Court Opinion

ID: 8902200
Source: CourtListenerOpinion
Date Created: 2022-11-27 01:18:25.886326+00
Date Added: 2024-06-11T17:07:56.593072
License: Public Domain

SEITZ, Chief Judge,
with whom Circuit Judge ALDISERT joins, concurring and dissenting in part.
The majority hold that defendants’ non-consensual possession of plaintiffs’ vehicles pursuant to Pennsylvania’s common law repairman’s lien is not action under color of state law, and, therefore, affirm entry of summary judgment against all plaintiffs except Lois Dillon. They reverse the entry of summary judgment against Lois Dillon because Pennsylvania’s statutory sale provision violates due process. I concur in that part of the court’s judgment reversing as to Dillon, but because I believe that the re*165pairman’s nonconsensual possession is both action under color of state law and violative of due process, I dissent from that part of the court’s judgment affirming the district court.
I join in parts IV and V of Judge Gibbons’ opinion in which he concludes that defendants’ actions under both the common law possessory lien and the statutory foreclosure sale provision are action under color of state law, and, therefore, must comply with due process standards. For the reasons stated by Judge Gibbons in part VI B of his opinion, I agree with all of my colleagues that the foreclosure by sale provisions clearly violate due process. Because the majority conclude that the repairman’s possessory lien did not implicate state action, they found it unnecessary to consider whether the lien would satisfy due process standards. Judge Gibbons and Judge Adams reach the issue concluding that the lien procedure comports with due process. I also reach this issue but for the reasons which follow conclude that the lien procedures fail to provide the minimum safeguards against arbitrary or mistaken seizure required by due process.
It is now settled law that a temporary interruption in the use of personal property is the deprivation of a significant property interest entitled to due process protection. Traditionally, due process has meant that notice and hearing must precede the deprivation. In the context of provisional remedies, the hearing, designed to establish the probable validity of the underlying claim which is the basis for the seizure, fulfills one of the basic purposes of due process— protection against the mistaken or arbitrary deprivation of property.
The Supreme Court has held that this purpose is fulfilled when a provisional remedy procedure, although not providing preseizure notice and hearing, does incorporate other protective preseizure procedures in conjunction with an immediate postseizure hearing after which the property must be returned unless the creditor proves his claim. This synthesis of Sniadach v. Family Finance Corp., 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969), Fuentes, v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972), Mitchell v. W. T. Grant Co., 416 U.S. 600, 94 S.Ct. 1895, 40 L.Ed.2d 406 (1974) and North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U.S. 601, 95 S.Ct. 719, 42 L.Ed.2d 751 (1975) was articulated in Jonnet Development Corp. v. Dollar Savings Bank, 530 F.2d 1123, 1128-29 (3d Cir. 1976).
In Fuentes and North Georgia Finishing statutes were stricken which required that the creditor seeking the provisional remedy initiate a suit, file an affidavit and post a double indemnity bond in favor of the debt- or. These procedures were held inadequate to protect the debtor from arbitrary or mistaken seizure. In both cases the debtor could regain use of his property by posting either a single or double indemnity bond, but in each case the Court rejected this as a basis for upholding the statutes. “When officials . . . seize one piece of property from a person’s possession and then agree to return it if he surrenders another, they deprive him of property whether or not he has the funds, the knowledge, and the time needed to take advantage of the recovery provision.” Fuentes, 407 U.S. at 85, 92 S.Ct. at 1997.
The preseizure procedural safeguards present in Mitchell which satisfied due process and which distinguish it from the Florida and Pennsylvania replevin remedy and Georgia attachment statute which did not are: (1) the remedy was limited to goods in which a security interest had been retained, thus simplifying the issue of the creditor’s right to repossess; (2) a judge rather than a clerk issued the writ; (3) the creditor was required to file an affidavit alleging specific facts based upon personal knowledge entitling it to possession, and (4) the creditor was required to prove its claim at an immediate postseizure hearing if the writ was not to be dissolved. Moreover, under the Louisiana statute, as with the stricken Florida and Georgia statutes, the creditor was required to file a complaint initiating an action for repossession and to post a double indemnity bond.
*166The Pennsylvania common law possessory lien challenged here stands in stark contrast to all of these statutory procedures — the viable as well as the infirm. The repairman is empowered to deprive the owner of possession without filing suit for the amount in dispute, without filing an affidavit, and without posting a bond to indemnify the debtor in the event the basis for impounding the vehicle was wrongful. Unless the debtor posts a double indemnity bond to protect the repairman he cannot recover the vehicle until after he prosecutes a suit to final judgment. Not only does this law lack the “saving characteristics of the Louisiana statute,” 419 U.S. at 607, 95 S.Ct. at 722, but it lacks even the rudimentary safeguards held insufficient in Fuentes and North Georgia Finishing. Because Pennsylvania’s possessory lien law has deprived the owner of possession without providing a single protection against arbitrary or mistaken seizure, its unconstitutionality follows a fortiori from Supreme Court precedent.
The proffered distinctions between these precedents and the facts in this case are unpersuasive. The availability of a prejudgment procedure for return of the auto to the owner upon posting a double indemnity bond is not, as previously noted, a saving factor. Fuentes, 407 U.S. at 84-85, 92 S.Ct. 1983. Nor does the fact that the repairman’s initial possession was consensual have any bearing on the validity of his wrongful detention long after his limited bailment has terminated.
It is hornbook law that the bailee must yield possession in accordance with the terms of the bailment contract, 8 C.J.S. Bailments § 37 (1962), and there was no contractual provision for retention of the vehicle as security here. Thus, the owner was deprived of property once the repairman’s bailment terminated and he detained the vehicle on the strength of state law.
Moreover, Fuentes and its progeny cannot be distinguished by suggesting that the creditor’s interest is stronger here. Unlike Mitchell, in which purchase money mortgages were involved, here the repairman’s accretion value will often be a minor part of the chattel’s value. As with the goods in Mitchell the vehicles are subject to destruction and waste, but in contrast to Mitchell the state can by virtue of its control over certificates of title devise procedures to protect a repairman from the risk of alienation of the vehicle without depriving the owner of possession. In short, if there is any difference between this ease and the Court’s precedent on this score, it is that the repairman’s interest here is less and the owners’ greater than those of the respective parties to a typical purchase money mortgage.
The error I find in the result reached by my brothers is apparent in the very real consequences which follow from the judgment upholding the possessory lien. In Fuentes the Court struck down a Pennsylvania procedure affording more protection to debtor-owners than does the retention lien here. As a result, Pennsylvania amended its court rules, modeling them on the Louisiana statute upheld in Mitchell. The hallmark of these rules is that the owner will not be deprived of his property unless the creditor files suit and posts bond, a judicial officer gives his sanction, and an opportunity is given for the owner to immediately regain possession without posting bond. Pa.R.Civ.P. 1073 et seq.
This court now says that those procedures need not apply when a repairman deprives an owner of possession. The supreme irony of this result is that the only legal recourse open to a dispossessed owner pending final judgment is to seek replevin in the shoes of a creditor under the same court rules designed to protect debtors from oppressive creditor tactics. The debtor-creditor world is turned upside down when the debtor-owner cannot regain his property without posting a double bond, filing suit and affording the creditor an early hearing — procedures designed to prevent a debtor from wrongfully losing possession. The consumers who won procedural protection against arbitrary and mistaken seizure when the court rules were amended to comply with Fuentes and Mitchell have been hoisted with their own petard.