Charles ETHEREDGE, on his behalf and on the behalf of all others similarly situated, Appellant, v. Lois BRADLEY, Clerk of the District Court for the State of Alaska, Third Judicial District, Appellee.
Nos. 1514, 1525
Supreme Court of Alaska
Oct. 27, 1972
ON PETITION FOR REHEARING TO NO. 1546
434 P.2d 665
ON PETITION FOR REHEARING TO NO. 1546
Equitable Life Assurance Society of the United States (Equitable) has petitioned for a rehearing contending that the case should be remanded to the trial court for a new trial or a hearing on the issue of whether a new trial should be held, based on our overlooking or misconceiving a material fact or question in the case.
Equitable has previously argued that the consideration of the direct negligence issue permitted prejudicial evidence to go to the jury adversely affecting its decision on the respondeat superior issue. At one point in our opinion, we stated: “We have carefully checked the record for instances of such potentially damaging testimony and find that while objections were occasionally made as to the form of particular questions, neither defendant ever objected on the ground of the relevance or the particularly prejudicial effect of the testimony“.
Equitable points out that at one point, counsel objected to the introduction of evidence pertaining to other sales campaigns conducted by it, the objections in part resting on the grounds of relevance. The testimony to which objection was made merely related to the fact that at the conclusion of the campaigns there were “wind up” parties during which alcoholic beverages were served. Such testimony had already been introduced prior to the objection in question and the testimony on the subject gave no indication of “wild partying” and excessive drinking so as to justify a contention of prejudicially affecting the jury‘s decision. It was the details of the partying at Land‘s End to which the court was principally referring in its opinion rather than the somewhat innocuous testimony pertaining to sales campaigns. Accordingly, we find no reason to reconsider our holding on this point.
Counsel has also suggested that we delete the final paragraph of the opinion wherein we refer to the Beaulieu1 case, for the reason that reference thereto “was made only in petitioner‘s Statement of Points on Appeal; no contention was otherwise made in the proceedings below or on appeal that Beaulieu should be reversed.” Since it is apparent that this point on appeal was abandoned, we agree that the paragraph in question may be striken.
Therefore, the petition for rehearing is denied.
John E. Havelock, Atty. Gen., Juneau, Richard B. Edwards, Asst. Atty. Gen., Anchorage, for appellee.
Before BONEY, C. J., and RABINOWITZ, CONNOR, and ERWIN, JJ.
OPINION
RABINOWITZ, Justice.
The central issue in this appeal is whether the procedural authorization of summary prejudgment attachment of property provided for in
On July 20, 1970, B. J. Bath, Inc., filed suit against appellant Etheredge to recover a debt allegedly owed it. On July 22, Bath secured a writ of attachment from appellee Bradley, Clerk of the District Court for the State of Alaska, Third Judicial District. Bradley issued the writ pursuant to
Etheredge moved to quash the writ of attachment on July 28, 1970. His motion was denied, whereupon he filed a separate class action against Bradley seeking declaratory judgment that
After he had instituted this class action, Etheredge consented to a judgment on the merits in the suit which Bath had filed against him. Answering Etheredge‘s class action complaint, Bradley admitted that the practice of her office was to issue writs of attachment without affording notice or opportunity for hearing to the person whose property is to be seized under the writ. Thereafter, both Etheredge and Bradley moved for summary judgment. The superior court granted summary judgment to Bradley. Etheredge has appealed the denial of his motion for summary judgment. Bradley has cross-appealed from the superior court‘s determinations (1) that Etheredge adequately represented his named class, and (2) that the declaratory judgment suit was not mooted by virtue of Etheredge‘s entry into a consent judgment in the Bath litigation.
Etheredge argues that the
Bradley in turn argues that attachments historically have been found to satisfy due process demands where, as in Alaska‘s pro-
Sniadach involved a prejudgment wage garnishment under a Wisconsin statute which allowed issuance of a garnishee summons at the request of a creditor‘s attorney, without a prior hearing on the underlying claim. While recognizing that summary interference with property interests may satisfy due process standards in “extraordinary situations,” such as to protect public health or in dealing with insolvent financial institutions, the Supreme Court stated:
Where the taking of one‘s property is so obvious, it needs no extended argument to conclude that absent notice and a prior hearing . . . this prejudgment garnishment procedure violates the fundamental principles of due process.1
In Sniadach, no need for special protection for the state or creditor was shown since the defendant was a Wisconsin resident over whom personal jurisdiction was readily available. There the Supreme Court was concerned with the hardship created by a procedure which deprived the debtor of his means of existence and characterized wages as “a specialized type of property presenting distinct problems in our economic system.”2
The hardship theme was picked up and emphasized again in Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L. Ed.2d 287 (1970). In that case, the Supreme Court held that in order to satisfy due process welfare recipients were entitled to an evidentiary hearing prior to termination of benefits. In the context of the need of the welfare recipient-plaintiffs, the Supreme Court said:
The extent to which procedural due process must be afforded the recipient is influenced by the extent to which he may be “condemned to suffer grievous loss,” . . . and depends upon whether the recipient‘s interest in avoiding that loss outweighs the governmental interest in summary adjudication. Accordingly, . . . “consideration of what procedures due process may require under any given set of circumstances must begin with a determination of the precise nature of the government function involved as well as of the private interest that has been affected by governmental action.”3
Since Sniadach v. Family Finance Corp. and Goldberg v. Kelly, there has been some confusion in federal and state courts as to the implications of these decisions. It was not clear whether the Supreme Court was ruling solely on constitutional due process grounds or was acknowledging a “hardship” exception to venerable prejudgment remedies. Another area of confusion was whether the factual context of Sniadach could be taken as describing the full extent of the opinion‘s reach, or whether the language “specialized type of property” implied a somewhat larger category of affected property rights.
Of the courts that resisted extension of Sniadach, some have expressly limited Sniadach to wage garnishment proceedings.4 Others have attempted to distinguish the sort of property interest involved from the “specialized type of property”5
The courts that have used Sniadach as the basis for re-evaluating summary prejudgment remedies by which persons are deprived of their property have recognized that the rationale of Sniadach was grounded in fundamental notions of due process rather than in considerations of hardship.7 Three courts have followed Sniadach to its logical conclusion. In Larson v. Fetherston, 44 Wis.2d 712, 172 N.W.2d 20 (1969), the Supreme Court of Wisconsin noted that despite the reference to hardship in Sniadach there was no valid distinction between wages and other types of property. Ruling that there was no reason to treat wages in the employer‘s hands differently from wages deposited in a bank or other financial institutions by the employee, the Wisconsin court went on to state that due process violations should not turn on the type of property involved. In Jones Press, Inc. v. Motor Travel Services, Inc., 286 Minn. 205, 176 N.W.2d 87 (1970), the Minnesota Supreme Court held Sniadach extends beyond wages, hardship, and injustice and applied Sniadach to prejudgment attachment of accounts receivable. In Randone v. Appellate Department of Superior Court of Sacramento County, 5 Cal.3d 536, 96 Cal.Rptr. 709, 488 P.2d 13 (1971), the Supreme Court of California applied Sniadach to invalidate California‘s statute which provided for summary judgment attachment remedies. In part, the court said:
California‘s attachment statute violates this procedural due process precept by sanctioning in substantially all contract actions attachment of a debtor‘s property, without notice and hearing. Nor is the overbroad statute narrowly drawn to confine attachments to extraordinary circumstances which require special protection to a state or creditor interest.8
After the briefs were filed and argument heard in this appeal, the Supreme Court of the United States decided Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972). In Fuentes the Supreme Court expressly rejected the narrow reading of Sniadach which Bradley has urged in this appeal. Fuentes involved the constitutionality of Florida and Pennsylvania statutes providing for the summary seizure of goods or chattels upon the ex parte application of any other person who claims a right to them and posts a security bond. The Supreme Court put the constitutional issue as “whether these statutory procedures violate the Fourteenth Amendment‘s guarantee that no State shall deprive any person of property without due process of law.”9 Invalidating Florida‘s and Pennsylvania‘s summary replevin procedure, Justice Stewart, in writing for the majority, said in part:
For more than a century the central meaning of procedural due process has been clear: “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.” . . . It is equally fundamental that the right to notice and an opportunity to be heard “must be granted at a meaningful time and in a meaningful manner.”
If the right to notice and a hearing is to serve its full purpose, then, it is clear that it must be granted at a time when the deprivation can still be prevented.10
Concerning the proper construction of Sniadach and Goldberg, the Supreme Court in Fuentes stated that these cases had “little or nothing to do with the absolute ‘necessities’ of life but establishing that due process requires an opportunity for a hearing before a deprivation of property takes effect.”11 The Supreme Court also went on to clarify its Sniadach comment on extraordinary circumstances justifying a pre-hearing seizure. The requisite elements are: (1) The seizure must be directly necessary to secure an important governmental or general public interest; (2) There must be a special need for very prompt action; (3) The state must maintain strict control over such summary pre-hearing seizures by permitting only those governmental officials who are responsible for determining the necessity and justification for summary seizure to do so under narrowly drawn standards.
The Supreme Court noted that the relative weight of property interests interfered with by prejudgment remedies is relevant to the form of notice and hearing. But Sniadach and Fuentes instruct that, except in the aforementioned “extraordinary situations,” due process requires some form of notice and hearing to establish the probable validity of the plaintiff‘s underlying claim before the defendant can be temporarily deprived of a property interest that “cannot be characterized as de minimus.”12 In our opinion, Sniadach and Fuentes preclude adoption of the “balance of interests” approach suggested by the dissent. Thus, it is clear that Sniadach is a due process decision; that Sniadach is not limited to protection of “necessities of life“; and that procedural due process mandates that a hearing be held at a meaningful time, which is defined as “a time when deprivation can still be prevented.” Alaska provides for attachment of property
Similarly,
Finally, there is no special state or creditor interest that would justify summary attachment in this case. As in Sniadach, Etheredge is a resident of the forum and Bath could have easily obtained personal jurisdiction over him. Sniadach and Fuentes reject the view that the “public interests,” arguably served by
We therefore hold that summary property attachment authorized by
Our decision that the summary prejudgment attachment procedure provided for by
Mootness is a construction of judicial policy, not of constitutional law.16 We have therefore adopted17 the longstanding exception to the mootness doctrine that allows review of questions that, although technically moot in a given case, are “capable of repetition, yet evading review.”18 While our application of this exception has been limited primarily to children‘s cases, there are other recurrent fact situations that raise matters of grave public concern.19 Property attachments under
Clerk of Court Bradley has indicated her intent to continue issuing writs of attachment pursuant to
Moreover, Etheredge‘s consent to judgment neither removed him from the class he purports to represent nor disabled him from adequately representing that class.
(a) Representation. If persons constituting a class are so numerous as to make it impracticable to bring them all before the court, such of them, one or more, as will fairly insure the adequate representation of all may, on behalf of all, sue or be sued, when the character of the right sought to be enforced for or against the class is
(3) several, and there is a common question of law or fact affecting the several rights and a common relief is sought.
Etheredge represents the class of all alleged debtors with bank accounts that could be attached without a prior hearing, pursuant to
We find the legal question is still vital and common to a class that includes Etheredge. We further find that his interest in the question ensures his adequate representation of that class.27
Reversed in part and affirmed in part.
BOOCHEVER, J., not participating.
BONEY, Chief Justice (dissenting).
I am unable to agree with the majority that
Because the due process clause affirms fundamental notions of fairness rather than specific rules of law, the words “due process of law” are not susceptible to precise definition.1 Thus consideration of whether certain procedures comply with or violate the due process clause must begin with an identification of the interests involved.2 The conflicting interests must then be balanced to determine whether or not those interests supporting the contested procedures outweigh those opposed.3
The interests of the parties in an attachment proceeding are obvious: the creditor-plaintiff wishes to collect his money due and to prevent the debtor from hiding his assets available to satisfy the debt; the debtor-defendant has interests in the possession of, the use of, and the ability to alienate his property as well as in ensuring he is not wrongfully deprived of his property. Certain interests of the state must also enter into the balance. There are public interests in ensuring the collectability of debts, in promoting the extension of credit, and in preventing the transfer of property for the purpose of defrauding creditors.4
I believe that an attachment procedure, in order to satisfy due process, must further the public interest and protect the
The majority opinion also creates a legal vacuum. No suggestions are made for procedures which would satisfy the majority‘s notions of due process. I can see no other meaningful way to protect the interests of creditors, while risking a lesser detriment to the interests of debtors, than is presented by our attachment procedure. An ex parte temporary restraining order would have exactly the same effect in the instant case. There is no difference to a debtor between attaching his checking account7 and restraining him from using it. In either case he has legal possession but has been denied the use of his property.8
The majority, by its decision, thus makes pre-judgment attachment impossible without a pre-attachment hearing. Implicitly, a restraining order prohibiting a debtor from alienating the property sought to be attached would likewise not be allowed pending the outcome of the attachment hearing.
I do not believe that we are compelled by recent United States Supreme Court cases to strike down our attachment procedure. I find Fuentes v. Shevin9, which the majority regards as controlling, to be distinguishable. That case concerned replevin actions. There the debtors were being deprived, without advance hearing, not only of the ability to alienate but also of the use and the possession of their property. The difference between the instant case and Fuentes is that other procedures could easily be devised which would not infringe upon the interests of the debtors and which would protect equally the interests of the creditors.10 In such circumstances the due process balance tips in favor of the debtors and the contested procedures must be struck down. Here, as discussed above, there are no alternatives available, and the extant procedures should be upheld.
Sniadach v. Family Finance Corp.11 is likewise distinguishable. There the debtor had no present ability to alienate his seized property, his future wages, at the time of the seizure. The interests of the creditor would not be prejudiced by the short delay required for notice of a hearing. Here, the debtor has the present ability to drain his checking account dry the moment he receives notice. The creditor is, therefore, prejudiced if the debtor receives any advance notice of a hearing.
In short, the instant case is distinguishable from Fuentes and Sniadach by the nature of the property here involved. In each of those cases, other procedures could
I regard Sniadach and Fuentes as encroachments into an area of established law. As such I believe that they should be closely read and narrowly applied.
I would therefore affirm the superior court‘s denial of Etheredge‘s motion for summary judgment.