## Facts

- Norman Jones, a Ford Motor Company employee, was subject to a wage withholding order for child support and separately owed a consumer debt to Sears, Roebuck & Co.
- Sears obtained a judgment against Jones and sought wage garnishment in a Michigan district court.
- Ford was already withholding amounts for child support under a support order when the Sears garnishment was pursued.
- The state court directed Ford to withhold for both obligations and treated the child-support withholding as a subtraction before computing the Consumer Credit Protection Act (CCPA) 25% garnishment limitation.
- Ford withheld a child-support amount and then withheld an additional amount for Sears calculated as 25% of wages remaining after the child-support withholding.
- After Ford raised compliance concerns, the Secretary of Labor filed a federal enforcement action to resolve the correct interpretation of Title III of the CCPA.
- The parties agreed the federal court would enter findings of fact and conclusions of law and then dismiss the action without a prospective injunction; Sears repaid Jones the disputed amount, and defendants agreed to administer future withholdings consistent with the Secretary’s interpretation.

## Issues

1. Whether child-support wage withholdings may be deducted from gross earnings to compute “disposable earnings” before applying the CCPA’s garnishment limits.
2. Whether a child-support wage assignment/order constitutes a “garnishment” under the CCPA.

## Decision

- The court adopted the Secretary of Labor’s interpretation of Title III of the CCPA.
- Child-support payments could not be subtracted from gross earnings when calculating “disposable earnings” for purposes of applying the federal garnishment cap.
- A child-support wage assignment/order qualified as a “garnishment” under the CCPA’s definition.
- State law could determine priority among competing withholding orders, but could not permit total withholding that exceeded federal CCPA ceilings based on properly calculated disposable earnings.
- The court entered findings and conclusions consistent with these holdings and dismissed the action without entering a prospective injunction, in light of corrective payments and agreed compliance.

## Legal Principles

- “Disposable earnings” under the CCPA are wages remaining after deductions required by law to be withheld (e.g., mandatory taxes), and do not exclude court-ordered child-support withholdings.
- A child-support wage assignment or support withholding order is a “garnishment” because it is a legal procedure requiring earnings to be withheld for payment of a debt.
- State garnishment priority rules remain operative only to the extent they do not cause or authorize withholding beyond the federal limits imposed by Title III of the CCPA.

## Conclusion

The court concluded that child-support withholding orders are themselves garnishments under the CCPA and cannot be used to reduce “disposable earnings” before applying federal garnishment limits; state procedures may set priority among orders but cannot increase total withholding beyond federally permitted levels.


Marshall v. District Court for the Forty-First-B Judicial District of Michigan (Mount Clemens Division), 444 F. Supp. 1110 (E.D. Mich. 1978)