Source: https://caselaw.findlaw.com/us-supreme-court/425/73.html
Timestamp: 2019-04-19 09:57:44+00:00

Document:
Where it is unclear whether the New York State courts will construe a New York prejudgment attachment statute so as to remove any federal constitutional problems, it is improper for a three-judge District Court to address the question of the statute's constitutionality or to interfere with its enforcement. The judgment declaring the statute unconstitutional and enjoining its enforcement is therefore vacated and the cases are remanded to the District Court with directions to abstain from a decision of the federal constitutional issues until the parties have had an opportunity to obtain a construction of the New York law from the New York state courts.
383 F. Supp. 643, vacated and remanded.
[ Footnote * ] Together with No. 74-859, Curtis Circulation Co. et al. v. Sugar et al., also on appeal from the same court.
A. Seth Greenwald, Assistant Attorney General of New York, argued the cause for appellants in No. 74-858. With him on the briefs were Louis J. Lefkowitz, Attorney General, and Samuel A. Hirshowitz, First Assistant Attorney General. Philip H. Busner argued the cause for appellants in No. 74-859. With him on the brief was Fred I. Sonnenfeld.
Fn [425 U.S. 73, 73] John E. Kirklin and Kalman Finkel filed a brief for the Legal Aid Society of New York City as amicus curiae urging affirmance.
This is an appeal from the judgment of a three-judge federal court declaring unconstitutional and enjoining [425 U.S. 73, 74] the enforcement of certain statutes of the State of New York which provide for prejudgment attachment of a defendant's assets. On April 13, 1973, appellant Curtis Circulation Co. (Curtis) filed a suit against appellees Sugar and Wrestling Revue, Inc. (Wrestling), and Champion Sports Publications, Inc. (Champion), in a New York state court. The complaint alleged that Curtis had advanced over $100,000 - of which $28,588.08 remained unpaid - to Champion under a contract with Champion pursuant to which Champion had agreed to permit Curtis to market certain identified sports magazines. It further alleged that Sugar, who owned and operated Champion, had caused title to the magazines to be transferred to Wrestling, another company owned and operated by Sugar, and had caused Wrestling to transfer the magazines to National Sports Publishing Corp. (National), a corporation not controlled by Sugar, for sale to the public. The consequence was that Champion had been stripped of its assets and that the magazines - out of the sales of which Curtis was to recoup its advance to Champion - had been sold instead by National. The complaint, containing several counts alleging fraud on the part of each defendant, sought a judgment for the $28,588.08 of Curtis' advances which remained unrepaid.
At the same time, Curtis sought to attach the debt owed by National to Wrestling for the magazines which National had sold and for which it had not yet paid Wrestling. New York Civil Practice Laws and Rules (CPLR) 6201 (Supp. 1975-1976) 1 provides for attachment [425 U.S. 73, 75] on various grounds. The order of attachment may be granted in favor of a plaintiff by a judge, upon ex parte motion at any time before judgment, 6211; and must be supported "by affidavit and such other written evidence as may be submitted, [showing] that there is a cause of action and the one or more grounds for attachment . . . that exist and the amount demanded from the defendant above all counterclaims known to the plaintiff." 6212 (a). In addition, the plaintiff will be ordered by the judge to give an undertaking in an amount fixed by the court out of which the defendant will be paid legal costs and damages resulting from the attachment if the defendant prevails in the underlying lawsuit. 6212 (b).
Pursuant to these procedures, Curtis filed a detailed affidavit alleging that it had a cause of action against appellees and Champion for fraud justifying a recovery of $28,588.08, and seeking an order of attachment under CPLR 6201 (4), (5), and (8) (Supp. 1975-1976).
On April 13, 1973, New York Supreme Court Justice Fine granted the motion conditioned on Curtis' providing a $10,000 undertaking, $8,570 of which was for the purpose of holding the defendants harmless should they prevail in the underlying suit. The undertaking was provided by Curtis and the order of attachment issued. The sheriff then levied on the debt owed by National to Wrestling, and money in the total amount of $24,324.17 [425 U.S. 73, 76] was paid to the sheriff by National in April and May 1973, and in April, June, and July 1974.
"Prior to the application of property or debt to the satisfaction of a judgment, the defendant, the garnishee or any person having an interest in the property or debt may move, on notice to each party and the sheriff, for an order vacating or modifying the order of attachment. Upon the motion, the court shall give the plaintiff a reasonable opportunity to correct any defect. If, after the defendant has appeared in the action, the court determines that the attachment is unnecessary to the security of the plaintiff, it shall vacate the order of attachment. Such a motion shall not of itself constitute an appearance in the action."
Appellees neither gave an undertaking nor moved to vacate the attachment under 6223. Instead they waited nine months until January 1974, and filed the instant action under 42 U.S.C. 1983 in the United States District Court for the Southern District of New York naming as defendants the sheriff, Judge Fine, the Attorney General, the Governor of New York, and the plaintiffs in the state action. Alleging that the temporary loss, pending decision on the merits of the underlying complaint, of the money owed them by National was injuring them irreparably, they sought a declaration that the attachment provisions of CPLR were unconstitutional, an order enjoining their further enforcement, and an order directing that the attachment of National's debt to Wrestling be vacated. Appellees [425 U.S. 73, 77] asked that a three-judge court be convened under 28 U.S.C. 2281 and 2284.
On June 17, 1974, the single-judge court rejected appellants' claim that it should abstain from deciding the constitutional issue, and a three-judge court was convened. On November 6, 1974, the three-judge court granted the requested relief "until and unless a meaningful opportunity to vacate an attachment is provided under CPLR  6223 or by the [c]ourts of the State of New York." The judgment was stayed, however, pending appeal to this Court.
It may be that the three-judge District Court below was correct in its "forecast," see Railroad Comm'n v. Pullman Co., 312 U.S. 496, 499 (1941), that even in light of recent cases in this Court, see, e. g., North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601 (1975); Mitchell v. W. T. Grant Co., 416 U.S. 600 (1974); Fuentes v. Shevin, 407 U.S. 67 (1972), the New York courts will construe CPLR 6223 to preclude an adequate preliminary [425 U.S. 73, 78] inquiry into the merits of a plaintiff's underlying claim. Cf. Boehning v. Indiana Employees Assn., 423 U.S. 6, 7 -8, n. (1975). On the other hand, as the order of the three-judge court itself recognized, the New York courts could conclude otherwise. The New York Court of Appeals has already held that an attachment may be vacated if it "clearly" appears "that the plaintiffs must ultimately fail" on the merits. Wulfsohn v. Russian Socialist Federated Soviet Republic, 234 N. Y. 372, 377, 138 N. E. 24, 26 (1923). See also Maitrejean v. Levon Properties, 45 App. Div. 2d 1020, 358 N. Y. S. 2d 203 (1974); Richman v. Richman, 41 App. Div. 2d 993, 344 N. Y. S. 2d 52 (1973); Martin Enterprises, Inc. v. M. S. Kaplan Co., 45 App. Div. 2d 883, 358 N. Y. S. 2d 160 (1974). The precise nature of any inquiry into the merits which will be made by the New York courts under this rubric is unclear, but an inquiry consistent with the constitutional standard is by no means automatically precluded. Indeed, two New York trial courts have expressly held, subsequent to the decision below, that where fact issues are raised, on a motion to vacate an attachment, with respect to the merits of the underlying claim, a preliminary hearing will be held on those issues. Regnell v. Page, 82 Misc. 2d 506, 369 N. Y. S. 2d 936 (1975); New York Auction Co. v. Belt, 81 Misc. 2d 1032, 368 N. Y. S. 2d 98 (1975).
Under these circumstances, it would be unwise for this Court to address the constitutionality of the New York attachment statutes, for decision on that issue may be rendered unnecessary by a decision of the New York courts as a matter of state law. City of Meridian v. Southern Bell Tel. & Tel. Co., 358 U.S. 639, 640 (1959); Reetz v. Bozanich, 397 U.S. 82 (1970); Harman v. Forssenius, 380 U.S. 528 (1965); Fornaris v. Ridge Tool Co., 400 U.S. 41 (1970); Railroad Comm'n v. Pullman Co., [425 U.S. 73, 79] supra. The court below has declared unconstitutional the statute of a State the continued utilization of which is undoubtedly of importance to that State. If the State construes its statute so as to remove any constitutional problems, friction with the State will have been avoided. Railroad Comm'n v. Pullman Co., supra, at 500-501. Finally, injunctive relief against the state officials who were defendants below appears particularly inappropriate in light of the fact that these 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.
Accordingly, we vacate the judgment below and remand these cases to the three-judge court and direct it to abstain from a decision of the federal constitutional issues until the parties have had an opportunity to obtain a construction of New York law from the New York state courts.
"8. there is a cause of action to recover damages for the conversion of personal property, or for fraud or deceit."

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