The Merchants National Bank of Mobile v. The Dredge General G. L. Gillespie, Etc.

TATE, Circuit Judge,

dissenting:

I respectfully dissent. In my opinion the prejudgment seizure of a vessel, authorized by Rule C, based solely upon ex parte conclusory allegations and automatically issued by the clerk without judicial scrutiny or authorization, offends the due process requirements for prejudgment seizure enunciated over the past decade by decisions of the United States Supreme Court. 1

The majority’s scholarly and forceful opinion has set forth compelling reasons why, in the maritime context, a prejudgment seizure need not be preceded by a hearing or by prior notice to the vessel or its owner. 2 The reasons advanced do not, however, compel the conclusion that the same protection to maritime interests might not likewise be accorded by procedures that meet minimum due process requirements, enunciated by the Supreme Court as to all other prejudgment seizures. For instance, the prejudgment seizure should be based upon a more detailed showing both as to the prima facie validity of the maritime lien and also of reasonable cause for the issuance of the writ (which showing could be made by affidavits indicating reliable hearsay testimony); the seizure should issue, not automatically upon filing by an interested party, but only after a judicial officer has had the opportunity to scrutinize the showing in order to ascertain that it establishes a prima facie case for the seizure; and the seizure should be made only after judicial authorization. 3

In a series of decisions over the past decade, the Supreme Court has enunciated the due process criteria that govern the validity of a prejudgment seizure of property of a debtor. Except in limited situations, prior notice and a post-seizure hearing is required; in the event that pre-seizure hearing is not required, the seizure must be authorized by a judicial officer, and it must be based upon an affidavit or showing going beyond conclusory allegations and clear *1352 ly setting out the facts entitling the creditor to sequestration, and the procedure must then entitle the debtor to a prompt post-seizure hearing to obtain the release of his property if the seizure is unwarranted. See, North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601 , 95 S.Ct. 719 , 42 L.Ed.2d 751 (1975); Mitchell v. W. T. Grant Co., 416 U.S. 600 , 94 S.Ct. 1895 , 40 L.Ed.2d 406 (1974); Fuentes v. Shevin, 407 U.S. 67 , 92 S.Ct. 1983 , 32 L.Ed.2d 556 (1972); Sniadach v. Family Finance Corp. of Bay View, 395 U.S. 337 , 89 S.Ct. 1820 , 23 L.Ed.2d 349 (1969).

The jurisprudence has recognized, however, that in limited circumstances (“extraordinary situations”) immediate seizure of property interest may be constitutionally permissible. In Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 676 , 94 S.Ct. 2080, 2089 , 40 L.Ed.2d 452 — which upheld such a prejudgment seizure — the Court reiterated that these extraordinary circumstances are those in which

“ ‘the seizure has been directly necessary to secure an important governmental or general public interest. Second, there has been a special need for very prompt action. Third, the State has kept strict control over its monopoly of legitimate force: the person initiating the seizure has been a government official responsible for determining, under the standards of a narrowly drawn statute, that it was necessary and justified in the particular instance.’ ” ,

In that case, the prejudgment seizure was upheld because pre-seizure notice and hearing might frustrate the interest served by the statute, but also because the purpose of the seizure fostered “the public interest in preventing continued illicit use of the property” and because the “seizure is not initiated by self-interested private parties rather Commonwealth officers determine whether the seizure is appropriate under the provisions of the Puerto Rican statutes.” Id., 416 U.S. at 679, 94 S.Ct. at 2090.

It is apparent to me that, if indeed these decisions govern admiralty actions, Rule C does not meet the due process requirements of prejudgment seizure there set forth. The interest of a private creditor, not of the public, is served by the seizure, which itself may be perfunctorily granted by a district court clerk upon conclusory affidavit by an interested creditor. 4 (Since we are considering the facial unconstitutionality of the Rule, my discussion primarily concerns the prejudgment seizure to enforce a maritime lien in general as did the majority. I will not discuss the specific instance of a preferred ship mortgage, which may afford more particularized showing, but which equally does not require judicial scrutiny and authorization.)

The majority seems to come close to conceding that, if the North Georgia-MitchellCalero-Fuentes decisions apply to admiralty prejudgment in rem procedures, then the Rule C prejudgment seizure (upon conclusory allegations of a creditor and without prior judicial authorization) does not meet all of the criteria for the “extraordinary situation” exception to the due process requirements imposed by those decisions. Rather, if I understand the majority, it feels that admiralty in rem jurisdiction raises considerations generically different from the ancient civil prejudgment remedies held to be unconstitutional by the decisional criteria set forth in those cases. To caricature the majority’s holding, it feels that because Admiralty is Different, the due process requirements of our Constitution as enunciated by the Supreme Court should not apply to the ancient practices peculiar to this arcane and specialized field.

*1353 I find no warrant in the decisions cited to believe that the due process required by the Fifth Amendment in federal proceedings is any less than that imposed upon state procedures by the similar due process requirements of the Fourteenth Amendment. While the peculiar needs of admiralty do indeed justify dispensing with prejudgment notice and hearing, I can find no reason to believe that its peculiar needs, any more than in the state creditor remedies held to be unconstitutional, dispense with prior factual showing of the validity of the creditor’s claim and with judicial authorization for such prejudgment seizure. As we stated in Johnson v. American Credit Co. of Georgia, 581 F.2d 526 at 534 (5th Cir. 1978), after summarizing the Supreme Court’s decisions: “It seems clear, then, that due process requires that a prejudgment seizure be authorized by a judge who has discretion to deny issuance of the appropriate writ.”

The relatively recent decision in Shaffer v. Heitner, 433 U.S. 186 , 97 S.Ct. 2569 , 53 L.Ed.2d 683 (1977), it seems to me, brings into substantial question some of the predicates upon which the majority bases its conclusion that Rule C passes constitutional due process muster. Shaffer , it is true, concerned a different issue than that before us: the due process validity of the quasi in rem attachment by a creditor of a non-resident’s property. Nevertheless, as the latest expression by the Court on due process considerations equally present in an admiralty in rem prejudgment seizure, its rationale and holdings are not without application to the present issue. See, e. g., Bohmann, Applicability of Shaffer to Admiralty in rem Jurisdiction, 53 Tul.L.Rev. 135 (1978).

For instance, insofar as the majority relies upon the in rem interest in the property created by a maritime lien, or the ship-personification theory, as somehow substantially lessening minimal due process requirements, Shaffer pointed out, 433 U.S. at 207 , 97 S.Ct. at 2581 : “The case for applying to jurisdiction in rem the same test of ‘fair play and substantial justice’ as governs assertions of jurisdiction in personam is simple and straightforward. It is premised on recognition that ‘[t]he phrase, “judicial jurisdiction over a thing”, is a customary elliptical way of referring to. jurisdiction over the interests of persons in a thing.’ ”

Again, insofar as the majority implies that the ancient admiralty procedures should thereby somehow be immune from the due process requirements enunciated by .Fuentes et al., Shaffer comments, 433 U.S. at 412 , 97 S.Ct. at 2584 : “ ‘[traditional] notions of fair play and substantial justice’ can be as readily offended by the perpetuation of ancient forms that are no longer justified as by the adoption of new procedures that are inconsistent with the basic values of our constitutional heritage.”

In summary, the majority opinion is a forceful and appealing statement of the reasons why due process requirements ordinarily applicable to prejudgment seizure by other creditors are not applicable to an admiralty in rem seizure, because Admiralty is Ancient and Admiralty is Different. Due process requirements are admittedly flexible and depend upon varying circumstances; perhaps, indeed, the majority’s conclusions will find favor with the Supreme Court. Nevertheless, since the Court has spoken so forcefully and clearly as to the minimum due process requirements applicable to a creditor’s prejudgment seizure — which Rule C does' not meet — , I am unable in the face of the Court’s clear holdings and expressions over the past decade to agree that admiralty’s Rule C should be exempt from the due process requirements applicable to all other prejudgment seizures by all other creditors. In the cited decisions, the Court rejected what seemed to me to be equally forceful pragmatic arguments by creditors as to the necessity for judicially unsupervised prejudgment seizures. I can see no logical or pragmatic reason, nor any based upon the Court’s decisions in the area, why a uniform standard of procedural due process should not apply to all private litigants, whether in admiralty or otherwise.

Accordingly, I respectfully dissent.

. In the main, my conclusions as to the unconstitutionality of Rule C are similar to those reached by the able district court in Karl Senner, Inc. v. M/V Acadian Valor, 485 F.Supp. 287 (E.D.La.1980) and to the excellent Note, 55 Tul.L.Rev. 936 (1981), analyzing that opinion and the applicable jurisprudence. I am indebted to the analyses therein. With regard to the maritime action commenced by a prejudgment seizure in rem, the Note summarizes (footnotes omitted): “A maritime action in rem, however, is virtually unknown outside admiralty jurisdiction and is one of the most drastic remedies known to modem law: process may issue without a court order and the defendant need not be personally served. Further, the plaintiff is not required to post bond to protect the defendant against a mistaken seizure, whereas the defendant may be required to post bond for twice the amount of the claim in order to have the seized property released.” 55 Tul.L.Rev. at 938.

. Nor do I quarrel with the majority’s conclusion that, in the maritime context, the seizure of the vessel itself may sufficiently give notice to those affected, through the master and by knowledge of the shipping agents, as to be sufficient for purposes of affording the prompt post-seizure hearing that the majority recognizes is constitutionally required.

. The opinion in Karl Senner, Inc., supra, 481 F.Supp. at 295 and n.15, notes that Rule C would probably pass constitutional muster with these requirements (assuming of course that prompt post-seizure hearing is available).

. Compare, for instance, the Supreme Court’s characterization in North Georgia Finishing, Inc., supra, 419 U.S. at 607 , 95 S.Ct. at 722 , of Mitchell v. W. T. Grant Co., supra, the only decision in the recent decade permitting prejudgment seizure by a private creditor without prior notice and hearing: “The writ, however, was issuable only by a judge upon the filing of an affidavit going beyond mere conclusory allegations and clearly setting out the facts entitling the creditor to sequestration. The Louisiana law also expressly entitled the debtor to an immediate hearing after seizure and to dissolution of the writ absent proof by the creditor of the grounds on which the writ was issued.”