Mississippi Chemical Corp. v. Chemical Const. Corp.

• Decision Date: 22 November 1977
• Docket Number: Civ. A. No. J75-275(N).
• Parties: MISSISSIPPI CHEMICAL CORPORATION, Plaintiff, v. CHEMICAL CONSTRUCTION CORPORATION et al., Defendants.
• Court: U.S. District Court — Southern District of Mississippi

444 F. Supp. 925

MISSISSIPPI CHEMICAL CORPORATION, Plaintiff, v. CHEMICAL CONSTRUCTION CORPORATION et al., Defendants.

Civ. A. No. J75-275(N).

United States District Court, S. D. Mississippi, Jackson Division.

November 22, 1977.

COPYRIGHT MATERIAL OMITTED

Joe H. Daniel, John M. Roach, Jackson, Miss., Hollaman M. Raney, Yazoo City, Miss., for plaintiff Mississippi Chemical Corp.

Thomas M. Murphree, Jr., Watkins & Eager, Jackson, Miss., for intervenors Protection Mutual Ins. Co. and Appalachian Ins. Co.

Daniel J. Brooks, Frederick E. Sherman, Layton and Sherman, New York, N. Y., Jimmie B. Reynolds, Jr., Jackson, Miss., for defendants Chemical Construction Corp., Aerojet-General Corp., Duane E. Bush.

Louis G. Baine, Jr., Jackson Miss., B. L. Riddick, Jackson, Miss., for defendant Willhoit Steel Erectors & Rental Services, Inc.

George F. Woodliff, Jackson, Miss., for defendant Marsh & McLennan, Inc.

Joe W. Hobbs, Jackson, Miss., for defendant Hartford Accident & Indemnity Co.

George E. Woodliff, III, Jackson, Miss., for defendant Brown & Root, Inc.,

Junior O'Mara, Kenneth W. Barton, Jackson, Miss., for defendant Continental Casualty Co.

L. Arnold Pyle, Ross F. Bass, Jr., Jackson, Miss., for defendant Airco, Inc.

W. Larry Latham, Jackson, Miss., for attachment defendant Barnard and Burk, Inc. Timothy R. Smith, Heidelberg, Woodliff & Franks, Jackson, Miss., for attachment defendants Monsanto Co. and Monsanto Enviro-Chem Systems, Inc.

ORDER

NIXON, District Judge.

This cause having come before the Court on Motion of the Defendant to vacate and have declared unconstitutional, or, alternatively, to reduce, chancery attachments by the Plaintiff; and upon the Plaintiff's Motion for attachment of funds at law should the Defendant's Motion relating to chancery attachments by sustained; and, after referral to the United States Magistrate by the United States District Judge, a Recommendation having been filed in this matter by the United States Magistrate recommending that the attachments secured by the Plaintiff under the Mississippi Attachment in Chancery statutes are unconstitutional and therefore should be vacated in their entirety; that the alternative Motion of the Plaintiff Mississippi Chemical to substitute the attachment at law procedure for the chancery attachment procedure should be denied because of the constitutional infirmities in the Mississippi Attachment at Law statutes; that all attachments imposed upon the indebtedness of non-Mississippi corporations to the Defendant as a result of transactions having no connection with the State of Mississippi should be vacated and not subsequently authorized; and the Court having considered the objections filed by the Plaintiff Mississippi Chemical Corporation and finding them to be without merit, it is the opinion of the Court that the Recommendation of the United States Magistrate should be adopted by this Court.

IT IS THEREFORE ORDERED that the Report and Recommendation of the United States Magistrate be, and the same is hereby, incorporated herein by reference and adopted as the Opinion of this Court, the Defendant's Motion is granted in accordance therewith, and the Plaintiff's Motion is hereby denied.

ORDERED, this the 22nd day of November, 1977.

RECOMMENDATION

JOHN M. ROPER, Magistrate.

This action is before the Court on motion of the Defendant, Chemical Construction Corporation (hereinafter Chemico), to vacate and have declared unconstitutional, or, alternatively, to reduce, chancery attachments by the Plaintiff, Mississippi Chemical Corporation (hereinafter Mississippi Chemical). Mississippi Chemical has moved alternatively for attachment of funds at law should Defendant Chemico's motion relating to the chancery attachments be sustained. Chemico opposes this motion, also on constitutional grounds. This case is before the U.S. Magistrate for recommendation upon reference by the District Judge.

Mississippi Chemical sued Chemico claiming damages in excess of $25,000,000. Plaintiff utilized Mississippi's Chancery Attachment statute, § 11-31-1 et seq., Mississippi Code of 1972, made applicable to this action by Rule 64, F.R.Civ.P., to attach substantial sums owed by certain corporations to Chemico. These corporations have withheld payment of sums owed Chemico and the Defendant now seeks to vacate these attachments, or to reduce the amounts attached to those amounts owed when the attachments were filed.

Chemico contends that the procedure authorized by the Mississippi Attachment in Chancery statutes, on its face and as applied in this action, violates due process by failing to afford the principal defendant notice or opportunity for a hearing and by failing to provide any other safeguards reasonably calculated to prevent an erroneous, arbitrary, and oppressive ex parte deprivation of property.

The Defendant further contends the statutes are violative of due process as applied in this case because they permit prejudgment attachment of debts owing to Chemico by other non-Mississippi corporations which are the result of transactions having absolutely no connection with the State of Mississippi.

NECESSITY OF A THREE-JUDGE COURT

The first question presented is whether it is necessary to request a three-judge court be convened in order to consider the matters before the Court. The law applicable is 28 U.S.C. § 2281.¹ The three-judge court amendments,² adopted August 12, 1976, presumably would not affect this Court's consideration of the constitutionality of the Mississippi attachment processes and the necessity of convening a three-judge court. Section 7 of the Act (28 U.S.C. § 2284) provides that the Act "shall not apply to any action commenced on or before the date of enactment." This provision was "added to make clear that cases filed prior to the enactment of this bill shall proceed to final disposition under the law existing on the date they were commenced." S.Rep.No.94-204, 94th Cong., 2nd Sess. 14 reprinted in 1976 U.S.Code & Admin.News, pp. 1988, 2001.

The convening of a three-judge court is not required when no injunction seeking to interdict the operation of a statutory scheme on a statewide basis is sought. Kennedy v. Mendoza-Martinez, 372 U.S. 144, 154, 83 S.Ct. 554, 9 L.Ed.2d 644 (1963); Flemming v. Nestor, 363 U.S. 603, 607, 80 S.Ct. 1367, 4 L.Ed.2d 1435 (1960); Wilson v. Gooding, 431 F.2d 855, 857-58 (5th Cir. 1970). The Mississippi Chancery Attachment statute is invoked solely by the Plaintiff's attorney, who serves the complaint upon the attachment Defendant. Thus, even if there was a request for injunctive relief against the chancery attachment procedure, this would not require the convening of a three-judge court because no state officer would be enjoined. Hobbs v. Tom Norton Motor Company, 373 F.Supp. 956, 958 (S.D.Fla.1974). A three-judge court could have been sought to enjoin the application of the attachment at law statutes, because state officers are vested with authority to issue writs of attachment. Chemico has not sought injunctive relief, however, but simply attacks the validity of Mississippi's attachment statutes as those statutes have, within the context of this lawsuit, been brought to bear against Chemico. Chemico was not required to seek, and has not sought, "affirmedly . . to interdict the operation of a statutory scheme" on a statewide basis. Wilson v. Gooding, 431 F.2d 855, 857 (5th Cir. 1970). There is no requirement that a party seeking to avoid the application of an allegedly unconstitutional state statute request the convening of a three-judge court even where, as in the case sub judice, a declaration of the unconstitutionality of that statute is sought.

Under the circumstances of this case, this Court is of the opinion that Chemico may properly draw into question the constitutionality of the Chancery Attachment statutes and Attachment at Law statutes without calling into operation a three-judge court. Kennedy v. Mendoza-Martinez, 372 U.S. 144, 154, 83 S.Ct. 554, 9 L.Ed.2d 644 (1963); Flemming v. Nestor, 363 U.S. 603, 607, 80 S.Ct. 1367, 4 L.Ed.2d 1435 (1960).³

The Defendant, Chemical Construction Corporation, or Chemico, is a Delaware corporation having its principal place of business in a state other than Mississippi but qualified to do business and registered to do business in the State of Mississippi. Chemico was served with process through its registered agent, CT Corporation Systems, in Jackson, Mississippi, on September 30, 1975. The suit, filed by Mississippi Chemical Corporation, sought injunctive relief and damages from Chemico, who was the contractor for the erection of a nitric acid plant at Yazoo City, Mississippi, the Plaintiff alleging a breach of contract. Several other parties have subsequently been brought into this action. The case has remained somewhat inactive since December of 1976, pursuant to an agreement among the various parties which would enable the nitric acid plant in question to be completed. The plant became operative in August of 1977. It does not appear at this time that the numerous parties involved herein will be able to resolve their differences without judicial assistance, thus requiring the immediate resolution of all pending motions and the resumption of discovery in this matter. This Court has extended the discovery period in this case until December 31, 1977.

The attachment defendant, Continental Casualty Company, was served with process by service on its agent for process, the Commissioner of Insurance of the State of Mississippi, Jackson, Mississippi, on September 30, 1975. The attachment defendants Barnard & Burk, Inc., Brown & Root, Inc., Monsanto Company, and Monsanto Enviro-Chem Systems, Inc. were served with process by service upon CT Corporation System, registered agent for service of process for each of the attachment defendants, on September 30, 1975.

Continental Casualty Company has now been dropped as an attachment defendant by consent of all par...