PROCEDURAL DUE PROCESS AND PRE-JUDGMENT CREDITOR REMEDIES - A PROPOSAL FOR REFORM OF THE BALANCING TEST

• NCJ Number: 44105
• Journal: Washington and Lee Law Review Volume: 34 Issue: 1 Dated: (WINTER 1977) Pages: 65-84
• Author(s): W H NEWTON
• Date Published: 1977
• Length: 20 pages
• Corporate Author: Washington and Lee University
• Publication Format: Article
• Language: English
• Country: United States of America

Annotation

SHORTCOMINGS OF THE TEST USED TO DETERMINE WHETHER PROCEDURAL DUE PROCESS REQUIRES OPPORTUNITY FOR A PRESEIZURE HEARING PRIOR TO DEPRIVATION OF PROPERTY ARE DISCUSSED, AND AN ALTERNATIVE APPROACH IS SUGGESTED.

Abstract

U.S. SUPREME COURT DECISIONS ON PREJUDGMENT CREDITOR REMEDIES HAVE INTERJECTED SUBSTANTIAL CONFUSION INTO COMMERCIAL AFFAIRS. SPECIFICALLY, IN CONNECTION WITH DETERMINING CIRCUMSTANCES IN WHICH PROCEDURAL DUE PROCESS REQUIRES OPPORTUNITY FOR PRESEIZURE HEARING PRIOR TO DEPRIVATION OF PROPERTY, THE BALANCING TEST USED BY THE COURT RESULTS IN UNCERTAINTY. THE RIGHT OF DUE PROCESS IS APPLICABLE ONLY IF GOVERNMENTAL ACTION RESULTING IN DEPRIVATION OF PROPERTY IS FOUND TO EXIST. THE UNCERTAINTY IN COMMERCIAL TRANSACTIONS CONCERNS NOT THE APPLICABILITY OF THE RIGHT OF DUE PROCESS, BUT RATHER THE REQUIREMENTS OF DUE PROCESS ONCE SUCH RIGHT IS FOUND TO EXIST. IN DETERMINING WHETHER GOVERNMENTAL ACTION RESULTING IN DEPRIVATION OF PROPERTY IS IN ACCORD WITH DUE PROCESS, THE COURT MAKES A CASE-BY-CASE ANALYSIS OF THE FACTS AND SUBJECTIVELY WEIGHTS THE RESULTS UNDER ITS BALANCING TEST. THOUGH FLEXIBLE, THIS TEST REQUIRES THAT NOTICE AND OPPORTUNITY FOR A HEARING BE PROVIDED BEFORE ONE IS DEPRIVED OF PROPERTY. UNCERTAINTY HAS CENTERED ON DELINEATION OF THOSE CIRCUMSTANCES UNDER WHICH THE COURT HOLDS PROCEDURAL DUE PROCESS TO REQUIRE AN OPPORTUNITY FOR FULL ADVERSARY HEARING BEFORE EVEN A TEMPORARY DEPRIVATION OF PROPERTY CAN OCCUR. HERE THE COURT RELIES ON A SUBJECTIVE RATHER THAN OBJECTIVE STANDARD FOR GAUGING THE CONSTITUTIONAL REQUIREMENTS OF PROCEDURAL DUE PROCESS. WHILE A SUBJECTIVE STANDARD PROMOTES UNCERTAINTY IN THE MARKET PLACE AND ABROGATES THE FUNCTIONAL RULE OF THE COURT, AN OBJECTIVE STANDARD WOULD DEFER JUDGEMENT ON COMMERCIAL MATTERS TO THE APPROPRIATE LEGISLATIVE BODY. AN OBJECTIVE STANDARD WOULD MEAN THAT JUDICIAL ACTION NO LONGER WOULD BE RESPONSIBLE FOR UPSETTING REASONABLE EXPECTATIONS OF PARTIES TO COMMERCIAL TRANSACTIONS, AND THAT MODIFICATIONS IN EXISTING COMMERCIAL PRACTICES WOULD BE EFFECTED IN A CONCISE, STABLE, AND ORDERLY FASHION THROUGH THE DELIBERATIVE LEGISLATIVE PROCESS. (AUTHOR ABSTRACT MODIFIED).