J.M. v. HobbsJ.M. v. Hobbs
2. Constitutional Law: Statutes: Presumptions. A court presumes that statutes are constitutional and will not strike down a statute unless its unconstitutionality is clearly established.
3. Special Legislation. A legislative act constitutes special legislation if (1) it creates an arbitrary and unreasonable method of classification or (2) it creates a permanently closed class.
4. ____. A special legislation analysis focuses on a legislative body‘s purpose in creating a challenged class and asks if there is a substantial difference of circumstances to suggest the expediency of diverse legislation. The prohibition aims to prevent legislation that arbitrarily benefits a special class.
5. Constitutional Law: Statutes: Special Legislation. When the Legislature confers privileges on a class arbitrarily selected from many who are standing in the same relation to the privileges, without reasonable distinction or substantial difference, then the statute in question has resulted in the kind of improper discrimination prohibited by the Nebraska Constitution.
6. Special Legislation: Public Policy. To be valid, a legislative classification must rest upon some reason of public policy, some substantial difference in circumstances, which would naturally suggest the justice or expediency of diverse legislation regarding the objects to be classified.
7. Constitutional Law: Special Legislation. Legislative classifications must be real and not illusive; they cannot be based on distinctions without a substantial difference. The distinctive treatment must bear some reasonable relation to the legitimate objectives and purposes of the legislative act. The question is always whether the things or persons classified by the act form by themselves a proper and legitimate class concerning the purpose of the act.
8. Special Legislation: Words and Phrases. A closed class refers to when a legislative body limits a law to a present condition, with no opportunity for the numbers of the class to increase.
9. Constitutional Law: Legislature. The Legislature has broad discretion to make statutory classifications, but its discretion is not unlimited. The Nebraska Constitution prohibits it from making arbitrary classifications that favor select persons or objects while excluding others that are not substantially different in circumstance in relation to an act‘s purpose.
I. SUMMARY
Before 2012, under
But in 2012, the Legislature amended
The appellant, Billy L. Hobbs, is a retired State Patrol officer who was convicted of one of the specified crimes—first degree sexual assault of a child. J.M., the victim‘s guardian and conservator, obtained a civil judgment against Hobbs and has twice sought an order in aid of execution. In response to J.M.‘s second attempt, after the statute was amended to apply retroactively, Hobbs challenged the constitutionality of the amendment on multiple grounds. The district court determined that the amendment was unconstitutional as special legislation and dismissed J.M.‘s motion.
We agree with the court that L.B. 916 arbitrarily benefits the select crime victims of its specified crimes. Simultaneously, L.B. 916 arbitrarily benefits those public employees and
II. BACKGROUND
In 2006, Hobbs was convicted of first degree sexual assault of a child, C.M., when she was between the ages of 12 and 14. The assaults occurred while Hobbs was married to C.M.‘s mother and living with them. A court sentenced Hobbs to 25 to 30 years’ imprisonment. J.M. then sued Hobbs on C.M.‘s behalf, and a court awarded J.M. a civil judgment of $325,000.
1. J.M.‘s First Appeal to This Court
In J.M.‘s first attempt to obtain an order in aid of execution, he alleged that Hobbs was a judgment debtor and, although incarcerated, was receiving a retirement pension from the State Patrol. Hobbs objected that under
We noted that under
We concluded that
We further agreed with the U.S. Supreme Court that exemptions are justified by broad social policies that take precedence over courts doing equity between particular parties. So a court‘s carving out of particular exceptions when the exemption is especially inequitable is impracticable. We agreed that any such exceptions should be left to the Legislature.
2. Legislature Amends § 81-2032 Retroactively
In 2012, the year after we issued our opinion in J.M.‘s first appeal, the Legislature amended
After this amendment, J.M., on C.M.‘s behalf, filed a new motion for an order in aid of execution. Hobbs challenged the amendment as unconstitutional. As stated, the district court concluded that the statute was unconstitutional as special legislation and dismissed J.M.‘s motion.
3. Scope of L.B. 916
The amendment to
(1) Except as provided in subsection (2) of this section, all annuities or benefits . . . shall not be subject to [any] process of law whatsoever and shall not be assignable except to the extent that [they] are subject to a qualified domestic relations order . . . . The payment of any annuities or benefits subject to such order shall take priority over any payment made pursuant to subsection (2) of this section.
(2) If a member of the retirement system is convicted of or pleads no contest to a felony that is defined as assault, sexual assault, kidnapping, child abuse, false imprisonment, or theft by embezzlement and is found liable for civil damages as a result of such felony, following distribution of the member‘s annuities or benefits from the retirement system, the court may order the payment of the member‘s annuities or benefits . . . for such civil damages, except that [those] reasonably necessary for the support of the member or any of his or her beneficiaries shall be exempt from such payment. . . . The changes made to this section by this legislative bill shall apply to
persons convicted of or who have pled no contest to such a felony and who have been found liable for civil damages as a result of such felony prior to, on, or after April 7, 2012.
(Emphasis supplied.)
The Nebraska Public Employees Retirement Systems, a state agency,7 administers most of the retirement plans affected by L.B. 916. Those five plans are for county employees,8 judges,9 State Patrol officers,10 public school employees,11 and public employees whose retirement benefits are governed by the State Employees Retirement Act.12
Counties and school districts are, of course, political subdivisions.13 In addition to the plans for county and public school employees, L.B. 916 applies to the retirement plans covering employees for three other political subdivisions: employees of a metropolitan utilities district,14 police officers in cities of the first class,15 and firefighters in cities of the first class.16 Finally, L.B. 916 permits a judgment predicated upon one of the specified crimes to attach to the deferred compensation plans for employees and elected officials of municipalities, counties, or other political subdivisions—after the funds are distributed.17
But the State Employees Retirement Act explicitly excludes some state employees from its coverage and implicitly excludes
But even for those retirement plans that L.B. 916 expressly affects, the scope of the attachment remedy is quite limited. A judgment creditor must show that an affected public employee was convicted of an enumerated felony and found liable for damages in a civil action. A judgment creditor‘s recovery against the employee in a civil action is insufficient, standing alone, to warrant attachment of a public employee‘s distributed retirement assets.
The scope of the remedy is also limited by the offender‘s age. That is, a judgment against a young offender will often lapse because of time constraints. L.B. 916 does not require a retirement plan administrator to make a lump-sum distribution to a plan member to compensate a judgment creditor, and a judgment cannot attach to the public employee‘s undistributed retirement assets. Instead, a judgment creditor must wait until the employee‘s assets are distributed in the normal course of
4. Legislative History
A court may review the legislative history of a statute or ordinance when considering a special legislation challenge.25 In concluding that the selection of only six felonies under
(a) Under the Amendment, a Judgment Only Attaches to Distributed Retirement Assets
L.B. 916 was originally introduced as 2012 Neb. Laws, L.B. 973,26 and later incorporated into L.B. 916.27 As introduced, L.B. 973 would have permitted a judgment to attach to an affected employee‘s undistributed retirement assets as soon as a victim obtained a civil judgment, except to the extent that the funds were needed for the reasonable support of the employee or his beneficiaries. So a judgment creditor would not have to wait until the funds were distributed.
But at the Nebraska Retirement Systems Committee hearing for L.B. 916, a representative for the Nebraska Public Employees Retirement Systems stated that permitting
In short, unless the Legislature limited the law to distributed retirement funds, the agency would incur costs for additional computer programming and obtaining actuarial recalculations.29 Moreover, the executive director of the retirement plan for Omaha school teachers explained that its plan would lose its tax-deferred status if it distributed funds to an employee who was still an active member.30 The Legislature specifically amended the bill to make retirement assets in the affected plans subject to attachment only after they are distributed.31
(b) The Legislature Intended the Amendment to Provide Compensation for the Victims of Serious Crimes
Senator Coash‘s statement of intent provides that L.B. 973 was enacted to give courts “an optional means of providing civil restitution to victims of particularly heinous crimes.”32
During the committee hearing, Senator Coash explained the bill‘s purpose as follows:
This is a bill to provide justice by way of restitution to victims of heinous crimes, specifically to victims who have been denied payment from their aggressors because his or her assets are sheltered in their [sic] public employee retirement pensions and/or benefits, even after such pensions or benefits have been distributed from the retirement plan to employees. [A] judge may order payment if . . . [t]he public employee has been convicted of or pleads no contest in criminal court to an egregious felony. And you‘ll note that these crimes listed, such as assault, kidnapping and theft, leave behind a living, aggrieved victim. These exceptions cannot be employed, by example, for those grieving a murder victim. Second criteria, the employee [must be] found liable in a civil court following the conviction. . . . [L]et‘s pretend that [a victim] has survived her attack [and if the defendant] was not convicted in criminal court but was only found liable in civil court, he would not . . . fit in this exemption. . . . We purposely set the bar for this very high. You‘ve got to get through criminal court and been convicted by a jury . . . in these very narrow crimes. . . . I understand that the state continues to have very valid reasons to protect pensions, which I fully support. I want to ensure that this policy change truly protects both the vulnerable victims of serious crime and the innocent family members of those that are convicted, and I have purposely set that threshold high so as to ensure restitution for the most aggrieved victims whose well-being is forever affected
by the crime and who may have the greatest need for that financial restitution.34
When asked why his bill did not include victims of a murder, Senator Coash stated the following:
Well, we discussed that quite a bit but in the case of a murder there is no living victim that needs the funds . . . we wanted to keep this narrow. We wanted to make sure that these funds were accessed for the actual victim, not the victim‘s family. So we made a conscious decision to leave those out.35
J.M., C.M., and J.M.‘s attorney all testified about this specific case in support of the bill. J.M.‘s attorney stated that he had approached Senator Coash about the bill and worked with him in drafting it. He disagreed with our decision in J.M.‘s first appeal and argued that he should be able to attach a judgment to distributed retirement assets. A senator specifically asked whether the attorney could attach Hobbs’ retirement assets if this bill passed. He said yes, because in working with Senator Coash, he “wanted to make sure that this [legislation] applied to this particular judgment.”36 He explained that the attachment remedy “was designed to be narrow. It‘s not my intent to make this any more encompassing than absolutely necessary to get this young woman some compensation out of this fund . . . .”37
III. ASSIGNMENTS OF ERROR
J.M. assigns that the court erred in concluding that
IV. STANDARD OF REVIEW
[1] The constitutionality of a statute presents a question of law, which we independently review.38
[2] We presume that statutes are constitutional and will not strike down a statute unless its unconstitutionality is clearly established.39
Under the special privileges and immunities clause of
[t]he Legislature shall not pass local or special laws in any of the following cases[:]
. . . .
Granting to any corporation, association, or individual any special or exclusive privileges, immunity, or franchise whatever . . . . In all other cases where a general law can be made applicable, no special law shall be enacted.
[3,4] A legislative act constitutes special legislation if (1) it creates an arbitrary and unreasonable method of classification or (2) it creates a permanently closed class.40 A special legislation analysis focuses on a legislative body‘s purpose in creating a challenged class and asks if there is a substantial difference of circumstances to suggest the expediency of diverse legislation.41 The prohibition aims to prevent legislation that arbitrarily benefits a special class.42
[5,6] When the Legislature confers privileges on a class arbitrarily selected from many who are standing in the same relation to the privileges, without reasonable distinction or substantial difference, then the statute in question has resulted in the kind of improper discrimination prohibited by the Nebraska Constitution.43 To be valid, a legislative classification must rest upon some reason of public policy, some substantial difference in circumstances, which would naturally suggest the justice or expediency of diverse legislation regarding the objects to be classified.44
VI. ANALYSIS
[8] Initially, we clarify that Hobbs does not, and could not, claim that L.B. 916 created a closed class. A closed class refers to when a legislative body limits a law to a present condition, with no opportunity for the numbers of the class to increase.48 Although the attachment remedy is limited in scope, the probability that other judgment creditors will come under the act‘s operation is more than theoretical.49 So the only issue here is whether the classes benefited by the remedy were arbitrarily selected.
The district court determined that
We reject this argument and J.M.‘s interpretation of Nebraska Mortgage Finance Fund. There, during a period of high mortgage rates, the Legislature made available tax-free and low-interest revenue bonds to private mortgage lenders to encourage them to make affordable mortgage loans to persons with low and moderate incomes. The Legislature intended for the difference between what the lenders and mortgagors paid in interest to pay for the program. The legislative history showed that high mortgage rates had caused a serious shortage of decent, affordable housing near workers’ jobs and had contributed to blight in cities. The fund for the bonds was overseen by a quasi-corporation operating as a governmental body with appointed officers.
We concluded that the act was a law of general applicability, not a special privilege for a select few, because the mortgage funds were equally available to all persons of low and moderate income across the state. We reasoned that the benefit received by private lending institutions from having the revenue bonds pass through them for low-interest mortgages was incidental to the act‘s public purpose: “The vital point in all such disbursements is whether the purpose is public. If it is, it does not matter whether the agency through which it is dispensed is public or not.”51 We concluded that the entire state benefited from the availability of decent housing. In upholding the act, we stated the following principles:
“‘An act is general, and not special or local, if it operates alike on all persons or localities of a class, or who are brought within the relations and circumstances provided
for, if the classification so adopted by the legislature has a basis in reason, and is not purely arbitrary. . . . “If a law affects equally all persons who come within its operation it cannot be local or special . . . .” . . . “A law is not local or special in a constitutional sense that operates in the same manner upon all persons in like circumstances.” “General laws are those which relate to or bind all within the jurisdiction of the law-making power, and if a law is general and operates uniformly and upon all brought within the relation and circumstance for which it provides it is not a local or special law in the constitutional sense.“‘”52
J.M.‘s argument hinges on a single sentence in this passage: “‘“‘If a law affects equally all persons who come within its operation it cannot be local or special . . . .‘“‘” But the passage also states that a law must operate uniformly for all persons in like circumstances under the act‘s purpose. So, we clearly meant that a court must consider all persons standing in similar circumstances under an act‘s purpose when determining whom the law effects and whether the law operates uniformly.
[9] When read in context, Nebraska Mortgage Finance Fund embodies this general principle: The Legislature has broad discretion to make statutory classifications, but its discretion is not unlimited. The Nebraska Constitution prohibits it from making arbitrary classifications that favor select persons or objects while excluding others that are not substantially different in circumstance in relation to an act‘s purpose. This interpretation is consistent with the principles that we set out above. To accept J.M.‘s argument would render the special legislation provision meaningless.
Next, we turn to J.M.‘s alternative argument. J.M. contends that the defined class of victims rests on a real and substantial difference from other crime victims. He argues that the Legislature correctly recognized that the victims of the six
But Hobbs contends that there is “no substantial difference between the classes of enumerated and unenumerated felonies that would explain why one class‘s pension fund is protected from attachment while the other‘s is not.”53 He argues that the purpose of L.B. 916 is to provide compensation to the victims of serious crimes, yet it excludes the victims of many serious crimes: e.g., murder, arson, robbery, and incest. He contends that through the enumerated felonies, L.B. 916 arbitrarily benefits (1) select victims who can collect a judgment from a public employee‘s retirement assets and (2) those pensioners who are convicted of other serious crimes yet are protected from attachment. We agree.
It is clear that the Legislature‘s desire both to provide relief for victims like C.M. and to protect the retirement assets of public employees in most circumstances explains its favored treatment of select victims—and its consequential favored treatment of public employees who have committed other serious crimes. By limiting the crime victims who can use this remedy to a small group in order to protect most public employees’ retirement funds, the Legislature has necessarily singled out a select group of offenders whose retirement benefits can be subject to attachment. But despite the Legislature‘s good intentions, the Constitution requires uniformity of laws:
“Uniformity [of laws] is required in order to prevent granting to any person, or class of persons, the privileges or immunities which do not belong to all persons. . . . It is because the legislative process lacks the safeguards of due process and the tradition of impartiality which restrain the courts from using their powers to dispense special favors
that such constitutional prohibitions against special legislation were enacted.”54
L.B. 916 cannot evade the special legislation prohibition. The most heinous crime under Nebraska law is capital murder. The victim‘s survivors frequently suffer real economic consequences and psychological trauma. But the act closes the door to relief for these victims. Moreover, even assuming that distinguishing between living crime victims and a murder victim‘s family members represents a rational distinction under the bill‘s purpose of providing compensation to the victims of serious crimes, the court correctly determined that the select class of living victims is arbitrary.
For example, if Hobbs had been C.M.‘s father (instead of stepfather), convicted of incest, and found liable for damages in a civil action, C.M.‘s trauma from the crime would be the same, if not greater. But she could not collect a judgment from Hobbs’ distributed retirement assets. Similarly, we can discern no reason to favor the victims of embezzlement, a property crime, but to exclude the victims of arson. No difference in the crimes’ traumatic effects justifies the diverse treatment of these victims.
Nor can we be blind to the Legislature‘s obvious exclusion of many retirement plans for public employees—over which it has authority—from the effects of L.B. 916. This exclusion further illustrates the arbitrariness of the selected victims who can benefit from the attachment remedy and the selected public employees whose retirement benefits are subject to attachment.
Finally, whether victims of the same crime can attach civil judgments to a public employee‘s distributed retirement assets will often depend on prosecutorial discretion. For example, if a victim is shot by a public employee but survives, the State might charge an assault or an attempted murder. If the State successfully prosecutes an assault, the victim can seek redress under L.B. 916 because it is an enumerated crime. But if the
In sum, the exclusive list of felonies in
VII. CROSS-APPEAL
On cross-appeal, Hobbs contends that the court erred in (1) ruling that
VIII. CONCLUSION
The court correctly determined that the amendment to
Affirmed.
Wright and Cassel, JJ., not participating.