Chisholm v. Gilmer

Background

Shareholders in a national bank were charged by the Comptroller of the Currency with assessments equal to the par value of their shares. To collect the assessment, the bank’s receiver served the shareholders with a Virginia notice of motion that described the claim and set a day for judgment. That Virginia practice, authorized by § 6046 of the Virginia Code, allowed a motion notice to be used instead of a traditional writ or summons. The shareholders objected in the federal District Court, saying the form of “process” was inadequate under a federal statute requiring writs to bear the court seal and clerk’s signature.

Reasoning

The key question was whether a Virginia notice of motion counted as process “issuing from the court” and so had to comply with the federal statute that requires court-issued process to be sealed and signed. The Court relied on the Conformity Act, which tells federal courts to follow the state practice in civil cases unless Congress has clearly said otherwise. The Court held that a notice of motion, even when used to start a common-law action, is not process issuing from the court and is not a writ. Therefore the federal statute about sealed, clerk-signed writs did not apply to Virginia’s notice-of-motion practice. The Court affirmed the lower court’s judgment for the receiver.

Real world impact

The ruling confirms that federal district courts sitting in Virginia may follow the state’s long-standing notice-of-motion practice. That means many suits in Virginia federal courts can be begun by state-style notice instead of formal sealed writs. The decision resolves a procedural dispute and leaves the merits of particular claims unaffected.