Rorick v. Devon Syndicate, Ltd.

Background

An Ohio resident sued a Canadian corporation in Ohio state court in June 1930 for money owed under a contract. A summons was issued but the company was not personally served; the plaintiff filed affidavits to attach and garnish the company’s property, and service by publication followed. The defendant removed the case (moved it) to federal court. Years later the plaintiff filed a supplemental affidavit and the federal court issued garnishment orders reaching more funds. The district court later discharged those garnishments and the appeals court agreed.

Reasoning

The Supreme Court reviewed whether the federal court could extend liens to other property after removal when a state court had already obtained power over some property. The Court found the notary who took the original affidavits was not disqualified under Ohio law and that the early attachments in the state court were not premature. The Court relied on the federal statute that preserves attachments obtained in state court after removal (giving those liens continuing effect) and on the statute allowing federal courts to use state remedies. Reading those statutes together, the Court held a federal district court may, under state law, preserve and extend valid state-court attachments after removal.

Real world impact

The decision means liens or garnishments that a plaintiff properly obtained in state court before moving a case to federal court can survive the move and, where state law allows, be extended in federal court to reach other assets. The case was sent back to the district court to sort out the remaining state-law questions under the Court’s guidance.