Court Opinion

ID: 8893138
Source: CourtListenerOpinion
Date Created: 2022-11-26 23:30:46.359911+00
Date Added: 2024-06-11T17:07:19.240431
License: Public Domain

KAUFMAN, Chief Judge
(dissenting) :
After reading my brothers’ opinion as a sequel to Shirley v. State Nat’l Bank, 493 F.2d 739 (2d Cir. 1974), I can at least applaud them on their consistency. But, my views too are well known. I stated in Shirley v. State Nat’l Bank, supra, 493 F.2d at 745 (Kaufman, C. J., dissenting):
I am of the view that the lawful non-consensual taking of property is a uniquely governmental function, [and therefore] I consider its exercise, whether by state officials or by private individuals so empowered, subject to the due process constraints functionally required to avoid arbitrary deprivations.
The device of wage assignment — no matter how old, how sacred, how firmly embedded in our common law tradition —-rests nevertheless on the private implementation of the state’s monopoly power over binding conflict resolution. When a finance company unilaterally determines that the assignor-debtor is in default, the essential predicate for triggering the wage assignment mechanism —and then takes the drastic step of seizing a significant property interest without the consent of the holder — it is performing an adjudicative function which is a fundamental component of the role of government in our society.
Appellants urge, however, and the majority agrees, that this delegation of power to the private sector — this waiver, in effect, of the debtor’s constitutional right to have default determined under the aegis of government, with the procedural requirements attendant thereto — is sanctified by the consensual nature of the wage assignment agreement. Yet, the language of these agreements includes no mention of the procedural safeguards the debtor is asked to relinquish. Thus, my comment in Shirley v. State Nat’l Bank, supra, 493 F.2d at 745, n. 1 (Kaufman, C. J. dissenting), applies with equal force here:
As in Fuentes v. Shevin, 407 U.S. 67, 94-96, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972), the fact that the plaintiff signed a form contract which authorized [wage assignment] will not immunize a seizure, under a waiver theory, where it is otherwise defective be*313cause the [wages are] seized without prior notice and an opportunity for a hearing. The absence of consent in the taking cannot be cured by resorting to the meaningless ritual of utilizing a contract of adhesion in which the fine print, even if read, fails to mention that the debtor has any right to a pre-seizure hearing.
Moreover, try as I might I cannot fathom how the majority finds comfort in Professor Kessler’s commentary on the now vacuous concept of freedom of contract — rendered an anachronism by the advent of the adhesion contract. Indeed, the author captures the very essence of the delegation of power principle by which so-called private conduct is infused with “state action.”
Society, by proclaiming freedom of contract, guarantees that it will not interfere with the exercise of power by contract. Freedom of contract enables enterprisers to legislate by contract and, what is even more important, to legislate in a substantially authoritarian manner without using the appearance of authoritarian forms. Standard contracts in particular could thus become effective instruments in the hands of powerful industrial and commercial overlords enabling them to impose a new feudal order of their own making upon a vast host of vassals.
F. Kessler, Contracts of Adhesion— Some Thoughts About Freedom of Contract, 43 Colum.L.Rev. 629, 640 (1943) (footnote omitted). It strikes me as rather fatuous to argue, as the majority does, that “the phrase ‘contract of adhesion’ becomes meaningless [because] the impoverished debtor is not subjugated to the whim of the creditor” when perhaps the most critical and certainly the most self-serving determination in the debtor-creditor relationship —default—is left by contract to the creditor, ex parte.
Indeed, by following the “consensual” path hewn by the majority, we go far toward eviscerating the salient teaching of Sniadach v. Family Finance Corp., 395 U.S. 337, 340, 89 S.Ct. 1820, 1822. 23 L.Ed.2d 349 (1969) concerning the injustices which arise from “prejudgment garnishment whereby the sole opportunity to be heard comes after the taking.” To be sure, my brothers have no difficulty whatsoever with Sniadach and with a mere nod they indicate their awareness of its existence. They then proceed to distinguish Sniadach from this case by noting the absence here of the court clerk’s purely ministerial role in Sniadach in issuing the ex parte summons. Meaningless distinctions of this sort are intended to give the appearance of continuity of the law, when in fact the majority here has clearly parted company with the Supreme Court’s rationale in Sniadach and Fuentes. It can hardly be questioned that the result of the filing of the wage assignment in this case was the equivalent in its effect to the garnishment proceedings in Snia-dach. If the debtor’s consent to the wage deprivation is not meaningful, as it cannot be without at least an understanding of the procedural shortcuts which follow wage assignment, compare Swarb v. Lennox, 405 U.S. 191, 92 S.Ct. 767, 31 L.Ed.2d 138 (1972) with D. H. Overmyer v. Frick Co., 405 U.S. 174, 92 S.Ct. 775, 31 L.Ed.2d 124 (1972), then that “consent” serves merely to camouflage the taking. The words of the Court, though uttered in a different context, are strikingly appropriate:
To hold otherwise would be to exalt artifice above reality and to deprive the [decision in Sniadach] of all serious purpose.
Gregory v. Helvering, 293 U.S. 465, 470, 55 S.Ct. 266, 268, 79 L.Ed. 596 (1935).
Nor can New York’s wage assignment statute be cleansed of its constitutional impurities by relying on the benevolence of the New York legislature in promulgating it. The Court, in Sniadach, was quite explicit about the relevance of good intentions:
The question is not whether the Wisconsin law is a wise law or [an] unwise law. Our concern is not what *314philosophy Wisconsin should or should not embrace, [citation omitted]. We do not sit as a super-legislative body. In this case the sole question is whether there has been a taking of property without that procedural due process that is required by the Fourteenth Amendment.
Sniadach v. Family Finance Corp., supra, 337 U.S. at 339, 89 S.Ct. at 1821.
Accordingly, since I find the requisite “state action” in the appellants’ performance of the uniquely public function of adjudication,1 and because the § 47-e “special proceeding” requires initiation by the debtor, a burden we have found constitutionally impermissible in our recent decision, Hernandez v. European Auto Collision, Inc., 487 F.2d 378, 385 n. 4 (Timbers, J. concurring in an opinion joined by Lumbard, J.), I would affirm Judge Foley’s decision — a well reasoned and sound analysis of the law.

. I fail to understand the majority’s reliance on Judge Friendly’s three-pronged test in Wahba v. New York University, 492 F.2d 96, 101-102. It lias no relevancy to this case since, unlike Wahl a, a finding of “state action” here would not turn on the applicability of the “partnership” or “symbiosis” test.