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Neukirchen v. Wood County Head Start

April 27, 1995

CATHERINE NEUKIRCHEN, PLAINTIFF-APPELLEE,

v.

WOOD COUNTY HEAD START, INCORPORATED, DEFENDANT-APPELLANT



Appeal from the United States District Court for the Western District of Wisconsin. No. 92 C 534--John C. Shabaz, Judge.

Before CUDAHY, ESCHBACH, and MANION, Circuit Judges.

MANION, Circuit Judge

ARGUED DECEMBER 1, 1994

DECIDED APRIL 27, 1995

Catherine Neukirchen obtained a judgment exceeding $86,000 against Wood County Head Start on a claim for age discrimination. Wood County Head Start refused to pay the judgment, however, so Neukirchen moved for a writ of execution against Wood County Head Start's property. The district court partially granted this motion, issuing a writ allowing execution against Wood County property costing less than $1000, along with property purchased with non-federal funds. Wood County Head Start appeals. We affirm in part and reverse in part, and remand for further proceedings.

I. Statement of the Case

Catherine Neukirchen, when she was fifty-two years old, applied to Wood County Head Start ("Wood County") for a position as a Central Manager or a Teacher Aide. Wood County refused to hire her based on her age and instead hired six younger applicants. Neukirchen sued Wood County for age discrimination pursuant to the Age Discrimination in Employment Act, 29 U.S.C. sec. 621 ("ADEA"). Following a trial, the jury returned a special verdict finding that Wood County had willfully discriminated against Neukirchen on the basis of her age by failing to hire her for either position and awarded her back and front pay. The court entered judgment in favor of Neukirchen in the amount of $87,275.02.

Neukirchen then attempted to collect this judgment from Wood County. Wood County was apparently willing to compensate Neukirchen for its discrimination--at least at first. This is evidenced by correspondence between Wood County and the Department of Health and Human Services ("HHS")--the agency charged by Congress to implement Head Start--indicating that Wood County planned to use $70,000 of surplus funds to pay Neukirchen's age discrimination judgment. *fn1 HHS, however, directed Wood County not to use the funds to pay Neukirchen, and Wood County dutifully obeyed HHS' directive.

After Neukirchen's efforts to collect from Wood County proved futile, she moved for a writ of execution against Wood County's property. Wood County moved to quash the writ of execution. The district court granted the Motion to Quash, subject to discovery and briefing. After discovery and briefing, the district court held a hearing on Wood County's motion, after which it issued a writ of execution against all Wood County property with a unit acquisition cost of less than $1000, along with property purchased with non-federal funds. Wood County and the Secretary of Health and Human Services ("Secretary"), as amicus curiae, appeal.

II. Analysis

On appeal, Wood County asserts that all property purchased with federal grant funds, including property costing less than $1000, constitutes federal property and as such is not subject to execution. Wood County also argues that property purchased with state funds is not subject to execution. We consider each issue in turn.

A. Execution Against Property Costing Less Than $1000

The writ of execution issued by the district court allowed execution against Wood County property costing less than $1000, including property purchased with federal funds. Wood County and the Secretary argue that property purchased in whole or part with federal funds cannot be attached, no matter what the cost of the property. *fn2

It is clear in this circuit that property purchased with federal grant funds constitutes federal property. In re Joliet-Will County Community Action Agency, 847 F.2d 430 (7th Cir. 1988) (holding that property purchased with federal grant funds did not belong to Joliet-Will but rather belonged to the federal government). It is also axiomatic that the doctrine of sovereign immunity prevents a judgment creditor from attaching federal property, absent consent by the United States. Buchanan v. Alexander, 45 U.S. (4 How.) 20 (1846) (holding that creditors of crew members of the frigate Constitution could not garnish their debtors' wages because "so long as the money remained in the hands of a disbursing officer, it is as much the money of the United States as if it had not been drawn from the treasury"); F.H.A. v. Burr, 309 U.S. 242, 244 (1940) (absent waiver of sovereign immunity, ...


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