Replevins, Making Use of a Valuable, but Often Overlooked Tool
So you’ve met with an attorney and you have been informed that you have a “strong” case. Of course you instruct your attorney to immediately run to the nearest courthouse and file a writ, summons, complaint or whatever legal document is necessary in order to immediately get the ball rolling. In the words of a certain sports broadcaster on crisp fall mornings, “Not so fast my friend!”1
Almost as important to the determination of whether or not you have a factual basis for a lawsuit, is the decision of what court to file that lawsuit in.2 However, before narrowing in on a particular court, there is the question of what type of court you will file in.
Our country has a dual court system; we have both state and federal courts. Generally, the difference between the two court systems boils down to jurisdiction. Jurisdiction is a court’s ability to hear a particular matter. State and local courts are, for the most part, courts of general jurisdiction with the ability to hear almost every type of dispute. Federal courts are established under the U.S. Constitution for the purpose of deciding disputes involving the Constitution and laws passed by Congress. However, there are certain scenarios where a particular matter may fall within both the jurisdiction of the state and federal court systems.
The decision of whether to file in either state or federal court also applies to replevin actions.3 While some attorneys and creditors may view replevin actions as a remedy solely for use in state court, there is a place for replevin actions in federal court. Specifically, Rule 64 of the Federal Rules of Civil Procedure provides that:
At the commencement of and throughout an action, every remedy is available that, under the law of the state where the court is ,4 provides for seizing a person or property to secure satisfaction of the potential judgment. But a federal statute governs to the extent it applies.
The aforementioned rule affords the parties to a federal action on all prejudgment remedies, including replevin, as they are provided for under the law of the state in which the federal court is . In fact, “state provisions about the circumstances and manner in which provisional remedies can be used … must be honored.”5
The operation of Federal Rule of Civil Procedure 64 embodies the Erie Doctrine as it implements the provisional remedies of replevin, attachment, garnishment, etc. made pursuant to local (state) statutes in federal diversity litigation.6 While federal courts must apply state substantive law pursuant to the Erie Doctrine, federal courts apply federal procedure to diversity matters.
Of course this use of state court prejudgment remedies doesn’t always mesh with federal court procedure. For example, in replevin actions, Pennsylvania Rule of Civil Procedure 1081(a) provides that, “[a] claim secured by a lien on the property may be set forth as a counterclaim. No other counterclaim may be asserted.”7 Thus, the only defenses that may be asserted to a replevin action in Pennsylvania are either title to the subject property or a lien against said property. However, Federal Rule of Civil Procedure 13 compels a defendant to assert his counterclaim, “if it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim.”8
The question then becomes whether or not a defendant in a replevin action in a Pennsylvania federal court may assert a counterclaim? When confronted with this issue, the United States District Court for the Eastern District of Pennsylvania found that the assertion of a counterclaim in a federal court replevin action was procedural in nature rather than substantive, and allowed the defendant to assert a counterclaim when it was clear the defendant had no lien rights.9
The fact is that the ability to utilize a replevin action and/or other such seizure remedies in federal court has existed for quite some time, but it is not a tool that is often utilized by creditors’ rights attorneys. I suspect that this is because of the amount in controversy requirements involved in meeting diversity jurisdiction. However, when proper jurisdiction exists, there are a number of factors that suggest that federal court may be the proper forum for your replevin action.
I suggest that the most important factor to examine is one that is inherent within the replevin process itself. That is the speed with which the matter is adjudicated. The purpose of a replevin action, particularly where pre-judgment seizure is sought, is to quickly determine ownership of a particular piece of property, so that the displaced owner can immediately begin receiving the benefit of possession of that property. In theory, everyday that the owner is deprived of possession damages continue to accrue.
Federal courts have less of a caseload than state courts. Therefore, it reasons that federal court litigation will be faster than state court. Other differences between state and federal courts, such as electronic filing and the requirements regarding service of original process, can provide a plaintiff with the ability to speed litigation along. State courts may not have the ability to file electronically, or may require the use of a public servant (i.e. sheriffs, constables, etc.), both of which can lead to unnecessary delays in litigation. Another factor may simply be the familiarity with the applicable rules of civil procedure. State court procedure varies greatly from state to state, whereas all federal courts adhere to the Federal Rules of Civil Procedure. Your attorney is going to be able to work faster and better serve you if he or she is more familiar with the civil procedure rules at hand. This will also eliminate the need for local counsel to do additional legal work.
While this article suggests that there are many benefits to filing a replevin action in federal court, it is not meant to condemn state courts or their handling of replevin actions. It is merely written to inform both creditors’ rights attorneys and their clients that there are other options available to remedy the situation at hand.
1 These are the words often uttered by football analyst Lee Corso on millions of television sets across the nation each Saturday morning on ESPN’s College Game Day.
2 Of course, there are a number of issues, including witness travel, litigation strategy, etc., that must be addressed before the filing of any lawsuit. However, this article is being written for the sole purpose of introducing attorneys and creditors to federal court replevin actions.
3 Generally speaking, a replevin action is a legal remedy by which a plaintiff may recover goods, unlawfully withheld from his or her possession, by means of a special form of legal process in which a court may require the defendant to return the specific goods to the plaintiff prior to the entry of judgment. In other situations, the plaintiff, or the court, may elect to adjudicate the right to possession prior to obtaining the relief to recover the goods in question.
4 Weener Plastics, Inc. v. HNH Packaging, LLC., 590 F. Supp. 2d 760, 764 (E.D.N.C. 2008).
5 Weener Plastics, Inc. v. HNH Packaging, LLC., 590 F. Supp. 2d 760, 764 (E.D.N.C. 2008), quoting, 11A C. Wright A. Miller & M. Kane, Federal Practice & Procedure, § 2932, p. 7 (2d ed. 1995).
6 Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938) (holding that federal courts must apply state substantive law when hearing diversity cases).
7 Pa.R.C.P. 1081(a).
8 Fed.R.C.P. 13.
9 Wright v. Redding, 408 F. Supp. 1180, 1183 (E.D.Pa. 1975) (“Federal rules determine such things as the commencement of action, pleading, joinder of actions and parties, use of discovery, mode of trial, and other procedural matters regulated in the Rules.”).
For additional information on perfection of security interests and the usage of other credit enhancements, please see the other articles in this Publications section.