The May Department Stores Company v. Monroe Williamson, Sisters of St. Mary v. Donald A. Lerch and United States Postal Service

549 F.2d 1147, 1977 U.S. App. LEXIS 10174

• Court: Court of Appeals for the Eighth Circuit
• Decided: February 7, 1977
• Docket: 76-1597 and 76-1713
• Status: Published

Opinions

STEPHENSON, Circuit Judge.

These appeals challenge the immunity of the United States Postal Service (USPS) to garnishment procedures to effect judgments in state courts. In both cases the USPS filed a motion to quash summons to garnishee. On July 2, 1976, the district court¹ sustained the motions of USPS, thereby holding that the USPS was immune to garnishment procedures to effect judgments in state courts. We reverse.

When Congress created the USPS, it gave the Postal Service the authority to sue and be sued in its official name. 39 U.S.C. § 401(1). The words “sue and be sued” in their normal connotation embrace all civil process incident to legal proceedings, including garnishment procedures. R.F.C. v. Menihan Corp., 312 U.S. 81, 85, 61 S.Ct. 485, 85 L.Ed. 595 (1941); FHA v. Burr, 309 U.S. 242, 245-46, 60 S.Ct. 488, 84 L.Ed. 724 (1940). We must determine whether .Congress has intended to include garnishment procedures within the scope of USPS’ authorization to “sue and be sued.”

In Keifer & Keifer v. R.F.C., 306 U.S. 381, 388, 59 S.Ct. 516, 83 L.Ed. 784 (1939), the Court noted that “the government does not become the conduit of its immunity in suits against its agents or instrumentalities merely because they do its work.” (citations omitted.)

In FHA v. Burr, supra, the Court grappled with the question of whether the Federal Housing Administration was subject to garnishment for monies due to an employee. After noting that waivers by Congress of governmental immunity for federal instrumentalities should be liberally construed, Mr. Justice Douglas stated the following:

[W]hen Congress establishes such an agency, authorizes it to engage in commercial and business transactions with the public, and permits it to “sue and be sued”, it cannot be lightly assumed that restrictions on that authority are to be implied. Rather if the general authority to “sue and be sued” is to be delimited by implied exceptions, it must be clearly shown that certain types of suits are not consistent with the statutory or constitutional scheme, that an implied restriction of the general authority is necessary to avoid grave interference with the performance of a governmental function, or that for other reasons it was plainly the purpose of Congress to use the “sue and be sued” clause in a narrow sense. In the absence of such showing, it must b.e presumed that when Congress launched a governmental agency into the commercial world and endowed it with authority to “sue or be sued”, that agency is not less amenable to judicial process than a private enterprise under like circumstances would be.

FHA v. Burr, supra, 309 U.S. at 245, 60 S.Ct. at 490 (footnote omitted).

In light of the principles enounced in the trilogy of Supreme Court cases cited above, we are unable to find that Congress has intended immunity of USPS to garnishment procedures.

The Postal Service argues that Congress did not intend to launch the USPS into the commercial world. Our review of the powers granted by Congress to the USPS convinces us otherwise. For example, Congress has empowered the USPS to enter into and perform contracts; to determine and keep its own system of accounts; to determine and keep the forms and contents of its contracts and other business documents; to acquire, hold, maintain, sell, lease, or otherwise dispose of personal or real property; to construct, operate, lease, and maintain buildings, facilities, and equipment; to accept gifts; to settle and compromise claims by or against it. 39 U.S.C. §§ 401(3)-(8). Furthermore, Congress specifically declared in creating the USPS that it should be conducted in a businesslike way. H.R.Rep. No. 17070, 91st Cong., 2d Sess., reprinted in [1970] U.S.Code Cong. & Ad.News, pp. 3649, 3660. The conclusion that Congress has launched the USPS into the commercial world is inescapable.

Additionally, the USPS argues that an implied restriction on USPS’ general authority to sue and be sued is necessary to avoid grave interference with its performance. However, as Mr. Justice Douglas aptly stated:

[Considerations of convenience, cost and efficiency which have been urged here are for Congress which, as we have said, has full authority to make such restrictions on the “sue and be sued” clause as seem to it appropriate or necessary.

FHA v. Burr, supra, 309 U.S. at 249, 60 S.Ct. at 492 (footnote omitted).

Finally, we note that Congress has clearly demonstrated the ability to restrict its consent to suits so as not to include garnishment when this result was intended. For example, the Commissioner of Education may “sue and be sued * * * ; but no * * * garnishment * * * shall be issued against the Commissioner or property under his control * * 20 U.S.C. § 1132c-2-(b)(2). Similarly, the Administrator of the Small Business Administration may “sue and be sued * * * ; but no * * * garnishment * * * shall be issued against the Administrator or his property * * 15 U.S.C. § 634(b)(1). Even though Congress restricted the consent to suit for the USPS in two limited ways, the Act is silent as to garnishment.²

Therefore, we conclude, as did the Seventh Circuit in Standard Oil Div., American Oil Co. v. Starks, 528 F.2d 201 (7th Cir. 1975), that there is no basis in law or policy for blocking these garnishment proceedings. Reversed.

1 . The Honorable John K. Regan, United States District Judge for the Eastern District of Missouri.

2 . Congress restricted the consent to suit in two respects: (1) by the applicability of the Federal Tort Claims Act and (2) procedural matters relating to suits against the United States. 39 U.S.C. § 409.