Summary
The Arkansas Supreme Court affirmed dismissal of Thomas Schultz's claims against his employer, Butterball, LLC, arising from wage withholding under an out-of-state child-support income-withholding order. The court held that Arkansas's Uniform Interstate Family Support Act authorized direct transmission of the order to the employer, required the employer to comply with a facially regular order, and immunized the employer from civil liability for complying. The court also rejected Schultz's due-process and state constitutional challenges and upheld dismissal with prejudice.
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Practice areas
Questions Presented
- Whether an employer may be held civilly liable for complying with an out-of-state income-withholding order that was sent directly to the employer without first being registered in Arkansas.
- Whether Arkansas's UIFSA income-withholding provisions violate due process or article 2, section 13 of the Arkansas Constitution.
- Whether the prior dismissal without prejudice of an attempt to register the child-support order barred later collection under res judicata or collateral estoppel.
- Whether the circuit court properly treated the motion to dismiss as one for summary judgment and properly dismissed the action with prejudice.
Holdings
- An employer that complies with an out-of-state income-withholding order appearing regular on its face, as authorized by Arkansas's UIFSA, is not subject to civil liability for withholding child support from the obligor's income.
- Registration in Arkansas is not required when an out-of-state agency sends the income-withholding order directly to the obligor's employer under Arkansas Code section 9-17-501.
- The UIFSA income-withholding scheme does not violate due process or article 2, section 13 of the Arkansas Constitution because it provides an obligor a mechanism to contest the validity or enforcement of the order and the support obligation has already been adjudicated.
- The court would not reach Schultz's res judicata and collateral-estoppel arguments because the circuit court's oral ruling was not incorporated into its written order.
- The circuit court properly treated the motion to dismiss as one for summary judgment and properly dismissed the action with prejudice because Schultz had no legally cognizable claim against Butterball.
Key quotations
“An employer who complies with an income-withholding order issued in another state in accordance with this article is not subject to civil liability to an individual or agency with regard to the employer’s withholding of child support from the obligor’s income.” (402 S.W.3d at 66)
“Here, the action was dismissed because Appellant did not have a claim against Appellee.” (402 S.W.3d at 71)
Factual background
Butterball withheld $700 per month from Thomas Schultz's wages beginning in April 2010 pursuant to an income-withholding order issued by the Stanislaus County Department of Child Support Services in California for past-due child support. Schultz objected to the withholding and later sued Butterball for injunctive relief and damages, arguing that the order did not comply with Arkansas's Uniform Interstate Family Support Act and that the statutory scheme was unconstitutional. The withholding order appeared regular on its face, and Butterball complied with it as required by Arkansas law.
Procedural history
Butterball began withholding $700 per month from Schultz's wages pursuant to an income-withholding order sent directly by a California child-support enforcement agency. After an earlier complaint was dismissed by the Franklin County District Court for lack of subject-matter jurisdiction, Schultz filed this action in the Franklin County Circuit Court. The circuit court considered matters outside the pleadings, treated the motion to dismiss as one for summary judgment, rejected Schultz's statutory and constitutional claims, and dismissed the complaint with prejudice. The Arkansas Supreme Court affirmed.