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Ninth Circuit: Incarceration Costs Subject to Bankruptcy Discharge

by Mark Wilson

"Seeking to obtain…revenue by unremittingly pursuing legal actions against disadvantaged individuals--the counterproductive practice at issue here--can have damaging effects on the community," the United States Court of Appeals for the Ninth Circuit recently declared. "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.'" The Court ultimately held that a mother's debt for her son's incarceration costs was discharged through bankruptcy.

California parents of juvenile detainees are liable for reasonable support costs while the minor is detained. A county may seek reimbursement "for food and food preparation, clothing, personal supplies and medical expenses." The law caps daily incarceration costs at $30 and limits the bill to the parent's "ability to pay" at the time the debt is imposed. See: Cal. Welf. & Inst. Code § 903(a). A previous version of the law permitted counties to bill parents for the full cost of their child's detention, but the California Supreme Court found that statute unconstitutional, "explaining that it is unacceptable to bill parents for the costs of protecting society against the misdeeds of their children." See In re Jerald C., 36 Ca1.3d 1, 10-11 (Cal 1984). The Court subsequently upheld the current version of § 903, noting that it properly limits the debt to "the reasonable costs expended for the support and maintenance of the minor." Co. of San Mateo v. Dell J., 46 Ca1.3d 1236, 1250 (1988).

Maria Rivera's minor son was detained in an Orange County juvenile detention center for over a year, from 2008 to 2010. Upon her son's release, the County Probation Department charged Rivera $23.90 for each day he was detained and $2,199 in legal expenses, for a total of $16,372.

Rivera sold her home in an attempt to pay the bill. On May 10, 2010, she paid $9,508. Yet, that was not enough to pay the debt in full and the county continued sending her regular bills.

The County eventually served Rivera with an order to appear before the juvenile court. When she failed to do so, a default judgment was entered against her, declaring that she still owed the County $9,905.

"The county's accounting in this case is highly questionable," the Ninth Circuit observed. "Rivera's son's expenses totaled $16,372. After Rivera's payment on May 10, 2010, this would leave at most $6,864. In addition, the child's father negotiated with the County to pay $3,336. If the father paid the full amount he promised, only $3,528 would appear to remain." Counsel for the County could not explain the discrepancy.

In September 2011, Rivera filed chapter 7 bankruptcy proceedings. In her bankruptcy petition, she listed the unpaid obligation to the county as a priority unsecured debt. The county did not object to Rivera's characterization of the debt.

In January 2012, the bankruptcy court granted Rivera full discharge of her debts. Nevertheless, Orange County persisted in attempting to collect the debt, asserting that it was a "domestic support obligation" (DSO) like alimony or child support, which is not dischargeable in a bankruptcy proceeding under 11 U.S.C. § 523(a)(5).

Rivera reopened the bankruptcy case and asked the court to sanction the county for attempting to collect a discharged debt. The court declined, finding that Congress expanded the category of DSOs in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) to include Rivera's debt. The judge agreed with the county that her debt was in the nature of support because the county sought to recover only the costs of her son's food, clothing, and medicine, rather than his full incarceration costs.

The Ninth Circuit reversed, finding that the "BAPCPA changed only the parties who could qualify as creditors to whom a DSO was owed, not the definition or nature of family support itself."

"Rivera's debt…arises from her son's involuntary detention for law enforcement purposes by a 'public safety agency,' and the provision of food and clothing is only incidental to such incarceration," the Court found. "Rivera's son was taken into custody not in order to provide a place where he could secure a wholesome upbringing but because of his criminal misbehavior, he was placed and remained in a detention facility because of the state's interest in enforcing the law, not because of its interest in giving him a nourishing home, affording him sustenance, ensuring his safety, or providing him with an improved domestic environment."

The Court was highly critical of the county's unceasing efforts secure payment from Rivera. "Burdening a minor's mother with debts to be paid following his detention--debts that she cannot escape even in bankruptcy--hardly serves the future welfare of the child and hardly enhances the Probation Department's attempt to transform him into a productive member of society," the Court declared. "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."

See: Rivera v. Orange County Probation Department, F.3d (9th Cir. 2016).

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Related legal case

Rivera v. Orange County Probation Department