MI Prisoners Lose Pension Garnishment Appeal

January 23, 2007 (PLANSPONSOR.com) - With a recent ruling by a federal appellate court, four prisoners in the Michigan prison system have lost another legal battle in their fight against the state's right to garish their pensions.

The 6 th U.S. Circuit Court of Appeals said US District Judge Marianne O. Battani of the U.S. District Court for the Eastern District of Michigan properly dismissed the prisoners’ suit because the plaintiffs had already litigated the same claims in a state court case.

The prisoners’ had lost before a Michigan state trial judge who rejected their claims that the Michigan State Correctional Facility Reimbursement Act (SCFRA) violated their due process rights as well as those granted by the federal Employee Retirement Income Security Act (ERISA).

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SCFRA requires prisoners to reimburse the state for the costs of incarceration from the prisoners’ own assets, which is defined by the state law to include pension benefits.SCFRA further allows  Michigan state courts to issue orders directing prisoners to have their pension plan administrator send their pension payments to the prison address for deposit into their prison account.

Circuit Judge Karen Nelson Moore, writing for the appellate court, said t he state court decisions were decided on the merits of the case and involved the same parties, and that any due process or ERISA arguments were or could have been resolved in those actions.“All of the claims raised by the plaintiffs in this case could have been or were litigated in prior state-court proceedings between the same parties. The plaintiffs have not provided any evidence that they did not have a full and fair opportunity to litigate their claims in state court,”  Moore wrote.

The latest ruling in Abbott v.  Michigan, 6th Cir., No. 06-1434, 1/22/06 is here .

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