BONITA H. MARSHALL
Argued February 10, 2014.
Circuit Court for Prince George's County. Case No. CAL10-23978.
Richard T. Seymour (Law Office of Richard T. Seymour, PLLC, Washington, DC) on brief FOR PETITIONER.
William F. Ryan. Jr. (Jerome C. Schaefer, Sarah A. Marquardt, Whiteford, Taylor & Preston, LLP, Baltimore, MD) on brief FOR RESPONDENT.
Barbera, C.J., Harrell, Battaglia, Greene, Adkins, McDonald, Wilner, Alan M. (Retired, specially assigned), JJ. Opinion by Wilner, J. Adkins, J., concurs and dissents. McDonald, J., concurs.
[437 Md. 544] Wilner, J.
This case began as a dispute over whether twenty-nine dollars and sixty-four cents was wrongfully deducted by respondent Safeway Inc. from the wages of its employee, Bonita Marshall, in response to two writs of garnishment issued by the District Court of Maryland pursuant to Md. Rule 3-646. [437 Md. 545] That dispute could easily and quickly have been fully resolved in the District Court garnishment actions. Instead, we have a class action suit that has been in litigation for three-and-a-half years, all but two weeks of which has been after Safeway at least tacitly acknowledged its error, tendered the excess deduction to Ms. Marshall, and changed its corporate policy to apply thenceforth the correct garnishment exemption standards.
So far, Ms. Marshall has lost in court. The Circuit Court for Prince George's County declined to certify the class and entered judgment in favor of Safeway, and the Court of Special Appeals affirmed that judgment. Marshall v. Safeway, 210 Md.App. 545, 63 A.3d 672 (2013). Although we disagree with one of the lower courts' holdings, we shall affirm the judgment of the Court of Special Appeals.
Nine issues are presented for our review, but they may be fairly consolidated into three:
(1) What is the applicable standard for determining the amount of wages exempt from garnishment;
(2) Do employees have a private right of action against their employer under Maryland Code, § 3-507.2 of the Labor and Employment Article (LE) for miscalculating the amount of exemption and, as a result, deducting more from the employee's wage than is proper; and
(3) Did the Circuit Court for Prince George's County err in denying class certification in this case?
In order to put what happened into a proper context, it is helpful, at the outset, to examine the laws governing the amount of wages that are exempt from attachment through a garnishment action. There is a conflict among a Maryland statute (Maryland Code, § 15-601.1 of the Commercial Law Article (CL)), a Federal statute (15 U.S.C. § 1673), and the preprinted Maryland District Court form (DC/CV 65) that is [437 Md. 546] commonly used by creditors seeking to garnish wages. It is that conflict that led to this case.
CL § 15-601.1(b) provides that, in Caroline, Kent, Queen Anne's, and Worcester counties, the amount of wages exempt from attachment (garnishment), for each workweek, is the greater of (i) 75% of the disposable wages due, or (ii) 30 times the minimum hourly wage under the Federal Fair Labor Standards Act (FLSA) in effect at the time the wages are due. In the rest of the State, including Prince George's County, where Marshall was employed and where the garnishment writs were issued, the amount exempt from garnishment under the statute is different; it is the greater of (i) the product of $145 multiplied by the number of weeks in which the wages due were earned, or (ii) 75% of the disposable wages due. In both cases, there is added to the exemption any medical insurance payment deducted from an employee's wages by the employer.
In both instances, one prong of the formula is the same -- 75% of the disposable wages due. The difference lies in the alternative prong -- $145 per week as opposed to 30 times the FLSA minimum hourly wage.
In contrast, 15 U.S.C. § 1673(a), which is part of the Federal Consumer Protection Act, provides, subject to exceptions set forth in subsection (b) and in § 1675, that " the maximum part of the aggregate disposable earnings of an individual for any workweek which is subject to garnishment may not exceed (1) 25 per centum of his disposable earnings for that week, or (2) the amount by which his disposable earnings for that week exceed thirty times the Federal minimum hourly wage prescribed in [FLSA] in effect at the time the earnings are payable, whichever is less." (Emphasis [437 Md. 547] added). There is no mention in § 1673 of medical insurance payments deducted by the employer.
It is important to note that the State law measures the amount of exemption, whereas the Federal statute measures the maximum amount that may be garnished, which is why the former applies the greater of the alternatives and the latter applies the lesser of them. The mirror image of both produces the same result with respect to the four Eastern Shore counties, but not with respect to the rest of the State.
To complicate things further, Form DC/CV 65 states, in the section captioned " INSTRUCTIONS TO GARNISHEE," that " Commercial Law Article § § 15-601 to 607 of the Annotated Code of Maryland and Rule 3-646 govern wage attachment procedures." In the section captioned " EXEMPTIONS FOR GARNISHMENT," however, the form states:
" THE FOLLOWING ARE EXEMPT FROM GARNISHMENT: (1) the greater of; (a) 75 percent of the disposable wages due; OR (b) 30 times the federal minimum hourly wages under the Fair Labor Standards Act in effect at the time the wages are due; AND (2) any medical insurance payment deducted from an employer's [sic] wages by the employer. Other federal and state exemptions may be available."
Thus, though stating that CL § § 15-601 to 607, which includes § 15-601.1, governs all wage attachments, the District Court form adopts, for the entire State, the part of the statutory formula applicable only to the four Eastern Shore Counties and, to that extent, is both inconsistent with the Maryland statute and internally ambiguous. On the other hand, to the extent that an amount equal to 30 times the FLSA minimum hourly wage will produce a larger exemption than $145 per week, the § 15-601.1 statutory formula applicable in Prince George's County is inconsistent with the Federal law.
It is easy to see how this can be confusing, but there is a simple answer. Although neither side has addressed the matter directly, the law is clear that, by virtue of another [437 Md. 548] section of the Federal law -- 15 U.S.C. § 1677 -- the Federal law preempts State law to the extent that the latter " allows a greater amount of a debtor's earnings to be reached than does the federal law . . . ." Anderson v. Anderson, 285 Md. 515, 525, 404 A.2d 275 (1979). States can provide a greater exemption than that provided by the Federal law, but not a lesser one. Thus, it is not permissible for Maryland to exempt only $145 per week if that would be greater than 75% of disposable wages but would produce less of an exemption than the Federal requirement of 30 times the FLSA minimum hourly wage.
In other words, notwithstanding the ambiguity arising from the blanket instruction in the District Court form that CL § § 15-601 through 15-607 govern wage attachment procedures, by virtue of the Federal preemption, the District Court Form got it right in stating the formula to be applied in determining the exemption -- the greater of 75% of disposable wages or 30 times the FLSA minimum hourly wage.
The Garnishments and Safeway's Response
The relevant evidence in this case comes from stipulated facts and a few undisputed documents. Marshall was an hourly employee of Safeway from November 2005 to December 2010. In February 2009, Capital One Bank obtained a judgment against her in the amount of $1,070 plus $60 costs and $160 attorneys' fees. On April 15, 2009, at Capital One's request, the District Court issued a Writ of Garnishment on Wages against her in the amount of $1,297, which was directed to Safeway. The writ was received by Safeway's payroll garnishment department on April 21, 2009.
At the time, the Safeway payroll garnishment program for Maryland employees
applied the exemption formula exactly as set forth in CL § 15-601.1. Because the writ was issued in [437 Md. 549] Prince George's County and because, as between $145 per week and 75% of Marshall's disposable wages, the former produced the greater exemption, that is what Safeway applied for the three pay periods during which the garnishment writ was in effect. The balance of the wages otherwise due to Marshall was paid to Capital One Bank. That garnishment was released by Capital One in July 2009.
A second writ was issued on August 10, 2009, but it was released by Capital One seven days later and apparently was never served on Safeway. In July 2009, a Legal Aid Bureau attorney contacted Safeway's payroll department in Phoenix, Arizona, on behalf of Marshall and pointed out that the appropriate exemption was that produced by the Federal statute -- 30 times the FLSA minimum hourly wage. An official in that department, Kristin Brossman, responded that she had checked with the guidebook used by Safeway -- the American Payroll Association's Guide to Federal and State Garnishment Laws -- and concluded, perhaps incorrectly, that Safeway was correct in applying the standard set forth in CL § 15-601.1. No objection to the amounts withheld and paid to Capital One was made in the garnishment proceeding.
On July 3, 2010, Safeway's payroll department received another garnishment writ from the District Court that had been issued on behalf of Capital One Bank on June 21, 2010. Again, Safeway applied the $145 per week exemption specified in CL § 15-601.1 for three pay ...