UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
January 7, 1976
Harry VAIL, Jr., et al., Plaintiffs,
Lawrence M. QUINLAN, Individually and in his capacity as Sheriff of Dutchess County, et al., Defendants
The opinion of the court was delivered by: MACMAHON
MacMAHON, District Judge.
This three-judge court has been convened, pursuant to 28 U.S.C. § 2281, to hear and determine this action, brought under the Civil Rights Act and its jurisdictional counterpart, 42 U.S.C. § 1983, 28 U.S.C. § 1343(3), by individual judgment debtors and all others similarly situated. Challenging the constitutionality of certain statutes of the State of New York, plaintiffs seek class action determination
and money damages, as well as declaratory and injunctive relief.
The challenged statutes, Sections 756, 757, 765, 767, 769-775
of Article 19 of the New York Judiciary Law (McKinney 1968), implement supplementary or postjudgment proceedings for collection of money judgments. They permit a judgment debtor, who has failed to comply with a disclosure subpoena concerning his ability to satisfy a judgment debt, to be held in contempt, fined and imprisoned without a hearing.
We hold that certain of the statutes in question, specifically, Sections 756, 757, 770, 772, 773, 774 and 775, violate the due process clause of the Fourteenth Amendment and accordingly that they are void and may no longer be enforced.
A creditor, unable to satisfy a money judgment, may compel a judgment debtor to disclose all matter relevant to satisfaction of the judgment.
Disclosure is generally effected by requiring the debtor, in response to a subpoena issued by the creditor, to attend a deposition or to supply information by answers to written questions submitted by the creditor.
False swearing or failure to comply with the subpoena is punishable as a contempt of court.
Procedures by which a debtor is held in contempt are set out in the Judiciary Law and constitute the statutory scheme challenged here. If the debtor does not comply with the disclosure subpoena, an order requiring him to show cause why he should not be punished for contempt will issue solely upon the basis of an affidavit by the creditor's attorney showing that the debtor failed to respond to the subpoena (§ 757(1)). If the debtor does not appear for a hearing upon the return date of the order to show cause, the court will make a final order directing that he be punished by fine or imprisonment (§§ 772, 770). The fine is in an amount sufficient to indemnify the creditor for any loss or injury caused as a result of the debtor's contempt, or, if no loss or injury is shown, in an amount not exceeding costs plus $250 (§ 773).
On the basis of an affidavit of the creditor's attorney showing that a demand for payment of the fine has been made and refused, an ex parte warrant be issued committing the debtor to prison until the fine is paid (§ 756). The debtor may remain incarcerated for up to 90 days before he is brought before the court for a review of the proceedings and a determination as to whether he should be discharged from imprisonment (§ 774). If the debtor is unable to endure the incarceration or to pay the sum of money, he may petition the court for release (§ 775), but the burden of proof is on the debtor to show why he should no longer be held.
The case of the plaintiff Vail is typical of the plight of the judgment debtor under the challenged statutory scheme. Vail and his wife were the subject of a default judgment for $534.63 entered in favor of Public Loan Company in January 1974. At that time, Vail and his family were on public assistance. On April 22, 1974, Charles Morrow, attorney for Public Loan, caused a subpoena to be served on Vail, requiring him to appear on May 28 before Charles Morrow for the taking of a deposition regarding all matters relevant to the satisfaction of the judgment. Vail did not appear for the deposition.
On the basis of the subpoena, an affidavit of due service, and an affidavit by Charles Morrow that Vail did not appear and that his conduct was calculated to and did actually defeat, impair and prejudice the rights and remedies of the judgment creditor, Judge Joseph Juidice of the Dutchess County Court issued an order on July 22 directing Vail to appear at the Dutchess County Court on August 13, to "show cause why he should not be punished as for contempt for violation of and noncompliance with the said subpoena in that he failed to appear or respond thereto." When Vail did not appear in County Court, Judge Juidice issued an "Order Imposing Fine," which held Vail in contempt and required him to pay $270 to the judgment creditor.
When Vail failed to comply
with the Order Imposing Fine, Charles Morrow, on the basis of the papers previously submitted on the application for the order to show cause, an affidavit of due service of the Order Imposing Fine, and an affidavit of Morrow that Vail had not complied, applied for and obtained an ex parte commitment order on September 23. The commitment order directed that, without further notice, the sheriff of any county arrest Vail and commit him to the county jail, that he be held in custody until the fine of $270 was paid, together with the sheriff's fees and the disbursements on the execution of the order.
Vail was arrested in his home on October 1 and committed to the Dutchess County Jail. At the time, he had only one dollar to last him until he received his next public assistance check. He and his family owned no property except household furniture and clothing. Vail was released the next day when a relative loaned him $294.25 to pay the fine plus additional costs.
A preliminary question for determination is whether we should abstain from deciding the issues raised in this action. Plaintiffs never raised their constitutional claims in state court, although the challenged statutory scheme does provide an opportunity for a hearing. Defendants contend that federal intervention before the state has an opportunity to construe its own laws is an untenable interference with the duty and authority of the state courts to enforce their judgments. Further, defendants cryptically assert that, even if no appeal is available from any or some of the orders of the defendant judges, a debtor in plaintiffs' posture must still exhaust his state appellate remedies.
Abstention is a judge-made doctrine based on considerations of federalism and a need to avoid premature constitutional adjudication. It allows a federal court, although having jurisdiction, to decline decision on the merits of the controversy. The doctrine is invoked when determination of a state law issue may resolve or materially alter the constitutional claim.
Defendants first contend that since the issues raised here have never been presented to a state court, interests of comity and federalism warrant dismissal of the action. It is clear, however, that when the challenge is to the constitutionality of statutes which are not ambiguous, abstention should not be used to require vindication of a federal claim in state court.
The method by which the civil contempt provisions are implemented cannot be in doubt, for each of the representative plaintiffs has been subjected to these statutes. The challenged statutes were originally enacted in 1909. They are not ambiguous on their face; nor have defendants suggested a limiting construction by which a state court could resolve the constitutional claim. We think, therefore, that we should not decline to reach the merits of this case under the traditional formulation of the doctrine of abstention.
More forcefully, defendants contend that the abstention doctrine articulated in Younger v. Harris, 401 U.S. 37, 91 S. Ct. 746, 27 L. Ed. 2d 669 (1971), should bar this action. In Younger, the Supreme Court held that considerations of comity and the reluctance of equity courts to interfere with criminal prosecutions prevented a federal court from intervening by way of an injunction or declaratory judgment in a criminal prosecution pending in state court. Younger was expanded in Huffman v. Pursue, Ltd., 420 U.S. 592, 95 S. Ct. 1200, 43 L. Ed. 2d 482 (1975), to apply to a civil proceeding brought under a state's nuisance statute to enjoin exhibition of obscene films.
Huffman did not extend Younger to apply to all pending state court actions. The Supreme Court characterized the nuisance proceedings as "more akin to a criminal prosecution than are most civil cases."
In Huffman, the state was a party to the proceedings because the action had been brought by the county prosecutor. Enforcement of the nuisance statute was found to be in aid of, and closely related to, criminal statutes which prohibited the exhibition of obscene materials. The Court, therefore, held Younger to apply to civil proceedings only when intervention would disrupt the very interests which would underlie a state's criminal laws.
In Anonymous v. Association of the Bar of City of New York, 515 F.2d 427 (2d Cir. 1975), the question was whether intervention in a state disbarment proceeding was comparable to the disruption in Huffman.13 The court found that it was, noting the characterization of the proceedings as quasi-criminal and the state's special interest in controlling the fitness and character of members of the bar.
When the circumstances of the instant case are measured against Huffman and Anonymous, it is clear that they do not fit within the limited extension of Younger. The challenged statutory scheme is designed to facilitate a creditor's collection of a judgment debt. The civil contempt proceedings are initiated by private parties to enforce compliance with subpoenas issued by private attorneys. They are not related to New York's criminal statutes; nor do they play any part in the enforcement of the state's criminal laws. Moreover, the challenged proceedings are defined as civil by the Judiciary Law.
It is also a predicate for Younger dismissal that the parties have an opportunity to raise and have their federal issues decided by a competent state tribunal.
Under Article 19 of the Judiciary Law, a debtor who fails to appear at the show cause hearing may be found in contempt, fined and subjected to incarceration ex parte (§ 770). If the court merely imposes a fine which the debtor fails to pay on demand, a warrant is issued ordering the debtor's imprisonment (§ 756). The challenged statutes, therefore, permit the debtor to be thrown in jail without an actual hearing on the basic issues of whether he has paid or is able to pay the fine, whether his assets were originally exempt from execution, or whether he ever received notice of the order to show cause or was otherwise notified of the hearing.
In Gerstein v. Pugh, 420 U.S. 103, 95 S. Ct. 854, 43 L. Ed. 2d 54 (1975), the Supreme Court held that a federal court injunction against the detention of a criminal defendant on the basis of an Information did not violate principles of Younger. The Court distinguished between an injunction brought against a state criminal prosecution and one directed against incarceration without a preliminary hearing.
Since plaintiffs claim that the statutory scheme challenged here also permits incarceration without a preliminary hearing, Younger does not apply.
Plaintiffs level four independent attacks under the due process clause against the statutory scheme supporting the civil contempt provisions of the Judiciary Law: (1) Sections 756, 757, 770, 773 and 774 permit an adjudication of contempt and order of imprisonment without an actual hearing; (2) Section 757 does not provide for adequate notice or warning of the consequences of failure to appear at the show cause hearing; (3) Sections 756, 770, 772 and 774 subject the debtor to imprisonment without informing him of his right to counsel and to assigned counsel if indigent; and (4) the fines and incarceration permitted under Sections 756, 770, 773 and 774 are punitive. Defendants contend that the notice and hearing provisions of the statutory scheme are sufficient under the due process clause. In examining these contentions, we recognize that the degree of procedural safeguard required by the constitution will be influenced by the importance of the private interest effected.
It is clear that the challenged sections of the Judiciary Law provide an opportunity for a hearing at the time the show cause order is made returnable. However, if the debtor does not appear, he is adjudged in contempt and subject to a warrant of commitment. Due process requires more than the mere opportunity to be heard when the interest involved is deprivation of the debtor's liberty. The statutory scheme presently allows imprisonment solely on the basis of a creditor's affidavit of service and an ex parte proceeding. A finding of contempt can be properly made only upon a hearing with both parties present.
The defect is not cured by providing a hearing within 90 days of incarceration. If a hearing is to serve its full purpose, it must be held before, not after, imprisonment.
A concomitant to a fair hearing is notice appropriate to the nature of the case.
Here, notice must be complete and clear, given the substantial deprivation of liberty that may result from failure to respond. Fundamental fairness requires that the show cause order contain a clear statement of the purpose of the hearing and a stark warning that failure to appear may result in contempt of court and imprisonment.
Moreover, the right to a hearing prior to imprisonment is ineffective without counsel.
The debtor cannot be expected to understand, much less to present, the legal and factual defenses to a finding of contempt that might be raised. Surely, a debtor who is deprived of his liberty is as much entitled to due process as is a defendant charged with a crime.
Finally, although it is well established that judicial sanctions in civil contempt are proper to compensate the complainant for losses sustained or to coerce compliance with a court's order,
the sanctions imposed under the challenged statutes are neither remedial nor coercive, but punitive. Where compensation is intended and a fine imposed, it must be based on evidence of the complainant's actual loss.
Section 773 requires the imposition of a fine up to $250 plus costs when the alleged contempt has not been shown to have resulted in any loss or injury to the creditor. If coercion is the purpose of the sanction, it can be justified only if the person has the ability to comply. The absence of the procedural safeguards of indictment and jury trial can be justified only by the conditional nature of the imprisonment and the contemnor's continued defiance.
Section 756 permits the arrest and incarceration of a debtor, whether or not he is able to comply with the order by paying the fine. To the extent, therefore, that the fines and imprisonment contained in the Judiciary Law are punitive, they cannot be imposed in a civil contempt proceeding.
Accordingly, under the due process clause of the Fourteenth Amendment, we declare unconstitutional and enjoin further application of Sections 756, 757, 770, 772, 773, 774 and 775 of Article 19 of the New York Judiciary Law.