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Nakauchi v. Cowart.

2022 COA 77. No. 21CA0318. Due Process—Child Support—Income Withholding Orders.

July 14, 2022

Nakauchi was required to pay monthly child support directly to J.H. pursuant to a child support order. J.H. inaccurately reported to Jefferson County Child Support Services (County) that Nakauchi had not made her monthly payment. Subsequently, without notice to Nakaushi, the County issued an income withholding order (IWO) to Nakauchi’s employer directing the employer to withhold her child support obligation from her wages and remit the funds to the Family Support Registry (FSR) to be paid to J.H. Nakauchi became aware of the IWO when her employer apprised her of it a week later. The employer withheld money from Nakauchi’s wages per the County’s directive. Nakauchi contacted the County and provided documents proving that she had not missed a payment and made a payment to the FSR for 12 months’ worth of child support. The County rescinded the IWO shortly thereafter.

Nakauchi then sued, in their official capacities, two county employees and two state employees who were involved in administering child support services, alleging that (1) they violated her due process rights under 42 USC § 1983 by failing to give her advance notice of the IWO and an opportunity to be heard, and (2) CRS § 14-14-111.5 is unconstitutional on its face because it does not require notice before an income assignment is issued. She sought declaratory and injunctive relief but not damages. Ultimately, the court ruled that (1) the County deprived Nakaushi of due process, but the claim was not actionable under § 1983, and (2) CRS § 14-14-111.5 is constitutional. The court issued a statewide injunction requiring that in a direct pay cases, child support enforcement agencies must provide notice to the obligor when they activate a forward-looking IWO. Following the trial court’s judgment, the State issued a memo notifying all local child support offices to begin providing noncustodial parents in direct pay cases with concurrent notice when issuing a forward-looking IWO. The County began affording direct pay obligors the 14-day notice that Nakauchi sought in her complaint for forward-looking IWOs. Defendants then filed a joint motion for summary judgment, arguing that Nakauchi’s claims had become moot while the litigation was pending. The court denied the motion.

On appeal, defendants argued that the trial court erred in its mootness analysis and the case remains moot on appeal. A case is moot when a judgment would have no practical legal effect on the existing controversy. But a defendant’s voluntary cessation of a challenged practice does not deprive a court of its power to determine the legality of the practice. Here, although the County effectively granted Nakauchi the relief she sought, it did so voluntarily, so the circumstances of this case fit squarely into the voluntary cessation exception to the mootness doctrine. Further, defendants admitted in their opening answer brief that, after the trial court’s judgment, the County reneged on its policy change and has since dispensed with the advance notice and implemented a policy of providing only concurrent notice for direct pay obligors in forward-looking IWO cases. Thus, the trial court correctly concluded that Nakauchi’s claims were not moot at the time of trial, and the case is not moot on appeal.

On the merits, the deprivation of Nakauchi’s wages implicated her due process rights, and defendants’ no notice policy did not comport with due process. Further, forward-looking IWOs must be preceded by notice and an opportunity to contest the IWO on a limited basis (e.g., that there is an error in the obligor’s identity or in the amount of support due). Accordingly, the court’s order of injunctive relief, which required only concurrent notice, did not sufficiently remedy the IWO’s procedural infirmities.

Nakauchi contended that the trial court erred by finding that the County defendants cannot be held liable for the due process violation under § 1983. However, the record supports the trial court’s findings that the County defendants were merely carrying out state policy not to provide notice to direct pay obligors.

The rulings that Nakauchi’s due process rights were violated and that the County defendants cannot be held liable under § 1983 were affirmed. The portion of the judgment determining that due process requires affording direct pay obligors only concurrent notice was reversed. The case was remanded for the court to modify its injunction to mandate advanced notice and an opportunity to challenge the IWO.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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