The courts which recognize a qualified immunity for private § 1983 defendants, including the First Circuit in the limited context in which it has done so, have adopted the objective legal reasonableness test of Harlow.
The Eleventh, Eighth and Fifth Circuits have held that a private § 1983 defendant is entitled to the same qualified immunity as a public official in circumstances comparable to those in the instant case. Jones v. Preuit & Mauldin, 851 F.2d 1321, 1325 (11th Cir. 1988) (en banc) (creditor effecting attachment under state statute of "highly questionable" constitutionality entitled to qualified immunity in § 1983 suit), vacated on other grounds, 489 U.S. 1002 (1989); Watertown Equipment Co. v. Norwest Bank Watertown, 830 F.2d 1487, 1489-90 (8th Cir. 1987) (private parties acting jointly with public officials to effect creditor remedies pursuant to state statutes enjoy qualified immunity), cert. denied, 486 U.S. 1001, 100 L. Ed. 2d 188, 108 S. Ct. 1723 (1988); Folsom Investment Co. v. Moore, 681 F.2d 1032, 1037 (5th Cir. 1982) (private party utilizing presumptively valid state attachment statute entitled to qualified immunity under Harlow standard).
These Courts have implied the availability of immunity to similarly situated private § 1983 defendants from the so-called defense of probable cause available at common law in wrongful attachment cases,
and found it to be justified by the important public policy of allowing citizens to rely on existing legal mechanisms to vindicate rights or resolve disputes. See Jones, 851 F.2d at 1324-25; Buller, 701 F.2d at 851; Folsom, 681 F.2d at 1037-38.
The court agrees that this is an important public interest sufficient to support qualified immunity in the circumstances alleged in this case. The court believes that it would be anomalous and unfair to hold that a private citizen acts under color of law for purposes of imposing liability when he enlists the aid of public officials and then to deny him the qualified immunity afforded to those officials, effectively making the former more liable than the latter. See Jones, 851 F.2d at 1325; Buller, 706 F.2d at 851. Further, while not facing the prospect of liability, many public officials likely would still be diverted from their official duties in such joint action cases by the need to provide discovery and trial testimony in § 1983 suits involving private parties with whom they acted in concert.
Consistent with these public interests, the court believes that affording private § 1983 defendants qualified immunity is preferable to adopting a subjective good faith defense. Just as "a reasonably competent public official should know the law governing his conduct," Hawlow, 457 U.S. at 819, so should attorneys and creditors be encouraged to keep abreast of the applicable law in their fields of endeavor. Today, a variety of private parties are expected to take reasonable steps to familiarize themselves with an array of health, safety, environmental, tax and other laws and regulations pertaining to the conduct of their affairs. A subjective standard too easily could encourage deliberate ignorance and produce dramatically different results in cases involving similarly situated parties. There are many clearly established constitutional rights the violation of which reasonably should not be tolerated even by one acting without malice and in subjective good faith.
Accordingly, the court concludes that in a suit for utilizing an existing state attachment process later found to be constitutionally deficient, a private § 1983 defendant may assert the same type of qualified immunity afforded to public officials under Harlow.
What the applicable law is and whether it was "clearly established" at the time of the act complained of are questions of law for determination by the court. Harlow, 457 U.S. at 818.
In determining whether a constitutional right is clearly established for purposes of qualified immunity, a court must determine whether the contours of the right at the time of the alleged violation were sufficiently clear in light of pre-existing law that a reasonable person in defendant's position would understand that his conduct violated that right. Anderson, 483 U.S. at 640. One acting under color of law is not required to predict the evolution of constitutional law, but is required to apply established legal principles to analogous factual situations. People of Three Mile Island v. Nuclear Reg. Com'rs., 747 F.2d 139, 144 (3d Cir. 1984). The purpose of qualified immunity is not to give state actors "one liability-free violation" of a constitutional right. Id. at 145.
The court in Berman did not hold that taking judgment by confession is unconstitutional. Berman, 758 F. Supp. at 278. A creditor is not precluded from obtaining judgment by confession and thereby securing priority over other creditors, obtaining a lien on real property, perfecting a claim for interest at the post-judgment rate or obtaining clear standing to secure assets upon a showing of fraudulent concealment or other exigent circumstances.
Rather, the court held that Pennsylvania's post-confessed judgment garnishment procedure fails to comport with due process because it does not provide for review and approval by an appropriate official invested with discretion, and does not ensure a prompt postseizure adjudication of the validity of the creditor's claim. Id. at 280.
The court agrees with the Eighth Circuit that by 1982, and thus ipso facto by 1989, it was clearly established, particularly in view of North Georgia Finishing,Inc. v. Di-Chem, Inc., 419 U.S. 601, 607, 42 L. Ed. 2d 751, 95 S. Ct. 719 (1975), that any statute which provided for prejudgment attachment of a debtor's bank account by a creditor without notice and an opportunity for a timely hearing, absent exceptional circumstances, violated the constitutional right not to be deprived or property without due process. Watertown Equipment Co., 830 F.2d at 1490. See also Jonnet v. Dollar Savings Bank of the City of New York, 530 F.2d 1123, 1130 (3d Cir. 1976). Today, virtually every state requires a hearing, proof of exigent circumstances or both before allowing an attachment of property. Doehr, 111 S. Ct. at 2116.
The procedure at issue in the instant case permits attachment of a bank account immediately following entry of a confessed judgment. Over a decade ago, however, the Third Circuit en banc stated that the due process standards applicable in cases of prejudgment attachment "govern" and "control" in the context of a postjudgment seizure as well. Finberg v. Sullivan, 634 F.2d 50, 57-8 (3d Cir. 1980) (en banc). By 1984, federal authorities had concluded that Pennsylvania's post-confessed judgment attachment and execution procedures did not adequately protect judgment debtors' due process rights. See FTC, Trade Regulation Rule: Credit Practices, 49 Fed. Reg. 7740, 7751 (1984). A three-judge panel had held the Illinois post-confessed judgment garnishment procedure unconstitutional for failure to ensure a hearing for the debtor at the time of execution. Scott v. Danaher, 343 F. Supp. 1272, 1277-78 (N.D. Ill. 1972).
The attachment in Finberg occurred after the entry of a default judgment on a claim for which defendant acknowledged her liability. She successfully contended, however, that because Pennsylvania garnishment procedures did not require a prompt postseizure hearing on her claim of exemption, they failed to provide due process. Thus, after Finberg one would assume that a similar garnishment executed pursuant to a confessed judgment the basis of which is contested at least would be constitutionally suspect.
For purposes of due process, it is difficult to conclude that a judgment debtor is entitled to a prompt hearing on a claim that some of his attached property is exempt but not on a claim that all of his property has been attached unjustifiably or even fraudulently, on the basis of an unsupportable or even spurious pleading.
The pertinent considerations in either context are whether the applicable attachment procedures minimize the risk of an inappropriate seizure and ensure an opportunity to be heard in opposition at a meaningful time. See Di-Chem, 419 U.S. at 607, 08; Fuentes v. Shevin, 407 U.S. 67, 97, 32 L. Ed. 2d 556, 92 S. Ct. 1983 (1972) (holding Pennsylvania replevin statute unconstitutional); Finberg, 634 F.2d at 58-59; Jonnet, 530 F.2d at 1129-30 (holding Pennsylvania foreign attachment procedures unconstitutional). See also Allegheny Clarklift v. Woodbine Industries, 356 Pa. Super. 269, 514 A.2d 606 (1986) (provision of state Landlord and Tenant Act permitting attachment of property at leased premises of defaulting tenant without prior notice and hearing violates due process).
If the Court in Finberg was only making a narrow point about social security recipients with income potentially exempt from attachment, it need not have discussed and relied upon four Supreme Court prejudgment seizure cases involving quite different circumstances, including Di-Chem in which the attachment of a corporate bank account was invalidated. The Court need not have stated that the case "presents the same interests that the Supreme Court sought to accommodate in the four prejudgment seizure cases" or that those cases "control the due process issue before us." Finberg, 634 F.2d at 58-59. The Court likely would not have referred to "any of a number of defenses" in addition to "a claim of exemption" available to a judgment debtor seeking to resist execution of a judgment. Id. at 58. Rather, it appears that the Court in Finberg was applying and logically extending established due process principles to the particular facts before it. This is what the court did in Berman.
That a procedure may be constitutionally suspect or even of "highly questionable" constitutionality, however, does not mean that a reasonable person could not believe it to be constitutional. See Jones, 851 F.2d at 1328. The development and application of due process standards in the property attachment context have been evolving. When governmental authorities continue to utilize a procedure, even one in "legal jeopardy," generally "it is not unreasonable for private actors to fail to quickly comprehend a developing body of doctrine that portends trouble for its constitutionality." Wyatt, 928 F.2d at 722.
The court concludes that in May of 1989 a creditor reasonably could have believed that the post-confessed judgment attachment procedure invoked in this case, while criticized and in some legal jeopardy, was not clearly constitutionally deficient. Accordingly, defendants are entitled to qualified immunity from liability on plaintiffs' § 1983 claim.
C. State Law Claims
Plaintiffs also assert that in billing and taking judgment for rental adjustments defendants knew were not owed, they committed fraud. Again, plaintiffs rely on the contention that the rental adjustment provision in their lease did not survive the Amendment.
Defendants' asserted belief that this provision remained in effect is supported by the plain language of the Amendment and is eminently reasonable on the face of the record. From the evidence adduced one cannot reasonably find that Myron Berman or MMC knew the rental adjustment bills to be false, or that plaintiffs justifiably relied on them and were injured as a proximate result thereof. See Sowell v. Butcher & Singer, Inc., 926 F.2d 289, 296 (3d Cir. 1991); Spivack v. Berks Ridge Corp., Inc., 402 Pa. Super. 73, 79, 586 A.2d 402 (1990).
Defendants have filed a contract counterclaim for the amounts claimed from Jordan, Mitchell under the rental adjustment provision. In the absence of complete diversity between defendants and plaintiffs, there is no independent jurisdictional basis over this claim. Pursuant to 28 U.S.C. § 1367(c)(3), a district court may decline to exercise its supplemental jurisdiction if all claims over which it had original jurisdiction have been dismissed. This very contract claim is the subject of litigation between the parties in the ongoing state court proceedings. The court will decline to exercise jurisdiction over defendants' contract counterclaim.
An appropriate order will be entered.
AND NOW, this 1st day of May, 1992, upon consideration of defendants' Motion for Summary Judgment and plaintiffs' response thereto, consistent with the accompanying memorandum, IT IS HEREBY ORDERED that said Motion is GRANTED and JUDGMENT IS ENTERED on plaintiffs' claims in favor of defendants and against plaintiffs.
IT IS FURTHER ORDERED that defendants' counterclaim is DISMISSED without prejudice to the parties' claims in the litigation regarding the same subject matter pending in the Pennsylvania courts, and accordingly the above-captioned case is CLOSED.
BY THE COURT:
JAY C. WALDMAN, J.