Schneider v. Margossian, Civ. A. No. 72-1421-G

• Decision Date: 26 October 1972
• Docket Number: 72-1881-G.,Civ. A. No. 72-1421-G
• Citation: 349 F. Supp. 741
• Parties: David SCHNEIDER et al., Plaintiffs, v. Michael MARGOSSIAN et al., Defendants. Janet C. PASTOR et al., Plaintiffs, v. Liman TRUST et al., Defendants.
• Court: U.S. District Court — District of Massachusetts

349 F. Supp. 741

David SCHNEIDER et al., Plaintiffs, v. Michael MARGOSSIAN et al., Defendants.

Janet C. PASTOR et al., Plaintiffs, v. Liman TRUST et al., Defendants.

Civ. A. Nos. 72-1421-G, 72-1881-G.

United States District Court, D. Massachusetts.

September 22, 1972.

Supplemental Memorandum and Order October 26, 1972.

Patrick J. King, Boston, Mass., Michael G. West, Cambridge & Somerville Legal Services, Cambridge, Mass., for David Schneider and others.

Paul Kilgarriff, Asst. Atty. Gen., Boston, Mass., for Joseph Conway.

Francis Fox, Paul J. Lambert, Bingham, Dana & Gould, Boston, Mass., for Harvard Trust Co.

Robert I. Goldman, Boston, Mass., for Janet C. Pastor and others.

Norman Ostroff, Boston, Mass., for Liman Trust & L. S. Jacobs.

James J. Marcellino, Ely, Bartlett, Brown & Proctor, Boston, Mass., for Harbor National Bank.

Danielle E. deBenedictis, Deputy Asst. Atty. Gen., Boston, Mass., for John E. Hurley.

Harvey Fishman, Cambridge, Mass., for Michael Margossian.

Before COFFIN, Circuit Judge, and GIGNOUX and GARRITY, District Judges.

MEMORANDUM OF DECISION

GARRITY, District Judge.

The joint question presented by these cases is whether the prejudgment attachment procedures under Massachusetts law, specifically the trustee process sections of Mass.G.L. c. 246, violate the due process clause of the Fourteenth Amendment to the Constitution of the United States. In each case the plaintiff had been sued in state court pursuant to the attachment procedure; as permitted by statute, their bank accounts were attached without any prior notice to them or opportunity to be heard before the making of the attachments. Plaintiffs then instituted these suits, seeking preliminary and permanent injunctive relief, alleging that the attachments were effected in violation of due process. As the actions sought to enjoin further enforcement of a state statute on the grounds of its inconsistency with the Constitution of the United States, three-judge courts were convened. Because plaintiffs were able to show both a substantial likelihood of success on the merits, and that a denial of immediate relief would work irreparable harm on them, this court after hearing granted preliminary injunctions enjoining the further enforcement against the plaintiffs of the trustee process sections of the Massachusetts statutes.¹

Upon further consideration of the briefs of the parties filed after the hearing, we now hold that the trustee process sections here attacked, Mass.G.L. c. 246, violate the due process clause of the Fourteenth Amendment to the Constitution of the United States. Accordingly, we enjoin the defendants from further enforcement of the trustee process statutes insofar as they deny to defendants in civil actions within the statutes' scope notice and an opportunity for hearing prior to the making of attachments on defendants' personal property by means of trustee process.

In deciding whether to issue preliminary injunctions we considered whether their effect would be to stay state court proceedings, in which event the court would be prevented by the federal anti-injunction statute, 28 U.S.C. § 2283, from granting the relief sought. We ruled that the Massachusetts trustee process procedure was sufficiently similar to the Connecticut prejudgment garnishment scheme to be governed by the holding of Lynch v. Household Finance Corp., 1972, 405 U.S. 538, 92 S.Ct. 1113, 31 L.Ed.2d 424, that garnishment procedures like Connecticut's do not amount to "proceedings in a state court" within the meaning of § 2283. We adhere to that judgment; a more recent Supreme Court decision, however, Mitchum v. Foster, 1972, 407 U.S. 225, 92 S.Ct. 2151, 32 L.Ed.2d 705, has obviated any need for a determination of this particular question. The Court there held that because 42 U.S.C. § 1983 authorizes suits in equity to redress the deprivation under state law of any constitutional rights, that statute falls within the "expressly authorized" exception to the federal anti-injunction statute, 28 U.S.C. § 2283. Since the instant actions were brought in reliance on § 1983, the anti-injunction statute does not apply to them, and the determination of whether trustee process constitutes a state court proceeding is not dispositive of the question whether we may grant the relief sought here.

Under long-standing practice, most civil actions in Massachusetts may be commenced by attaching the defendant's property. Under this procedure, the plaintiff simply fills in the blanks on a writ, averring that the defendant is liable to him for a certain amount on a particular cause of action; the writ then directs the appropriate officer to attach the property of the defendant, either in the defendant's hands or, as here, in the hands of a trustee. Mass. G.L. c. 223, § 16. Whether the goods are attached in the defendant's or the trustee's hands is immaterial: the property is held to "satisfy such judgment as the plaintiff may recover," c. 223, § 42; see also c. 246, § 20, unless the defendant has the attachment dissolved by posting bond, c. 223, § 120. Although the defendant receives notice of the attachment shortly after its making, c. 223, § 17, there is no provision whereby he can contest an attachment before it is made.²

There is no more elastic concept in American jurisprudence than that of due process. Not only has the concept been greatly broadened over the years, but the requirements of due process also vary from situation to situation at any given time. Mullane v. Central Hanover Bank & Tr. Co., 1950, 339 U.S. 306, 313, 70 S.Ct. 652, 94 L.Ed. 865. What is "due" under one set of circumstances may not be "due" under another. At core, however, the meaning of procedural due process has been that "parties whose rights are to be affected are entitled to be heard; and in order that they may enjoy that right they must be notified," Baldwin v. Hale, 1864, 1 Wall. 223, 68 U.S. 223, 233, 17 L.Ed. 531, in a manner and at a time that are meaningful, Armstrong v. Manzo, 1965, 380 U.S. 545, 552, 85 S.Ct. 1187, 14 L.Ed.2d 62. A few short years ago a three-judge court would have acted boldly were it to declare that the trustee process sections of Massachusetts law were constitutionally deficient, for it was not clear whether due process "rights" included the unrestricted use of property for a potentially short time. Recent Supreme Court decisions, however, have made it plain that the Massachusetts laws here attacked do not pass constitutional muster.

In Sniadach v. Family Finance Corporation, 1969, 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349, the Supreme Court held that a Wisconsin statute allowing a creditor, with no special need, to garnish the wages of his alleged debtor prior to a hearing violated the dictates of due process. The opinion of the Court noted that garnishment visits special hardship on the poor and asserted that wages are a special form of property, even a temporary loss of which could "drive a wage-earning family to the wall." 395 U.S. at 341-342, 89 S.Ct. at 1823 (footnote omitted). The Sniadach case is thus directly on point here insofar as the trustee process section of Massachusetts law authorizes the garnishment of wages, which it does, Mass.G.L. c. 246, § 24. In Fuentes v. Shevin, 1972, 407 U. S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556, the Court recently expanded the Sniadach rule, stating that the principles of procedural due process cannot be applied on the basis of distinctions between different kinds of property, 407 U.S. at 88, 92 S.Ct. 1983. The Court explained: "It is not the business of a court adjudicating due process rights to make its own critical evaluation of marketplace choices and protect only the ones that, by its own lights, are `necessary.'" Id. The Court thereby implicitly dismissed the idea that Sniadach was predicated solely on the importance of wages to the poor and suggested that Sniadach was applicable to all property whose use is restricted to any degree.

The Court in Fuentes cautioned that its narrow holding—that prejudgment replevin provisions violate due process "insofar as they deny the right to a prior opportunity to be heard before chattels are taken from their possessor," —was not absolute. For example, no hearing would be required where attachment was necessary to secure quasi in rem jurisdiction, to guard against a bank failure, or to protect the public against dangerous products. Absent some such justification, reflecting an "important governmental or general public interest," however, a defendant's property could not be subject to attachment unless he had an opportunity to contest at least the probable validity of the underlying claim before the attachment, citing Sniadach v. Family Finance Corp., 1969, 395 U.S. at 342, 89 S.Ct. 1820, 23 L.Ed.2d 349 (Harlan, J., concurring).

The Fuentes Court was disturbed by several characteristics of the Florida and Pennsylvania statutes under attack; and what the Court said about them is equally applicable here. All the statutes failed to serve an important public interest, involving instead merely the intervention of state machinery in private disputes. The applicability of the statutes was not predicated on a finding that prompt action was necessary. Indeed, no such finding is necessary under any of the statutes; the statutes

"abdicate effective state control over state power. Private parties, serving their own private advantage, may unilaterally invoke state power to replevy goods from another. No state official participates in the decision to seek a writ; no state official reviews the basis for the claim to repossession; and no state official evaluates the need for immediate seizure. There is not even a requirement that the plaintiff provide any information to the court on these matters. The state acts largely in the dark." (footnote omitted). 407 U.S. at 93, 92 S.Ct. at 2001.

It is true that the Fuentes case involved replevin, while under the Massachusetts statute...