The opinion of the court was delivered by: TEITELBAUM
The issue before the Court is not one which lends itself to simplistic application of precedent. A review of the cases raising this and analogous issues in federal courts makes clear that the guidelines of stare decisis have long since grown hazy and vague.
In 1969, the United States Supreme Court, in Sniadach v. Family Finance Corp., 395 U.S. 337, 23 L. Ed. 2d 349, 89 S. Ct. 1820, struck down as unconstitutional the Wisconsin pre-judgment garnishment procedures, holding that such procedures, which permitted a debtor's wages to be frozen without notice to the debtor and without the opportunity for a prior hearing, violated fundamental principles of due process.
In 1970, in Goldberg v. Kelly, 397 U.S. 254, 25 L. Ed. 2d 287, 90 S. Ct. 1011, the Supreme Court held that procedural due process under the Fourteenth Amendment required that formal termination of welfare benefits to certain recipients be undertaken only after a prior evidentiary hearing.
In 1971, in Lebowitz v. Forbes Leasing & Finance Corp., 326 F. Supp. 1335 (E.D. Pa.), District Judge Edward Becker tested and upheld the constitutionality of the Pennsylvania foreign attachment procedures. In Lebowitz, plaintiff Lebowitz filed an equity action in the Court of Common Pleas of Philadelphia County claiming that defendant Forbes, a Delaware corporation, had breached an employment agreement with him. The Forbes corporation was not registered to do business in Pennsylvania and had its principal office in New York. Lebowitz subsequently had a writ of foreign attachment issued under the Pennsylvania Rules of Civil Procedure which claimed an amount due of $200,000.00. The writ was served upon two Philadelphia banks in which Forbes maintained accounts totalling approximately $75,000.00. Defendant Forbes, successful in having the case removed to the United States District Court on diversity grounds, then filed a motion to quash the attachments after it had entered a general appearance without posting bond. Forbes' motion was based upon its argument that the attachments violated the due process standards enunciated in Sniadach v. Family Finance Corp., supra.
Judge Becker's well-reasoned opinion, supra, at 1340-41, summarizes the Pennsylvania foreign attachment rules and notes that until the court has obtained in personam jurisdiction over the defendant (by appearance or the filing of a bond,) everything is done on a purely ministerial basis by the prothonotary and sheriff without notice or hearing to the defendant. Once the Court has jurisdiction over the defendant the attachment may be dissolved (pursuant to Pennsylvania Rule 1273) if the defendant posts a bond or security or if the plaintiff does not pursue the action diligently.
The Lebowitz opinion then thoroughly analyzes the interests of the state, the creditor and the non-resident debtor and arrives at the conclusion that, not only do the debtor's interests predominate over those of the creditor and state, but that the debtor's interests are prejudiced by the use of Pennsylvania's foreign attachment procedures as written. The contrast between the procedural safeguards found in Pennsylvania's Fraudulent Debtor Attachment procedure (Pa. Rule 1286) and the lack thereof as to foreign attachment brings home this point.
In this regard, Judge Becker states:
Despite his "grave doubt" (Id. at 1351) as to their constitutionality, expressed above, Judge Becker upheld the constitutionality of the Pennsylvania Foreign Attachment Procedures on the basis of the "apparent vitality" (Id. at 1352) of Ownbey v. Morgan, 256 U.S. 94, 65 L. Ed. 837, 41 S. Ct. 433 (1921) and McKay v. McInnes, 279 U.S. 820, 73 L. Ed. 975, 49 S. Ct. 344 (1929). In Ownbey and McKay, decisions rendered some 40 years previously, (McKay without opinion), the Supreme Court respectively upheld the constitutionality of the Delaware and Maine attachment procedures against due process attack. Judge Becker's reasoning in this regard was as follows:
"Certainly [ Ownbey & McKay ] are not expressly affirmed. But, at least, however, their vitality has been recognized. The thrust of the analysis contained in this opinion [Lebowitz] is directed to the theory that, were it to have Ownbey & McKay before it directly today, the U.S. Supreme Court might well decide them differently. In view, however, of the language in Sniadach, which, at least, recognizes the vitality of Ownbey & McKay, even if it does not impliedly approve of them, a United States District Judge is not at liberty to ignore their precedential effect." (footnotes omitted) Id. at 1353.
Judge Becker's decision was reviewed and affirmed by the Court of Appeals for the Third Circuit at 456 F.2d 979 (3d Cir. 1972) under the same caption. Chief Judge Seitz' holding may be summarized as stating that the Sniadach opinion does not necessitate a finding that foreign attachment is unconstitutional, especially in light of the availability of Pennsylvania long-arm jurisdiction.
On June 12, 1972, four months after the Third Circuit decision in Lebowitz was handed down, the U.S. Supreme Court decided Fuentes v. Shevin, 407 U.S. 67, 92 S. Ct. 1983, 32 L. Ed. 556 (1972). In Fuentes, the Florida and Pennsylvania replevin statutes, which permitted the seizure of goods and chattels without prior notice to the possessor or the opportunity for a prior hearing, were struck down as unconstitutional. Reversing in that consolidated case decisions of statutory three-judge courts which had upheld the statutes, the Supreme Court relied heavily upon Sniadach, Goldberg v. Kelly, supra, and Bell v. Burson, 402 U.S. 535, 29 L. Ed. 2d 90, 91 S. Ct. 1586 (1972).
"There are 'extraordinary situations' that justify postponing notice and opportunity for a hearing. Boddie v. Connecticut, 401 U.S., at 379. These situations, however, must be truly unusual. Only in a few limited situations has this Court allowed outright seizure without opportunity for a prior hearing. First, in each case, 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 ...