American Express Bank v. Randall

2015 UT App 305

THE UTAH COURT OF APPEALS

AMERICAN EXPRESS BANK,
Appellant,
v.
PATRICIA RANDALL,
Appellee.

DEPARTMENT OF WORKFORCE SERVICES,
Non-party State Agency.

Opinion
No. 20140362-CA
Filed December 24, 2015

Second District Court, Farmington Department
The Honorable David M. Connors
No. 129704389

Gregory M. Constantino, Attorney for Appellant1

SENIOR JUDGE RUSSELL W. BENCH authored this Opinion, in which
JUDGES GREGORY K. ORME and MICHELE M. CHRISTIANSEN
concurred.2

BENCH, Senior Judge:

¶1 American Express Bank (Amex) appeals the district
court’s decision denying Amex access to certain employment

1. The Appellee and the Department of Workforce Services did
not file briefs in this matter and did not otherwise participate on
appeal.

2. The Honorable Russell W. Bench, Senior Judge, sat by special
assignment as authorized by law. See generally Utah R. Jud.
Admin. 11-201(6).
American Express Bank v. Randall

records held by the Department of Workforce Services (the
Department). We reverse and remand.

BACKGROUND

¶2 Amex obtained a default judgment against Patricia
Randall in the amount of $33,307.44, plus post-judgment interest.
The awarded amount represents the past-due balance on
Randall’s account with Amex, accrued interest, and court costs.
In its efforts to collect on the judgment through garnishment
proceedings, Amex sought access to Randall’s employment
records from the Department pursuant to Utah Code section
35A-4-314. Randall did not oppose Amex’s motion, but the
Department did. The Department’s opposition was based
entirely on its assertion that ‚federal regulations require *it+ to
‘diligently pursue’ a motion to oppose every compulsory process
for employment records.‛ (Quoting 20 C.F.R. § 603.7.) After
holding a hearing on the matter, the district court denied Amex’s
motion on the basis that section 35A-4-314 requires compliance
with the Utah Rules of Civil Procedure and that Amex failed to
satisfy ‚its burden under the applicable Rules of Civil
Procedure‛ by demonstrating the efforts ‚it had made to obtain
the requested information directly from [Randall] or from other
available source[s], rather than in the first instance from the
[Department].‛ Amex appeals.

ISSUE AND STANDARD OF REVIEW

¶3 Amex argues that the district court misinterpreted Utah
Code section 35A-4-314. ‚A matter of statutory interpretation [is]
a question of law that we review on appeal for correctness.‛
MacFarlane v. Utah State Tax Comm'n, 2006 UT 25, ¶ 9, 134 P.3d
1116 (alteration in original) (citation and internal quotation
marks omitted).

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American Express Bank v. Randall

ANALYSIS

¶4 Amex argues that the district court is limited to denying
its motion on the grounds raised by the Department—that
federal regulations required it to oppose Amex’s request and
that the ‚good cause‛ standard from the Government Records
Access and Management Act (GRAMA) applies here—and that
the Department’s arguments are without merit. Further, Amex
argues that the district court misinterpreted section 35A-4-314 by
reading into the statute the proportionality and relevance
requirements of rule 26 of the Utah Rules of Civil Procedure and
by sua sponte relying on rule 26 to deny its request. We address
each argument in turn.

I. The Federal Regulation

¶5 Utah Code section 35A-4-314 creates a procedure by
which creditors can obtain certain information from the
Department after obtaining a judgment against a debtor. See
Utah Code Ann. § 35A-4-314(1) (LexisNexis Supp. 2014). The
statute states, in relevant part,

A court shall grant an order to disclose the [name
and address of the last known employer of the
debtor] if, under the applicable Utah Rules of Civil
Procedure:

(i) the judgment creditor files a motion with the
court, which includes a copy of the judgment, and
serves a copy of the motion to the judgment debtor
and the division;

(ii) the judgment debtor and the division have the
opportunity to respond to the motion; and

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American Express Bank v. Randall

(iii) the court denies or overrules any objection to
disclosure in the judgment debtor’s and the
division’s response.

Id. § 35A-4-314(2)(a).

¶6 There is no dispute that Amex complied with parts
(2)(a)(i) and (2)(a)(ii) of the statute. Thus, the only question
before the district court was whether to overrule the
Department’s objection. See id. § 35A-4-314(2)(a)(iii). The
Department’s objection was based solely on its understanding
that under 20 C.F.R. section 603.7(a), it was required to
‚diligently pursue‛ an objection. The Department offered no
substantive objection to Amex’s motion in its written opposition,
even though section 35A-4-314 specifies grounds on which the
agency may successfully defeat a motion like Amex’s—i.e., if the
agency establishes ‚that disclosure will have a negative effect on:
(i) the willingness of employers to report wage and employment
information; or (ii) the willingness of individuals to file claims
for unemployment benefits.‛ See id. § 35A-4-314(2)(b).

¶7 The federal regulation underlying the Department’s
objection does require an agency to object to requests like
Amex’s. It states, in relevant part,

[W]hen a subpoena or other compulsory process is
served upon a State [unemployment
compensation] agency . . . which requires the
production of confidential . . . information . . . ,
[the] agency . . . must file and diligently pursue a
motion to quash the subpoena or other compulsory
process if other means of avoiding the disclosure of
confidential . . . information are not successful or if
the court has not already ruled on the disclosure.
Only if such motion is denied by the court or other
forum may the requested confidential . . .
information be disclosed . . . .

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American Express Bank v. Randall

20 C.F.R. § 603.7(a) (2015) (emphasis added). The federal
regulation also provides that ‚disclosure is permissible, where
. . . a subpoena or other compulsory legal process has been
served and a court has previously issued a binding precedential
decision that requires disclosures of this type, or a well-
established pattern of prior court decisions have required
disclosures of this type.‛ Id. § 603.7(b)(1); see also id. § 603.5(h)
(providing that disclosure of confidential employment
information ‚is permissible‛ ‚in response to a court order‛).

¶8 By way of this language, the federal regulation
‚anticipate[s] discovery‛ of this type of protected information,
‚specifically providing that when the information is sought with
a court-ordered subpoena in accordance with [a+ state’s law, the
subpoena must be granted.‛ See Kelley v. Billings Clinic, No. CV
12-74-BLG-SEH-CSO, 2013 WL 2422705, at *2 (D. Mont. June 3,
2013). By enacting section 35A-4-314, the Utah Legislature
contemplated ‚that there would be persons to whom disclosure
[of confidential employment information] would be
appropriate.‛ See id. at *4. Indeed, our legislature stated its intent
in the enacted bill: ‚This bill allows certain employment records
to be disclosed by the Unemployment Insurance Division to a
creditor, if the creditor obtains a court order . . . .‛ Act of May 14,
2013, ch. 473, 2013 Utah Laws 2749, 2749 (S.B. 281).

¶9 Additionally, ‚*b+y filing no reply brief, the Department
has not attempted to refute the arguments presented‛ on appeal
by Amex. See Kelley, 2013 WL 2422705, at *4. The Department has
offered no reason why disclosure of the requested information
would ‚have a negative effect on . . . the willingness of
employers to report wage and employment information . . . [or]
the willingness of individuals to file claims for unemployment
benefits.‛ See Utah Code Ann. § 35A-4-314(2)(b). Moreover,
despite the fact that the confidentiality of this information is
meant to protect Randall, she did not oppose Amex’s motion. See
id. Thus, 20 C.F.R. section 603.7 does not, in and of itself, provide

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American Express Bank v. Randall

a sufficient basis for the district court to deny Amex’s otherwise
proper motion under Utah Code section 35A-4-314.

II. GRAMA

¶10 During the hearing before the district court, the
Department argued that section 35A-4-314 should be construed
to include a ‚good cause‛ standard, akin to the standard applied
under GRAMA, which balances the need for confidentiality
against the needs of the public to access information. See
generally Utah Code Ann. § 63G-2-301 (LexisNexis 2014). ‚In
undertaking statutory construction, [w]e look first to the plain
language of a statute to determine its meaning. Only when there
is ambiguity do we look further. Moreover, [w]hen examining
the plain language, we must assume that each term included in
the *statute+ was used advisedly.‛ MacFarlane v. Utah State Tax
Comm'n, 2006 UT 25, ¶ 12, 134 P.3d 1116 (alterations in original)
(citations and internal quotation marks omitted).

¶11 We readily reject the Department’s GRAMA argument in
light of the specific language in section 35A-4-314 that the
‚requirements of *GRAMA] Subsection 63G-2-202(7) and Section
63G-2-207 do not apply to information sought through a court
order as described in this section.‛ See Utah Code Ann. § 35A-4-
314(2)(c) (LexisNexis Supp. 2014); see also id. § 63G-2-202(7)
(2014) (describing when ‚[a] governmental entity shall disclose a
record pursuant to the terms of a court order‛); id. § 63G-2-207(1)
(‚Subpoenas and other methods of discovery under the state or
federal statutes or rules of civil, criminal, administrative, or
legislative procedure are not written requests under
[GRAMA].‛). This language clearly indicates the legislature’s
intent that GRAMA not apply in this context. Accordingly, the
‚good cause‛ standard from GRAMA does not apply to Amex’s
request under section 35A-4-314.

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III. Rule 26

¶12 Last, Amex challenges the district court’s reliance on rule
26 of the Utah Rules of Civil Procedure as a basis to deny its
request. The district court relied on language in section 35A-4-
314(2)(a) that references our rules of civil procedure. As stated
above, the relevant portion of the statute provides,

A court shall grant an order to disclose the
information described in Subsection (1) if, under the
applicable Utah Rules of Civil Procedure:

(i) the judgment creditor files a motion with the
court, which includes a copy of the judgment, and
serves a copy of the motion to the judgment debtor
and the division;

(ii) the judgment debtor and the division have the
opportunity to respond to the motion; and

(iii) the court denies or overrules any objection to
disclosure in the judgment debtor’s and the
division’s response.

Id. § 35A-4-314(2)(a) (Supp. 2014) (emphasis added). The district
court relied on the emphasized text when it likened Amex’s
motion to a ‚disputed discovery request‛ and attributed to
Amex the ‚burden of showing proportionality and relevance‛
under rule 26.3 See generally Utah R. Civ. P. 26(b)(3) (‚The party
seeking discovery always has the burden of showing
proportionality and relevance.‛). Amex argues ‚that the Rules of

3. Because we conclude that rule 26 has no bearing in this
context, we do not address the propriety of the district court
raising the rule sua sponte.

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Civil Procedure which are ‘applicable’ are those Rules necessary
to effectuate post judgment motions.‛

¶13 The plain language of the statute requires the judgment
creditor to, inter alia, file a motion with the court, serve the
debtor, and await the debtor’s and agency’s response in
accordance with the rules of procedure ‚applicable‛ to this type
of motion practice. See Utah Code Ann. § 35A-4-314(2)(a); see also
MacFarlane, 2006 UT 25, ¶ 12 (instructing that we first consider
the plain language of a statute to determine its meaning). The
statute does not implicate all of the Utah Rules of Civil
Procedure. The pretrial discovery rules, including the specific
proportionality and relevance requirements relied on by the
district court, are not applicable under section 35A-4-314(2)(a).
Furthermore, the statute imposes various data safeguards and
security measures on a judgment creditor’s access to and use of
confidential information, obviating the need to also impose rule
26’s proportionality and relevance requirements in this context.
See Utah Code Ann. § 35A-4-314(3)–(7). Accordingly, the district
court erred in relying on rule 26 to deny Amex’s motion.

CONCLUSION

¶14 The district court erred in applying rule 26 to Amex’s
motion and in denying the motion on that basis. The Department
did not offer a substantive objection under section 35A-4-314 on
the basis of which the district court may have legitimately
denied Amex’s motion, and there is no dispute that Amex’s
motion otherwise complied with section 35A-4-314. Accordingly,
we reverse the district court’s ruling and remand for further
proceedings in accordance with this opinion.

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