Schall v. Joyce

SLOVITER, Circuit Judge,

dissenting.

All members of this panel are struggling with this appeal because, as the majority notes, the district court has given us no explanation why it stayed the action and whether it intended the stay to remain in effect after the state court had opened the judgment. The obscurity of the order with which we are dealing affects our appellate jurisdiction as well as our view of the merits. In these circumstances, I would not engage in the speculation which necessarily pervades the majority opinion. Instead, I would remand so that the district court can explain the nature of its order.

With respect to jurisdiction, I agree with the majority that when a district court, through use of a stay, has relegated a federal suit to state court, this court has appellate jurisdiction. Unlike the majority, I believe that we have an inadequate basis to conclude that that is what happened here. As the majority notes in its discussion of the mootness issue, “[t]he state court will not necessarily displace all of the issues in the federal court suit, which is broader in scope.” Maj. op. at 106. I presume the majority is referring to the fact that in her state court petition to open judgment Schall has made neither the constitutional nor federal statutory claims that she asserts in her federal suit.

Were I to speculate on the district court’s intent, I would be inclined to the view that the district court, faced with a complaint alleging that Pennsylvania’s confession of judgment procedures fail to provide due process protections prior to execution for people such as plaintiff who allege a forged signature on a mortgage and confession of judgment note, believed that plaintiff should test her allegations by seeking a stay in the state court of the execution on her confession of judgment. There is nothing on the record before us or on the district court docket that shows that once the state court opened the judgment any party notified the district court. Thus, there is no reason to conclude that the district court’s stay of the federal suit pending resolution of the state court action was done for “the sole purpose and effect ... to surrender jurisdiction of a federal suit to a state court,” which was the only type of stay order held to be appealable in Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 , 10-11 n. 11, 103 S.Ct. 927 , 934 n. 11, 74 L.Ed.2d 765 (1983), upon which the majority relies.

The majority’s insistence on reaching the merits despite its uncertainty as to the basis for the stay order leads it to speculate yet again, this time as to the legal theory on which the district court relied, which the majority theorizes was Younger abstention. My principal objection to the majority’s opinion is that it reaches out to sustain abstention on Younger grounds by expanding the holding in Pennzoil Co. v. Texaco, Inc., 481 U.S. 1 , 107 S.Ct. 1519 , 95 L.Ed.2d 1 (1987), so that it can be used to support abstention almost any time related suits are pending in state and federal courts.

The state interests that were found in Pennzoil to be “so important that exercise of the federal judicial power would disregard the comity between the States and the National Government,” 481 U.S. at 11 , 107 S.Ct. at 1526 , arose out of Texaco’s *115 attempt to avoid posting a bond to secure an $11 billion damage judgment awarded to Pennzoil after the state had already expended substantial time and effort by its personnel and jurors in the course of the still ongoing proceedings. The distinction I make between this case and Pennzoil does not rest on the size of the money judgment, as the majority chooses to characterize it. Much more important is the fact that here the state “proceedings” which took place before the stay consisted merely of the filing of the confession of judgment. If “the state’s interest in ensuring that its orders and judgments not be rendered nugatory” is sufficient to require Younger abstention in such a case, maj. op. at 109, then abstention would appear to be necessary in virtually every case in which a state court had entered an order, no matter how inconsequential the state court action is with respect to the concerns of federalism and comity that underlie abstention.

Although the majority notes that even the Pennzoil Court eschewed holding “Younger abstention is always appropriate whenever a civil proceeding is pending in state court,” 481 U.S. at 14 n. 12, 107 S.Ct. at 1527 n. 12, the majority’s analysis leaves only the proverbial needle’s eye in which to find Younger inapplicable. The majority proposes that the only room left for exercise of federal jurisdiction in the face of pending state court proceedings is that federal courts may interfere when “the state court has not yet rendered judgment.” Maj. op. at 109; but see id. at 24 , 107 S.Ct. at 1533 (abstention required even when judgment opened because proceedings continue).

Only this term the Supreme Court cautioned against overexpansive readings of Pennzoil. In New Orleans Public Service, Inc. v. Council of City of New Orleans, — U.S. -, 109 S.Ct. 2506 , 105 L.Ed.2d 298 (1989), the Court reversed a federal court abstention order based in part on the pendency of state court proceedings to review actions taken by a state ratemak-ing body. As Justice Scalia explained:

Although our concern for comity and federalism has led us to expand the protection of Younger beyond state criminal prosecutions ... to civil proceedings involving certain orders that are uniquely in furtherance of the state courts’ ability to perform their judicial functions, see Juidice v. Vail, 430 U.S. 327, 336, n. 12 [ 97 S.Ct. 1211, 1217, n. 12 , 51 L.Ed.2d 376 ] (1977) (civil contempt order); Pennzoil Co. v. Texaco Inc., 481 U.S. 1, 13 [ 107 S.Ct. 1519, 1527 , 95 L.Ed.2d 1 ] (1987) (requirement for the posting of bond pending appeal), it has never been suggested that Younger requires abstention in deference to a state judicial proceeding reviewing legislative or executive action. Such a broad abstention requirement would make a mockery of the rule that only exceptional circumstances justify a federal court’s refusal to decide a case in deference to the States.

109 S.Ct. 2517 -18 (emphasis added) (citations omitted). The confession of judgment order automatically entered but then opened in this case does not represent an order “uniquely in furtherance of the state courts’ ability to perform their judicial functions,” id., and the mere entry of such an order cannot constitute grounds for abstention, as the majority would hold.

The majority’s construction of Pennzoil would alter the well-established rules that “ ‘the pendency of an action in the state court is no bar to proceedings concerning the same matter in the Federal court having jurisdiction ...,’” Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 , 96 S.Ct. 1236, 1246 , 47 L.Ed.2d 483 (1976) (quoting McClellan v. Carland, 217 U.S. 268, 282 , 30 S.Ct. 501, 505 , 54 L.Ed. 762 (1910)), and that federal courts retain their “virtually unflagging obligation ... to exercise the jurisdiction given them.” Colorado River, 424 U.S. at 817 , 96 S.Ct. at 1246 .

I find it inexplicable that the majority applies Pennzoil so as to substantially shift the allocation of business between the federal and state courts when it could have affirmed the abstention order under the theory that federal courts should attempt to avoid constitutional determinations when the state courts may interpret the state *116 procedures so as to eliminate, or at least to alter materially, the constitutional question presented. The Supreme Court’s decision in Carey v. Sugar, 425 U.S. 73 , 96 S.Ct. 1208 , 47 L.Ed.2d 587 (1976) (per curiam), directly controls. In Carey , plaintiff had attached a debt owed to defendant pursuant to New York’s Civil Practice Laws & Rules (CPLR). The attachment remained unchallenged for nine months until defendant filed a section 1983 suit in federal court contending that the hearing procedures provided by the CPLR to vacate the attachment were constitutionally inadequate.

The Supreme Court held that the district court had erred in failing to abstain. Although the CPLR did not explicitly provide that the hearing to vacate would permit consideration of the plaintiff’s likelihood of prevailing on the merits, the Supreme Court noted “that [New York's] officials contended below and continue to contend here that New York, law does provide an opportunity for a preliminary hearing on the merits of a plaintiff’s underlying claim.” Id. at 79 , 96 S.Ct. at 1211. The Court explained that a decision of the New York courts as a matter of state law could render a decision on the constitutionality of the New York attachment statutes unnecessary. Citing Railroad Commission v. Pullman Co., 312 U.S. 496 , 61 S.Ct. 643 , 85 L.Ed. 971 (1941), the Court stated, “If the State construes its statute so as to remove any constitutional problems, friction with the State will have been avoided.” Carey, 425 U.S. at 79 , 96 S.Ct. at 1211 .

A comparable situation is presented here. Schall’s section 1983 suit contends that the policies and practices of the Allegheny County Prothonotary’s and Sheriff's Office do not provide any procedural safeguard to insure due process prior to execution in a confessed judgment. In his brief on appeal, the Prothonotary states that plaintiff “has every opportunity to demonstrate any defect or fault in the procedure by which judgment was entered.” Brief of Prothon-otary at 8. With respect to Schall’s challenge to the Pennsylvania Civil Rules, the Brief for Appellees Chief Justice Nix et al. asserts that the procedure provided allows a debtor to examine the documentation in case s/he wishes to “ ‘prepare to strike or open the judgment,’ ” and states that under Rule 2959 petition for relief may be filed and that “[i]f prior grounds for relief are shown, a stay of proceedings on the judgment may be granted and, as experience teaches all practicing lawyers, invariably is granted.” Brief for Appellees Nix et al. at 11.

The situation here is thus directly comparable to that in Carey . Judge Becker’s position that Pullman abstention is inapplicable is particularly puzzling because he joined the majority opinion in Georgevich v. Strauss, 772 F.2d 1078, 1089 (3d Cir.1985) (in banc), cert. denied, 475 U.S. 1028 , 106 S.Ct. 1229 , 89 L.Ed.2d 339 (1986), holding Pullman abstention was appropriate in light of the defendants' claim that plaintiffs would be accorded precisely those procedures which they sought to obtain through the federal suit. This court also held that there was no reason why Pullman abstention would not be appropriate to an “as applied” challenge to a statutory scheme, id. at 1091, notwithstanding the dissenters’ position that the only ambiguity was a statutory gap. Id. at 1097 (Sloviter, J., dissenting). Because these authorities provide a basis for upholding the district court's order under the well-established principle of law seeking to avoid unnecessary constitutional determinations even if we had jurisdiction in this case, I find it inexplicable why the majority has chosen to use this vehicle to embark on an excursion into Younger waters not yet fully charted. Although it will undoubtedly engage the interest of the law review commentators, it is clearly not necessary to the disposition of this appeal.