Did federal debt collection law override Kentucky’s filing and service rules for garnishing state employees?

Plain-English summary

The Kentucky Attorney General concluded in 2015 that the federal Fair Debt Collection Practices Act did not override Kentucky’s rules for serving garnishments of state employees or filing out-of-state judgments. The federal venue provision applied to debt actions against consumers, while the opinion treated a Kentucky garnishment as an action against the garnishee.

The question followed the Treasurer’s refusal to accept out-of-state garnishment orders that had not been properly registered in Kentucky. The AG reasoned that a foreign judgment had to be filed under Kentucky’s Uniform Enforcement of Foreign Judgments Act before it carried the force of a Kentucky judgment. It also identified the state treasurer and finance cabinet secretary as recipients of service on the Commonwealth.

Currency note

This opinion was issued in 2015. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Did the FDCPA venue provision replace Kentucky’s garnishment service rule?

The AG said no. It concluded that the federal provision concerned legal actions against consumers, whereas the garnishment action it analyzed ran against the garnishee.

What did the opinion say about an out-of-state judgment?

It said a properly authenticated foreign judgment could be filed with a Kentucky court clerk under the state enforcement statute and then treated like a Kentucky judgment.

Where did the quoted state statute direct service of a garnishment on the Commonwealth?

The opinion quoted KRS 427.130(3) as requiring service on the finance and administration cabinet secretary and the state treasurer.

Background and statutory framework

The Treasurer asked whether 15 U.S.C. § 1692i(a) displaced state service and filing procedures. The AG analyzed KRS 427.130(3) and KRS 426.955, citing Redondo Const. Corp. v. United States, 157 F.3d 1060 (6th Cir. 1998), on registration of foreign judgments and Wade v. Poma Glass & Specialty Windows, Inc., 394 S.W.3d 886, 892 (Ky. 2012), on the garnishee’s role.

Citations and references

Statutes: KRS 427.130(3); KRS 426.955; 15 U.S.C. § 1692i(a).

Cases: Redondo Const. Corp. v. United States, 157 F.3d 1060 (6th Cir. 1998); Wade v. Poma Glass & Specialty Windows, Inc., 394 S.W.3d 886, 892 (Ky. 2012).

Source

• Landing page: https://www.ag.ky.gov/Resources/Opinions/Pages/Opinions.aspx
• Original Word document: https://www.ag.ky.gov/Resources/Opinions/Opinions/OAG15-013.doc

Original opinion text

OAG 15-013

August 21, 2015

Subject: Whether the Fair Debt Collection Practices Act preempts Kentucky requirements for service of garnishments of state employees and filing garnishments in accordance with Kentucky’s Uniform Enforcement of Foreign Judgments Act

Requested by: Todd Hollenbach

Kentucky State Treasurer

Written by: Matt James

Syllabus: The Fair Debt Collection Practices Act does not preempt Kentucky requirements for service of garnishments of state employees and filing garnishments in accordance with Kentucky’s Uniform Enforcement of Foreign Judgments Act.

Statutes construed: KRS 426.955; KRS 427.130

Opinion of the Attorney General

Todd Hollenbach, Kentucky State Treasurer, has requested an opinion of this office on whether the federal Fair Debt Collection Practices Act (“FDCPA”) preempts Kentucky requirements for service of garnishments of state employees and the filing of garnishments in accordance with Kentucky’s Uniform Enforcement of Foreign Judgments Act (“UEFJA”). We advise that the FDCPA does not preempt Kentucky requirements for service of garnishments of state employees and filing garnishments in accordance with Kentucky’s UEFJA.

Historically, the Treasurer has declined to accept orders of garnishment by out-of-state courts unless such orders were properly registered in Kentucky courts. A law firm is challenging the Treasurer’s practice on the grounds that the service and registration requirements are preempted by the FDCPA. At issue is whether the FDCPA preempts state requirements to serve and register out-of-state garnishments against Kentucky state employees.

KRS 427.130(1) provides that “salaries or sums due state, county, city and school board officers and employees shall be subject to attachment or garnishment.” KRS 427.130(3) provides that “service of attachments or garnishments upon the Commonwealth of Kentucky shall be made by serving the secretary of the finance and administration cabinet, and the state treasurer.”

The Full Faith and Credit Clause, U.S. Const. art. IV, § 1, provides that “full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state.” However, the Full Faith and Credit clause does not automatically make the judgments of one state binding in another state. “To give it the force of a judgment in another state, it must be made a judgment there; and can only be executed in the latter as its laws may permit.” McElmoyle, for Use of Bailey v. Cohen, 38 U.S. 312, 325 (1839). In order to streamline the process of enforcing out-of-state judgments, states enacted versions of the UEFJA; Kentucky’s UEFJA is codified at KRS 426.950 et seq. KRS 426.955 provides that “a copy of any foreign judgment authenticated . . . may be filed in the office of the clerk of any court of competent jurisdiction of this state. The clerk shall treat the foreign judgment in the same manner as a judgment of any court of this state.” In Redondo Const. Corp. v. United States, 157 F.3d 1060 (6th Cir. 1998) the court explained the purpose of the UEFJA:

The purpose of the UEFJA is to give the holder of a foreign judgment the same rights and remedies as holders of domestic judgments, and to make foreign judgments just as easy to enforce. Fairbanks v. Large, 957 S.W.2d 307, 308-09, 310 (Ky. Ct. App.1997). The statutory language makes full faith and credit automatic upon proper registration. In defining the status of a foreign judgment, the statute says that upon proper registration, the clerk “shall treat the foreign judgment in the same manner as a judgment of any court of this state.” There is no requirement that a Kentucky court rubberstamp the foreign judgment before Kentucky will recognize it as equivalent to a domestic judgment. Thus, we hold that upon proper registration, the holder of a foreign judgment has the equivalent of a Kentucky judgment and may proceed accordingly.

Id. at 1065. Instead of filing another action in a Kentucky court to enforce an out-of-state judgment, a person entitled to judgment against a party in Kentucky may simply file the out-of-state judgment with any county clerk, follow the notice procedures of KRS 426.960, and that judgment has the effect of a Kentucky judgment.

15 U.S.C. § 1692i(a), part of the FDCPA, provides:

Any debt collector who brings any legal action on a debt against any consumer shall— . . . (2) . . . bring such action only in the judicial district or similar legal entity— (A) in which such consumer signed the contract sued upon; or (B) in which such consumer resides at the commencement of the action.

“If applicable, the FDCPA establishes that venue for the collection of a consumer debt is proper only in the proper court of the Kentucky county ‘(A) in which such consumer signed the contract sued upon; or (B) in which such consumer resides at the commencement of the action.’” Winkler v. Germann, 329 S.W.3d 349, 352-53 (Ky. Ct. App. 2010). The law firm argues that 15 U.S.C. § 1692i(a) preempts Kentucky’s requirements to serve and register out-of-state judgments granting garnishments against Kentucky state employees under the UEFJA.

In Pickens v. Collection Services of Athens, Inc., 165 F.Supp.2d 1376 (M.D. Ga. 2001), aff’d, 273 F.3d 1121 (11th Cir. 2001) (Table), the court found that 15 U.S.C. 1692(i) “applies only to legal actions which are brought against a consumer. Thus, the Court must determine whether the garnishment action in this case was brought against the consumer or against another party.” Id. at 1380. The court determined that:

under Georgia garnishment law, “a garnishment proceeding is an action between the plaintiff [judgment creditor] and the garnishee.” . . . The judgment debtor is not a party to the garnishment. . . . Thus, as required by the Georgia code, the garnishment action in this case was an action by the judgment creditor against the garnishee, and not against the consumer. Accordingly, the Court does not believe that the garnishment action violates the FDCPA venue provision.

Id. The Pickens court reasoned that since according to Georgia garnishment law, a garnishment proceeding was against a garnishee, and not the judgment debtor, it was not an action “against any consumer” within the scope of 15 U.S.C. § 1692(i)(a). Similarly, in Smith v. Solomon & Solomon, P.C., 887 F.Supp.2d 334 (D. Mass. 2012), aff’d, 714 F.3d 73 (1st Cir. 2013), the court reached the same conclusion in the context of Massachusetts’ trustee process for garnishments:

The FDCPA statutory language is clear in that the venue provision applies only to legal actions “against the consumer.” Having determined that trustee process in Massachusetts is an action against a third-party trustee and not the consumer, Smith's complaint fails sufficiently to allege that the defendants initiated a legal action against a consumer in violation of the FDCPA's venue provision . . . .

Id. at 340. Pickens and Smith both held that the FDCPA venue provisions do not apply to garnishment actions in their respective states because such actions were against the garnishee or trustee, and not against the consumer.

Kentucky garnishment law is similar to the laws in Pickens and Smith in that garnishment actions are against the garnishee. KRS 425.501(3) provides that “the order of garnishment shall be served on the persons named as garnishees, and in addition a copy thereof shall be delivered by the garnishee to the judgment debtor,” and KRS 425.511(1) requires that “each garnishee summoned shall appear.” “The judgment creditor then obtains an order of garnishment to serve on the garnishee, and the garnishee must answer in the action in accordance with the Rules of Civil Procedure.” Wade v. Poma Glass & Specialty Windows, Inc., 394 S.W.3d 886, 892 (Ky. 2012). As in Pickens and Smith, garnishment actions in Kentucky are against the garnishee and not the consumer. Accordingly, the venue requirements in 15 U.S.C. §1692i(a) do not apply to garnishment actions in Kentucky, as they are not actions against a consumer.

In summary, the venue provisions of the FDCPA do not preempt Kentucky’s service requirements for garnishing state employees or filing garnishments in accordance with Kentucky’s UEFJA.

JACK CONWAY

ATTORNEY GENERAL

Matt James

Assistant Attorney General