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Fifth Circuit Upholds Summary Dismissal of Texas Prisoner’s Challenge to Deduction of Medical Co-Pay From Account Receiving VA Payments

On July 9, 2020, the Fifth Circuit court of appeals upheld the summary dismissal of a Texas Department of Criminal Justice (TDCJ) prisoner’s challenge to the department’s deduction of a $100 annual medical co-pay from his prisoner trust fund account to which his Veterans Administration (VA) benefit payments are deposited.

In doing so, the court held that that the VA payments were comingled with deposits from private individuals and from the prisoner’s account at Altra Federal Credit Union such that it was impossible to determine whether VA benefits were being “garnished” for the medical co-pay.

TDCJ prisoner Roger Hawes filed a lawsuit under 42 U.S.C. § 1983 seeking to enforce 38 U.S.C. § 530l(a)(l), which exempts veterans’ benefits payments “from the claim of creditors” and prohibits “attachment, levy, or seizure by or under any legal or equitable process whatsoever.” 31 C.F.R. § 212 was enacted in 2011 to “implement statutory provisions that protect Federal benefits from garnishment.”

In December 2015, a $100 medical co-pay was deducted from Hawes’ trust fund account. TDCJ refused to refund the money. Hawes filed suit.

Hawes alleged that the “garnished” money came from his VA benefits. The district court held that Hawes could seek to enforce § 530l(a)(l) and § 212 as a private individual, but they applied only to financial institutions and TDCJ was not a financial institution. Therefore court granted defendants summary judgment. Hawes appealed.

On appeal, the Fifth Circuit did not endorse the district court’s reasoning. Instead, it noted that, in addition to his VA benefits, Hawes had received substantial deposits from a private individual and from his Altra account such that it was impossible to determine whether the $100 used for the co-pay came from his VA benefits. Therefore, Hawes could not make a claim under §5301(a) and the summary judgment was affirmed. See: Hawes v. Stephens, 5th Cir., No. 19-40341

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Related legal case

Hawes v. Stephens