North Georgia Finishing, Inc. v. Di-Chem, Inc. – Oral Argument – November 18, 1974

Media for North Georgia Finishing, Inc. v. Di-Chem, Inc.

Audio Transcription for Opinion Announcement – January 22, 1975 in North Georgia Finishing, Inc. v. Di-Chem, Inc.

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Warren E. Burger:

We’ll hear arguments next in 73-1121, North Georgia Finishing against D-Chem Incorporated.

Mr. Coppedge, I think you may proceed now whenever you are ready.

Warren N. Coppedge, Jr.:

Mr. Chief Justice, and may it please the Court.

The case presented to the Court today is a garnishment action involving Title 46, Section 101, that (Inaudible) of the code of Georgia, which provides for prejudgment garnishment by a plaintiff upon the defendant’s bank account without notice to the defendant.

The authority for our position before this Court today is contained in this Court’s decisions in Sniadach, Fuentes versus Shevin, and Mitchell versus W. T. Grant Company.

We also consider the authority of Boddie versus Connecticut, at 401 US 371, to be especially applicable to the facts of this case.

And the facts are, that on August the 20, 1971, Di-Chem Inc.

filed a suit on account against North Georgia Finishing, and concurrently therewith, an intermediate sequential order, filed a garnishment action, and served its summons of garnishment upon the First National Bank of Dalton, in Georgia.

And the summons of garnishment, was issued by a clerk of the court.

It was based only upon the conclusory allegation, that the plaintiff had reason to apprehend the loss of a sum of money or a part thereof in the process of garnishment issue.

The summons required the garnishee to answer in not less than 30, no more than 45 days, all of the property that it had at the time service belonging to the defendant, and all of the property that might have come into his possession in the interim and this is not withstanding the fact that all of the property may have more or less than were as sued for, by the plaintiff in the case.

Harry A. Blackmun:

The allegation in the affidavit follows the statute, doesn’t it?

Warren N. Coppedge, Jr.:

Yes, sir.

It’s exactly parallel to the statute, and as a matter of fact it’s a printed allegation supplied to people, by the local printing industry in courts and you may be filling the blanks.

Harry A. Blackmun:

Now, what’s wrong with that, you have to have it?

Warren N. Coppedge, Jr.:

No sir.

Nothing is wrong with it.

Harry A. Blackmun:

It isn’t true then you don’t sign the affidavit?

Warren N. Coppedge, Jr.:

Insofar as form, nothing is wrong with that.

Now, the Georgia practice as stated in Powell versus Powell, at 95 Georgia Appeals 122 provides that a defendant in such a case is not even a party to the case, and is not entitled to any notice either pre-seizure or post-seizure, he is just not a party to the case, until he posts bond.

In this case, North Georgia Finishing posted bond, as soon as the courthouse opened after the weekend was over, the garnishment was issued on Friday afternoon, and in doing so freeze its bank account.

Harry A. Blackmun:

He’s a party to the main action, isn’t he?

Warren N. Coppedge, Jr.:

Pardon?

Harry A. Blackmun:

He is a party to the main action?

Warren N. Coppedge, Jr.:

He’s a party to the main action, but he’s not a party to this action.

Harry A. Blackmun:

But the main action is then pending in contrast to the Sniadach situation maybe in Wisconsin?

Warren N. Coppedge, Jr.:

The main action continues to pend, and it must be filed prior to the garnishment action.

In this case, it was the immediate preceding sequentially filed case.

And then, North Georgia Finishing posted its bond to do two things.

One is, to substitute property, that is to substitute a bond for its bank account, which was a commercial bank account, and which had been tied up by virtue of the garnishment and secondly, under the authority of the Georgia codes, it posted bond in order to gain access to the court, in order to establish standing.

Lewis F. Powell, Jr.:

Mr. Coppedge.

Warren N. Coppedge, Jr.:

Yes.

Lewis F. Powell, Jr.:

Did your client have an opportunity at the time he posted a bond to challenge the accuracy of the statements in the affidavit?

Warren N. Coppedge, Jr.:

No sir and there is no statutory provision provided by Georgia law for either a pre-seizure hearing or a post-seizure hearing.

As a matter of fact, we have have no standing in the case, until we post a bond and this is why, we think the authority of Boddie versus Connecticut to be especially applicable because if we understand in that case, it says that access to the courts shall not be a function of a financial requirement.

Lewis F. Powell, Jr.:

Well, after you posted a bond in this case, did you can contest the affidavit anywhere in courts?

Warren N. Coppedge, Jr.:

No sir.

Lewis F. Powell, Jr.:

I was under the impression you did, I don’t know where that came from?

Warren N. Coppedge, Jr.:

No sir, there was a hearing before the trial judge.

There were allegations in the motion to set aside that the affidavit was granted; however, there was nothing heard on that particular allegation.

We do not consider that we have a authority under the Georgia statute to a cert.

There was an allegation in our motion to set aside the garnishment.

Lewis F. Powell, Jr.:

You made an allegation, but you don’t think it had any basis or justification– (Voice Overlap)

Warren N. Coppedge, Jr.:

Yes sir, I don’t think it had any of them.

There was nothing presented and there was no evidence presented.

We merely argued that this case is — this Court’s Sniadach opinion.

Lewis F. Powell, Jr.:

Did you attempt to introduce any evidence?

Warren N. Coppedge, Jr.:

No sir.

Harry A. Blackmun:

Mr. Coppedge, is your client still in business?

Warren N. Coppedge, Jr.:

Yes sir.

Harry A. Blackmun:

He hasn’t gone into bankruptcy?

Warren N. Coppedge, Jr.:

No sir, my client is not in business as North Georgia Finishing Company any longer.

It changed its name to Beavercreek Carpet Mills Inc to more correctly reflects its nature of business and that is the general manufacturing of carpet rather than carpet finishing.

It is a wholly owned subsidiary Beavercreek Mills Inc.

which is a subsidiary of another company.

They are no longer active in manufacturing and selling carpet, but they are still a corporate entity and still in existence.

Potter Stewart:

What happened to the underlying litigation here?

Warren N. Coppedge, Jr.:

The underlying litigation is still pending, there is no hearing on it.

Potter Stewart:

I see.

Warren N. Coppedge, Jr.:

Our purpose today, may it please the Court is not necessarily to rehash the written briefs previously filed but there have there a number of recent cases, following Mr. Justice White’s opinion in the Mitchell versus W. T. Grant, case.

Byron R. White:

I won’t say that was the Court’s opinion?

Warren N. Coppedge, Jr.:

Mr. Justice White speaking for the Court.

We would take an opportunity to call this Court’s attention to several of those cases that have flowed from this Court’s opinion in Mitchell versus W.T. Grant, and we would take this opportunity to state that we are in agreement with all that we have found.

The first is a case of September 4, 1974 in the Supreme Court of Georgia, it’s a case of Roberts versus Macaulay at 232 Georgia 660.

Harry A. Blackmun:

Are these in your brief?

Warren N. Coppedge, Jr.:

No sir, they are not, they are subsequent cases.

You mind stating that again.

Warren N. Coppedge, Jr.:

Roberts versus Macaulay, 232 Georgia 660 wherein Justice Hall speaking for the sixth of the seven justices of that court quoted with approval Mitchell versus W.T. Grant, and stated that the one overriding constitutional problem presented by the Georgia Possessory Warrant Statute which was the statute under consideration in that case, was the absence of judicial control over the institution of the proceedings which could be begun by application to the court clerk.

In this case, in the garnishment case before this Court, it was commenced by application to a court clerk.

In this case of Roberts versus Macaulay, the Court recognized the Fuentes decision of this Court which it did not recognize when we were before that Court.

It declare the Georgia Possessory Warrant Statute unconstitutional.

William J. Brennan, Jr.:

It doesn’t suggest, does it, that this ought to go back to the Georgia Supreme Court for reconsideration, does it?

Warren N. Coppedge, Jr.:

No, sir, I don’t believe so and I don’t —

William J. Brennan, Jr.:

I gather you suggest under the possessory statute, they reached a conclusion contrary to this one based upon a subsequent — about Mitchell and they didn’t deal with Fuentes and now they considered Fuentes.

Warren N. Coppedge, Jr.:

No sir, they did not deal with Fuentes when we were before that court.

They dealt with a case of American Olean Tile Co. versus Zimmerman, Hawaiian case and cited that as their authority.

Subsequent to that time, the Supreme Court of Hawaii has declared non-notice seizures of bank accounts to be unconstitutional.

William J. Brennan, Jr.:

Based again on Mitchell and —

Warren N. Coppedge, Jr.:

No sir.

That was pre Mitchell, in the case of Brunswick Corporation versus Galaxy Cocktail Lounge at 513 Pacific 2nd 1390.

William J. Brennan, Jr.:

What’s the title?

Warren N. Coppedge, Jr.:

Brunswick Corporation versus Galaxy Cocktail Lounge Inc.

William H. Rehnquist:

What’s the nature of the possessory warrant in Georgia law, I am not familiar with it?

Warren N. Coppedge, Jr.:

Possessory warrants in Georgia were first enacted in 1822 and were a means of summarily bestowing possession of run away slaves.

William H. Rehnquist:

I take it there is a difference purpose now?

Warren N. Coppedge, Jr.:

Pardon.

William H. Rehnquist:

I take it there it has a different purpose now?

Warren N. Coppedge, Jr.:

Well, runaway slaves or other property, and it has been applied to other property since 1865.

Now it is no different in effect from the provisions of the garnishment statute in that and it alters possession of property pending suit and prior to hearing.

William H. Rehnquist:

Well, how — does garnishment really alter the possession of property.

William H. Rehnquist:

Well, what kind of a property right you conceive that you client had against the bank.

He wasn’t entitled to so many particular bills, was he?

Warren N. Coppedge, Jr.:

Mr. Justice Rehnquist, our position is that this particular piece of property, and this is one of the reason we feel this case is distinguishable from the Mitchell case, is that we are entitled to the money in the bank.

The bank is —

William H. Rehnquist:

Well, are you under Georgia law?

I mean, supposing that the bank went into receivership and went bankrupt, your claim wouldn’t be regarded as a trust — trustee fund claim, would it, it’s just an ordinary debt?

Warren N. Coppedge, Jr.:

I suppose we’d have to look at the FDIC, decision power to —

William H. Rehnquist:

Well, you might be covered through insurance, but typically a depositor’s claim against a bank isn’t property in the sense of having a right to a particular group of bills in the banks, well it’s a show, it’s an action, it’s a contract.

Warren N. Coppedge, Jr.:

It’s a creditor debtor relationship.

William H. Rehnquist:

And nothing was transferred by this really garnishment, was it?

Warren N. Coppedge, Jr.:

Yes sir, we have a right under our contract with that bank to make use of the funds that we have deposited in that bank, and if the deprivation of the use of the funds, the use is the only purpose to which bank accounts and money can be put to my knowledge.

William H. Rehnquist:

Well, what’s wrong with the Supreme Court of Georgia’s analogy in this case, that it is like a lis pendens on property, that prevents you from using the property, but it doesn’t transfer possession of it?

Warren N. Coppedge, Jr.:

Mr. Justice Rehnquist, lis pendens in Georgia pertains only to a situation where there are equities and the property.

Number one, lis pendens cannot be asserted in Georgia, unless an equitable claim of title is asserted against property.

Secondly, lis pendens leaves the property and the use and possession of that person against whom the lis pendens writ is filed.

Lis pendens is applicable in our opinion only to a real-estate, or perhaps to a mechanic’s type lien, laborer’s lien, material men’s lien wherein that property is left in the possession, use and enjoyment of the contended debtor and only can be issued in an equitable situation, and there are several cases on that point, Watson versus Whatley at 218 Georgia 86.

William H. Rehnquist:

Are these cited in your brief?

Warren N. Coppedge, Jr.:

No sir.

Yes sir, they are, they are footnoted in the brief, excuse me.

William H. Rehnquist:

Now when you speak of not being able to use this money, you can’t use it by putting up the bond, can’t you?

Warren N. Coppedge, Jr.:

Yes sir, but in that instance, all we have done is substituted one form of our property with another, and we believe that this Court’s opinion in the Fuentes case, where it’s indicated that we’ve been deprived of our property and we are still deprived of our property, because that bond shows up on our corporate financial statement as a binding obligation of the corporation.

All we’ve done is substituted the types of property that we have been deprived.

Warren E. Burger:

No but if you had debts outstanding, would it be any different on your balance sheet?

Warren N. Coppedge, Jr.:

Sir, this debt is very much a contested debt, and we submit to the court that the principle use of prejudgment garnishments in Georgia are as an economic bludgeon to either for settlement on more favorable terms or surrender.

Warren E. Burger:

Well, I don’t know if the condition of your balance sheet is very crucial to this kind of a case, but the fact is, honest accounting would require you to show some kind of a contingency liability based upon the maximum possible claim that might be established against you, wouldn’t it?

Warren N. Coppedge, Jr.:

Your Honor, I don’t believe so.

I think certainly we do have to properly account and post our balance sheets, but if we honestly contend that we don’t owe anybody any money, and we are sued for this money on open account, I think I am not familiar with accounting practices enough to say, well, now we have got to show that, accept as a contingent liability under suits, somewhere else —

Warren E. Burger:

I am sure your accountant will unquestionably tell you, you better put something in your statements if you are issuing the statement through a bank?

Warren N. Coppedge, Jr.:

And the statement which are concerning contingent liability and litigation, but I don’t think we have to list it in the assets and liabilities of the corporation, that it is an acknowledged debt.

As a matter of fact I’ve had a case where that was done, and I used this evidence against these debtors.

Lewis F. Powell, Jr.:

Mr. Coppedge what assets did North Georgia have in the state of Georgia, it’s a foreign corporation?

Warren N. Coppedge, Jr.:

Yes sir, it had a finishing house, it had a carpet mill and it had a bank account.

Lewis F. Powell, Jr.:

Were these plant facilities subject to mortgage?

Warren N. Coppedge, Jr.:

I am sure they were.

I would state to the Court that there were, but I have no independent knowledge of that.

But I am certain that they were real state mortgages, and I am certain that they were factoring contracts with various of the factoring incorporations.

Lewis F. Powell, Jr.:

You read in your motion that there was no reason to believe that there was any danger of assets not being sufficient.

There was no proof one way or the other.

Warren N. Coppedge, Jr.:

No sir, there was no proof one way or the other.

To answer Your Honor’s question in a little more detail, we believe that Mr. Justice Stewart’s opinion in the Fuentes case that due process test should be based upon the merits of the case, and not upon the relative financial strength of the parties.

At page 1996 Fuentes states clearly, that the bond has no replacement for due process hearing before a neutral hearing officer, with discretion and knows that a bond merely replaces one piece of property with another, and does nothing to advance the cause of due process.

We agree with the court in that decision, that a bond offers only minimal protection and we know that the deprivation is for 30 to 45 days, of all of the property which that bank was have in its possession on deposit from our company, and it is not limited with —

Harry A. Blackmun:

What do you mean by offering only minimal protection, this is a double bond, isn’t it, that the other side has to put on?

Warren N. Coppedge, Jr.:

Yes sir, but it just doesn’t address the issue of fairness and due process.

It doesn’t establish as the Mitchell case test required, as we read the Mitchell case that there must be some judicial officer with discretion to issue this seizure warrant, that there must be some facts stated upon ways to base the seizure warrant, that there must be some reasonable hearing, following the issuance of the seizure warrant.

None of the these things are provided for in the Georgia statutory scheme.

Further, we think that the Mitchell decision is support for our position before this Court in that the Mitchell decision limits itself or partly limits itself to property wherein both the debtor and the creditor have a legal and equitable interest, that is by virtue of title retention contract.

Harry A. Blackmun:

Well, you can distinguish the facts in the Mitchell as the other side can distinguish the facts of Sniadach too, you are kind of in between them, aren’t you, under the Georgia system?

Warren N. Coppedge, Jr.:

I think not for this reason.

The Wisconsin statute as I understand it, number one, you did not have to post the bond to gain access to the courts as you do in Georgia.

Number two, in Wisconsin the garnishment automatically dissolved after 10 days.

There is no such disillusion feature in Georgia.

Harry A. Blackmun:

And number three, I maybe wrong as to this, in Wisconsin, couldn’t your garnishment action antedate the main action?

Warren N. Coppedge, Jr.:

I am not sure Your Honor of that.

I am not sure, and I did not consider that in this case.

William H. Rehnquist:

Of course for a wage garnishment, when you are talking about disillusion after 10 days, that probably means two pay dates.

It certainly doesn’t mean that after 10 days you give back the money held during those two pay days, it just means it doesn’t apply beyond 10 days, doesn’t it?

Warren N. Coppedge, Jr.:

I believe that’s correct.

William H. Rehnquist:

And in your case, I take it once your bank account is garnished, you don’t go on depositing money in there, you get a new bank account.

Warren N. Coppedge, Jr.:

I certainly hope.

William H. Rehnquist:

Oh!

I would hope?

Warren N. Coppedge, Jr.:

Yes sir, but they will go after any other bank account I have.

All they have to do is issue new summons.

William H. Rehnquist:

Well, but that might be evidence of harassment or attempt of add leverage, if they have enough tied up to satisfy their claim, I would presume they wouldn’t do any more?

Warren N. Coppedge, Jr.:

You don’t know Your Honor, for 30 days, and it couldn’t be considerably more that they have tied up.

They can tie up $200,000 on a $100,000 bond, and that’s what’s in the bank.

Warren E. Burger:

Is that subject to an interlocutory motion?

Warren N. Coppedge, Jr.:

There is no statutory provision for it, and in practice I will call another lawyer up and say, hey, you got too much, how about reducing?

Warren E. Burger:

Well, wouldn’t there be an inherent power in the Court to issue an order to trim it down to enough to give you your protection?

Warren N. Coppedge, Jr.:

I know of no such order ever having been issued in my practice, and I know that I have not made an application, I have done it informally with counsel.

I would call two other cases to the Court’s attention.

First is a case of the United States District Court in Texas and it’s cited at 43 Law Week 20-120 Garcia versus Klaus (ph) wherein that court held the Texas statute which appears to be parallel to the Georgia statute in material part unconstitutional following the opinion of this Court in the Mitchell case and also a three-Judge Court of the Southern District of New York in Sugar versus Curtis Circulation Company at 43 Law Week 2183, which also followed the Mitchell opinion of this Court and held a Georgia statue — held a New York statute to be unconstitutional.

William H. Rehnquist:

Mr. Coppedge, if this Court were to agree with you as to the infirmities of the present Georgia statute and that Georgia Legislature wanted to go back and try to make some constitutional provision whereby a plaintiff in a case like this suing an out of State corporation could get some sort of security that would ultimately satisfy a judgment if it got it, what could the Legislature do?

Warren N. Coppedge, Jr.:

Mr. Justice Rehnquist, I have no objection whatsoever and so stated in my brief that we do not oppose what we consider to be this Court’s attempt to reach a constitutional accommodation between the rights of debtors and the rights creditors by providing some safeguard either immediately prior to the issuance of the attachment, or the right of hearing after the attachment.

William H. Rehnquist:

A hearing prior to the attachment is useless, if you’ve got a debtor with a tendency to abscond, he won’t have any money in the bank, the minute he gets notice of the hearing?

Warren N. Coppedge, Jr.:

Your Honor, I said either, and I think that the Court could issue an interlocutory order requiring property under injunction to be held for three to four days, so we could have a hearing.

William H. Rehnquist:

So you say there could be some sort of seizure prior to the hearing on the merits?

Warren N. Coppedge, Jr.:

Absolutely, absolutely.

We think that there should be a constitutional accommodation somewhere, but a clerk issuing a seizure upon conclusions without either any pre-seizure or a post seizure hearing, just doesn’t measure up in our opinion.

Byron R. White:

Is your reference that you want effective (Inaudible)

Warren N. Coppedge, Jr.:

No sir, I think – I think.

Byron R. White:

you are not claiming that if there is a debt here, you are not claiming that there should be pre-judgment (Inaudible)

Warren N. Coppedge, Jr.:

No sir, if it’s properly issued under proper control and safeguard.

I am claiming that we can be bludgeoned economically by interrupting the commercial course of business.

Byron R. White:

But if the judge -– if the creditor went to a Judge with a piece of paper and swore before the Judge of these facts and the Judge thought that gave a probable clause at least pending some further hearings you wouldn’t have any objection?

Warren N. Coppedge, Jr.:

No sir.

William H. Rehnquist:

What the Board has done is a different division of clerk here and a Judge in the case posited by Justice White.

Warren N. Coppedge, Jr.:

We think that is one of the basic reasons.

The other is the fact that it’s issued upon conclusory allegations without saying anything.

Byron R. White:

Do you think it even between two fairly equal people that are creditors, you don’t think your client’s standing for it to get any (Inaudible) protection against the risk of error against the claim of a debtor previously there from the plaintiff’s posting a double bond?

Warren N. Coppedge, Jr.:

No sir, it’s a devastating –

Byron R. White:

Well, it may be devastating but not in terms of money, it is wrong —

Warren N. Coppedge, Jr.:

Well, but the condition of the bond is not to pay any in double.

The condition of the bond is only to pay what money I am out in defending it.

Byron R. White:

I know but it’s costing, it’s costing money to put up the bond?

Warren N. Coppedge, Jr.:

If he has a professional bonding company, if he gets a Vice President of the company to sign the bond as he did in this case, it doesn’t.

William H. Rehnquist:

What are elements of damages on an action on the bond in Georgia?

Warren N. Coppedge, Jr.:

Only to pay what money you are out in defending the bond, should I appear that it should not have been issued.

William H. Rehnquist:

You mean the only thing you can recover is the cost of defense?

Warren N. Coppedge, Jr.:

Yes sir.

William H. Rehnquist:

Not damages —

Warren N. Coppedge, Jr.:

All damages, which in my opinion, don’t go to double the bond; they go to whatever you can show you are out.

Byron R. White:

There isn’t any penalty —

Warren N. Coppedge, Jr.:

There is no penalty.

If whatever I can prove, maybe I can prove interest expense, maybe I can prove my lawyer’s but there is not a penalty, it’s not a punitive bond, and it’s certainly not — won’t go double the bond, it won’t even go to the principal obligation.

Lewis F. Powell, Jr.:

Mr. Coppedge, I just want to be sure I understand your position.

Would you be content if the Georgia law provided a prompt hearing after the garnishment at which you could raise all of the issues that you have in mind?

Warren N. Coppedge, Jr.:

Absolutely.

Lewis F. Powell, Jr.:

In other words, you don’t insist on a prior hearing but —

Warren N. Coppedge, Jr.:

I insist that a judge issue the sequestration warrant and not a clerk.

Lewis F. Powell, Jr.:

But you don’t insist on a hearing at that point?

Warren N. Coppedge, Jr.:

I insist that the least, that the ex parte before Judge who exercises discretion, and hears something other than a conclusion, I don’t insist that I have to be present.

Lewis F. Powell, Jr.:

Right.

Warren N. Coppedge, Jr.:

Thank you!

Warren E. Burger:

Very well.

You may have about seven minutes now Mr. Kemp, but you can get started that away.

Lemuel Hugh Kemp:

Mr. Chief Justice, may it please the Court.

I will end when the clock sounds.

I have my family here and I have to take them back on a train tonight, but I think I can cover the essential points.

Lemuel Hugh Kemp:

Mr. Chief Justice, and may it please the Court.

I will take up three points rely on my brief on my constitutionality of the Georgia statute.

The first is, as indicated by Mr. Justice Powell, we think that waiver rights, the garnishment issued, they file the bond, not to create a stand-in, but to free up this bank account.

Three weeks later, as an after thought, after having read a little law perhaps, they came in and filed an assault and an under attack in paragraph 11, to answer to Mr. Justice Powell.

Paragraph 3, said, if plaintiff had no reason to apprehend the loss of any judgment.

Then three weeks, after they filed the bond, not to create stand-in but to free the bank account, they came in and had an opportunity to have a complete and a full hearing of any kind and at their instance it was heard and Judge (Inaudible) of superior court entered an order in which he denied each and every of the grounds on page 10 and 11 in the appendix of the North Georgia’s brief.”

So we say they waived any rights.

Secondly they had many other ways which could have attacked.

The main action was removed to federal court, although they could have filed a separate suit in federal court.

They could have filed an inter-plea, they could have filed a declaratory judgment, they could raised it in many different issues.

The reason they filed the bond was to free the bank account.

Our second point is that under the authority of DeFunis versus Odegaard, the issue is a moot, first because they filed the bond.

Once they filed the bond under Georgia law, Roberts versus (Inaudible) the dissolution bond takes the place of the property or the fund garnished.

There is no issue anymore, it’s moot, just as when the law student graduated, the issue out of Washington and Oregon became mute.

Secondly, and I don’t want to get into an argument of counsel as to whether or not it’s plant is solvent or not, but I respectfully submit and stating my place that what has happened is exactly what Mr. Foster said when he filled out this affidavit.

The defendants will not be forthcoming to answer the garnishment and we submit that if the Court does want to make an inquiry, it’s not in the record, but the insolvency of the debtor if it in fact existed would make the garnishment moot.

Thirdly, and the third point is, we make the point in our brief that the Georgia statute and Your Honors, I frankly have inquired into the various areas of — and I’ll cover in my brief is constitutional and we distinguish, if we think (Inaudible) and (Inaudible) the Mitchell decision and the recent decision in the last week of the court, upon seizure of automobiles and similar recent cases which I don’t have cited in my brief because it came down after the brief was typed.

The main point I want to make otherwise is that even if this court should reach Mr. Coppedge’s conclusion and assertion that the statute is unconstitutional required to provide notice that it should not be applied to retroactively.

This case was filed in August 1971.

Sniadach had been decided, but it’s certainly it didn’t presage Fuentes, that was limited to specialized wages.

Fuentes had not been decided when the case would argued in the Trial Court in December 1971, and when Trial Court had issued its order.

Under the case of Linkletter versus Walker cited in our case, another case was cited in our brief, this Court had held that it will not apply retroactively, so as to dislodge established reliance on a statute.

Most recently in the case of Lemon versus Kurtzman which involved the Pennsylvania state, reimbursing sectarian schools, notwithstanding the fact that the statue had been declared unconstitutional, the Court refused to apply the statue or the unconstitutional holding that.

In that case the Court stated statutory or even Judge made rules of law of hard facts on which people must rely in making decisions.

This fact of legal life underpins our modern decisions recognizing a doctrine of non-retroactivity.

So we say in this case, Your Honor, and respectfully submit, we don’t think that the statute is unconstitutional.

We don’t think that you should ever reach the issue, because of waiver and because of mootness, but even if you do reach it and agree with counsel for petitioner, we respectfully submit Di-Chem is relying on it.

The only thing that they have got is this bond now, if they don’t get into claim that there was no holding or poor shuddering of Fuentes, and therefore it would be inapplicable and under this Court’s doctrine as stated in the Kurtzman case and in the Walker and Linkletter case that if the Court does reach a conclusion that the Georgia statute is unconstitutional for any reason whatever, that it should be given prospective application only and it should not be applied retroactively because what we’re talking about is Di-Chem’s right to get to stick to $51000 and I’m not sure that even the bond is solving it at this time because of various and sundry things that have gone in these corporations but at least we respectfully to submit that we should have our right to go after North Georgia and after his bondsman.

Lewis F. Powell, Jr.:

Mr. Kemp why hasn’t main litigation been tried in three years?

Lemuel Hugh Kemp:

We’ve been waiting to see what the ultimate outcome is going to be and whether it’s going to be bond available.

Lemuel Hugh Kemp:

If there is no bond available, we own this case on the contingencies on a side, we have got about three-four hundred hours unless there is a bond available there was no use to going ahead and trying the main action because that would just eat up more judicial time and more effort.

Potter Stewart:

Mr. Kemp, is there direct conflict now between your State Court and the District Court for the Northern District of Georgia in the Atlanta division?

What’s the practical situation down there now with this conflict?

Lemuel Hugh Kemp:

I don’t really know.

As far as I know in Atlanta I can’t understand it.

If I want to issue a garnishment in Atlanta, I have no problem.

Of course our Superior Court judge will not let us issue one.

He follows the suggestion in some ways as suggested by Justice Rehnquist.

We go over with an order and say and take our client with us and swear him in and say that they are going to run off with this money.

Your Honor, if you don’t issue this garnishment, he issues a garnishment and gives them three days to show why it shouldn’t be dissolved.

Potter Stewart:

And that in his view was satisfies what was held by the Federal Court in Morrow Electric Company against Cruse?

Lemuel Hugh Kemp:

To my knowledge yes, that’s the practice.

As a matter of fact, Mr. Guptill (ph) who thought of this procedure where we could keep on [Attempt to Laughter] where we could keep on tying up people’s money.

Lewis F. Powell, Jr.:

Mr. Kemp, when the judge you’ve mentioned, gives three days, is that provided by the statute in Georgia or is that just a policy?

Lemuel Hugh Kemp:

Just policy, it’s usually on any kind of a – on that type of judgment.

We have a three days to show cause and on that point a wife can tying up a man’s property by filing a suit and if he is got a plant amounting to three million dollars, he’s got everything he has got tied up right now with a lis pendens in a divorce action and she wants it all, we can’t sell it, we can’t borrow on it, we can’t sell our stock.

So a lis pendens is a pretty effective though; I have (Inaudible) Your Honor.

Warren E. Burger:

Mr. Coppedge, do you have any thing more you have about three minutes.

Warren N. Coppedge, Jr.:

Mr. Justice I — may it please the Court.

I would just like to answer to Mr. Justice Stewart’s question because of this situation in Georgia created not only that — well, the Morrow Electric Case but also Aaron versus Clark, 342 F. Supp.

898, we have jury rigged, a situation whereby if we want to restrain property we contend under the Georgia general equity statues that we have no adequate legal remedy that because of the conflict in the decisions of the courts, we have no adequately legal remedy.

We take our client in, we swear him in before the judge he testifies and the court issues an ex parte injunction requiring the defendant to to appear in a very short time and show cause and we think that the general assembly of Georgia should render this to dignity of statute.

Potter Stewart:

They don’t have —

Warren N. Coppedge, Jr.:

We don’t have —

Potter Stewart:

— (Voice Overlap) yourselves?

Warren N. Coppedge, Jr.:

Because without it we don’t have a fair system of sequestering property.

William H. Rehnquist:

Mr. Coppedge, what the Superior Court (Inaudible) was to refuse to dissolve the garnishment, isn’t that right?

Warren N. Coppedge, Jr.:

The Superior Court of Whitfield Country denied our motion to dismiss the case.

William H. Rehnquist:

To dismiss the–

Warren N. Coppedge, Jr.:

The application — the garnishment case on the constitutional grounds asserted which at the time was —

William H. Rehnquist:

Well, the Supreme Court of Georgia up held that rule.

Now if we were to reverse that, what would be the effect of our reversal on the liability on the bond?

Warren N. Coppedge, Jr.:

I think that there would be no liability on the bond because the liability, the condition of bond as set forth on the appendix which Your Honor has before you is to pay such judgment as may be rendered in this case and that refers to the garnishment case.

In Georgia what you do is you get a judgment in your main case and then if it’s not paid then you go sue the other case.

And they have not perused the main case and there is a counter claim pending in the main case and I assume that would be pursued later.

Thank you.

Warren E. Burger:

Thank you gentleman..

The case is submitted.