Townsel v. Dish Network L.L.C., 668 F.3d 967

Townsel signed up for DISH satellite service with equipment cost amortized over two years and a termination fee option.
Townsel authorized DISH to charge her debit card for the termination fee if she discontinued service during the first two years.
Townsel stopped paying the monthly service charge before two years elapsed; DISH treated this as discontinuation and charged the termination fee via debit card.
Townsel sued under 42 U.S.C. § 407(a), challenging the debit-card collection as an unlawful assignment of Social Security benefits.
§ 407(a) bars transfer or execution of future Social Security payments and protects benefits from attachment or garnishment.
The district court dismissed for failure to state a claim; the Seventh Circuit affirmed, addressing whether § 407(a) creates a private damages action.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether § 407(a) creates a private damages action.	Townsel seeks damages under § 407(a) against a private creditor.	DISH argues no private damages action exists under § 407(a).	No private damages action; defense governs.
Whether using a debit card constitutes an assignment of Social Security benefits.	Townsel asserts preauthorization of debit use assigns Social Security benefits.	DISH had no knowledge or concern about the funds’ source and did not assign benefits.	Using funds from Social Security to pay a debt is not an assignment.
Whether the district court’s dismissal was appropriate.	A private § 407(a) claim could save the suit.	Private action is not recognized and amendment would be futile.	Affirmed; no private damages action recognized and dismissal proper.

Washington State Dept. of Social & Health Services v. Guardianship Estate of Keffeler, 537 U.S. 371 (2003) (distinguishes 'legal process' from routine payment transactions)
Philpott v. Essex County Welfare Bd., 409 U.S. 413 (1973) (benefits deposited and traced in private actions)
Bennett v. Arkansas, 485 U.S. 395 (1988) (private enforcement against assignment defenses)
Cort v. Ash, 422 U.S. 66 (1975) (implied private rights of action analysis)
Maine v. Thiboutot, 448 U.S. 1 (1980) (private enforcement under 42 U.S.C. § 1983 against state actors)
London v. RBS Citizens, N.A., 600 F.3d 742 (7th Cir. 2010) (retiree cannot enforce § 407(a) via § 1983 against private creditor)
Lopez v. Washington Mutual Bank, 302 F.3d 900 (9th Cir. 2002) (private action limitations on Social Security benefit-related claims)
Tidwell v. Schweiker, 677 F.2d 560 (7th Cir. 1982) (assignment vs. ordinary payment transfer analysis)
Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308 (2005) (nature of federal question jurisdiction)
Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164 (1994) (supervising private damages actions and implied rights)