444 F.2d 1300 (5th Cir. 1971), 30295, Henry v. First Nat. Bank of Clarksdale

Docket Nº:30295.
Citation:444 F.2d 1300
Party Name:Aaron HENRY et al., Plaintiffs-Appellees, v. FIRST NATIONAL BANK OF CLARKSDALE et al., Defendants, Claiborne HardwareCompany et al., Defendants-Appellants.
Case Date:June 23, 1971
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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Page 1300

444 F.2d 1300 (5th Cir. 1971)

Aaron HENRY et al., Plaintiffs-Appellees,

v.

FIRST NATIONAL BANK OF CLARKSDALE et al., Defendants, Claiborne HardwareCompany et al., Defendants-Appellants.

No. 30295.

United States Court of Appeals, Fifth Circuit.

June 23, 1971

Page 1301

Dixon L. Pyles, W. E. Gore, Jr., Satterfield, Shell, Williams & Buford, Dan H. Shell, Pyles & Tucker, Jackson, Miss., for appellants.

Frank R. Parker, Lawrence D. Ross, George Taylor, Jackson, Miss., for Henry.

Jack H. Young, Fred L. Banks, Jr., Reuben V. Anderson, Armand Derfner, James Lewis, Jackson, Miss., for other appellees.

Before RIVES, THORNBERRY and CLARK, Circuit Judges.

THORNBERRY, Circuit Judge:

In this interlocutory appeal, filed pursuant to 28 U.S.C.A. 1292(a), 1 the defendants-appellants, who are also complainants in a pending state civil action instituted by them in Mississippi Chancery Court, contest the propriety and validity of an order of the United States District Court of the Northern District of Mississippi entered on June 9, 1970, 50 F.R.D. 251, in which that court preliminarily enjoined the appellants (hereinafter referred to as 'state court complainants') from further prosecuting the aforementioned state civil action then pending in the Chancery Court of the First Judicial District of Hinds Courty, Mississippi. A clear picture of what has transpired so far in the court below, and of what is and is not raised in this interlocutory appeal, is essential to an understanding of our disposition of this case.

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I. Facts and Procedural History

A. Background

This controversy began in 1966 when a group of Negro citizens in Port Gibson, Mississippi, began a movement designed to protest what they considered to be racial discrimination practiced by the white merchants and local officials of Port Gibson. The group sought to achieve fair employment practices, fair treatment of Negro customers, and to otherwise eliminate discrimination through the use of economic pressure in the nature of a boycott of the merchants in Port Gibson. The boycott was effectuated by picketing to publicize the action, and by other non-picketing activities such as leafleting and public meetings through which citizens of Port Gibson were encouraged to join the boycott. After this boycott had been in effect for several years, twenty-three white merchants of Port Gibson, who were subject to the boycott, joined in a suit filed on or about November 4, 1969, in State Chancery Court in Hinds County, Mississippi, against (1) the National Association for the Advancement of Colored People, a nonresident (New York) corporation; (2) the Mississippi Action for Progress, Inc. (MAP), a federally-funded nonprofit resident corporation, and (3) approximately 150 named individuals, adult residents of Mississippi alleged to be working 'in concert with and under the direction of * * * NAACP and MAP.' (These three groups of defendants will be referred to hereinafter as the 'state court defendants'.) In addition, the state court complainants joined as defendants approximately fifty banks in the State of Mississippi alleged to have in their possession funds, property and effects of the nonresident defendant NAACP. The state court complainants alleged that the state court defendants had entered into a conspiracy in restraint of trade and had engaged in secondary boycotts and other malicious and wrongful interference with the state court complainants' businesses, all in violation of the Mississippi Anti-Trust Laws. Miss. Code Ann. 1088, 1089 (1942). 2 Among the allegations of

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the state court complaint are charges that the state court defendants abused the customers of the state court complainants by threatening them with physical violence, addressing them with obscene and insulting language, destroying their property, and beating and assaulting them. For relief, the state court complainants sought (A) to have 'the funds, property and effects of the nonresident defendant NAACP, its branches or auxiliary offices in the State of Mississippi, in the hands of and under the control of the resident (defendant Banks) * * * attached' (presumably as a source of damages) and held to await the decrees and orders of the court; (b) to have all the defendants (except the Banks) enjoined from '(1) Picketing in or about the business premises of the complainant, (2) stationing guards at or near the vicinity of the said premises or the complainants; (3) soliciting, advising, threatening, coercing and constraining any person from trading with complainants; (4) interfering with the businesses of the complainants; (5) boycotting the businesses of the complainants; (6) asking or demanding that others cease doing business with the complainants; and (7) committing acts in restraint of trade and/or in violation of the laws of the State of Mississippi thereto appertaining;' and (C) to recover damages in excess of 3.5 million dollars, for which the state court defendants would be held jointly and severally liable.

Shortly after the filing of this State Chancery suit, and without notice or hearing, the Clerk of the Chancery Court for the First Judicial District Court of Hinds County commenced to serve writs of attachment against what was purported to be the funds of the NAACP on deposit in various Banks around Mississippi, ordering the Banks to hold the funds of the NAACP until further notice. The Clerk's action was taken pursuant

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to Miss. Code Ann. 2730 (1942), 3 which authorizes attachment of the property of non-residents without notice or hearing. It turned out, however, that the Banks upon which the writs of attachment were served had frozen not the assets of the non-resident NAACP, which was a named defendant in the state civil action, but rather the assets of the Mississippi State Conference of the NAACP, and of all local NAACP branches in the State of Mississippi, all of which organizations claim not to have been named as defendants in the state civil action, and claim further to be residents of the State of Mississippi and therefore not subject to its non-resident attachment statutes.

B. Proceedings Below: Stage I

Believing that their constitutional rights to due process of law had been infringed by these attachments, the Mississippi State Conference and the Coahoma Branch of the NAACP, acting individually and on behalf of all other local branches similarly situated, filed a section 1983 action in federal court against the Banks which had frozen their funds pursuant to the writs of attachment. The original complaint in this suit was filed on November 7, 1969, by Aaron Henry, President of both the Mississippi State Conference and the Coahoma Branch. (The parties to the original complaint will be referred to hereinafter as the 'original plaintiffs.') The original plaintiffs alleged that although they are authorized by the NAACP, a New York Corporation, to use the words 'National Association for the Advancement of Colored People' as part of the title of their respective associations, and have agreed to abide by the constitution of the New York NAACP, They are completely autonomous and independent of the New York NAACP. They alleged further that they were not defendants to the state civil action and had received no notice of the suit, and that they are residents of the State of Mississippi and therefore not subject to its non-resident attachment procedures. Charging that they had been and were being irreparably injured in that all their operational funds, which were used to carry out constitutionally protected activities such as a voter registration drive, had been frozen without notice and hearing, and without even being named in the state civil action, they sought 'to enjoin (the) attachment of property belonging to them made without compliance with fundamental constitutional guarantees.' The original plaintiffs thus moved for a temporary restraining order and a preliminary injunction. The court below held a hearing on the original plaintiffs' motion for a temporary restraining order on November 17, 1969, at which one of the defendant Banks appeared and moved to have the state court complainants made parties to the proceeding on grounds that the state court complainants claimed an interest in the contested funds. The court below granted the Banks' motion, as well as the original plaintiffs' motion for a temporary restraining order. The court then set December 1, 1969 for a hearing on the original plaintiffs' motion for a preliminary injunction. At this hearing, the state court complainants appeared and contested

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the motion. At the conclusion of this hearing, and on the strength of the evidence taken, along with the various pleadings of the parties, the court granted the original plaintiffs' motion for preliminary relief on December 15, 1969, ordering the defendant Banks 'to release all funds (of the original plaintiffs) held by them pursuant to the writs of attachment * * * upon posting by plaintiffs * * * of a bond in the amount of 110% Of (the) funds,' and further preliminarily enjoining the state court complainants 'from subjecting or causing to be subjected in anyway funds of (the original plaintiffs) deposited in the defendant Banks to attachment or other process causing (the original plaintiffs) to be deprived of the use of their funds.'

No appeal was taken by either the Banks or the state court complainants from the interlocutory injunction of December 15, 1969. 4 And although it may be within the scope of our reviewing powers on this appeal to consider the validity of this December 15 interlocutory injunction against the attachments, we decline to do so for several reasons. 5 First, the Banks, against whom a major command of the December 15 order runs, are not parties to the present...

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