Congress from extending federal minimum wage and maximum hour requirements to state and municipal employees.

Federal courts have distinguished Usery in rejecting tenth amendment attacks on section 523(a)(5)(A). See In re Glidden, 653 F.2d 85 (2d Cir. 1981); In re Morris, 10 B.R. 448 (Bkrtcy.N.D.Iowa 1981). They have done so on three principal grounds.

*807 First, Usery was decided under the commerce clause. The Court said: “We express no view as to whether different results might obtain if Congress seeks to affect integral operations of the state governments by exercising authority granted it under other sections of the Constitution . ... ” 426 U.S. at 852, n. 17, 96 S.Ct. at 2474, 49 L.Ed.2d at 258. Congress has specific power to enact uniform laws on the subject of bankruptcy under U.S.Const. Art. 1, section 8, cl. 4. Applying the balancing approach of Usery, “the federal interests of uniform and effective discharge provisions enacted by Congress pursuant to its bankruptcy powers [are] demonstrably greater than [a state’s] interests in collecting support obligations from discharged debtors.” Morris, 10 B.R. at 453.

Second, section 523(a)(5)(A) does not burden a traditional state function. States are free to pursue traditional programs to promote the welfare of children. The discharge provision merely affects the state’s right to recoup AFDC system costs under a federal statute making assignment of child support payments a precondition to federal funding of the state AFDC program:

It thus can hardly be said that the discharge provision compromises an otherwise unhindered freedom on [a state’s] part to structure a “traditional” or “integral” state governmental function. The State’s latitude in designing and operating an AFDC program has been circumscribed from the outset by the restrictions set forth in Title IV-A.... The AFDC system as a whole has long been recognized as being “based on a scheme of cooperative federalism” ... a scheme that by its very nature anticipates a sharing of responsibility and authority between the cooperating governments.

Glidden, 653 F.2d at 88. The state function involved here is far removed from the fundamental kind of local decision affected in Usery.

Third, even if Usery were applicable to an exercise of the bankruptcy power, and even if a traditional state function were affected, no evidence exists that the discharge provision would substantially or materially impede the state function. See Morris, 10 B.R. at 454.

In accordance with the reasoning of the federal cases, we find no tenth amendment violation.

II. The eleventh amendment issue. Plaintiff contends that U.S.Const. amend. XI is violated because the statute has the effect of permitting a person to infringe the sovereignty of a state. The eleventh amendment provides in part that the “judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or executed against one of the United States by Citizens of another State ...” The amendment has been construed also to preclude suits against a state by its own citizens. Hans v. Louisiana, 134 U.S. 1, 10 S.Ct. 504, 33 L.Ed. 842 (1890).

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Bluebook (online)
315 N.W.2d 805, 1982 Iowa Sup. LEXIS 1320, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-of-minn-ex-rel-daggett-v-barr-iowa-1982.