Maria Rivera’s young son spent over a year in Orange County, California’s juvenile detention facilities. When he was released, the county sent a $16,372 bill to Rivera, claiming she needed to pay for the food her son ate, the clothing he wore, and the medicine he took while he was incarcerated.
The debt imposed a considerable hardship on Rivera. She sold her home to cover the debt, although this sale only allowed her to pay off about $9,500. Moreover, the county appears to have charged her significant interest on the unpaid portion of the debt. It eventually obtained a court order requiring her to pay nearly $10,000 more in addition to the funds she raised through the sale of her home.
With no other options, and no remaining assets, Rivera declared bankruptcy. And yet, even after this declaration, the county continued to hound her to pay money that it said she owed for a crime that she did not commit.
In Rivera’s case, this saga has a happy ending, although it is a happy ending that took three rounds of litigation in three separate courts before a panel of judges finally declared that she had been through enough. Writing for a unanimous panel of the United States Court of Appeals for the Ninth Circuit, Judge Stephen Reinhardt explained in In re Rivera on Wednesday that Orange County could not continue to seek repayment of this debt after her bankruptcy.
Rivera turned on a provision of the bankruptcy code that is intended to prevent parents from using bankruptcy to dodge their family obligations. Under that provision, a debt cannot be discharged in bankruptcy if it is “in the nature of alimony, maintenance, or support (including assistance provided by a governmental unit) of such spouse, former spouse, or child of the debtor or such child’s parent.”
So a parent who, for example, owes child support payments to their ex-spouse cannot escape those payments simply by declaring bankruptcy. As Reinhardt wrote, “bankruptcy provides a way to leave one’s debts, but not one’s most fundamental family obligations, behind.”
“the County’s actions compromise the goals of juvenile correction and the best interests of the child, and, ironically, impair the ability of his mother to provide him with future support.”
Orange County claimed that the bill it sent Rivera was analogous to child support because it was a bill for food, clothing and other basic necessities for Rivera’s minor child. The court disagreed, concluding that a bankruptcy code provision intended to ensure that parents do not escape their obligations to their children could not be used to help fund a government agency that is primarily concerned with something quite unrelated to child support.
“The ‘support’ that the Probation Department provided to Rivera’s son in the course of his detention,” Reinhardt explained, “was incidental to — and the price of — its larger governmental purpose of promoting ‘public safety’ and ‘reduc[ing] crime” through “corrections practices.’” He added that “juvenile detention serves not domestic but correctional ends.”
Even more importantly, the court explained, allowing a provision of the bankruptcy code that was intended to protect children from deadbeat parents to be used in the way Orange County attempted to use it here would have perverse effects. “A conclusion that Rivera’s debt is excepted from discharge would not benefit her son,” Reinhardt wrote. To the contrary, it “would only detract from her ability to fulfill her family support obligations.” This case “is troubling,” according to the court, “because the County’s actions compromise the goals of juvenile correction and the best interests of the child, and, ironically, impair the ability of his mother to provide him with future support.”
“In relentlessly pursuing the debt’s collection and opposing its discharge, the County raises yet another obstacle to Rivera’s efforts to provide her son with the support about which the County claims to be so deeply concerned. That ‘betray[s] a misguided sense of values.’”
So the good news for Rivera is that, after years of harassment and litigation, she is freed from her obligation to pay a debt she may never be able to afford. And the Ninth Circuit’s decision is also good news for people in similar positions in the nine states overseen by that court, as it will set a precedent that will prevent other county from engaging in similar tactics so long as this decision stands.
But the Rivera case also appears to be, as Reinhardt lays out in his opinion, part of a larger effort to raise funds on the backs of the least fortunate.
Orange County’s public budget shows that the Probation Department relies on self-generated revenue for more than 40% of its financing. Seeking to obtain that revenue by unremittingly pursuing legal actions against disadvantaged individuals — the counterproductive practice at issue here — can have damaging effects on the community. Not only does such a policy unfairly conscript the poorest members of society to bear the costs of public institutions, operating “as a regressive tax,” but it takes advantage of people when they are at their most vulnerable, essentially imposing “a tax upon distress.”
And, lest there be any doubt, such taxes upon distress are hardly limited to Orange County. In California as a whole, “driving while poor” can be a harrowing experience, as minor offenses can lead to fines that low-income drivers cannot afford. And that, in turn, can cause them to lose their license, to receive even more fines because the only way they can work is to drive without a license, and eventually force them into an abyss of debt owed to the state.
Similarly, in Ferguson, Missouri and the surrounding areas, courts often prey upon the poor to raise funds for the local government. One community, where a quarter of the population lives below the poverty line, collects 66 percent of its revenue from fines and fees.
Reinhardt’s opinion will provide a minor buffer against some of these efforts to tax distress, but it will only be a very minor one. For, while Rivera ultimately won her court case, she did so only after she had to sell her house, turn over the profit from the sale to Orange County, and then face years of bankruptcy proceedings and litigation.