Performance Drilling Co., LLC v. H & H Welding, LLC - No. 3:09CV185TSL-JCS, 2009 U.S. Dist. LEXIS 32190 (S.D. Miss. Apr. 15, 2009)

Rule:

Miss. Code Ann. § 11-31-2 establishes the specific requirements for obtaining an order of attachment. This section requires that a complainant seeking an order of attachment provide an affidavit which includes, among other things, 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. The chancellor is charged to examine the affidavit and bill of complaint and is authorized (but not required) to issue an order of attachment only if he finds that the complainant's affidavit establishes a prima facie case demonstrating his right to recover on his claim against the defendant and also finds that the complainant's ability to recover the amount of his claim may be significantly impaired or impeded unless the order of attachment is issued. The statute further requires that as a condition to issuance of an order of attachment, the complainant must give 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.

Facts:

Performance Drilling Company (Performance) is a Mississippi limited liability company which provides drilling services to persons and entities engaged in the exploration and production of oil and gas. On March 19, 2009, H&H Welding filed suit against Performance in the Chancery Court of Jones County, Mississippi, alleging that it had contracted with Performance to build certain component parts for oil drilling rigs, that H&H had built and delivered the component parts to Performance in December 2008 in accordance with the parties' agreement, that despite repeated demands Performance had failed to pay for the component parts as agreed and that Performance was indebted to H&H for nearly $ 800,000. Included in H&H's complaint was a request for an order of attachment pursuant to Mississippi Code Annotated § 11-31-1 et seq. In its complaint and in Chris Holifield's accompanying affidavit, H&H asserted that Performance had incorporated the component parts fabricated by H&H into a drilling rig that had been removed from Mississippi to Louisiana where Performance had placed it in service, drilling a well near Tallulah, Louisiana. In order to secure payment of Performance's debt for the property that had been moved out of state, H&H sought attachment of Performance's real and personal property in Mississippi. The chancery court immediately issued an order of attachment, finding that Holifield's affidavit and supporting documentation established a prima facie case of H&H's right to recover on its claim against Performance, and that Performance, having removed the property sold to it by H&H to Louisiana, was an "absconding debtor" from which H&H's ability to recover the amount owed by Performance would be significantly impaired or impeded unless an order of attachment was issued. Performance filed suit pursuant to 42 U.S.C.S. § 1983, seeking a declaration that Mississippi's attachment statute unconstitutional. Performance moved for a preliminary injunction pursuant to Fed. R. Civ. P. 65.

Issue:

Was Mississippi's attachment statute unconstitutional?

Answer:

No.

Conclusion:

The court determined that Mississippi's attachment statutes satisfied the requirements of due process. The Mississippi statutes required that the complainant set forth the specific facts supporting his claim and permitted an order of attachment to issue only if the chancellor found the complainant had established a prima facie case demonstrating his right to recover on his claim. Moreover, the Mississippi statutes required that the complainant state specific reasons why his ability to recover on his claim was at risk if the order of attachment was not issued. Further, the Mississippi procedure mandated that the complainant put up a bond to protect the defendant in the event the attachment was later found to have been wrongful. The inclusion of safeguards to minimize the risk of an erroneous pre-hearing deprivation, coupled with the availability of an immediate post-attachment hearing to dissolve the attachment, met the demands of due process. Thus, Performance had failed to establish a likelihood of success on the merits of its claim.