author: DAN M. RUSSELL, Jr., District Judge.

text:
    The ESTATE OF David L. PORTNOY, Deceased, Jerri Bridges, Administratrix, Plaintiff, v. The CESSNA AIRCRAFT COMPANY Defendant v. MISSISSIPPI SCHOOL OF AVIATION, et al., Attachment Defendants.
    Civ. A. No. S83-0011(R).
    United States District Court, S.D. Mississippi, S.D.
    Feb. 20, 1985.

      Floyd J. Logan, Gulfport, Miss., for Estate of David Portney.
    Eaton A. Lang, Jr., Gulfport, Miss., Thomas C. Gerity, Watkins & Eager, Jackson, Miss., for Cessna Aircraft Company.
    Roy C. Williams, Megehee, Brown, Williams & Mestayer, Pascagoula, Miss., for Victory Aircraft Inc.
    Robert Alan Byrd, Biloxi, Miss., Charles R. Davis, Alex A. Alston, Jr., David A. Bowers, Jackson, Miss., for Mississippi School of Aviation.
    H. D. Brock, Greenwood, Miss., for Kimmel Aviation, Inc.
   MEMORANDUM OPINION

DAN M. RUSSELL, Jr., District Judge.

The case in chief originally arose out of the crash of a military airplane, a Cessna 02A, in the waters of the Mississippi Sound near Bay St. Louis, Mississippi, on November 11, 1976. David L. Portnoy, a resident of Pennsylvania and Staff Sergeant in the Pennsylvania Air National Guard, was killed in the crash. Jerri Bridges, a Mississippi resident and secretary of counsel for the plaintiffs, was appointed Administratrix of the Estate of David L. Portnoy. Bridges, as Administratrix, instituted a products liability suit in the Federal District Court for the Southern District of Mississippi against Cessna Aircraft Company based on defects in the 02A aircraft as manufactured by Cessna. The wrongful death beneficiaries are Portnoy’s brother and his mother and father.

The defendant, Cessna Aircraft Company, is a Kansas corporation with its principal place of business in Wichita. Cessna is not registered to do business in Mississippi. Bridges first attempted to acquire personal jurisdiction over Cessna by utilizing the Mississippi long arm statute, Miss.Code Ann. § 13-3-57 (1972). Cessna Aircraft Company filed a motion to dismiss on the grounds that Bridges could not utilize the Mississippi long arm statute’s provisions since the decedent was a non-resident of Mississippi. Judge Harold Cox sustained Cessna’s motion and the plaintiff subsequently appealed to the U.S. Fifth Circuit Court of Appeals which affirmed Judge Cox’s decision. 730 F.2d 286.

While Judge Cox’s decision was pending on appeal, the Estate of Portnoy filed a second action in the Chancery Court of Hancock County, Mississippi, on October 29,1982, requesting an order of attachment be issued binding money owed to Cessna “now or subsequently in the hands of” several attachment defendants. On November 2, 1982, the Chancery Court of Hancock County, Mississippi, entered an order that a writ of attachment be issued against the attachment defendants binding the property, effects and money in their hands, owned by or owed to Cessna Aircraft Company. Pursuant to the Chancery Court’s order, an attachment bond in the amount of $10,000.00 was posted against a claim of $2,500,000.00 actual damages and $2,500,000.00 punitive damages.

Cessna Aircraft Company removed the case to Federal Court on January 4, 1983, and now submits before the Court a motion to dismiss contending (1) due process precludes the court from exercising quasi in rem jurisdiction since the property attached has absolutely no relation to the plaintiff’s claim against Cessna, and (2) that the Mississippi attachment statutes, Miss.Code Ann. § 11-31-1 et seq. (Supp.1984) violate the due process clauses of the fifth and fourteenth amendments of the United States Constitution. (See Appendix.)

I. CESSNA’S DUE PROCESS CHALLENGE

Cessna correctly states that the International Shoe requirement of due process was specifically made applicable to the assertion of jurisdiction via attachment in two recent landmark cases, Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977), and Rush v. Savchuk, 444 U.S. 320, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980). The due process to be afforded in a quasi in rem action requires more than the physical existence of property in the forum state. In particular, Cessna contends that these holdings specifically require that in order for the Court to exercise quasi in rem jurisdiction, the property attached must be either the subject matter of the litigation or related in some way to the cause of action. Therefore, the existence of property in the forum state, if unrelated to the cause of action, is no longer sufficient for the assertion of quasi in rem jurisdiction over a non-resident. Cessna argues that none of these due process requirements established by Shaffer are met since the cause of action does not bear any reasonable relationship to the business allegedly done by Cessna in Mississippi, is not the subject matter of this litigation, nor is it related to the property sought to be attached. After careful review of the cases governing the connexity requirement and federal due process, it is the opinion of this Court that neither the U.S. Supreme Court nor the U.S. Fifth Circuit Court of Appeals require a causal relationship to be a determinative factor of due process.

The century old decision of Pennoyer v. Neff, 95 U.S. (5 Otto) 714, 24 L.Ed. 565 (1878), identified the exercise of a court’s jurisdiction as being in personam, in rem, or quasi in rem. When exercising in personam jurisdiction, a court may act directly upon an individual in determining his liability and enforcing a judgment. In quasi in rem actions, jurisdiction is based on property located within the state’s sovereign through which the court applies the property of the defendant to the satisfaction of a claim against him. To exercise in personam jurisdiction over the person of a foreign corporation in a diversity action involves questions of both state and federal law. Basically, there must be a state long arm statute which grants personal jurisdiction and the exercise of such jurisdiction must be consistent with the due process requirements of the United States Constitution. Product Promotions, Inc. v. Cousteau, 495 F.2d 483, 489 (5th Cir.1974). Only after all statutory requirements prescribed in a state’s long arm statute are satisfied must the court determine whether the assertion of that jurisdiction exceeds constitutional bounds. Prejean v. Sonatrach, Inc., 652 F.2d 1260, 1264 (5th Cir. 1981).

The United States Supreme Court in International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) stated what due process was constitutionally required when a court was to exercise personal jurisdiction over a litigant:

[D]ue process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend “traditional motions of fair play and substantial justice.”

Id. See also Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278 (1940) and Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958).

These decisions have been interpreted by the Fifth Circuit to constitute a dual test for determining the due process issue. First, “there must be some minimum contact with the state which results from an affirmative act of the defendant.” Secondly, “it must be fair and reasonable to require the defendant to come into the state and defend the action.” Standard Fittings Co. v. Sapag, S.A., 625 F.2d 630, 643 (5th Cir.1980); Product Promotions, Inc. v. Cousteau, 495 F.2d 483, 494 (5th Cir.1974). In assessing the minimum contacts which exist with a state, the mere number is not determinative. Quasha v. Shale Development Corp., 667 F.2d 483, 488 (5th Cir.1982). Fairness is to be determined from a weighing of all the relevant factors pertaining to each individual case. “[F]ew answers will be written in black and white. The greys are dominant and even among them the shades are ¡numerable.” Kulko v. Superior Court, 436 U.S. 84, 92, 98 S.Ct. 1690, 1697, 56 L.Ed.2d 132 (1978) (quoting Estin v. Estin, 334 U.S. 541, 545, 68 S.Ct. 1213, 1216, 92 L.Ed. 1561 (1948)). What is determinative is whether the total contacts with the forum “support an inference that the nonresident defendant purposefully availed himself of the benefits of conducting business in the forum.” Standard Fittings, 625 F.2d at 643; Product Promotions, 495 F.2d at 495; Quasha, 667 F.2d at 483. Such contacts must be deliberate and not fortuitous, “so that the possible need to invoke the benefits and protections of the forum’s laws was reasonably foreseeable, if not foreseen, rather than a surprise.” Standard Fittings, 625 F.2d at 643; Product Promotions, 495 F.2d at 496. In judging these contacts, the court is to focus on “the relationship among the defendant, the forum, and the litigation....” Shaffer, 433 U.S. at 204, 97 S.Ct. at 2580.

The Fifth Circuit has identified three primary and two secondary factors which may be used in determining whether due process has been afforded in the exercise of personal jurisdiction over a foreign corporation. These include, respectively, the quantity of contacts, the nature and quality of the contacts, the connection of the cause of action to the contacts, the interest of the forum in providing a forum for its residents, the convenience to the parties, and the nature and character of the business.

The defendant contends that since there is not a connection between the cause of action and the property attached, or Cessna’s contacts with Mississippi, the exercise of jurisdiction would deprive Cessna of due process. To follow defendant’s argument would formulates a third prerequisite of connexity to the test of due process rather than treating this factor as just one of the primary elements to be weighed in consideration with the others.

The U.S. Supreme Court has expressly refused to make the causal connexity requirement determinative of due process in the exercise of in personam jurisdiction, and the Fifth Circuit has repeatedly refused to impose its own stricter interpretation. Following the decision in International Shoe, the Supreme Court specifically held in Perkins v. Benquet Consolidated Mining Co., 342 U.S. 437, 445-449, 72 S.Ct. 413, 418-420, 96 L.Ed. 485 (1952) that due process would not be offended when a state exercises jurisdiction over a non-resident defendant that carries on sufficiently substantial activities within a state unrelated to the cause of action. Just recently the U.S. Supreme Court stated that:

Even when a cause of action does not arise out of or relate to the foreign corporation’s activities in the foreign state, due process is not offended by a State’s subjecting the corporation to its in personam jurisdiction when there are sufficient contacts between the State and the foreign corporation, (citations omitted).

Helicopteros Nacionales De Colombia v. Hall, — U.S. —, —, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404 (1984).

The Fifth Circuit has followed the precedent of the U.S. Supreme Court in holding that federal due process does not require the causal connexity as argued by Cessna. “It is true that due process allows a state to assert jurisdiction over a nonresident defendant that carries on continuous and systematic activities in the state unrelated to the cause of action.” Prejean v. Sonatrach, Inc., 652 F.2d 1260, 1265 (5th Cir. 1981). “Louisiana law does not require the causal connexity, nor does federal due process.” (emphasis added). Pedelahore v. Astropark, Inc., 745 F.2d 346 (5th Cir. 1984); Wilkerson v. Fortuna Corp., 554 F.2d 745, 749-750 (5th Cir.1977).

Cessna cites a series of Fifth Circuit cases in support of their argument that there must be a sufficient nexus between the activities of the non-resident within the state and the plaintiff’s cause of action. Aycock v. Louisiana Aircraft, Inc., 617 F.2d 432 (5th Cir.1980); Husted v. Piper Aircraft Corp., Civil Action No. J82-0038(N) (S.D.Miss. March 2, 1983); Smith v. DeWalt Products Corp., 743 F.2d 277 (5th Cir.1984). Although these cases did require a causal connection between the cause of action and the defendant’s activities in the forum, they did so not as a matter of federal due process but rather as the result of a state statutory requirement specifically contained within the Mississippi long arm statute on which in personam jurisdiction was predicated. In addition to the minimum contacts that are needed to ensure the due process rights of non-resident defendants, a forum state may impose its own jurisdictional requirements, such as those outlined in the Mississippi long arm statute. “[B]y its own terms,” the Mississippi long arm statute limits in personam jurisdiction “to those cases in which the cause of action accrues from or is incident to the activities of the nonresident defendant.” Smith v. DeWalt, 743 F.2d at 279; Aycock, 617 F.2d at 434-435. Therefore, the requirement of a causal connexity for the exercise of personal jurisdiction is entirely a requirement of the forum. Had the plaintiff been entitled to utilize the Mississippi long arm statute, jurisdiction would have still been questionable since “[t]he mere fact that [Cessna] markets its products nationally and that some of these goods find their way into Mississippi is not a sufficient nexus to subject [Cessna] to in personam jurisdiction under the ‘doing business’ provision of the Mississippi long arm statute.” Smith v. DeWalt, 743 F.2d at 279.

Though mortally wounded by this blow, the plaintiff fights on bravely by attempting to assert quasi in rem jurisdiction via attachment of certain outstanding accounts owed Cessna by its Mississippi dealers. The question thus presented is whether the causal connexity requirement should be extended to eases where jurisdiction is asserted through attachment. Since this requirement is not mandated by federal due process, this Court feels that it should not be extended.

Until recently, the technical legal distinction, or fiction, was that in rem or quasi in rem jurisdiction did not impose a personal liability on the property owner since he was not before the Court. Such jurisdiction only indirectly affected the defendant by an in rem judgment adverse to his interest in the property subject to the court’s disposition. This reasoning allowed many courts to evade application of due process consideration. However, in June of 1977 the U.S. Supreme Court decided Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977), in which the Court concluded that to continue to recognize the fiction that assertion of jurisdiction over the person “would serve only to allow state-court jurisdiction that is fundamentally unfair to the defendant.” Id. at 212, 97 S.Ct. at 2584. Therefore, “all assertions of state court jurisdiction must be evaluated according to the standards set forth in International Shoe, and its progeny.” Id. No longer would the mere presence of a defendant’s property within the forum be sufficient to confer jurisdiction by a court, but rather the same due process requirement of minimum contacts reflecting “fair play and substantial justice” which governs in personam jurisdiction would be applicable. After all, the purpose of obtaining jurisdiction through attachment — rationalized the court — is to compel the defendant to enter a personal appearance. If a direct assertion of personal jurisdiction would violate the constitution then indirect assertion should be equally impermissible. Id. at 209, 97 S.Ct. at 2582. Such minimum contacts are not sufficient when the only contact between the defendant and the forum is property located in the state completely unrelated to the cause of action. In such situations, jurisdiction must'have some other foundation. Id. at 213, 97 S.Ct. at 2584. Shaffer did not state as a rule per se that under all situations, regardless of the total contacts a non-resident may have with the forum, due process requires a causal connection between the property attached and the cause of action. To do so would create a higher constitutional standard of due process to be afforded when evaluating in rem or quasi in rem jurisdiction. Rather, Shaffer imposed the same due process requirements of International Shoe and its progeny governing in personam situations to cases involving the assertion of jurisdiction by attachment.

Shaffer and the subsequent case of Rush v. Savchuk, 444 U.S. 320, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980), specifically left room for the assertion of quasi in rem jurisdiction regardless of the relationship of the property attached to the litigation provided the court's analysis of the defendant’s total contacts with the forum satisfy the “traditional motions of fair play and substantial justice.”

These are cases where the property which now serves as the basis for state-court jurisdiction is completely unrelated to the plaintiff's cause of action. Thus, although the presence of the defendant’s property in a state might suggest the existence of other ties among the defendant, the State, and the litigation, the presence of the property alone would not support the State’s jurisdiction.

Shaffer, 433 U.S. at 208-209, 97 S.Ct. at 2581-2582.

We held in Shaffer that the mere presence of property in a State does not establish a sufficient relationship between the owner of the property and the State to support the exercise of jurisdiction over an unrelated cause of action. The ownership of property in the State is a contact between the defendant and the forum, and it may suggest the presence of other ties. 433 U.S. at 209 [97 S.Ct. at 2582], Jurisdiction is lacking, however, unless there are sufficient contacts to satisfy the fairness standard of International Shoe.

Rush, 444 U.S. at 328, 100 S.Ct. at 577.

Therefore, the causal connexity requirement is not a constitutional standard of due process which must exist before either in personam or quasi in rem jurisdiction may be exercised. As we have seen, however, it is a state statutorily imposed jurisdictional requirement outlined in the Mississippi long arm statute governing in personam jurisdiction.

The Mississippi attachment statutes governing the exercise of in rem jurisdiction, Miss.Code Ann. §§ 11-31-1 et seq. (Supp.1984) contain no such causal connexity requirement which the legislature was free to impose when it recently amended the statute. Therefore, the test of proper jurisdiction is narrower being simply “whether there are sufficient minimum contacts to make it fair and just that the foreign corporation be required to come to [Mississippi] to defend the action that was begun by attachment.” Intermeat, Inc. v. American Poultry, Inc., 575 F.2d 1017, 1022-1023 (2nd Cir.1978).

Since this cause has been taken under advisement, the Mississippi Supreme Court has reached a similar conclusion concerning the causal connexity requirement and its relation to due process in quasi in rem jurisdictional cases. In Administrators of the Tulane Educational Fund v. Cooley, 462 So.2d 696 (Miss.1984), the court stated that Shaffer specifically omitted “any requirement of a direct relationship between the res seized and the litigation.” Id. at 703. The fact that Tulane’s tortious conduct occurred in Louisiana was of no constitutional consequence.

Similarly, the fact that there is no substantial connection between the property owned by Tulane in this state and seized by the process of the Court and the operative events giving rise to Cooley’s claim of liability on the part of Tulane is per se of no constitutional consequence, (citations omitted).
Tulane may be subject to an adjudication of its rights in the property seized only if, in addition to the seizure of that property, Tulane has contacts with Mississippi such that maintenance of the suit does not offend traditional motions of fair play and substantial justice. Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977).

Id. at 703.

We must now judge the contacts existing between Cessna and Mississippi in compliance with the guidelines illustrated earlier to determine if they pass constitutional muster and permit the Court to exercise quasi in rem jurisdiction in this matter.

In two previous cases the U.S. District Court for the Northern District of Mississippi has exercised in personam jurisdiction over Cessna. These cases, however, cannot be used to influence this Court in deciding the issue sub judice for each case is to be considered individually based on the contacts contained therein. In addition, there are several factual distinctions between the present case and those cited below which bear directly on what contacts exist with the forum diminishing the relevance of their precedential value.

The evidence presented before the court reflects that Cessna has never been licensed or qualified to do business in Mississippi, maintains no type of facility in Mississippi, has no interest in any corporation doing business in Mississippi, has no interest in any personal property in Mississippi, paid no taxes to the State of Mississippi, nor maintained any offices in Mississippi.

This is not to say that Cessna maintains no contacts with this forum. Cessna presently has dealership agreements with the three attached defendants, Kimmel Aviation, Victory Aircraft, and Mississippi School of Aviation.

Kimmel Aviation has conducted its business in the agricultural field for approximately 25 years. In 1968 it became a Cessna agricultural aircraft dealer performing such services as agricultural aircraft sales, parts, service, crop dusting, and maintenance. Since 1982 Kimmel Aviation has sold a total of three agricultural planes. The total dollar value of business with Cessna involving all types of transactions over the past year was $214,296.33. In better years Kimmel has sold as many as 70 aircraft and conducted business with Cessna exceeding 2 million dollars.

Victory Aircraft became associated with Cessna in 1983. Although it has never sold a Cessna aircraft, the volume of business Victory has conducted with Cessna exceeds $500,000.00.

Mississippi School of Aviation operates a flight school as well as being an operative Cessna dealer since 1976.

Cessna permits the independent dealerships to display the Cessna logo. It also engages in a co-operative advertising program in Mississippi. Cessna sends marketing representatives, zone managers, and district managers into Mississippi on a regular basis, as well as providing technical experts in effecting repairs when warranted. Sales of Cessna aircraft are financed through Cessna’s wholly owned subsidiary, Cessna Finance Corporation.

Cessna points out that no planes are sold on consignment in Mississippi, nor does it ship or deliver any aircraft to Mississippi for sale. All planes are sold from its Wichita facility with transportation being the concern of the purchaser. Contrary to what may be suggested, this can hardly be considered the case in which Cessna aircraft find their way into Mississippi via the unilateral action of the purchaser. Nor is it “a case in which the seller has structured its primary conduct to avoid contact with the forum state. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, at 297, 100 S.Ct. 559 at 567, 62 L.Ed.2d 490 (1980). Rather, by its own affirmative acts [Cessna] has introduced its products into Mississippi for use in that state.” DeMelo v. Toche Marine, Inc., 711 F.2d 1260, 1271 (5th Cir.1983). By entering into dealership contracts with Mississippi residents, allowing for the display of their logo, offering co-operative advertising, providing financial assistance, and supplying support personnel, Cessna has made a deliberate effort to serve the Mississippi market and place its goods in Mississippi.

Two other factors relevant in evaluating due process include “the interest of the state in providing a forum for the suit”, and “the relative conveniences and inconveniences to the parties.” Brown v. Flowers, 688 F.2d 328, 333 (5th Cir.1982); Austin v. North American Forest Products, Inc., 656 F.2d 1076, 1090 (5th Cir.1981).

Although plaintiffs residence is not a separate requirement sufficient in itself to defeat jurisdiction, it is relevant in considering the state’s interest in providing a forum. Under the facts of the present case, it is hard to visualize what interest Mississippi may have in providing a forum for the redress of injury suffered on behalf of a non-resident by a product having no connection with this state. However, it is apparent that parties other than the plaintiff who reside in Mississippi, such as the dealers whose debts are subject to attachment, will be an indirect part of the litigation. Mississippi certainly has an interest as far as these attached defendants are concerned. Also, forcing Cessna to litigate this case in Mississippi would not create such an inconvenience to Cessna as to deny it due process.

Therefore, it is the opinion of this Court that in economic reality the defendant maintained contacts with the State of Mississippi. Although the plaintiff’s cause of action is unrelated to these contacts, these economic contacts, when coupled with other relevant factors, are substantial enough to indicate that Cessna “has ‘purposefully availed’ itself of the privilege of conducting activities in Mississippi and its ‘conduct and connection with the forum state are such that [it] should reasonably anticipate being haled into court there.’ ” DeMelo, 711 F.2d at 1271.

II. THE CONSTITUTIONALITY OF THE MISSISSIPPI ATTACHMENT STATUTE

Cessna has also raised several contentions in regard to the Mississippi Attachment Statute. Constitutional infirmities with the statute are argued to include the statute’s failure to (1) require a nexus between the property attached and the underlying claim; (2) provide for a pre-seizure hearing; (3) provide for a limited appearance; (4) require similar bond requirements; and (5) to specifically limit attachment to property and debts existing before service of the order of attachment. The court briefly addresses these contentions as follows.

1. The Statute Fails to Require a Nexus Between the Property Attached and the Underlying Claim.

This issue has been previously discussed. As illustrated above, the gravamen of any attachment action focuses on whether there exists sufficient minimum contacts between the defendant corporation and the forum. The nature of the property attached is only one contact to be considered provided the actual situs of the property is within the forum. Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977); Rush v. Savchuk, 444 U.S. 320,100 S.Ct. 571, 62 L.Ed.2d 516 (1980); Administrators of the Tulane Education Fund v. Cooley, 462 So.2d 696 (Miss.1984);

2. The Statute Does Not Provide for a Pre-Seizure Notice or a Pre-Seizure Hearing.

In Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972), the court struck down the replevin laws of Florida and Pennsylvania for failure to afford an individual “a hearing before he is deprived of any significant property interest, except for extraordinary situations where some valid governmental interest is at stake that justifies postponing the hearing until after the event.” Id. at 82, 92 S.Ct. at 1995 (quoting Boddie v. Connecticut, 401 U.S. 371, 378, 91 S.Ct. 780, 786, 28 L.Ed.2d 113 (1971)). However, Fuentes apparently did not extend the requirement of a pre-attachment hearing to cases which involved the act of attachment in order to secure jurisdiction in state court since this is considered “clearly a most basic and important public interest.” Id. 407 U.S. at 91, n. 23, 92 S.Ct. at 1999, n. 23. In Mitchell v. W.T. Grant Co., 416 U.S. 600, 94 S.Ct. 1895, 40 L.Ed.2d 406 (1974), the Supreme Court upheld the Louisiana sequestration statute as comporting with due process even though it did not provide for a pre-seizure notice and hearing. The court stated that the import of Fuentes and other due process cases did not result in the strict requirement of a pre-seizure hearing.

They merely stand for the proposition that a hearing must be had before one is finally deprived of his property and do not deal at all with the need for a pretermination hearing where a full and immediate post termination hearing is provided. The usual rule has been “[wjhere only property rights are involved, mere postponement of the judicial inquiry is not a denial of due process, if the opportunity given for ultimate judicial determination of liability is adequate.” (citations omitted).

Mitchell v. W.T. Grant Co., 416 U.S. at 611, 94 S.Ct. at 1902.

In Merrill Lynch Government Securities, Inc. v. Fidelity Mutual Savings Bank, 396 F.Supp. 318 (S.D.N.Y.1975), the plaintiff ex parte applied for an order of attachment of the defendant’s New York bank account to obtain quasi in rem jurisdiction. The attachment was granted under New York attachment law upon the ground that the defendant was a foreign corporation. The defendant moved to vacate the attachment on the ground that it was issued without prior notice and hearing in violation of the due process clause of the Fourteenth Amendment to the United States Constitution, and that New York State’s prejudgment attachment statute under which the attachment order was granted was unconstitutional. The Court, in denying the defendant’s motion to vacate the order of attachment, stated: “This Court is of the view that attachment without prior notice of a nonresident’s property in order to acquire quasi in rem jurisdiction when personal jurisdiction is lacking or doubtful does not deny due process of law.” Id. at 320.

This court shares a similar view in finding that the Mississippi attachment statute affords adequate due process by granting the defendant, upon request, an immediate post-seizure hearing to seek dissolution of the order of attachment. At such hearing, the complainant has the burden to establish by satisfactory proof the grounds for the attachment, the existence of the claim, and the impairment or impediment which a failure to continue the attachment could bring to the complainant’s ability to recover. Miss.Code Ann. § 11-31-2 (Supp.1984).

3. The Statute Prohibits a Defendant from Making a Limited Appearance to Defend His Claim to the Property Attached.

The defendant contends that the Mississippi attachment statute fails to provide for the attachment defendant who is not otherwise subject to in personam jurisdiction to make a limited appearance to defend his claim to the property attached. Although Miss.Code Ann. § 11-31-2 (Supp.1984) does provide for a special appearance to seek dissolution of the order of attachment, Miss.Code Ann. § 11-31-1 (1972) provides that judgment will be entered against the defendant in personam if he enters his appearance to defend the case in chief. Cessna argues that such a procedure imposes an unconstitutional condition on Cessna’s right to protect its property.

A split of authority has always existed as to whether a defendant should be entitled to defend on the merits but only be subject on judgment to the value of the property proceeded against. Although such a split exists, the U.S. Supreme Court has never attempted to dispose of the conflict. Neither did the court in Mississippi Chemical Corp. v. Chemical Construction Corp., 444 F.Supp. 925 (1977) address the lack of a limited appearance as a constitutional infirmity when stating the reasons the Mississippi attachment statutes were unconstitutional. One reason this issue may have been skirted is that Shaffer's requirement of minimum contacts in attachment cases substantially reduces the significance of the limited appearance. Restatement (Second) of Judgments § 8 comment g, (1982).

Although the conflict may continue in a more limited sense, this court is not of the opinion that precedent is so definitive as to require a declaration that Miss.Code Ann. § 11-31-1 (1972) is unconstitutional in failing to provide for a limited appearance. In fact, Cessna fails to cite, and this Court fails to find any case law in which a state statute which provided for a general appearance was held unconstitutional.

Cessna does not deny the fact that it is allowed access to this Court in order to defend on the merits the claims made by the complainant. Rather, Cessna states that Mississippi’s general appearance procedure imposes an “unconstitutional condition” upon its right to protect its property from appropriation. 73 Harv.L.Rev. at 954, quoted in Dry Clime Lamp Corporation v. Edwards, 389 F.2d 590, 596-597, n. 8 (5th Cir.1968). This issue was presented before a federal court in U.S. Industries, Inc. v. Gregg, 58 F.R.D. 469 (D.Del.1973) with arguments identical to those presented by Cessna. In upholding the Delaware statute which prohibited a limited appearance to defend on the merits without subjecting oneself to the in personam jurisdiction of the Court, Judge Stapleton noted that conditions existing on the exercise of a fourteenth amendment right is not unconstitutional per se. Id. at 478. “The question, accordingly, is not whether [Cessna’s] constitutional right to defend has been conditioned, but rather whether it has been unreasonably conditioned.” Id. at 479, (citing York v. Texas, 137 U.S. 15, 11 S.Ct. 9, 34 L.Ed. 604 (1890); Adam v. Saenger, 303 U.S. 59, 58 S.Ct. 454, 82 L.Ed. 649 (1938); McGautha v. California, 402 U.S. 183, 91 S.Ct. 1454, 28 L.Ed.2d 711 (1971)). In weighing the public interest and the burden imposed upon the defendant from which reasonableness is to be determined, the Court concluded that a general appearance was not an unreasonable condition, and as such it did not offend due process. U.S. Industries, 58 F.R.D. at 479-481.

Beyond this basic holding that a statute’s failure to provide a limited appearance is not unconstitutional, this Federal District Court is faced with the problem of following either Mississippi law or following what it considers to be the federal rule of this Circuit. “Most of the existing federal cases dealing with limited appearances seem to ignore state law, ...” 4 Wright S. Miller, Fed.Prac. 8 Proc. § 1123 p. 514. In particular, the Fifth Circuit failed to follow Mississippi law in providing for only a general appearance when it considered the case of Dry Clime Lamp Corporation v. Edwards, 389 F.2d 590 (5th Cir.1968). This was a removed case with suit beginning in the Mississippi state court under the Mississippi attachment statutes. Without touching upon the constitutionality of Mississippi’s failure to provide for a limited appearance, the Court expressed its discontent with forcing a defendant to submit to the Court’s in personam jurisdiction in order to defend its property interest. The Court held:

[Tjhat in a removed case commenced in state court against a nonresident defendant by garnishment or attachment of a debt owed by a resident, which debt is wholly unrelated to the subject matter of the principal suit, if the nonresident defendant timely objects to in personam jurisdiction the court may not enter a judgment which operates against him in personam except insofar as it affects his interest in the funds garnished or attached, even though the nonresident defendant, after properly asserting his objections to the jurisdiction, appears and contests the merits of the claim of the principal suit.

Id. at 595-596.

It is not the prerogative of this Court to decide whether following a federal rule in a diversity action which is contrary to state law comports with the reasoning behind the Erie doctrine. It is sufficient to say that this court favors the granting of a limited appearance to the defendants in a quasi in rem action, and since the Fifth Circuit has provided what this court interprets to be a federal rule granting such an appearance, Cessna should be permitted to contest the merits of the principal suit without subjecting itself to an in personam judgment.

4. The Statute’s Bond Requirements are Unfair and Discriminatory as to an Attached Defendant.

While the amended statute now requires that the plaintiff post a bond, a plaintiff’s bond is required to be only “in an amount satisfactory to the Chancellor.” Miss.Code Ann. § 11-31-2(2)(c) (Supp.1984). Yet the defendant must post a bond in the amount of 125% of the value of the property that has been attached or 125% of the plaintiff’s total demand, whichever is less, to regain the immediate possession of his property. Miss.Code Ann. § 11-31-2(3)(b) (Supp.1984). Cessna contends that such a procedure is entirely unfair. However, the court is of the opinion that a rational basis exists for the distinction. The attached defendant must stand ready to make the plaintiff whole up to the amount of the property actually attached. Any amount less would leave the complainant unprotected against actions by the defendant to remove the res from the forum. In other words, the bond is a security or substitution for the defendant’s originally attached property. The complainant, unlike the attached defendant, is only liable for actual damages and attorney fees should the attachment be determined by the Chancellor to have been brought in bad faith. A determination of this issue will usually follow an immediate post-seizure hearing to which the defendant is entitled. Such an immediate hearing provides possible relief for the defendant before his damages become compounded. It would be inequitable to require the complainant to post a bond equal in value to the res when in all reality any possible damage to the defendant is anticipated to be minimal. The Mississippi attachment statute attempts to balance the inequities of arbitrary bond requirements by allowing the Chancellor to weigh the circumstances of each case and prescribe a bond which assures protection of the defendant without punishing the complainant.

In any event, Miss.Code Ann. § 11-31-2 (Supp.1984) does not prohibit the Chancellor from exercising his inherent authority to make equitable adjustments concerning plaintiff’s bond when the need arises. A defendant who feels that the plaintiff’s bond is insufficient to protect his interest can always file a motion seeking a bond increase.

5. Statute is Silent as to Future Accruing Debts.

The defendant contends that the attachment statute does not specifically limit the attachment of funds due and owing Cessna arising out of Mississippi from operating continuously for an indefinite period of time. The Court, however, finds that the statute is self-limited in application which obviates any necessity in determining the constitutionality of attachment of indebtedness subsequent to the actual service of the writ.

As a general rule, an order of attachment will cover only the indebtedness existing at the time of the attachment and will not reach debts subsequently acquired. Any attachment which is viewed as binding a subsequent indebtedness is usually the product of a particular statutory provision which sets an actual time as to when the attachment becomes fixed. This time has been variously set in jurisdictions to be either the time of service of the writ, the time of answer, the time of trial, or the time of judgment. Id.

Miss.Code Ann. § 11-31-3 (Supp. 1984) states that “it shall be sufficient to bind such effects or indebtedness that the order of attachment ... be served upon the persons ... owing such indebtedness.” Therefore, an indebtedness is not bound until the order of attachment is actually served. “When property is attached in these proceedings, the service of process creates a lien on the property and the lien is established when the writ is served.” Associates Discount Corporation v. Clark, 240 Miss. 723, 128 So.2d 535, 536-537 (1961). See also Geo. H. Jet Drilling Co. v. Tibbits, 230 F.Supp. 58 (W.D.La. 1964). Such statutory language has not been construed by the courts to bind all indebtedness which arises subsequent to service of the writ of attachment. This issue was specifically addressed in the Mississippi Supreme Court case of Aetna Insurance Co. v. Robertson, 128 Miss. 387, 88 So. 883 (1921), in which the court interpreted almost identical statutory language to have the effect of binding only those “effects of the nonresident defendants at the time of the service, and at least until answer has been filed, or if no answer is filed, until the return day.” Id. 88 So. at 891. Such interpretation limits the attachment of subsequent indebtedness to 30 days at most past the actual service of the attachment order upon the attached defendant.

The order of attachment issued by the Chancellor purports to bind “the property, effects and money in the hands of said co-defendants owned by or owed to the said nonresident defendant, Cessna Aircraft Company, subjecting any said property or indebtedness now or hereafter owned by or owing to the said nonresident co-defendant, Cessna Aircraft Company, to the demand of the Complainant herein.” Such an open-ended attachment is clearly contrary to that which is permissible under the Mississippi statute. Therefore, the Chancellor’s order of attachment should be modified to bind only that property or indebtedness existing at the time the writ of attachment was served, and any subsequent property or indebtedness owned by or owing to Cessna up to the time the respective defendants’ answers were filed, or if no answer was filed, until thirty days after service was rendered.

Furthermore, the plaintiff is directed to make an accounting of this limited indebtedness to this Court within forty-five (45) days for determining whether the attached property aggregately exceeds the sum or value of ten thousand dollars as required by 28 U.S.C. § 1332 for this Court to exercise jurisdiction.

CONCLUSION

Neither the U.S. Supreme Court, nor the U.S. Fifth Circuit Court of Appeals, has required the cause of action to arise out of a foreign corporation’s activities in the state in order to satisfy due process. All that is required is that the foreign corporation have sufficient minimum contacts with the forum so that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.” In addition to the minimum contacts, a state may impose its own jurisdictional requirements. The Mississippi attachment statutes fail to require a causal connexity between the property attached and the cause of action. Therefore, as long as it is determined that Cessna has sufficient minimum contacts with Mississippi due process is satisfied. Having reviewed all such contacts, it is the opinion of this Court that sufficient minimum contacts exist between Cessna and the State of Mississippi to subject Cessna to the jurisdiction of this forum.

It is also the opinion of this Court that none of the contentions raised by the defendant were substantiated to the degree necessary to warrant a holding that the Mississippi attachment statutes are unconstitutional. Miss.Code Ann. § 11-31-2 (Supp.1984) requires a complainant to present to the Chancellor a complaint accompanied by an affidavit. The affidavit is to provide a detailed statement of the facts and grounds on which the complainant bases his claim. Upon finding that the complainant’s ability to recover the amount of his claim may be significantly impaired or impeded, the Chancellor may issue an order of attachment. The complainant is to then post a bond for the protection of the defendant. The defendant is entitled to an immediate post-seizure hearing, in which he is granted a special appearance, to determine the validity of the seizure. Finally, the defendant may regain possession of his property by posting a bond for the protection of the complainant. In the case sub judice, the above procedures were complied with and afforded to the defendant.

However, by allowing the complainant to attach all subsequent property and indebtedness of the defendant, the Chancellor’s order exceeds in execution of the boundaries imposed by the attachment statute and state court interpretation. Therefore, the order of attachment should be modified to concur with the holding of this opinion. The plaintiff is directed to make an accounting to this Court of all indebtedness attached in accordance with this Court’s modification of the Chancellor’s order within forty-five (45) days.

An order in accordance with the opinion of this Court shall be provided as set forth in the Local Rules.

APPENDIX

MISSISSIPPI ATTACHMENT STATUTES

Sec.
11-31-1 (1972). Jurisdiction; debtors.
11-31-2 (Supp.1984). Application; determination.
11-31-3 (Supp.1984). How effects or indebtedness bound.

Miss.Code Ann. § 11-31-1. Jurisdiction; debtors.

The Chancery Court shall have jurisdiction of attachment suits based upon demands founded upon any indebtedness, whether the same be legal or equitable, or for the recovery of damages for the breach of any contract, express or implied, or arising ex delicto against any nonresident, absent or absconding debtor, who has lands and tenements within this state, or against any such debtor and persons in this state who have in their hands effects of, or are indebted to, such nonresident, absent or absconding debtor. The court shall give a decree in personam against such nonresident, absent or absconding debtor if summons has been personally served upon him, or if he has entered an appearance.

Miss.Code Ann. § 11-31-2 (Supp.1984). Application; determination.

(1) Upon the filing of the bill of complaint, the complainant may apply for an order of attachment by presenting to the chancellor the bill, and an affidavit which shall include the following:

(a) A statement that the action is one described in section 11-31-1, and is brought against a defendant described in said section 11-31-1.

(b) A detailed statement of the facts and grounds which entitle the complainant to an order of attachment including a statement of the specific reasons why the complainant’s ability to recover the amount of his claim may be endangered or impeded if the order of attachment is not issued.

(c) A statement of the amount the plaintiff seeks to recover.

(d) A statement that the complainant has no information or belief that the claim is discharged in a proceeding under the Federal Bankruptcy Act (11 U.S.C., Section 1, et seq.), or that the prosecution is stayed in a proceeding under the Federal Bankruptcy Act.

(e) A description of the property to be attached under the writ of attachment and a statement that the complainant is informed and believes that such property is not exempt from attachment or seizure under section 85-3-1.

(f) A listing of other persons known to the complainant who may have an interest in the property sought to be attached together with a description of such interest.

(2) The chancellor shall examine the affidavit and the bill of complaint and may, in term time or in vacation, issue an order of attachment with respect to such property under the following conditions:

(a) The chancellor finds that unless the order of attachment is issued, the complainant’s ability to recover the amount of his claim may be significantly impaired or impeded.

(b) The chancellor finds that the affidavit establishes a prima facie case demonstrating the complainant’s right to recover on his claim against the defendant.

(c) The complainant gives security in an amount satisfactory to the chancellor to abide further orders of the court and to protect the defendant from injury should the action of attachment be judicially determined to have been wrongfully brought.

(3)(a) If such an order of attachment is issued, the defendant shall, upon request, be entitled to an immediate post-seizure hearing to seek dissolution of the order of attachment. Such post-seizure hearing shall have precedence on the docket of the chancery court over all other matters except similar matters previously filed. At such hearing, the chancellor shall order dissolution of the order of attachment unless the complainant establishes by satisfactory proof the grounds upon which the order was issued, including the existence of a claim as described in section 11-31-1, and the impairment or impediment which a failure to continue the attachment could bring to the complainant’s ability to recover the amount of such debt. An appearance by the defendant at the post-seizure hearing shall be considered a special appearance and not a general appearance for the purposes of personal jurisdiction over the defendant.

(b) In the alternative, a debtor may regain immediate possession of the property attached by giving security satisfactory to the chancellor in an amount equal to one hundred twenty-five percent (125%) of the value of the property attached or one hundred twenty-five percent (125%) of the amount of the claim, whichever is less.

(c) If the chancellor should determine that the attachment was not brought in good faith, then the chancellor in his discretion may award actual damages (including reasonable attorney’s fees) to the defendant.

Miss.Code Ann. § 11-31-3. How effectors or indebtedness bound.

When a bill shall be filed for an attachment of the effects of a nonresident, absent or absconding debtor in the hands of persons in this state, or of the indebtedness of persons in this state to such nonresident, absent or absconding debtor, it shall be sufficient to bind such effects or indebtedness that the order of attachment together with a copy of the bill of complaint and affidavit be served upon the persons possessing such effects or owing such indebtedness.

      . Product Promotions, Inc. v. Cousteau, 495 F.2d 483, 494 n. 17 (5th Cir.1974); Standard Fittings Co. v. Sapag, S.A., 625 F.2d 630, 643 (1980).

      . See also Mladinich v. Kohn, 250 Miss. 138, 164 So.2d 785 (1964) and DeMelo v. Toche Marine, Inc., 711 F.2d 1260, 1269 n. 10 (5th Cir.1983).

      . Miss.Code Ann. § 13-3-57 (1972), the statute in effect at the time of the present accident, read as follows:
      Any nonresident person, firm, general or limited partnership, or any foreign or other corporation not qualified under the constitution and laws of this state as to doing business herein, who shall make a contract with a resident of this state to be performed in whole or in part by any party in this state, or who shall commit a tort in whole or in part in this state against a resident of this state, or who shall do any business or perform any character of work or service in this state, shall by such act or acts be deemed to be doing business in Mississippi. Such act or acts shall be deemed equivalent to the appointment by such nonresident of the secretary of state of the State of Mississippi, or his successor or successors in office, to be the true and lawful attorney or agent of such nonresident upon whom all lawful process may be served in any actions or proceedings accrued or accruing from such act or acts arising from or growing out of such contract or tort, or as an incident thereto, by any such nonresident or his, their, or its agent, servant or employee.

      . Plaintiff Duane Cooley sought recovery for the alleged wrongful death of his wife at the Tulane Hospital and Medical Center in New Orleans, Louisiana. Cooley brought an attachment action seizing proceeds of debts owed to Tulane by Mississippi parties having an aggregate value of $147,677.50.

      . F.L. Crane Co. v. Cessna Aircraft Co., 73 F.R.D. 384 (N.D.Miss.1976); Williams v. Cessna Aircraft Corporation, 376 F.Supp. 603 (N.D.Miss. 1974). See also Pattillo v. Cessna Aircraft Corp., 379 So.2d 1225 (Miss. 1980).

      . Since 1960 Cessna has had written dealership or pilot center agreements with the following entities at the following locations in Mississippi: Gulf Park Aviation, Inc., Ocean Springs, MS; Miller-Wills Aviation, Inc., Jackson, MS; FTC Walston Wings, Inc., Olive Branch, MS; Centaur Aviation, Inc., Olive Branch, MS; Cleveland Air Services, Cleveland, MS; Thedford Aero, Inc., Greenville, MS; McComb Flying Service, McComb, MS; Aero International, Inc., Gulfport, MS; Port City Aviation, Vicksburg, MS.

      . Keeton v. Hustler Magazine, Inc., — U.S. —, —, 104 S.Ct. 1473, 1480, 79 L.Ed.2d 790 (1984).

      . The other individual killed in the crash, John Baggs, was a resident of Texas. His estate promptly filed a products liability action against Cessna in the U.S. District Court for the Northern District of Texas. A judgment favorable to the plaintiffs in that action was rendered in July of 1981. Portnoy’s estate filed its action subsequent to the Baggs judgment in Mississippi to take advantage of this state’s six year statute of limitations after being denied access to the forum of David Portnoy’s resident, Pennsylvania, by that state’s prescription statute.

      . Messall v. Suburban Trust Co., 244 Md. 502, 224 A.2d 419, 421 (1966); 6 AM JUR 2d § 461.

      . Several state statutes have been cited by the plaintiffs which have provisions allowing for subsequent attachment. The defendant has failed to present any authority which supports its contention that such legislation is unconstitutional. Therefore, even if the Court were to find that the Mississippi Attachment Statute specifically provided for open-ended attachment, it would be hesitant to hold that such a provision was unconstitutional.

      . Miss.R.Civ.P. 12(a)


source: Caselaw Access Project

author: PAINE, District Judge.

license: Public Domain

text:
    UNITED STATES of America v. Richard B. COLLINS, Defendant.
    No. 83-6010-Cr-Paine.
    United States District Court, S.D. Florida.
    Feb. 20, 1985.

      Deborah Branscomb, Sp. Atty. U.S. Dept, of Justice, Washington, D.C., for U.S.
    Stephen Bronis, Miami, Fla., for defendant.
   PAINE, District Judge.

This cause is before the Court on defendant’s motion to declare section 6(c) of the Classified Information Procedures Act (CIPA) unconstitutional. 18 U.S.C. Appendix. (DE 182). The government has responded urging the Court to deny defendant’s motion.

CIPA provides various procedures which must be employed during the course of a criminal prosecution when the defendant announces an intent to introduce classified information in defense of the charges brought against him. Particularized notice must be given to the government of the items intended to be introduced. CIPA, 18 U.S.C. Appendix III, § 5(a); United States v. Collins, 720 F.2d 1195 (11th Cir.1983). Upon receipt of proper notice, the case progresses to the point where the Court must make a pre-trial ruling on the use, relevance and admissibility of the information. CIPA, 18 U.S.C. Appendix III, § 6(a). In determining the threshold question of section 6(a) admissibility, the Court should not consider the fact that the items in question are classified in nature. U.S. v. Smith, 36 Crim.L.Rptr. 2271, 2272, 750 F.2d 1215 (4th Cir.1984).

It is not until the case progresses to section 6(c) that the classified nature of the information might be considered. Id. Compare United States v. Wilson, 586 F.Supp. 1011 (1983 by Weinfield, D.J., S.D. N.Y.). (where no section 6(c) determination appears necessary given the Court’s determination of inadmissibility at the section 6(a) stage).

The constitutionality of section 6(c) appears to be a matter of first impression. Counsel have cited no case which addresses the precise point, and the Court’s own research has not uncovered a published treatment of the constitutionality of section 6(c). This Court has already determined, by order of August 3, 1984, that some items of classified information are relevant to the issues in this case.

Section 6(c) provides in part that

(1) Upon any determination by the court authorizing the disclosure of specific classified information under the procedures established by this section, the United States may move that, in lieu of the disclosure of such specific classified information, the court order—
(A) the substitution for such classified information of a statement admitting relevant facts that the specific classified information would tend to prove; or
(B) the substitution for such classified information of a summary of the specific classified information.
The court shall grant such a motion of the United States if it finds that the statement or summary will provide the defendant with substantially the same ability to make his defense as would disclosure of the specific classified information. The court should hold a hearing on any motion under this section. Any such hearing shall be held in camera at the request of the Attorney General.

CIPA, 18 U.S.C. Appendix, § 6(c) (emphasis added.) The defendant advances the following constitutional deficiencies allegedly contained in section 6(c):

1. that section 6(c) constitutes an unconstitutional impingement on his rights to compulsory process under the Sixth Amendment;
2. that section 6(c) denies him due process of law under the Fifth Amendment;
3. that the standard of providing the defendant with substantially the same ability to present his defense is void for vagueness.
4. that section 6(c) denies him equal protection of law under the Fifth Amendment; and

For the reasons set forth below, the Court deems these contentions to be without merit and therefore declines to declare section 6(c) of CIPA unconstitutional.

I. Compulsory Process.

The Sixth Amendment to the United States Constitution provides in part that:

In all criminal prosecutions, the accused shall enjoy the right ... to have compulsory process for obtaining witnesses in his favor,____

There is no question that General Collins, as the accused in this case, indeed enjoys the right of compulsory process. The right of compulsory process, however, is inapplicable to the issues presented herein.

It has long been accepted that inclusion by the Framers of the right to compulsory process in the Bill of Rights was in response to “the notorious common law rule that in cases of treason or felony the accused was not allowed to introduce witnesses in his defense at all.” Washington v. Texas, 388 U.S. 14, 19, 87 S.Ct. 1920, 1923, 18 L.Ed.2d 1019 (1967) [citing, 3 Story, Commentaries on the Constitution of the United States, §§ 1786-1788 (1st ed. 1833) ]. The Framers sought to guarantee that both sides of the story, the prosecution’s and the defendant’s were before the jury. Id. at 20, 87 S.Ct. at 1923. However, the right of compulsory process “does not confer the right to present testimony free from the legitimate demands of the adversarial system; ....” United States v. Nobles, 422 U.S. 225, 241, 95 S.Ct. 2160, 2171, 45 L.Ed.2d 141 (1975). Nor does compulsory process “always assure a defendant of the testimony sought. (For example) [a] valid assertion of the witness’ Fifth Amendment rights justifies a refusal to testify despite the defendant’s Sixth Amendment rights.” United States v. Goodwin, 625 F.2d 693, 700 (5th Cir.1980) (parenthetical added).

Simply put, the right to compulsory process, to require the attendance of witnesses, is in no manner affected by section 6(c) substitutions. There is no per se exclusion of defense witnesses.

II. Due Process

Defendant’s citation of Washington v. Texas is more appropriately considered in this context for its language relative to a defendant’s right to a fair trial. Although Washington v. Texas addresses a fair trial in terms of violations of the compulsory process clause, its language in applying that right to the States is instructive.

The right to offer the testimony of witnesses, and to compel their attendance, if necessary, is in plain terms the right to present a defense, the right to present a defendant’s version of the facts as well as the prosecution’s to the jury so it may decide where the truth lies. Just as an accused has the right to confront the prosecution’s witnesses for the purpose of challenging their testimony, he has the right to present his own witnesses to establish a defense. This right is a fundamental element of due process of law.

Washington v. Texas, 388 U.S. 14, 19, 87 S.Ct. 1920, 1923, 18 L.Ed.2d 1019 (1967).

Defendant has argued that the substitutions permitted under section 6(c) would preclude him from presenting his side of the story to the jury. It is also suggested that prohibiting him from eliciting the minutiae of each item of classified information will adversely impact upon the jury’s determination of his credibility as a witness. There is no argument from the government that General Collins should not be permitted to have a fair trial and opportunity to present his version of the facts to the jury. The only real issue presented by the instant challenge is whether defendant should be allowed free reign in presenting his defense. There is no question that the substance of the information at issue is relevant to the defenses asserted. It does not follow, however, that because the evidence is relevant that it is necessarily admissible in the form offered.

Indeed courts make determinations of whether relevant evidence, in the form offered, may be excluded when applying F.R. Evid. 403. That rule specifically provides that

[although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.

Indeed the notes of the Advisory Committee on the proposed rules recognize that “certain circumstances call for the exclusion of evidence which is of unquestioned relevance.” The Committee also noted that one factor to be considered in making a Rule 403 determination is the availability of “other means of proof.”

Section 6(c) requires that a balancing test be made in order to guarantee that the defendant is not prejudiced by any substitution. Simply put, section 6(c) does not preclude presentation of the defendant’s story to the jury, it merely allows some restriction on the manner in which the story will be told.

Defendant’s argument that his credibility will be harmed if he is prohibited from expounding upon the details of the classified information is also without merit. This is so especially in a case such as this where the government has agreed to inform the jury that defendant does, in fact, know the details of the classified information at issue. The jury, therefore, would be apprised of the fact that the government concedes the defendant’s knowledge of the classified information, but that the classified information in it minutae is being kept from them. It can hardly be said that with the above announcement, the jury would be affected adversely in their credibility determination by the fact that General Collins would not be permitted to give the explicit details he seeks to convey.

Substantiality Standard.

Defendant also argues that the standard of substantiality employed by section 6(c) is void for vagueness. Initially the Court notes its agreement with the government’s contention that the void for vagueness attack is inapplicable to a procedural statute such as CIPA.

As generally states, the void-for-vagueness doctrine requires that a penal statute define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited....

Kolender v. Lawson, 461 U.S. 352, 357, 103 S.Ct. 1855,1858, 75 L.Ed.2d 903 (1983) [Cal. Penal Code § 647(e) held unconstitutionally vague because of failure to clarify what constitutes “credible and reliable” identification.] See also Colautti v. Franklin, 439 U.S. 379, 99 S.Ct. 675, 58 L.Ed.2d 596 (1979) [Sections 5(a), 5(d) of Pennsylvania Abortion Control Act held unconstitutionally vague for failure to clarify what constitutes viability in section 5(a) and imposition of penal sanction in section 5(d) for violation of 5(a).]; Rose v. Locke, 423 U.S. 48, 96 S.Ct. 243, 46 L.Ed.2d 185 (1975). [Tenn. Code Ann. § 39-707 (1955) providing criminal sanctions for “crimes against nature” did not violate “fair warning requirement embodied in the Due Process clause prohibit[ing] the States from holding an individual ‘criminally responsible for conduct which he could not reasonably understand to be proscribed.’ ” Id. at 49, 96 S.Ct. at 244 (citations omitted).]

Even if our precedents did provide for an attack on a procedural statuted under the void for vagueness doctrine, the word “substantially” is not impermissibly vague. As noted by the Rose Court the “prohibition against excessive vagueness does not invalidate every statute which a reviewing court believes could have been drafted with greater precision.” Id.

Substantial is one of those words that permeates the law. Courts must make determinations based on a substantiality standard on a daily basis. For example in reviewing decisions of administrative agencies, a court cannot overturn the administrative ruling if there is substantial evidence in the record to support the ruling. Mullins v. Secretary of Health and Human Services, 680 F.2d 472 (6th Cir.1982). Every law student masters the concept of substantial performance in their first year contracts class. Matador Drilling Co., Inc. v. Post, 662 F.2d 1190 (5th Cir.1981).

In the realm of criminal law Courts in this circuit are well familiar with the substantiality standard when determining, under the dictates of United States v. James, 590 F.2d 575 (5th Cir.1979), whether there is substantial independent evidence of a conspiracy to allow co-conspirator statements to be admitted. Courts must also address the substantiality standard on a regular basis when assessing a challenge to a jury verdict based on sufficiency of the evidence. United States v. Pitt, 717 F.2d 1334 (11th Cir.1983); United States v. Latner, 702 F.2d 947 (11th Cir.1983). Suffice it to say that the standard of substantiality is not vague and is one which requires, in the context of CIPA, substitutions which provide the gist of the defense in virtual entirety although not necessarily the minutiae.

Equal Protection

Defendant’s final argument is that section 6(c) denies him the equal protection of the laws by requiring him to accept substitutions, if found substantially equivalent to the classified proffer. Equal protection assures that individuals who are similarly situated will not be treated differently. The basic concepts of equal protection as set forth in the Fourteenth Amendment apply to the Federal Government through the due process clause of the Fifth Amendment. U.S. v. Hawes, 529 F.2d 472 (5th Cir.1976).

The guarantee of equal protection does not guarantee exact equality. Norvell v. Illinois, 373 U.S. 420, 83 S.Ct. 1366, 10 L.Ed.2d 456 (1967). Nor does the guarantee “require things which are different in fact ... to be treated in law as though they were the same.” Tigner v. Texas, 310 U.S. 141, 147, 60 S.Ct. 879, 882, 84 L.Ed. 1124 (1939). See also, Rinaldi v. Yeager, 384 U.S. 305, 86 S.Ct. 1497, 16 L.Ed.2d 577 (1966). “[I]n all equal protection cases, ..., the crucial question is whether there is an appropriate governmental interest suitably furthered by the differential treatment.” Police Dept. of Chicago v. Mosely, 408 U.S. 92, 95, 92 S.Ct. 2286, 2290, 33 L.Ed.2d 212 (1972). Naturally, that nature of the basis for “discrimination” (eg. race, alienage, gender, economics, etc.) will trigger the appropriate level of scrutiny. See eg., Malden Amusement Co., Inc. v. City of Malden, 582 F.Supp. 297 (D.Mass.1983); Nat’l Gay Task Force v. Board of Education, 729 F.2d 1270 (10th Cir.1984).

In this case it is a little difficult to determine what discriminatory classification defendant alleges has been forced upon him. Presumably the contention is that he, unlike other criminally accused, may be forced to accept substitutions in lieu of evidence he wants to introduce. Given the nature of CIPA, the factor which prompts the distinction is the accused’s prior exposure to classified information. Such a factor could hardly be said to be the type of immutable characteristics, such as race, which would require application of strict scrutiny.

Clearly if any level of scrutiny is appropriate for defendant’s argument, the rational basis test is it. In other words if section 6(c) bears a rational relationship to fostering a legitimate governmental interest, its effect is not violative of the Constitution.

Congress’ desire to curb the use of classified information as a tool for “greymail” is, at the very least, a legitimate governmental interest. CIPA, although difficult to administer because of its recent vintage and the lack of published opinions treating its provisions, contains thorough procedures for making pre-trial evidentiary determinations. These determinations assure that any classified information used is necessary. In this Court’s view section 6(c) does not discriminate. Even if it could be said that 6(c) was a discriminatory provision this Court of the view that it meets the rational relationship standard and thus is not violative of equal protection.

Accordingly, it is

ORDERED and ADJUDGED that defendant’s motion to declare section 6(c) of the Classified Information Procedures Act unconstitutional is denied.

      . This discussion assumes, for the sake of argument, that there is discrimination present. The Court, however, is more persuaded by the argument that a defendant introducing classified information is not similar in fact to other criminally accused and that the restrictions placed in section 6(c) are nothing more than a F.R.Evid. 403 type determination, to which every defendant is subject. If anything the CIPA defendant stands in a better position than the regular defendant offering 403 evidence: if the evidence is found relevant but no substitutions are acceptable under CIPA the government bears the weight; if evidence offered by a non-CIPA defendant violates 403, it is excluded and the defendant bears the weight.

      . Because of the Court’s finding above as to the rational basis test there will be no need to proceed to a determination of discriminatory intent. Shaw v. Martin, 733 F.2d 304 (4th Cir. 1984).


author: ELFVIN, District Judge.

text:
    Luise M. ROSS, as Administratrix of the Goods, Chattels and Credits of Sonya C. Ross, Deceased, Plaintiff, v. COLORADO OUTWARD BOUND SCHOOL, INC., Defendant.
    No. CIV-78-273E.
    United States District Court, W.D. New York.
    Feb. 21, 1985.

      Kevin J. Sullivan, Buffalo, N.Y., for plaintiff.
    Thomas Segalla, Timothy M. O’Mara, Buffalo, N.Y., for defendants.
   MEMORANDUM and ORDER

ELFVIN, District Judge.

Plaintiff has alleged that the death of her daughter Sonya July 22, 1977 while participating in a mountain climbing exercise sponsored by defendant was due to its negligence. The matter is properly before the Court pursuant to diversity jurisdiction. Presently pending are defendant’s motions to set aside service of process pursuant to Fed.R.Civ.P. rule 12(b)(5), to dismiss for lack of personal jurisdiction pursuant to rule 12(b)(2) or, alternatively, to transfer the case to the United States District Court for the District of Colorado pursuant to 28 U.S.C. § 1404(a).

Service of process in this matter was made by hand delivery to one Hugh Downey by Carl Pinson, a Denver Deputy Sheriff, April 24, 1978. New York’s Civil Practice Law and Rules (“CPLR”) § 311 provides in relevant part:

“Personal service upon a corporation * * shall be made by delivering the summons as follows:
1. upon any domestic or foreign corporation, to an officer, director, managing or general agent, or cashier or assistant cashier or to any other agent authorized by appointment or by law to receive service * *

Defendant argues that Downey, who was listed in the 1978 tax return of Colorado Outward Bound School, Inc. (“COBS”) as “administrator” (see Exhibit A to May 11, 1984 affidavit of Kevin J. Sullivan, Esq.), did not have appropriate authority to receive service. This argument is technical in nature and it is clear from the facts, including the lack of any indication that Downey attempted to refuse service, that

“[o]bjectively viewed, in the light of the circumstances, the service made was calculated to give the corporation fair notice and, in fact, resulted in immediate redelivery of the summonses to a proper person.” De Vore v. Osborne, 78 A.D.2d 915, 432 N.Y.S.2d 919, 921 (3d Dep’t 1980).

Accordingly, service must be sustained.

The question of personal jurisdiction in this case is also governed by New York law. See Marine Midland Bank, N.A. v. Miller, 664 F.2d 899 (2d Cir.1981); Arrowsmith v. U.P.I., 320 F.2d 219 (2d Cir.1963) (en banc). The facts of the case preclude resort to the “long-arm statute” embodied in CPLR § 302 to obtain jurisdiction over “COBS”, a Colorado corporation. Directly on point is Diskin v. Starck, 538 F.Supp. 877 (E.D.N.Y.1982), in which plaintiffs — two citizens of New York — complained of tortious injury to their children while said children had been enrolled in a summer camp in Vermont. The court held that personal jurisdiction in New York could not be obtained over the Vermont defendants under CPLR § 302(a)(3) :

“Although this section requires the occurrence of tortious conduct outside the state, its essential predicate is that the injury giving rise to the plaintiffs’ claim occur within the state. See Kramer v. Hotel Los Monteros, S.A., 57 A.D.2d 756, 757, 394 N.Y.S.2d 415, 416 (1st Dep’t 1977); Black v. Oberle Rentals, Inc., 55 Misc.2d 398, 400, 285 N.Y.S.2d 226, 228-29 (Sup.Ct. Onondaga Co.1967); see also Spectacular Promotions, Inc. v. Radio Station WING, 272 F.Supp. 734, 736-37 (E.D.N.Y.1967).” Id. at 879.

Similar facts are presented by the case at bar in which both the alleged tortious conduct and the death of Sonya Ross occurred in Colorado. As in Diskin v. Starck, supra

“[P]laintiffs cannot sustain jurisdiction under § 302(a)(3) merely by showing that as domiciliaries of this state, they suffered further damage (either economic or physical), on account of the earlier injuries sustained outside the state. See Kramer v. Hotel Los Monteros, supra, 57 A.D.2d at 757, 394 N.Y.S.2d at 416; Black v. Oberle Rentals, supra, 55 Misc.2d at 400, 285 N.Y.S.2d at 228-29.” Ibid.

Nor does CPLR § 302(a)(l)’s conferral of jurisdiction over a non-domiciliary who “transacts business within the state or contracts anywhere to provide goods and services in the state” avail plaintiff in this case. Again, as was stated in Diskin v. Starck, supra,

“The courts in New York consistently have held that injuries sustained while participating outside the state in recreational activities advertised and contracted for within the state, bear too remote a relationship to the advertising and contractual activity claimed to be the transaction of business in the state to warrant a conclusion that the injuries arose from the in-state activity. See Noble v. Singapore Resort Motel of Miami Beach, 21 N.Y.2d 1006,1008, 290 N.Y.S.2d 926, 927, 238 N.E.2d 328, 329 (1968) (per curiam); Meunier v. Stebo, Inc., 38 A.D.2d 590, 591, 328 N.Y.S.2d 608, 611 (2d Dep’t 1971); see also Gelfand v. Tanner Motor Tours, Ltd., 339 F.2d 317, 321-22 (2d Cir.1964).” Id. at 880.

The remaining provisions of section 302 by their terms are clearly inapplicable.

Faced with an inability to obtain in personam jurisdiction over defendant through CPLR § 302, plaintiff attempts to assert a jurisdictional nexus under the more traditional “doing business” test of CPLR § 301, by relying on an alleged link between COBS and its purported “parent” Outward Bound, Inc. (“OBI”), a Delaware corporation with allegedly closer ties to New York than those of defendant.

“Under CPLR 301 ‘the authority of the New York courts [to exercise jurisdiction over a foreign corporation] is based solely upon the fact that the defendant is “engaged in such a continuous and systematic course of ‘doing business’ here as to warrant a finding of its ‘presence’ in this jurisdiction” ’ * * * The test, though not ‘precise’ * * * is a ‘simple pragmatic one’ * * *: is the aggregate of the corporation’s activities in the State such that it may be said to be ‘present’ in the State ‘not occasionally or casually, but with a fair measure of permanence and continuity’ * * * and is the quality and nature of the corporation’s contacts with the State sufficient to make it reasonable and just according to ‘ “traditional notions of fair play and substantial justice” ’ that it be required to defend the action here * * Laufer v. Ostrow, 55 N.Y.2d 305, 309-310, 449 N.Y.S.2d 456, 458, 434 N.E.2d 692, 694 (1982).

The “doing business” standard of CPLR § 301 requires a considerably greater showing of contacts with New York than the “transacts business” standard under section 302(a)(1). See Bialek v. Racal-Milgo, Inc., 545 F.Supp. 25, 34 (S.D.N.Y.1982). The anomalous possibilities of permitting a plaintiff to obtain jurisdiction under the more stringent requirements of section 301 when the same defendant could not be reached via section 302(a)(1), merely by in-canting some linkage between the defendant corporation and a corporation “doing business” in the proposed forum state, are readily apparent.

“A plaintiff seeking to base jurisdiction over a parent corporation on the activities of its subsidiary must show not only that the subsidiary ‘does business’ in New York, but also show either (1) that the subsidiary does all the business that its parent could do were it in New York by its own officials, making the subsidiary really an ‘agent’ of the parent, Frummer v. Hilton Hotels International, Inc., 19 N.Y.2d 533, 537, 281 N.Y.S.2d 41, 44, 227 N.E.2d 851, 854, cert. denied, 389 U.S. 923, 88 S.Ct. 241,19 L.Ed.2d 266 (1967), or (2) day-to-day control of the subsidiary by the parent that is so complete as to render the subsidiary, in fact, merely a ‘department’ of the parent. Delagi v. Volkswagenwerk AG, * * * 29 N.Y.2d [426,] * * * 432, 328 N.Y.S.2d [653,] 657, 278 N.E.2d [895,] * * * 897.” Bialek v. Racal-Milgo, Inc., supra at 32.

It is clear that OBI is not connected to COBS in a sense sufficient to establish jurisdiction under section 301. Assuming, arguendo, that jurisdiction could be obtained over OBI and that plaintiff’s relevant averments are accurate, plaintiff has merely shown that OBI has a nationwide promotional function for its six Outward Bound schools, of which defendant is one. For. example, plaintiff has included as Exhibit D to the said affidavit of Sullivan, a purported attachment to the 1978 OBI tax form which states:

“Outward Bound Inc has been organized for the purpose of acting as a central parent organization for the establishment, maintenance, operations, control and support of all Outward Bound Schools.
* * * * * *
“Administrative fees [are] paid to Outward Bound Inc. by the various Outward Bound Schools for administrative and fund raising purposes. These fees and services facilitate the performance of Outward Bound Inc.’s charitable and educational activities.”

Plaintiff has also submitted, as Exhibit G to said affidavit, an apparent charter agreement between COBS and OBI wherein OBI grants COBS the right to operate a school to “promote the concept of OUTWARD BOUND”, but retains certain rights of approval over various COBS decisions. Consistent with the implication of these documents, plaintiff has alleged some minor degree of confluence of directors and organizational personnel between COBS and OBI, some monetary benefit accruing to COBS through the efforts of OBI, some attendance by COBS administrators at OBI annual meetings in New York, and various other manifestations of the relationship between the two corporations. But the mere existence of a garden-variety parent-subsidiary or franchisor-franchisee relationship, even if plaintiff has established such, is not sufficient to establish jurisdiction under the test outlined in Bialek v. Racal-Milgo, Inc., supra. One could not argue, for example, that a New York resident who was injured while spending a vacation in a Hilton hotel in Colorado could subsequently sue in tort in New York based solely on the fact that there is a national Hilton organization which presumably is doing business in New York. What is contemplated in order to justify this boot-strap jurisdiction under section 301 is more in the nature of either an alter-ego or piercing the corporate veil theory, involving some equitable grounds for treating the two corporations as one for jurisdictional purposes, or a particularly substantial coincidence of identity between the two bodies — the point being that the same factors that would justify a finding of jurisdiction as to one would similarly attach to the other. Plaintiff has not made such a showing.

That this Court does not have personal jurisdiction over defendant, however, does not disempower it to transfer this action to a cognizant federal court pursuant to 28 U.S.C. § 1406(a). Corke v. Sameiet M.S. Song of Norway, 572 F.2d 77 (2d Cir.1978). The District of Colorado, wherein plaintiff’s causes of action assertedly arose, would have been a proper district for the original institution of this action under 28 U.S.C. § 1391(b) and the fact that venue was also proper in this forum poses no bar to a transfer under section 1406(a). Id. at 79-80.

Accordingly, inasmuch as this Court lacks personal jurisdiction over defendant and, consistent with the discussion herein, the case is hereby ORDERED transferred to the United States District Court for the District of Colorado pursuant to 28 U.S.C. § 1406(a).

      . Personal jurisdiction may be obtained over “any nondomiciliary, or his executor or administrator, who in person or through an agent:
      * * * commits a tortious act without the state causing injury to person or property within the state * * * if he
      (i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or
      (ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce * * *”

      . While such argument has more often been used to reach a parent through its subsidiary, it has been held that under New York law the same standards by which a parent corporation is sought to be subjected to in personam jurisdiction based on acts of a subsidiary are to be applied where a subsidiary is sought to be reached through the presence of a parent. DCA Food Industries Inc. v. Hawthorn Mellody, Inc., 470 F.Supp. 574 (S.D.N.Y.1979).

      . The statute provides:
      "A court may exercise such jurisdiction over persons, property, or states as might have been exercised heretofore.”

      . Or the converse in the present case. See fn. 2, supra.

      . It is worth noting that this Court would have granted defendant’s motion to transfer pursuant to 28 U.S.C. § 1404(a) in any event. COBS, which had the burden as moving party to show that such a transfer should be made, see Factors, etc., Inc. v. Pro Arts, Inc., 579 F.2d 215, 218 (2d Cir.1978), cert. denied, 440 U.S. 908, 99 S.Ct. 1215, 59 L.Ed.2d 455 (1979), has submitted affidavits specifying the names and substance of the proposed testimony of certain key witnesses, most of whom reside in Colorado, as is required when a transfer is sought on account of the convenience of witnesses. Ibid. This Court recognizes that the cost of bringing willing witnesses to this district from Colorado to testify, as well as the detriment to defendant’s case in having to rely alternatively on the deposition testimony of Colorado witnesses who might not voluntarily appear at a New York trial, are important considerations which weigh in favor of transfer. See Vassallo v. Niedermeyer, 495 F.Supp. 757, 760 (S.D.N.Y.1980). Of course such considerations can cut both ways. Moreover, this Court must consider the fact of plaintiff s residence and plaintiffs decedent’s former residence in New York, as well as plaintiffs assertion that many of plaintiffs witnesses reside either in New York or in the eastern part of the country. (Supplemental Affidavit of Luise M. Ross of September 18, 1984.) Unfortunately plaintiff has not made clear what the substance of the testimony of many of the witnesses would be. It appears, however, that said witnesses include, on the one hand, co-participants with decedent in the 1977 COBS program and, on the other, various persons who had contact with decedent in New York. The thrust of the testimony of the latter witnesses appears primarily concerned with the damages aspect of plaintiffs case so that plaintiff could request a bifurcated trial from the transferee court and thereby avoid any expense in transporting and lodging the damages witnesses unless and until a liability verdict had been returned in plaintiffs favor. Plaintiffs claim remains one that arises almost entirely from events occurring in Colorado and the Court is convinced that Colorado is the appropriate jurisdiction for further proceedings in this matter.


author: EDWARD C. REED, Jr., District Judge.

text:
    Maureen SAVAGE, Plaintiff, v. HOLIDAY INN CORPORATION, INC., Harrah’s Inc., Does I-X, inclusive, A, B, C, Corporation, X, Y, Z, Partnership, D, E, F, Limited Partnership, Defendants.
    No. CV-R-84-168-ECR.
    United States District Court, D. Nevada.
    Feb. 21, 1985.

      Charles R. Zeh, Reno, Nev., for plaintiff.
    Janet Beronio, Stateline, Nev., and Philip L. Ross and John H. Feldmann, III, San Francisco, Cal., for Harrah’s Inc.
    No appearance has been entered by Holiday Inn Corporation, Inc.
   MEMORANDUM DECISION AND ORDER

EDWARD C. REED, Jr., District Judge.

Defendant Harrah’s, Inc. (Defendant) has moved the Court to dismiss the Fifth and Sixth Causes of Action set forth in the Complaint for failure to state a claim upon which relief can be granted (Fed.R.Civ.P. 12(b)(6)). In addition, the motion asks the Court to strike as immaterial and impertinent (Fed.R.Civ.P. 12(f)) paragraph no. 8 of the Complaint, which contains allegations as to the fictitious defendants, and paragraph no. 5 of the Fourth Cause of Action, which contains allegations that the plaintiff is entitled to damages for humiliation, embarrassment, anxiety and harm to her physical health, mental health and reputation.

The plaintiff is a woman in her early fifties who contends that she was terminated as an employee of Harrah’s, Inc., by reason of discrimination based on age and sex. Such discriminatory firing violated both federal law, 42 U.S.C. § 2000e et seq. (Title VII) and 29 U.S.C. § 621 et seq. (ADEA), and Nevada statute, NRS 613.310 et seq., according to the Complaint. Further, she alleges that the wrongful conduct constituted a breach of an employment contract between her and the defendants.

In the Fifth Cause of Action, the plaintiff seeks punitive damages for her wrongful termination in breach of public policy. Defendant argues that punitive damages may not be awarded for violations of either Title VII or the ADEA. Nor may such damages be recovered under the State statutes invoked by the plaintiff, Defendant contends. Defendant further alleges that Nevada has never adopted the tort cause of action for wrongful termination in breach of public policy and, even if it had, the employment discrimination statutes would be the exclusive remedy available to the plaintiff.

The plaintiff has conceded that punitive damages are not recoverable under either Title VII or the ADEA. However, she disputes the contention that Nevada hasn’t adopted the wrongful termination in derogation of public policy exception to the “at-will” employment doctrine. The “at-will” employment rule provides that employment for an indefinite term may be terminated at any time for any reason by either the employee or the employer without legal liability. Dissent of Steffen, J. in Southwest Gas Corp. v. Ahmad, 99 Nev. 594, 668 P.2d 261, 262 (1983).

First of all, the plaintiff asserts that the State has never embraced the “at-will” doctrine. Second, she cites the recent Nevada Supreme Court opinion in Hansen v. Harrah’s, 100 Nev.Adv.Op. 8, 675 P.2d 394 (1984), for the proposition that there would be a public policy exception to the doctrine even if it were recognized. Because wrongful termination in violation of public policy is a tort cause of action, the plaintiff insists that consequential, general and punitive damages are all recoverable.

In reply, Defendant asserts that Hansen creates only a narrow exception to the “at-will” employment rule, for discharge of an employee in retaliation for his or her filing of a workmen’s compensation claim. Further, any exception wouldn’t apply where state statute provides detailed procedures and remedies for discrimination in employment, as does Nevada. Finally, Defendant points out that the plaintiff’s termination occurred prior to the Hansen decision, so that it would be unfair to award punitive damages against a defendant who couldn’t have known beforehand that his conduct would be actionable.

The employers argued, in Hansen, that the “at-will” employment rule was in effect in Nevada and that the State’s extensive workmen’s compensation laws provided the exclusive remedies available to an employee. 675 P.2d at 396. The opinion answers: “We are not persuaded.” Ibid. It holds that the “at-will” rule is subject to limited exceptions (plural) founded upon strong public policy. On page 397 the Court declares that retaliatory discharge for the filing of a workmen’s compensation claim by an employee is actionable in tort, so that statutory remedies are not exclusive. On the same page, the opinion holds that, as with any intentional tort, punitive damages are appropriate when the terminated employee can demonstrate the requisite malicious, oppressive or fraudulent conduct on the part of the employer. However, the Court decided that it would be unfair to impose punitive damages in the case before it, since the tort cause of action for retaliatory discharge was being adopted for the first time by the Nevada Supreme Court in that very case. Punitive damages are justified as punishment of the offender; an employer should not be punished for conduct it could not have known beforehand was actionable in the jurisdiction. 675 P.2d at 397; see also Brown v. Transcon Lines, 284 Or. 597, 588 P.2d 1087,1095 (Ore.1978). The Hansen opinion was handed down January 25, 1984. It reversed lower court dismissals of the plaintiffs’ complaints, that had been based on failure to exhaust administrative remedies and the lack of recognition in Nevada of a retaliatory discharge exception to the “at-will” employment rule. The plaintiff in the present case was terminated October 12, 1983. Since that date antedated the Hansen opinion, it would be improper to assess punitive damages against Defendant for violation of the public policy exception to the “at-will” doctrine.

Retaliatory discharge for the filing of a workmen’s compensation claim is not here involved. The plaintiff’s position is that her firing was motivated by her employer’s discriminatory bias against older employees and female employees. When a state’s legislature has enacted legislation that forbids certain conduct, that conduct is against public policy. Lucas v. Brown & Root, Inc., 736 F.2d 1202, 1205 (8th Cir. 1984); Tameny v. Atlantic Richfield Co., 610 P.2d 1330, 1332-3 (Cal.1980). NRS 233.010(1) specifically declares that it is the public policy of the State of Nevada to foster the right of all persons to hold employment without discrimination because of age or sex. Further, NRS 613.330(1) makes it an unlawful employment practice for an employer to discharge any person because of his or her sex or age. It seems safe to conclude that Nevada has a strong public policy against age or sex discrimination in employment. In light of the Hansen v. Harrah’s opinion, this Court predicts that the Nevada Supreme Court, if and when it faces the question, will recognize that sex or age discrimination fits into the public policy exception to the “at-will” employment doctrine.

The standards applicable to a motion to dismiss are that the plaintiff’s allegations are to be assumed to be true, that the complaint should be construed in light favorable to the plaintiff, and that a claim should not be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts which would entitle her to relief. See United States v. City of Redwood City, 640 F.2d 963, 966 (9th Cir.1980). Applying those principles, the Fifth Cause of Action, which alleges wrongful termination in breach of public policy, should not be dismissed. However, paragraph 2 thereof, which claims that the plaintiff is entitled to punitive damages therefor, must be stricken.

The Sixth Cause of Action sounds in the tort of breach of covenant of fair dealing. It incorporates all of the preceding paragraphs of the Complaint and further alleges that there is an implied covenant of good faith and fair dealing in every employment contract, which the defendants violated as to the plaintiff.

Defendant maintains that neither the Legislature nor the courts of Nevada have ever adopted a cause of action for breach of any implied covenant of good faith and fair dealing in employment situations. The plaintiff, in response, cites cases which suggest that the implied covenant is intimately related to the public policy exception. Therefore, if a state’s courts recognize the exception, they probably also would recognize the implied covenant.

The seminal case in Nevada seems to be Aluevich v. Harrah’s, 99 Nev. 215, 660 P.2d 986 (1983), which revolved around a lessor’s exercise of an option to cancel a gift shop lease by giving ninety days’ notice. The appellant there argued that the option had been exercised so that the lessor might open its own gift shop on the premises, thus usurping the appellant's profitable business, which had been developed over a period of ten years. The opinion noted that in a 1975 case the Nevada Supreme Court recognized an implied covenant of good faith and fair dealing in a case where an insurer had refused, without proper cause, to compensate an insured for a loss covered by his policy. 660 P.2d at 987. On the same page, the Aluevich Court continues:

The dissent correctly notes that an implied covenant of good faith and fair dealing has mainly been implied in contractual relations which involve a special element of reliance such as that found in partnership, insurance and franchise agreements. The case relied on by the dissent concerned a situation where one party has traditionally held vastly superi- or bargaining power — the termination of a salesperson’s “at will” employment contract. Fortune v. National Cash Register Co., 373 Mass. 96, 364 N.E.2d 1251, 1253 (Mass.1977).

The need to show the existence of the special element of reliance, before the implied covenant of good faith may be applied to the termination of an “at-will” contract, is emphasized again in Dalton Properties, Inc. v. Jones, 100 Nev.Adv.Op. 88, 683 P.2d 30, 31 (1984). Both Aluevich and Dalton Properties determined that the evidence had failed to prove the special element of reliance. Nevertheless, it should be noted that the above-quoted portion of the Aluevich opinion acknowledges that traditionally the employer holds vastly superior bargaining power when negotiating an “at-will” employment contract. The implied covenant has been applied elsewhere in employment contexts. See Garibaldi v. Lucky Food Stores, Inc., 726 F.2d 1367, 1374 (9th Cir.1984); Cancellier v. Federated Department Stores, 672 F.2d 1312,1318 (9th Cir.1982). At the present stage of the instant action it cannot be said that it appears beyond doubt that the plaintiff can prove no set of facts which would entitle her to relief. Therefore, Defendant’s motion to dismiss the Sixth Cause of Action should be denied. This Cause of Action does not allege entitlement to punitive damages, so that is not at issue.

The plaintiff has conceded that the Ninth Circuit frowns upon the naming of fictitious persons as defendants (e.g., Craig v. United States, 413 F.2d 854, 856 (9th Cir. 1969), and Sigurdson v. DelGuerico, 241 F.2d 480, 482 (9th Cir.1956)) and acquiesces in the striking of paragraph no. 8 of her Complaint, which deals solely with such defendants.

Defendant’s motion to strike the portion of paragraph no. 5 of the Fourth Cause of Action, which asks damages for humiliation, embarrassment, anxiety and harm to the plaintiffs physical health, mental health and reputation, is based on the premise that such damages are not recoverable in an action based on breach of contract. The Fourth Cause of Action alleges breach of the plaintiff’s contract of employment with the defendants.

In response, the plaintiff points out that the allegations of said paragraph no. 5 are incorporated by reference into the Fifth and Sixth Claims for Relief, both of which sound in tort. Tort damages are recoverable when an employer’s discharge of an employee contravenes public policy. Tameny v. Atlantic Richfield Co., 610 P.2d 1330, 1336 (Cal.1980); see also Hansen v. Harrah’s, 675 P.2d at 397. The same is true'where the claim is based on breach of the implied covenant of good faith and fair dealing. Cancellier v. Federated Department Stores, 672 F.2d at 1318. The invocation of Title VII or the ADEA does not bar other remedies available under pendent state claims. See Ibid.; Kelly v. American Standard, Inc., 640 F.2d 974, 983 (9th Cir.1981); Bradshaw v. Zoological Society of San Diego, 569 F.2d 1066, 1068 (9th Cir.1978). Therefore, the motion to strike paragraph no. 5 should be granted as to-the Fourth Cause of Action, but not as to the Fifth and Sixth Causes of Action.

IT IS, THEREFORE, HEREBY ORDERED AS FOLLOWS:

1) Defendant Harrah’s, Inc.’s motion to dismiss the Fifth Cause of Action is denied, but nevertheless, paragraph no. 2 thereof, which claims entitlement to punitive damages, shall be stricken.

2) Defendant Harrah’s, Inc.’s motion to dismiss the Sixth Cause of Action is denied.

3) Defendant Harrah’s, Inc.’s motion to strike paragraph no. 8 of the Complaint, dealing with fictitious defendants, is granted.

4) Defendant Harrah’s, Inc.’s motion to strike paragraph no. 5 of the Fourth Cause of Action, which deals with certain general damages, is granted insofar as it applies to the Fourth Cause of Action, but is denied insofar as said paragraph has been incorporated into the Fifth and Sixth Causes of Action.