Henry v. First Nat. Bank of Clarksdale

• Decision Date: 21 May 1979
• Docket Number: No. 76-4200,76-4200
• Citation: 595 F.2d 291
• Parties: Aaron HENRY et al., Plaintiffs-Appellees, v. FIRST NATIONAL BANK OF CLARKSDALE et al., Defendants-Appellants, v. MISSISSIPPI ACTION FOR PROGRESS, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 291

595 F.2d 291

Aaron HENRY et al., Plaintiffs-Appellees, v. FIRST NATIONAL BANK OF CLARKSDALE et al., Defendants-Appellants, v. MISSISSIPPI ACTION FOR PROGRESS, INC., Defendant-Appellee.

No. 76-4200.

United States Court of Appeals Fifth Circuit.

May 21, 1979.

Dixon L. Pyles, W. E. Gore, Jr., Crane D. Kipp, Jackson, Miss., for Claiborne Hardware, et al.

Frank Parker, Alix Sanders, Lawyer's Comm. for Civ. Rights Under Law, Jackson Miss., Robert E. Kopp, Neil H. Koslowe, Attys., Dept. of Justice, Washington, D. C., Nathaniel R. Jones, Charles E. Carter, New York City, Robert A. Murphy, William Caldwell, Lawyer's Comm. for Civ. Rights Under the Law, Washington, D. C., Dennis J. Dimsey, App. Section, Civ. Rights Div., Dept. of Justice, Washington, D. C., Allen R. Snyder, Benton R. Hammond, Vincent H. Cohen, Washington, D. C., for Aaron Henry and N.A.A.C.P.

Thomas E. Royals, Robert H. Taylor, Jr., Jackson, Miss., for Mississippi Action for Progress, Inc.

Appeal from the United States District Court for the Northern District of Mississippi.

Before THORNBERRY, AINSWORTH and MORGAN, Circuit Judges.

AINSWORTH, Circuit Judge:

Serious questions of federalism are raised in this strongly contested Mississippi civil rights case, especially as concerns the right of a federal court, on constitutional grounds, to enjoin the execution of a judgment of a Mississippi state court. In this appeal we review the action of the federal district court in issuing three preliminary injunctive orders prohibiting the enforcement by state court plaintiffs of an injunction and damages award entered in a judgment of the Chancery Court of Hinds County, Mississippi pending review of the state court judgment by the Mississippi Supreme Court and, if necessary, by the United States Supreme Court. This dispute has been before the federal courts and the state courts of Mississippi intermittently for almost a decade. It is before us now for the second time.

The factual background to this extended litigation has been summarized in earlier reported decisions of this court and the district court. See Henry v. First National Bank of Clarksdale, N.D.Miss., 1970, 50 F.R.D. 251, Rev'd, 5 Cir., 1971, 444 F.2d 1300, Cert. denied, 405 U.S. 1019, 92 S.Ct. 1284, 31 L.Ed.2d 483 Reh. denied, 406 U.S. 963, 92 S.Ct. 2057, 32 L.Ed.2d 351; Henry v. First National Bank of Clarksdale, N.D.Miss., 1976, 424 F.Supp. 633. The latter cited decision is the subject of the instant appeal.

The pertinent facts begin in 1966 when civil rights organizations and several black citizens in Claiborne County and Port Gibson, Mississippi organized a boycott of white businesses in Claiborne County and Port Gibson to protest racial discrimination by the merchants and local public officials and to seek certain concessions concerning racial matters. The leaders of the boycott held public meetings and organized picketing, leafletting and solicitations to encourage black citizens to support the boycott. At times violence or threats of violence were employed to enforce the boycott and discourage black patronage of white merchants.

Procedural History

On or about October 31, 1969, after the boycott had been in effect several years, 23 white merchants in Port Gibson and Claiborne County filed suit in the Chancery Court of Hinds County against the National Association for the Advancement of Colored People (NAACP), a New York corporation, Mississippi Action for Progress (MAP), a federally-funded, nonprofit Mississippi corporation, and 146 individual defendants, seeking injunctive relief and $3.5 million in damages. Plaintiffs sought to enjoin the defendants from picketing or guarding white businesses, conducting a secondary boycott by applying economic pressure on businesses to seek concessions from public officials, asking, soliciting, threatening or coercing others to cease trading with white businesses, and otherwise restraining trade in violation of the laws of Mississippi. The state plaintiffs alleged that the boycott and the various activities undertaken in support thereof violated Mississippi's antitrust laws. The complaint also named as parties defendant the First National Bank of Clarksdale and 55 other banks alleged to have in their possession funds of the national NAACP or of its branches and auxiliary offices in Mississippi. Plaintiffs sought to attach these funds pursuant to Mississippi statutes authorizing the attachment in chancery of the assets of a nonresident debtor. Miss.Code Ann. §§ 11-31-1 et seq. (1972). Soon after the filing of the complaint the clerk of Chancery Court issued writs of attachment to the defendant banks.

On November 7, 1969 the Mississippi State Conference of the NAACP (State Conference) and the Coahama Branch of the State Conference (Local Branch), on behalf of itself and all other local branches, brought suit in federal district court against the Bank of Clarksdale, the Coahama National Bank and the First National Bank of Clarksdale as representatives of all the defendant banks in the state action, seeking the release of funds sequestered pursuant to the state writs of attachment. The State Conference and the Local Branch alleged that, although they used the name NAACP, they were independent and autonomous organizations, residents of Mississippi, and that they were suffering irreparable harm from the attachment of their assets without notice or an opportunity to be heard in a state suit to which they were not parties. On motion by the First National Bank of Clarksdale, the district court ordered the state court plaintiffs joined as parties defendant in the federal suit as necessary and proper parties, and on December 15, 1969 the district court entered a preliminary injunction which Inter alia enjoined the state court plaintiffs "subject to final action of this court, from subjecting or causing to be subjected in any way funds of plaintiffs deposited in the defendant banks to attachment or other process causing plaintiffs to be deprived of the use of their funds." The state court plaintiffs, joined as defendants in this federal action, failed to appeal or otherwise challenge the injunction. See Henry v. First National Bank of Clarksdale, 5 Cir., 1971, 444 F.2d 1300, 1305-06 & nn. 4, 5, 6, 7, 8 & 9 (Henry I ).

Also on December 15, 1969 the national NAACP moved to intervene as a party plaintiff in the federal court suit and the original federal plaintiffs moved to join MAP as a party defendant. In addition, the federal plaintiffs amended their complaint to expand significantly the issues in the case and the relief sought. Aaron Henry who originally appeared in his official capacity as president of the State Conference and the Local Branch now appeared individually and as the representative of the class of all individual defendants in the state court suit. The amended complaint sought generally to enjoin the state court plaintiffs from further prosecuting the state suit. The district court granted the NAACP's motion to intervene and the motion to join MAP and on June 9, 1970 the district court entered a preliminary injunction barring prosecution of the state suit by the state court plaintiffs "until the rights of the parties can be ascertained." 50 F.R.D. 251, 268.

On appeal this court reversed the district court's grant of the preliminary injunction because of lack of subject matter jurisdiction, holding that there is no state action for purposes of 42 U.S.C. § 1983 or the Fourteenth Amendment where the state has simply held open its tribunals to litigation by private parties. The mere availability of a forum for the resolution of private conflicts does not clothe private litigants with the authority of the state. Henry I, supra at 1309. For purposes of finding the requisite state action, we distinguished the situation where private parties have merely brought an action in state court from the situation where a private party has procured a judgment and is able to enlist the power of the state on his behalf in enforcing the judgment. See, e. g., New York Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964); Shelley v. Kraemer, 334 U.S. 1, 68 S.Ct. 836, 92 L.Ed. 1161 (1948); Stevens v. Frick, 2 Cir., 372 F.2d 378, Cert. denied, 387 U.S. 920, 87 S.Ct. 2034, 18 L.Ed.2d 973 (1967). While reversing the district court's injunction of June 9 against further prosecution of the state suit, we made clear that the preliminary injunction entered December 15, 1969 barring interference with funds in the defendant banks was not under consideration in the appeal and that it remained in force pending further action by the district court. Henry I, supra at 1306.

Pursuant to this court's mandate the district court dissolved its injunction against prosecution of the state court suit and dismissed the amended complaint. The state court suit proceeded to trial in the Hinds County Chancery Court on June 11, 1973; the trial took approximately eight months with the appearance of about 144 witnesses. On August 9, 1976 the Hinds County Chancellor rendered a lengthy opinion pursuant to which he entered on August 19 a decree and order granting injunctive relief against the continuation or enforcement of the boycott by the state court defendants, holding the defendants, NAACP, MAP, and various individuals, jointly and severally liable for damages and attorneys' fees in the amount of $1.25 million, finding that the funds in the Mississippi banks subject to writs of attachment in chancery were the property of the nonresident NAACP and directing the banks to pay the funds to the state court plaintiffs. Claiborne Hardware, Inc. v. NAACP, No. 78,353 (Miss.Ch.Ct. Aug. 9, 1976). In Mississippi, trial court judgments become executory immediately upon their entry, although execution of a judgment for damages may be stayed pending appeal to the appellate courts by the posting of a supersedeas bond in the amount of 125% Of the judgment. See Miss.Code Ann. §...