Could the South Dakota State Auditor set a cutoff time after which late-arriving wage garnishment summonses would not attach to an already-printed state employee paycheck, so the payroll system could be fully automated?

Plain-English summary

In late 2000, South Dakota was moving from manual to automated payroll. Under SDCL 21-18-12 and the state-as-garnishee provisions in SDCL 21-18-28 and 21-18-40, a wage garnishment summons attached at the moment of service. If a creditor's summons reached the Auditor's office between the printing of a paycheck and the actual delivery of that paycheck to the state employee, the Auditor was on the hook to honor the garnishment, even though the warrant was already physically printed. That meant manual hand-processing of already-printed warrants, which was exactly the friction the new system was trying to eliminate. State Auditor Vern Larson asked whether he could pick a cutoff time (right before payroll printing) after which summonses would not attach to that pay cycle.

AG Mark Barnett separated the question into two parts: what does current law allow, and what could new law do?

On current law, no. Garnishment was a statutory remedy and the statutes were clear. SDCL 21-18-12 fixed liability at the time of service. SDCL 21-18-40 specifically applied that rule to the state as garnishee. The Auditor's rulemaking authority over the procedure for issuing state warrants (SDCL 4-9-1.1) did not include the power to adopt rules inconsistent with state law, as the South Dakota Supreme Court had held in Estate of Dahl v. Department of Revenue. Without a statutory change, the Auditor could not move the point at which garnishee liability attached.

On future law, the Legislature could. Garnishment was a creature of legislation, and the Legislature could narrow or modify the remedy, subject to constitutional limits. Granger v. Luther (1920) and Lee v. Clark Implement Co. (1913) drew the line: the Legislature could change remedies going forward, but could not eliminate or unduly burden the enforcement of liens already in place. So a new statute setting a garnishment deadline against the state would have to grandfather existing liens. The opinion also flagged equal protection and privileges-and-immunities concerns: any deadline applied to state employees but not to private-sector employees would need to survive that scrutiny.

Currency note

This opinion was issued in 2000. 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. SDCL chapter 21-18 has been amended multiple times since 2000, including the introduction of an electronic-filing framework and updates to the garnishee disclosure form, and federal wage-garnishment caps under the Consumer Credit Protection Act have been recalibrated since then.

What the opinion meant at the time

For the State Auditor's payroll office, the opinion was a no on its immediate ask but a clear roadmap. The office could not solve the printed-warrant problem by administrative rule. It had to take the issue to the Legislature.

For state employees facing wage garnishment, the opinion confirmed that the established rule continued to apply: a summons served on the state before the actual disbursement of wages would reach those wages, even if the paper warrant was already printed.

For creditors and creditor's attorneys, the opinion was a reassurance that nothing changed unilaterally in the Auditor's office. Service on the state still attached when made, not when payroll closed its books.

For legislative drafters, the opinion drew a careful template: a permissible amendment had to (a) operate prospectively only, (b) protect existing liens, and (c) avoid creating a state-employee-only carve-out that could be attacked under equal protection or privileges-and-immunities theories.

For practitioners advising the state on payroll software design, the opinion meant building in a manual override hook for late-arriving summonses, at least until the law changed.

Common questions

Q: What did "attached at time of service" actually mean for state warrants?
A: Under SDCL 21-18-12 and 21-18-40, the moment a garnishment summons was served on the state, the state had to treat wages owed to the debtor employee but still in the state's possession as subject to that garnishment. Service of the summons functioned as an assignment of the debtor's claim against the state, up to the sum claimed.

Q: Could the State Auditor make a rule even though it conflicted with statute, if the rule was procedural?
A: No. SDCL 4-9-1.1 gave the Auditor rulemaking authority over warrant-issuing procedure, but the South Dakota Supreme Court had held in Estate of Dahl that an agency rule could not be inconsistent with state law. A rule moving the attachment point would be inconsistent with SDCL 21-18-12 and would fall.

Q: What kind of constitutional issue could a state-as-garnishee deadline raise?
A: Two main risks. First, equal protection: a creditor with a state-employee debtor would face a stricter deadline than a creditor with a private-sector debtor, with no obvious justification. Second, privileges-and-immunities: state employees would effectively enjoy a quasi-immunity from late-served garnishments that no private-sector worker had. The opinion did not say these challenges would succeed, just that drafters had to think about them.

Q: What was the federal Consumer Credit Protection Act doing in this analysis?
A: 15 U.S.C. §§ 1671 to 1677 cap the percentage of wages that can be garnished and supply other procedural protections. The opinion mentioned the statute to acknowledge the federal floor; the South Dakota question was about the timing of attachment, not the amount.

Q: Could the Auditor at least require electronic service to attach?
A: The opinion did not address an electronic-versus-paper service requirement directly. The general rule (no agency rule inconsistent with statute) would still apply: if SDCL 21-18-12 said attachment happened at service, an agency could not redefine what counted as service without statutory authority.

Background and statutory framework

South Dakota wage garnishment law in 2000 ran through SDCL Chapter 21-18. The framework had two pieces: the general garnishee rules (service, disclosure, exemption claims) in SDCL 21-18-1 through 21-18-27.1, and the special state-as-garnishee rules in SDCL 21-18-28 through 21-18-40.

Under the general rules, service of the summons on the garnishee fixed liability. SDCL 21-18-12 said "from the time of the service of the summons upon the garnishee he shall stand liable to the plaintiff to the amount of the property, money, credits, and effects in his possession or under his control belonging to the defendant." The disclosure form in SDCL 21-18-27.1 made the timing concrete: the garnishee had to disclose what was owed in both the past pay period and the current pay period as of the date of service.

The state-as-garnishee rules adapted the general framework. SDCL 21-18-40 said no actual liability could be incurred by the state in a garnishment, but the service of the summons "shall be of the same force and effect only as an assignment of the sum claimed or as much thereof as may be due the defendant from the state." So the state was not on the hook in its sovereign capacity for a money judgment, but it was on the hook to redirect wages owed to its employee.

The case law tracked the statutes. Sigler v. St. Paul Fire & Marine Ins. Co. (1980) set out the prerequisites for garnishment: the garnishee must be indebted to the judgment debtor or hold property belonging to the judgment debtor, and the obligation must be absolute and not contingent on a future event. Woodbine Savings Bank v. Yager (1931) was older authority for the proposition that service of the summons was the moment of attachment. Wasserburger v. Consolidated Mgt. Corp. (1993) confirmed that wages in the garnishee's possession at the time of service were subject to garnishment.

The two cases on legislative authority to modify remedies were even older. Granger v. Luther (1920) said the Legislature could suspend, modify, or change a remedy but could not effectively deny the remedy for an existing obligation. Lee v. Clark Implement Co. (1913) applied the same rule to existing liens: the Legislature could not enact a law rendering more difficult or uncertain the enforcement of a right under an existing lien.

The Auditor's rulemaking constraint came from Estate of Dahl v. Department of Revenue (1979): an agency cannot adopt rules that are inconsistent with state law, even when it has statutory rulemaking authority.

Pulling those threads together, the opinion concluded that an administrative cutoff was out of reach but a properly drafted statute was not. The required statutory features were prospective application only, protection of liens already in place, and careful attention to equal protection and privileges-and-immunities concerns when treating state employees differently from private-sector employees.

Citations and references

Statutes:
- SDCL ch. 21-18 (garnishment generally)
- SDCL § 21-18-12 (liability from service)
- SDCL § 21-18-27.1 (garnishee disclosure form)
- SDCL § 21-18-28 (state as garnishee)
- SDCL § 21-18-40 (no judgment against state; assignment effect)
- SDCL § 4-9-1.1 (State Auditor rulemaking)
- 15 U.S.C. §§ 1671-1677 (Consumer Credit Protection Act, garnishment)

Cases:
- Sigler v. St. Paul Fire & Marine Ins. Co., 298 N.W.2d 792 (S.D. 1980)
- Woodbine Savings Bank v. Yager, 58 S.D. 542, 237 N.W. 761 (1931)
- Wasserburger v. Consolidated Mgt. Corp., 502 N.W.2d 256 (S.D. 1993)
- Estate of Dahl v. Department of Revenue, 286 N.W.2d 528 (S.D. 1979)
- Granger v. Luther, 42 S.D. 636, 176 N.W. 1019 (1920)
- Lee v. Clark Implement Co., 31 S.D. 581, 141 N.W. 986 (1913)

Source

• Landing page: https://atg.sd.gov/OurOffice/OfficialOpinions/opinions.aspx
• Original PDF: https://atg.sd.gov/OfficialOpinions/Official%20Opinion%2000-01.pdf

Original opinion text

December 7, 2000

The Honorable Vern L. Larson
South Dakota State Auditor
500 East Capitol Avenue
Pierre, SD 57501-5070

OFFICIAL OPINION NO. 00-01
Garnishment of State Wages

Dear Mr. Larson:

You have requested an opinion from this Office concerning the following factual situation:

FACTS:

Part of the responsibility of the State Auditor involves the processing of garnishment of wages of state employees. Procedures for garnishment are established by state and federal laws. In the development of a new payroll system for the State of South Dakota, we are attempting to automate as much of the processes as possible. One of the positive aspects of automation is removing the possibility for human error.

Presently this office has interpreted state law to require us to withhold potential monies due from a properly filed garnishment even though the paycheck has been written but not delivered or mailed to the state employee.

In working with the software company on implementation of a new payroll system, the question has been raised as to whether authority exists for the State to establish a deadline for receipt of garnishment summons. The preferred deadline would be just prior to the automated processing of the payroll warrant. Consequently, this would then permit the State to eliminate any manual processes in regard to payroll garnishments.

Based upon these facts you have posed the following question.

QUESTION:

If the State cannot establish a deadline for the filing of garnishment summons under current statutes, could state law be amended to allow such a deadline?

IN RE QUESTION:

Garnishment is a statutory remedy, existing at the will of the Legislature. State garnishment procedures are found at SDCL Chapter 21-18.

[T]he following prerequisites are necessary before a garnishment action can occur: (1) The garnishee must be indebted to or have property in its possession or under its control belonging to a judgment debtor; or (2) the garnishee's liability to the judgment debtor must be absolute and without dependence on any future contingency.

Sigler v. St. Paul Fire & Marine Ins. Co., 298 N.W.2d 792 (1980). The federal Consumer Credit Protection Act (15 U.S.C.A. §§ 1671-1677) is also implicated when wages are garnished.

Under the current state statutory scheme, the date on which a garnishment summons is served establishes the time at which a garnishee becomes liable to a plaintiff in garnishment. Woodbine Savings Bank v. Yager, 58 S.D. 542, 237 N.W. 761 (1931). SDCL 21-18-12 provides as follows:

From the time of the service of the summons upon the garnishee he shall stand liable to the plaintiff to the amount of the property, money, credits, and effects in his possession or under his control belonging to the defendant, or in which he shall be interested, to the extent of his right or interest therein, and of all debts due or to become due to the defendant, except such as may be by law exempt from execution.

Under this statute wages owed to a debtor/employee which are in the possession of the garnishee at the time the summons in garnishment is served are subject to garnishment. See Wasserburger v. Consolidated Mgt. Corp., 502 N.W.2d 256 (1993). In fact, the disclosure form to be completed by the garnishee as found in SDCL 21-18-27.1 provides: "If the garnishee summons was served upon you at a time when earnings from a prior completed pay period were owing but not paid, complete the following disclosure for earnings from both the past pay period and the current pay period." These statutes also apply when the State is the garnishee. SDCL 21-18-28.

Wages due to a state employee which are still in the possession of the State at the time of the service of the summons in garnishment on the State are subject to garnishment. SDCL 21-18-40 provides:

No judgment shall be entered against the state of South Dakota, nor shall any actual liability be incurred by the state in any garnishment proceeding. Any judgment entered against the principal defendant when the state is garnishee shall be paid only out of moneys due such principal defendant at the time of the service of the summons in garnishment and service of such summons on the state shall be of the same force and effect only as an assignment of the sum claimed or as much thereof as may be due the defendant from the state.

Clearly the Legislature has established the time of the service of the summons in garnishment as the point at which garnishee liability attaches. That is the point at which the State becomes liable to turn over to the garnishor funds which are owed to the state employee, but still in the State's possession. There is nothing in the current statutory scheme that would allow the State Auditor to create a different point in time for the attaching of that liability. Although the State Auditor does have rule making authority over the procedure for issuing state warrants, SDCL 4-9-1.1, that authority does not include the power to adopt rules that are inconsistent with state law. Estate of Dahl v. Department of Revenue, 286 N.W.2d 528 (S.D. 1979).

The question then becomes whether the Legislature may establish a different time at which garnishee liability attaches. Your goal is to have a deadline which is before the automated printing of a salary warrant so that changes, like garnishment, do not have to be made once a warrant is printed. You want to avoid disruption of the proposed automated payroll system.

What you are seeking is tantamount to a legislative determination that a warrant is beyond garnishment after it is printed, even though it is still in the possession of the State. For example, if the Legislature imposed a deadline for the service of a summons in garnishment against the State, and the summons was served after that deadline, the garnishment proceeding would not apply to that warrant. This would eliminate the need for hand processed changes to warrants already printed, but still in the possession of the State.

As pointed out, garnishment is a statutory creation. The Legislature may limit garnishment proceedings as it sees fit, as long as it does so consistent with constitutional requirements.

Remedies are the creatures of legislation and the power that creates may suspend, modify, or change the remedy . . . .

The power to suspend, modify, or change a remedy does not authorize the enactment of a law which would so modify or change an existing remedy or suspend a remedy for such length of time as to, in effect, deny a remedy to one seeking to enforce a right or redeem a wrong growing out of a contract existing at the time of the enactment of such law.

Granger v. Luther, 42 S.D. 636, 176 N.W. 1019 (1920). The same reasoning applies to existing liens. The "Legislature may not enact a law rendering more difficult or uncertain the enforcement of a right under an existing lien." Lee v. Clark Implement Co., 31 S.D. 581, 141 N.W. 986 (1913).

As to future liens, however, the Legislature may modify remedies. Thus if the Legislature decides to establish a deadline for when a garnishment summons must be filed in actions seeking to garnish wages where the State is the garnishee, there should not be a constitutional due process impediment as long as liens existing at that time are protected. That is not, however, the only constitutional concern to be considered. Whatever approach is taken would have to be carefully crafted to avoid creating equal protection claims or privilege and immunity arguments for discriminating in favor of state employees.

Respectfully submitted,

MARK BARNETT
ATTORNEY GENERAL

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