Just a few days ago, in Noatex Corp. v. King Constr. of Houston, L.L.C., 2013 U.S. App. LEXIS 20656, 14-15 (5th Cir. Miss. Oct. 10, 2013), the Fifth Circuit Court of Appeals affirmed a federal district court ruling that held Mississippi's Stop Notice statute unconstitutional.
A stop notice claim differs from a mechanic's lien in that the stop notice creates a claimholder's interest in construction funds (as opposed to an interest in the land being improved). Most stop notice statutes provide a mechanic's lienholder what amounts to a pre-judgment garnishment of such construction funds. Once notice is provided, the holder of the construction funds is required to set aside a sufficient amount to pay the stop notice claim.
Mississippi's stop notice statute (Miss. Code Ann. § 85-7-181) had been in force nearly forty years when the federal district court for the Northern District of Mississippi held that "Mississippi's...
