complaint only in the addition of plaintiff Demcher and the plaintiffs Dzubaks, and the relatively insignificant substitution of defendant Pettit for defendant Cortese. Although it appears that the only purpose of the amended pleading was to avoid the thorny issue of whether the denial or non-certification of a putative class action in conjunction with the apparent mooting of the putative class representative's claims renders the entire case moot and therefore non-adjudicable, there is little question that under the federal rules the plaintiff was entitled "(to) amend (her complaint) once as a matter of course at any time before a responsive pleading (was) served." Fed.R.Civ.P. 15(a).
IV. CLASS ACTION CLAIMS
Plaintiffs seek certification of a class composed of all judgment debtors with personalty in Philadelphia who are or may be subject to having their personalty garnished under the Pennsylvania Rules of Civil Procedure and who have either legal or equitable defenses to all or part of the execution. Plaintiffs also desire certification of a subclass of all judgment debtors who have personalty in Philadelphia which is exempt from execution by virtue of federal law.
Because the merits of the constitutional claims asserted here on behalf of the class have for the reasons set forth below been decided adversely to the plaintiffs, class action certification would serve no purpose and is therefore denied.
Courts may not, consistent with the "case or controversy" requirement of article III, hear cases which are moot, I. e., where "the issues presented are no longer "live' or the parties lack a legally cognizable interest in the outcome." Powell v. McCormack, 395 U.S. 486, 496, 89 S. Ct. 1944, 1951, 23 L. Ed. 2d 491 (1968). Defendant contends that the return to the plaintiff of the bulk of the exempt funds renders the claim dead and the case moot. On the contrary, plaintiff Finberg has in fact not recovered all of the funds originally garnished from her bank account; $ 23.50 of the $ 550.00 originally garnished was retained by the bank to cover its expenses resulting from the garnishment, and it is this sum that the plaintiff in her amended complaint now seeks as damages. Clearly, this is a "live" claim, albeit a modest one; it differs from its predecessor in amount, but not in kind. And certainly, any claim for monetary damages resulting from operation of a challenged statute is a legally cognizable one. See Flagg Bros, Inc. v. Brooks, 436 U.S. 149, 154 n.2, 98 S. Ct. 1729, 56 L. Ed. 2d 185 (1978). This case is, therefore, not moot, so that I must proceed to the merits of the plaintiff's claim.
VI. SUPREMACY CLAIM: 42 U.S.C. § 407
The Supreme Court has established a two-pronged analysis for determining whether a state statute, regulation or rule of court is in conflict with a federal statute. Perez v. Campbell, 402 U.S. 637, 91 S. Ct. 1704, 29 L. Ed. 2d 233 (1971). First, the purposes of the state and federal statutes must be examined; then they must be compared, to determine whether, in purpose or in effect, the state statute "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Id. at 649, 91 S. Ct. at 1711, Quoting Hines v. Davidowitz, 312 U.S. 52, 67, 61 S. Ct. 399, 404, 85 L. Ed. 581 (1941).
The primary purpose of the garnishment procedures here in question is the effective and convenient enforcement of creditors' money judgments. The purpose of the exemption in § 407, on the other hand, is to protect from the claims of creditors, funds intended by Congress for the maintenance and support of Social Security recipients and their families, Brown v. Brown, 32 Ohio App.2d 139, 288 N.E.2d 852 (1972), so that a payment of money to a needy individual pursuant to one law cannot readily be rescinded by virtue of another.
At first blush, there is a conflict here, between Pennsylvania's desire to aid creditors and Congress' desire to hinder them. And yet, Pennsylvania's garnishment statute does not on its face conflict with § 407, since it makes no express provision for the garnishment of Social Security funds. Nor is there any other reason to suspect that the Pennsylvania legislature intended to subvert either the purpose or the effect of § 407. On the contrary, because the enactment by Congress of the Social Security Act preceded the enactment of the Pennsylvania garnishment statute by some twenty-five years, it is probable that the Pennsylvania legislature recognized and respected the various exemptions contained in the Social Security Act. It is a settled rule of statutory construction that a legislature is presumed to act with knowledge of existing law on the subject, and absent a clear manifestation of contrary intent, its enactments are presumed to be harmonious with that existing body of law. See, e.g., United States v. Sanders, 145 F.2d 458 (10th Cir. 1944); Zientek v. Reading Co., 93 F. Supp. 875 (E.D.Pa.1950); Eckert v. Socony Vacuum Oil Co., 13 F. Supp. 342 (E.D.Pa.1935). Moreover, where two statutes address the same subject, courts have generally striven to give effect to both, if possible. See, e.g., United States v. Borden Co., 308 U.S. 188, 198, 60 S. Ct. 182, 84 L. Ed. 181 (1939). Consequently, I conclude that the Pennsylvania statute neither contemplates nor authorizes any garnishment in violation of § 407, and that any garnishment of Social Security funds conducted under color of the Pennsylvania rules is unlawful, so that one who proceeds with such a garnishment will be liable for the return of the unlawfully seized, federally exempted funds.
The noble goals of a state statute, however, are not alone sufficient to exonerate the statute under the Supremacy Clause; its actual effect upon federal law must also be weighed. Perez, supra, 402 U.S. at 652, 91 S. Ct. 1704. Although in this case the application of the Pennsylvania statute had the undisputed effect of vitiating the plaintiff's right under federal law to an exemption for her Social Security funds, the abridgment of this right was not compelled by the statute as I have construed it above, but rather was an unauthorized and unlawful seizure of exempt funds. I conclude that the Pennsylvania Rules of Civil Procedure Rules 3101 Et seq. are neither in purpose nor in effect repugnant to the "full effectiveness of federal law," Id., and therefore are not violative of the principle contained in the supremacy clause of the federal Constitution.
VII. DUE PROCESS CLAIMS
The plaintiffs contend that the Pennsylvania garnishment provisions violate the due process clause of the fourteenth amendment because they neither provide for notice and a hearing prior to the initial seizure of funds nor do they provide adequate notice and hearing after the seizure to insure that property of a debtor is not wrongfully converted. For the reasons set forth below, I cannot agree.
The determination of whether particular state statutory provisions afford the minimum due process guaranteed by the fourteenth amendment requires a balancing of the governmental and private interests at stake, as well as consideration of "the risk of an erroneous deprivation of (a private) interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards." Mathews v. Eldridge, 424 U.S. 319, 335, 96 S. Ct. 893, 903, 47 L. Ed. 2d 18 (1976).
The government's most substantial interest one that for the most part overlaps the interests of the judgment creditor lies in the speedy satisfaction of judicially validated claims. By insuring that money judgments fairly obtained in court are expeditiously and inexpensively reduced to money form, the state seeks to promote and protect commercial transactions and the extension of credit to consumers within its borders.
The private interests at stake here are those of the judgment debtor. The debtor obviously has a direct and substantial interest in not being wrongfully deprived of his property. This interest is doubly compelling where, as in the case of plaintiff Finberg, the money that is threatened with garnishment represents the debtor's sole means of support and is in fact paid to the debtor, pursuant to statutes like the Social Security Act,
largely on the basis of the debtor's demonstrated degree of disability or destitution. Furthermore, the seizure of a social security recipient's bank account works a potentially far more severe deprivation of property than does the oft-litigated device of wage garnishment. See, E. g., Sniadach v. Family Fin. Corp., 395 U.S. 337, 89 S. Ct. 1820, 23 L. Ed. 2d 349 (1969); Brown v. Liberty Loan Corp., 539 F.2d 1355 at 1357 (1976). Clearly, the impoundment of a single paycheck is more readily tolerable to an able-bodied, gainfully employed debtor than the garnishment of all accumulated life savings is to an elderly, needy social security recipient like the plaintiff Finberg.
There is one additional concern that is shared equally by all parties the state, the judgment creditor and the judgment debtor: all are concerned with the legality or propriety of the garnishment process. The judgment creditor has an interest in the immediate seizure of only those assets which under the law are properly subject to seizure, since the wrongful garnishment of a debtor's assets, E. g., in violation of a state or federal exemption, merely tends to increase the delay and expense of the garnishment process. By the same token, the confidence bred in creditors by the certainty of the method of collection furthers the state's interest in the smooth flow of commerce within its borders. And of course the impecunious judgment debtor is greatly concerned with the lawfulness of the procedure whereby he is deprived of the funds needed to procure the bare necessities of life.
In balancing all the governmental and private interests implicated in this case, the judgment debtor's interest in bare survival must invariably predominate over the interest of creditors and the state in mere economy of debt collection. The right to a subsistence way of life is considered fundamental for due process purposes. Goldberg v. Kelly, 397 U.S. 254, 263-264, 90 S. Ct. 1011, 25 L. Ed. 2d 287 (1970). The question arises, then, whether Pennsylvania's garnishment statute contains sufficient procedural safeguards to minimize the risk of an erroneous deprivation of this precious right.
In the context of pre-judgment garnishment, due process normally requires prior notice and an opportunity for a hearing. See, e.g., Fuentes v. Shevin, 407 U.S. 67, 92 S. Ct. 1983, 32 L. Ed. 2d 556 (1973); Sniadach, supra.
The demands of due process are considerably less stringent, however, where the garnishment occurs after the entry of judgment. In Endicott-Johnson Corp. v. Encyclopedia Press, 266 U.S. 285, 45 S. Ct. 61, 69 L. Ed. 288 (1924), the Supreme Court rejected the contention that a New York statute authorizing post-judgment garnishment without notice or a hearing conflicted with the due process clause, reasoning that:
(T)he established rules of our system of jurisprudence do not require that a defendant who has been granted an opportunity to be heard and has had his day in court, should, after a judgment has been rendered against him, have a further notice and hearing before supplemental proceedings are taken to reach his property in satisfaction of the judgment. Thus, in the absence of a statutory requirement, it is not essential that he be given notice before the issuance of an execution against his tangible property; after the rendition of the judgment he must take "notice of what will follow," no further notice being "necessary to advance justice."
Although the Endicott-Johnson rationale is considered by some to have been rejected by the subsequent decision in Griffin v. Griffin, 327 U.S. 220, 66 S. Ct. 556, 90 L. Ed. 635 (1946); See Hanner v. DeMarcus, 389 U.S. 926, 88 S. Ct. 288, 19 L. Ed. 2d 277 (1967) (Douglas, J., dissenting); Brown v. Liberty Loan Corp., 539 F.2d 1355 (5th Cir. 1976); Greenfield, A Constitutional Limitation on the Enforcement of Judgments-Due Process and Exemptions, 1975 Wash.U.L.Q. 877, 892; Kennedy, Due Process Limitations on Creditor's Remedies: Some Reflections on Sniadach v. Family Finance Corp., 19 Am.U.L.Rev. 158, 173-76 (1970), the two cases are in fact distinguishable. In Griffin, a 1926 alimony decree had been modified in a fully contested proceeding in 1936 and again modified in a 1938 hearing of which the defendant received no notice. The Court held that the failure to notify the defendant of the 1938 proceeding denied him due process as to any defenses which might have arisen after the 1936 hearing. This holding does not, in my opinion, disturb the Endicott-Johnson, decision, which deals only with the enforcement of judgments in which liability has been fully and finally adjudicated. Where there is no final adjudication of liability, as in the case of alimony decrees perpetually subject to modification for changed circumstances, a defendant cannot be said to have had his "day in court." This approach to Endicott-Johnson and Griffin is entirely in harmony with the Griffin Court's assessment that: "Due process does not require that notice be given before confirmation of rights theretofore established in a proceeding of which adequate notice was given." 327 U.S. at 233-34, 66 S. Ct. at 563.
The additional fact that the Griffin Court never mentioned the Endicott-Johnson decision further buttresses the conclusion that the due-process-invoking facts in the two cases are fundamentally dissimilar, and that the related legal theories upon which they were decided are therefore quite compatible.
Finally, although some lower courts have declined to follow Endicott-Johnson, see Betts v. Tom, 431 F. Supp. 1369 (D.Hawaii 1977); First Nat'l Bank v. Hasty, 410 F. Supp. 482 (E.D.Mich.1976), the fact remains that Endicott-Johnson has never been expressly overruled. When squarely presented forty-four years latter with an opportunity to reject that case's reasoning, the Supreme Court dismissed the writ of certiorari as improvidently granted. Hanner, supra.
The Endicott-Johnson doctrine, therefore, lives on, and this court is in good company in so holding. See, e.g., Katz v. Ke Nam Kim, 379 F. Supp. 65 (D.Hawaii 1974); Langford v. Tennessee, 356 F. Supp. 1163 (E.D.Tenn.1973); Moya v. DeBaca, 286 F. Supp. 606 (D.N.M.1968), Appeal dismissed, 395 U.S. 825, 89 S. Ct. 2136, 23 L. Ed. 2d 740 (1969).
Moreover, this notion of constructive notice and hearing based on an underlying final determination of liability may further be supported by the Supreme Court's pre-judgment attachment line of decisions. Mitchell v. W.T. Grant, 416 U.S. 600, 94 S. Ct. 1895, 40 L. Ed. 2d 406 (1974); Fuentes, supra; Sniadach, supra; see Mathews v. Eldridge, 424 U.S. 319, 96 S. Ct. 893, 47 L. Ed. 2d 18 (1976); Hasty, supra. In Hasty, Judge Pratt found that the fundamental concern of the Court in the pre-judgment line of cases "to protect the debtor by requiring some assurance of the validity of the underlying claim prior to issuance of a writ," Id. at 488 is determinative in the post-judgment context as well, by virtue of the central distinguishing feature of post-judgment garnishment:
Seizure occurs after a full and final determination on the merits . . . . Accordingly, the debtor has been afforded a full range of due process. Certainly, then, a hearing on any remaining issue concerning the propriety of the garnishment may properly be postponed until after issuance, under the rationale of Mitchell, supra. A judgment concluding the merits of a case is obviously more than adequate to satisfy the requirement of partial pre-issuance safeguards and justify a delayed hearing.