Rose v. Rose

PETITIONER:Rose
RESPONDENT:Rose
LOCATION:United States Tax Court

DOCKET NO.: 85-1206
DECIDED BY: Rehnquist Court (1986-1987)
LOWER COURT: State appellate court

CITATION: 481 US 619 (1987)
ARGUED: Mar 04, 1987
DECIDED: May 18, 1987

ADVOCATES:
Howell H. Sherrod, Jr. – on behalf of Appellee Rose
Jerry S. Jones – on behalf of the Appellant
Roger Clegg – as amicus curiae, supporting Appellant
W. J. Michael Cody – on behalf of Appellee Tennessee

Facts of the case

Question

Audio Transcription for Oral Argument – March 04, 1987 in Rose v. Rose

William H. Rehnquist:

Mr. Jones, you may proceed whenever you are ready.

Jerry S. Jones:

Mr. Chief Justice, and may it please the Court:

This veterans’ rights case is here on appeal from the Court of Appeals of the State of Tennessee, the Supreme Court of that great state having denied application for permission to appeal, which is in the nature of a writ of certiorari.

The issue in this case is whether the scheme which the states have devised to circumvent federal law frustrates a federal purpose and violates the expressed intent of Congress when it enacted the Veterans’ Benefits Act.

There are three federal statutes which are primarily at issue in this case.

They are all found in the Veterans’ Benefits Act, Title 38 to the United States Code.

They are 211(a), 3101, and 3107.

The United States government has joined in this case as amici and the government is in a better position to argue the federal law than I, so with the Court’s permission I will touch on those statutes but defer the in-depth discussion to the United States government.

Harry A. Blackmun:

Mr. Jones, let me straighten myself out on some factual matters.

The marriage of these two people took place after his Vietnam injuries, I take it?

He was fully disabled when they were married?

Jerry S. Jones:

That’s correct, Justice White.

Harry A. Blackmun:

So the children came along also after the disability?

Jerry S. Jones:

Yes, Your Honor.

Harry A. Blackmun:

Did the Tennessee courts order… do any more than to require that he pay $800 a month?

Jerry S. Jones:

Two hundred dollars per month?

Harry A. Blackmun:

Eight hundred dollars, whatever the figure was.

Jerry S. Jones:

It was $800 per month, Your Honor.

Harry A. Blackmun:

Did it do any more than that?

It did not direct any allocation of the disability benefits directly?

Jerry S. Jones:

No, Your Honor.

That is where we contend that there was an attempted… or where the State did circumvent the expressed intent of Congress.

Harry A. Blackmun:

But the order itself merely placed on him an obligation to pay $800 a month.

If he had acquired it from inherited wealth, he could pay it out of that, couldn’t he?

Jerry S. Jones:

There would be no question.

We would not be here if that were the case.

Harry A. Blackmun:

And the order did not tell him… or did it, that is what I am asking… to use $800 of your disability payment to satisfy the support obligation?

Jerry S. Jones:

The court did not state that.

But the facts show that $500 per month must come from veterans disability benefits or from property which was accumulated by the use of veterans disability benefits.

Harry A. Blackmun:

Well, suppose he had inherited some money in the meantime?

Jerry S. Jones:

If it had been a substantial amount so that he could have made his child support payments, we would not be here.

John Paul Stevens:

Do you contend… let me just be sure I understand.

The property accumulated from the pension payments could have been used or could not have been used to satisfy an obligation?

Jerry S. Jones:

I am sorry.

I didn’t understand the question.

John Paul Stevens:

Well, supposing instead of $800 a month, he had a Cadillac or something he bought with veterans payments and the order had said, don’t pay $800 a month, sell the Cadillac and give the proceeds of sale to your dependents.

Would that violate the statute?

Jerry S. Jones:

Yes, it would violate the intent.

I don’t think it would violate the statute per se.

But the statute states that the veterans benefits are exempt from levy, attachment or seizure both before and after receipt by the beneficiary.

Now, the cases which deal with that problem outside the domestic relations area indicates that the funds which are used to purchase assets, or the assets that are purchased from these funds are likewise exempt because Congress stated that the funds were exempt both before and after receipt by the beneficiary.

Sandra Day O’Connor:

Mr. Jones, the record shows, I take it, that Mr. Rose had $7,000 accumulated?

Jerry S. Jones:

The record does not show that, Justice O’Connor.

The State will argue that there was some $12,000 from the sale of the parties’ marital residence.

Sandra Day O’Connor:

I see.

Jerry S. Jones:

But the proof would show that that money came from the Veterans Administration from a grant that was given to Mr. Rose to help defray the cost of a house that was designed to meet his special needs.

Sandra Day O’Connor:

But that the money was not itself part of the disability payments?

Jerry S. Jones:

It comes under the… no, no, that’s correct, Your Honor.

It comes… the money that he received for the house comes from a special grant from the Veterans Administration for people who need to have homes that–

Sandra Day O’Connor:

And is that money subject to the same legal restrictions that the disability payments, monthly disability payments are under?

Jerry S. Jones:

–Justice O’Connor, it is my understanding that any money which comes from the Veterans Administration is subject to the anti-attachment provisions in 3101.

Sandra Day O’Connor:

And whatever money was available to him over and above the monthly payments, you assert, came through the Veterans Administration and is subject to whatever the legal requirements are?

Jerry S. Jones:

That is correct, Your Honor, and I might clear one point on that.

When I talk in terms of money coming from the Veterans Administration, that is money which comes to a disabled veteran.

Any money that comes for other reasons is not at issue here, and I couldn’t answer that with regards to money that might come through the Veterans Administration for a veteran who is not disabled.

The situation here is that we have a highly decorated Vietnam veteran who received some 15 citations including the Vietnam Cross of Gallantry, the Bronze Star for valor, and the Purple Heart among the others.

Mr. Rose lost both of his legs, his right hand, and a portion of his right arm in addition to his right eye in combat in the former Republic of Vietnam.

As a result of those injuries Mr. Rose received a medical discharge from the United States Army and was… at that time began receiving these veterans disability benefits which are at issue here today.

While he was recuperating in a Veterans Administration hospital he met Mr. Rose who was assigned to his care.

A courtship followed and marriage was the end result of that courtship in 1973.

Jerry S. Jones:

After the two children, and about ten years later, Mrs. Rose filed for divorce, was granted a divorce from the veteran, and was awarded custody of the two minor children.

Mr. Rose was despondent at that time to the point that he was probably in a state of shock.

He didn’t even contest this at that time.

He contested none of this at that time.

The decision became final, was not appealed from.

Mr. Rose consulted with me and wanted to know if he had rights.

After advising him that in my opinion he may have rights under the Veterans’ Benefits Act, I advised him that if he did not pay the child support as ordered he would probably go to jail.

Mr. Rose decided to enforce his federal rights and stopped making child support payments except that he paid the sum of $90, which is the minimum amount that is designated by the Veterans Administration for the benefit of the children who are not living with the veteran.

That brought it to a head real quickly.

He was in fact incarcerated for a short period of time and we brought this case up through the state courts and are now here asking the Court, this Court, the Supreme Court of the United States, to determine whether what we have here is in fact a levy, an attachment or a seizure of these veterans disability benefits.

The logic of the State is this–

Harry A. Blackmun:

That has to be your position, isn’t it, that it equates with an attachment, or if you will, a garnishment?

Jerry S. Jones:

–Yes, Your Honor.

A right without the ability to assert that right is no right at all.

In this case the states are saying,

“If you enforce your federal rights to have this property, unassignable, then you lose your freedom. “

“The decision, Mr. Rose, is yours. “

Sandra Day O’Connor:

Mr. Jones, if this were a similar provision in a spendthrift trust in the private sector rather than in a statute, I suppose there is considerable authority that the State’s position is correct, that support payments can be ordered and can be enforced by contempt proceedings and are not subject to the spendthrift trust provisions.

Is that right?

Jerry S. Jones:

I cannot answer that, Your Honor.

I would be glad to brief it, if it would shed light for this Court.

We think, though, that the Act of Congress which has vested jurisdiction of these funds for child support matters in the Veterans Administration, is conclusive and controlling, particularly in light of the fact that there’s the anti-attachment provisions in the law which is very similar to what this Court decided in Hisquierdo in 1979 and McCarty versus McCarty in 1981, which Congress re-examined those and passed new laws but as in those cases, this is a question for the Congress to determine and not for the states in an effort to override or circumvent the laws which Congress had enacted.

Antonin Scalia:

Mr. Jones, your basic argument is that Congress wanted this money to be for the exclusive use of the veteran and not to be allocable to his dependents?

Jerry S. Jones:

No, Justice Scalia.

That is not what the law is at all.

The law says that… I think the purpose or the intent is that the Administrator of the Veterans Administration is in a better position to weigh the needs of the disabled veteran and the needs of the family, and because there is a national interest involved here, raising a military and providing for the military, that if the family has to suffer because the veteran’s needs are greater than the family’s needs, then it’s because it’s a vital national interest.

Antonin Scalia:

How has the Administrator used his authority under Section 3107?

Does he do it on a case-by-case basis or is it just this $90 minimum that you are talking about?

Jerry S. Jones:

No, Your Honor.

The Veterans Administration has promulgated regulations wherein a custodial parent may petition, has a right to petition, the Veterans Administration and then the benefits will be apportioned according to the equities of the case.

Jerry S. Jones:

There are some 27,000 veterans’ former spouses receiving money through that procedure at the present time.

Sandra Day O’Connor:

Mr. Jones, do you really think that some remote, distant federal institution like the Veterans Administration is in a better position as a practical matter to consider the details and equities of all these thousands of cases and to consider the real needs of the children and the disabled veteran, than state courts where these matters are traditionally handled?

Jerry S. Jones:

Your Honor, I would be reluctant to respond to that.

I think Congress has spoken with force and clarity in this matter and I think that they have made the decision.

I think that they have weighed it, and if they are wrong I am sure they’ll re-evaluate their position.

William H. Rehnquist:

Thank you, Mr. Jones.

We will hear now from you, Mr. Clegg.

Mr. Clegg, somewhere in your argument you will tell me how this order affects the payment of this disability monthly check, if it is monthly, in any way.

It still goes direct to the veteran, as I understand it.

You carry on and relate it to me.

Roger Clegg:

I will address that, and feel free to remind me if I overlook that.

Thank you, Mr. Chief Justice, and may it please the Court:

The issue in this case is whether a state court can require a divorced veteran to pay over part of his disability benefits for child support, or whether that kind of apportionment can be made only by the Veterans Administration.

This case is not about whether appellees should get child support from Mr. Rose’s benefits or even about how much child support she should get.

It is about who decides these questions, the state court or the Veterans Administration.

William H. Rehnquist:

Let me ask you, Mr. Clegg, and I think it has been gone into before but I want to make certain I understand.

What actually happened here is that the state court entered an order requiring that Mr. Rose pay $800 a month for child support?

Roger Clegg:

That is correct.

William H. Rehnquist:

Was there any effort to garnish?

Roger Clegg:

No, there was not.

William H. Rehnquist:

Or attach?

Roger Clegg:

Let me give the–

William H. Rehnquist:

Can you answer whether or not there was any effort?

Roger Clegg:

–No, there was not.

However, it is clear from the proceedings that the court knew that the payments would have to come from these veterans disability benefits, and the court said… knew that, and saying that said to Mr. Rose,

“Pay this child support that you have fallen behind in or you will go to jail. “

Harry A. Blackmun:

But why does that equate with an attachment or a garnishment?

Roger Clegg:

Why isn’t it a seizure?

I think that our argument is that reading 38 U.S.C. 3101(a), it is an attachment levy or seizure.

3101(a) reads,

Roger Clegg:

“Payments of benefits due or to become due under any law administered by the Veterans Administration shall be exempt from taxation, shall be exempt from the claim of creditors, and shall not be liable to attachment, levy or seizure by or under any legal or equitable process whatever– “

Harry A. Blackmun:

But where was this–

Roger Clegg:

–“# before or after”–

Harry A. Blackmun:

–Where was the attachment or garnishment or seizure anywhere along the line?

Roger Clegg:

–Your Honor, the–

Harry A. Blackmun:

The Veterans Administration still paid it monthly direct to the veteran?

Roger Clegg:

–That’s right, and he would get it and if he was willing to stay in jail he could continue to receive it.

That’s correct.

I don’t think that that is a fair reading of 3101.

I don’t think that–

Byron R. White:

If he owed some merchant and the merchant sued and the court ordered the veteran to pay the creditor out of his check, that statute would bar it because the funds are exempt from the claims of creditors, is that it?

Roger Clegg:

–That’s right, and that’s the second string to our bow, is that we think that Mrs. Rose here is a creditor.

If that is correct, then the language of attachment, levy and seizure need not be met.

Again, though, I don’t think it is proper to read the evidently very broad language of Section 3101 in such a narrow fashion, and the Court in the Hisquierdo case was reading an almost identically worded section 231-M and did not feel so constrained.

Family law–

John Paul Stevens:

May I just follow up on Justice White’s question.

Does it mean that in the… say a creditor case, say the creditor got a judgment for $1,000.

Would you say the Tennessee court couldn’t even enter the judgment?

Maybe it wouldn’t be collectable, but could they defend the suit if, say, he bought some new clothes or a car or something and ran up a bill of a couple thousand dollars at a store and the store then sued him for the $2,000 and he defended on the ground,

“The only money I have I received from the Veterans Administration, ergo, don’t enter a judgment against me. “

Could he do that?

Well, they could get the judgment, I guess, but–

Roger Clegg:

–The judgment, fine, but when the court turns to him and says,

“Pay this or go to jail– “

John Paul Stevens:

–All right.

So that, is it, just by analogy then, is the order requiring the payment of $800 a month different from the judgment?

Maybe the… or say,

“Go to jail or pay it. “

maybe.

Is the order of the Tennessee court itself requiring the payment contrary to the federal statute?

Roger Clegg:

–I think that it is in this context where, you know, the sheriff was there and the Court turned to the sheriff and said, you know, “Take him into custody”, and where he was in fact in custody an incarcerated in this case.

Harry A. Blackmun:

That’s the only position you can take, isn’t it?

Roger Clegg:

I’m sorry?

Harry A. Blackmun:

That the only position you can take.

Roger Clegg:

Well, I think that even… I’m not sure about that, Justice Blackmun.

I think that because in this case he was in fact put in jail, even if the court order was not violative of Section 3101, that the judgment of the Tennessee Court of Appeals affirming that order was.

William H. Rehnquist:

Well, are the contempt proceedings where the Court tells him to go to jail… it is ordinarily separate from the order requiring him to pay, isn’t it?

Roger Clegg:

That’s correct, but–

William H. Rehnquist:

Was it separate here?

I mean, was an order first entered requiring him to pay $800 a month and then when he was unable to comply he was held in contempt?

Roger Clegg:

–I believe that the sequence was that that order was entered.

There was a hearing where Mr. Rose said,

“I don’t believe that I have to pay this until the Veterans Administration has apportioned the amount. “

The Court said,

“I don’t believe that that’s what the law is. “

“Pay it or you will go to jail. “

They conferred, counsel and Mr. Rose conferred and came back to the Court and said,

“Well, we’re going to stand on our rights. “

and the Judge said,

“Fine, you’re going to jail. “

And he went to jail.

William H. Rehnquist:

Well, whether you’re willing to do so or not, surely you could confine your attack to the order committing him for contempt, saying that the state court order, 800> [“], isn’t indicating where that money should come from.

It’s only when the state judge knows that he is going to have to pay these Veterans Administration benefits and still insists on sending him to jail if he doesn’t, that’s your legal or equitable process, not the entry of the order.

Roger Clegg:

That’s our best argument, Your Honor.

Sandra Day O’Connor:

Mr. Clegg, isn’t there really a line of common law precedents and cases that distinguish familial obligations from commercial obligations, and in similar contexts, in spendthrift trust provisions written just like this statute, haven’t courts enforced those familial obligations?

Roger Clegg:

Well, there has been a divergence of opinion on that, Justice O’Connor, and as Appellant State point out, this law was… 3101 was enacted in these terms in 1935.

In 1932 there was an Idaho Supreme Court decision which upholds the government’s position in this case.

In 1933 there was the Tennessee State Court decision which upholds the government’s position in this case.

In 1936, the year afterwards, there was a New York State Court opinion upholding the government’s position in this case.

So, I think that you are quite right that there is a line of authority that treats alimony and child support differently, but I don’t think that that authority is so clear that it can override the very explicit and broad language in this statute, which this Court said in the Porter versus Aetna case, is to be construed broadly.

Sandra Day O’Connor:

What about the other assets that Mr. Rose might have had?

Do you take the position that whatever aid he received to acquire housing is governed by precisely the same statutory language?

Roger Clegg:

I believe that it would be, Justice O’Connor, because 3101, as I said,

“payments of benefits due or to become due under any law administered by the Veterans Administration. “

I should add that the $7,000 that you brought up, Mr. Rose filed an affidavit saying, you know, before the Tennessee court saying that that money was no longer available at the time.

So, it was clear to the Court that Mr. Rose was going to have to make this payment out of veterans disability benefits or go to jail.

It’s quite clear.

Byron R. White:

Mr. Clegg, I take it your argument is that even in the absence of this no attachment, no garnishment statute, that this order was invalid because it invaded the… it was contrary to the intent of Congress with respect to who should make these kinds of rules?

Roger Clegg:

That’s right.

Byron R. White:

Wholly an independent argument?

Roger Clegg:

That’s right.

I mean, we think that 3101 is sufficient for this case.

But it is not our only argument.

There is the fact that in 42 U.S.C. 659 and 662 where Congress provided explicitly that certain federal payments could be subjected to legal process for child support, it exempted any payments for Veterans Administration payments.

This is similar to the reasoning that the Court used in the McCarty case.

And as you say, Congress said in 38 U.S.C. 3107 that the Veterans Administration would have this power.

I should add that… in response to one of the earlier questions… that this procedure is one not only that has been used 27,000 times but which is laid out in the regulations.

The Veterans Administration, and it’s a regional office that does this, so it’s not completely–

Sandra Day O’Connor:

So, where would someone in Tennessee have to go?

Roger Clegg:

–I assume it’s somewhere in Tennessee.

Sandra Day O’Connor:

Does the VA ever pay more than $90 a month?

Roger Clegg:

Yes, they do, and in fact the regulations say that in a typical apportionment case somewhere between 20 and 50 percent of the benefits is generally an equitable amount.

In this case that would come out to $700 a month, almost as much–

Sandra Day O’Connor:

Rut that’s not… why do we have the $90 figure here?

Roger Clegg:

–That’s the statutory amount that is automatically given a veteran when he has an additional child dependent.

But the VA is not limited to that and has not limited themselves to that.

The VA is going to consider the same factors that the state court considered.

It is going to consider the need of the veteran, the need of his children, their other income, and the level of benefits that he gets.

In short, I think that Congress has spoken explicitly to this question and–

Harry A. Blackmun:

Mr. Clegg, suppose that he had $400 a month income from some independent source, some retirement.

Roger Clegg:

–No problem with that.

Harry A. Blackmun:

What do you mean, no problem?

Wouldn’t you be taking the same position here because $400 is only one-half of $800?

Roger Clegg:

I’m sorry.

Harry A. Blackmun:

That $400 would have to come out of his disability payment?

Wouldn’t you be making the same argument here?

Roger Clegg:

Yes.

That $400–

Harry A. Blackmun:

Suppose it were $795, and five dollars that he had to use out of the disability payment–

Roger Clegg:

–Yes.

Harry A. Blackmun:

–You still would be here for the $500?

Roger Clegg:

For the five dollars, yes.

The Court can consider these benefits in setting child support payments.

It can take all his other money away.

But what it can’t do is touch one penny of those veterans benefits.

Harry A. Blackmun:

So, each month, then, one would have to look at his independent income to see whether there is a violation of the statute, each month?

He might in some month have $805 from independent income?

Roger Clegg:

That’s right.

Harry A. Blackmun:

That’s not a very good system, is it?

Roger Clegg:

That problem is avoided if you go to Veterans Administration in the first instance and if you go to the state court in the first instance then the problem is going to arise only if the veteran asserts that he is being forced to pay out of his disability benefits and then the burden of proof is going to be on him to show that.

Thurgood Marshall:

Wouldn’t the federal government have a right to tell somebody what they can do with that money?

Roger Clegg:

Yes, Justice Marshall, and in this instance Congress set out a statutory scheme that provides that the Veterans Administration–

Thurgood Marshall:

Well, is it welfare?

Roger Clegg:

–No, it’s veterans disability benefits.

Thurgood Marshall:

What is it, a disability payment?

Roger Clegg:

Yes.

Thurgood Marshall:

That wasn’t earned?

Roger Clegg:

I think it was earned.

I’d like to reserve the remainder of my time for rebuttal.

William H. Rehnquist:

Very well, Mr. Clegg.

William H. Rehnquist:

We will hear next from you, Mr. Sherrod.

Howell H. Sherrod, Jr.:

Mr. Chief Justice, and if it may please the Court:

This case is not a veterans case to start with.

It is a case that arose out of a divorce in Tennessee where there was a hearing, where Mr. Rose was represented by an attorney who declined to put on proof in a divorce case, that the court, the Tennessee Court was the only forum that Ms. Rose had to approach because the State of Tennessee as the exclusive jurisdiction of dissolution of marriage.

Custody and support flow from that.

At the time that the court originally heard the divorce, Mr. Rose made $43,000 tax-free.

The court is obligated under Tennessee law to make a decision as to the relative abilities to pay by the parents of the children and then look at the needs of the children, and then make an award.

They did this.

They made an award of $800 a month.

Of the $800 a month there was a source of income for Mr. Rose outside his veterans benefits in the amount of $474 today.

It was $465 at the time the award was made.

The difference would have to be made up.

In the original divorce they split the equity in the house.

Mr. Rose got $12,000.

I would respectfully suggest that the federal statutes do not protect the property… the payments, once items have been purchased, and that that money was available to make up the difference between his income that was not veterans benefits and the $800 awarded by the court.

The time for the contempt was approximately five or six months later.

At that point in time there was no way… I said there is no way… there is no indication that the $12,000 had been spent.

In fact, Mr. Rose files an affidavit that says,

“I have spent some of the money and the rest of it I have set aside for this litigation as opposed to paying my kids’ child support. “

Sandra Day O’Connor:

Mr. Sherrod.

Howell H. Sherrod, Jr.:

Yes, ma’am.

Sandra Day O’Connor:

Apparently Mrs. Rose never made application to the VA for an apportionment or child care–

Howell H. Sherrod, Jr.:

That is correct, and there is a reason.

There are two parallel systems.

It’s like comparing apples and oranges or rocks.

It has a Tennessee statute which looks at custody and awards support for children based upon the ability of the parents to pay and the needs of the child.

That adjudication is made based upon any evidence which is brought before the court, which Mr. Rose could have done.

The veterans’ apportionment is there specifically for those cases where a veteran might become incompetent or the state remedy might otherwise be inadequate and you couldn’t, for example, get service of process over a veteran.

Then, a person could go to–

Sandra Day O’Connor:

–But you don’t take the position, do you, that Mrs. Rose was somehow precluded by state law or otherwise from applying at the VA for an apportionment?

Howell H. Sherrod, Jr.:

–No, it would just have been a futile act.

There would be no reason for her to go there because the State of Tennessee had the jurisdiction to do what she wanted to do, that is, procure–

Sandra Day O’Connor:

But it would hardly be futile if she could get money.

Howell H. Sherrod, Jr.:

–Well, it’s two parallel systems.

She had a choice.

Sandra Day O’Connor:

She just chose not to do it?

Howell H. Sherrod, Jr.:

Yes, ma’am.

William H. Rehnquist:

Nothing under Tennessee law would have prevented her from going to the VA in addition to getting her divorce and getting custody of the children, would it?

Howell H. Sherrod, Jr.:

Nothing would have prevented her from asking for an apportionment.

The VA does not take the same factors into account, though, that the state court would.

William H. Rehnquist:

She might have been unsuccessful or less successful, but she didn’t even try here?

Howell H. Sherrod, Jr.:

She did not try, and she would have had to go to Nashville, Tennessee and they do not have any published means by which one could effect this procurement.

For example, under the Veterans’ rules and regulations, she would have made her application.

If an objection was made, it could have been up to a year before a decision would have been made and during that period of time she would have received no allocation.

The Veterans Administration takes into consideration such things as the meritoriousness of the custodial spouse, which has nothing to do with the rights of the children.

For example, they could have found that this was an unfit person to get an allocation,

“Therefore, we’re not going to give it regardless of the needs of the children. “

John Paul Stevens:

I take it, though, Mr. Sherrod, it’s your position that if she had gone, maybe after a delay and gotten, say three or four hundred dollars a month from the direct payment out of the Veterans Administration, you could then have gone back to the Tennessee court and said,

“This isn’t enough, we need an additional allotment? “

Howell H. Sherrod, Jr.:

Yes, Your Honor.

John Paul Stevens:

So you could have had both, I suppose, at least theoretically, under your view of the case?

Howell H. Sherrod, Jr.:

Yes, Your Honor, but all you get… you’re not getting the same thing.

What you get from the State of Tennessee is an order of support.

What you get from the Veterans Administration is an allotment check that comes directly from the government to be applied to the order of support.

John Paul Stevens:

Right.

Howell H. Sherrod, Jr.:

Theoretically, I guess, the Veterans Administration could say, we’re going to give an allotment check of $1,000.

Well, when it comes Mr. Rose only owes $800, so $200 would be immediately refundable.

I find it hard to fathom that the Veterans Administration would give an allotment check–

John Paul Stevens:

But if you would rather get your money in that form and then pay the overage back than have to fight for it every month–

Howell H. Sherrod, Jr.:

–Yes, sir.

Howell H. Sherrod, Jr.:

A question was asked, too, about what are veterans’ benefits, and they are actually an earnings replacement based upon average impairment in earning capacity.

And so, given that, the other cases like this, Hisquierdo and McCarty, talk about money going to a beneficiary.

In this particular case the beneficiary is not the veteran.

The beneficiary is the veteran and his family, and his family includes his children, divorced or not divorced, and under those circumstances Hisquierdo and McCarty would be readily distinguishable because these are the same dollars that the man was using to pay for his children for the ten years he was married.

That money was sent to him as a replacement for his income.

He made the choice to get married and have children.

He has the income to support them.

Now taking the worst case, what if his wife had died and now he’s got his children without a custody order, he just has custody.

And he takes the position, well, I don’t have to buy their clothes any more.

I don’t have to buy their food.

Is he immune from any kind of civil or criminal prosecution because it’s veterans benefits and nobody can get them?

I think that would be a very untenable position for the government to take, and it’s an extreme example.

The purpose of the state jurisdiction is not the same as the purpose of the federal regulations.

Like what I just said, the federal regulations are basically in addition to any state jurisdiction that’s available.

There is no major damage which we can see which we believe to be the test.

We do not believe the test is exclusivity of the VA apportionment procedure because if that’s true, they would not have provided for apportionees to receive parts of the money.

I mean, if it says they may consider upon proper application whether or not to make an apportionment–

William H. Rehnquist:

–But how about getting away from the apportionment statute and getting back to the attachment, garnishment statute, don’t you… because it’s a pretty strong argument that an order committing Mr. Rose for contempt for failure to pay the child support payments would come under the definition of attachment, levy or seizure by any legal or equitable process whatever?

Howell H. Sherrod, Jr.:

–No, Mr. Chief Justice, because the order doesn’t interfere with the flow of money from the VA to the veteran.

It’s not… and were the government to make the statement that this protection of anti-attachment follows what is purchased by the funds, I believe that to be incorrect.

William H. Rehnquist:

But how about the language at the very end of 38 U.S.C. 3101 where it says,

“either before or after receipt by the beneficiary? “

Howell H. Sherrod, Jr.:

Are you talking about where there is a contempt action that, you are going to jail if you don’t pay this money?

William H. Rehnquist:

Well, the language I just read said that you can’t have equitable process or attachment or garnishment, anything like that, either before or after receipt by the beneficiary.

So, it seems to me it’s designed to do more than just not interfere with the flow of money from the VA to the veteran.

Howell H. Sherrod, Jr.:

Well, there is no specific intent.

The veteran still has the ability to, in this particular case especially, not to pay… not to use VA benefits.

At the time the order of contempt was made, he was in a position that he could have paid outside the veterans’ benefits and still made his payments.

So, in this particular case, factually it wouldn’t apply.

Theoretically I do not believe… I think it is distinguishable.

Howell H. Sherrod, Jr.:

It is not a… I think the words are “specific attachment” which would include a garnishment or process such as that.

And I think what it is, if a court doesn’t have the jurisdiction to enforce its orders–

William H. Rehnquist:

Well, if the Tennessee Court of Appeals had said he could have made these payments without invading veterans’ benefits we might have a different case.

But that isn’t what they said.

Howell H. Sherrod, Jr.:

–The only cases that benefits don’t seem to address your point, if it is that there is a federal interest that they are trying to protect and there is no federal interest in this case that is trying to be protected, because even if the veterans’ benefits were supposed to be used entirely for that $800 and the court ordered contempt, the benefits in this case are not those benefits that are specifically protected by a federal statute.

So, I would say that it would not be applicable, not that it couldn’t be called an equivalent process.

I just think it would not be applicable.

The case that comes to mind is Robison where there was a review of educational benefits and the Veterans Administration… in that particular case it’s

“state jurisdiction is not judicial review. “

And I’m trying to liken that the contempt is not the equivalent… it’s not trying to place judicial review or Veterans Administration use or the allocation of specific veterans funds to a use which they were not supposed to be applied.

I think none of those apply in this case.

William H. Rehnquist:

I was thinking the contempt citation was analogous, or at least might be governed by the language,

“attachment, levy or seizure by any legal or equitable process whatever. “

If you are told, you know, either you pay this money out of the $800 or you go to jail, that certainly comes pretty close to any kind of legal or equitable process.

Howell H. Sherrod, Jr.:

It seems to me like we would be prostituting the Section 3101 which is not there to protect the veteran… it’s there to protect the veteran and his family from creditors but it’s not there to protect the veteran from his family and that’s what they’re using it for in this case.

I guess that’s what I am trying to say.

I would also say that our argument would be the same if the veteran were injured after or… it doesn’t make any difference whether his disability occurred before or after he married and had children.

We feel that it’s a choice that he makes.

In a particular case, had he married and had children, you know… I think every person is chargeable with the fact that if you have children you’re going to have a duty to support them and I don’t think you can have children and then ignore the duty of… regardless of when the disability comes along.

So, when you make that–

Antonin Scalia:

And supposedly, if this statute prevents what was attempted to be done here on the basis of the “attachment, levy, garnishment” language it would also prevent this veteran from being incarcerated for child support, for failure to support his children when his wife is still alive.

Howell H. Sherrod, Jr.:

–Yes, sir, I would think that would be true.

Antonin Scalia:

The State could not proceed against him at all for failure to support his children and his obligation would be dependent entirely upon whatever the VA thought was appropriate?

Howell H. Sherrod, Jr.:

Yes, sir, I believe that would be the result.

I will also state we found no legislative or congressional intent that pre-empts state law in this area.

The only legislative intent that we found was to see that a veteran is protected, and a veteran is protected under many of the statutes but under this particular statute the veteran and his family is to be protected.

I’d reiterate that.

If there are no further questions, I would defer to Mr. Cody.

William H. Rehnquist:

Thank you, Mr. Sherrod.

General Cody, we will hear from you at this time.

W. J. Michael Cody:

Mr. Chief Justice, and may it please the Court:

It is the position of the State of Tennessee that Congress has not pre-empted in this case the traditional function of the states in determining child support.

The Tennessee statute is constitutional on its face and is applied here in that there is no expressed conflict with federal law and no major damage to clear and substantial federal interest in this case.

Antonin Scalia:

What do you feel is the purpose of the provision that allows the Administrator to apportion?

What is it there for?

W. J. Michael Cody:

Justice, it is our view that 3107, which is the apportionment statute, is an administrative aid in child support enforcement.

It is an alternative and a parallel proceeding which is compatible with state court enforcement.

It is a method that allows the government to make direct payments to the children, something that of course the state court cannot do.

It is available in addition to or when state court remedies are unavailable or inapplicable.

When this statute was originally passed in 1924 it primarily was concerned with incompetence, and it still applies in that situation.

There might be a case where there was a separation but not a divorce, where the husband is in another state or where they might not even know where the husband is.

It is a way that the government can assist in a direct payment.

We think the statute is clear that it is not exclusive.

The language… the word “may” is used twice in the statute.

The state court in its order is not making an apportionment.

It’s not doing anything akin to 3107.

It’s not executing on a federal interest.

And there’s no division of that interest.

The state believes that this Court, as well as Congress, has recognized that domestic relations including the protection of children and the support of children belongs to the laws of the state, and the state courts provide forums and have historical expertise and the ability to give a comprehensive review to support, custody and visitation, all of those things that are involved.

So, there has developed an area, I believe, in the law which requires a presumption against pre… emption in the field of domestic relations.

Congress must positively require by direct enactment, before this pre-emption will be presumed.

The consequences of the conflict, if they could be found in one of these three statutes which we submit are not there, those conflicts would have to sufficiently injure a federal program so as to require a non-recognition.

We believe that here there is no major damage to any clear and substantial federal interest.

The purpose here, as indicated earlier, is that if a veteran is disabled that he and his dependents will have a source of income to replace these lost earnings.

I think, as Justice O’Connor indicated, there is a body of law from this Court beginning with the Westmore decision in 1904, that says that children are not creditors and child support is not a debt; that this exemption in 3101 is for the veteran and his family and not for the veteran against his family.

Prior judicial considerations in this area, we think overwhelmingly show that the courts… the D.C. Circuit, two decisions there, and nine states have held that child support is not within exemptions, and Congress has re-enacted this statute many times without significant change.

We believe that there was a desire on the part of Congress to protect veterans from creditors and not to protect veterans from state courts; that if Congress had intended the 3107, the apportionment aspect, to be a sole recourse rather than an ancillary and an assisting resource, then it could have said so clearly.

We submit that under the facts of this case, that there has been no damage to any substantial federal interest.

It is suggested by the Solicitor that the interest here is that if a veteran believes that his disability benefits might be awarded to his children by a state court that somehow he might conceal his injury.

That does not seem to be a strong purpose because military pay is already subject to garnishment itself, and we believe it untenable that Congress would have intended that this result would happen.

John Paul Stevens:

General Cody, your argument raised a question in my mind about these 27,000 cases over at the Veterans Administration.

You suggest that many of them may be voluntary arrangements where there is not necessarily a divorce situation but where there is a reason why they would not want to pay the money directly to the veteran but might to a dependent.

I just notice the statute authorizes payment to, on behalf of the veteran, spouse, children or dependent parents.

But this case doesn’t involve a spouse.

It’s an ex-spouse.

Do you agree that they actually make these payments to former spouses as well as spouses?

W. J. Michael Cody:

If the Court please, Mr. Justice, I think that one of the difficulties that we have in this record is the way this case came up, there is very little information as to how the VA procedure does work because the apportionment situation did not occur.

When the Solicitor mentioned in that regard that it could be 20 percent as a minimum given, under the regulations that apparently only applies to a hardship situation and not a regular apportionment.

It is difficult for me to answer your question but I think that we would have to say that if the apportionment statute means anything at all, that it would have to be available to a separated or a former spouse.

But we believe it is an ancillary procedure that, in line with the 1975, 1977 and ’84 child enforcement support legislation, that Congress recognized that we’ve got an emergency in this country in supporting children, in getting assets available to them, and this is just a way that the federal government assists in what is primarily a state, traditional state function.

If there are no further questions.

William H. Rehnquist:

Thank you, General Cody.

Mr. Clegg, you have one minute remaining.

Antonin Scalia:

Mr. Clegg, I hate to impose on your one minute, but really what do you do about the situation where a veteran who is receiving benefits, his wife hasn’t left him, his children are still living with him, and the state wants to move against him for failure to support his children?

What can they do?

Can the state do anything?

Roger Clegg:

Well, they can go after everything except for the disability.

Antonin Scalia:

Well, they couldn’t put him in jail or couldn’t punish him at all because so long as that’s all that he’s getting, you are saying they can’t punish him for failure to support his children, right?

Roger Clegg:

They have to go to he Veterans Administration in that situation.

Antonin Scalia:

That’s pretty extreme, isn’t it?

Roger Clegg:

I don’t think that that’s extreme.

That is the statutory scheme that Congress has.

The Veterans Administration has been charged with the care of veterans and overseeing the payment of their benefits.

John Paul Stevens:

May I ask one other question?

Is it your view that, supposing there is enough money, say the man had enough money to pay $700 or $800 a month of support money, but the court fixed that amount largely on the basis of the availability of the… that would not violate the statute?

Roger Clegg:

That’s fine.

John Paul Stevens:

That’s fine.

And you do say that the word 3107?

Roger Clegg:

Yes.

The regulation… if I can complete this answer–

John Paul Stevens:

But the regulations–

Roger Clegg:

–Money can go directly to the children in this situation.

That is what would happen.

It would go to the children through the former spouse.

John Paul Stevens:

–But it would be support money rather than alimony?

It would no authorize the payment of the equivalent alimony, then?

Roger Clegg:

The regulations say that payment can be made to estranged spouses.

I don’t know if that includes ex-spouses.

John Paul Stevens:

Well, see, an estranged spouse would be a spouse but a divorced spouse is not a spouse.

Roger Clegg:

I’m not sure whether–

John Paul Stevens:

See, the thing, your 27,000 person figure is a very persuasive figure, but maybe they are all cases in which the veteran was perfectly happy to have all or any part of the compensation paid to the family because he was unable to write checks or something like that.

Roger Clegg:

–Well, mainly the 27,000 figure is to show that apportionments are not something that are never made by the VA.

There are–

John Paul Stevens:

But we don’t know how many of those are broken families?

Roger Clegg:

–No, we don’t.

I mean, it could be all or it could be none.

William H. Rehnquist:

Thank you, Mr. Clegg.

Roger Clegg:

Thank you.

William H. Rehnquist:

The case is submitted.