Could a South Carolina town claim Eleventh Amendment immunity from a student loan wage withholding suit?

Plain-English summary

Pendleton had received an order to withhold a town employee’s wages for an unpaid student loan. Its attorney asked whether an earlier South Carolina Supreme Court ruling, which protected a state agency from a suit over a similar order, also shielded a municipality. The AG concluded it did not.

The earlier ruling concerned state sovereign immunity. The opinion quoted U.S. Supreme Court authority that the Eleventh Amendment bar extends to states and appropriate state officials, but not counties and similar municipal corporations. It therefore found the state agency decision inapplicable to Pendleton. The opinion addressed that immunity question, without deciding a separate defense to the particular order.

Currency note

This opinion was issued in 2007. 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

Q: Did the state agency garnishment ruling protect the Town of Pendleton? A: No. The AG said the prior Eleventh Amendment holding for a state agency did not apply to a municipality.

Q: Why did the AG distinguish the town from the state agency? A: It relied on U.S. Supreme Court language that Eleventh Amendment immunity does not extend to counties and similar municipal corporations.

Q: Did the AG resolve every question about the specific withholding order? A: No. The request and answer concerned whether the town could invoke the state agency immunity ruling.

Background and statutory framework

The opinion compared a South Carolina Supreme Court decision on a state agency and federal student loan wage withholding with U.S. Supreme Court authority on the reach of Eleventh Amendment immunity.

Citations and references

The opinion discussed 20 U.S.C. § 1095(a), United Student Aid Funds, Inc. v. South Carolina Department of Health and Environmental Control, and Mt. Healthy City School Dist. Bd. of Educ. v. Doyle.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/september-11-2007/
• Original PDF: https://www.scag.gov/wp-content/uploads/2011/03/mccormac-m-c-9-11-07-os-8443-garnishment-of-wages-town-employees.pdf

Original opinion text

September 11, 2007

Mary C. McCormac, Esquire
Mary C. McCormac Attorney at Law, LLC
Post Office Box 1535
Clemson, South Carolina 29633
Dear Ms. McCormac:
We understand from your letter that you represent the Town of Pendleton (the “Town”) and wish to request an opinion of this Office on behalf of the Town concerning the garnishment of wages of Town employees. You explain as follows: The Town has received an “Order of Withholding From Earnings” from United Student Aid Funds, Inc., instructing the Town to garnish the wages of a Town employee for an apparent failure to repay student loans. Based on our Supreme Courts findings in United Student Aid Funds, Inc. v. South Carolina Dept. of Health and Environmental Control, 356 S.C. 266, 588 S.E.2d 599 (2003), you inquire as to whether “the Eleventh Amendment operates to similarly bar a suit brought against a South Carolina Municipality for failure to comply with a withholding order issued pursuant to 20 U.S.C. § 1095(a).” Law/Analysis In United Student Aid Funds, Inc. v. South Carolina Department of Health and Environmental Control, 356 S.C. 266, 588 S.E.2d 599 (2003), the South Carolina Supreme Court considered whether the South Carolina Department of Health and Environmental Control, as a state agency, must comply with a federal statute requiring employers to garnish wages of their employees who default on their student loan agreements. As the Court explained, the federal act creating Federal Family Education Loan Program contains a provision allowing student loan guaranty agencies to issue orders requiring a defaulting loan holder’s employer to withhold a portion of the defaulting loan holder’s income until the debt is paid. Id. at 270, 588 S.E.2d at 601 (citing 20 U.S.C.A. § 1095a(a)). The act also allows the guaranty agency to sue the employer for failing to comply with the withholding order. Id. The Court cited the “plain statement rule” in that Congress

Ms. McCormac
Page 2
September 11, 2007
may abrogate the states’ immunity “by unequivocally stating in ‘clear and manifest’ language its intent to abrogate the immunity.” Id. at 273, 588 S.E.2d at 603. The Court found Congress failed to specify that states are to be included in the term employer under the act. Id. at 274, 588 S.E.2d at 603. Therefore, the Court concluded because “Congress did not include a clear statement of its intent to abrogate state sovereignty,” the Eleventh Amendment bars application of this provision of the act to a state agency.” Id. at 274, 588 S.E.2d at 603. According to the United States Supreme Court: “The bar of the Eleventh Amendment to suit in federal courts extends to States and state officials in appropriate circumstances, but does not extend to counties and similar municipal corporations.” Mt. Healthy City School Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 280 (1977). Because the Town is a municipality and according to the Supreme Court, is not protected by the Eleventh Amendment, we are of the opinion that the principles conveyed by our Supreme Court in United Student Aid Funds, Inc. are inapplicable to the Town. Very truly yours, Henry McMaster Attorney General

By:

REVIEWED AND APPROVED BY:

______
Robert D. Cook
Assistant Deputy Attorney General

Cydney M. Milling
Assistant Attorney General