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f2d_477/html/1151-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "CLARK, Circuit Judge:",
"license": "Public Domain",
"url": "https://static.case.law/"
} |
James Faldon TURNBOW, Petitioner-Appellant, v. Dr. George J. BETO, Director, Texas Department of Corrections, Respondent-Appellee.
No. 72-3777
Summary Calendar.
United States Court of Appeals, Fifth Circuit.
April 18, 1973.
Richard P. Dambold, Amarillo, Tex. (court appointed), for petitioner-appellant.
John L. Hill, Atty. Gen., Lang A. Baker, Asst. Atty. Gen., Austin, Tex., for respondent-appellee.
Before WISDOM, AINSWORTH and CLARK, Circuit Judges.
Rule 18, 5th Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of N. Y., 431 F.2d 409, Part I (5th Cir. 1970).
CLARK, Circuit Judge:
On this second appeal from the denial of Turnbow’s third federal habeas corpus petition we affirm the district court’s finding that Turnbow was adequately advised of his right to appellate counsel. We also affirm the denial of habeas relief on his claim of lack of counsel at sentencing — not on the merits of the claim but rather because the issue has never been presented to the state courts of Texas.
On the first appeal in this case, we found that Turnbow’s present petition presented a new ground for habeas relief — specifically, the abridgment of his right to a direct criminal appeal in for-ma pauperis — and remanded to the district court to determine whether this contention was deliberately withheld on appellant’s previous federal habeas applications and for further proceedings as required. Turnbow v. Beto, 464 F.2d 527 (5th Cir. 1972). After an evidentiary hearing at which the appellant appeared with appointed counsel, the district court entered the following findings of fact:
(1) Petitioner did not deliberately withhold from his earlier applications for the writ of habeas corpus his contention that his right to appeal in for-ma pauperis had been abridged; (2) the judge of the trial court did not advise Petitioner of his right to appeal in forma pauperis-, (3) Petitioner’s appointed counsel did advise Petitioner of his right to appeal and had advised him that they would represent him on appeal without compensation if he desired to appeal the conviction; (4) Petitioner was not represented by counsel at sentencing; (5) at the time of sentencing Petitioner knew that he had a right to appeal and knew that the appointed attorneys would represent him if he desired to appeal; and (6) Petitioner at no time advised any responsible state official that he desired to appeal.
On the basis of these findings, the district court denied habeas relief.
Advice Regarding Appellate Counsel
It is well established that, as a matter of right, an indigent defendant is entitled to assistance of court-appointed counsel for the purpose of a direct appeal from a state court conviction. Douglas v. California, 372 U.S. 353, 83 S.Ct. 814, 9 L.Ed.2d 811 (1963). In his original petition the Petitioner alleged that he was denied effective assistance of appellate counsel since he was not informed that an attorney would be furnished without charge to prepare his direct appeal. This contention has now been decided adversely to him by the district court, which found that his court-appointed trial counsel discussed the right of appeal with the defendant and advised him that if he desired to appeal, they would represent him without compensation.
The appellant does not suggest that this fact determination based upon conflicting evidence consisting of testimony by the appellant and an affidavit and answers to interrogatories by Homer L. Moss, one of the original court-appointed attorneys, is clearly erroneous. Rather, the appellant now argues that, despite the offer of his trial counsel to represent him on appeal without compensation, that he was entitled to specific advice by the trial judge concerning his right to appeal in forma pauperis. The appellant relies on the opinion of the Second Circuit in United States ex rel. Smith v. McMann, 417 F.2d 648 (2d Cir. en banc 1969), cert. denied 397 U.S. 925, 90 S.Ct. 929, 25 L.Ed.2d 105 (1970), which imposes a duty on the state trial court to give an instruction concerning appellate counsel rights to a convicted defendant who (1) is indigent and (2) does not know his rights. This court dealt with an identical contention in McGriff v. Wainwright, 431 F.2d 897 (5th Cir. 1971). In McGriff we pointed out that even if the mandatory instruction rule of Smith were applicable in this circuit, which it is not, the defendant would not be entitled to relief because he was in fact informed of the availability of free appellate counsel by his appointed trial counsel and thus the failure of the judge to provide additional information regarding appellate counsel did not amount to an abridgment of the right to appeal in forma pauperis. See Bartley v. Kentucky, 462 F.2d 610 (6th. Cir. 1972).
We therefore affirm the judgment of the district court that the Petitioner was not denied the right of direct appeal because of his indigency.
Counsel at Sentencing
It is evident from the record developed on remand that Turnbow was not represented by counsel at sentencing. Gideon v. Wainwright, 372 U.S. 355, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963), and its progeny establish an absolute right to counsel at any stage of criminal proceedings where substantial rights of an accused may be affected. Mempa v. Rhay, 389 U.S. 128, 88 S.Ct. 254, 19 L.Ed.2d 336 (1967), specifically applied Gideon to sentencing proceedings. See also Worts v. Dutton, 395 F.2d 341 (5th Cir. 1968); Houston v. Ellis, 252 F.2d 186 (5th Cir. 1958); and Ellis v. Ellisor, 239 F.2d 175 (5th Cir. 1956).
The court below, having found an absence of counsel during the sentencing proceedings, denied habeas relief on the ground that the Petitioner was not prejudiced thereby. While acknowledging that under Texas procedure sentencing was a critical phase of a criminal case, the court found that the Petitioner had been made fully aware of his rights and had reached a firm decision not to appeal in advance of the sentencing proceeding.
We find it unnecessary to consider the merits of the district court’s decision in this issue, since we find that the appellant’s present contention regarding the absence of counsel during sentencing has not been raised and exhausted before Texas state courts. We therefore affirm the denial of federal habeas relief on this issue on the ground of lack of exhaustion of available state remedies. This affirmance does not prejudice the defendant’s right to present his allegations in the proper forum.
The judgment denying the writ of habeas corpus is
Affirmed.
. Although Turnbow’s state conviction occurred in 1957, he is entitled to the benefit of Douglas, since the Supreme Court lias given that decision retroactive effect. Smith v. Crouse, 378 U.S. 584, 84 S.Ct. 1929, 12 L.Ed.2d 1039 (1964).
. By analogy, the apjiellant points out that federal district courts are required to advise a criminal defendant of his right to appeal and of the right to apply for leave to appeal in forma pauperis. F.R.Crim.P., Rule 32(a)(2). (1966 Amendments).
. It is the established law in this circuit that:
For a petitioner to be entitled to post-conviction relief, it is not enough to show that indigency occasioned the petitioner’s inability to employ counsel or to appeal; the petitioner must show that the State deprived him of his Fourteenth Amendment rights. State action is shown when a responsible official in the State’s system of justice rejects a request for counsel or fails to take proper steps toward appointment of counsel for a convicted defendant when he has knowledge of the defendant’s indigency and desire for appellate counsel, (emphasis added).
Pate v. Holman, 341 F.2d 764, 775 (5th Cir.), modified 343 F.2d 546 (5th Cir. 1965); Giles v. Beto, 437 F.2d 192 (5th Cir. 1971); McGriff v. Wainwright, supra, 431 F.2d at 899; Goforth v. Dutton, 409 F.2d 651 (5th Cir. 1969); Beto v. Martin, 396 F.2d 432 (5th Cir. 1968). See United States ex rel. O’Brien v. Maroney, 423 F.2d 865 (3rd Cir. 1970).
. Although the Second and Seventh Circuits —United States ex rel. Diblin v. Follette, 418 F.2d 408 (2d Cir. 1969); United States ex rel. Singleton v. Woods, 440 F.2d 835 (7th Cir. 1971) — emphasize the role of the trial judge in informing an indigent defendant of his appeal rights; this circuit’s rule which relies upon advice of counsel — e. g., Thomas v. Beto, 423 F.2d 642 (5th Cir. 1970) and Andry v. Henderson, 429 F.2d 26 (5th Cir. 1970) — is equally efficacious in result.
. Mempa was held retroactive in McConnell v. Rhay, 393 U.S. 2, 89 S.Ct. 32, 21 L.Ed.2d 2 (1968).
. Punishment having been set by the trial jury at ninety-nine years confinement, the length of sentence was not in issue at the sentencing proceeding since the judge’s action in such a situation are purely perfunctory. Vernon’s Ann.Tex.Code Crim.Pro. art. 42.09.
. This discussion is not intended as an exercise in the niceties of procedural technicality. The Texas Court of Criminal Appeals lias held in a case virtually identical on the facts to the one sub judice that regardless of an indigent, defendant’s previously announced intentions in regard to appeal, the absence of counsel during the sentencing proceeding is a violation of Sixth and Fourteenth Amendment rights. Ex parte Vestal, 468 S.W. 2d 372 (Tex.Cr.App.1971).
|
f2d_477/html/1154-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "SETH, Circuit Judge.",
"license": "Public Domain",
"url": "https://static.case.law/"
} |
William James ROGERS, Appellee, v. Walter ROTH, Appellant.
No. 72-1549.
United States Court of Appeals, Tenth Circuit.
Argued and Submitted March 27, 1973.
Decided May 8, 1973.
Leonard 0. Thomas, Kansas City, Kan. (David K. Fromme of Weeks, Thomas, Lysaught, Bingham & Johnston, Kansas City, Kan., and Harold E. Doherty, Topeka, Kan., with him on the brief), for appellant.
Raymond L. Dahlberg, Great Bend, Kan. (H. Lee-Turner, Great Bend, Kan., with him on the brief), for appellee.
Before SETH, Circuit Judge, DURFEE , Judge, and McWILLIAMS, Circuit Judge.
Judge, United States Court of Claims, sitting by designation.
SETH, Circuit Judge.
This is an appeal in a diversity negligence action which arose in Kansas from a car-motorcycle collision. The case was tried to a jury which found for the plaintiff. The issues on appeal concern basically the use of a discovery deposition of a non-party; changes in the deposition made by the deponent after the material-was transcribed; and the motivation for the changes. By reason of the fact that basic issues were left unresolved during the course of trial, we must reverse and remand for a new trial.
Much of the argument on appeal concerns the version as to how the accident occurred as given by a young man, then seventeen years old, who was riding on the motorcycle with the plaintiff when it was struck by defendant’s car. The principal issue relates to the manner in which some asserted changes in this person’s story were used by the plaintiff’s attorney before the jury.
Jeff Jensen, who is not a party to the suit, was riding behind the plaintiff who was operating the motorcycle at the time of the collision. He was not injured in the accident, and he described what took place to several people at the-scene immediately after the collision, and to others some short time later. He also signed a written statement for the insurance adjusters a day or two after the accident. Some two years later the plaintiff took Jeff Jensen’s discovery deposition. Signing of the deposition by the witness was not waived. The reporter transcribed the questions and answers, and submitted them to counsel for both sides. The defendant’s attorney, Mr. Patterson, wrote a letter dated October 1, 1969, to Jeff Jensen’s father in which he indicated that some of the statements made by Jeff as they appeared in the transcription were not consistent with the statement the witness had theretofore given to the insurance adjusters or others. Specific references were made in the letter or attached portions of the transcription. Jeff Jensen thereafter appeared before the reporter who had taken the deposition and made some of the changes referred to in the above letter of October 1, 1969. The witness was not sent, and did not see, a copy of the letter, but he did have copies of some pages from the transcription of the deposition which apparently accompanied the letter, and whereon portions were underlined. The deposition was so changed, sworn to, and signed by the witness. Thereafter the plaintiff with the consent of the court again took or resumed, Jensen’s deposition. During this deposition, the witness was examined at length as to the reasons for the changes in his answers.
Some two years elapsed after the depositions above referred to until trial was held. The record shows that Jeff Jensen was present in the court room during the course of the trial, but neither side called him to testify. The defendant testified as to what Jeff Jensen had told him and others about the accident shortly after its occurrence. It was during the course of the cross-examination of this witness, and an expert witness, that the incidents took place, and rulings were made,, which defendant-appellant asserts as grounds for reversal.
During the course of the trial, but in chambers, the depositions were discussed by the attorneys, as were the changes, and the letter from defendant’s attorney to the father of Jeff Jensen. These conferences were at the close of plaintiff’s case and there suggestions were advanced by plaintiff’s attorney that defendant’s attorney had acted improperly in reference to the changes in the deposition of Jensen. It was pointed out that the father of the witness was a partner in an insurance agency with the defendant, and the policy covering defendant had been written by the agency.
The method used in making the changes as related to Rule 30(e), Fed.R.Civ.P., the propriety of the changes, and the propriety of the actions by defendant’s attorney in suggesting changes in the deposition were not resolved in the face of these challenges by plaintiff’s attorney. These problems were also not resolved during the course of the trial, the facts were not developed, and no inquiry was then made into the changes nor why they were made, nor the position of defendant’s attorney in relation thereto.
As indicated above, the problems came to the fore during the cross-examination of the defendant who testified as to statements made at the scene by Jeff Jensen. Also the issues arose during the cross-examination of defendant’s expert witness Stackley who sought to reconstruct the accident.
Some of the cross-examination of defendant is as follows:
“Q. (By Mr. Turner) I am talking about, you learned about Mr. Patterson’s conversations with Don Jensen about the necessity to get Jeff Jensen to change his story, didn’t you ?
“Mr. Patterson: Object to that, assuming facts not in evidence, as prejudicial.
“Mr. Turner: I am entitled to attack the credibility of Jeff Jensen, Your Honor, under the Rule.
“The Court: Well, if there is any basis for your making that statement, of course you are.
“Mr. Patterson: I might ask that it be stricken and the Jury instructed to disregard it unless and until there is some evidence of such an accusation.
“The Court: Well, let’s find out what the witness says.
“The Witness: What was the question?
“Q. (By Mr. Turner) Let me do it this way: You know that the first time Jeff Jensen testified was by deposition on August 4, 1969, Great Bend, Kansas? A. That was the same day I did. Yes.
“Q. Yes? A. Yes; that is correct.
“Q. And then you learned later that Mr. Patterson had contacted his father with a suggested list of changes that Jeff Jensen should make in his testimony; didn’t you, sir ?
“Mr. Patterson: To which I object on the ground there is no evidence to that effect.
“Mr. Turner: There will be.
“Mr. Patterson: It is improper cross-examination.
“The Court: We’ll see what his answer is. Overruled.
“The Witness: I knew that Jeff had made another deposition.
“Q. (By Mr. Turner) Well, so we are entirely clear about it. You and Don Jensen had talked extensively about this matter; hadn’t you? A. We haven’t really, no.
“Q. All right. Didn’t Don Jensen tell you that Mr. Patterson had written him a letter suggesting that the changes that Jeff Jensen should make in his sworn testimony given on August 4, 1969, because his testimony hurt you?
“Mr. Patterson: To which we object on the ground there is no — object to the form of the question. It is improper cross-examination, outside the scope of the direct examination and does not serve to impeach the declarant or the witness. It is injected purely for prejudicial purposes.
“The Court: Overruled.
“TheWitness: Yes.”
There were subsequent similar questions and objections during the cross-examination of the defendant. The court in response to one objection stated that the persons concerned with the letter and the deposition were in the court room and could be cross-examined.
During cross-examination of defendant’s expert Stackley, who reconstructed the accident, further statements and references to the changes in the deposition were made by plaintiff’s attorney, and his personal view was expressed as to the reasons for the changes. In reference to the attorney for defendant providing portions of the deposition for the use of the expert, the following cross-examination took place:
“Q. Did he point out the portions of the Jeff Jensen’s testimony that he gave before he received instructions from his father—
“Mr. Patterson: Again to which we object on the ground that Counsel assumes that this in fact occurred. I think it is prejudicial. I think I would like to have a hearing before the Court.
“The Court: I have read these depositions, Mr. Patterson. That is what happened.
“Mr. Patterson: Well—
“The Court: You are overruled.
“Q. (By Mr. Turner) Okay, sir. Were you furnished that portion of Jeffery Jensen’s deposition where he testified before he was instructed by his father as to how he should change his sworn testimony as a result of a letter he received from Mr. Patterson ? A. I read both of his—
“Mr. Patterson: I would like to object, Your Honor, for the record.
“The Court: Well, you object for the record, but you are overruled.
“The Witness: I read both of them, sir.
“Q. (By Mr. Turner) Okay. My questions are going to be directed to his testimony under oath before he was instructed to start changing his testimony. Now, sir, first of all—
“Mr. Patterson: Your Honor, I wonder if I can have a continuing objection.
“The Court: You may have a continuing objection. You will be overruled.
“Go ahead.”
This was followed by a series of questions by plaintiff’s attorney wherein he would read questions from a deposition of Jeff Jensen, and ask the expert who was on the stand to read the answers. These “questions” were extensive, and much of the deposition, which was apparently in the form before it was changed, was so read to the jury. These portions had nothing, to do with matters which concerned the expert witness nor his calculations. He had placed no reliance thereon. This was done over defendant’s objections. There was objection made also that the witness was being asked to answer from portions of the deposition which had been later changed by the witness. To this the court said: “This was his recorded testimony, Mr. Patterson. You can show that he changed it if you wish.” During the cross-examination of the expert, virtually the entire deposition of Jeff Jensen was so read to the jury, and its use went far beyond impeachment of the declarant Jensen which it purported to be. This also, as above indicated, was by using the deposition before it was changed.
Thus during the course of the trial there were repeated references by plaintiff’s attorney as to changes in the story of Jeff Jensen; to requests made by defendant’s attorney to Jeff’s father that the deposition be changed, and references that the attorney for defendant and the witness had acted improperly. All this was before the jury, and the matter was never determined by the court during the trial. The trial concluded with continued references in the closing arguments to the jury to the actions by defendant’s attorney in reference to the deposition of Jeff Jensen as being improper and an attorney of defendant was referred to as an “evidence manipulator.”
The trial was concluded, the jury retired to deliberate, and the judge then questioned under oath Donald W. Jensen and Jeff Jensen. The deposition in its original form with the changes interlined, the written statement of Jeff Jensen given to the adjuster, the letter to Donald Jensen from defendant’s attorney about the deposition with indications of portions of the deposition, and the second deposition were admitted as the court’s exhibits.
Thereafter the jury returned with its verdict for plaintiff.
Defendant made a motion for a new trial which asserted in part the improper questioning by plaintiff’s attorney in using the uncorrected deposition, in its use beyond impeachment, and in the suggestions made to the jury of improper conduct by defendant’s attorney. The motion was overruled by the court in an order which recited that the circumstances disclosed “. . . a concerted effort on the part of a witness’s father and the attorney employed by defendant’s insurer to tamper with a witness and obtain substantial changes in his testimony.” The court further said: “The Court believes that to permit the suppression of the glaring manipulations of the testimony offered by the witness Jeff Jensen in depositions which the witness Stackley says he used'in forming his opinions on how the accident happened, in reconstructing it, would have been prejudicial to the plaintiff.” Westinghouse Electric Corp. v. Wray Equipment Corp., 286 F.2d 491 (1st Cir.).
It is apparent from the above description and from the quotations that the issue as to the validity of the changes made by Jeff Jensen in his deposition, whether Rule 30 had been complied with, whether there was impropriety in suggesting the changes on the part of the father of the witness or on the part of the attorney for the defendant became a significant part of the trial. But the uncertainty continued throughout the trial, and was misused by plaintiff’s attorney. The court in a post-trial hearing heard some of the witnesses, and reached the conclusion expressed in the order denying the motion for a new trial.
Jeff Jensen never appeared as a witness before the jury, but one version of his testimony came in from the use of the unchanged deposition as read by plaintiff’s attorney through the expert witness Stackley. The deposition as changed by Jeff Jensen before he signed it was not before the jury, nor was the second or continuation deposition taken some months later. We find no objection in the record by plaintiff’s attorney as to the manner in which the deposition was changed by the witness several months after it was transcribed nor a motion to suppress the changes. He did, however, ask the court if he could again take the witness’s deposition, and this was done.
If a witness gives a deposition and signature is not waived, he may later make changes under Rule 30(e), and give reasons. This is contemplated and on occasion is obviously necessary. The references during the trial before the jury to the original version as being under oath were misleading and prejudicial since only portions of the answers were used. There was but one deposition, this was the original transcription with the interlined changes plus the continuation. Usiak v. New York Tank Bridge Co., 299 F.2d 808 (2d Cir.), refers only to statements by parties and contains no other holding. Rule 32(a)(4), Fed.R.Civ.P., requires the use of other portions when only part is used to present a fair picture. Westinghouse Electric Corp. v. Wray Equipment Corp., 286 F.2d 491 (1st Cir.). This rule should be applied especially when the witness has under the rules entered changes to his answer on the deposition. The party seeking to use the deposition has the burden of conforming with the rule.
The record indicates that during one of the in chambers conferences after the plaintiff had rested, the defendant’s attorney told the court that he was not going to call Jeff Jensen as a witness, but would call others who had heard his statements made shortly after the accident. The court questioned defendant’s counsel and stated that the court understood that the testimony of others would be offered under proposed Federal Rule 806. Defendant’s attorney asserted there was no response from plaintiff’s attorney, and we must assume there was consent that the matter would be so handled. The court indicated that the credibility of the declarant was subject to attack as if he had taken the stand. It was apparently under this theory that the trial court permitted what purportedly was the use as impeachment by inconsistent statement of the deposition through the expert witness. This we must hold was error as to so much of the deposition as was properly used to show a subsequent inconsistent statement, because the complete answer of the declarant in the deposition was not used, but only part. This was incomplete and misleading, and as indicated the issue was never resolved at trial. It was also error because “the deposition” was not used only to show an inconsistent statement, but was read to the jury as if it had been fully admitted in evidence. This was contrary to Rule 32.
The jury should have had properly before it sufficient facts to enable it to decide whether the subsequent statements of the declarant did in fact contradict the declarations of the eyewitness admitted as an exception to the hearsay rule as above recited. The contradiction theory was advanced by the plaintiff and he had the burden. As it turned out, the question whether the declarant was telling what he believed to be the truth in the deposition, or what someone else had influenced him to state as the truth as shown by the changes, the reason for the changes, and the circumstances surrounding them was never presented properly to the jury. All the jury had was the fact of change as to some of the answers, and the reasons expressed by counsel. The issue was raised by the plaintiff but was never put in a form suitable for proper consideration by the jury as should have been done. The motion of defendant for mistrial together with the objections made preserved these points. See Calhoun v. United States, 384 F.2d 180 (5th Cir.). Much of the briefs of the parties and the authorities argued relate to the manner in which depositions may be changed, but as indicated we do not reach this question.
The trial judge, in the statement quoted above following a reference by plaintiff’s attorney as to the changes instructed by the witness’s father, said: “The Court: I have read these depositions, Mr. Patterson. This is what happened.” The court so expressed to the jury its conclusion that the witness’s father had instructed him to make changes in the deposition. This position of the court was expressly based on the depositions which were not before the jury. The jury was again precluded from properly passing on the truth of the statements of Jeff Jensen, and was left to speculate or rely solely on the court’s statement of its conclusion, and the attorney’s views. Straub v. Reading Co., 220 F.2d 177 (3d Cir.).
As indicated above, there were repeated references to the impropriety of defendant’s counsel in reference to the depositions. This culminated in the description of defendant’s attorney as an “evidence manipulator” by plaintiff’s attorney in his closing argument. This issue of the propriety of the actions of defendant’s attorney is somewhat different from the truth of the depositions or changes considered above. This issue was also improperly brought forward from time to time during the trial, and it also was not resolved or otherwise handled by the court to enable the jury to put it in its proper place. The issue was an obviously inflammatory and prejudicial one, and was so used by the plaintiff. It was and is in reality unrelated to the merits of the case. The defendant should not have been required to take the risk or certainty of a penalty from the jury for wrongdoing by his attorney (if there was such, which we, of course, do not decide) in connection with a deposition taken some two years before. This was a matter for the court to resolve, and to separate from the issues properly before the jury so that the defendant was not tried with the attorney on the basis of the subjective views of the attorneys. This matter loomed large unfortunately in the presentation of the facts.
The combination of these circumstances requires us to reverse, and to remand for a new trial.
Reversed and remanded. |
f2d_477/html/1160-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "KENNEDY, District Judge.",
"license": "Public Domain",
"url": "https://static.case.law/"
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WESTWOOD CHEMICAL, INC., Plaintiff-Appellant, v. JOHNS-MANVILLE FIBER GLASS, INC., Defendant-Appellee. WESTWOOD CHEMICAL, INC., Plaintiff-Appellant, v. CERTAIN-TEED PRODUCTS CORPORATION, Defendant-Appellee. WESTWOOD CHEMICAL, INC., Plaintiff-Appellant, v. FERRO CORPORATION, Defendant-Appellee.
Nos. 72-1743, 72-1744, 72-1803.
United States Court of Appeals, Sixth Circuit.
Argued Jan. 30, 1973.
Decided May 4, 1973.
Marshall I. Nurenberg, Cleveland, Ohio, Theodore A. TeGrotenhuis, Olmsted Falls, Ohio, C. D. Lambros, Cleveland, Ohio, on brief; Paul Weick, Akron, Ohio, Walter J. Blenko, Pittsburgh, Pa., of counsel, for plaintiff-appellant.
C. Willard Hayes, Washington, D. C., and John Lansdale, Jr., Cleveland, Ohio, for defendants-appellees.
Robert W. Poore, Barry L. Springel, Jones, Day, Cockley & Reavis, Cleveland, Ohio, for Johns-Manville, Fiber Glass, Inc.; Robert M. Krone, Denver, Colo., C. Willard Hayes, Cushman, Darby & Cushman, Washington, D. C., Warren Daane, Cleveland, Ohio, William Webb, Pittsburgh, Pa., of counsel.
John Lansdale, Jr., James M. Phemister, Cleveland, Ohio, on the brief for Certain-Teed Products Corp. and Ferro Corporation; Squire, Sanders & Dempsey, Cleveland, Ohio, of counsel.
Before PHILLIPS, Chief Judge, PECK, Circuit Judge, and KENNEDY, District Judge.
The Honorable Cornelia G. Kennedy, United States District Judge, Eastern District of Michigan, sitting by designation.
KENNEDY, District Judge.
These consolidated appeals arise out of protracted patent litigation beginning in 1962. In two cases (Nos. 72-1744 and 72-1803), plaintiff-appellant West-wood Chemical, Inc. seeks review of the refusal of the District Court to set aside consent judgments dismissing patent infringement actions against defendantsappellees Certain-Teed Products Corporation and Ferro Corporation. In the third case (No. 72-1743), Westwood appeals from the District Court’s entry of a judgment of dismissal of its patent infringement action against defendant-appellee Johns-Manville Fiber Glass, Inc.
An understanding of the issues raised by these appeals requires a brief review of the history of these cases. Over a period of several years, Westwood brought multiple patent actions alleging infringement of its patents Nos. 2,742,378 and 2,841,566. Both patents are in the nature of process and product patents relating to “treating fillers, pigments and fibers with unsaturated organo-silanes for use in reinforcing polyester resin bodies.” Westwood Chemical, Inc. v. Owens-Corning Fiberglas Corp., 445 F.2d 911, 912 (6th Cir. 1971), cert. denied, 405 U.S. 917, 92 S.Ct. 941, 30 L.Ed.2d 786 (1972). In each instance Westwood generally alleged infringement of the patents without specifying particular claims, although it appears that the two patents together comprised 42 claims. The earliest such action was filed against Ferro on September 12, 1962. On June 10, 1963, a second action was brought against Owens-Corning Fiberglas Corporation and Johns-Man-ville. Shortly thereafter, the claims against Owens-Corning and Johns-Manville were severed for trial by the District Court. On October 25, 1967, a third suit was begun against Certain-Teed. Three additional actions were later brought against other corporations, none of which is involved on these appeals.
In 1967, Westwood moved to have the actions against Ferro, Owens-Corning and Johns-Manville consolidated for trial, on the basis that the questions of law and fact raised by each of the defendants as to both non-infringement and validity were identical. Early in 1968, Westwood filed further motions to consolidate all seven actions. These motions were opposed by the defendants, four of whom were direct competitors, because they feared that consolidation would require disclosure to one another of trade secrets relating to manufacturing processes. Ferro pointed out, furthermore, that Ferro, Owens-Corning and Johns-Manville had been cooperating in their preparations for their defense with the understanding among counsel that the Owens-Corning case would be tried first, although in the ordinary course of events the suit against Ferro, which was the oldest, would have been tried first, and that the parties had relied upon that understanding. Ferro also argued that consolidation would unreasonably delay trial of the then approximately six-year-old case against it.
With the proceedings in this posture, Westwood, Ferro, Johns-Manville and later Certain-Teed entered into a stipulation providing in relevant part:
1. The case of Westwood Chemical, Inc. v. Owens-Corning Fiberglas Corporation, Civil Action No. C63-460, as severed, shall be the first case of the above enumerated cases to be tried.
2. The final decision (including appeals) as to the validity of the United States Patents Numbers 2,742,378 and 2,841,566, in the case of Westwood Chemical, Inc. v. Owens-Corning Fiberglas Corporation, Civil Action Number C63460, as severed, shall be final and binding upon all parties hereto, the same as if each defendant were a party to said case.
Plaintiff then withdrew its motions to consolidate.
At the trial of the Owens-Corning case, only certain of the claims under the patents were placed in issue by plaintiff. This election of claims was made subsequent to the filing of the stipulation. The District Court held both patents to be totally invalid for obviousness to one having ordinary skill in the art. On appeal, this Court modified the judgment of the District Court by restricting the determination of invalidity to the claims actually in issue at trial, since Owens-Corning had not sought declaratory relief as to the remaining claims. Owens-Corning, supra, 445 F.2d at 913.
Following denial by the Supreme Court of Westwood’s petition for certiorari, 405 U.S. at 917, 92 S.Ct. 941, the attorneys for appellees Ferro and Certain-Teed sent proposed forms of judgments of dismissal of those cases to Westwood’s trial counsel, who, while still counsel of record, had been relieved of active management of the Westwood cases. He endorsed the judgments with his approval and forwarded them to T. A. TeGrotenhuis, the patentee and an officer of Westwood, who also was (and is still) an attorney for the corporation, requesting that he review them. Mr. TeGrotenhuis, in turn, forwarded the judgments to counsel for Ferro and Certain-Teed, and they were entered by the District Court on March 20, 1972. These judgments, entered by consent of the parties, referred to the parties’ stipulation, by which “it was agreed that the final decision (including appeals) as to the validity of the United States Patents Nos. 2,742,378 and 2,841,556, in the case of Westwood Chemical, Inc. v. Owens-Corning Fiberglas Corporation, should be final and binding upon all the parties hereto, the same as if the defendant were a party to said case.”
Thereafter, Westwood’s present counsel filed motions to set aside these consent judgments. Westwood argued that the judgments should be limited to dismissal of those claims under the patents whose validity had actually been adjudicated in the Owens-Corning case, and that as to the remaining claims the actions against Ferro and Certain-Teed should be reinstated. The District Court declined to reinstate any portion of the actions or to modify the previous judgments, and it is from this ruling of the District Court that Westwood appeals in two of the cases before us for review (Nos. 72-1744 and 72-1803).
In Johns-Manville (No. 72-1743), Westwood appeals from an order and judgment of the District Court, entered June 7, 1972, upon motion of the defendant, dismissing the complaint. In dismissing the suit against Johns-Manville, the District Court relied upon the stipulation, supra, which was the basis for the consent dismissals in Ferro and Certain-Teed.
As already indicated, the parties stipulated that as to the validity of the patents in suit, the final decision in the Owens-Corning case would be final and binding upon all parties, the same as if each defendant were a party to that case. Insofar as Owens-Corning is concerned, the decision in its case is res judicata as to all of the claims under the two patents belonging to Westwood, not simply those actually litigated and found to be invalid, since Westwood cannot litigate such claims piecemeal. Appellees take the position that the same prohibition against piecemeal litigation must be applied in the actions brought against them in order to give effect to the language in the stipulation “the same as if each defendant were a party to said case.” Westwood argues, on the other hand, that the stipulation is limited to the validity of the patent claims actually asserted against Owens-Corning, that it is, therefore, entitled to assert against appellees infringement of the balance of the claims under the patents, and that dismissal should accordingly be limited to the claims actually declared invalid in Owens-Corning.
No evidence has been offered as to the intent of the parties in entering into the stipulation, although numerous arguments have been made as to what must have been intended. In his order in the Certain-Teed case denying plaintiff’s motion to set aside the consent judgment of dismissal, the District Judge, who was familiar with the entire litigation, found the stipulation to be “quite direct and uncomplicated.” He accorded to the stipulation its literal meaning treating Certain-Teed as if it were a defendant in Owens-Corning. The District Judge found support for this construction of the stipulation in the conduct of West-wood’s trial counsel, who, “[bjased upon his clear understanding of the case,” had approved the judgment dismissing the complaint. Counsel had signed the stipulation, and was fully familiar with the facts and issues involved in the cases since he had tried, and handled the appeal of, the Owens-Corning case.
The District Court’s construction of the stipulation is a sound one. If West-wood’s interpretation were correct, there would have been no reason to use the language “the same as if each defendant were a party to said case.” Perhaps the parties did not and, indeed, could not anticipate all of the circumstances which might arise (and in fact did arise) subsequent to the signing of the stipulation. They agreed, however, to confer a certain status upon all defendants signing the stipulation with the intention of achieving finality in the Owens-Corning trial. If it was Westwood’s intent to reserve certain patent claims to assert against the remaining defendants, it should have said so. Clearly, none of the parties contemplated having the issue of validity tried piecemeal, which is the interpretation urged by Westwood.
The orders and judgment of the District Court are affirmed.
. Quoting from the judgments entered by the District Court. The essential wording of the two judgments is the same.
|
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John GIERINGER, Appellant, v. CENTER SCHOOL DISTRICT NO. 58 et al., Appellees.
No. 72-1535.
United States Court of Appeals, Eighth Circuit.
Submitted Feb. 15, 1973.
Decided April 20, 1973.
Rehearing Denied May 23, 1973.
Irving Achtenberg, Kansas City, Mo., for appellant.
R. Lawrence Ward, Kansas City, Mo., for appellees.
Before LAY and BRIGHT, Circuit Judges, and NICHOL, District Judge.
Sitting by designation.
BRIGHT, Circuit Judge.
John Gieringer, in this civil rights action under 42 U.S.C. § 1983, seeks reinstatement to his teaching position in the appellee-school district and compensatory and punitive damages against members of the appellee-school board in their official and private capacities. The district court denied any relief, finding that Gieringer had not been dismissed for a constitutionally impermissible reason nor, since he was nontenured, denied procedural due process.
On this appeal, Gieringer asserts that he was dismissed for the exercise of his right of free speech and that the findings of the trial court in support of its conclusion to the contrary were clearly erroneous. He further argues that the failure to provide him with notice of cause and a hearing on his dismissal denied him due process and equal protection guaranteed by the Fourteenth Amendment. Finally, he contends that the court erred in admitting a letter and certain testimony which were hearsay. We reverse the judgment, disposing of this case on First Amendment grounds.
The school board employed Gieringer for the 1969-1970 school year as an elementary physical education teacher assigned to classes in two schools in the district. During the 10 years prior to this assignment, Gieringer had served as a guidance counselor in the same school district. Over the latter portion of this 10-year period, friction had developed between Gieringer and his superiors as a result of several incidents. The school superintendent concluded from these incidents that Gieringer’s attitude toward his superiors and fellow employees was insubordinate, rude, and abrasive. For these reasons, in the spring of 1969, the superintendent recommended that Gieringer’s contract not be renewed. The school board rejected the recommendation but, as we have noted, transferred Gieringer to a different position at other schools in the district.
During the next school year, Gieringer appears to have gotten along well professionally with his superiors, receiving satisfactory or better ratings from the principals at both new schools. The sole exception to this apparent rapport arose out of an impromptu report delivered by Gieringer at a meeting of the Center Community Teachers Association in October, 1969. The subject of this report related to the school district’s financial ability to raise teachers’ salaries.
The district court related the following background to this incident:
The “out-of-class speech” contention arises out of a report plaintiff made at a meeting of the Center Community Teachers Association. The background of the incident is that a tract of federally owned land is located in the School District. Under Section 521 of Title 40, U.S.C.A., the agency occupying these premises was obliged to pay an amount equal to the local real estate taxes to the local authority. This Act expired in 1968. G.S.A., the Government agency, had withheld payments, however, for the years 1966-68, inclusive, on the ground that the assessed valuation was too high. The county brought suit to collect for these years. The law providing for such payments was not reenacted upon its expiration, and, although bills were introduced for that purpose, the School Board was informed throughout 1969 by the Congressman representing the district that passage appeared very doubtful.
Meanwhile, the teachers were seeking higher salaries for the 1969-70 school year. The Board submitted a larger tax levy to the voters to increase salaries,. but it was defeated. In the fall of 1969 the County Counselor’s office announced a settlement of the suit with G.S.A., which would result in a lump sum payment to the Board for the past three years of payments which had been withheld. The teachers immediately asked for a salary increase, and the Board refused on the grounds that this was a “one-shot” payment, and there would be no way to finance the increased salaries in the following years.
The plaintiff was delegated by an officer of the C.C.T.A. to investigate this contention of the Board and report to the Association.
The basis for Gieringer’s report to the Teachers Association lay in his conversations with the county attorney regarding the settlement agreement, Gieringer’s impression was that even if the necessary enabling legislation failed, an alternative source of funds might be found. The essence of the report, as preserved in the Association’s minutes, was that “John Gerringer [sic] reported that due to a court case over disputed property that a substantial amount of money should come into the district this year and in the next few years.” Based on Gieringer’s report, the Teachers Association resolved to study and investigate the matter of teachers’ salaries further.
The school superintendent, upon receiving word of Gieringer’s report from a teacher who had attended the meeting, concluded that the report had been deliberately designed to undermine the credibility of the school administration in the eyes of the teachers. The incident was considered evidence that the history of difficulties between Gieringer and the administration would continue. The superintendent, therefore, in March, 1970, renewed his recommendation that Gieringer’s contract not be renewed for the following school year. The school board this time voted unanimously to approve the superintendent’s recommendation.
In support of this action, the appellees argue that Gieringer’s dismissal rested upon the entire history of his inability to get along with his superiors rather than simply upon the report which he had made to the Teachers Association. The record serves to belie this argument. The school board’s transfer of Gieringer in 1969 to different schools and a different position eliminated earlier frictions and cleared the air. Thereafter, the only criticism of Gieringer’s performance as a teacher emanated from his report given to the Teachers Association. It is clear from the record that this report served as a catalyst and that without it no discharge would have occurred.
Thus, the precise question before us narrows to whether the school board dismissed Gieringer for the exercise of his First Amendment right of free speech or, as the administration urges, because his report was in fact a deliberate misrepresentation or otherwise so insubordinate or provocative as to justify his dismissal. The district court deemed the report to be constitutionally unprotected :
The plaintiff was not simply criticizing Board practices or policies, but was accusing them of deliberately withholding or misrepresenting important and material facts. Such a report would naturally cause serious dissension among the teachers, and similarly cause a lack of confidence in the Board by all taxpayers in the district. The facts, as represented by plaintiff, were completely untrue, as the most cursory investigation would show. The statements were irresponsible and obviously made to create consternation and dissension. The constitutional guaranty of free speech does not apply to statements such as these, and the Court finds this point against the plaintiff.
The controlling law is to be found in the Supreme Court’s decision in Pickering v. Board of Education, 391 U.S. 563, 88 S.Ct. 1731, 20 L.Ed.2d 811 (1968). The teacher in Pickering, in a letter to a newspaper, publicly criticized the school board’s allocation of funds between educational and athletic programs and the way in which the real reasons for seeking additional tax revenues had been glossed over by the board and superintendent. The board dismissed the teacher on the ground that his letter was deliberately false and misleading and therefore an unjustifiable attack upon the board and the school administration, disruptive of the operations of the school district. The dismissal was sustained by the state courts.
In reversing, the Supreme Court held (1) that a teacher retains the right as a citizen to comment on matters of public concern; (2) that to the degree such commentary is substantially accurate, it provides no grounds for dismissal absent a showing of disruption of the teacher’s classroom duties or the regular operation of the school, and (3) that, even if the commentary is inaccurate, a showing of disruption is still required unless it can be proved that the statements in question were knowingly or recklessly made. The Court determined that Pickering’s letter contained inaccuracies but that these were not knowing or reckless and that no disruptive effect had been shown.
Here, the settlement agreement was a matter of public concern. Nothing in the evidence suggests that Gieringer’s report in any way interfered with his teaching. It does not appear to have jeopardized his relationship with fellow teachers with whom he had to work closely. It did not result in disruption of the district’s operations. While the report evidenced optimism that the agreement might provide enough money to support a salary increase for teachers, it was couched in possibilities. There is no evidence that Gieringer deliberately sought to misrepresent his conversations with the county attorney in order to embarrass the administration. Gieringer’s inference, from the background circumstances reported to him, that the school board would continue to receive federal monies was at least as permissible as the pessimistic pronouncements by the administration that any amount received from the federal government would represent only a “one shot” payment.
In short, none of the indicia recounted in Pickering, which would take expression out of the sphere of protected activity, appear in this case. We, therefore, conclude that Gieringer’s report was protected within the constitutional standards delineated in Pickering and hold that Gieringer was dismissed for a constitutionally impermissible reason.
The judgment of the district court is reversed. The case is remanded for the entry of judgment reinstating Gieringer and awarding him loss of backpay, subject to mitigation by Gieringer’s earnings since his dismissal and without any award for punitive damages. Cooley v. Board of Educ., 453 F.2d 282, 287 (8th Cir. 1972); Ramsey v. Hopkins, 447 F.2d 128 (5th Cir. 1971).
. The district court opinion has not been reported.
. Even assuming' Gieringer’s report may have been only partially a factor in his dismissal, if that report was protected activity, then the dismissal was still constitutionally impermissible. Cook County Teachers Union, Local 3600, AFT v. Byrd, 456 F.2d 882, 888 (7th Cir.), cert. denied, 409 U.S. 848, 93 S.Ct. 56, 34 L.Ed.2d 90 (1972); Fluker v. Alabama State Bd. of Educ., 441 F.2d 201, 230 (5th Cir. 1971).
. Congress, in fact, did authorize continued in-lieu-of-tax payments for 1969 and 1970 pursuant to 40 U.S.C. § 523. The legislation, however, was repealed effective January 1, 1971. Pub.L. No. 91-466, § 2 (Oct. 17, 1970).
|
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The WASHINGTON POST COMPANY et al. v. Richard G. KLEINDIENST, Acting Attorney General of the United States, et al., Appellants.
No. 72-1362.
United States Court of Appeals, District of Columbia Circuit.
Argued June 30, 1972.
Decided Sept. 6, 1972.
Leonard Schaitman, Atty., Dept. of Justice, with whom Harold H. Titus, Jr., U. S. Atty., and Morton Hollander, Atty., Dept. of Justice, were on the brief, for appellees. John A. Terry, Joseph M. Hannon, Michael A. Katz, and Robert D. Zsalman, U. S. Attys., also entered appearances for appellants.
Joseph A. Califano, Jr., Washington, D. C., with whom Charles H. Wilson, Jr. and Richard M. Cooper, Washington, D. C., were on the brief, for appellees.
Melvin L. Wulf, New York City, and Hope Eastman, Washington, D. C., filed a brief on behalf of Tom Wicker and others as amici curiae urging affirmance.
Before McGOWAN, LEVENTHAL and ROBINSON, Circuit Judges.
ORDER
PER CURIAM.
This case came on for hearing on an appeal from a ruling by the District Court, reflected in a memorandum opinion dated April 9, 1972, 357 F.Supp. 770, that the policy of the Federal Bureau of Prisons in denying all requests by the press to interview designated prisoners violated the First Amendment. The Court directed the Bureau to modify its rules within 30 days to permit such interviews under terms and conditions appropriately reflective of administrative and disciplinary considerations. That decision is presently subject to a stay by the Supreme Court, issued May 13, 1972, pending appeal in this court.
At the oral argument, the Government pressed upon us a supervening decision by the Supreme Court in Branzburg v. Hayes, 408 U.S. 665, 92 S.Ct. 2646, 33 L.Ed.2d 626, decided June 29, 1972, as representing a significant limitation by the Supreme Court of the reach of the First Amendment in relation both to the precise issue immediately involved in the three cases then decided, and to the general area of press guarantees. Branzburg, unlike the case before us, compelled revelation by reporters to grand juries of information gathered by them, but the First Amendment claim rested heavily upon the assertion that access to information would be restricted if such compulsion was exerted. One of the cases heard by the Supreme Court with Branzburg and reversed by it, Caldwell v. United States, 434 F.2d 1081 (9th Cir. 1970), was cited by the District Court as relevant to the scope of press access.
Since the case before us deals with the scope of First Amendment rights to access, Branzburg supplies a new element to be considered in the decisional process' which was not in existence at the time the record was made and the conflicting claims resolved in the District Court. It seems obvious that considerations of sound judicial administration suggest that any record for future appellate consideration be made in awareness of it, if that is feasible under the circumstances, as it is here.
Accordingly, we have concluded, while retaining jurisdiction of this appeal, to remand the record for such further consideration as the District Court may wish to give the case in the light of Branzburg and, in any event, for specific findings (which may follow upon further evidentiary proceedings) with respect to the following:
1. The extent to which the accurate and effective reporting of news has a critical dependence upon the opportunity for private Dersonal interviews.
2. The extent to which the so-called, “big wheel” justification has any tangible footing in a significantly wide spectrum of experience in prison administration.
3. The factual foundations for any other asserted justifications for blanket prohibition of private personal interviews.
4. Whether there may be a valid basis for a ban, in the interest of avoiding impairment of good order, as to a particular prisoner or prisoners, even in the absence of a prior history of unruliness or disruptiveness.
5. Whether it is unfeasible to pursue a flexible approach to the allowance of private personal interviews, with appropriate scope for the judgment of the responsible prison officials and their consideration of administrative, convenience or necessity.
6. Any other matters which, in the view of the District Court, by reference to Branzburg or otherwise, would further refine and illuminate the competing claims and assertions made by the parties so that ultimate resolution of the news access right under the First Amendment claimed in this instance may be as informed as possible.
By reason of the foregoing, it is hereby
Ordered that the record in this case is remanded to the District Court for the purposes hereinabove stated and, upon the conclusion of proceedings held hereunder, shall as supplemented be returned to this court for further consideration of the pending appeal. |
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“AMERICANS UNITED” INC., et al., Appellants, v. Johnnie M. WALTERS, Commissioner of Internal Revenue.
No. 71-1299.
United States Court of Appeals, District of Columbia Circuit.
Argued Sept. 11, 1972.
Decided Jan. 11, 1973.
Certiorari Granted June 4, 1973.
See 93 S.Ct. 2752.
Mr. Alan Morrison, with whom Mr. Franklin C. Salisbury, Washington, D. C., was on the brief, for appellants.
Mr. Leonard J. Henzke, Jr., Atty., Tax Div., Dept. of Justice, with whom Messrs. Thomas A. Flannery, U. S. Atty. at the time the brief was filed, and Grant W. Wiprud, Atty., Tax Div., Dept. of Justice, were on the brief, for appellee.
Before FAHY, Senior Circuit Judge, and TAMM and WILKEY, Circuit Judges.
TAMM, Circuit Judge:
This case comes to us on appeal from an order in the district court denying appellants’ (plaintiffs below) petition to convene a three-judge district court pursuant to the provisions of 28 U.S.C. § 2282 (1970), and granting appellee’s motion to dismiss. For the reasons stated at length below we affirm the action of the district court as it pertained to the individual appellants involved, but as to the corporate appellant reverse and remand for further proceedings consistent with this opinion.
I. BACKGROUND
Appellant Americans United, incorporated as “Protestants and Other Americans for Separation of Church and State,” is organized under the laws of the District of Columbia and is a nonprofit educational corporation. On July 3, 1950, the Commissioner of Internal Revenue issued a ruling that Americans United qualified as tax exempt under § 101(6) of the Internal Revenue Code of 1939, the predecessor to § 501(e)(3) of the 1954 Code. Consequently, for a period of nearly twenty years not only was Americans United free from taxation upon its income, but also contributors to the corporation were entitled to the deductions provided under § 170 of the 1954 Code (§ 23(q) of the 1939 Code). On April 25, 1969, a letter ruling from the Service revoked the 1950 ruling, holding that Americans United had violated §§ 170(c)(2)(D) and 501(c)(3) of the Code by devoting a substantial part of its activities to attempts to influence legislation. More particularly, the letter ruling stated that although part of Americans United’s activities could be classified as “educational” or “charitable” within the meaning of § 501(c)(3) of the Code, it was, nonetheless, an “active advocate of a political doctrine.” The majority of the corporation’s activities were held to be in furtherance of the following goals: “the mobilization of public opinion; resisting every attempt by law or the administration of law which widens the breach in the wall of separation of church and state; working for the repeal of any existing state law which sanctions the granting of public aid to church schools; and uniting all ‘patriotic’ citizens in a concerted effort to prevent the passage of any federal law allotting, directly or indirectly, federal education funds to church schools.”
While Americans United still retained a tax exempt status as an organization described in § 501(c)(4) of the Code, the removal of its § 501(c)(3) exemption allegedly proved to be most damaging. Americans United states that its resulting removal from the list of § 170 corporations to whom tax free contributions could be made dried up its well of contributory resources to such an extent that it operated at a deficit for the first time in its history during fiscal year 1970. Consequently, on July 30, 1970, this action was commenced in the United States District Court for the District of Columbia. Two individual plaintiffs, Archer and Lowell, apparently suing as taxpayers who intended in the future to contribute to Americans United, joined with Americans United in bringing the class action.
The amended complaint in the district court averred violations of various first and fifth amendment liberties and guarantees: (1) §§ 170 and 501, and the action of the Commissioner in giving force and effect thereto, were unconstitutional and void insofar as they denied § 501(e)(3) status to the corporate appellant by reason of its exercise of first amendment rights, and likewise denied individual appellants the privilege of deducting the contributions used as a vehicle to exercise their first amendment rights. (2) Since what was a “substantial part” in the case of Americans United was not a “substantial part” in the case of other, larger organizations opposed to appellants’ viewpoint, the change of status because of the substantiality of the activities of one organization as opposed to another in expressing opinions and influencing legislation was an unreasonable classification against Americans United, and by reason thereof Americans United and other organizations similarly situated were being discriminated against and denied equal protection of the laws in violation of the fifth amendment of the United States Constitution. (3) Appellants claimed that their tax dollars were being used by reason of §§ 170 and 501 in a manner that aided and strengthened churches whose size permitted their influencing of legislation to be “relatively less substantial than that of the corporate [appellant],” and that appellee’s actions in enforcement thereof constituted violations of the establishment and free exercise clauses of the first amendment. (4) The exemption clause of § 501(c)(3) amounted to an invalid delegation of legislative power “in that the statutory standards of ‘substantiality’ and ‘propaganda’ [were] lacking in specificity for the carrying out of the purpose of Section 501(c)(3).” (5) Finally, the defendant acted arbitrarily and capriciously in abuse of his discretion in applying, in this situation, the “substantial influencing” clause of the statutory exemption of § 501(c) (3).
Appellants’ complaint founded jurisdiction for the action upon 28 U.S. C. § 1331 (1970) (civil action where amount in controversy exceeds $10,000 and which arises under the Constitution and laws of the United States), 28 U.S. C. § 1340 (1970) (whereby jurisdiction is bestowed in the federal district court in any civil action arising under an Act of Congress providing for internal revenue), and § 10 of the Administrative Procedure Act, 5 U.S.C. §§ 701-706 (1970) (making final agency action subject to judicial review). Appellants also sought the convention of a three-judge district court pursuant to 28 U.S.C. §§ 2282 and 2284 (1970), and requested the following relief: (1) Declaratory judgment that the “exemption clauses of Section 501(c)(3) [were] separable from the remainder of the section and [were] null and void” as unconstitutional under the first and fifth amendments, and as an invalid delegation of legislative power. (2) Judgment “requiring” the appellee to “reevaluate” corporate appellant as a § 501(e)(3) charitable corporation and to reinstate corporate appellant on the Cumulative List, Organizations Described in Section 170(c) of the Internal Revenue Code of 1954, if found to be eligible under the newly constituted § 501(c)(3). (3) Judgment restraining the appellee from enforcing §§ 170(c) and 501(c)(3) so as to deprive the individual appellants “of the benefit of tax advantages in the exercise of their First Amendment rights by reason of the unconstitutionality of those sections.” (4) Judgment that appellee acted in an arbitrary and capricious manner in changing the status of corporate appellant. (5) In the alternative, judgment requiring appellee to reopen the revocation proceedings and reevaluate the corporate appellant “in the light of the final decision in this case.”
Appellee filed a motion to dismiss, based essentially on 28 U.S.C. § 2201 (1970), which prohibits declaratory judgments “with respect to Federal taxes,” and 26 U.S.C. § 7421(a) (1970), which prohibits suits “for the purpose of restraining the assessment or collection of any tax.” The trial court denied appellants’ petition to convene a three-judge court, finding that no substantial constitutional question was raised, and granted appellee’s motion to dismiss, citing National Council on the Facts of Overpopulation v. Caplin, 224 F.Supp. 313 (D.D.C.1963).
Alleging error in both aspects of the trial court’s order, appellants 'bring this appeal. Contending that no taxes have been assessed or collected, that this is a civil rights rather than tax case, and that they have no other adequate remedy, appellants maintain that the provisions of 26 U.S.C. § 7421(a) (1970) and 28 U.S.C. § 2201 (1970) cannot be used to prohibit the declaratory and injunctive relief sought. They further contend that they have raised substantial constitutional questions meriting the invoking of a three-judge court under the standards established in Idlewild Bon Voyage Liquor Corp. v. Epstein, 370 U.S. 713, 82 S.Ct. 1294, 8 L.Ed.2d 794 (1962). Appellee’s posture on appeal is somewhat different, of course, and in addition to the grounds listed by the trial judge for dismissing the action he relies upon the doctrine of governmental immunity, claiming this to be an unconsented suit against the United States. Louisiana v. McAdoo, 234 U.S. 627, 34 S.Ct. 938, 58 L.Ed. 1506 (1914).
II. JURISDICTION
1. Introduction
The statutes providing for three-judge “constitutional” courts, adopted to avoid impolitic action on the part of lone federal district judges in matters of broad regulatory scope, are procedural rather than substantively jurisdictional in nature. A complaint which raises substantial constitutional questions and otherwise meets the requirements of § 2282 can and should be dismissed if independent district court jurisdiction is found wanting. “[T]he provision requiring the presence of a court of three judges necessarily assumes that the District Court has jurisdiction.” Ex Parte Poresky, 290 U.S. 30, 31, 54 S.Ct. 3, 4, 78 L.Ed. 152 (1933). This court has held that a dismissal for want of jurisdiction is properly a matter for a single district judge without considering the question of convening a three-judge court. Eastern States Petroleum Corp. v. Rogers, 108 U.S.App.D.C. 63, 280 F.2d 611 (1960), cert. denied, 364 U.S. 891, 81 S.Ct. 222, 5 L.Ed.2d 187 (1960). Accord, National Council on the Facts of Overpopulation v. Caplin, 224 F.Supp. 313 (D.D.C.1963). The first order of business for the single district judge is simply put (although, as here, not so simply decided): Does the district court have jurisdiction even to consider the applicability of a three-judge panel, or are the plaintiffs out of court for lack of subject matter jurisdiction?
The anti-injunction statute (26 U.S.C. § 7421 (1970)) by its terms denies jurisdiction to “any court” in actions seeking to enjoin the assessment or collection of taxes. If such a statute is applicable here the appellants cannot be afforded the relief requested, regardless of the substantiality of the constitutional questions raised. See, e. g., Harvey v. Early, 160 F.2d 836 (4th Cir. 1947).
Although its legislative history may be “shrouded in darkness,” the raison d’etre of § 7421(a) was illuminated by Chief Justice Warren in Enochs v. Williams Packing & Navigation Co., Inc., 370 U.S. 1, 7, 82 S.Ct. 1125, 1129, 8 L.Ed.2d 292 (1962):
The manifest purpose of § 7421(a) is to permit the United States to assess and collect taxes alleged to be due without judicial intervention, and to require that the legal right to the disputed sums be determined in a suit for refund. In this manner the United States is assured of prompt collection of its lawful revenue. (Emphasis added, footnote omitted.)
See also State Railroad Tax Cases, 92 U.S. 575, 613-614, 23 L.Ed. 663 (1875). Section 7421(a) was thus born of administrative and governmental necessity, used to prevent intermeddling in the tax collection process. An offspring of the equity rule that a suit to enjoin the collection of taxes was not maintainable unless an adequate remedy at law was lacking, its language is much stronger and more encompassing in scope. Even if it can be shown that irreparable injury will result if the collection is effected, § 7421(a) bars a suit for an injunction in the absence of very special circumstances. See Enochs, supra, 370 U.S. at 6, 82 S.Ct. 1125.
The history of the Declaratory Judgments Act and § 2201 is somewhat different. When initially promulgated in 1934, the phrase “except with respect to Federal taxes” was absent from § 2201. Consequently, federal taxpayers (innovative as they are) quickly utilized it to obtain declaratory judgments holding various tax statutes unconstitutional, something they were barred from accomplishing under the anti-injunction statute. Congress (innovative as it is) quickly reacted and amended § 2201 to include the contentious phrase. The Senate Finance Committee, in reporting out the amended version, stated that the “application of the Declaratory Judgments Act to taxes would constitute a radical departure from the long-continued policy of Congress [as represented today by § 7421(a)] with respect to the determination, assessment, and collection of Federal taxes.” Literally broader than § 7421(a) in its preclusion of tax oriented remedies, the § 2201 exception has literarily been found coterminus with that provided by § 7421(a). McGlotten v. Connally, 338 F.Supp. 448 (D.D.C.1972). See also Bullock v. Latham, 306 F.2d 45 (2d Cir. 1962), and Tomlinson v. Smith, 128 F.2d 808 (7th Cir. 1942). We believe that to be a correct interpretation, one soundly based on the history of the exception and on the paradoxicalness of authorizing injunctive relief while depriving courts the authority to declare the rights of the parties in connection with the injunctive relief. The breadth of the tax exception of § 2201 is eo-extensive with the effect of § 7421(a), and so the applicability of the latter to our situation is determinative of jurisdiction.
2. Individual Appellants
The springboard of the action before us — namely that the removal of Americans United from the status of those corporations to whom tax deductible contributions can be made has wreaked havoc upon its financial stature — is the same for both the individual and corporate appellants. They seek to keep Americans United afloat. However, the posture of the appellants and the effect that the relief sought would have upon them is distinctively different. Stripped to its barest essentials, the individual appellants’ relief relates directly to the assessment and collection of taxes. They seek, despite their averments that no taxes have been assessed and that this is a civil rights rather than tax case, to enjoin the appellee from assessing or collecting taxes on those dollars contributed by them to Americans United. In paragraph 3 of the relief portion of appellants’ amended complaint this becomes evident:
[Plaintiffs pray that the following relief be granted:] Judgment enjoining defendant Thrower from enforcing Sections 170(c) and 501(c)(3) of Title 26 U.S.C.A., so as to deprive the individual plaintiffs and others similarly situated of the benefit of tax advantages in the exercise of their First Amendment rights by reason of the unconstitutionality of those sections.
The allegations that the tax will be assessed and collected in violation of their constitutional rights is to no avail. See Dodge v. Osborn, 240 U.S. 118, 36 S.Ct. 275, 60 L.Ed. 557 (1916); Harvey v. Early, 160 F.2d 836 (4th Cir. 1947); Moon v. Freeman, 245 F.Supp. 837 (E.D.Wash.1965); National Council on the Facts of Overpopulation v. Caplin, 224 F.Supp. 313 (D.D.C.1963). The allegation that no tax has as yet been assessed, and that therefore the action is somehow without § 7421(a), we find to be equally without merit. In the words of Chief Judge Sirica in National Council, supra, 224 F.Supp. at 314, “[t]he Court cannot agree that the immunity of a tax assessment from court-imposed restraint has anything to do with the timing of that restraint.” Finally, the individual appellants have not shown the high probability of success on the merits that warrants the non-application of § 7421(a) under the standards enunciated in Enochs v. Williams Packing & Navigation Co., Inc., 370 U.S. 1, 7, 82 S.Ct. 1125, 1129, 8 L.Ed.2d 292 (1962):
[I]f it is clear that under no circumstances could the Government ultimately prevail, the central purpose of the Act is inapplicable and, under the Nut Margarine case, [Miller v. Standard Nut Margarine Co., 284 U.S. 498, 52 S.Ct. 260, 76 L.Ed. 422 (1932)], the attempted collection may be enjoined if equity jurisdiction otherwise exists. In such a situation the exaction is merely in “the guise of a tax.” Id., [284 U.S.] at 509 [52 S.Ct. at 263].
We believe that the question of whether the Government has a chance of ultimately prevailing is to be determined on the basis of the information available to it at the time of suit. Only if it is then apparent that, under the most liberal view of the law and the facts, the United States cannot establish its claim, may the suit for an injunction be maintained.
The action brought and the relief sought by the individual appellants directly ranges within the ambit of § 7421(a), and as to them the action of the district court in dismissing the case was correct.
3. Corporate Appellant
Americans United, at the present time exempt from taxation on income by virtue of 26 U.S.C. § 501(c)(4) (1970), does not seek in this lawsuit to enjoin the assessment or collection of its own taxes. Because of the “tax breaks” attendant to contributions to corporations qualifying under § 170(c) of the Code, qualification thereunder is a precious possession and removal from the Cumulative List, Organizations Described in Section 170(e) of the Internal Revenue Code of 1954 is a damaging — sometimes fatal — injury to the financial status of any "charitable” organization. Potential contributors with a minimum of business acumen are careful to get the most for their contributed dollar, and one certain way not to do so is to contribute to non-§ 170 corporations. Appellant, therefore, presented with the dollar dilemma of finding prospective contributors closing their wallets, seeks to have the court restrain the Commissioner from meting § 501(c)(3) and § 170(c) qualifications in the alleged unconstitutional manner. A necessary side effect of any relief, of course, will be to allow contributions which otherwise would be made with after tax dollars to become deductible. Consequently, the appellee alleges that this is in essence a suit to restrain the assessment or collection of a tax and barred by § 7421(a).
McGlotten v. Connally, 338 F.Supp. 448 (D.D.C.1972), involved a class action brought by a black American denied membership in an Elks Lodge because of his race. The plaintiff sought to enjoin the Secretary of Treasury from granting tax benefits to fraternal and nonprofit organizations which excluded nonwhites from membership. The statutes involved were similar to those in the case before us, granting various exemptions both to the organizations and their contributors. The plaintiff alleged that the statutes were either unconstitutional, unconstitutonally interpreted, or that the benefits granted thereby were in violation of Title VI of the Civil Rights Act of 1964. The defendant moved to dismiss citing §§ 2201 and 7421(a), but a three-judge district court denied the motion. Chief Judge Bazelon, writing for the court, stated:
Plaintiff’s action has nothing to do with the collection or assessment of taxes. He does not contest the amount of his own tax, nor does he seek to limit the amount of tax revenue collectible by the United States. The preferred course of raising his objections in a suit for refund is not available. In this situation we cannot read the statute to bar the present suit. To hold otherwise would require the kind of ritualistic construction which the Supreme Court has repeatedly rejected. Even where the particular plaintiff objects to his own taxes, the Court has recognized that the literal terms of the statute do not apply when “the central purpose of the Act is inapplicable.” In the present case, the central purpose is clearly inapplicable. It follows that neither § 7421(a) nor the exception to the Declaratory Judgment Act prohibits this suit.
Id. at 453-454 (footnotes omitted).
A case from the opposite side of the restraint coin, wherein the Commissioner threatened to remove the tax exempt status of an organization because of racially discriminatory policies, is Bob Jones University v. Connally, 341 F.Supp. 277 (D.S.C.1971). Fearing that a drop in its level of contributions would cause irreparable harm, the University sought a preliminary injunction restraining the Commissioner from removing its § 501(e)(3) qualification. Faced with identical §§ 2201 and 7421(a) arguments, the district judge granted the injunction. The court found that the gravamen of the plaintiff’s complaint was not to ask the court to substitute its views for that of the Commissioner, see Jolles Foundation, Inc. v. Moysey, 250 F.2d 166 (2d Cir. 1957), but rather to prevent the Commissioner from acting “beyond the authority granted by the constitution or by the Congress, and to read into the Internal Revenue Laws powers that are not expressly given and that were never intended by Congress.” 341 F.Supp. at 282-283. The court went on to state:
If there were no contest as to the legality or the power of the defendants to revoke under existing law plaintiff’s tax exempt status because of its admitted racial discriminatory admissions policy, but was instead a case involving the applicability of such a rule to the plaintiff, it would then appear to be a case where this court was asked to preempt discretionary power of a federal officer which it would be powerless to do. . . . Plaintiff is not challenging the applicability of the rule, but the legality of the rule itself.
Bob Jones University is not seeking a declaratory judgment, but rather seeks to enjoin the defendants from exercising alleged illegal and ultra vires power and authority. Consequently, it is concluded that the levy, assessment, and collection of a tax is not the main issue. Plaintiff does not contest the amount or method of any levy, assessment, or collection, or evidence to be used in making such determination of taxes that might become due. Plaintiff is seeking to enjoin what it contends to be illegal and unconstitutional actions or threatened actions on the part of officials of the United States Government which it claims would lead to irreparable harm . . . .
Id. at 283.
Here, as in Bob Jones, the essence of appellants’ attack is not against the applicability of a test or their ability to qualify under presently existing standards. As the appellee correctly points out in his brief, “[appellants] do not seriously contend that Americans United qualifies under Section 501(c)(3) as written. Rather, they contend that the clause disqualifying organizations which devote a substantial part of their activities to political propaganda and lobbying should be elided as unconstitutional, and they seek a declaratory judgment to that effect.”
Appellee principally relies upon Jolles Foundation, Inc. v. Moysey, supra. Although there is language in Jolles regarding § 2201 we believe it to be distinguishable and not persuasive. In Jolles the appellant alleged that the Commissioner erred in his determination of its tax exempt qualification, and brought an action which the court correctly viewed as in the nature of mandamus “against the Commissioner to compel him to reverse his position based upon the activities of the Foundation already held not to come within the exemption . . . . ” 250 F.2d at 169. We submit that the Jolles case did not involve the alleged unconstitutionality of a taxing statute, but a challenge respecting the judgment of the Commissioner, and manifestly “the court cannot presume to speak for the Commissioner or take over his duty to pass upon the tax status of organizations applying for exemption.” Id.
Here, as in McGlotten and Bob Jones, no tax has been or will be assessed against the corporate appellant. The restraint upon assessment and collection is at best a collateral effect of the action, the primary design not being to remove the burden of taxation from those presently contributing but rather to avoid the disposition of contributed funds away from the corporation. The corporation, alleging constitutional violations of an identical nature to that of the individual appellants, irreparable injury, and an inadequate legal remedy, does so in a posture removed from a restraint on assessment or collection. We find, as did the courts in Bob Jones, McGlotten, and impliedly the court in Green v. Kennedy, 309 F.Supp. 1127 (D.D.C.1970), on permanent injunction, Green v. Connally, 330 F.Supp. 1150 (D.D.C.1971), aff’d per curiam, Coit v. Green, 404 U.S. 997, 92 S.Ct. 564, 30 L.Ed.2d 550 (1971), that it would be an all too encompassing interpretation of § 7421(a) to consider it as precluding a suit of this nature, and refuse to so hold.
We do not adopt the doctrine that § 7421(a) is inapplicable so long as a party does not seek to restrain the collection or assessment of its own taxes. Our holding is much narrower. In those situations where a non-taxpayer sues in the stead of the taxpayer, e. g., the shareholder suits brought on behalf of a reluctant corporation, Corbus v. Alaska Treadwell Gold Mining Co., 187 U.S. 455, 464, 23 S.Ct. 157, 47 L.Ed. 256 (1903), cf., Helvering v. Davis, 301 U.S. 619, 639-640, 57 S.Ct. 904, 81 L.Ed. 1307 (1937), or where the tax itself directly operates to place a financial burden upon the non-taxpayer, e. g., where the valuation of an estate for estate tax purposes would affect the tax liability of a non-taxpayer at a future date, West Chester Feed & Supply Co. v. Erwin, 438 F.2d 929 (6th Cir. 1971), when a tax levied upon processing oil would directly affect one about to enter the processing business, Gardner v. Helvering, 66 App.D.C. 364, 88 F.2d 746 (1936), cert. denied, 301 U.S. 684, 57 S.Ct. 784, 81 L.Ed. 1342 (1937), au fond it is a suit to restrain the collection or assessment of a tax “indirectly” levied upon the plaintiff, and within the purpose and proscription of § 7421(a).
What we have then is a hybrid sort of fellow. The challenge upon which we reverse runs not to the exercise of discretion or the everyday working affairs of the Commission, something we feel history and good sense implore us to leave alone, nor is it concerned with taxes levied either directly or “indirectly” upon the corporate appellant, something which § 7421(a) mandates us to leave alone. Finally, an alternate legal remedy in the form of adequate refund litigation is unavailable. The lack, of a meaningful alternate form of relief is important herein for two reasons: first, its absence solidifies our belief that the situation sub judice is without the purpose and expected scope of § 7421(a), and second, its absence renders equitable relief most appropriate. We suspect that the birthrate of such a hybrid will be so low that the proverbial “flood gates” to judicial review of Internal Revenue Service action will remain closed.
4. Sovereign Immunity
Appellee, relying chiefly upon Louisiana v. McAdoo, 234 U.S. 627, 34 S.Ct. 938, 58 L.Ed. 1506 (1914), urges the court to recognize this suit as one against the United States to which consent has not been given, and hence barred by the doctrine of sovereign immunity. We feel that the appellee has failed to recognize this suit as rightly falling within the exceptions to the doctrine as reiterated by the Supreme Court in Dugan v. Rank, 372 U.S. 609, 622, 83 S.Ct. 999, 10 L.Ed.2d 15 (1963). Those exceptions relate to (1) actions by officers beyond their statutory powers, and (2) actions within the scope of their authority, when the powers themselves or the manner in which they are exercised are constitutionally void. The appellants do not challenge the right of the Commissioner to adopt rules and regulations, but they do challenge his right to enforce a statute which they assert violates various constitutional liberties. This clearly falls within the “exception” almost as broad as the “rule,” that “sovereign immunity does not prevent a suit against a state or federal officer who is acting either beyond his authority or in violation of the Constitution.”
III. SUBSTANTIAL CONSTITUTIONAL QUESTION
The single district court judge below denied appellants’ motion to convene a three-judge panel pursuant to 28 U.S.C. § 2282 (1970), for the stated reason that the challenge raised no substantial constitutional questions. We reverse and remand with respect to the only remaining appellant in this litigation, Americans United, with instructions to promptly convene a § 2282 panel.
In Bulluck v. Washington, 152 U.S.App.D.C. 39, 468 F.2d 1096 (1972), rehearing en banc, July 14, 1972, we have recently had an opportunity to restate the scope of a district court’s inquiry (and consequently our scope of review) when confronted with an application for a § 2282 panel. The court is limited to questioning (1) whether the constitutional questions raised are substantial, which in turn is limited to a determination of whether they are “obviously without merit” or so clearly unsound by reason of previous decisions of the Supreme Court “as to foreclose the subject and leave no room for the inference that the question sought to be raised can be the subject of controversy.” Ex Parte Poresky, 290 U.S. 30, 32, 54 S.Ct. 3, 4, 78 L.Ed. 152 (1933); (2) whether the complaint at least formally alleges a basis for equitable relief; and (3) whether the case presented otherwise comes within the requirements of the three-judge panel. Idlewild Bon Voyage Corp. v. Epstein, 370 U.S. 713, 715, 82 S.Ct. 1294, 8 L.Ed.2d 794 (1962).
As our discussion of the case to this point has shown, what appellant effectively seeks here is a restraint on the enforcement of the “substantial part” clause of § 501(c)(3). It accomplishes this by seeking a declaratory judgment that the section is unconstitutional, and by requesting injunctive relief to force the Commissioner to reclassify it and other similarly situated corporations as tax exempt if they are found to qualify. This type of action, affecting legislation of broad regulatory scope and amounting to a restraint on its enforcement as written and interpreted, is within the § 2282 mandate. Satisfied that the other requirements for the three-judge panel are present, and that equitable relief is properly requested, we turn to the substantiality question.
Although as can be seen from our earlier listing appellants originally raised a multitude of possible constitutional violations, at oral argument and in its Reply Brief it has narrowed its focus, and we believe wisely so, to the “discriminatory” aspects of § 501(c)(3). Basically, this is that since larger, wealthier organizations can engage in conduct identical to that of appellant without, because of their size, falling within the “substantial part” category of § 501(c)(3) and thereby losing their precious tax exempt status (and more precious listing among those corporations to whom tax free contributions can be made), § 501(c)(3) is unconstitutionally discriminatory in violation of the equal protection ramifications of the due process clause of the fifth amendment. See Bolling v. Sharpe, 347 U.S. 497, 74 S.Ct. 693, 98 L.Ed. 844 (1954). We find such a claim, novel as it may be, neither obviously without merit nor foreclosed by previous Supreme Court decisions.
Appellee relies chiefly upon Cammarano v. United States, 358 U.S. 498, 79 S.Ct. 524, 3 L.Ed.2d 462 (1959), but Cammarano, while disposing of appellants’ claim that first amendment rights are violated by the questioned statute, does not attempt to deal with possible discriminatory conduct. In Cammarano liquor dealers had expended funds in advertising campaigns against statutory resolutions in Washington and Arkansas which would have effectively closed their businesses, and sought to deduct their costs as ordinary business expenses. The lower courts ruled that “the payments . . . were ‘expended for . the . . . defeat of legislation’ within the meaning of Treas.Reg. 111, § 29.23(0)-1 and were therefore not deductible as ordinary and necessary business expenses under § 23(a)(1)(A) of the Internal Revenue Code of 1939.” Id. at 501, 79 S.Ct. at 527. The court, per Justice Harlan, continued:
Petitioners are not being denied a tax deduction because they engage in constitutionally protected activities, but are simply being re°quired to pay for those activities entirely out of their own pockets, as everyone else engaging in similar activities is required to do under the provisions of the Internal Revenue Code. Nondiscriminatory denial of deduction from gross income to sums expended to promote or defeat legislation is plainly not “ ‘aimed at the suppression of dangerous ideas.’ ”
Id. at 513, 79 S.Ct. at 533. Americans United, on the other hand, alleges just that discriminatory conduct found lacking in Cammarano. This discrimination relates solely to the “size” of the organization, which appellants allege is directly related to its wealth and power structure, and comes into play during and because of the exercise of first amendment protected liberties. By allowing larger, richer organizations more “dollar punch” in terms of “propagandizing” and “influencing legislation” before their respective activities are considered “substantial,” the Commissioner is accused of following the mandate of § 501(c)(3) and treating identical activity differently, solely on the basis of the size, or wealth, of the acting party.
Nearly every jurist and attorney today is aware of the flood of cases before the bench raising important questions, at least in the context of the fourteenth amendment equal protection clause, concerning the interpretation of “fundamental rights,” “suspect categories,” and their resultant “compelling state interest test.” A case similar to the redoubtable Serrano v. Priest, 5 Cal.3d 584, 96 Cal. Rptr. 601, 487 P.2d 1241 (1971), which struck down California’s system of public school financing as violative of the fourteenth amendment, and straightforwardly classified both “wealth” and “education” as categories calling for stricter justification in terms of equal protection, is presently submitted before the United States Supreme Court. San Antonio Independent School District v. Rodriguez, 411 U.S. 1, 93 S.Ct. 1278, 36 L.Ed.2d 16 (1972). The Court’s decision in that case should prove most instructive in an area of concern before us —“discrimination” of this type as within the “wealth” category, and the status of “wealth” as giving rise to the compelling interest test.
If discrimination exists here it relates to the exercise of the most fundamental of rights, those protected by the first amendment, and raises questions concerning the directness of its relationship to wealth. We are aware that the various tests of which we speak have arisen in the context of the fourteenth amendment, but find that they are nonetheless relevant to the consideration of whether the government has exercised its taxing powers in such a discriminatory fashion as to violate the due process guaranties of the fifth amendment. This is neither a frivolous challenge nor one which, as of the writing of this opinion, has been foreclosed by the Supreme Court.
We want to stress that our opinion is in no way meant to state our views of the merits of this case beyond that required: namely, that the possibility of success is not so certain as to merit the Enochs exception with respect to § 7421(a), yet not so frivolous or foreclosed as to merit denial of the § 2282 motion. The discrimination problem may ultimately prove to be a mirage, or even a muddle, but it certainly is not maggot-pated.- The question merits a three-judge panel.
Reversed and remanded for further proceedings consistent with this opinion.
WILKEY, Circuit Judge,
concurring:
I concur unreservedly in Judge Tamm’s opinion for the court, all the more willingly because his opinion is a model of lucidity in a field of law — taxation — in which that quality is as rarely found iii either judicial decisions or legislation as sunlight on the dark side of the moon.
Since we have decided no issue on the merits, except that the constitutional issues are sufficiently serious to require decision by a three-judge court, I believe it appropriate to raise a question for the consideration of the three-judge court which was not briefed by the parties and is not dealt with by our court’s opinion.
As I see it, the basis of our decision here is that there is a substantial constitutional question because the challenged tax provision discriminates on the basis of wealth (size), and because the Supreme Court is currently considering cases which may say that such distinctions need to be closely analyzed. Although other statutes are relevant, the vital statute at issue is 26 U.S.C. § 501(c)(3) (1970), quoted in footnote one of the court’s opinion. Making a careful analysis of this statute, the first part states why tax exemption is granted — and that relates to the purpose of the organization. Thereafter are listed several factors which will nullify the tax-exempt status granted by the first part of § 501(c)(3). One of the disqualifications for tax-exempt status is expressed in the phrase, “. . .no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation, . . . ”
And this disqualification phrase is what this case is all about. 26 U.S.C. § 501(c)(3) first ties tax status to the purpose of the organization — and the “no substantial . . . influence legislation” disqualification test (like the disqualification reference to private earnings or political campaigns) is aimed at assuring some purity in that purpose.
It is arguable that a small organization that spends almost all of its funds lobbying is not organized or conducted for the same purpose as a large organization, which may spend quantitatively as much, but which proportionately devotes most of its activities to unquestionably exempt purposes. If we make an analysis by following the impact of the donor’s dollar, a gift to “Americans United” has “more punch” on the legislative front than a gift to a large church organization which spends only 1% of its income on lobbying activities.
In that sense, the large organization is not engaged in what can reasonably be called “identical conduct.” The statute does not give any greater privilege of speech to large organizations — other than the greater amount of impact any group can have if it raises more money. Rather, the interpretation of equal protection sought by “Americans United” would give a greater right of speech — by emasculating the “purpose” rationale of § 501(e)(3) — to small organizations. We cannot ignore the “purpose” rationale, because purpose is the only ground for tax exemption under § 501(c)(3).
Furthermore, if the larger groups are seen as engaged in “identical conduct” —what is to be the bench mark? If the purpose of the tax statute is to be preserved at all, then the large church organizations probably must hold to devoting a small percentage of their resources to lobbying. Is that quantitative amount then to guide — so that a small organization, with total funds amounting only to the tiny percentage which the large organization devotes to this purpose, could devote 100% of its funds to lobbying and still be exempt?
In short, it is certainly arguable that small groups are not being treated differently by § 501(c)(3) because they are small, but because they are obviously operating for a different purpose if they devote their comparatively small funds on a much different proportionate basis to propaganda for legislation.
I have raised the issue above by stating only one side of the argument. There are, of course, counterarguments. We are not here deciding this or any other issue on the merits, but since neither party has seen fit to bring this issue to the courts’ attention, I feel it of sufficient importance to raise it for such consideration as the three-judge court and parties may wish to give it.
. 26 U.S.C. § 501(c) (3) (1970):
Corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office.
. Organizations which have secured rulings that they are tax exempt under § 501(c)(3) are described in I.R.S. Publication No. 78, Cumulative List, Organizations Described in Section 170(c) of the Internal Revenue Code of 1954. The requirements for §§ 501(c)(3) and 170(c)(2) are nearly identical in every respect.
. 26 U.S.C. § 501(c) (4) (1970) :
Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare, or local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes.
. 28 U.S.C. § 2282 (1970) :
An interlocutory or permanent injunction restraining the enforcement, operation or execution of any Act of Congress for repugnance to the Constitution of the United States shall not be granted by any district court or judge thereof unless the application therefor is heard and determined by a district court of three judges under section 2284 of this title.
. In this manner the appellants seek to continue the viability of § 501 (c) (3) without the challenged “substantial part” exception to the exemption. As the Court of Appeals for the Tenth Circuit has recently stated: “Where a court is compelled to hold such a statutory discrimination invalid, it may consider whether to treat the provisions containing the discriminatory underinclusion as generally invalid, or whether to extend the coverage of the statute.” Moritz v. Commissioner, 469 F.2d 466 at p. 470 (10 Cir. 1972). Cf. Welsh v. United States, 398 U.S. 333, 361, 90 S.Ct. 1792, 26 L.Ed.2d 308 (1970) (Harlan, J., concurring), and Skinner v. Oklahoma, 316 U.S. 535, 542-543, 62 S.Ct. 1110, 86 L.Ed. 1655 (1942).
. 28 U.S.C. § 2201 (1970) :
In a ease of actual controversy within its jurisdiction, except with respect to Federal taxes, any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.
. 26 U.S.C. § 7421(a) (1970) :
Except as provided in sections 6212 (a) and (c), 6213(a), and 7426(a) and (b) (1), no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.
The exceptions provided are not applicable to this case.
. See Note, Enjoining the Assessment and Collection of Federal Taxes Despite Statutory Prohibition, 49 Harv.L.Rev. 109 (1935).
. Act of June 14, 1934, ch. 512, 48 Stat. 955.
. See, e. g., Penn v. Glenn, 10 F.Supp. 483 (W.D.Ky.1935), app. dismissed per curiam, 84 F.2d 1001 (6th Cir. 1936), and F. G. Vogt & Sons, Inc. v. Rothensies, 11 F.Supp. 225 (E.D.Pa.1935). Although both courts refused to grant injunctive relief, they expected the tax collector to “respect the decision.” If he did not do so and the taxpayer was forced to sue for a refund, “the trial court would probably be justified in refusing him a certificate of probable cause, and thus he and his bond would be liable for the judgment obtained.” 11 F.Supp. at 231. This was a neat circumvention of the anti-injunction statute, but one that Congress did not appreciate.
. Act of August 30, 1935, ch. 829, § 405, 49 Stat. 1027.
. S.Rep. No. 1240, 74th Cong., 1st Sess. 11 (1935).
. Since Americans United qualifies as a tax exempt organization pursuant to § 501 (c)(4) of the Code, the normal avenue of challenge, tax refund litigation, is not available. Appellee in his Supplemental Memorandum and at oral presentation has for the first time suggested two additional “adequate” legal remedies available to the appellant corporation. These are the federal social security and unemployment tax refund litigations, since § 501(c)(3) organizations are exempt from both taxes while § 501(c)(4) organizations are exempt from neither.
Appellant points out that although not required to pay social security taxes while exempt under § 501(c) (3), it elected to do so. A termination of such an election requires two years advance notice and cannot be made if the election has been in effect more than eight years, as it was here. Moreover, under 26 U.S.C. § 3121 (k) (3) (1970), an organization which once terminates its election to pay those taxes voluntarily cannot renew the election. Although the unemployment tax refund litigation is not fraught with perils of equal magnitude, it is subject to certain conditions and, we feel, is so far removed from the mainstream of the action and relief sought as to hardly be considered adequate.
. Green, involved a class action brought by black students and their parents to enjoin the Secretary of Treasury from granting tax exempt status to private schools discriminating against blacks. A three-judge district court was convened and, Judge Leventhal writing, determined that the Internal Revenue Code could not be interpreted as granting a tax exempt status to such organizations. Although faced with governmental insistence that the relief sought was barred by §§ 2201 and 7421(a), the court did not address the problem but granted the injunctive relief. The ease was affirmed per curiam and without opinion by the Supreme Court, but as by that time the Commissioner had “voluntarily” altered the rules to comply with the decision, and the government did not press the appeal, the precise force and effect of the affirmance is questionable.
. The ultimate effect of the Green and McGlotten litigations was to increase the tax revenue of the United States, while at least theoretically the effect of Bob Jones and the case at hand is to decrease the tax revenue. We do not believe, and ajjpellee has in fact agreed, that such a fact is of distinguishable merit. It is untenable that a party seeking to have an entire section declared unconstitutional, thus removing the exemption and theoretically increasing the tax revenue, should be treated differently from one seeking to remedy the discriminatory underinclusion by striking the unconstitutional clause, and thus theoretically decreasing the tax revenue.
In reaching our conclusion regarding the applicability of § 7421(a) we have considered, and found unpersuasive, the decisions in Liberty Amendment Committee of the U.S.A. v. United States, Civ.No.70-721-HP (C.D.Cal. June 19, 1970), aff’d per curiam, No. 26,507 (9th Cir. July 7, 1972), and Crenshaw County Private School Foundation v. Connally, 343 F.Supp. 495 (M.D.Ala.1972).
. Arguably Americans United’s purpose could be that of “representing” its remaining contributors who now face the assessment of taxes on their contributed dollars —a sort of “end run” maneuver to avoid the proscriptions of § 7421(a) that we have found to apply to suits brought by those contributors — but we do not believe such to be a realistic appraisal of the situation. Americans United is concerned about its own preservation which is threatened not by the indirect burden of the tax upon them, but by the “unconstitutional” action of the Commissioner resulting in the driving of prospective contributors to other “charities.”
. Standing to sue and ripeness problems, neither of which we find to preclude the lawsuit before us, could also work to prevent other litigation which arguably would be without the scope of §§ 2201 and 7421 (a).
. K. Davis, Administrative Law Treatise 522 (1958). Professor Davis treats Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908) as the “foundation case” for such a rule :
If the act which the state attorney general seeks to enforce be a violation of the Federal Constitution, the officer, in proceeding under such enactment, comes into conflict with the superior authority of that Constitution, and he is in that case stripped of his official or representative character and is subjected in his person to the consequences of his individual conduct.
Id. at 159-160, 28 S.Ct. at 454. See also Georgia R. R. & Banking Co. v. Redwine, 342 U.S. 299, 304-305, 72 S.Ct. 321, 96 L.Ed. 335 (1952).
. See p. 1173, supra.
. It is true that in Helvering v. Lerner Stores Co., 314 U.S. 463, 468, 62 S.Ct. 341, 343, 86 L.Ed. 343 (1941), Justice Douglas wrote that “[a] claim of unreasonable classification or inequality in the incidence or application of a tax raises no question under the Fifth Amendment which contains no equal protection clause.” The great weight of authority today, however, as exemplified by Bolling, Schneider v. Rusk, 377 U.S. 163, 84 S.Ct. 1187, 12 L.Ed.2d 218 (1964), and Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969), is that “[w]hile the Fifth Amendment contains no equal protection clause, it does forbid discrimination that is ‘so unjustifiable as to be violative of due process.’ ” 377 U.S. at 168, 84 S.Ct. at 1190.
. See dissent of Marshall, J., in California v. LaRue, 409 U.S. 109, 93 S.Ct. 390, 34 L.Ed.2d 342 (1972), for discussion of classifications based on speech. See also Speiser v. Randall, 357 U.S. 513, 78 S.Ct. 1332, 2 L.Ed.2d 1460 (1958), a case which although decided on procedural due process grounds discussed the effect of tax exemptions:
To deny an exemption to claimants who engage in certain forms of speech is in effect to penalize them for such speech. Its deterrent effect is the same as if the State were to fine them for this speech. The appellees are plainly mistaken in their argument that, because a tax exemption is a “privilege” or “bounty,” its denial may not infringe speech.
Id. at 518, 78 S.Ct. at 1338.
. Some counterarguments may be derived from William G. Ilalby’s article, “Is the Income Tax Unconstitutionally Discriminatory?”, 58 A.B.A.J. 1291 (December, 1972). Others may be inspired by the reflection that, if 200 years ago men revoltecl on the principie that “Taxation without representation is tyranny”, then today men may rise in righteous wrath because taxation with representation but beyond human comprehension is even worse.
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f2d_477/html/1184-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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UNITED STATES of America v. Emmett C. McKINNEY, a/k/a Charles McKinney, Appellant.
No. 71-1981.
United States Court of Appeals, District of Columbia Circuit.
Jan. 15, 1973.
Mr. Wallace L. Duncan, Washington, D. C. (appointed by this Court), was on the brief for appellant.
Mr. Harold H. Titus, Jr., U. S. Atty., Messrs. John A. Terry and James A. Fitzgerald, Asst. U. S. Attys., were on the brief for appellee.
Before BAZELON, Chief Judge, LEVENTHAL, Circuit Judge, and HARRISON WINTER , United States Circuit Judge for the Fourth Circuit.
Sitting by designation pursuant to Title 28, U.S.C. § 291 (a).
PER CURIAM:
On this appeal from unlawful possession of a firearm, the central issue is the reasonableness of the seizure of the sawed-off shotgun in appellant’s hotel room. The pertinent facts that emerged at the hearing, on the appellant’s motion to suppress, developed that on July 30, 1970, at approximately 9 a. m., the manager of the Franklin Park Hotel noticed that the phone in room 642 (appellant’s room) was off the hook, and dispatched a bellman there to replace the receiver. The bellman entered the room with a pass key, and in looking for the telephone, which was obscured by a newspaper, 'he observed a sawed-off shotgun lying on a night table. This was reported to the manager, who notified the police. The police went to the hotel, without a search warrant, and on arrival there, about 10 a. m., were admitted to the room by the management. They observed the gun, checked it, removed a live shell and replaced the weapon on the table.
When appellant entered the room, at about 11:20 a. m., he was arrested.
The District Court ruled that the failure to obtain a warrant was justified by the exigency and circumstances, and by the fact that, this being a transient hotel, the police reasonably concluded that they had to act quickly to avoid losing the evidence that was available. Although a warrantless entry is prima facie unreasonable under the Fourth Amendment, a warrant is not required in the case of exigent circumstances, and the court must look to the facts of the particular case to determine whether there was the requisite exigency. Warden v. Hayden, 387 U.S. 294, 298, 87 S.Ct. 1642, 18 L.Ed.2d 782 (1967); Dorman v. United States, 140 U.S.App.D.C. 313, 435 F.2d 385 (1970, en banc).
Dorman set forth a number of pertinent factors. The case at bar did not involve a “complacent” crime but rather a grave offense which, if not a crime of violence strictly speaking, obviously posed a danger to the community. There was strong probable cause to believe that a crime had been committed by the occupant of the room, see 22 D.C.Code 3214, 26 U.S.C. 5861(d), even though there was a possibility that a justification for possession of such a weapon might be established. The entry by the police detectives was peaceful, and during the day, and had been preceded by entries by the hotel staff. While a hotel room is entitled to privacy, the police were entitled to take into account that what was involved was a nonresident of the District of Columbia who had recently checked into a transient hotel, and, again, that this was a sawed-off shotgun, an ominous threat in and itself, cf. Epperson v. United States, 125 U.S.App.D.C. 303, 371 F.2d 956 (1967). Under these circumstances we find the entry and seizure valid.
We turn to appellant’s complaint of his conviction on the first count. We think this conviction is infirm and should be vacated, though not precisely for the reasons stated by appellant. However, this contention has no practical effect, since there were concurrent sentences on the first and second counts, to 2-6 years, to serve 6 months and the balance suspended, 3 years probation. And we do not think the interest of justice requires remand for resentencing on the second count.
The difficulty with Count 1 is that it charges that appellant violated 26 U.S.C. § 5861(c) and § 5871 by a knowing possession of a firearm that was made without the filing of an application to the Secretary of the Treasury as required by 26 U.S.C. § 5822. The problem is that 26 U.S.C. § 5861(c), as amended in 1968, prohibits possession of a firearm “made in violation of the provisions of this” act, and we see no proof to that effect. The Government’s Exhibit 2 is a certificate of the Treasury Department that the firearm described (by serial number, inter alia) was not “registered to, or * * * acquired by lawful making, transfer or importation by Charles (NMN) McKinney.” This was probative as to Count 2, which charges a knowing possession, in violation of 26 U.S.C. § 5861(d) and 5871, of a shotgun not registered in the National Firearms Registration and Transfer Record. But the Treasury Certificate has been asked to do additional duty, to prove a violation of 26 U.S.C. § 5861(c), for which it was not designed. We hurry by the question whether the notation on this certificate describing the firearm as showing “Crescent Firearms Co., Norwich, Conn. U.S.A. (Stamped on the receiver)” is sufficient proof that the firearm was made in the United States (rather than imported), because, in any event, it is plainly insufficient to show that the firearm was unlawfully made by Crescent Firearms Co. For all that is certified by the Treasury Department, it might well have been lawfully made by Crescent Firearms Co., but thereafter unlawfully transferred to appellant, which would make his receipt and possession a violation of subsection (b)— but not (c)— of 26 U.S.C. § 5861. The only other pertinent evidence in the record is the Government’s introduction of the statement of appellant that he bought the firearm from persons unknown on the 14th Street Strip for self-protection (Tr. 30).
The judgment is vacated as to count 1, and affirmed as to count 2.
So ordered.
. The circumstances are critically different from those in Page v. United States, 282 F.2d 807 (8th Cir. 1960), relied on by appellant. That case involved (a) an entry into Page’s home, (b) made the morning of February 11, after the sawed-off shotgun had been observed on February 10(c) which was sought to be justified as incident to an arrest made outside the home.
. The uncontradicted testimony of the police officer that defendant was advised of his rights before he was asked any questions disposes of appellant’s claim under Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966).
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f2d_477/html/1187-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "SPOTTSWOOD W. ROBINSON, III, Circuit Judge: FAHY, Senior Circuit Judge,",
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Lawrence D. COLEMAN et al., Appellants, v. The Honorable Arthur L. BURNETT, United States Magistrate for the District of Columbia, et al.
No. 71-1114.
United States Court of Appeals, District of Columbia Circuit.
Argued June 11, 1971.
Decided March 14, 1973.
Jon P. Axelrod, Washington, D. C., with whom Norman Lefstein, Washington, D. C., was on the brief, for appellants.
C. Madison Brewer, Asst. U. S. Atty., with whom Thomas A. Flannery, U. S. Atty. John A. Terry, Gregory C. Brady, Joseph M. Hannon, Asst. U. S. Attys., at the time the brief was filed, C. Francis Murphy, Corp. Counsel for the District of Columbia, Richard W. Barton and Leo N. Gorman, Asst. Corp. Counsels, were on the brief, for appellees. Charles F. Flynn and William H. Schweitzer, Asst. U. S. Attys., also entered appearances for appellee Burnett.
Before FAHY, Senior Circuit Judge, and McGOWAN and ROBINSON, Circuit Judges.
SPOTTSWOOD W. ROBINSON, III, Circuit Judge:
This appeal tenders for resolution questions as to the examinatorial entitlements of the criminally accused at federal preliminary hearings. Appellants, Lawrence D. Coleman, Jorge D. Dancis and Ronald Shepard, were arrested and charged with the commission of unrelated crimes within the District of Columbia. Following arrest, each was brought before a judicial officer for the proceedings prescribed by then Rule 5 of the Federal Rules of Criminal Procedure. Coleman and Dancis each sought, and each was denied, a subpoena requiring the attendance at his preliminary hearing of the only apparent eyewitness to his alleged offenses. Shepard, during his preliminary hearing, was restricted in cross-examination of the complainant and a corroborating Government witness, and in the presentation of evidence of his own.
Subsequent to the preliminary hearings, the three appellants joined in a class-action complaint in the District Court. They sought declaratory judgments that the preliminary hearings were defective, writs of mandamus reopening them, and an injunction restraining, pendente lite, presentation of their cases for grand jury consideration. The District Court denied a preliminary injunction and dismissed the action, and this appeal ensued. For reasons which follow, we reverse the District Court's judgment to the extent that it denied a declaration that Dancis’ preliminary hearing was faulty and remand the case in order that the declaration may be made. In all other respects we affirm, but without prejudice to rectification in the criminal proceeding pending against Dancis of the error committed at his preliminary hearing.
Some of the questions advanced on appeal are common to the cases of two or more of the three appellants. Each appeal, however, also tenders an issue not present in either of the others. We therefore treat the three cases separately.
I. COLEMAN’S APPEAL
After joining in this appeal, Coleman was indicted in two bills for multiple violations of the federal narcotic laws. Two days before oral argument on the appeal, he entered a plea of guilty to two counts, one in each of the two indictments. He insists that his preliminary hearing, at which the charges laid in one of the indictments were aired, was fatally infirm and that we should now direct that it be reopened. He further argues, as he must, that the plea does not stand in the way of the appeal brought here for that purpose. We do not agree.
A plea of guilty consummating a voluntary and intelligent choice of available alternatives has serious ramifications for the criminal proceeding. It operates as an admission of all material facts alleged in the count or counts pleaded to, and thus dispenses with the need to prove them. More important, however, is the effect of the plea beyond this service for the Government. “[T]he plea is more than an admission of past conduct; it is the defendant’s consent that judgment of conviction may be entered without a trial — a waiver of his right to trial before a jury or a judge.” It is thus an act bringing the prosecution to a successful end by solemnly establishing the offense so acknowledged :
A plea of guilty differs in purpose and effect from a mere admission or an extra-judicial confession; it is itself a conviction. Like a verdict of a jury it is conclusive. More is not required; the court has nothing to do but give judgment and sentence.
We speak, of course, only of a valid plea of guilty, which by definition is one which is understandably as well as voluntarily made. The plea cannot take on that character unless, among other things, the accused is aware of the consequences, of which its conclusivity on the proceeding is not the least. But if, on the other hand, the accused possesses that awareness and nonetheless enters the plea, it is truly an “intentional relinquishment or abandonment” of defenses and procedural entitlements of which the defendant otherwise might have availed himself.
So it is that “[a]n unqualified plea of guilty, legitimately obtained and still in force, bars further consideration of all but the most fundamental premises for the conviction.” Emerging from the numerous decisions on the subject is the well settled rule that an unconditional plea of guilty waives all prior infirmities in the prosecution which affect neither the court’s jurisdiction nor the substantive sufficiency of the indictment. The decisions make equally plain the corollary that as long as the plea stands, it bans consideration of other types of defects on appeal. We are unable to distinguish, in terms of the bar, a direct appeal in the criminal proceeding from an appeal in collateral litigation designed, as here, to secure benefits at a criminal trial.
As we have said, the key to waiver, and to conclusivity of the plea on further litigation, combines the accused’s understanding that that would become a consequence of pleading guilty and his willingness to so plead on those term. The plea is invalid, of course, if the accused did not realize that it would sacrifice his right to judicial determination of the factual and legal issues by a trial with ultimate appellate review. And surely an accused is not barred from pursuing his appeal by pleading guilty where a statute authorizes him to do both. But there is an inherent conflict in the notion that, absent such a statute — the case in the federal system —an accused can intelligently waive adverse pre-plea rulings with a view to reposing the litigation and still keep the issues alive on appeal.
We are mindful of the suggestion that the ends of sound judicial administration might be better served by permitting the accused to preserve adverse rulings on legal questions for appeal without the burden of a potentially futile trial on the merits. That position was asserted in United States v. Doyle, but the court answered:
The premise is sound enough but the conclusion does not follow. There are a number of ways to deal sensibly with such a case without departing from the [conclusivity rule]. A plea expressly reserving the point accepted by the court with the Government’s consent or a stipulation that the facts are as charged in the indictment are two; failing either of these, the defendant can simply stand on his not guilty plea and put the Government to its proof without developing a case of his own.
We agree, and believe too that without a choice between the competing values by an exercise of statutory or rule-making powers, the availability of appeal must depend on the breadth of the accused’s waiver.
That Coleman’s waiver was broad enough to encompass his present appeal is a matter not fairly open to doubt on the record. Unlike the two counts to which he pleaded guilty, other counts of the indictments against him charged crimes for which there were mandatory penalties, which anyone would naturally wish to avoid. The Government was willing to accept Coleman’s plea on the two counts carrying lighter penalties, but only if the plea were tendered right away. The Govern-. ment made it plain that it would not hold its offer of acceptance open just to enable Coleman to litigate this appeal. This was fully appreciated by defense counsel, who protested the Government’s position to the District Judge, and by Coleman himself, who acknowledged to the judge his understanding that the plea would foreclose both trial and appeal. We conclude that Coleman’s outstanding plea of guilty has precisely that effect.
The plea, we are also persuaded, was unaffected by Coleman’s simultaneous protestation of innocence. While pleas of guilty are usually accompanied by express admissions of guilt, lack of that element in no wisé conditions the plea. In North Carolina v. Alford, the Supreme Court held flatly that “[a]n individual accused of crime may voluntarily, knowingly' and understandably consent to the imposition of a prison sentence even if he is unwilling or unable to admit his participation in the acts constituting the crime.” Long prior to the decision in Alford, penalties imposed on defendants who maintained even vigorously that they did not commit the charged offenses, but who nonetheless entered pleas of nolo contendere, were upheld against constitutional attacks upon them. In Alford, the Court perceived no difference between a guilty plea refusing to avow the commission of the offense and one simultaneously maintaining the accused’s innocence. As long as each is voluntarily and intelligently entered, there is no cause for constitutional complaint.
Similarly, the Government’s refusal to extend its acceptance of the plea for the period Coleman continued in this litigation did not vitiate the plea. The Government’s declination stemmed from its concern that its case against Coleman might deteriorate in the meantime, and it is not for us to substitute our judgment for its. Nor is this a “situation [in which] the prosecutor or judge, or both, deliberately employ their charging and sentencing powers to induce a particular defendant to tender a plea of guilty.” On the contrary, the record supports amply the conclusion that Coleman made his plea voluntarily, and knowingly at the expense of the appeal. We hold that his attack on his preliminary hearing is now barred.
II. SHEPARD’S APPEAL
Appellant Shepard was charged with assaulting a Deputy United States Marshal while a prisoner in the cellblock of the District of Columbia Court of General Sessions. A judge of that court, sitting as a committing magistrate, presided over his preliminary hearing. The complaining witness, Deputy Marshal John H. Lonien, testified that while he was on duty in the cellblock, Shepard committed an unprovoked attack upon him, striking him above the right eye with a fist. Another Government witness, Herbert Rutherford, employed as a guard in the cell-block, corroborated Marshal Lonien’s testimony.
Shepard’s counsel was permitted considerable latitude in cross-examination of these witnesses as to matters they had testified to on direct examination. The judge, however, sustained the Government’s objections to a number of inquiries directed to them on other topics. The specific complaint Shepard refers to us runs to the judge’s rulings on eleven questions propounded to Marshal Lonien and four to Guard Rutherford. Those questions, in the main, solicited testimony as to disparaging remarks assertedly directed to cellblock personnel by prisoners other than Shepard, and to the nature and extent of any injuries inflicted by Shepard on Marshal Lonien and of injuries allegedly sustained by Shepard himself. The judge also ruled out Shepard’s proffer of photographs purporting to show his post-altercation physical condition, and inquiry of a defense witness as to whether cellblock personnel had tried to confiscate the photographs.
The more common basis of the Government’s objections to defense counsel’s cross-examinatorial approach was that he was venturing beyond the boundaries of a hearing designed to explore probable cause and embarking on a quest for discovery of elements of the Government’s case. After some amount of prior ambivalence on the subject, Shepard now disclaims any attempt at discovery, as distinguished from refutation of probable cause. - He further argues that the questions addressed to Marshal Lonien and Guard Rutherford bore a substantial relationship to the existence or nonexistence of probable cause.
At the outset, we put aside an otherwise litigable circumstance which has come to our attention. Exercising our power to judicially notice proceedings in related cases, we learned that, after oral argument and submission in this court, Shepard entered a plea of guilty to a lesser offense included within the charge on which he was indicted. Unlike their stance with respect to Coleman, appellees have not contended that Shepard’s plea affects his appeal, nor indeed did either side see fit to even make us aware of the plea. We have pointed out that a plea of guilty operates as a barrier only when it possesses the elements of a valid waiver of further litigation. In Coleman’s instance, the record satisfies us that his plea did, but in Shepard’s we have no record on the matter at all. Accordingly, we do not consider this potential problem.
A. Discovery at Preliminary Hearings
Former Rule 5(c) granted the accused, and its present counterpart continues to confer, the right to “cross-examine witnesses against him” at a preliminary hearing. The true dimension of that right is bound to depend in considerable measure upon the degree to which discovery by the defense may be a purpose the preliminary hearing is designed to serve. That,’ in turn, is a topic upon which the judges of this court have expressed views which, to say the least, have not been entirely harmonious. One view has been that the sole objective of a preliminary hearing is to determine whether there is probable cause to believe that the accused has committed an offense, and that the accused may lay claim to the benefit of only so much discovery as may become incidental to a properly conducted inquiry into probable cause. That view has now been incorporated into federal jurisprudence by the Federal Magistrates Act.
This Act provides mandatorily, with exceptions later to be considered, for “a preliminary [hearing] ... to determine whether there is probable cause to believe that an offense has been committed and that the arrested person has committed it.” The reason the Act indulges the preliminary hearing no independent discovery role is evident from its legislative history. During hearings before the Senate Committee on the Judiciary, witnesses urged “that preliminary examination afforded a necessary and useful medium for defense counsel to obtain discovery of the prosecution’s evidence.” The Committee, however, was “of the opinion that the problem of discovery should be treated separately from that of the preliminary hearing.” Although the need for expanded pretrial discovery procedures was recognized, the Committee felt that
The preliminary hearing does not present an ideal opportunity for discovery. It is designed for another purpose; namely, that of determining whether there is probable cause to justify further proceedings against an arrested person. Thus, the degree of discovery obtained in a preliminary hearing will vary depending upon how much evidence the presiding judicial officer thinks is necessary to establish probable cause in a particular case. This may be quite a bit, or it may be very little, but in either event it need not be all the evidence within the possession of the Government that should be subject to discovery.
The Committee accordingly concluded “that discovery procedure should remain separate and distinct from the preliminary examination. . . . ”
That settles the matter, of course, for Shepard and others whose hearings took place after the effective date of the Act. The mission of the hearing is an investigation into probable cause for further proceedings against the accused. It does not include discovery for the sake of discovery. To be sure, the evidence the Government offers to establish probable cause is by nature also discovery for the accused. So also is information adduced on cross-examination of Government witnesses on the aspects of direct-examination testimony tending to build up probable cause. In those senses, some discovery becomes a by-product of the process of demonstrating probable cause. But in no sense is discovery a legitimate end unto itself.
B. Cross-Examination at Preliminary Hearings
To say merely that discovery is not a primary function of federal preliminary hearings is to respond only incompletely to the issue Shepard poses. As we have said, former Rule 5(e) conferred upon the accused the right to “cross-examine witnesses against him,” and that right he continues to enjoy. Moreover, in Coleman v. Alabama, the Supreme Court, in holding that a preliminary hearing to ascertain probable cause to bind an accused for additional proceedings is a critical stage of the criminal process at which the Sixth Amendment right to counsel obtains, pointed out as one of the considerations supporting its holding that “the lawyer’s skilled examination and cross-examination of witnesses may expose fatal weaknesses in the [prosecution’s] case that may lead the magistrate to refuse to bind the accused over.” Since the right to counsel is the right to effective assistance of counsel, Coleman requires us to evaluate Shepard’s challenge with the increased solicitude appropriate when constitutional rights are at stake. This we have done, and we are led to the conclusion that the District Court’s disposition of Shepard’s grievance should not be disturbed.
According to Shepard’s brief on appeal, the purpose of his counsel’s questions on cross-examination of the two Government witnesses was to show that “(a) there were no physical injuries to the Marshals; (b) there were severe injuries to Mr. Shepard rendering him unconscious; (c) the assault charge was brought as a subterfuge for the Marshals’ own conduct; (d) the Marshals were provoked by disparaging remarks by prisoners other than Mr. Shepard; (e) there was mass confusion in the cellblock seriously impeding the perception of the Marshals; and (f) there was evidence that Mr. Shepard acted in self-defense, if he acted at all.” The first difficulty we have encountered is that the handling of the cross-examination made this understanding all too difficult to come by. Cross-examination at a preliminary hearing, like the hearing itself, is confined by the principle that a probe into probable cause is the end and aim of the proceeding, and the line between refutation of probable cause and discovery into the prosecution’s case ofttimes is thin. Here counsel’s purpose in pro pounding the questions which the presiding judge excluded was unquestionably blurred by the fact that counsel frequently appeared to be off on an impermissible quest for discovery. At no time prior to the rulings complained of did counsel delineate for the judge’s edification the factual thesis he was seeking to promote. Only as the hearing neared its close, and after the rulings had been made, did counsel broach anything remotely similar to the defensive theory now explained on appeal. Our reading of the hearing record leaves us with the conviction that the presiding judge, when ruling on counsel’s questions, could hardly divine what counsel had in mind. Therefore, we cannot say that he committed error in barring responses to inquiries that seemed unrelated to the task of evaluating probable cause.
Moreover, cross-examination is properly to be limited at preliminary hearing, as at trial, to the scope of the witness’ direct examination. To the extent that it is not — and here it was not —cross-examination ostensibly, even if undesignedly, becomes an effort at some sort of discovery. We do not suggest that magistrates may not indulge variations from the usual order of offering evidence, and during presentation of the Government’s case permit the defense to get in elements of its own. But when cross-examination exceeds the range of direct examination unaccompanied by an elucidation of its connection with probable cause, it is small wonder that discovery is taken to be the examiner’s goal.
An even more important consideration stems from the difference between the objective of the preliminary hearing and that of the trial. While, of course, conviction necessitates proof at trial of all elements of a crime beyond a reasonable doubt, it suffices for purposes of a binding over for trial that the evidence show “probable cause to believe that an offense has been committed and that the defendant has committed it.” The preliminary hearing is not a mini-trial of the issue of guilt, but is rather an investigation into the reasonableness of the bases for the charge, and examination of witnesses thereat does not enjoy the breadth it commands at trial. “A preliminary hearing,” the Supreme Court has said, “is ordinarily a much less searching exploration into the merits of a case than a trial, simply because its function is the more limited one of determining whether probable cause exists to hold the accused for trial.”
It is the contrast of probable cause and proof beyond a reasonable doubt that inevitably makes for examinatorial differences between the preliminary hearing and the trial. Probable cause signifies evidence sufficient to cause a person of ordinary prudence and caution to conscientiously entertain a reasonable belief of the accused’s guilt. Proof beyond a reasonable doubt, on the other hand, connotes evidence strong enough to create an abiding conviction of guilt to a moral certainty. The gap between these two concepts is broad. A magistrate may become satisfied about probable cause on much less than he would need to be convinced. Since he does not sit to pass on guilt or innocence, he could legitimately find probable cause while personally entertaining some reservations. By the same token, a showing of probable cause may stop considerably short of proof beyond a reasonable doubt, and evidence that leaves some doubt may yet demonstrate probable cause. In the instance before us, the testimony of two witnesses on direct examination furnished more than an ample foundation for a finding of probable cause which the cross-examination allowed did not impair. By our appraisal the convoluted defensive theory Shepard now says he wanted to develop was not likely to change the result. Whatever its potency as a basis for a reasonable doubt at trial, its capability to dissolve enough of the Government’s showing to negate probable cause strikes us as highly improbable. We speak not only of the cross-examination which was banned but also of the items of similar purport which on Shepard’s presentation were excluded. In any event, the situation is far too cloudy to warrant a grant of the extraordinary relief which Shepard seeks.
Magistrates presiding over preliminary hearings, no less than judges presiding over trials, are endowed with broad powers to supervise examination of witnesses. Beyond that, they should be indulged some leeway in their resolution of probable cause issues. Courts should not upset these judgmatic exercises unless a supervisory excess or a decisional error is clearly shown, and we do not perceive either here. Shepard’s counsel was permitted to cross-examine each Government witness closely as to the elements of his direct testimony and, for the reasons stated, we cannot say that disallowance of the questions ruled out was improper. For similar reasons, we are unable to say that the photographs and the questions as to the defense witness possessed such a tendency to dissolve probable cause that their exclusion was erroneous. A writ of mandamus lies only to enforce a plain, positive duty; it is not available to exact a response to a dubious claim. At best, any obligation to reverse the rulings on the excluded evidence is entirely too unclear. We accordingly affirm as to Shepard.
III. DANCIS’ APPEAL
Dancis, our third appellant, was charged with two violations of the Marijuana Tax Act. The charges came on for ventilation at a preliminary hearing over which a United States Magistrate presided. The magistrate denied his counsel’s request for a subpoena requiring the attendance of an unnamed undercover agent, who apparently was the sole available eyewitness to the two marijuana transactions attributed to Daneis. The Government’s only witness at the hearing was the agent’s supervisor, whose testimony as to the alleged transactions was necessarily hearsay, and as to the transactor’s identity was simply that the agent had identified Daneis from a six-year old photograph. The magistrate, on a finding of probable cause, held Daneis for grand jury action, and the District Court, in the case under review, held that the hearing was legally sufficient.
Daneis argues that each of two flaws vitiated his preliminary hearing. One is that the magistrate’s refusal to allow him access to the undercover agent’s testimony was prejudicial error. The other is that the Confrontation Clause outlaws the magistrate’s finding of probable cause solely upon the hearsay testimony of the agent’s supervisor. We deem it unnecessary to reach the constitutional issue posed by Daneis’ second contention because we agree that he is on sound ground in advancing the first.
A. Defensive Evidence at Preliminary Hearings
Former Rule 5(c) confirmed the right of an accused to “introduce evidence in his own behalf” at his preliminary hearing. It also imposed the requirement that an affirmative decision on probable cause be reached “on the evidence.” The specifications of present Rule 5.1(a) are identical. Thus a federal preliminary hearing is not only the occasion upon which the Government must justify continued detention by a showing of probable cause, but also an opportunity for the accused to rebut that showing. Rule 5(c) made it clear that it is as much the arrestee’s prerogative to endeavor to minimize probable cause as it is the Government’s to undertake to maximize it, and that both sides must be indulged reasonably in their respective efforts. And the Government’s demonstration on probable cause must surmount not only difficulties of its own but also any attack the accused may be able to mount against it.
In sum, “the evidence” which alone must guide resolution of the probable cause issue is the whole evidence— for the defense as well as for the prosecution. The magistrate must “listen to [the] versions [of all witnesses] and observe their demeanor and provide an opportunity to defense counsel to explore their account on cross-examination.” The magistrate “sits as a judicial officer to sift all the evidence before resolving the probable cause issue. . . . ” He “cannot decline to issue subpoenas on the ground that only the Government’s evidence is probative.”
These provisions of the Rules and our interpretations of them are now reinforced by the holding in Coleman v. Alabama that the Sixth Amendment secures for the accused the assistance of counsel at a preliminary hearing having for its purpose a determination on probable cause to hold him for further proceedings. Among counsel’s potential contributions, the Court stated, is “skilled examination . of witnesses [which] may expose fatal weaknesses in the [prosecution’s] case that may lead the magistrate to refuse to bind the accused over.” It cannot be gainsaid that what the Sixth Amendment mandated for Alabama’s preliminary hearing it exacts equally for the federal preliminary hearing which, we repeat, is exclusively an exploration into probable cause to hold the accused to answer the prosecution further. Nor can it be doubted that Coleman demands more than the mere presence of counsel at the hearing. The right to counsel which Coleman declared would amount to no more than a pious overture unless it is a right to counsel able to function efficaciously in his client’s behalf. The Sixth Amendment’s guaranty of counsel is a pledge of effective assistance by counsel, and Coleman makes it clear that federal preliminary hearings, as critical stages of criminal prosecutions, require no less. If the accused’s counsel is reduced to a state of impotence in the discharge of this responsibility, it is evident that the accused is deprived of the very benefit which the Sixth Amendment’s boon of counsel was designed to confer.
So, an accused is normally entitled to subpoenas compelling the attendance at his preliminary hearing of witnesses whose testimony promises appreciable assistance on the issue of probable cause. The test, our past utterances on the subject have indicated, couples the witness’ materiality with an absence of good cause for not requiring his presence, and its operation does not depend upon which side might have been expected to call the witness. Certainly an accused will not in every instance qualify for a subpoena for the production of a Government witness at his preliminary hearing, but where he succeeds in a plausible showing that that witness could contribute significantly to the accuracy of the probable cause determination, the request for the subpoena should be granted. “This,” we have said, “is consistent with the principal purpose of the preliminary hearing as a mechanism to determine whether the evidence is adequate to establish probable cause.”
We think the testimony of the undercover agent Dancis desired at his preliminary hearing met the standard of materiality. From aught that appears, he was the only available person who could testify to the two charged marijuana transfers from personal observation, and by the same token the only one who could directly identify the party responsible for them. Since probable cause to bind Dancis over for further prosecution depended on the caliber of the Government’s showing that he was that party and that what he did on the two occasions under scrutiny was illegal, it seems clear that the witness he requested could have given testimony bearing critically upon those matters. In Washington v. Clemmer it was the complainant in a rape case who was sought, and in Ross v. Sirica the only three eyewitnesses to a murder. In both cases we held that denial of the accused’s access to them was error, and it appears to us that the sole eyewitness to the transgressions laid to Dancis was equally material.
As we admonished in Ross, “[w]hatever the full reach of the accused’s subpoena rights at a preliminary hearing, . . . he is entitled to compel the attendance of eyewitnesses unless, of course, 'because of physical or psychological disability in a particular case’ such witnesses cannot attend.” That seems the more so when the nature of the Government’s presentation at Dancis’ preliminary hearing is taken fully into account. The Government offered but one witness, and he could testify on the vital issues of offenses and identity only from hearsay, and it is evident that that weakened the showing. To the extent that hearsay is employed, the effort to establish probable cause becomes more prone to attack since the reliability of the absent hearsay declarant always becomes an added factor to be reckoned with. In Ross, where, similarly to Dancis’ case the Government’s one witness at a preliminary hearing on a murder charge was a police officer who could merely relay what three eyewitnesses had told him about the crime, two judges of this court aptly observed, without dispute from the rest, that
A judicial officer engaged in a judicial determination of probable cause can hardly rest easy solely with the hearsay account of the policeman of what these eyewitnesses told him if the eyewitnesses can be available, so that he can listen to their versions and observe their demeanor, and provide an opportunity to defense counsel to explore their account on cross-examination. The presence of those witnesses impresses us as falling within the orbit of the rights conferred upon the accused by the fourth sentence of Rule 5(c). . . .
Indeed, the problem addressed in Ross is compounded in the situation before us now. The Government’s evidence at Dancis’ preliminary hearing was not only hearsay but also hearsay without any apparent means of refutation whatever. The undercover agent was not only absent from the hearing but at the time was also totally unidentified. He did not sign the complaint against Dancis, nor was he named in it, and the testimony at the hearing referred to him simply by his code name “John P.” Defense counsel’s inquiries on cross-examination as to his real name, and even as to generic characteristics, drew objections from the Government which the magistrate sustained. There was little or nothing in the Government’s .presentation to lend credit to the reliability of either the agent or the observations purportedly incriminating and identifying Dancis. It is difficult to imagine a case wherein the accused was more helpless to defend against a hearsay attribution of probable cause.
To say, as we do, that the testimony of the absent witness was material does not mean necessarily that the refusal of the subpoena was error vitiating the preliminary hearing. A refusal may be justified, and if it is a finding of probable cause climaxing the hearing must stand. The record before us, however, is singularly devoid of any such justification. There is no hint that the undercover officer was physically unamenable to a subpoena or in any way disabled from responding to it. There is no suggestion that his information about the episodes under exploration was to any extent privileged from compulsory disclosure. Nor is there a basis for attributing the denial of the subpoena to the exigencies of any undercover operation. The magistrate did not predicate the denial upon any of these grounds, nor did the Government even urge any of them. And to the extent that the record may furnish indications that the magistrate was satisfied on probable cause without hearing from the undercover agent, it suffices to repeat that the issue thereon cannot properly be resolved without accommodating reasonable demands of the prosecution and the defense for the production of evidence capable of shaping the outcome.
B. Return of Indictment
Concluding as we do that the magistrate erred in refusing Daneis the benefit of the undercover officer’s testimony, we are left to determine how the mistake should be corrected. The first question confronting that effort is whether the indictment returned against Daneis forecloses rectification of the error. It is well settled that an indictment itself establishes sufficient proba-' ble cause for holding the accused for trial, and that explains why we have consistently held that he is not entitled to a preliminary hearing where he is indicted before a hearing is held. Typical situations are those wherein the accused is indicted prior to arrest on the charges, or prior to the date set for preliminary hearing on the charges, or where he is in custody on another charge when indicted. In none of these instances can a preliminary hearing serve a need to probe probable cause to detain the accused, for the indictment has fulfilled that need. Nor can the hearing be invoked merely as a device for obtaining discovery, for discovery independent of the ascertainment of probable cause is not one of its functions.
The case before us, however, is markedly different. Dancis was given a preliminary hearing on the pending charges prior to return of the indictment. At that hearing, by his allegation, he was denied the right then conferred by former Rule 5(c) to examine a witness in his own behalf. That contention, we think, keeps Dancis in court despite the post-hearing rendition of the indictment.
Where in terms of the requirements of the Rules, a preliminary hearing is defective, the accused is obviously entitled to a reopening of the hearing to enable remediation of the defect if that can be done before a grand jury acts in the matter. “To say that the preliminary hearing[] [was] defective is to say that the determination of probable cause was inadequate and should not operate to deprive the accused of his liberty pending grand jury consideration.” Accordingly, we have not hesitated to direct a supplemental preliminary hearing on demonstration that at the original hearing the accused did not get his just due. That remedy,' of course, is additional to the accused’s prerogative to seek a dissolution of the commitment itself.
We have, moreover, adhered to the view that such a deprivation can be remedied by a reopening of the hearing even after return of an indictment. The indictment bars relitigation of the question of probable cause, of course, but the fact remains that save for disrespect of the accused’s rights he would have enlarged his insight into the Government’s case against him — as a by-product of efforts pro and con on probable cause in the course of the Government’s submission. Since, however, a Rule 5(c) right was dishonored, the accused lost a part of that by-product, and we have held that the hearing should be reopened to afford the accused an opportunity to retrieve the part which has been lost.
That is the rationale of our past decisions respecting post-indictment supplemental preliminary hearings. The supplemental hearing was not an occasion for a reexamination of probable cause, for the indictment had settled that issue. Nor was its purpose discovery for its own sake, but only such discovery as would inexorably have accompanied scrupulous observance of the Rule 5(c) right. Reopening of the preliminary hearing, then, emerged as both an appropriate sanction for and remediation of Rule 5(e) violations, not unlike, though less drastic than, the more familiar sanction of former Rule 5(a) which the Supreme Court’s Mallory decision supplied. The effect of the supplemental hearing was to confer upon the accused the benefit of only so much incidental discovery as would have been his but for the infringement of Rule 5(c).
Since our development of this prophylactic doctrine, however, the Federal Magistrates Act was adopted, and the question becomes whether the Act has set the doctrine for naught. The Act lays down the broad mandate that an arrestee be offered a preliminary hearing, the date for which must be fixed at his initial appearance before a judge or magistrate after his arrest. The hearing must be conducted “within a reasonable time following initial appearance, but in any event not later than” ten days where the arrestee remains in custody or twenty days where he is enlarged in the interim. The Act specifies, however, in Section 303(e) that “[n]o preliminary examination . . . shall be required to be accorded an arrested person if at any time subsequent to the initial appearance of such person before a judge or magistrate and prior to the date fixed for the preliminary examination ... an indictment is returned. ...”
We need not ponder whether the Act erects a barrier to a post-indictment pretrial reopening of a preliminary hearing which is seriously defective under the criteria specified in the Rules. To be sure, the remedy we provided in Ross v. Sirica, in circumstances comparable to those here, was a remand to the magistrate for a supplemental hearing. But Ross, like other decisions in its day, rested on the theory that discovery was as much a function of the preliminary hearing as an investigation into probable cause to bind the accused for further prosecution. The Act was passed after Ross was decided, and whether or not it imposed an absolute ban on reopenings of preliminary hearings, it certainly destroyed discovery as a reason for ordering a reopening. Furthermore, nothing in Ross nor in any of our other holdings inexorably required a supplemental hearing when another procedure might do equal or superior service. On the contrary, it was our uniform practice to relegate the problem of remediation, not to the magistrate, but to the trial judge when the deficiency in the preliminary hearing first came to light after the accused had been convicted.
Even more importantly, Ross predated not only the Act but also the Supreme Court’s decision in Coleman v. Alabama, and Coleman introduced an element of the remedy problem which this court has not hitherto had- occasion to consider. To put in a nutshell what we later elucidate, Coleman identifies the constitutional right to effective assistance of counsel as an incident of preliminary hearings and assures yindieation of that right. It is evident, then, that the return of an indictment against the accused cannot eliminate the need for procedures of some kind to redress violations of the Coleman right. On the other hand, the Coleman-type remedy, when invoked prior to trial, embraces an array of alternatives for dissipating potential prejudice. So, even if a reopening of the hearing survives the Act as one of these alternatives, Dancis cannot compel that particular choice.
Mandamus is an extraordinary remedy, available only to enforce a clear, unequivocal duty. It does not lie to control an exercise of judgment. Dancis, we say, is entitled, notwithstanding the indictment, to protection against injury resulting from the magistrate’s mistake. But Dancis is not necessarily entitled to receive that protection through a supplemental hearing before the magistrate, assuming even that the Act leaves that course open as a possibility. Additionally, as we later discuss, a supplemental hearing suffers by comparison with other alternatives open in this case. It is unnecessary, then, for us to decide whether in any event such a hearing would be available after an indictment has issued, and that decision we pretermit to another day.
C. The Remedy
Coleman v. Alabama bestowed upon Dancis an inviolable right to protection against harmful consequences flowing from the magistrate’s refusal to permit examination of the undercover agent at the preliminary hearing. Coleman also offers guidance as to the proper course to be taken where, following trial and conviction, the accused seeks to remedy a constitutional deficiency in his preliminary hearing. In Coleman, the Court could not determine from the record whether the absence of counsel from the accused’s preliminary hearing actually worked prejudice at his trial, so it vacated the conviction and remanded the case to the Alabama courts for an inquiry on that score. In the event that prejudice was found, the remedy would be a new trial; but if, applying the test set out in Chapman v. California, it was found that the infirmity in the preliminary hearing was harmless, the conviction would be reinstated. Even prior to Coleman, as we have said, in our own post-conviction decisions we have settled upon the same remedial course where serious flaws in preliminary hearings left them infirm.
These decisions chart the route to be traveled when the error is judicially detected only after conviction. But that is not Dancis’ situation, for while he has been indicted he has not yet been tried. Dancis could, of course, proceed to trial secure in the knowledge that should he encounter prejudice because of the refusal of the subpoena requested at his preliminary hearing, any conviction would have to be set for naught. But it would be senseless to require him to undergo trial and conviction before undertaking to repair the defect. On the contrary, we have emphasized that one deprived of his just due at a preliminary hearing not only may, but ordinarily must, seek rectification in court immediately. This position may reflect the undesirability of permitting an accused to withhold his complaint until after he has lost a gamble on the jury’s verdict. In any event, it certainly reflects a decided preference to avert prejudice before it occurs rather than to wait and deal with it after the fact.
We think, too, that the problem of remediation arising pretrial, no less than when it emerges after conviction, is one to be addressed by the court itself. There is nothing to be gained, over and above handling by the judge, by sending the case back to the magistrate for a supplemental preliminary hearing after the accused has been indicted. The magistrate cannot reinvestigate probable cause, for the indictment establishes its existence, nor is there anything else that officer can do that the judge cannot do better. The concern is that the accused may suffer prejudice at his forthcoming trial by the infringement of his rights at the hearing, and avoidance of prejudice is the function and duty of the judge himself. Obviously the judge could not, by directing the magistrate to reopen the preliminary hearing, shift his own responsibility to the magistrate. In our view, where an unmitigated blunder at a preliminary hearing may infect the ensuing trial, the court is obligated to scrutinize the accused’s claim of possible injury, and to take appropriate corrective action.
We perceive no reason why, in the circumstances presented, the problem at hand cannot be fully accommodated within the framework of' the criminal prosecution pending against Dancis. The judge who is to preside at Dancis’ trial is amply equipped to dissipate whatever risk of prejudice was bred by Dancis’ inability to call the undercover officer as a witness at his preliminary hearing. There are opportunities uniquely open to the trial judge, particularly with the cooperation of the parties, to seek remediation of the magistrate’s error before any real damage is done, and the judge is free to draw upon his imagination in the kind of remedy-fashioning which traditionally has been a prerogative of the federal judiciary. Moreover, it would be advantageous to the prosecution and the accused alike to eliminate the problem from the realm of future litigation.
The indictment against Dancis named the undercover agent, and it may well be that he testified before the grand jury. If so, the trial judge might consider making the agent’s grand jury testimony available to defense counsel. Alternatively, since after indictment the Government no longer has had an interest in keeping the agent’s identity secret, and obviously will have to produce him as a witness at trial, a voluntary interview may be indicated. If need be, the judge might set appropriate bounds for an interview and arrange for the agent’s participation therein. It may be that, by consent of the parties and approval of the judge, a deposition by written interrogatories to the agent would suffice as an expedient. Without any effort to exhaust the possibilities, we make these observations simply as suggestions of procedures calculated to safeguard Dancis against prejudice consistently with an orderly and expeditious progression of the case to trial. The point we do emphasize is that the judge is in a position to do anything the magistrate could now undertake, and indeed to do a great deal more. We leave for the trial judge, in the first instance, the decision on suitable relief.
The judgment appealed from is reversed insofar as it denied the requested declaration that Dancis’ preliminary hearing was rendered defective by the magistrate’s refusal to allow a subpoena commanding the appearance of the undercover agent as a witness, and the case is remanded to the District Court in order that such a declaration may be made. In all other respects, the judgment is affirmed, but without prejudice to steps in the criminal proceeding pending against Dancis which are designed to appropriately remedy the error committed at his preliminary hearing.
So ordered.
FAHY, Senior Circuit Judge,
concurring in part and dissenting in part:
I concur in Part I (the Coleman case) of Judge Robinson’s very careful and scholarly opinion. I also concur in Part III (Dancis’ appeal). As to Part II (Shepard’s appeal) I am of a different view. I think the cross-examination of the principal government witness was unduly restricted at the preliminary hearing. Unless subsequent events which are not considered by the court should lead to a different disposition of his case, I think he is entitled to a supplemental preliminary hearing.
I accept the position that the purpose of the preliminary hearing was to determine probable cause and not to obtain discovery, but the effort of defense counsel in the cross-examination was to elicit testimony which bore upon the issue of probable cause. Shepard had been identified by the principal government witness as the one who had made the involved assault upon him. The magistrate explicitly recognized that the cross-examination was designed to impeach this witness. Defense counsel was endeavoring to show a situation of pandemonium in a cellblock, in which the officer’s identification of Shepard as the one who attacked him might have been mistaken due to a general melee following racial slurs and an attack upon Shepard himself, who was felled and rendered unconscious with a fractured skull. Moreover, in the cross-examination counsel was not only seeking to test the credibility of the complaining witness but, in a good faith and intelligent, lawyer-like manner, was seeking to bring before the magistrate a fair exposition of what occurred, which had by no means been adequately developed by the government’s witnesses. Thus, after being repeatedly rebuffed, counsel stated:
MR. AXELROD [defense counsel]: If I could show in this preliminary hearing, Your Honor, that the reason this charge was brought was to cover up a wrongful assault on Mr. Shepard, and you would let me go into some of these questions as to who made the decision to charge and what Marshal Lonien [the complaining witness being examined] did afterwards, I think I could prove to Your Honor right now, before the case goes over to the District Court, that an assault didn’t take place and this was a cover up. (P. 26 of Transcript of Preliminary Hearing.)
THE COURT: Sir, you have heard what I said as to limitations I am placing on the evidence that will be admitted on this preliminary hearing. Within the scope of those limitations, you may proceed.
The limitations in my opinion deprived the defense of a fair opportunity to probe the issue of probable cause as contemplated by Rule 5, F.R.Crim.P.
It is clear that in seeking to impeach a witness on cross-examination counsel may question him on matters affecting credibility, including his lack of knowledge or perceptive capacity, his bias or his adverse interest in the litigation, and including also any prior inconsistent statements or acts. Rule 611(b) of the proposed new Rules of Evidence explicitly grants the right to go beyond the scope of the direct in cross-examination of a witness in a jury trial, with discretion in the judge as indicated:
A witness may be cross-examined on any matter relevant to any issue in the case, including credibility. In the interests of justice, the judge may limit cross-examination with respect to matters not testified to on direct examination.
Here the witness was the complaining witness, and the cross-examination was not before a jury during a trial but before a judge at a preliminary hearing, during which both hearsay and otherwise inadmissible evidence may be presented. Rule 5.1, F.R.Crim.P., effective October 1, 1972. The overly restrictive limitations imposed upon counsel are not in keeping with these developments.
Moreover, “discovery” by the time-honored method of seeking the truth— proper cross-examination — provided at a preliminary hearing the discovery is incidental to the issue of probable cause, is in. line with the modern trend for greater discovery in criminal proceedings.
Unless intervening events which, as I have said, we have not considered, should preclude it, I would require that Shepard now be given a supplemental probable cause hearing. Only about an hour would be consumed.
. Coleman was charged with violating 21 U.S.C. § 174 (1964) and 26 U.S.C. §§ 4704(a), 4705(a) (1964), Dancis with violating 26 U.S.C. 4742(a) (1964) and unlawful possession of narcotic drugs impinging on D.C.Code §§ 33-402 (1967), Shepard with assaulting a deputy United States Marshal in transgression of 18 U.S.C. § 111 (1964).
. Coleman and Dancis were presented to a United States Magistrate. See former Fed.R.Crim.P. 5; 28 U.S.C. § 636(a)(1) (Supp. IV 1968). Shepard was brought before a judge of the District of Columbia Court of General Sessions (now Superior Court) sitting as a committing magistrate pursuant to 18 U.S.C. § 3041 (1964) and D.C.Code § 11-963 (c) (1967).
. Former Fed.R.Crim.P. 5(e), which is critically involved in this case, is quoted in note 54, infra. Former Rule 5 was recently amended. Fed.R.Crim.P. 5, 5.1 (effective Oct. 1, 1972). Now, Rule 5 deals with the accused’s initial appearanee before the magistrate and Rule 5.1 with his preliminary hearing.
The Federal Magistrates Act, Pub.L. No. 90-578, tit. III, § 303(a), 82 Stat. 1107, 1117 (1968), 18 U.S.C. § 3060 (1970), which implemented former Rule 5(c) and now Rule 5.1, is discussed in Parts 11(A), III(B), infra.
. Appellants, invoking Fed.R.Civ.P. 23, brought the action as purported representatives of a class composed of themselves and all others similarly situated. The District Court made no determination as to whether the litigation could be maintained as a class action. See Fed.R.Civ.P. 23(c)(1). Appellants have registered no objection or claim of error on that account. AVe deem the omission harmless at the present since we affirm as to Coleman and Shepard and since the determination will be open to the District Court upon our remand as to Dancis. Fed.R.Civ.P. 61.
. The District Court issued a temporary restraining order enjoining the United States Attorney from presenting appellants’ cases to a grand jury until an application for a preliminary injunction could be heard. After the request for preliminary injunction was denied, this court continued the restraint temporarily, but dissolved it following appellees’ concession that the return of indictments would not preclude a reopening of the challenged preliminary hearings if found to be defective. See Part III(B), infra.
. These include the discovery function of the preliminary hearing and the effect of an indictment upon prior defective hearings, discussed in Parts II(A), III(B), infra, and the accused’s right to present witnesses at the hearing, discussed in Part III (A), infra.
. There were two multicount indictments, each predicating charges on 21 U.S.C. § 174 (1964) and 26 U.S.C. §§ 4704(a), 4705(a) (1964). These sections have all since been repealed. Pub.L. No. 91-513, tit. III, §§ 1101(a)(2), 1101(b)(3)(A), 84 Stat. 1291, 1292 (1970), but the prosecutions were unaffected by the repeal. 84 Stat. 1294 (1970).
. These two counts were laid on 26 U.S.C. § 4704(a) .(1964). See text infra at note 30.
. The strategy admittedly is to gain a decision favorable to reopening.of the preliminary hearing with a view to a possible later motion in the District Court for leave to withdraw the plea.
. Cf. United States v. Miller, 293 F.2d 697, 698 (2d Cir. 1961); United States v. Swaggerty, 218 F.2d 875, 879 (7th Cir.), cert. denied, 349 U.S. 959, 75 S.Ct. 889, 99 L.Ed. 1282 (1955).
. United States v. Smith, 407 F.2d 33, 35 (2d Cir. 1969); United States v. Fragus, 422 F.2d 1244, 1245 (5th Cir. 1970); Newalk v. United States, 254 F.2d 869, 870 (5th Cir. 1958); Berg v. United States, 176 F.2d 122, 125 (9th Cir.), cert. denied, 338 U.S. 876, 70 S.Ct. 137, 94 L.Ed. 537 (1949); Kahl v. United States, 204 F.2d 864, 866 (10th Cir. 1953).
. E. g., United States v. Bishop, 431 F.2d 481, 482 (5th Cir. 1970); Williams v. United States, 290 F.2d 217, 218 (5th Cir. 1961); Bartholomew v. United States, 286 F.2d 779, 781 (8th Cir. 1961).
. Brady v. United States, 397 U.S. 742, 748, 90 S.Ct. 1463, 1469, 25 L.Ed.2d 747 (1970).
. Kercheval v. United States, 274 U.S. 220, 223, 47 S.Ct. 582, 71 L.Ed. 1009 (1927). See also Boykin v. Alabama, 395 U.S. 238, 242, 89 S.Ct. 1709, 23 L. Ed.2d 274 (1969); Machibroda v. United States, 368 U.S. 487, 493, 82 S.Ct. 510, 7 L.Ed.2d 473 (1962).
. See, e. g., Fed.R.Crim.P. 11; McCarthy v. United States, 394 U.S. 459, 465-470, 89 S.Ct. 1166, 22 L.Ed.2d 418 (1969); Von Moltke v. Gillies, 332 U.S. 708, 724, 68 S.Ct. 316, 92 L.Ed. 309 (1948); Kercheval v. United States, supra note 14, 274 U.S. at 223, 47 S.Ct. 582, 71 L.Ed. 1009.
. Acceptance of a plea of guilty or nolo contendere is forbidden unless the judge determines “that the plea is made . . . with understanding of the consequences of the plea.” Fed.R.Crim.P. 11. See also the cases cited supra note 15 and infra note 18.
. Johnson v. Zerbst, 304 U.S. 458, 464, 58 S.Ct. 1019, 82 L.Ed. 1461 (1968).
. See Edwards v. United States, 103 U.S.App.D.C. 152, 155, 256 F.2d 707, 710, cert. denied, 358 U.S. 847, 79 S.Ct. 74, 3 L.Ed.2d 82 (1958); United States v. Warden, 381 F.2d 209, 213 (2d Cir. 1967).
. United States v. Doyle, 348 F.2d 715, 718-719 (2d Cir.), cert. denied, 382 U.S. 843, 86 S.Ct. 89, 15 L.Ed.2d 84 (1965).
. Id. at 718; United States v. Washington, 237 F.2d 632, 633 (3d Cir. 1956); Bloombaum v. United States, 211 F.2d 944, 945 (4th Cir. 1954); Fowler v. United States, 391 F.2d 276, 277 (5th Cir. 1968); United States v. Parker, 292 F.2d 2, 3 (6th Cir. 1961); United States v. Hetherington, 279 F.2d 792, 796 (7th Cir.), cert. denied, 364 U.S. 908, 81 S.Ct. 271, 5 L.Ed.2d 224 (1960); Hopkins v. United States, 344 F.2d 229, 234 (8th Cir. 1965); Berg v. United States, supra note 11, 176 F.2d at 125; Salazar v. Rodriguez, 371 F.2d 726, 729 (10th Cir. 1967). Guilty pleas are survived, however, by claims that the indictment fails to charge an offense, e. g., Kolaski v. United States, 362 F.2d 847, 848 (5th Cir. 1966); Marteney v. United States, 216 F.2d 760, 762 (10th Cir. 1954), or that the statute under which a defendant is charged is unconstitutional, e. g., Haynes v. United States, 390 U.S. 85, 87, 88 S.Ct. 722, 19 L.Ed.2d 923 n. 2 (1968); Ex parte Siebold, 100 U.S. 371, 374, 25 L.Ed. 717 (1879).
. Compare United States v. Doyle, supra note 19, 348 F.2d at 718-719; Fowler v. United States, supra note 20, 391 F.2d at 278; Taylor v. United States, 385 F.2d 835, 836 (8th Cir. 1967), cert. denied, 393 U.S. 879, 89 S.Ct. 181, 21 L.Ed.2d 153 (1968); with Haynes v. United States, supra note 20, 390 U.S. at 100, 88 S.Ct. 722, 19 L.Ed.2d 923; Kolaski v. United States, supra note 20, 362 F.2d at 848; Jaben v. United States, 333 F.2d 535, 538 (8th Cir. 1964), aff’d, 381 U.S. 214, 85 S.Ct. 1365, 14 L.Ed.2d 345 (1965).
“In a sense ... all plea bargaining involves a compromise of the right to appeal. A guilty plea works as a waiver of all ‘non-jurisdictional’ violations of the defendant’s rights, and it may therefore prevent those violations from becoming the basis for an appeal.” Alschuler, The Prosecutor’s Role In Plea Bargaining, 36 U.Chi.L.Rev. 50, 83 n. 78 (1968).
This is not to say that the plea renders the case moot. By leave of court, it may be withdrawn before or after sentence, Fed.R.Crim.P. 32(d), and if withdrawn the prosecution resumes. It also resumes, of course, following any determination that the plea was invalidly entered. The doctrine that a valid outstanding plea of guilty ordinarily forecloses further litigation does not rest upon any notion that the controversy is dead. Its consequence, more accurately, is that the issues are in a state of repose as long as the plea remains in effect.
. See text supra at notes 16-18.
. Compare United States v. Warden, supra note 18, 381 F.2d at 214-215 with Briscoe v. United States, 129 U.S.App.D.C. 146, 148, 391 F.2d 984, 986 (1968); Redwine v. Zuckert, 115 U.S.App.D.C. 130, 132, 317 F.2d 336, 338 (1963).
. See United States v. Warden, supra note 18, 381 F.2d at 214-215.
. See 1 C. Wright, Federal Practice and Procedure § 175, at 381 (1969).
. Supra note 19.
. 348 F.2d at 719 (footnote omitted).
. See Judicial Conference of the United States, Committee on Rules of Practice and Procedure, Proposed Amendments to the Rules of Criminal Procedure of the United States District Courts, Rule 11(c) (3), (4) (Prelim. Draft 1971) 52 F.R.D. 409, 415-416 (1971).
. See text supra at notes 22-23.
. 21 U.S.C. § 174 (1964) ; 26 U.S.C. § 4705(a) (1964). See also note 8, supra.
. Before accepting Coleman’s plea of guilty, the District Judge “address[edl the defendant personally” in order to “determin[e] that the plea [was] made voluntarily with understanding of the nature of the charge and the consequences of the plea,” Fed.R.Crim.P. 11; see also McCarthy v. United States, supra note 15, 394 U.S. at 464-467, 89 S.Ct. 1166, 22 L.Ed.2d 418, and the following transpired :
THE COURT: If this plea of guilty is accepted, there will be no trial, there will be no appeal; you understand that?
* * * * *
DEFENDANT COLEMAN: Yes.
. North Carolina v. Alford, 400 U.S. 25, 37-38, 91 S.Ct. 160, 27 L.Ed.2d 162 (1970).
. Id. at 37, 91 S.Ct. 160.
. Hudson v. United States, 272 U.S. 451, 453, 47 S.Ct. 127, 71 L.Ed. 347 (1926).
. Supra note 32.
. 400 U.S. at 37, 91 S.Ct. at 167.
. Id. See also United Brotherhood of Carpenters & Joiners v. United States, 330 U.S. 395, 412, 67 S.Ct. 775, 91 L.Ed. 973 (1947); United States v. Norris, 281 U.S. 619, 622, 50 S.Ct. 424, 74 L.Ed. 1076 (1930). And see Hudson v. United States, supra note 34.
. North Carolina v. Alford, supra note 32, 400 U.S. at 37, 91 S.Ct. 160.
. See Brady v. United States, supra note 13, 397 U.S. at 755, 90 S.Ct. 1463, 25 L.Ed.2d 747; McMann v. Richardson, 397 U.S. 759, 770, 90 S.Ct. 1441, 25 L.Ed.2d 763 (1970); Parker v. North Carolina, 397 U.S. 790, 796, 90 S.Ct. 1458, 25 L.Ed.2d 785 (1970).
. United States v. Doyle, supra note 19, 348 F.2d at 719.
. Brady v. United States, supra note 13, 397 U.S. at 751, 90 S.Ct. at 1470 n. 8.
. 18 U.S.C. § 111 (1964).
. Shepard had been held in default of a $300 bond on a petit larceny charge, D.C.Code § 22-2202 (1967). The Government subsequently entered a nolle prosequi in that case.
. Now the Superior Court of the District of Columbia.
. See note 2, supra.
. See note 47, infra.
. The following questions were directed to Marshal Lonien on cross-examination and excluded:
' Q. Did you lose any time from work because of this incident?
* * * * *
Q. Did you hear any of the other marshals making racial slurs and telling the prisoners to move faster?
* * * * *
Q. Isn’t it true, Marshal Lonien, some other prisoners, beside Mr. Shepard, made disparaging remarks to you?
* * * * *
Q. Did you ever describe what happened on this day to Mr. Luke Moore as an escape attempt?
*****
Q. Can you describe how you attempted to lead him?
* * * * *
Q. Did you see Mr. Shepard on the floor with other marshals?
*****
Q. Did you know, Marshal Lonien, how Mr. Shepard was rendered unconscious ?
*****
Q. Did you see anybody kick Mr. Shepard in the eye?
* * * * *
Q. Did you ask anybody for help? * * * * *
Q. Did you ever describe what took place in the cellblock as a riot?
*****
Q. Did you receive medical treatment for your injuries?
* * * * *
Questions addressed to Guard Rutherford but excluded were:
Q. Do you know who took Mr. Shepard’s handcuffs off?
* * * * *
Q. Mr. Rutherford, have you had any trouble with prisoners as they are being led in?
* * * * *
Q. Did you have a part in restraining Mr. Shepard on that date? *****
Q. Did you see Marshal Lonien attempt to place Mr. Shepard in solitary confinement?
. There were other objections to specific questions, principally on the ground that they were outside the scope of the witness’ direct examination.
. That position became clear to us for the first time from a memorandum filed after the case had been submitted to us.
. See Craemer v. Washington, 168 U.S. 124, 129, 18 S.Ct. 1, 42 L.Ed. 407 (1898); Butler v. Eaton, 141 U.S. 240, 243-244, 11 S.Ct. 985, 35 L.Ed. 713 (1891); Zahn v. Transamerica Corp., 162 F.2d 36, 48 n. 20 (3d Cir. 1947).
. See text supra at notes 22-24.
. See text supra at notes 30-41.
. No transcript of the proceeding eventuating in the change of plea appears in the record of Shepard’s criminal case.
. Former Fed.R.Crim.P. 5 (c) provided:
The defendant shall not be called upon to plead. If the defendant waives preliminary examination, the commissioner shall forthwith hold him to answer in the district court. If the defendant does not waive examination, the commissioner shall hear the evidence within a reasonable time. The defendant may cross-examine witnesses against him and may introduce evidence in his own behalf. If from the evidence it appears to the commissioner that there is probable cause to believe that an offense has been committed and that the defendant has committed it, the commissioner shall forthwith hold him to answer in the district court; otherwise the commissioner shall discharge him. The commissioner shall admit the defendant to bail as provided in these rules. After concluding the proceeding the commissioner shall transmit forthwith to the clerk of the district court all papers in the proceeding and any bail taken by him.
United States Magistrates now exercise the functions formerly committed to commissioners : Federal Magistrates Act, Pub.L. No. 90-578, tit. III, § 303(a), 82 Stat. 1107, 1117 (1968), 18 U.S.C. § 3060 (1970).
Present Fed.R.Crim.P. 5.1 (a) provides :
If from the evidence it appears that there is probable cause to believe that an offense has been committed and that the defendant committed it, the federal magistrate shall forthwith hold him to answer in district court. The finding of probable cause may be based upon hearsay evidence in whole or in part. The defendant may cross-examine witnesses against him and may introduce evidence in his own behalf. Objections to evidence on the ground that it was acquired by unlawful means are not properly made at the preliminary examination. Motions to suppress must be made to the trial court as provided in Rule 12.
. See the several views expressed in Ross v. Sirica, 127 U.S.App.D.C. 10, 14, 380 F.2d 557, 561 (1967). See also Blue v. United States, 119 U.S.App.D.C. 315, 322, 342 F.2d 894, 901 (1964), cert. denied, 380 U.S. 944, 85 S.Ct. 1029, 13 L.Ed.2d 964 (1965); Dancy v. United States, 124 U.S.App.D.C. 58, 60, 361 F.2d 75, 77 (1965); Holmes v. United States, 125 U.S.App.D.C. 187, 188, 370 F.2d 209, 210 (1966).
. Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 16, 380 F.2d at 563 (statement of Judges McGowan and Leventhal).
. Federal Magistrates Act, Pub.L. No. 90-578, tit. III, § 303(a), 82 Stat. 1107, 1117 (1968), 18 U.S.C. § 3060 (1970).
. See note 140, infra, and accompanying text.
. Federal Magistrates Act, Pub.L. No. 90-578, tit. III, § 303(a), 82 Stat. 1107, 1117 (1968), 18 U.S.C. § 3060 (1970).
. S.Rep. No. 371, 90th Cong., 1st Sess. 34 (1967).
. Id.
. Id.
. Id.
. The Committee also specified another reason:
In addition, because its fundamental purpose is to prevent unjustified restraints of liberty, the preliminary examination should be held within a short time after an accused is first arrested. Discovery, on the other hand, can most usefully take place at a later stage, much closer to trial, when the evidence is more nearly complete and defense counsel is better prepared.
Id. at 34-35.
. Id. at 35.
. Appellees do not suggest that the Federal Magistrates Act repealed Rule 5(c). As was said in United States v. Hinkle, 307 F.Supp. 117, 120 (D.D.C.1969) :
[I]t appears . . . that Sec. 3060 as amended does not repeal Rule 5 (c), as there is no conflict posed when the two are read in pari materia. Rather, Sec. 3060 serves as a clarification of the standard to be applied in determining whether in a particular case a preliminary hearing is called for, and if so, the purpose of the preliminary hearing. On the other hand, Rule 5(c) complements Sec. 3060 by providing the evidentiary and procedural rules to be applied when a hearing is held.
Fed.R.Crim.P. 5.1(a) now confirms that view. See Advisory Committee’s Note thereto.
. See note 54, supra.
. See note 54, supra.
. 399 U.S. 1, 90 S.Ct. 1999, 26 L.Ed.2d 387 (1970).
. Id. at 7-10, 90 S.Ct. 1999. The right to counsel at federal preliminary hearings is also statutorily granted. Criminal Justice Act of 1964, Pub.L. No. 88-455, § 2, 78 Stat. 552 (1964), as amended, 18 U.S.C. § 3006A(b)-(c) (1970).
. “Plainly the guiding hand of counsel at tlie preliminary hearing is essential to protect the indigent accused against an erroneous or improper prosecution. First, the lawyer’s skilled examination and cross-examination of witnesses may expose fatal weaknesses in the State’s case that may lead the magistrate to refuse to bind the accused over. Second, in any event, the skilled interrogation of witnesses by an experienced lawyer can fashion a vital impeachment tool for use in eross-examination of the State’s witnesses at the trial, or preserve testimony favorable to the accused of a witness who does not appear at the trial. Third, trained counsel can more effectively discover the case the State has against his client and make possible the preparation of a proper defense to meet that case at the trial. Fourth, counsel can also be influential at the preliminary hearing in making effective arguments for the accused on such matters as the necessity for an early psychiatric examination or bail.” 399 U.S. at 9, 90 S.Ct. at 2003.
. E. g., Powell v. Alabama, 287 U.S. 45, 71, 53 S.Ct. 55, 77 L.Ed. 158 (1932); United States v. Hammonds, 138 U.S.App.D.C. 166, 169-170, 425 F.2d 597, 600-601 (1970); Harried v. United States, 128 U.S.App.D.C. 330, 333-334, 389 F.2d 281, 284-285 (1967); Bruce v. United States, 126 U.S.App.D.C. 336, 340, 379 F.2d 113, 117 (1967).
. Compare Brown v. Fauntleroy, 143 U.S.App.D.C. 116, 117 & n. 2, 442 F.2d 838, 839 & n. 2 (1971).
. Brief for Appellants, at 12.
. Part 11(A), supra.
. At that point counsel stated :
If I could show in this preliminary hearing, Your Honor, that the reason this charge was brought was to cover up a wrongful assault on Mr. Shepard, and you would let me go into some of these questions as to who made the decision to charge and what Marshal Lonien [the witness] did afterwards, I think I could prove to Your Honor right now, before the case goes over to District Court, that an assault didn’t take place and this was a cover up.
. That is the standard specified both in former Rule 5(c) and present Rule 5.1(a). See note 54, supra.
. See California v. Green, 399 U.S. 149, 195-200, 90 S.Ct. 1930, 26 L.Ed.2d 489 (dissenting opinion); 8 J. Moore, Federal Practice § 5.1.02[3] (Cipes ed. 1965).
. Barber v. Page, 390 U.S. 719, 725, 88 S.Ct. 1318, 1322, 20 L.Ed.2d 255 (1968).
. Compare People v. Wisecarver, 67 Cal.App.2d 203, 153 P.2d 778, 781 (1944); Stroman v. Gilbert, 2 Conn.Cir. 179, 197 A.2d 99, 102 (1963); State v. Howland, 153 Kan. 352, 110 P.2d 801, 806-807 (1941).
. See, e. g., McGill v. United States, 121 U.S.App.D.C. 179, 183-186 & n. 4, 348 F.2d 791, 795-798 & n. 4 (1965).
. See text supra at note 74.
. See note 47, supra, and text supra following note 47.
. United States v. Bates, 287 F.Supp. 657, 660-661 (E.D.Tenn.1968).
. Id.
. Laughlin v. Reynolds, 90 U.S.App.D.C. 414, 415, 196 F.2d 863, 864 (1952); Chapman v. Santa Fe Pac. R.R., 90 U.S.App.D.C. 34, 38, 198 F.2d 498, 502 (1951), cert. denied, 343 U.S. 964, 72 S.Ct. 1058, 96 L.Ed. 1361 (1952); Clark v. Memolo, 85 U.S.App.D.C. 65, 67, 174 F.2d 978, 980 (1949); Hammond v. Hull, 76 U.S.App.D.C. 301, 303, 131 F.2d 23, 25 (1942), cert. denied, 318 U.S. 777, 63 S.Ct. 830, 87 L.Ed. 1145 (1943).
. 26 U.S.C. § 4742(a) (1964), which was since repealed by Pub.L. No. 91-513, tit. III, § 1101(b)(3)(A), 84 Stat. 1291, 1292 (1970), which, however, left the prosecution unaffected. 84 Stat. 1294 (1970).
. “In all criminal prosecutions, the accused shall enjoy the right to . be confronted with the witnesses against him . . . .” U.S.Const, amend. VI.
. The argument, as we understand it, is not that hearsay must be as totally excluded from preliminary hearings as it is from trials, but seems rather to be that the elements of probable cause dependent upon eyewitness observations cannot be established on a wholly hearsay basis. “Credible” hearsay may underlie an arrest warrant. E. g., United States v. Harris, 403 U.S. 573, 579, 91 S.Ct. 2075, 29 L.Ed.2d 723 (1971); Whiteley v. Warden, 401 U.S. 560, 567, 91 S.Ct. 1031, 28 L.Ed.2d 306 (1971); United States v. Thornton, 147 U.S.App.D.C. 114, 117, 454 F.2d 957, 960 (1971). Hearsay may support a grand jury indictment. E. g., Costello v. United States, 350 U.S. 359, 363, 76 S.Ct. 406, 100 L.Ed. 397 (1956); United States v. Callahan, 439 F.2d 852, 860 (2d Cir.), cert. denied, 404 U.S. 826, 92 S.Ct. 56, 30 L.Ed.2d 54 (1971); United States v. Aloisio, 440 F.2d 705, 707-708 (7th Cir.), cert. denied, 404 U.S. 824, 92 S.Ct. 49, 30 L.Ed.2d 51 (1971); United States v. Daddano, 432 F.2d 1119, 1125 (7th Cir. 1970), cert. denied, 402 U.S. 905, 91 S.Ct. 1366, 28 L.Ed.2d 645 (1971) . Until recently, the question whether hearsay was admissible in preliminary hearings remained open with us, see Washington v. Clemmer, 119 U.S.App.D.C. 216, 339 F.2d 715, following remand, 119 U.S.App.D.C. 226, 229, 339 F.2d 725, 728 (1964); Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 18, 330 F.2d at 565; Howard v. United States, 128 U.S.App.D.C. 336, 341, 389 F.2d 287, 292 (1967), as was the question whether a finding of probable cause to hold the accused to answer may be predicated on hearsay evidence alone, e. g., Washington v. Clemmer, supra, 119 U.S.App.D.C. at 220, 339 F.2d at 719. See, however, id. at 225-226, 339 F.2d at 724-725 (statement of Judge [now Chief Justice] Burger). Now, however, Fed.R.Crim.P. 5.1(a) provides that the finding “may be based upon hearsay evidence in whole or in part.” See note 54, supra.
. We cannot accept the argument that Coleman v. Alabama, supra note 69, establishes the validity of that contention. Coleman vindicates the Sixth Amendment right to counsel at preliminary hearings, see Part II(B), supra. But Coleman did not touch the issue of right to confrontation at such hearings, and other decisions speak to the right of confrontation at trial. Dutton v. Evans, 400 U.S. 74, 91 S.Ct. 210, 27 L.Ed.2d 213 (1970); California v. Green, supra note 78; Pointer v. Texas, 380 U.S. 400, 85 S.Ct. 1065, 13 L.Ed.2d 923 (1965). As stated in text, we do not reach the question on this appeal.
. Constitutional questions are not to be resolved unless the need to do so is imperative. See, e. g., Rosenberg v. Fleuti, 374 U.S. 449, 451, 83 S.Ct. 117, 9 L.Ed.2d 97 (1963); Bush v. Texas, 372 U.S. 586, 590, 83 S.Ct. 922, 9 L.Ed.2d 958 (1963); Rescue Army v. Municipal Court, 331 U.S. 549, 568, 67 S.Ct. 1409, 91 L.Ed. 1666 (1947).
. See note 54, supra.
. See note 54, supra.
. See note 54, supra.
. This the accused may undertake either by the production of witnesses of his own or by cross-examination of witnesses presented by tlie Government. See Part IX (B), supra.
. While the standard of probable cause which the Government must meet at preliminary hearings is roughly equivalent to the standard required for issuance of an arrest warrant or for an arrest without a warrant, see text supra at notes 77-81, the procedure at preliminary hearings differs from that upon the issuance of a warrant or a warrantless arrest in at least one very important respect. That difference ' is the presence of the accused at the preliminary hearing and his right to cross-examine prosecution witnesses and introduce evidence in his own behalf. Arrest warrants, on the other hand, are issued upon the Government’s ex parte presentation to a magistrate, and warrant-less arrests are made on information communicated ex parte to arresting officers. The traditional function of the preliminary hearing is a second determination on probable cause, this time after according the accused a reasonable opportunity to rebut it. Unless the accused is indulged in that respect, the preliminary hearing is little more than a duplication of the probable cause decisions that foreran his arrest.
. Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 18, 380 F.2d at 565 (statement of Judges McGowan and Leventhal).
. Id. at 12, 380 F.2d at 559.
. Id.
. Supra note 69.
. 399 U.S. at 7-10, 90 S.Ct. 1999, 26 L.Ed.2d 387.
. Id. at 9, 90 S.Ct. at 2003. See note 71, supra.
. See Part II(A), supra.
. See eases cited supra note 72.
. Compare White v. Ragen, 324 U.S. 760, 764, 65 S.Ct. 978, 89 L.Ed. 1348 (1945); Powell v. Alabama, supra note 72, 287 U.S. at 71, 53 S.Ct. 55, 77 L.Ed. 158; Newberry v. Wingo, 449 F.2d 344, 345 (6th Cir. 1971).
. Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 13, 380 F.2d at 560; Washington v. Clemmer, supra note 89, 119 U.S.App.D.C. at 219, 329 F.2d at 718. See also United States v. Huff, 143 U.S.App.D.C. 163, 170, 442 F.2d 885, 892 (1971).
. Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 13, 380 F.2d at 560; Washington v. Clemmer, supra note 89, 119 U.S.App.D.C. at 219, 339 F.2d at 718. As we stated in the latter case, those “ [1] ikely to be called on this basis, in addition to alibi witnesses, are the complainant and other material witnesses named in the complaint who for some reason have not been called by the Government.” 119 U.S.App.D.C. at 219, 339 F.2d at 718.
. Limitations on the right to subpoena witnesses have been recognized where the witness is physically or psychologically unable to testify, Washington v. Clemmer, supra note 89, 119 U.S.App.D.C. at 219 n. 11, 339 F.2d at 718 n. 11, and where the witness’ testimony could not, in light of other evidence, negative probable cause, Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 18 n. 4, 380 F.2d at 565 n. 4 (statement of Judges McGowan and Leventhal).
. Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 12-13, 380 F.2d at 559-560; Washington v. Clemmer, supra note 89, 119 U.S.App.D.C. at 219, 339 F.2d at 718.
. Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 13, 380 F.2d at 560.
. Supra note 89.
. Supra note 55.
. Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 14, 380 F.2d at 561; Washington v. Clemmer, supra note 89, 119 U.S.App.D.C. at 228, 339 F.2d at 727.
. Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 13, 380 F.2d at 560, quoting Washington v. Clemmer, supra note 89, 119 U.S.App.D.C. at 219, n. 11, 339 F.2d at 718 n. 11.
. Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 18, 380 F.2d at 565 (statement of Judges McGowan and Leventhal) (footnote omitted). See also Washington v. Clemmer, supra note 89, 119 U.S.App.D.C. at 229, 339 F.2d at 728.
. When defense counsel inquired of the undercover officer’s supervisor on cross-examination “Now, what is John P’s full name?” “What is the officer’s nationality?” “What is the officer’s race?”, the magistrate sustained objections from the Government to each question.
. See note 108, supra, and accompanying text.
. See note 108, supra, and accompanying text.
. Compare McCray v. Illinois, 386 U.S. 300, 311, 87 S.Ct. 1056, 18 L.Ed.2d 62 (1967); Rugendorf v. United States, 376 U.S. 528, 534-535, 84 S.Ct. 825, 11 L.Ed. 2d 887 (1964); Roviaro v. United States, 353 U.S. 53, 62, 77 S.Ct. 623, 1 L.Ed.2d 639 (1957); United States v. Skeens, 145 U.S.App.D.C. 404, 407-408, 449 F.2d 1066, 1069-1071 (1971).
. Compare Robinson v. United States, 148 U.S.App.D.C. 58, 61-62, 459 F.2d 847, 850-851 (1972); Ross v. United States, 121 U.S.App.D.C. 233, 235, 349 F.2d 210, 212 (1965). We note that Daneis’ preliminary hearing was not reached until three months after the date of the alleged offenses, with the result that any ongoing undercover operation on the latter date may have terminated prior to the preliminary hearing.
. See Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 18 n. 4, 380 F.2d at 565 n. 4 (statement of Judges McGowan and Leventhal).
. See text supra at notes 95-99.
. Costello v. United States, supra note 89, 350 U.S. at 363, 76 S.Ct. 406, 100 L. Ed. 397; Ex parte United States, 287 U.S. 241, 250, 53 S.Ct. 129, 77 L.Ed. 283 (1932); Howard v. United States, supra note 89, 128 U.S.App.D.C. at 341-342, 389 F.2d at 293-294; Crump v. Anderson, 122 U.S.App.D.C. 173, 175-177, 352 F.2d 649, 651-653 (1965).
. United States v. Lewis, 140 U.S.App.D.C. 40, 42 n. 3, 433 F.2d 1146, 1148 n. 3 (1970). See also Godfrey v. United States, 122 U.S.App.D.C. 285, 286, 353 F.2d 456, 457 (1965).
. Crump v. Anderson, supra note 123, 122 U.S.App.D.C. at 175-180, 352 F.2d at 651-656.
. Clemons v. United States, 133 U.S.App.D.C. 27, 44 n. 19, 408 F.2d 1230, 1247 n. 19 (en bane 1968), cert. denied, 394 U.S. 964, 89 S.Ct. 1318, 22 L.Ed.2d 567 (1969); Walker v. Rodgers, 128 U.S.App.D.C. 420, 389 F.2d 961 (1968).
. See Part II(A), supra.
. See Part II(A), supra.
. Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 16, 380 F.2d at 563 (statement of Judges McGowan and Leventhal).
. Washington v. Clemmer, supra note 89, 119 U.S.App.D.C. at 221, 339 F.2d at 720, 119 U.S.App.D.C. at 228, 339 F.2d at 727.
. See Di Cesare v. Chernenko, 303 F.2d 423, 424 (4th Cir. 1962).
. Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 13-14, 380 F.2d at 560-561.
. Mallory v. United States, 354 U.S. 449, 77 S.Ct. 1356, 1 L.Ed.2d 1479 (1957). By the doctrine of that case, statements obtained from an arrestee after unreasonable delay in presenting him to a commissioner (now a magistrate) are excluded from the evidence at trial. See also McNabb v. United States, 318 U.S. 332, 346, 63 S.Ct. 608, 87 L.Ed. 819 (1943).
. Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 12 n. 5, 380 F.2d at 559 n. 5; id. at 16-17, 18-19, 380 F.2d at 563-564, 565-566 (statement of Judges McGowan and Leventhal) ; Blue v. United States, supra note 55, 119 U.S.App.D.C. at 320-322, 342 F.2d at 899-901.
. Pub.L. No. 90-578, tit. III, § 303(a), 82 Stat. 1107, 1117 (1968), 18 U.S.C. § 3060(a) (1970).
. Id.
. Pub.L. No. 90-578, tit. III, § 303(b), 82 Stat. 1107, 1117 (1968), 18 U.S.C. § 3060(b) (1970).
. Pub.L. No. 90-578, tit. III, § 303(b) (1) , 82 Stat. 1107, 1117 (1968), 18 U.S.C. § 3060(b)(1) (1970).
. Pub.L. No. 90-578, tit. III, § 303(b) (2) , 82 Stat. 1107, 1117 (1968), 18 U.S.C. § 3060(b)(2) (1970).
. “No preliminary examination in compliance with subsection (a) of this section shall be required to be accorded an arrested person, nor shall such arrested person be discharged from custody or from the requirement of bail or any other condition of release pursuant to subsection (d), if at any time subsequent to the initial appearance of such person before a judge or magistrate and prior to the date fixed for the preliminary examination pursuant to subsections (b) and (c) an indictment is returned or, in appropriate cases, an information is filed against such person in a court of the United States.” Pub.L. No. 90-578, tit. III, § 303(e), 82 Stat. 1107, 1117 (1968), 18 U.S.C. § 3060(e) (1970).
. Supra note 55.
. 127 U.S.App.D.C. at 14, 380 F.2d at 561.
. See id. at 12, 380 F.2d at 559.
. See Part II(A), supra.
. See cases cited infra note 160.
. Supra note 69.
. See text infra at notes 155-159. See also text supra at notes 69-73, 100-105.
. See Coleman v. Alabama, supra note 69, 399 U.S. at 10-11, 90 S.Ct. 1999, 26 L.Ed.2d 387 and cases cited infra note 160.
. See text infra.
. Will v. United States, 389 U.S. 90, 95-96, 88 S.Ct. 269, 19 L.Ed.2d 305 (1967); Thornton v. Corcoran, 132 U.S.App.D.C. 232, 234, 407 F.2d 695, 697 (1969); Jones v. Gasch, 131 U.S.App.D.C. 254, 265, 404 F.2d 1231, 1242 (1967), cert. denied, 390 U.S. 1029, 88 S.Ct. 1414, 20 L.Ed.2d 286 (1968).
. See cases cited supra note 85.
. In re Flasphaler, 97 U.S.App.D.C. 82, 228 F.2d 53, cert. denied, 351 U.S. 973, 76 S.Ct. 1033, 100 L.Ed. 1491 (1956); Dilling v. United States, 79 U.S.App.D.C. 47, 142 F.2d 473 (1944); Bartlesville Zinc Co. v. ICC, 58 App.D.C. 316, 317, 30 F.2d 479, 480, cert. denied, 279 U.S. 856, 49 S.Ct. 351, 73 L.Ed. 997 (1929); United States ex rel. Abilene & S. Ry. v. ICC, 56 App.D.C. 40, 41, 8 F.2d 901, 902, cert. denied, 270 U.S. 650, 46 S.Ct. 351, 70 L.Ed. 781 (1926).
. Compare Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 13-14, 380 F.2d at 560-561; Blue v. United States, supra note 55, 119 U.S.App.D.C. at 320, 342 F.2d at 899; and cases cited infra note 160.
. See text infra.
. Supra note 69.
. 399 U.S. at 7-10, 90 S.Ct. 1999, 26 L.Ed.2d 387. See also text supra at notes 69-73, 100-105.
. Id. at 10-11, 90 S.Ct. 1999.
. 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967). In Chapman, it was held that before a federal constitutional error can be held “harmless,” the court must be of the belief that it was harmless beyond a reasonable doubt. 386 U.S. at 24, 87 S.Ct. 824. The court must find that there is no reasonable possibility that the error complained of might have contributed to the conviction. Id. See Fahy v. Connecticut, 375 U.S. 85, 86-87, 84 S.Ct. 229, 11 L.Ed.2d 171 (1963).
. 399 U.S. at 10-11, 90 S.Ct. 1999.
. Holmes v. United States, supra note 55, 125 U.S.App.D.C. at 188-189, 370 F.2d at 210-211; Dancy v. United States, supra note 55, 124 U.S.App.D.C. at 61, 62, 361 F.2d at 78, 79. See also Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 12 n. 5, 380 F.2d at 559 n. 5. Cf. Shelton v. United States, 120 U.S.App.D.C. 65, 66, 343 F.2d 347, 348, cert. denied, 382 U.S. 856, 86 S.Ct. 108, 15 L.Ed.2d 93 (1965); Blue v. United States, supra note 55, 119 U.S.App.D.C. at 320-322, 342 F.2d at 899-901.
. Ross v. Sirica, supra note 55, 127 U.S.App.D.C. at 14, 380 F.2d at 561; Blue v. United States, supra note 55, 119 U.S.App.D.C. at 321-322 & n. 7, 342 F.2d at 900-901 & n. 7.
. We leave for the District Court’s determination the question whether the declaration should be made on an individual or class basis. See note 4, supra.
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UNITED STATES of America v. Clarence E. JONES, Appellant.
Nos. 71-1691, 72-1284.
United States Court of Appeals, District of Columbia Circuit.
Argued Nov. 2, 1972.
Decided March 15, 1973.
Roger A. Clark, New York City (appointed by this Court) for appellant. William C. Potter, Jr., Washington, D. C., and David T. Bryant (both appointed by this Court) entered appearances for appellant.
Paul L. Friedman, Asst. U. S. Atty., with whom Harold H. Titus, Jr., U. S. Atty., John A. Terry, Herbert B. Hoffman and Kenneth M. Robinson, Asst. U. S. Attys., were on the brief, for appellee.
Before TAMM and LEVENTHAL, Circuit Judges, and CHARLES E. WYZANSKI, Jr., Senior United States District Judge for the District of Massachusetts.
Sitting by designation pursuant to 28 U.S.C. § 294(d)(1970).
TAMM, Circuit Judge:
Appellant, Clarence E. Jones, was convicted in the United States District Court for the District of Columbia of a violation of D.C.Code § 22-2801 (1967), carnal knowledge of a female child under sixteen years of age. He was sentenced to imprisonment for a period of not less than five nor more than twenty years, and his appeal from that conviction was brought to this court in No. 71-1691. Appellant additionally filed a Motion to Vacate Sentence pursuant to 28 U.S.C. § 2255 (1970), which motion was ultimately denied following a hearing. The appeal from that determination was brought to this court in No. 72-1284. The two appeals were consolidated for purposes of argument and decision, and as to both we affirm the disposition of the district court.
FACTS
The testimony of various witnesses at the trial developed the facts essentially as follows. At 4:15 p. m. on Tuesday, November 3, 1970, fifteen year old Jancelyn Peagues was walking home from her modern dance class following a dáy of school. A late model, grayish blue Continental automobile with a dent in the door on the passenger’s side pulled alongside. The driver, who was alone in the car at the time, asked Jancelyn if he “didn’t . . . know [her] from some place.” Jancelyn looked toward the driver, replied that she did not, and continued walking. When she reached the corner of Iowa Avenue and Buchanan Street she glanced back, saw that the car was double parked in the street, and resumed walking. Suddenly, someone came up from behind, grabbed her, poked something sharp into her side, and told her to come with him or be shot.
Jancelyn was forced into a nearby alley where the two walked “side by side” for a few minutes and she was able to get a good look at her assailant's face. She was led into a deserted garage and, ultimately, raped, Jancelyn testified that a few minutes after her assailant forcibly attained penetration “he stopped and got up, and he asked me wasn’t I going to let him finish what he was doing, and I told him no. Then he started mumbling something and he fixed his clothes and just left.” She then adjusted her clothes, double checked to be sure her assailant had left, and went home. The entire incident took nearly forty minutes. Jancelyn testified at trial that she was able to look at her assailant’s face during at least thirty minutes of this time.
Only Jancelyn’s father and brother were at home when she arrived and, afraid and ashamed to tell them what occurred, she went directly to her room and took a bath, not reappearing until dinner. At dinner she said nothing of what had happened, ate very little, and was very quiet. Her mother, who had returned from work and was present at dinner, testified that she knew Jancelyn was in her menstrual period at the time and not feeling well. Following dinner Jancelyn returned to her room and watched television until about ten o’clock when her twenty-two year old sister, Sonia, returned home from work. Sonia testified that she found Jancelyn very upset, sitting on the side of her bed and crying, and it was at that time, some six hours following the rape, that Jancelyn first told anyone of the incident. Sonia immediately took Jancelyn to her mother. Mrs. Peagues asked her daughter, “Jancelyn, why didn’t you tell me?” to which Jancelyn replied “Oh, mama, I was afraid,” and continued crying. Mrs. Peagues contacted her husband and upon his immediate return home from work they took Jancelyn to D. C. General Hospital.
At 4:00 a. m., prior to her physical checkup, Jancelyn spoke to Detective Griffith of the Metropolitan Police Sex Squad. The detective recalled that Jancelyn “was upset and crying” while she reported to him the events of the preceding afternoon. Jancelyn described her assailant as having worn a maroon jacket and brown pants, as a Negro male, approximately twenty-one years of age, about six feet one or two inches in height, with a medium build and brown skin complexion. She also described in detail the scene of the rape.
The examining doctor testified at trial that he examined Jancelyn at 5:55 a. m. on the same morning. The examination revealed laceration in the hymen and the presence of blood in the vagina and at the cervix. The doctor testified that the examination was consistent with penetration within the last twenty-four hours, although no intact sperm was discovered. The doctor additionally testified that the blood could have come either from the laceration or menstruation, but that he was unable to tell which.
Later in the morning of November 4 Jancelyn accompanied a detective to the scene of the rape and photographs were taken of the inside of the garage. The pictures, which were introduced as evidence at trial, depicted the scene precisely as Jancelyn had described it to Detective Griffith at the hospital.
On November 7 Jancelyn went to police headquarters to look at photographs. She looked at five books, each of which contained sixty to seventy-five color Polaroid photographs of Negro males between eighteen and twenty-seven years of age. She stopped when‘she arrived at the picture of appellant, let out a scream, and started crying. The detective present testified that she pointed to the picture and stated “That’s the man who raped me.” At trial Jancelyn once more looked through the book containing appellant’s photograph and again selected appellant’s picture. The photograph was subsequently submitted to the jury for its consideration.
On November 10 the appellant was arrested at his parent’s home at 822 Shepherd Street, Northwest, six and one-half blocks from the location of the rape. A four-door bluish gray Continental parked across the street caught the attention of one of the arresting officers —it contained a dent in the right front and generally matched the description given by Jancelyn to the police — and further checks showed that the ear was registered to Ann Thompson, appellant’s girl friend. Jancelyn testified at trial that photographs taken by the police depicted the car she saw her assailant driving on the day of the rape.
On November 24 Jancelyn returned to police headquarters for the purpose of viewing a lineup. She positively identified the appellant from the ten men in the line.
At trial the appellant did not testify in his own behalf, did not controvert to a substantial degree any of the above, but presented an alibi defense on the basis of testimony of his girl friend and assorted relatives. The jury returned a verdict of guilty and appellant was sentenced on August 9, 1971, to imprisonment for five to twenty years, with a recommendation that he be incarcerated in an institution where he could receive psychiatric treatment.
No. 71-1691
In his appeal from the guilty verdict appellant raises two specific issues that merit discussion: (1) Did the trial court err in refusing to enter a judgment of acquittal because complainant’s testimony was without independent corroboration? (2) Did the court err in permitting in the jury’s presence the use of a book of photographs maintained by the Metropolitan Police Sex Squad, and in admitting in evidence a “masked over” photograph of appellant, thereby allegedly enabling the jury to infer that appellant had a prior police record ?
1. Independent corroboration
The wealth of opinions in this circuit regarding the vagaries of the independent corroboration requirement for sex related offenses renders a lengthy dissertation inappropriate. Therefore, what follows is only a brief summary of the guidelines which we must respect. (1) Corroboration of the testimony of complainants in “sex cases” is an indispensable prerequisite to conviction. See Coltrane v. United States, 135 U.S.App.D.C. 295, 418 F.2d 1131 (1969), and the cases cited therein at footnote 12. (2) There must be corroboration as to both the corpus delicti and the identity of the assailant. Carter v. United States, 138 U.S.App.D.C. 349, 427 F.2d 619, 624 (1970). (3) The need for corroboration depends upon the danger of falsification. Thomas v. United States, 128 U.S.App.D.C. 233, 387 F.2d 191, 192 (1967). (4) Since in general the danger of an erroneous identification in a rape case is not of the same magnitude as the danger of a fabricated rape, Franklin v. United States, 117 U.S.App.D.C. 331, 330 F.2d 205, 208 (1964), the facts of a particular case may be such that a convincing identification by the complaining witness based upon an opportunity to observe need not be further corroborated. Carter v. United States, supra,, 427 F.2d at 624. (5) The corroboration testimony need not be “direct” but may be circumstantial, for “[i]f by ‘direct corroboration’ is meant the testimony of an eyewitness, the result would be in most cases that conviction could not be had except upon the defendant’s confession.” Ewing v. United States, 77 U.S.App.D.C. 14, 135 F.2d 633, 636 (1942), cert. denied, 318 U.S. 776, 63 S.Ct. 829, 87 L. Ed. 1145 (1943). (6) Corroboration in a case involving an alleged sex offense is any evidence, outside of the complainant’s testimony, which has probative value — any evidence which could convince the trier of fact that the crime was committed. United States v. Terry, 137 U.S.App.D.C. 267, 422 F.2d 704, 707 (1970). (7) While corroboration is initially a matter for the trial court, just as in any question concerning the legal sufficiency of the evidence to warrant submission of the case to the jury, it is the jury’s function to decide whether the standard of corroborative proof has been met. Borum v. United States, 133 U.S.App.D.C. 147, 409 F.2d 433, 438 (1967), cert. denied, 395 U.S. 916, 89 S.Ct. 1765, 23 L.Ed.2d 230 (1969). (8) Finally, every case must be evaluated on its own merits, Bailey v. United States, 132 U.S.App.D.C. 82, 405 F.2d 1352, 1358 (1968), and no magical quantitative balancing test utilizing a “checklist of factors” is either appropriate or workable. United States v. Terry, supra, 422 F.2d at 708.
When considering all of the various elements, overworked but hopefully not overworn, we must determine whether the trial judge erred in sending the case to the jury. Can we say that given proper instructions as to corroboration a reasonable juror could not conclude that the appellant was guilty of the crime charged? Patently, the answer to that question must be no.
Appellant correctly does not challenge the sufficiency of the corroboration of identity in this case, but maintains that corroboration of the corpus delicti is lacking. In considering the corroboation we must keep in mind that since this offense involved a “female child under sixteen years of age,” the only remaining element of the corpus delicti is penetration, for when a child under the age of consent is involved the law conclusively presumes force and the question of consent is immaterial. Wheeler v. United States, 93 U.S.App.D.C. 159, 211 F.2d 19 (1953), cert. denied, 347 U.S. 1019, 74 S.Ct. 876, 98 L.Ed. 1140 (1954).
The absence of any evidence tending to show a motive for fabrication coupled with the maturity that the victim demonstrated throughout the proceedings lent inherent credence to her testimony, and while not in and of themselves corroborative, they diminished the “danger of falsification” that is the foundation of the corroboration requirement. With that in mind, surely the medical testimony that Jancelyn’s condition was consistent with penetration, her emotional state when she first revealed what had happened, when she first discussed the case with the police, and when she first identified appellant’s picture, taken in conjunction with her accurate description of the scene of the events, and the description of the automobile linked to the appellant, supply-more than ample corroboration of the corpus delicti. See, e. g., United States v. Gambrill, 146 U.S.App.D.C. 72, 449 F.2d 1148 (1971) (credit cards stolen at time of rape found in car in which appellant was riding); United States v. Huff, 143 U.S.App.D.C. 163, 442 F.2d 885 (1971) (distraught emotional state, bump on forehead, apartment disarranged, clothes of victim in disarray); United States v. Terry, 137 U.S.App.D.C. 267, 422 F.2d 704 (1970) (bruises and contusions, prompt reporting, distraught emotional state — intent conviction) ; United States v. Bryant, 137 U.S.App.D.C. 124, 420 F.2d 1327 (1969) (torn dress strap — intent conviction).
2. Impermissible inference
Relying upon our opinion in Barnes v. United States, 124 U.S.App.D.C. 318, 365 F.2d 509 (1966), the appellant finds fault both with the prosecutor’s use at trial of the book of photographs from which Janeelyn originally selected appellant’s picture, and the submission of that same Polaroid snapshot to the jury.
In his opening statement the prosecutor' referred to Jancelyn’s trip to the “sex squad office” a few days following the rape and to her identification of appellant after looking through several “books of photographs.” While Jancelyn was testifying at the trial the prosecutor entered as an exhibit the album from which she had originally selected the appellant’s photograph. Thereafter he gave the book to Janeelyn for purposes of an in-court photographic identification, which was successful. The prosecutor then placed Detective Tague on the stand (Detective Tague was the officer present at the police station when Janeelyn originally selected the photograph), and after eliciting that the detective was employed with the sex squad and that Janeelyn had looked at the pictures at the sex squad office, the prosecutor utilized the book in subjecting the detective to questioning regarding Jancelyn’s original identification. Ultimately the prosecutor sought to have not only appellant’s photograph but also the entire book shown to the jury. Defense counsel strongly objected as to the book: “I don’t want that volume of photographs going to the jury. There are all kinds of notations on the back of those pictures. It looks like a rogues gallery. I think it is inflammatory. The testimony is that she picked a picture out of the book and the book itself is absolutely improper to go to the jury. There is a listing there of other people.” The prosecutor then agreed not to submit the entire book but continued to urge that the Polaroid picture of appellant be shown to the jury. After the picture was backed with a white cardboard sheet so that no prejudicial notations appeared, the court submitted it to the jury without defense counsel objection. Finally, in his summation speech the prosecutor again referred to Jancelyn’s trip to the sex squad office and subsequent identification.
The photograph in question is a Polaroid snapshot showing a natural frontal pose of the appellant. There is absolutely nothing in the picture to indicate a prior criminal record or association with the police. Barnes is limited in its holding to the inadmissibility of photographs of a “mug shot” variety, for the court therein found that the admission of “a full-length snapshot of an ordinary nature . . . presents no problem.” Id. at 510. The photograph in question before us today is akin to that found admissible in Barnes, and its admission once more presents no problem. See United States v. Hallman, 142 U.S.App.D.C. 93, 439 F.2d 603 (1971).
In United States v. Clemons, 144 U.S.App.D.C. 235, 445 F.2d 711 (1971), cert. denied, 404 U.S. 956, 92 S.Ct. 322, 30 L.E.2d 273 (1971), an objection was raised to a reference by the prosecutor in his opening statement concerning a previous identification of the accused through the use of pictures shown by the police. The prosecutor in Clemons stated that the “detective . . . got together a group of Polaroid color film” from which the accused was selected, and it was argued that this would “indicate to any reasonably alert juror that ‘appellant at least had a prior arrest record and probably a criminal record.’ ” 445 F.2d at 712-713. The court responded :
The prosecution strategy is usually to buttress the complaining witness’s in-court identification by calling forth from the witness’s memory the circumstances of any prior identification. This has been a proper and strategically sound tactic for years. The photo was described to the jury as a “Polaroid color film” and not as a “mug shot” such as the one that gave the court trouble in Barnes. Since the prosecutor’s examination of his witness was not only skillful but legally faultless, we find no impropriety in the opening statement preview he gave to the jury. If we are to grant prosecutors any devices with which to buttress an in-court identification, then we must permit the method employed here.
Id. at 713 (footnotes omitted).
Appellant attempts to distinguish Clemons and Hallman — a case likewise ruling admissible testimony regarding a pre-trial identification from non-“mug type” photographs — in that here (1) there were incidental references to the identification taking place at the sex squad, and (2) the very book from which the photograph was selected was physically used, although not admitted as evidence, at trial. We fail to find these distinctions meriting reversal.
In any sex related case the natural inference of a reasonable juror will be that the victim worked with the vice or sex squad of the local police department in gaining the arrest of the accused. The departmentalization of the police function is neither a new nor novel idea to the ordinary citizen. Incidental references to this fact (here in the opening and closing statements, and in the examination of a detective working for the sex squad) cannot add an aura of impermissibility not present in Clemons or Hallman.
The same logic holds true for the use of the photographic album at trial. Any reasonable juror will assume a minimum of organization at the police department which would necessitate that photographs of individuals kept for reviewing are stored in other than paper sacks or old shoe boxes. Absent a showing by an appellant of some independent specific prejudice resulting from the use of the album and warranting reversal, some prejudice substantiated by more than the bare allegation that its use alone subjects the jury to an impermissible inference of a prior criminal record, we will find no prejudicial error. No such independent grounds having been alleged in this case, the conviction must stand. As Judge Leventhal stated in Hallman, supra, 439 F.2d at 604-605:
A juryman might well conjecture that there must have been prior suspicion of the defendant, else why would the police have his photograph. But we cannot push sound principles to untenable extremes.
If there has been basic fairness of approach, the prosecution is entitled to present evidence of pretrial identification, as being more meaningful to the jury than the more ritualized in-court identification.
. . . The importance that a jury know of the reality of a fair pretrial identification weighs with more substance in the scales of justice than speculative possibility that the jury may conjecture defendant was involved in some other offense.
In upholding the conviction of appellant we feel constrained to strike a note of caution. While not error, the use of the photographic album at the trial amounted to what best can be termed “prosecutorial overkill.” The identification evidence in this case was overwhelming: there was testimony that the physical description of the assailant originally given by the victim closely matched that of the accused; there was testimony regarding pretrial photographic identification of the accused, and the very photograph selected was admitted into evidence; there was testimony concerning the victim’s selection of the accused from a police lineup; finally, there was an in-court identification. Considering the weight of such evidence we find questionable the prosecutor’s decision to bring the album to trial for yet another photographic identification. The cumulative nature of the in-court photographic identification minimized its value, while the possibility of prejudice remained at a fairly high level. Although we find no prejudice in this case we note that in the future caution should be taken to determine if action such as this is absolutely necessary. The use of the album is in our opinion a risky prosecutorial venture, and one as to which great care should be exercised.
No. 72-1284
Appellant filed a Motion to Vacate Sentence pursuant to 28 U.S.C. § 2255 (1970) which was denied following a hearing on March 3, 1972. The basis for the motion was appellant’s assertion that absent a showing that his substitute counsel for purposes of the lineup had in fact conferred with his trial cousel, he was effectively denied his sixth amendment right to assistance of counsel. United States v. Wade, 388 U.S. 218, 87 S.Ct. 1926, 18 L.Ed.2d 1149 (1967).
The court below reached the following conclusions of fact that we find to be clearly supported by the record: the defendant was represented by substitute counsel at the lineup at which he was identified by the complainant; neither substitute nor trial counsel had a clear recollection as to whether they communicated concerning the circumstances of the lineup; neither substitute nor trial counsel could find anything objectionable with respect to the lineup. Furthermore, prior to trial, trial counsel received an abundance of information concerning the lineup from the following sources: (a) communications with the Assistant United States Attorney at the preliminary hearing held the day after the lineup; (b) his examination of the complaining witness at the preliminary hearing; (c) his discovery sessions with the Assistant United States Attorney prior to trial; (d) his examination of the lineup photograph and police reports of the lineup supplied to him by the government prior to the Wade-Stovall hearing; and, (e) his examination of witnesses at the Wade-Stovall hearing prior to trial.
Based on the above conclusions the court determined that there was no evidence whatsoever on the record that the pretrial lineup was either suggestive or unfair, that the presence of substitute counsel at the lineup did not contravene appellant’s sixth amendment rights, United States v. Kirby, 138 U.S.App.D.C. 340, 427 F.2d 610 (1970), that appellant was not prejudiced by any possible lack of communication when trial counsel possessed all relevant information concerning the lineup, and therefore that appellant was in no way denied effective assistance of counsel. In any event, the court found that any error committed in admitting the identification testimony was harmless in view of the overwhelming evidence of guilt. Harrington v. California, 395 U.S. 250, 89 S.Ct. 1726, 23 L.Ed.2d 284 (1969).
In United States v. Johnson, 147 U.S.App.D.C. 31, 452 F.2d 1363 (1971), while expressing no opinion on the merits of appellants’ claims that they were denied effective assistance of counsel because of an alleged failure of their substitute lineup counsel to communicate with trial counsel, we remanded to the district court to enable the appellants to supplement the record. We thus took note in Johnson, as we had earlier in Marshall v. United States, 141 U.S.App.D.C. 1, 436 F.2d 155 (1970), of the gravity of the issue of effective representation raised in matters such as this. In Marshall the court went so far as to suggest that, at least in some circumstances, the government might well have to assume the burden of ensuring that substitute counsel’s observations are transmitted to the trial counsel. Appellant urges this court to adopt the policy that if the prosecution cannot prove communication between trial and substitute counsel error must be recognized regardless of the lack of prejudice apparent after a full hearing on the matter. We firmly disagree that such is required.
Recently, in United States v. Smallwood, 153 U.S.App.D.C. 387, 473 F.2d 98 (1972), this court was faced with the identical allegation that substitute counsel representing the appellant at lineup was ineffective “because he failed to provide trial counsel with an account of the lineup.” The court in Smalhuood engaged in an independent analysis of the lineup and considered the information available to the trial counsel in concluding that no reasonable possibility of prejudice had been proven:
Failure to communicate with substitute counsel would have been of consequence if he had significant information to communicate. There is no indication, however, that substitute counsel had such information, and any suggestion that he did must be founded on sheer speculation and surmise.
At 101. Impliedly, therefore, the Small-wood court rejected the absolute bar proposed by the appellant in the case before us.
It is plainly one thing to say that if the prosecution fails to ensure counsel collaboration regarding the lineup procedures that it must suffer the consequences if, following a full hearing on the matter, a reasonable possibility of prejudice to the defendant emerges, but it is quite another thing to say that when no meaningful possibility of prejudice appears following a hearing the prosecution must suffer for failure to arrange a meaningless conference. In other words, if failure to communicate results in fact in a lack of the effective assistance of counsel mandated by the sixth amendment then the Government, as opposed to the defendant, should be held responsible and the lineup evidence suppressed. That simply is not this case, however, and we cannot read either Johnson, Marshall, or Smallwood, as intimating that a more stringent requirement is essential to the protection of a defendant’s constitutional rights.
In this case there was a full hearing during the course of which all relevant evidence regarding the purported sixth amendment violation was received. There was no showing of prejudice. Counsel were unable to conclusively state that they had not conferred, and clearly the appellant was not harmed in any event. The findings of the district court should be upheld.
The conviction of appellant for violation of D.C.Code § 22-2801 (1967), and the denial of the Motion to Vacate Sentence filed pursuant to 28 U.S.C. § 2255 (1970), are accordingly
Affirmed.
. D.C.Code § 22-2801 (1967) provides in pertinent part:
Whoever has carnal knowledge of a female forcibly and against her will, or eamally knows and abuses a female child under sixteen years of age, shall be imprisoned for not more than thirty years ....
. Although the complainant originally described the car as a two-door, the ear ultimately impounded by the police and owned by appellant’s girl friend was a four-door model.
. For an extensive background of the sex corroboration requirement in this circuit see Coltrane v. United States, 135 U.S.App.D.C. 295, 418 F.2d 1131 (1969).
. Not wishing to depart from what has almost become a tradition in sex offense cases, we hereby note that “[Rape] is an accusation easily to be made and hard to be provecí, and harder to be defended by the party accused, tho never so innocent.” 1 Hale, Pleas of the Crown *635.
. Tr. vol. II, p. 188.
. Defense counsel, when shown the photograph prior to its submission to the jury- and after any prejudicial markings were covered, stated “Yes, that is agreeable.” Tr. vol. II, p. 189.
. Counsel should be particularly aware of markings on the album itself, and consider the possibility that the physical presence of the book alone might work to precipitate prejudicial remarks from witnesses that normally would be suppressed, We approve the non-admission of the album into evidence and recommend eaution in its use.
. The Marshall court stated, 436 F.2d at 160 n. 18:
Where the Government elects to use “substitute” counsel to satisfy an accused’s Sixth Amendment rights, it may well be incumbent upon the prosecution to ensure that the observations and opinions of the substitute counsel are transmitted to the accused’s subsequently appointed trial counsel. Under this view, the “diligence” of the trial counsel in learning of events at the lineup is not particularly relevant. Unless the Government takes affirmative action to provide trial counsel with the report of substitute counsel’s observations, the defendant may be denied his Sixth Amendment right to effective assistance of counsel. Cf. Levin v. Katzenbach, 124 U.S.App.D.C. 158, 363 F.2d 287 (1966).
In Marshall the substitute counsel had left the country and could not be located for consultation. I-Iis notes were unavailable to trial counsel, and notes made by other Legal Aid attorneys present at the time were “buried” in the agency’s files, and not located until after the trial. 436 F.2d at 158 n. 9.
. Chief Judge Bazelon, writing a separate concurring opinion in Smallwood, opted for adoption of a per se exclusion rule “[i]f the Government, after providing substitute counsel, fails to make reasonably available to trial counsel either the substitute counsel or the observations he made at the hearing . . . . ” At 102. Here, as in Smallwood, there is no evidence that trial counsel “lacked reasonable access” to the substitute counsel. We take note of the Government’s obligation to provide effective assistance of counsel, and will not allow the use of substitute counsel to degenerate into a meaningless sham. We cannot agree, however, with the contention that Wade requires the per se exclusion of lineup testimony should the Government fail to arrange a meeting between trial and substitute counsel. Standing alone, such inaction simply is not enough.
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Irving POLCOVER, Appellant, v. SECRETARY OF the TREASURY et al.
No. 71-1920.
United States Court of Appeals, District of Columbia Circuit.
Argued Dec. 14, 1972.
Decided April 4, 1973.
Rehearing Denied May 11, 1973.
Edward L. Merrigan, Washington, D. C., for appellant.
Paul L. Friedman, Asst. U. S. Atty., with whom Harold H. Titus, Jr., U. S. Atty., John A. Terry, and James F. Rutherford, Asst. U. S. Attys., were on the brief, for appellee. Thomas A. Flannery, U. S. Atty. at the time the record was filed also entered an appearance for appellee.
Before BAZELON, Chief Judge, TAMM, Circuit Judge, and HARRISON WINTER, Circuit Judge for the Fourth Circuit.
Sitting by designation pursuant to 28 U.S.C. § 291(a) (1970).
TAMM, Circuit Judge:
Appellant brought suit in the district court against the Secretary of the Treasury, et al., seeking a declaration of the illegality of his removal from federal employment, an injunction restoring him to his position, and a judgment for back pay due and owing him as computed under the Back Pay Act of 1966. On cross-motions for summary judgment the district court, without oral argument and without a statement of reasons, held for the appellee. Recognizing our limited scope of review, and giving due consideration to all the arguments advanced by the appellant in seeking reversal, we affirm the judgment of the district court.
I.
Prior to a discussion of the facts and law in this case we desire to take note of the duplicative nature of judicial review achieved in employee adverse action litigation. This court pointed out some eight years ago in Dabney v. Freeman, 123 U.S.App.D.C. 166, 358 F.2d 533 (1965), that employee discharge cases, although cast in the mold of original actions in the district court for reinstatement and related relief, are disposed of on the basis of the administrative record and should be governed by the principles generally applicable to judicial review of administrative action. See Scott v. Macy, 131 U.S.App.D.C. 93, 402 F.2d 644, 647 n. 6 (1968). As such, this court has continually held them subject to specific scope of review limitations. Comparable with judicial review of the actions of other agencies, the base of this specific scope of review — that of review of final employee adverse action taken by the Civil Service Commission [hereinafter “Commission”] — has broadened over the past twenty years, from review limited to insuring statutory compliance, see, e. g., Boylan v. Quarles, 98 U.S.App.D.C. 337, 235 F.2d 834 (1956), to that requiring at least the exercise of discretion by the agency official, see Hargett v. Summerfield, 100 U.S.App.D.C. 85, 243 F.2d 29 (1957), cert. denied, 353 U.S. 970, 77 S.Ct. 1060, 1 L.Ed.2d 1137 (1957), to finally the more current “rational basis test,” see Eustace v. Day, 114 U.S.App.D.C. 242, 314 F.2d 247 (1962). Regardless of whether the. test of today is framed in the language of determining whether the Commission acted in an arbitrary or capricious manner, or whether substantial evidence in the record supports its determination, see Dabney, supra, 358 F.2d at 535, 537, the fact remains that the district court is engaged in limited judicial review, and that its determination is based upon the agency record submitted to it. No de novo evidentiary hearing is permitted. See Dabney, supra, 358 F.2d at 535.
Almost without exception the district court is presented with cross-motions for summary judgment and its decision is often rendered, as it was here, without a written statement of reasons. When subsequently appealed the court of appeals, limiting itself to the precise scope of review utilized by the district court, renders its decision. No specific deference is paid to the decision of the district court (such would be most difficult in any event in the instance of no district court opinion); rather this court reviews the record and determines anew if there has been procedural error, if there is substantial evidence to support the action, or if the Commission action is in some manner otherwise arbitrary or capricious. In other words, we conduct the identical review we are so often called upon to use in statutorily provided judicial review of other agency orders, e. g., F.C.C., N.L. R. B., F.T.C. The only difference is that in this instance our review follows identical review in the district court.
Duplication, delay, expense and de-. spair for the employee-litigant are inherent in such a system. The interposition of the district court serves, it seems to us, no viable purpose. In the case sub judice the petition in the district court was filed by appellant on July 18, 1969, and the order granting appellee’s summary judgment motion was entered on October 6, 1971 — a span of nearly twenty-seven months. We wish not to allocate blame for the delay to either of the parties but to the system which fosters it. Such delay would be understandable if meaningful results were produced. Here we find none. The record before us is identical to that before the lower court, and even if a district court opinion were filed this court would not be required to afford it any special notice.
Perhaps one way to avoid the duplication would be to accord some deference to the district court’s review of the record and its determinations. A parallel to such action could be drawn to the Supreme Court’s occasional usage of a “hands off” policy regarding courts of appeals decisions in statutory agency review cases. See NLRB v. Pittsburgh Steamship Co., 340 U.S. 498, 502-503, 71 S.Ct. 453, 95 L.Ed. 479 (1951), and Universal Camera Corp. v. NLRB, 340 U.S. 474, 490-491, 71 S.Ct. 456, 95 L.Ed. 456 (1951). We find, however, that for several reasons such a maneuver would not be appropriate. (1) The Supreme Court “rule” has developed most strongly in NLRB cases, where the Court has been influenced by the fact that “Congress has charged the Courts of Appeals and not this Court with the normal and primary responsibility for granting or denying enforcement of Labor Board orders.” NLRB v. Pittsburgh Steamship Co., supra, 340 U.S. at 502, 71 S.Ct. at 456. No similar Congressional charge exists here. (2) The Supreme Court itself has experienced difficulty in the execution of such a “rule.” See Gastelum-Quinones v. Kennedy, 374 U.S. 469, 83 S.Ct. 1819, 10 L.Ed.2d 1013 (1963). (3) A “rule” limiting our appellate review to a determination of whether the district court utilized the proper scope of review, or was clearly erroneous (bypassing questions of the difficulty of application) will most likely in application amount either to a rubber stamp— in which instance we will merely, be shifting the needless delay from the district court to the court of appeals — or degenerate into the test we presently utilize. (4) Such review would be contrary to unwaivering precedent established in this circuit, and would treat review of Civil Service Commission action differently from that afforded other agencies. A better solution must be found.
Our displeasure with the review procedure currently utilized is not of recent vintage, nor is it original with this panel. Circuit Judge McGowan has on at least four previous occasions made footnote references to the problem. See Adams v. Laird, 136 U.S.App.D.C. 388, 420 F.2d 230, 234 n. 2 (1969), cert. denied, 397 U.S. 1039, 90 S.Ct. 1360, 25 L.Ed.2d 650 (1970); Goldwasser v. Brown, 135 U.S.App.D.C. 222, 417 F.2d 1169, 1171 n. 1 (1969), cert. denied, 397 U.S. 922, 90 S.Ct. 918, 25 L.Ed.2d 103 (1970); Scott v. Macy, 131 U.S.App.D.C. 93, 402 F.2d 644, 647 n. 6 (1968); Connelly v. Nitze, 130 U.S.App.D.C. 351, 401 F.2d 416, 417 n. 1 (1968).
There is no question that at the minimum a considered, knowledgeable study of the problem is necessary. Quite possibly reasons not now apparent will surface to demonstrate the value of the present procedure. We express no conviction to abandon the present procedure unless close study warrants such a move, and in the last analysis that move must be made by the legislative rather than judicial branch of government. Judge McGowan’s suggestion in Adams v. Laird, supra, that the topic would be most appropriate for study in the first instance by the Judicial Review Committee of the Administrative Conference of the United States is reaffirmed by this panel. We note that the Conference, acting upon a recommendation of its Committee on Agency Organization and Personnel, has recently adopted Recommendation 72-8: Adverse Actions Against Federal Employees. The Recommendation calls for expansive changes at the agency level in employee adverse action procedures, changes meant both to provide additional protections to federal employees and to accelerate and simplify the entire process. The Recommendation stops short, however, of requesting a revision of the judicial review procedures. In view of this recent concise study of procedure at agency level, further study of the problem at the judicial review level would seem warranted.
The chapeau of a legislator is not one that we, as members of the judiciary, can or should have stashed away in our wardrobe. We may, however, express concern over matters directly affecting the prompt and efficient dispensation of justice. Finding that Judge McGowan’s marginal references of the past have been less than marginally successful is generating study, we have elevated them to the text.
II.
On November 30, 1964, appellant, a Grade GS-12 Internal Revenue Agent with eighteen years experience in the federal service and a Veterans Preference Act beneficiary, received a Notice of Proposed Adverse Action from his District Director. The Notice stated, in pertinent part:
It is proposed to both suspend you for not more than thirty days and remove you from the Service in order to promote the efficiency of the Revenue Service for the following reasons:
Charge I: Acceptance of a Bribe
Specification: On or about May 19, 1961, you accepted the sum of $1,000.00 from Mr. Albert M. Gold-stein, an accountant of 4 E. 43rd Street, New York, New York, to influence your decision and action in your audit of the 1959 income tax return of his client, R. Carl and Sarah M. Chandler.
Charge II: Failure to Report the Offer of a Bribe
Specification: You failed to report the offer of the bribe set forth in the specification to Charge I above.
The Notice further advised appellant that he had until 5:00 p. m., December 2, 1964, to reply in writing to the proposed suspension, and ten days to reply personally and in writing to the proposed removal (which was to take effect in not less than thirty days). On 4 December appellant, not having replied to the proposed suspension, was notified by letter from the District Director that he was officially suspended without pay. On 8 December appellant’s counsel addressed a letter to the Regional Commissioner protesting the suspension and demanding that a hearing “be held to review the actions taken against [appellant] or those contemplated to be taken in the future.” Thereafter on 21 December at the direction of the District Director appellant appeared personally before an “oral reply officer.” The entire transcript of that proceeding appears in the margin. On 22 December the District Director reaffirmed his suspension order “[a]fter careful consideration of your [appellant’s] statements and those made by your attorney on your behalf.” An unsuccessful appeal from the suspension order was taken to the Regional Commissioner.
On 30 December the District Director officially removed appellant from the Internal Revenue Service effective January 5, 1965, and informed appellant of his appeal rights to both the Regional Commissioner and the Civil Service Commission. On January 13, 1965, the appellant by letter of counsel appealed to the Regional Commissioner, stating that “[t]he procedural steps, notices, rulings and perfunctory reviews have been taken by the Service in . violation of the rights of my client as an employee and as a citizen of the United States.” The letter further challenged the “farcial” [sic] nature of the hearings, the substantiality of proof, the “so-called specifications” in the Notice, and ended with a demand for a full and complete hearing. On January 19, 1965, appellant received acknowledgement of his appeal, but the hearing was unexpectedly delayed.
On February 5, 1965, the appellant received another letter from the Regional Commissioner. In pertinent part the letter stated:
At the request of the Director, Manhattan District, and the United States Attorney for the Southern District of New York, we are holding administrative action on Mr. Polcover’s appeal in abeyance until the completion of the court action currently pending in that Judicial District in which he will be the defendant.
The letter further informed appellant that within ten days after a verdict was reached in the court action he would have to renew his request for an administrative appeal. In April of 1966 a grand jury returned a two-count bribery indictment against the appellant, and in September of 1967, following a directed verdict of acquittal as to one count, appellant received a jury verdict of acquittal as to the other. On September 29, 1967, appellant renewed his appeal. A hearing followed some three months thereafter. The primary evidence against appellant presented at the hearing was the transcript of testimony given by Mr. Goldstein at the previous trial. On February 23, 1968, the Hearing Officer issued a “Report of Findings” which found that a preponderance of the evidence sustained the charges levied against appellant. The Regional Commissioner adopted the report, and appellant subsequently took unavailing appeals to the Civil Service Commission’s Regional Office and its Board of Appeals and Review. Such appeals constituted the final agency action in appellant’s case.
On July 18, 1969, appellant filed a civil action in the district court against the Secretary of the Treasury, the Commissioner of Internal Revenue, and the Chairman and Commissioners of the United States Civil Service Commission. He sought a declaratory judgment that his removal from the Internal Revenue Service had been illegal, a judgment for back pay, and an injunction restoring him to his position. He raised, with two notable exceptions discussed below, those issues raised here on appeal. Following cross-motions for summary judgment the district court granted appellees’ motion and dismissed the action on October 15, 1971:
III.
Appellant’s challenge is not focused solely on the substantiality of the evidence supporting the Commission’s determination of removal, but includes allegations of a multitude of procedural errors which he asserts violated his rights under either the Veterans’ Preference Act or the United States Constitution. We have considered all (although all are not specifically discussed), and reject all.
We decline to enter into a lengthy discussion of the facts and underlying evidence supportive of the Commission’s action. We recognize the limits imposed on our scope of review (see part I supra) which bind us to the agency record and preclude a de novo consideration of the evidence. The test is not how we would decide the issue based on the evidence in the record, but whether substantial evidence in the record supports the decision of the Commissioner. See, e. g., Moore v. Administrator, 155 U.S.App.D.C. 14, 475 F.2d 1283 (1973).
The evidence before the Commission’s Board of Appeals and Review consisted primarily of that presented to the hearing officer on January 9, 1968, pursuant to the appeal taken to the Regional Commissioner. Included therein is the transcript of the criminal trial testimony of Mr. Goldstein (reasserting that a bribe was given), and Mr. Chandler (disclaiming knowledge of a bribe), a sworn affidavit of Goldstein to the effect that he had given a $1,000 bribe to appellant in exchange for a favorable audit of Chandler’s 1959 income tax return, and various work papers of Gold-stein and Chandler tending to support the bribe allegation. Undoubtedly the hearing officer and the various appellate levels after him gave significant weight to the sworn affidavit and testimony of Goldstein. Appellant’s evidence consisted chiefly of a complete denial of involvement, his own work papers (which supported the taxpayer’s claimed liability, but which were not submitted to the IRS until the day of the alleged bribe), and an attack (which was of some merit) upon Goldstein’s credibility. Although we might otherwise view the evidence were we in the legal position of the hearing officer or the Commission, we have little difficulty finding that substantial evidence supports their conclusion that the preponderance of the evidence sustains the specifications and consequent removal. As such, that conclusion must not be altered.
Appellant makes much of the fact that he was acquitted of the parallel criminal charges filed against him, and that the acquittal was in the face of evidence identical to that before the Commission. The difference between proof to a “preponderance” of the evidence, the burden assumed by the agency in administrative proceedings of this nature, and proof “beyond a reasonable doubt,” the burden assumed by the government in criminal prosecutions, is critical. As the second circuit court of appeals stated in Finfer v. Caplin, 344 F.2d 38, 41 (2d Cir. 1965), cert. denied, 382 U.S. 883, 86 S.Ct. 177, 15 L.Ed.2d 124 (1965):
The law does not require that the proof which might lead to an administrative determination that removal would be for the best interests of the IRS be of the same quality as would be necessary to convince a jury beyond a reasonable doubt to convict in a criminal case. The jury to be sure, had not been convinced beyond a reasonable doubt but the Commissioner could well have concluded that the evidence was substantial enough to justify a refusal to reinstate.
See also Silver v. McCamey, 95 U.S.App.D.C. 318, 221 F.2d 873, 875 (1955).
IV.
Three procedural defects that can be dealt with in summary fashion are alleged.
1. Thirty-seven month delay
Appellant complains of the thirty-seven month delay between the February, 1965, letter of the Regional Commissioner informing him that his appeal would be held in abeyance until “the completion of the court action currently pending,” and the March, 1968, final decision of the Regional Commissioner following a full hearing. Alleging three distinct bases for his complaint appellant conceives such action to be arbitrary, unreasonable, and capricious.
(1) Appellant asserts that there was no criminal action pending against him at the time of the notification. While it is true that the indictment did not issue until some fifteen months later, we agree with the appellee that there indeed was a criminal action “pending” from November 23, 1964, when a criminal complaint against appellant was filed by an IRS agent, until the trial in September of 1967.
(2) Appellant complains of needless “stigma” that attached for an unreasonable length of time as a result of his inability to clear his name in the administrative proceedings. The stigma of bribery attached primarily because of the pendency and conduct of the criminal proceedings, not because of the removal. Once the criminal action was terminated the full hearing and decision were rendered within a reasonable time.
(3) Appellant complains that the delay violated the Veterans Preference Act and applicable regulations. Although 5 C.F.R. § 771.214 does call for “expeditious consideration” and the avoidance of “unreasonable delay” in the handling of agency appeals, the parameters of reasonable delay must be developed in a practical vein. Nowhere in the regulations is there a proscription of a delay occasioned by circumstances such as these. This court has specifically warned of the dangers of subjecting an employee to an administrative hearing while criminal action is pending. Silver v. McCamey, supra, 221 F.2d at 874-875:
We agree . . . that due process is not observed if an accused person is subjected, without his consent, to an administrative hearing on a serious criminal charge that is pending against him. His necessary defense in the administrative hearing may disclose his evidence long in advance of his criminal trial and prejudice his defense in that trial. (Footnote omitted.)
See also Finfer v. Caplin, supra, 344 F. 2d at 40, and Grossner v. Trustees of Columbia University in City of New York, 287 F.Supp. 535, 551 (S.D.N.Y. 1968). In Cohen v. United States, 369 F.2d 976, 988, 177 Ct.Cl. 599 (1966), cert. denied, 387 U.S. 917, 87 S.Ct. 2029, 18 L.Ed.2d 969 (1967), the Court of Clayns was confronted with the identical problem. The test utilized in Cohen, and the one we feel should control, was whether any “demonstrable prejudice” could be shown to have been caused by the delay. We find none here, and additionally note an interesting factor we find important, although not controlling. The record shows nothing regarding a request by appellant — following receipt of the Regional Commissioner’s “abeyance” letter —that the appeal hearing be held notwithstanding the pendency of the criminal proceedings. There simply has not been a showing that the agency was arbitrary or capricious in the imposition of the delay.
2. Right of cross-examination
Appellant complains that his fifth and sixth amendment rights, along with those preserved for him by the applicable regulations, were violated when the government failed to produce Gold-stein, appellant’s accuser, at the evidentiary hearing. The record shows that appellant’s request for live confrontation was not made until the completion of the hearing, and that although Goldstein had been used by the agency in other hearings, he was not within its employ. Neither the Internal Revenue Service nor the Commission has power to subpoena witnesses, and while 5 C.F.R. § 771.210(f) provides that “[t]he examiner shall give the parties opportunity to cross-examine witnesses who appear and testify,” and 5 C.F.R. § 771.211(b) requires an agency normally to render its employees available as witnesses when so requested, no constitutional or regulatory violation existed here. Williams v. Zuckert, 372 U.S. 765, 83 S.Ct. 1102, 10 L.Ed.2d 136 (1963), is controlling in establishing that (a) the biirden is on the petitioner desiring the presence of witnesses at his hearing to make a timely and sufficient attempt to obtain their presence, or to show that under the circumstances and without fault of his own he was justified in failing to make such an attempt; and, if so (b) to show that proper and timely demand was made upon the agency to produce such witnesses for cross-examination. Appellant’s demand, coming at the end of the hearing, was neither proper nor timely. See Garcia v. Schwartz, 283 F.Supp. 157 (D.Colo.1968), and the cases cited therein. Cf. Goldwasser v. Brown, supra, 417 F.2d at 1174. Appellant’s extensive cross-examination of Goldstein at the criminal trial solidifies our opinion that no due process violations occurred at the hearing.
S. Suspension without opportunity to personally answer
Specifically for the first time on this appeal appellant alleges that the failure to afford him an opportunity to personally reply to the proposed suspension violated his procedural rights and voided the entire removal process. Only a cursory study of the regulatory scheme adopted to implement the Veterans Preference Act is needed to prove the error of this allegation. Title 5, U. S.C. § 7512(b) (1970) provides, inter alia, that “[a] preference eligible employee against whom adverse action is proposed is entitled to . . . (2) a reasonable time for answering the notice personally and in writing . . . .” Adverse action is defined in 5 U.S.C. § 7511(2) (1970) to include “removal, suspension for more than SO days, furlough without pay, or reduction in rank or pay.” (Emphasis added.) The suspension of appellant was by its terms for “not more than thirty days,” and thus not within the “adverse action” definition. Title 5, C.F.R. § 752.202(d) and (e) discusses the duty status of employees during the notice (thirty day) period prior to removal. Section 752.-202(e) provides that when retention of an employee in an active duty status may be detrimental to the Government or the general public (circumstances we find present when the specifications involve actions of the nature involved in this case) “the agency may suspend him.” If the suspension is for thirty days or less, the procedures required in 5 C.F.R. §§ 752.301-04 are applicable. A right to a personal reply is not provided in that instance. 5 C.F.R. § 752.-302(b):
An employee is entitled to a reasonable time for filing a written answer to the notice of proposed suspension and for furnishing affidavits in support of his answer. If the employee answers, the agency shall consider the answer in reaching its decision.
V.
The final procedural error asserted by the appellant, and the one we find meriting the most discussion, relates to the effectiveness of his personal reply to the original removal notice. As mentioned earlier, 5 U.S.C. § 7512(b)(2) (1970) grants a preference eligible employee against whom adverse action is proposed “a reasonable time for answering the notice personally and in writing.” Appellant charges that this mandate was circumvented when he was not allowed to reply personally to the District Director but was relegated to an “oral reply officer.” Asserting that the right to answer personally means the right “to confer with the official who proposes to suspend or remove him,” and that under Paterson v. United States, 319 F.2d 882, 162 Ct.Cl. 675 (1963), the placing of an intermediary between the employee and that official does not meet the requirement, appellant attempts to void the removal action.
Reference is made to 5 C.F.R. § 752.-202(b) which provides in pertinent part:
The right to answer personally includes the right to answer orally in person by being given a reasonable opportunity to make any representations which the employee believes might sway the final decision on his case, but does not include the right to a trial or formal hearing with examination of witnesses. When the employee requests an opportunity to answer personally, the agency shall make a representative or representatives available to hear his answer. The representative or representatives designated to hear the answer shall be persons who have authority either to make a final decision on the proposed adverse action or to recommend what final decision should be made.
The language of the regulation is clear enough, and would indicate that the oral reply officer must at a minimum have power of recommendation. Yet the unique propensity of the legal process to render murky the clearest of thoughts has run its normal course. Within certain guidelines, namely that an oral reply is assured, see Washington v. United States, 147 F.Supp. 284, 137 Ct.Cl. 344 (1957), petition for cert. dismissed per stipulation, 355 U.S. 801, 78 S.Ct. 6, 2 L.Ed.2d 19 (1957), that an interview with any particular officer is not guaranteed, see O’Brien v. United States, 284 F.2d 692, 151 Ct.Cl. 392 (1960), and that an “investigator intermediary” is not permissible, see Paterson v. United States, supra, the requirement has been subjected to varying interpretations. This is in part due to a 1960 Court of Claims decision, O’Brien v. United States, supra.
In O’Brien a Justice Department employee received notice of proposed adverse action and was granted an oral reply to the first assistant to an Assistant Attorney General. The Assistant Attorney General possessed the power to recommend dismissal to the Deputy Attorney General who had the power of termination. The employee-petitioner raised a familiar challenge, and the court replied, 284 F.2d at 694-695:
Apparently, plaintiff believes that his bureaucratic superior denied him the opportunity to make a personal appeal when he delegated to a subordinate the task of hearing plaintiff’s oral presentation. We cannot agree. No decision of this court has suggested what form the personal interview at the agency level ought to take, except to indicate that there is no right to an adversary type hearing at this stage. Certainly, anything that the plaintiff might have presented to the Assistant Attorney General he could have presented to his assistant who prepared an extensive memorandum following the interview. It is true that this delegate did not have the power to hire and fire the plaintiff, but neither did the Assistant Attorney General. He merely made his recommendations to the Deputy Attorney General after having considered, we must presume, any material which plaintiff had presented at the personal interview. We believe that the procedure followed with respect to the agency hearing was in full compliance with the statute. We do not think that the statute guarantees a veteran an interview with any particular official as long as he is given the opportunity to present such appeals as he may wish to make to a superior who has the authority to either recommend or take final action. (Citation omitted.)
This language could be interpreted as requiring no recommendation authority in the officer charged with actually hearing the reply. This would be consonant with a normal reading of 5 C.F.R. § 752.202(b) only if “hearing” the oral answer need not be in person, but rather could be by transcript of an oral answer made to another individual. If such were the case, in view of the power of the District Director (to whom the transcript was forwarded) to make the final removal decision, appellant’s position, would be completely without merit. Naturally, such is not the case. Any interpretation of that nature was rejected by the Court of Claims in Ricucci v. United States, 425 F.2d 1252, 192 Ct.Cl. 1 (1970), motion for reconsideration denied, 432 F.2d 453, 193 Ct.Cl. 120 (1970).
Ricucci involved the proposed removal of an employee of the Internal Revenue Service. The employee elected an oral reply, which he made to an IRS Special
Agent appointed by the District Director. The reply proceeding was evidently similar to that held in our case, and at its conclusion the reply officer stated “Mr. Rieucei’s reply and all materials submitted here today will be carefully considered and a decision will be rendered by the District Director.” The court noted that there was nothing in the record to indicate that the oral reply officer ever made, or had the power to make, a recommendation.
Looking to a requirement that there be a “significant difference in use and function between an oral reply and a written reply” — else why provision for both — the Ricucci court, in reversing the Commission, held that the employee was “entitled to a general give and take discussion of the case, which the appointment of an investigator as ‘oral reply officer’ seems as if expressly designed to negate.” 425 F.2d at 1254-1255. The court noted that it must be the oral reply officer himself who has the power to recommend or finally act on the proposed disposition. That officer should additionally be a member of the class of “those who would so recommend in the regular course of their duties, whether of a line or staff nature.” 425 F.2d at 1255. The court concluded:
Taking the Regulation and Manual together, in summary, we read them as written for the protection of employees, and meaning that the accused employee may have an opportunity to discuss his ease with an official of his agency. Not only may he state anything he pleases, from the number of mouths he has to feed to the alleged bias of his immediate supervisor, but he may expect help in presenting his case in form of such comments from the other side as would be natural from a person knowledgeable about the case and expecting largely to influence its resolution. Courts could hardly measure out the exact amount of loquacity he could demand, but at least they can discourage choice of an agency representative professionally trained to disclose nothing. Further, he has a right to expect that the “oral reply officer” will be one whose recommendation would be meaningful, not an empty formality.
425 F.2d at 1255-1256.
We reserve judgment on the extensive standards established by the Court of Claims. At a minimum, however, we agree that the purpose of an oral reply as expostulated by the Ricucci court would be thwarted absent a power of meaningful recommendation of disposition vested in the individual who personally meets with the employee. Unfortunately, the record before us is barren concerning the powers of the oral reply officer. We would be dealing in conjecture and perhaps self-deception were we to attempt to glean from the record the compliance, or noncompliance, with the statutory procedural requirement of a meaningful oral reply. The ultimate question governing disposition of the entire matter thus becomes “On whose shoulders must rest the burden of our lack of information?” If the appellees’, then at a minimum remand to the district court with instructions to remand to the Commission for further hearings is required; if the appellant’s, affirmance of the district court is required.
Throughout the proceedings, from his first letter to the Regional Commissioner to his final appeal to the Commission, appellant has complained of various procedural deficiencies in his removal. Nowhere, however, not even in the district court below, did he raise a specific challenge regarding the qualifications of the oral reply officer. It is thus for the first time on this appeal that appellant circuitously draws attention to this possible procedural defect.
We could merely repeat again the oft repeated hornbook phrase that appellate courts will not sit in review to correct errors never claimed at the agency level, except where necessary to avoid unfairness or injustice, and thus mercifully bring to an end this somewhat lengthy discourse. Our perturbation and frustration at the failure to raise the issue below, which failure results in the absence of a meaningful record on which to judge the merits of an important question, forces us to indulge on the reader’s patience for a moment longer.
In Connelly v. Nitze, 130 U.S.App.D.C. 351, 401 F.2d 416 (1968), the appellant for the first time in the district court alleged a procedural error which we found to be of convincing merit. Noting the inadequacy of the “legal advice” that the appellant had received regarding his procedural rights, the “less than searching presentation on his behalf made by the union to the Commission,” and the irresponsible action on the part of the agency, we overlooked the untimeliness of the challenge and reversed the district court. Similar action is not the rule but the exception. Finding here none of the factors considered persuasive in Connelly, we decline to remand for further hearings.
In Goldwasser v. Brown, 135 U.S.App.D.C. 222, 417 F.2d 1169 (1969), cert. denied, 397 U.S. 922, 90 S.Ct. 918, 25 L.Ed.2d 103 (1970), we were faced with a similar untimely claim going to the standard utilized by the “Appeals Examiner” in reaching his decision regarding the appellant’s adverse action appeal. We declined to consider the issue, stating in language appropriate to this case:
We think that this contention comes far too late to warrant its being made the occasion for judicial invalidation of administrative proceedings. The issue is one peculiarly appropriate for bringing to the attention of the administrative tribunal in the first instance in order that it may have the opportunity to consider, and to dispel if necessary, any infirmities which cause litigants before it to doubt the essential fairness of the hearing.
417 F.2d at 1174-1175.
Ample opportunity was given to the appellant to raise the existence of procedural defects in the proper forum, at the agency and Commission levels, so that evidentiary hearings and a thorough sounding of the matter could be initiated. Appellant did raise several specific challenges, notably those relating to delay, cross-examination, and substantiality, but until now any infirmities in the powers of the oral reply hearing officer have not even been hinted. The boilerplate language of challenge to all procedures is not the minimum specification of issues we deem necessary.
The fluctuating state of the law could excuse a misdirected challenge to the authority of the oral reply officer, but not the absence of a challenge altogether. Litigation must end somewhere. In this scheme of judicial review that somewhere (as to the issues to be considered on appeal) is the Commission. “Great is the art of beginning, but greater the art is of ending.” Finding no good reason to divert from the general rule the opinion of the district court is
Affirmed.
. Pub.L. 89-380, 80 Stat. 94, March 30, 1966.
. In one special instance in the past cases have been remanded to the district court with instructions to hold evidentiary hearings. In Williams v. Zuckert, 372 U.S. 765, 83 S.Ct. 1102, 10 L.Ed.2d 130 (1963), the Supreme Court directed a remand to the district court “with instructions to hold a hearing and determine whether the petitioner, desiring the presence of witnesses at his hearing, either discharged his initial burden under the applicable regulations . or . whether proper and timely demand was made upon the Air Force so that it was required to produce such witnesses for cross-examination.” Id. at 765, 83 S.Ct. at 1102. This procedure was followed in Studemeyer v. Macy, 320 F.2d 797, 116 U.S.App.D.C. 75 (1963). The procedure in all other instances has been to remand to the Commission to conduct a new hearing as to a specific factual issue, see Goodman v. United States, 123 U.S.App.D.C. 165, 358 F.2d 532 (1966), Dabney v. Freeman, 123 U.S.App.D.C. 166, 358 F.2d 533 (1965), to conduct a hearing that was incorrectly denied, see Connelly v. Nitze, 130 U.S.App.D.C. 351, 401 F.2d 436 (1968), Holden v. Finch, 144 U.S.App.D.C. 310, 446 F.2d 1311 (1971), or upon failure of the record as it stands to remit without prejudice to the agency to institute new procedures, see Scott v. Macy, 131 U.S.App.D.C. 93, 402 F.2d 644 (1968), 121 U.S.App.D.C. 205, 349 F.2d 182 (1965). The Court of Claims likewise will not conduct evidentiary hearings when it discovers an issue of fact, but will remand to the appropriate agency level. See Camero v. United States, 345 F.2d 798, 170 Ct.Cl. 490 (1965).
. See, e. g., Moore v. Administrator, 155 U.S.App.D.C. 14, 475 F.2d 1283 (1973); Holden v. Finch, 144 U.S.App.D.C. 310, 446 F.2d 1311 (1971); Adams v. Laird, 136 U.S.App.D.C. 388, 420 F.2d 230 (1969), cert. denied, 397 U.S. 1039, 90 S.Ct. 1360, 25 L.Ed.2d 650 (1970); Goldwasser v. Brown, 135 U.S.App.D.C. 222, 417 F.2d 1169 (1969), cert. denied, 397 U.S. 922, 90 S.Ct. 918, 25 L.Ed.2d 103 (1970); Scott v. Macy, 131 U.S.App.D.C. 93, 402 F.2d 644 (1968), 121 U.S.App.D.C. 205, 349 F.2d 182 (1965); Connelly v. Nitze, 130 U.S.App.D.C. 351, 401 F.2d 416 (1968); Mendelson v. Macy, 123 U.S.App.D.C. 43, 356 F.2d 796 (1966); Sudduth v. Macy, 119 U.S.App.D.C. 280, 341 F.2d 413 (1964).
. See, e. g., Adams v. Laird, 136 U.S.App.D.C. 388, 420 F.2d 230 (1969), cert. denied, 90 S.Ct. 1360, 25 L.Ed.2d 650, 397 U.S. 1039 (1970); Connelly v. Nitze, 130 U.S.App.D.C. 351, 401 F.2d 416 (1968).
. All the court of appeals decisions manifest a fresh look at the record and an independent judgment based thereon. See, e. g., Moore v. Administrator, 155 U.S.App.D.C. 14, 475 F.2d 1283 (1973); Connelly v. Nitze, 130 U.S.App.D.C. 351, 401 F.2d 416 (1968); Pelicone v. Hodges, 116 U.S.App.D.C. 32, 320 F.2d 754 (1963); Eustace v. Day, 114 U.S.App.D.C. 242, 314 F.2d 247 (1962). Only on rare occasions is the opinion of the district court mentioned, and even rarer is there a reference to whether the scope of review it utilized was correct. Dabney v. Freeman, 123 U.S.App.D.C. 166, 358 F.2d 533 (1965), is an exception, but it involved a direct attack by the appellant asserting a right to an evidentiary hearing at the district court level.
. See, e. g., Adams v. Laird, 136 U.S.App.D.C. 388, 420 F.2d 230 (1969), cert. denied, 397 U.S. 1039, 90 S.Ct. 1360, 25 L.Ed.2d 650 (1970); Goldwasser v. Brown, 135 U.S.App.D.C. 222, 417 F.2d 1169 (1969), cert. denied, 397 U.S. 922, 90 S.Ct. 918, 25 L.Ed.2d 103 (1970); Connelly v. Nitze, 130 U.S.App.D.C. 351, 401 F.2d 416 (1968).
. See, e. g., Moore v. Administrator, 155 U.S.App.D.C. 14, 475 F.2d 1283 (1973); Dabney v. Freeman, 123 U.S.App.D.C. 166, 358 F.2d 533 (1965).
. See, e. g., Mendelson v. Macy, 123 U.S.App.D.C. 43, 356 F.2d 796 (1966); Pelicone v. Hodges, 116 U.S.App.D.C. 32, 320 F.2d 754 (1963); Eustace v. Day, 114 U.S.App.D.C. 242, 314 F.2d 247 (1962).
. See generally 4 K. Davis, Administrative Law Treatise § 29.04 (1958).
. The Recommendation is based on a report authored by Professor Richard A. Merrill, University of Virginia School of Law. It provides, inter alia, for an evidentiary hearing prior to the effective date of the adverse action, and for single appeal therefrom to a central appellate authority within the Civil Service Commission.
. But see J. Trezise, Judicial Review of Civil Service Determinations Involving Discipline or Removal of Federal Employees, October, 1971, a “tentative working paper of the Administrative Conference of the United States” which advocates statutory review in the court of appeals. The paper notes Judge McGowan’s references in the Connelly and Scott cases, but apparently has not been the subject of any formal action by the Conference. See also Johnson and Stoll, Judicial Review of Federal Employee Dismissals and Other Adverse Actions, 57 Cornell L.Rev. 178 (1972).
. The Notice of Proposed Adverse Action did not inform the appellant of the existence of any underlying statements, documents, investigative reports, etc., upon which the Notice was based and which supported the specifications contained therein. This requirement, now found in 5 C.F.R. § 752.202(a)(2), did not become a part of the regulations until November 1, 1970. See 85 Fed.Reg. 14,917 (September 24, 1970).
. The transcript of the Oral Reply Hearing is reprinted in toto:
MR. ISAACS : The purpose of this meeting today is to give Mr. Irving Pol-cover an opportunity to make an oral reply to the letter of proposed removal or other disciplinary action which was issued to him November 30, 1964.
I have been appointed by the District Director to hear his oral reply and to accept any additional information or evidence that may be submitted. Up to this point, there has been no decision made to remove Mr. Polcover.
After he has had this opportunity to submit his oral reply, the record will be very carefully studied and all the material, including his written reply, if any, will be carefully considered.
The District Director will then render a decision in this case. A verbatim transcript will be made of these proceedings and a copy will be furnished to Mr. Polcover. The proceedings will be informal and rules of evidence will not apply.
These proceedings will be conducted in an orderly fashion. We request that all persons speak clearly and slowly enough so that the tape recorder will be able to record all conversation. I would like to emphasize that this is not an appeal hearing, but an opportunity for Mr. Polcover to present oral statements and whatever other material he may desire to submit, in addition to his written reply, if any, to the letter of proposed removal.
Before we proceed, I would like each individual to identify himself, for the record.
MR. WEINSTEIN: My name is Jerome S. AVeinstein. I am the attorney for Mr. Polcover, with offices at 291 Broadway, Borough of Manhattan, City of New York, and to my right is Mr. Polcover.
MR. POLCOVER: I’m Irving Pol-cover, what you might call the appellant, or whatever you want to call me.
MR. DENU: I am William Denu, I am the Personnel Technician.
MR. ISAACS : Will you proceed, Mr. Weinstein.
MR. WEINSTEIN: I would like to protest the proposed severance of Mr. Polcover from the service, and object to it on the ground that it is illegal, contrary to the facts, contrary to the law, and that all the proceedings heretofore have been without process of law and in disregard of the rights of my client.
Mr. Polcover is entirely, completely innocent of the charges leveled against him, and I believe that the proposed action, as indicated in the letter of November 30th, should be voided.
In conclusion, I would like again to say that the proposed removal of Mr. Polcover from the service is without basis of fact or in law.
MR. ISAACS : Do you have any further statements or any additional evidence you wish to give at this time, Mr. Weinstein?
MR. WEINSTEIN: We have no evidence other than what Mr. Polcover has stated, that he is innocent, that these charges are without foundation or proof.
MK. ISAACS : If there is no further evidence, I would like to make this statement. Mr. Polcover’s reply, submitted here today, will be carefully considered and a decision will be rendered by the District Director.
MR. WEINSTEIN: Thank you.
. Although a criminal complaint was filed against appellant on November 23, 1964, and he was subsequently arrested, a criminal indictment was not returned by the grand jury until April 7, 1966. The first count of the indictment charged appellant with violation of 26 U.S.C. § 7214(a) (2) (1970) (knowingly receiving a fee not authorized by law for the performance of his duty to audit the Chandlers’ tax return) ; the second count charged violation of 18 U.S.C. § 1001 (1970) (making a false or fraudulent statement in the Internal Revenue field audit examination of the Chandlers’ tax return).
. 5 C.P.R. § 772.307(c): “The decision of the Board is final and there is no further right of appeal.” The Commissioners may, in certain enumerated situations, reopen and reconsider any previous decisions. 5 C.P.R. § 772.308. See Mass-man v. Secretary of Housing & Urban Development, 332 F.Supp. 894 (D.D.C. 1971).
. 5 U.S.C. §§ 7511, 7512, 7701 (1970).
. There have been slight changes in the wording and numbering of the Commission regulations over the past eight years. Unless the changes affect substantial rights our citation will be to the current compilation.
. 5 C.F.R. § 752.303 provides that when retention of the employee on an active duty status may be detrimental to the Government, etc., “the agency may require the employee to answer the charges and submit affidavits within such time as under the circumstances would be reasonable, but not less than 24 hours.”
. See footnote 13 supra.
. The oral reply officer in Rieueci was a member of the IRS Intelligence Division. “That Division we understand investigates taxpayer frauds and is ' organizationally separate both from plaintiff’s part of the Agency and from the Inspection Service which investigates employee misconduct.” 425 F.2d at 1253.
The Ricucci court limited Paterson v. United States, 319 F.2d 882, 162 Ct.Cl. 675 (1963), to a situation where the “investigator” had developed facts to substantiate the charges involved in the same adverse action in which he was called to hear the oral reply. We agree.
. The jrarpose of the oral reply, which Rieueci so correctly discussed, has long been misunderstood. An example of the misunderstanding can be seen in the Goverment’s oral argument in this case, a portion of which follows :
(Assistant United States Attorney) : Perhaps this oral reply officer is not even the person to recommend whether there should be a suspension or removal, that doesn’t appear in the record, but he does submit to his superior a report of that oral reply hearing and in this case on the basis of that report the District Director made a recommendation, and the Regional Commissioner, as I understand it, made a determination. So it, perhaps, and I’m not sure the record is clear on this, the oral reply officer merely transmits anything that is submitted to him, because that’s the purpose of the oral reply hearing —for the man who they are considering taking adverse action against to come in and say “Well I deny it” or “Here’s some material for you to consider” or “Here’s a statement I want to make.” So that that can be considered before the adverse action is taken, and the wheels are begun to move from which there then is given the right of a hearing, appeals, and so on.
. We reject appellant’s contention in his Reply Brief that the transcript of the oral reply hearing shows that the hearing officer had neither the authority to make nor recommend a final decision. See footnote 13 supra.
. H. Longfellow, Elegiac Verse, stanza 14 (1881).
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Mark AVRECH, Appellant, v. The SECRETARY OF the NAVY.
No. 71-1841.
United States Court of Appeals, District of Columbia Circuit.
Argued Dec. 5, 1972.
Decided March 20, 1973.
Dorian Bowman, New York City, and David Rein, Washington, D. C., for appellant.
Harold H. Titus, Jr., U. S. Atty., and John A. Terry, Michael A. Katz and James F. McMullin, Asst. U. S. Attys., for appellee.
Before Mr. Justice CLARK, and WRIGHT and WILKEY, Circuit Judges.
Mr. Justice Tom C. Clark, United States Supreme Court, Retired, sitting by designation pursuant to 28 U.S.C. § 294(a) (1970).
Mr. Justice CLARK:
Appellant, Mark Avrech, brought this suit seeking a declaration that his 1969 court-martial conviction was constitutionally invalid under the First and Fifth Amendments and an order that the conviction be expunged from his military record and that he recover all pay and benefits lost by reason of the conviction. Avrech was convicted of violating Article 134 of of the Uniform Code of Military Justice, known as the “General Article,” which imposes criminal sanctions on “all disorders and neglects to the prejudice of good order and discipline in the armed forces” and “all conduct of a nature to bring discredit upon the armed forces.” More specifically, Avrech was charged with attempting to publish and publishing a statement disloyal to the United States, with design to promote disloyalty and disaffection among the troops. After pleading not guilty, he was acquitted of publishing but found guilty of attempting to publish the statement. He complains that the language of Article 134 is unconstitutionally vague and over-broad under the Fifth Amendment in that the Article did not give him fair notice that his contemplated statement was forbidden; he also urges that his statement was protected free speech under the First Amendment. The District Court upheld his conviction. We reverse on the Fifth Amendment ground.
1. Background of the Prosecution:
Avrech enlisted in the Marines in 1967 and was sent to Vietnam in February, 1969, with the rank of private first class. While stationed at Danang and on night duty with the group supply of-, fices, Avrech typed up a stencil criticizing American involvement in Vietnam. It stated:
“I’ve been in this country now for 40 days and I still don’t know why I’m here. I’ve heard all the arguments about communist aggression and helping the poor defenseless people. I’ve also heard this three years ago. The entire Vietnamese Army will switch to a pacification role in 1967 and leave major fighting to the American troops. (Statement of South Vietnamese Foreign Minister, L. A. Times, Nov. 18, 1966.) It seems to me that the South Vietnamese people could do a little for the defense of their country. Why should we go out and fight their battles while they sit home and complain about communist aggression. What are we cannon fodder or human beings? If South Vietnam was willing to go it on their own back in 1964 what the hell is the matter with them now? The United States has no business over here. This is a conflict between two different politically minded groups. Not a direct attack on the United States. It’s not worth killing American boys to have Vietnam have free elections. (Former Vice President Richard M. Nixon, L. A. Times, December 31, 1967.) That was our present leader of this country and now he has the chance to do something about the situation and what happens. We have peace talks with North Vietnam and the V.C. That’s just fine and dandy except how many men died in Vietnam the week they argued over the shape of the table? Why does this country think that it can play games with peoples lives and use them to fight their foolish wars, I say foolish because how can you possibly win anything like a war by destroying human lives. Human lives that have no relation at all to the cause of the conflict. Do we dare express our feelings and opinions with the threat of court-martial perpetually hanging over our heads ? Are your opinions worth risking a court-martial? We must strive for peace and if not peace then a complete U.S. withdrawal. We’ve been sitting ducks for too long. ***** *SAM* ”
Sometime thereafter Avrech asked his immediate superior, Corporal William R. Jackson, who was operating the mimeograph machine in their office, to duplicate the statement or permit him to do so. When Jackson inquired as to the content of the stencil, Avrech replied: “If I tell you that you won’t let me run it off.” Jackson then refused. Later Avrech let Jackson read the stencil; the latter reproached Avrech and subsequently turned it over to a superior officer. This prosecution folllowed.
Avrech was sentenced to confinement at hard labor for one month, reduction in rank, and forfeiture of pay for three months. The Commanding Officer suspended the confinement but the remainder of the sentence was sustained by the Staff Judge Advocate and the Judge Advocate General of the Navy. On June 26, 1970, Avrech received a bad conduct discharge after a second and unrelated special court-martial conviction for having stolen a camera from the Navy Exchange. The Navy Court of Military Review, in ordering the discharge, took into account Avrech’s conviction here under attack.
The District Court granted the Government’s motion for summary judgment, holding that Avrech’s statement was not protected by the First Amendment and that Article 134 provides a sufficiently definite warning as to the proscribed conduct and a sufficiently ascertainable standard of guilt to survive the constitutional vagueness challenge.
2. History and Components of Article 134:
We need not pause to detail the history of Article 134. Its antecedents go back to British military sources prior to American Independence. In this country the Constitution entrusted to the Congress the power “to make Rules for the Government and Regulation of the land and naval Forces,” Article I, § 8, Cl. 14. In 1950, pursuant to this grant, the Congress adopted the Uniform Code of Military Justice. Article 134 of the Code includes three clauses which prohibit (1) “all disorders and neglects to the prejudice of good order and discipline in the armed forces;” (2) “all conduct of a nature to bring discredit upon the armed forces;” and, (3) crimes and offenses not capital (this last clause not being here in issue). The General Article is the American version of an older provision of military law known by the British as the “Devil’s Article.” A distinguished commentator and leading authority in the field, William Hough, made no attempt to define the “disorders” proscribed in the Article’s antecedents, only characterizing them as acts that “more usually take place under circumstances unconnected with duty and are esteemed disorderly or insubordinate conduct.” The Practice of Courts-Martial (1825) at 634. Hough’s examples of “disorders” included habitual insubordinate language and conduct at the mess, drunkenness, abusing and striking a sentry on duty, and adultery with the wife of a soldier. Id. at 642. Hough defined “neglect” to mean “neglecting to observe standing orders and regns., or, those orders which are issued and intended to be carried into immediate execution or shortly after.” Id. at 633. His examples of “neglect” included keeping the books in a negligent manner, not reporting infectious diseases to the proper authority, and allowing government goods to be stolen. Id. at 641. The second clause of Article 134, prohibiting “all conduct of a nature to bring discredit upon the armed forces,” was originally enacted for the “single purpose” of subjecting retired enlisted men to court-martial punishment for conduct similar to that proscribed under Article 133 for retired officers. Both clauses have been expanded beyond recognition and now encompass the residue of offenses that have sprung up with what were thought to be the necessities of disciplining the ever-increasing population of the armed forces. While the United States Court of Military Appeals has held that conduct condemned by the General Article must be “directly and palpably — as distinguished from indirectly and remotely —prejudicial to good order and discipline,” United States v. Holiday, 4 USCMA 454, 456 (1954), the Article now encompasses over seventy specific offenses. The listed offenses range from “abusing a public animal” to “disloyalty to the United States” with such offenses as dishonorably failing to pay a debt, straggling, pandering, and assault with intent to commit murder in between. This crazy quilt of offenses is patched together in the Manual for Court-Martial, issued as an Executive Order of the President under Article 36 of the Code, which authorizes the President to prescribe “procedure, including modes of proof, in eases before courts-martial.” The latest manual, promulgated by an Executive Order of the President, is dated June 19, 1969 and known as Manual for Courts-Martial, United States, 1969 (Revised edition). The military forces have “amplified” (to use a word employed in the Government’s brief) the General Article by including in Appendix 6 — Forms for Charges and Specifications — the seventy-odd charges described above. The Executive Order “prescribing” the Manual has saving clauses covering prior investigations, trial after arraignment or other actions begun before its effective date. A further proviso excludes “any act done or omitted prior to the effective date of this manual which was not punishable when done or omitted.”
3. The Theory of the Armed Forces:
(1) The Government argues that the Article 134 language here under scrutiny has acquired a core of settled and understandable content through long tradition and the listing of specific offenses in the Manual. United States v. Frantz, 2 USCMA 161 (1953). In the Frantz case the Court of Military Appeals assumed that civilian vagueness standards apply to the military but concluded that the Article had achieved a meaning sufficiently settled and definite to overcome the vagueness claim. The Government also points to Dynes v. Hoover, 20 How. 65, 15 L.Ed. 838, 61 U.S. 65 (1858), holding that a military law provision comparable in scope to the General Article was not subject to abuse because the nature of the proscribed conduct and its punishment were “well known by the practical men in the navy and army.” At 82. And, Winthrop, Military Law and Precedents (2d Edition 1920), in speaking of military custom, includes those service-wide practices which have prevailed for a long period of time and which are “well defined, equitable and uniform in application.” At 42-43.
We believe, however, that today Article 134 gives no fair warning of the conduct it proscribes and fails to provide any ascertainable standard of guilt to circumscribe the discretion of the enforcing authorities. Interpretation of the General Article through the Manual to proscribe some seventy explicit offenses, rather than evidencing settled and understandable meaning, indicates just the contrary. For example, not until 1951 did the disloyalty charge prosecuted here become a badge of infamy within reach of the Manual. And even Frantz, supra, did not crystallize the phantom offenses that could be included within Article 134, for we find' the 1969 edition of the Manual continues to expand their number. Indeed, the only apparent purpose of Article 134 is to act as a catch-all for varied types of unforeseen misconduct not otherwise covered by the Code. Though servicemen may be instructed on the meaning and proper applications of Article 134, the Article’s development demonstrates that its coverage has no limits. At most, instruction could only inform servicemen of the specific conduct deemed punishable under the Article in the past and of the fact that comparable misconduct may likewise be punished. And often this would not shed much light on the peculiar facts involved in the act under scrutiny since even conduct listed in the Manual must be found prejudicial to good order and discipline or service discrediting. United States v. Gittens, 8 USCMA 673 (1953). Nor can we approve the practice under Article 134 of judicially creating new offenses by analogizing them to previously recognized offenses under that Article. See Everett, Article 134, Uniform Code of Military Justice — A Study in Vagueness, 37 North Carolina L. Rev. 142, 152-153, 157-158 (1959). For example, the acceptance of money for transporting passengers in a government vehicle, conduct not mentioned in the Manual under Article 134, has been 'analogized to graft and bribery (three year offenses). United States v. Alexander, 3 USCMA 346 (1953). The Supreme Court recently condemned the “punishment by analogy” approach in Papachristou v. City of Jacksonville, 405 U.S. 156, 168-169, 92 S.Ct. 839, 846, 31 L.Ed.2d 110 (1972): “Such crimes [derived by analogy], though long common in Russia, are not compatible with our constitutional system.”
Moreover, the old authorities cited bear little weight. Not only has the General Article been expanded beyond recognition, but the greater percentage of our armed forces are today non-career personnel. They are draftees or enlisted personnel with little military experience. Even the “old soldiers” themselves say that the language in Article 134 judged by the void-for-vagueness eases is “unduly indefinite.” Wiener, Are the General Military Articles Unconstitutionally Vague? 54 ABA Journal 357, 363 (1968). Furthermore, the highest of judicial authority in the Army recommends the abolition of Article 134 because “we can't defend our use of it in this modern world. It probably could not withstand a ‘vague and indefinite’ attack in the Supreme Court.” Kenneth J. Hodson (Chief Judge, United States Army Court of Military Review), “Perspective, The Manual for Courts-Martial, 1984,” 57 Military Law Review 1, 12 (1972). These two officers, the former a distinguished constitutional authority as well as a World War II colonel in the Judge Advocate General’s Department, and the latter, himself a renowned former Judge Advocate General as well as the present Chief Judge of the Army’s highest court, speak both impressively and authoritatively. And the opinions of the Military Court of Appeals add more weight to this conclusion. It has held repeatedly that the Manual does not limit or confine Article 134. The Manual is not exhaustive of Article 134 misconduct; its crazy quilt of offenses does not cover Article 134’s bed. See, e.g., United States v. Sadinsky, 14 USCMA 563 (1964). Further, the inclusion of specific conduct in the Manual specifications does not necessarily mean the conduct is punishable under the Article. United States v. Alexander, 12 USCMA 26 (1960). The Court of Military Appeals has held that it is reversible error for the court-martial law officer not to instruct that acts charged under Article 134 must be found either to have prejudiced good order and discipline or have discredited the armed forces, even though the charges against the accused track the language of a Manual specification. United States v. Gittens, supra. In United States v. Smith, 13 USMCA 105, 119 (1962), the Court held that Congress never delegated the power to make substantive rules by way of the Manual and that the Manual was intended merely to serve as a substitute for legal research facilities insofar as it includes rules of substantive law. In the same year the court refused to permit the use of an erroneous instruction on self-defense, though prescribed by the Manual; since it was a matter of substantive law rather than procedure, the Manual did not control. United States v. Acosta-Vargas, 13 USMCA 388. These cases demonstrate it is neither necessary nor sufficient that a serviceman’s conduct fit a Manual specification in order for him to incur criminal liability under Article 134. Nothing could point more accusingly to the vagueness of Article 134 than for the Court of Military Appeals to say that in the final analysis, the Manual is but a mini-digest of the roving character of Article 134, whose vague and indefinite language is absolutely controlling. Clearly the broad net of Article 134 will catch an accused though the Manual does not.
(2) Nevertheless, the Government says the clear knowledge of Avrech that his actions might lead to a court-martial shows that he had fair warning that Article 134 prohibited his proposed action. We find the law to the contrary. The fear, if any, which Avrech had that his action might lead to his court-martial does not demonstrate that he knew his actions were covered by Article 134. Nor does it provide a substitute for the Article’s vague and indefinite language. Bouie v. City of Columbia, 378 U.S. 347, 84 S.Ct. 1697, 12 L.Ed.2d 894 (1964). There the Court found “it irrelevant that petitioners at one point testified that they had intended to be arrested,” since “the record is silent as to what petitioners intended to be arrested for •x- * Whether a statute affords “fair warning . . . must be made on the basis of the statute itself and the other pertinent law, rather than on the basis of an ad hoc appraisal of the subjective expectations of particular defendants.” At 355-356, n. 5, 84 S.Ct. at 1703-1704.
(3) The Government says further that civilian standards of specificity do not apply to the military. We have concluded that they do. Indeed, the Court of Military Appeals assumed in Frantz, supra, that civilian standards applied and found “the conceivable presence of uncertainty” in the first two clauses of Article 134. However, it found that the Article had acquired the “core of a settled and understandable content of meaning” that established standards “well enough known to enable those within . . . [its] reach to correctly apply them.” 2 USMCA at 163. As we have noted, we disagree with this conclusion. Other military courts have also recognized the applicability of civilian vagueness standards. In United States v. Howe, 17 USMCA 165, 178-179 (1967), the Court accepted the application of general Supreme Court standards in civilian cases without indicating any departure from those standards in the name of military necessity. Likewise, we follow the view of the United States Air Force Board of Review in United States v. McLeod, 18 CMR 814 (1954) and the Coast Guard Board of Review in United States v. Barker, 26 CMR 838 (1958). Both applied the requirements of the Fifth Amendment to military courts-martial.
It is true that the Supreme Court originally adopted a hands-off policy towards courts-martial. As late as 1950 the Court quoted with approval re Grimley (United States v. Grimley), 137 U.S. 147, 150, 11 S.Ct. 54, 34 L.Ed. 636 (1890), that “the civil courts exercise no supervisory or correcting power over the proceedings of a court-martial . The single inquiry, the test, is jurisdiction.” Hiatt v. Brown, 339 U.S. 103 at 111, 70 S.Ct. 495 at 498, 94 L.Ed. 691 (1950). However, in the same year, in a unanimous opinion by Mr. Justice Douglas, the Court stated that if a court-martial denies a defendant the opportunity to raise a defense then it has no jurisdiction to find guilt. Whelchel v. McDonald, 340 U.S. 122, 124, 71 S.Ct. 146, 95 L.Ed. 141 (1950). Three years later in Burns v. Wilson, 346 U.S. 137, 73 S.Ct. 1045, 97 L.Ed. 1508 (1953), Chief Justice Vinson in an opinion joined by three other members of the Court, stated that federal courts are empowered to hear a denial of due process by the military, if the latter has refused to hear such claims or has misapplied constitutional requirements. Justices Black and Douglas dissented because they thought the military had misapplied civilian due process standards. Finally, Mr. Justice Black in Reid v. Covert, 354 U.S. 1, 37, 77 S.Ct. 1222, 1 L.Ed.2d 1148 (1957), said the applicability of the Bill of Rights to the military was “as yet . not . . . clearly settled.” And in O’Callahan v. Parker, 395 U.S. 258, 265-266, 89 S.Ct. 1683, 23 L.Ed.2d 291 (1969) the Court through Mr. Justice Douglas posed the query whether Article 134 satisfies the standards of vagueness developed by civilian courts, but he did not pause to answer.
The question, however, seems settled in this Circuit by Kauffman v. Secretary of the Air Force, 135 U.S.App.D.C. 1, 415 F.2d 991, 997 (1969), where the court said:
“We hold that the test of fairness requires that military rulings on constitutional issues conform to Supreme Court standards, unless it is shown that conditions peculiar to military life require a different rule.”
It is true that this proviso excepts from Supreme Court standards those situations where conditions peculiar to military life require a different rule. However, the trial court apparently found no such conditions present in this case since it applied Supreme Court standards. None have been shown here. Moreover, as General Hodson points out, other Articles are available to cover the offenses now punished under the General Article, e.g., Articles 92 and 128, which would serve the military just as well. 57 Military Law Rev., 1, 12. The Government, however, questions the application of Supreme Court standards to military personnel stationed in a combat zone. We readily understand its apprehension, but the argument is beside the point because there are Articles other than Article 134 that fully and satisfactorily govern combat situations. Two Articles, 92 and 99, come to mind. They punish failure to obey any lawful order or regulation and misbehavior before the enemy, respectively. As General Hodson so clearly says: “We don’t really need” Article 134. It is purely and simply a housekeeping device and the specific conduct which it has been held to prohibit can be as effectively controlled through the utilization of other Articles of the Code. It therefore appears to us that there is no valid military justification for suspending the application of the constitutional right of fair warning to Article 134. It follows that the General Article must fall.
Reversed.
. The jurisdiction of the District Court is not questioned here nor is the existence of a case or controversy. We find botli jurisdiction and justiciability present.
. Article 134, General Article, 10 U.S.C. § 934:
“Though not specifically mentioned in this chapter, all disorders and neglects to the prejudice of good order and discipline in the armed forces, all conduct of a nature to bring discredit upon the armed forces, and crimes and offenses not capital, of which persons subject to this chapter may be guilty, shall be taken cognizance of by a general, special, or summary court-martial, according to the nature and degree of the offense, and shall be punished at the discretion of that court.”
The third clause, referring to crimes and offenses not capital, is not in issue in this case. References in the opinion to Article 134 or the General Article are meant to encompass only the first two clauses.
. Maximum punishments under the Uniform Code are fixed in the Manual for Courts-Martial by Executive Order of the President. Article 134 punishments run from 20 years imprisonment and dishonorable discharge for assault with intent to commit murder or rape to one month’s imprisonment and forfeiture of two-thirds of one month’s pay for, e. g., appearing in an unclean uniform. The offense charged here carries a three year maximum sentence. See Table of Maximum Punishments, Manual for Courts-Martial, 1909.
. The availability of effective, and we might add, preferable alternatives to punishing disloyal statements under Article 134 is evidenced by the companion cases of United States v. Daniels, 19 USCMA 529 (1970), and United States v. Harvey, 19 USCMA 539 (1970). Harvey indicates that disloyal statements are subject to punishment under 18 U.S.C. 2387 as well as Article 134. Daniels holds that conviction under Sec. 2387 requires “ ‘a clear and present danger that the activities in question will bring about the substantivo evils’ delineated in the statute [insubordination, mutiny, refusal of duty, etc.]” In contrast, Article 134 merely requires a finding that the statement was prejudicial to good order and discipline or service discrediting. In view of the Harvey court’s recognition of the vagueness problems involved — i. e., “Words by themselves may not always reveal their character . . . The Vietnam war has evolved a vast outpouring of written and oral comment. The language of many of the comments is poised on a thin line between rhetoric and disloyalty to the United States.” (at 544) — we doubt the military would consider itself prejudiced if forced to rely on Sec. 2387, incorporating as it does a “clear and present danger” test.
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f2d_477/html/1245-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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Calvin Morgan BISSETTE, and Frances T. Bissette, for themselves and for all others similarly situated, v. COLONIAL MORTGAGE CORPORATION OF D. C., Appellant.
No. 72-1742.
United States Court of Appeals, District of Columbia Circuit.
Argued March 1, 1973.
Decided April 12, 1973.
Joseph V. Gartlan, Jr., Washington, D. C., for appellant.
Benny L. Kass, Washington, D. C., for appellees.
Before McGOWAN and WILKEY, Circuit Judges, and ROBERT VAN PELT, Senior United States District Judge for the District of Nebraska.
Sitting by designation pursuant to 28 U.S.C. § 294(d) (1970).
WILKEY, Circuit Judge:
This case arises on appeal from the District Court’s grant of summary judgment for the Bissettes (husband and wife) on their complaint seeking damages and a declaration that Colonial Mortgage Corporation of D. C. violated the Truth in Lending Act. The trial court, 340 F.Supp. 1191, explicitly refused to make any finding as to when a contractual relationship between plaintiffs and defendants arose. Therefore, its precise and only holding was that Truth in Lending Act disclosures made at the time of “settlement” or “closing” in a home purchase and mortgage transaction come too late to satisfy the Act’s requirements, even if no contractual relationship between the borrower and lender was established prior to that time. We disagree, reverse the grant of summary judgment, and remand for a further determination on an essential factual issue.
In June of 1970 Mr. and Mrs. Calvin Bissette signed an agreement to purchase a house from the Ardon Corporation, contingent on procurement of adequate financing. On 9 September 1970 they met with an officer of Colonial Mortgage for the purpose of discussing the necessary loan. At that time they filled out an application for FHA insurance. On 23 November 1970 Colonial Mortgage notified the Bissettes that FHA had issued a firm commitment to insure suitable financing. Whether at that time Colonial Mortgage committed itself to issue the loan is hotly debated, and was not resolved by the District Court’s disposition of the case. After entering into a pre-possession agreement with Ardon, the Bissettes moved into the house on 2 December 1970. Finally, on 23 December 1970, “closing” or final settlement took place. At that time full Truth in Lending Act disclosures were made and the mortgage instruments were executed.
Assuming, as we must, that no contractual relationship arose between the Bissettes and Colonial Mortgage prior to closing, there was no violation of the Act’s requirements as to timing of disclosure. The Truth in Lending Act, at 15 U.S.C. § 1639(b), provides:
Except as otherwise provided in this part, the disclosures required by subsection (a) of this section shall be made before the credit is extended, and may be made by disclosing the information in the note or other evidence of indebtedness to be signed by the obligor. [Emphasis'added.]
Any lingering ambiguity in the statute is eliminated by the relevant regulations, promulgated by the Federal Reserve Board under its authority to interpret and implement the Act. Regulation Z clearly set forth the requirement that disclosure must be made “before the transaction is consummated.” 12 C.F.R. 226.8(a). Section 226.2(cc) further clarifies the timing requirement:
The transaction shall be considered consummated at the time a contractual relationship is created between a creditor and a customer irrespective of the time of performance of either party.
Finally, Federal Reserve Board Public Information Letters, which may not be legally binding but should be treated as persuasive, incorporated this view and stated that the time of consummation or contract should be analyzed on the basis of local law.
The District Court passed by the plain import of the statute and regulations, went instead to what it considered the overall legislative purpose, devised its own implementing rules as to how to carry out that purpose (this Congress and the Board had already done), and found a violation because the legislative purpose of allowing comparison shopping for credit would be frustrated if disclosure was not made prior to closing. The Bissettes seek to support this approach by arguing that this “remedial” Act should be liberally construed. However, “liberal construction” and interpretation based on legislative purpose can only go so far. Where the meaning of the statute and regulations is clear, a contrary reading would become destruction of the statutory scheme, as administered by the Board.
The statute and regulations provided a clear and discernible line by which lenders could measure the time of required compliance — certainly a welcome instance of clarity in the midst of otherwise complex and difficult provisions. In essence, the Bissettes urge that the borrower’s inability, as a practical matter, to shop around should trigger the lender’s disclosure obligation. If that were the case, the time for compliance would not only be uncertain but different in every case. Furthermore, a home buyer can insist on a clear prior contractual commitment from the lender. Since that would elicit disclosure in precisely those cases where the consumer desired to stop shopping and took steps to solidify the deal, the applicable regulation does not, contrary to the District Court’s assumption, inevitably lead to the frustration of the statute’s purpose.
We of course agree that it would be preferable, from the consumer’s vantage point, to require disclosure well before the final formalities. Indeed, the Federal Reserve Board now apparently shares that view. On 27 July 1972 the Board proposed an amendment to Regulation Z which would require disclosure to home buyers “not less than 10 business days before the date on which the customer executes the note or other evidence of debt.” Of course, the very necessity for a proposed “amendment” implies that the Board feels no disclosure is required prior to the date of closing (or an earlier contract) under current law. As the press release announcing the proposed amendment shows by its own description of current practice, affected creditors uniformly accepted the plain meaning of the applicable regulations. While urging earlier disclosure, the Board nowhere indicated that this industry practice constituted a violation of the provisions currently in effect.
We hasten to note that our holding in this case would not operate to invalidate the proposed amendment, should it be promulgated. The Board has broad power to implement the Act, power dele: gated to it by a Congress which was uncertain as to the refinements potentially required to implement successfully its novel statutory scheme. 15 U.S.C. § 1604 provides that
The Board shall prescribe regulations to carry out the purposes of this subchapter. These regulations may contain such . . . provisions as in the judgment of the Board are necessary or proper to effectuate the purposes of this subchapter .... [Emphasis added.]
It should be noted that the Board’s solution, unlike that of the District Court, cures the major objection to the Bissettes’ suggested reading of the statute —since the 10-day requirement would provide a clear and ascertainable measurement of the time for compliance. The fact that the Board might prospectively alleviate the chaos caused by the District Court’s decision lends little support to the court’s conclusion, for the resulting uncertainty was very real to Colonial Mortgage in the context of this transaction. In short, the Federal Reserve Board is empowered within limits to change its regulations and amplify the Act; but the District Court could not properly ignore the law applicable to these parties as it plainly stood when this case arose.
We hold that the applicable and binding regulations merely required disclosure at any time prior to the existence of a contractual relationship between borrower and lender. Since the District Court made no finding on the essential issue of when such a contract arose, we must remand for that determination and for further proceedings consistent with this opinion.
Reversed and remanded.
. 15 U.S.C. § 1601 et seq. The court also denied defendant-appellant’s motion for summary judgment. Decision on whether or not to certify the case as a class action was held in abeyance pending resolution of the summary judgment motions.
. 15 U.S.C. § 1601 of the Act states that it is the “purpose of this subchapter to assure a meaningful disclosure of credit terms so that the customer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.” (Emphasis added.) Plaintiffs argue that disclosure is not “meaningful” unless it occurs at a time when comparison shopping for credit is still possible for the consumer as a practical matter. They have chosen an interpretation of “meaningful” which connotes effectiveness of result. As a purely linguistic matter, the word “meaningful” appears, more precisely, to connote effectiveness of communication — especially since a prime statutory goal was to eliminate the confusion generated by numbers which, because based on different computations, could not be easily juxtaposed to judge their relative desirability. However, since the general section setting forth legislative goals neither constitutes an operative section of the statute nor prevails over the specific provisions, as clarified by regulations, we refrain from the pursuit of a metaphysical analysis of the “meaning” of “meaning.”
. See Gardner & North Roofing & Siding Corp. v. Board of Governors of Federal Reserve System, 150 U.S.App.D.C. 329, 464 F.2d 838 (1972).
. Colonial Mortgage protested that any disclosure requirement before closing would be impossible to meet because the actual terms of credit would not be settled until that time. Although we are not faced with that issue here,' an absence of absolute certainty on terms appears to pose no insurmountable problems because approximations are allowable where exact amounts are unavailable at the time disclosures must be made. See 12 C.F.R. § 226.6(f).
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FIDELITY VOICES, INC., et al., Appellants, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, WNJR Radio Co., a partnership, Intervenor.
No. 72-1434.
United States Court of Appeals, District of Columbia Circuit.
Argued March 12, 1973.
Decided April 13, 1973.
Benedict P. Cottone and David Meyers, Washington, D. C., for appellants.
Gregory M. Christopher, Counsel, F. C. C. with whom John W. Pettit and Joseph A. Marino, Associate Gen. Counsel, F. C. C., were on the brief for appellee.
John P. Bankson, Jr., Washington, D. C., with whom William M. Barnard, Washington, D. C., was on the brief, for intervenor, WNJR Radio Co.
Before LEVENTHAL and ROBB, Circuit Judges, and WILLIAM J. JAMESON, Senior United States District Judge for the District of Montana.
Sitting by designation pursuant to § 28 U.S.C. 294(d).
PER CURIAM:
This is an appeal from an order of the Federal Communications Commission granting Intervenor, WNJR Radio Co., interim authority to operate radio station WNJR, Newark, New Jersey. The facts are presented in detail in the Commission’s orders and may be summarized as follows. In 1968, the FCC refused to renew the license of WNJR. Thereafter, nine individual parties filed applications to take over permanent operation of the station. These applications were docketed for comparative hearings. During their pendency, the City of Newark was granted temporary authority to keep WNJR on the air on an emergency basis. Recognizing that the City was prepared to operate the station only as a stop-gap until December 31, 1971, and that further interim measures would be needed, the FCC announced that it would accept applications for interim operating permits, and sought to encourage participation from among the would-be regular licensees.
Although various individual applications for interim authority had previously been filed, it was not until December 6, 1971, that the first joint application — filed by WNJR Radio Co.— was accepted for filing. On December 13, a joint interim application was lodged with the Commission by North Jersey Radio, Inc., a group composed of two of the Appellants, one of whom had previously filed an individual application for interim authority. The next day two others among the Appellants (Fidelity Voices, Inc. and Sound Radio, Inc.) filed objections to the WNJR Radio proposed joint agreement. On December 15, the Commission adopted an order (issued December 21) granting interim operating authority to Intervenor, under the terms of the WNJR Radio agreement. No mention was made of the competing application of North Jersey Radio. This was later dismissed as moot, by a letter from the Commission dated December 28. Appellants’ petition for reconsideration was denied on April 12, 1972.
This court is concerned with various aspects of the pending case, and their possible impact in combination with each other. They may be identified as follows:
1. We are concerned over the procedural stance of a “withdrawal” by the individual station upon the filing of a later joint application. The Commission determined that the applications of the three companies combined to form WNJR Radio Co., which were filed individually, had vitality as individual applications for purposes of measuring the date on which favorable action could be taken. If their joining together in an application of WNJR Radio Co. had been taken as an abandonment of the individual applications, the Commission would obviously have been acting improperly in granting such application less than 30 days after the acceptance for filing of the joint application. Yet the FCC seems to have reflected a quite different procedural premise when it disposed of the application filed by North Jersey Radio, Inc., even though it was still pending as an individual application in December, on the ground that it had been “withdrawn” by the request to be combined with another application.
2. We are concerned whether the Commission has really focused on the point raised by petitioners in objecting to the provision of the intervenor group, WNJR Radio Co., that the employees of the previous licensee must be retained unless dismissed for cause. Several of these employees had committed themselves to and identified themselves with particular applicants for permanent operating authority who had joined in WNJR’s application for a temporary authorization. The FCC, on reconsideration, sought to soften the problem by stating that these employees would only have the same rights as other employees, and that there was a general disposition to keep on board the employees who had been operating for the previous licensee.
The FCC does not seem to have focused at all upon the substantial problem on the merits identified by petitioners before us — that this protection against dismissal except for cause must be considered in combination with provisions of the WNJR partnership agreement that no new partner adhering to the group can bring in talent. This raises a question whether the agreement was truly “open-ended” within the meaning of our prior decision on interim authority.
3. In essence petitioners were objecting that the structure of the WNJR agreement was not truly open-ended, because it invited new members into the organization only upon an assumption that the operation would be conducted by nine key employees being identified with two of the applicants. Petitioners raised the question why there was any need for those employees to be “frozen in” in this manner. Although petitioners had no present intention that any of these employees be removed, they wish to be on equal comparative status, and claim this special freezing, and security for employees having long term identification with particular applicants, is likely to raise problems. This point requires consideration.
4. We appreciate that the FCC was acting under the impetus of a need for urgent action, since the City of Newark was proposing an almost immediate withdrawal from the support of this station. However, it does not expressly appear that the FCC gave consideration to the alternative of 90-day authorizations, as an emergency matter, such as it later provided in the Green County case.
* * *
In sum, a substantial question on the merits was not considered by the FCC, which acted on the basis of a procedural ground that is flawed by other action of the FCC in the proceeding, that on its face seems to reflect a divergent approach. In the interest of justice, 28 U.S.C. § 2106, we remand for further consideration of the interim authority issue. We do not necessarily say that an evidentiary hearing is required. But certainly an appropriate procedure for presentation of the issues must be adopted. Whether that proves to involve presentation of evidence, or appropriately may be handled in some other way, is for consideration in the first instance by the Commission.
Reversed and remanded.
. 32 F.C.C.2d 758, 23 P & F Radio Reg.2d 424 (1971), reconsideration denied, 34 F.C.C.2d 923, 24 P & F Radio Reg.2d 123 (1972).
. Communications Act of 1934, § 309(b) (1), 47 U.S.C. § 309(b)(1); 47 CFR § 1.580.
. WNJR Radio Co. Partnership Agreement, ¶ 27:
[T]he following persons, each of whom is a principal in an Inactive Partner, shall be retained and employed in the respective positions they occupied as employees of the prior licensee of WNJR . . . and neither the Managing Partner nor the General Manager of the station shall discharge
any of these persons from their respective positions without cause shown. No other person who is or becomes a principal in an Inactive Partner shall be employed at the station.
. Beloit Broadcasters, Inc. v. FCC, 125 U.S.App.D.C. 29, 365 F.2d 962 (1966). See Community Broadcasting Co. v. FCC, 107 U.S.App.D.C. 95, 274 F.2d 753 (1960).
. Green County Broadcasting Co., 36 F.C.C.2d 74, 24 P & F Radio Reg.2d 966 (1972).
. Commission counsel at oral argument concluded that the case was mooted because the petitioners seeking review had agreed to merge, contingent upon FCO acceptance for filing of their merger j)etition, and that this has been agreed to by the FCC. We think this matter should also be considered in the first instance by the FCC. Offhand we see no reason why an open-ended interim authority agreement that was put in a form acceptable to, say, 9 companies, would be mooted because three of these companies had decided to merge. The invitation of WNJR for others to join its agreement would presumably extend to a merged company, as well as to thi'ee individual companies. And the merged company would have the same right to an unslanted structure as the merging companies had. These are only preliminary reflections. The matter must await focusing in the light of the FCC’s consideration.
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f2d_477/html/1251-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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Leo M. EISEL, Appellant, v. SECRETARY OF THE ARMY. Gary S. GELBER, Appellant, v. SECRETARY OF THE AIR FORCE.
Nos. 71-1943, 71-1944.
United States Court of Appeals, District of Columbia Circuit.
Argued Jan. 19, 1973.
Decided March 28, 1973.
David Rein, Washington, D. C., for appellants.
James B. McMahon, Asst. U. S. Atty., with whom Harold H. Titus, Jr., U. S. Atty., John A. Terry, James F. Flanagan, and Ruth R. Banks, Asst. U. S. Attys., were on the brief, for appellees.
Before McGOWAN, TAMM and WILKEY, Circuit Judges.
WILKEY, Circuit Judge:
Appellants in this case are two members of the “inactive reserve” of the United States Army and Air Force who voluntarily joined the Armed Forces, but who were permitted to complete their educations before beginning tours of active duty. Prior to entering active duty appellants allegedly became conscientious objectors and under the appropriate military regulations sought release from their military obligations. The Army and Air Force denied appellants’ requests for discharge, whereupon appellants petitioned the U.S. District Court for the District of Columbia for a writ of habeas corpus to obtain their releases from the military. The District Judge issued preliminary injunctions to prevent appellants from being required to report for active duty; this injunction has remained in effect pending disposition of this appeal and appellants have never reported for active duty. After hearing argument the trial court dismissed the petitions on the ground of lack of jurisdiction, since appellants’ respective “immediate custodians” were not located in the District of Columbia.
We agree that the District Court lacked jurisdiction to grant appellants’ petitions. Our conclusion is not, however, based upon a finding that appellants’ “immediate custodians” are not present in the District of Columbia. Indeed, we find that the concept of “immediate custodianship” is largely irrelevant to determining which particular federal court may entertain habeas petitions brought by inactive reservists.
I. Background
A. Appellant Eisel
Eisel was commissioned as an officer in the United States Army Reserve in June 1964. He was allowed to continue his education and was never attached to an active unit of the military. For bookkeeping purposes Eisel’s records were kept at a records center in Indiana, although he was never stationed there or physically present in Indiana. During this period of inactive status Eisel lived several places in the United States and for a time in New Zealand.
While living in Cambridge, Massachusetts, and while still on inactive status, Eisel applied for discharge from the Army as a conscientious objector. Eisel was interviewed in Massachusetts by Army representatives to determine if he should be released, and most of his negotiations with the military took place while he was residing there. At some point after these initial contacts Eisel moved to New York, where he currently resides.
While Eisel’s application was still pending he was ordered to report for active duty in Virginia. This order was enjoined by a District Court in Massachusetts and subsequently by the U.S. District Court here. (The Massachusetts action was dismissed on petitioner’s motion.) As a result Eisel has never reported to his station in Virginia, and has never physically been in that state.
B. Appellant Gelber
Appellant Gelber was commissioned in the United States Air Force Reserve in October 1966 and like Eisel has been on inactive status since then. Gelber’s records were stored in Denver, Colorado, although he has never been physically located in Denver.
Gelber lived for most of his period as an inactive reservist in Cambridge, Massachusetts, and it was there that he petitioned for release from the military as a conscientious objector. Gelber was interviewed by the Air Force in Massachusetts, although in the course of seeking his release he or his attorney corresponded with Air Force personnel in such diverse places as Colorado, Virginia, Washington, D.C., and Texas. During this entire period and up to the present Gelber has lived in Cambridge, Massachusetts.
Upon being ordered to report for active duty in Alaska (with a stop-off in Texas), Gelber sought and obtained in the District of Columbia a preliminary injunction against the order. Thus, Gelber has never physically been present in either Colorado, Texas, Alaska, or the District of Columbia.
II. Contentions of the Parties
Federal habeas corpus law provides that a habeas action “shall be directed to the person having custody of the person detained.” Appellants Eisel and Gelber allege that the person “having custody” of them and causing them to be “detained” are the respective Secretaries of the Army and Air Force. Since these “custodians” are officially located in the District of Columbia, appellants argue that Washington is the proper place to seek habeas relief.
The Government vigorously contests the theory that the civilian Secretaries of the Army and Air Force are in any relevant sense the “custodians” of appellants. It contends that only the “immediate custodian” of a petitioner is amenable to a writ of habeas corpus. The Government argues that Gelber’s “immediate custodian” is the commander of the record center in Colorado where his records were located prior to being called to active duty. Ironically, with regard to Eisel, the Government argues that the “immediate custodian” is not the commander of the record center in Indiana but rather the commander of the installation in Virginia where Eisel has been ordered to report. The Government offered no real explanation of why the commander of the record center would be the “immediate custodian” of one of the appellants but not of the other.
The District Court declined to hold that the civilian Secretaries of the Armed Services were the “custodians” of Gelber and Eisel. In so doing, the trial judge accepted the Government’s contention that only the “immediate custodian” was a proper party to a habeas action and that the action could only properly be brought in the jurisdiction where this “immediate custodian” is physically located. Sensing an inherent contradiction in the Government’s contention that the commander of the records center was the “immediate custodian” of one of the petitioners but not the other, the District Judge attempted to be consistent; he held that the “immedite custodians” of appellants Eisel and Gelber were the respective commanders of the records centers where their records were located prior to their being called to active duty.
III. The Proposed Tests
We sympathize with the trial court’s attempts to reach the truth through the morass of conceptual contradictions and non sequiturs that abound in this area of the law. We likewise believe that his determination that this action should not be maintained in the District of Columbia was correct. We would prefer not to base our decision, however, upon a determination as to whether the service Secretaries are the “immediate custodians” of the appellants. Where inactive reservists may or may not bring habeas actions is better determined by analyzing the policies for and against allowing an action in a particular jurisdiction, rather than by the blind incantation of words with implied magical properties, such as “immediate custodian.”
In determining the most feasible jurisdiction in .which to permit habeas actions by inactive reservists, there are at least six distinct interests which should be considered. First, the forum should be close to the records of the case and to the witnesses who may have to appear. Second, the choice should promote a fair distribution of habeas cases among the District Courts rather than concentrating the burden on a few. Third, the forum should be one before which it is convenient for the petitioner to appear. Fourth, it should be a forum convenient for the Government. Fifth, and perhaps most important, the forum should be one that is easily determined; the rule for determining its location should be clear and unquestionable. Sixth, to the extent possible, there should be a single, exclusive forum in order to prevent forum shopping among alternatives. It is easy to see that these interests may at times be conflicting and that a rule fulfilling all of them perfectly would be difficult if not impossible to formulate. We believe, however, that the best solution will result from a careful evaluation and weighing of these competing considerations.
Our method of analysis is reinforced by the very recent decision of the Supreme Court in Braden v. 30th Judicial Circuit Court of Kentucky (1973). There the Court held that the petitioner, imprisoned in Alabama but subject to a detainer issued by a Kentucky court for an offense charged there, was “in custody” within the meaning of 28 U.S.C. § 2241(c)(3) for purposes of habeas corpus to require a speedy trial in Kentucky. While emphasizing the importance of the location of the custodian in this criminal case, the Court employed practical considerations in determining where an action would lie:
In terms of traditional venue considerations, the District Court in the Western District of Kentucky is almost surely the most desirable forum for the adjudication of the claim. (Footnote omitted.) It is in Kentucky, where all of the material events took place, that the records and witnesses pertinent to petitioner’s claim are likely to be found. And that forum is presumably no less convenient for the respondent, the Commonwealth of Kentucky, than for the petitioner. The expense and risk of transporting the petitioner to the Western District of Kentucky, should his presence at a hearing prove necessary, would in all likelihood be outweighed by the difficulties of transporting records and witnesses from Kentucky to the district where petitioner is confined. (Footnote omitted.) Indeed, respondent makes clear that “on balance, it would appear simpler and less expensive for the State of Kentucky to litigate such questions [as those involved in this case] in one of its own Federal judicial districts.”
A. Washington, D.C.
Adopting this functional approach to the problem compels the conclusion that appellants should not be permitted to seek habeas relief in the District of Columbia. Eisel and Gelber are not and never have been residents of the District of Columbia. Their only significant contacts with the military have occurred elsewhere. While there are numerous representatives of the military in the District of Columbia, there is no reason to believe that the military operations in Washington are of any more relevance to appellants than to any other inactive reservist or for that matter to any member of the military, active or inactive.
In short, appellants’ relationship to the military located in the District of Columbia, including the various civilian Secretaries, is no different from that of any other member of the military. Thus, if we were to permit Gelber and Eisel to proceed in the District, we would be compelled to permit any inactive reservist, and perhaps any member of the military, the same privilege. It is unclear how many reservists are in situations similar to that of appellants or how many of them might be expected to seek release from service by petition of habeas corpus. Undoubtedly, the number of both groups could be expected to fluctuate, with relatively large numbers seeking release during the time bullets are flying and few seeking release when playing soldier looks more fun.
Whatever may be the actual number, it is probable that under some conditions the number could be quite large. Such an influx could seriously overburden an already busy court system. This problem would be compounded by the substantial fluctuations that could be expected between times of peace and war, since it would be difficult for the Congress to ameliorate the burden by creating more judgeships for an influx that could well be short-lived.
An even more compelling reason not to permit this suit is that it may often be inconvenient for habeas petitioners to retain counsel and come to Washington in order to seek release from the military. While it may be most expedient for Eisel and Gelber to bring their action in the District of Columbia, this, of course, would not be universally true. The burden of seeking relief in Washington, D.C., could, for example, be overwhelming for an inactive reservist located in Montana or Alaska.
Appellants have suggested that this problem could be avoided by making the District of Columbia an alternative location for habeas petitions by inactive reservists. Although it was not clear where else appellants felt that an action might be brought, the implication was that in actions such as this a petitioner would have a choice of seeking a writ in either Washington or some other presumably more convenient location. Indeed, under a recent Supreme Court decision it seems clear that a certain class of inactive reservists — a class which appears to include appellant Gelber — has already been granted the right to bring an action elsewhere than in the District of Columbia. Necessarily then, in at least some situations, Washington would be merely an alternative to bringing an action in another jurisdiction. While this proposal may solve the problem of inconvenience, it creates another which is at least as troublesome, since alternative jurisdictions would almost certainly lead to forum shopping by reservists.
It is also unlikely that Washington would necessarily be close to the records and witnesses in a typical inactive reservist situation. Reservists seeking discharge as conscientious objectors are always interviewed by, the military personnel in the petitioner’s area of residence; the testimony of these interviewers could be critical in some cases. Likewise, the testimony of ministers, employers, teachers, and other acquaintances could play an important role in a proceeding. Locating jurisdiction for all reservists in any one place, including Washington, would necessarily inconvenience witnesses located elsewhere.
For these reasons we find that Eisel and Gelber should not be permitted to maintain these actions in the District of Columbia.
B. The Record Centers
While locating the forum in Washington has distinct disadvantages, establishing jurisdiction at the various centers that store the records of inactive reservists fails on almost every count. Apparently, it is the practice of the various branches of the military to store the records of inactive reservists in a single location. Thus if jursdiction were located in the record center forum, all reservists’ cases would be concentrated in a few locations to almost as great an extent as would be the case if Washington were found to be the proper forum. The problem of concentration would be compounded since there are substantially fewer federal District Judges in Indiana and Colorado than there are in the District of Columbia; thus, the burden would be even greater on the judicial system in those places. These isolated record centers will often be remote and inconvenient for both the petitioner and witnesses. Although the Government has at times advocated the record centers as the proper location, it is difficult to imagine that locating all reservists’ actions in such places as Denver, Colorado, and Fort Benjamin Harrison, Indiana, would be significantly more convenient for the Government than permitting the action elsewhere. Conceivably, it could lead to even greater inconvenience, since the Government undoubtedly has limited resources in these areas which could be overburdened by the influx of habeas cases.
If it were determined that the record centers were a proper location, it would necessarily be merely an alternative forum. The Supreme Court decision mentioned in discussing the Washington alternative did not, whatever else it might have done, establish that cases such as this must be brought in the location of the record centers. Thus, permitting the record center alternative would inevitably lead in some circumstances to the possibility of forum shopping.
Of all the interests that should be considered in determining the proper jurisdiction, the only one that the record center alternative even arguably satisfies is that it is relatively simple to determine. This is, however, a poor dividend indeed for the cost of forfeiting every other interest which a rule should seek to satisfy.
C. First Duty Station
The third possible alternative suggested by the parties, permitting an action in the district to which the reservist has been ordered to report for active duty, is equally unacceptable. As with the other alternatives, the place of reporting would in many cases be inconvenient for witnesses and might be far from the records. It is also clear that such a rule would establish multiple jurisdictions in which actions might be maintained since, as has been noted, the Supreme Court has established at least a limited right to maintain actions in a petitioner’s place of domicile. Forum shopping is thus a problem with this alternative.
By far the greatest reason not to require actions in the jurisdiction where a reservist is ordered to report is the potential inconvenience that such a rule would impose on the reservist. With this rule the military could determine the forum virtually at will by simply ordering the reservist to a particular location. The services could, for example, select the jurisdiction for cases by issuing active duty orders to a reservist for a designated post, which might be a remote outpost far from the petitioner’s home. Such a rule would also permit the military to select a jurisdiction thought to be favorable to the Government by designating it as the place to report. This rule would be both inconvenient and unfair.
For these reasons we cannot accept the place of duty alternative.
IV. The Proper Rule
This court is satisfied that it would be improper to permit appellants to seek habeas relief in the District of Columbia. We are aware, however, that our comments are of little solace to Gelber and Eisel who must now set off in search of the proper forum. This unfortunate consequence may be compounded by the possibility that upon instituting an action in another jurisdiction the Government may deny that the new location is the proper forum. It has been suggested that in future proceedings, by taking contradictory positions on which jurisdiction is proper, the Government might engage in a form of inverse forum shopping, i.- e., whatever court is hearing the case will always be argued to be the wrong jurisdiction. Such tactics, if successful, could prevent the case from ever being heard. While we certainly do not ascribe such unworthy motives to the Government, we are concerned by the apparent contradictions in the Government’s position in this case and the unwillingness of counsel on appeal to articulate a clear-cut rule for determining just where inactive reservists might bring habeas actions. To help prevent the Kafkaesque specter of supplicants wandering endlessly from one jurisdiction to another in search of a proper forum, only to find that it lies elsewhere, we think it proper to carry our reasoning to its ultimate conclusion and determine where we believe the proper forum to be.
As seen above, under a functional analysis approach none of the alternatives advanced by the parties in this case is acceptable. The true answer lies in an entirely different direction. There are, however, numerous guideposts in existing law that are of help in determining the answer.
A. Existing Law
Appellants’ action here is based upon a remedy granted by a federal statute. Although the statutory scheme designates particular forums as proper in some situations, it is silent regarding the appropriate jurisdiction for this type of action. Further, while the statute does provide that the action shall be against the “person having custody of the person detained,” it does not define “custody” or specify who the person having “custody” will be. Nowhere does the statutes speak of an “immediate custodian” or intimate that an action must necessarily be instituted in the location of such an “immediate custodian,” even if it were possible to grant substance to the vague concept of “immediate custodianship.” Confronted with this vacuum the courts have attempted to formulate rules governing where habeas actions might be maintained.
Until relatively recently, only persons who were actually physically restrained could seek habeas relief. The concept of “custody” was narrowly limited and only those who were literally in someone’s physical custody couíd obtain a writ. Since habeas petitioners were actually imprisoned or otherwise prevented from moving about, if one had territorial jurisdiction over the petitioner one necessarily had territorial jurisdiction over the person who was actually holding him captive — his “immediate custodian,” if you will. This was true because if the petitioner was physically restrained, there must' be someone in the same location who was doing the actual restraining. In such situations the issue of whether a court had jurisdiction over a custodian was relatively unimportant; if one had proper jurisdiction over the petitioner, one necessarily had jurisdiction over the custodian.
In the leading Supreme Court decision of Ahrens v. Clark, petitioners confined in New York brought suit in the District of Columbia against the Attorney General of the United States to obtain their release. The Court decided that Washington was not the proper forum because it did not have territorial jurisdiction over the petitioners, although the Court has recently explained that the lack of territorial jurisdiction in Ahrens was important because of the risk and expense attendant upon the production of 120 prisoners from New York. There was nothing in the opinion that would intimate that the Court felt that the action would fail because the Attorney General was not the “immediate custodian” of those being held “in custody.” Indeed,' there is language that intimates that the Court felt that the issue of who had “immediate custody” was largely irrelevant to where the action should be maintained.
Thus according to the Supreme Court, it was the location of the petitioner, not the location of the “immediate custodian,” that was determinative of the outcome. In cases of physical custody, however, the locations of petitioner and “immediate custodian” are necessarily the same. Thus it is possible that one could sufficiently blur the distinction and argue that the location of the “immediate custodian” rather than the petitioner was outcome determinative. This misinterpretation is aided by the existence of a number of cases decided prior to Ahrens that held, in effect, that habeas actions would only lie in the jurisdiction of the “immediate custodian.”
Within the last decade habeas jurisdiction has expanded greatly and the remedy has been applied to situations in which the petitioner has not been physically restrained in the traditional sense. In the landmark case of Jones v. Cunningham, the Supreme Court retreated from its prior requirement of strict custody and recognized that legal as well as physical restraints could be properly regarded as a “custody.” In holding that a prisoner released on parole was sufficiently in “custody” to seek habeas relief, the Jones Court listed a number of factors which it felt entitled the parolee to maintain the action. Jones was subject to four types of restraints: (1) he was restricted in his physical movement, unable to leave his community or change his residence without special permission; (2) he was subject to other regulations which did not specifically restrict his movement but had that practical effect, including the requirements that he obtain special permission before operating an automobile and that he report regularly to his parole officer; (3) he was threatened with reincarceration for violations of his parole; and (4) he could be ordered back to prison without a court hearing.
It is unclear from the Court’s opinion which of these factors it felt were determinative. The Court appeared to rely heavily, however, on the limitations placed upon the petitioner’s physical freedom:
History, usage, and precedent can leave no doubt that, besides physical imprisonment, there are other restraints on a man’s liberty, restraints not shared by the public generally, which have been thought sufficient in the English-speaking world to support the issuance of habeas corpus. . . . Such restraints are enough to invoke the help of the Great Writ. Of course, that writ always could and still can reach behind prison walls and iron bars. But it can do more. It is not now and never has been a static, narrow formalistic remedy; its scope has grown to achieve its grand purpose— the protection of individuals against erosion of their right to be free from wrongful restraints upon their liberty.
Since physical restraint was a part of the test, the nature of the “custody” concept was not altered. Physical restraints similar to those in Jones have generally existed in the areas to which Jones has been extended: probation ; escape from detention; conditional suspension of a sentence; and, in some cases, bail.
By like token, the expansion of the habeas remedy under Jones and its progeny did not alter the location where such actions would lie. These cases all involved criminal detentions in which the proper forum is designated by statute. Since the nature of the evil (£. e., the “custody”) that was sought to be remedied had not been altered, there was no basis for the courts to depart from the established statutory and common law.
The inactive reservist presents a situation in which the concept of “custody” has been stretched to the extreme. The petitioner is as mobile as any other member of our society and conceivably can be in “custody” anyplace he happens to be at the time. Indeed, it was not until the Supreme Court’s decision in Strait v. Laird, handed down May 1972, that it was established conclusively that an inactive reservist was actually in “custody” and therefore able to seek habeas relief.
Holding that inactive reservists are “in custody” creates several conceptual and practical problems. The conceptual problems are discussed completely in Justice Rehnquist’s dissent in Strait. Since Strait is now clearly the law, these conceptual problems are not of primary concern for this court. The fundamental practical problem of where an inactive reservist may bring suit, however, is.
In this area of administrative as opposed to criminal custody there are no statutory guidelines. As we noted above, the place where the petitioner was in “custody” has been the touchstone for this determination. Since the inactive reservist is not “in custody” in any páricular place this test is no longer particularly helpful.
In casting about for another test, it is not surprising that one might fix upon the other factor that has occasionally been mentioned in previous actions — the location of the “custodian.” While it may be true that the petitioner is not “in custody” in any particular place, it is superficially reasonable to conclude that if the inactive reservist is in “custody” at all, as the Supreme Court has said that he is, then he must have a “custodian.” The reasoning continues that if one could but find this “custodian” all questions would be solved. We have seen the problems that this sort of reasoning produces. It is not surprising that one who is “in custody” only in the most metaphorical sense would also have a “custodian” that partakes of the chimerical.
This search for the proper “custodian” is not merely unproductive, it is not required by law. There has never existed in this Circuit an absolute requirement that a habeas action be brought in the location of the “immediate custodian.” For example, servicemen stationed abroad have been freely granted the right to bring habeas actions in the District of Columbia even though their “immediate custodians” were not in any sense located here. In such situations the “immediate custodian” — presumably the petitioner’s commanding officer— was not within the territorial jurisdiction of any federal District Court. Thus, to the extent that the concept of “immediate custodian” has ever had any viability, it has readily given way to the practical impossibility of obtaining such jurisdiction.
B. The Nature of Custody for the Inactive Reservist
The answer to the issue of the proper forum must begin with an understanding of the significance of the altered nature of “custody” in the context of the inactive reservist. Unlike an incarcerated prisoner, an inactive reservist is in “custody” only in a highly metaphysical sense. The chains imposed by the Government bind only his sense of well-being and if he is a prisoner at all his confinement emanates from his own mind.
The altered nature of “custody” necessitates a reconsideration of the nature of “custodianship.” In situations of physical custody it is both natural and helpful to think of an actual person charged with the physical restraint of the prisoner. Where the petitioner is at large but the restraints deny him freedom of movement it will still be proper to think of his “custodian” as being the person who is causing the restraint.
In the case of the inactive reservist, however, this type of thinking is entirely inappropriate. The instant ease illustrates the point. Here there is no showing that any of the suggested “immediate custodians” have exercised any real control over the petitioners. The commanders of the record centers and the bases to which petitioners have been ordered to report have never had anything to do with the denial of the requests for release. The record centers’ commanders have been mere shadows through which others worked and the relationship of the base commanders is at best potential. By like token, the civilian service Secretaries’ relationship to the petitioners is extremely remote.
The fact is that petitioners have been denied release from the service by none of these people. Their true “jailer” is that faceless amalgam of decision-making process known as the “bureaucracy.” Perhaps it would be possible to trace through the baroque interior of the petitioners’ cases and discover the precise point that it was decided that they would not be released from the service, and designate that moment, the point at which they were placed “in custody” and the particular decision-maker as their “custodian.” Yet such a process would often be impossible and would not be particularly helpful. It is far more helpful simply to accept reality and think of the “custodians” of inactive reservists as being, in a general sense, the Armed Services of which they are a part.
In the extreme example of non-physical “custody” presented by the inactive reservist, the petitioner’s “custodian” accompanies him everywhere he goes. If the restraints in this case are largely psychological, they will exist in the petitioner’s mind regardless of his location.
C. The Location of the Proper Forum.
Accepting our analysis of the nature of the inactive reservists’ “custody” and his “custodian” does not mean however, that he may choose his forum by simply appearing personally in a jurisdiction, thereby bringing his mental “jailer” along with him. To think in such terms is to make the same error that the parties here make in keying jurisdiction to the location of the “custodian.” This whole issue simply cannot be allowed to turn on the location of an entity whose existence is such a source of controversy.
Indeed, the Supi’eme Coui’t has specifically held that the mere presence of a petitioner in a forum, standing alone, is not sufficent to support a court’s jurisdiction. In Schlanger v. Seamans the Court was asked to consider a denial of habeas relief to a serviceman who had obtained a temporary leave of absence from the service to attend college in Arizona. The Court held that the mere presenee of the petitioner in Arizona to attend school was not enough to permit him to bring the action there.
While the situation of a serviceman on leave to attend school is not entirely analogous to that of an inactive reservist, we think that the principle established in that case is applicable here; mere presence in a jurisdiction is not enough to support a habeas action. The Schlanger result is, of course, consistent with the functional method of determining the proper forum for habeas actions. If one were permitted to establish jurisdiction by merely being before the court, a petitioner could select any forum he wished; this would be forum shopping in its most extreme form.
There is much language in the Schlanger opinion that indicates the Court felt jurisdiction would not lie in Arizona because the petitioner’s “custodian” or commanding officer was elsewhere. We do not feel that this language, even assuming that it was determinative in that case, is of relevance here. The petitioner in Schlanger was not an inactive reservist, but rather was on leave of absence. His commander was not the keeper of some records in an obscure place where the petitioner had never been. His commander was the commanding officer of petitioner’s last duty station. Schlanger's commanding officer had been in charge of his conduct in a very physical and immediate way and the petitioner had remained subject to the commanding officer’s control while on his leave of absence. All of Sehlanger’s contacts with the Army had been through his chain of command, and there is no suggestion that confusion existed regarding to whom the petitioner was responsible.
On these facts we see that Schlanger’s condition was more analogous to that of a parolee who, although free, has retained continuing contacts with a particular, easily identifiable entity. In such a situation the concept of “custodianship” may retain viability since the “custodian” is not an object of speculation as with the inactive reservist. In short, the nature of the “custodian” in Schlanger was similar to the traditional definition of that term. As we have shown, the “custodian” in the inactive reserve context bears little resemblance to its traditional counterpart. We therefore do not feel that the Supreme Court’s discussion of “custodianship” in Schlanger is relevant to this case. And, as the Court plainly stated in Strait, “[t]he jurisdictional defect in Schlanger, however, was not merely the physical absence of the Commander of Moody AFB from the District of Arizona, but the total lack of formal contacts between Schlanger and the military in that distl’ict.”
The ultímate answer to where jurisdiction does lie for • the inactive reservist may be found in a careful consideration of the Supreme Court’s opinion in Strait v. Laird. That case involved an inactive reservist who, unlike the petitioner in Schlanger, had never been on active duty and who sought release from the military as a conscientious objector. The petitioner in Strait had been a longtime resident of California and it was in that state that he sought release from the militax-y, first by application to the military and failing that by petitioning for a writ of habeas corpus in the federal court. The Government argued that the California courts had no jurisdiction because Strait’s “custodian,” supposedly the same commander of the record center in Indiana involved in this ease, was not within the court’s jurisdiction. The Government’s argument was based on an interpretation of Schlanger that would require actions always to be brought in the jurisdiction of the “immediate custodian.” The Strait Court wisely rejected this mechanistic method of solving the problem and inquired into the factors that were relevant to a functional determination of the proper forum.
The Court in Strait felt there were essentially four factors relevant to its determination that California was the proper forum for the petitioner’s action: (1) California was Strait’s “home”; (2) he had never been on active duty; (3) California was where he had received his commission; and (4) California was where petitioner had made his application for release from the militai'y and where the application had been processed. The Court concluded with the observation that “[i]t was in California where . . . [petitioner] had his only meaningful contact with the Army . . . ."
Under these criteria it is quite clear that appellant Gelber may bring his action in Massachusetts. Massachusetts is Gelber’s domicile and it is where he has applied for release and engaged in negotiations with the military to obtain release. As in the Strait case, Massachusetts is where the petitioner has “had his only meaningful contact with the Army . . . . ”
The meaning of the Strait opinion for appellant Eisel is, however, less clear. Eisel moved from Massachusetts to New York after his initial application for release and interviews with service personnel. Thus, while Eisel had his “most meaningful contact” with the service in Massachusetts, his “home” is in New York. The Court in Strait did not tell us which of the several factors it considered were determinative there. Undoubtedly, it considered all of them relevant and did not wish unnecessarily to decide which should prevail when they might be in conflict. Here two of the factors are in conflict and we must determine which should be allowed to control.
It would be possible to establish a rule that held the forum to be where the serviceman had his most significant contacts with the military. Such a choice has the rather obvious disadvantage, however, of being vague and easily subject to misinterpretation. It may well be that an inactive reservist may have contacts with the military in a number of different places. Deciding where the, place of the “most significant contacts” is might be as difficult as finding the mythical “immediate custodian.”
Employing the petitioner’s home or domicile as the determining factor does not have this disadvantage. If we apply the six criteria used to analyze the suggested “custodian” tests in Part II above, we see that a standard based on one’s domicile is virtually free of objections. First, witnesses such as ministers, employers, and friends who would testify regarding the petitioner’s status as a conscientious objector are more likely to be located in the jurisdiction of the petitioner’s domicile. Second, such a rule will promote an even distribution of this type of habeas cases throughout the country; the number of such actions in any given jurisdiction should be roughly proportionate to the size of the population. Thirdly, it is clearly a convenient forum for the petitioner. Fourthly, there does not appear to be any reason to think that a domiciliary test would work an inconvenience on the Government. Fifthly, the forum under a domiciliary test would be relatively easy to determine. There are of course situations in which the exact location of a person’s domicile is unclear. Such situations are relatively uncommon; they are certainly not as difficult of resolution as the alternatives that have been suggested to us. In addition, our judicial system is familiar with the concept of domicile — the problem has arisen in the context of decedents’ estates, divorce, and taxation — and there will be a body of law that courts can draw upon to resolve controversies. Finally, such a rule would establish a single exclusive forum, thereby preventing forum shopping. Traditionally a person has been able to have only one domicile. It is also not possible to change one’s domicile by simply moving from place to place.
We believe that our proposed rule of domicile is both correct under existing law and consistent with the policy considerations relevant to determining the proper forum in habeas cases. Admittedly, there is language in the Strait opinion which might be read as an indication that the Court there considered the concept of “custodianship” in concluding that the action was properly maintainable in California. This language is more properly read, however, as a statement that the “custodian” was in California because that is where appellant had his “home” and his most significant contacts with the military. There is no suggestion in the opinion that California is the proper forum because petitioner’s immediate custodian is located there. The Court did conclude that the custodian was present in California; that presence, however, was of a highly metaphysical nature. The discussion was no doubt included in order to eliminate the possibility that the Court’s opinion might be misinterpreted as doing away with the need for a “custody” and a “custodianship.” Likewise, in this case we are not saying that appellants are not in “custody” or that their “custodians” are not located within the jurisdiction of the forum. We are simply saying that the location of the “custodian” in this situation assumes such an uncertain character that its location should not be made the test for determining the proper forum.
Based on the above, we conclude that appellant Eisel may bring his action in the jurisdiction of his domicile, New York.
The injunction of the District Court has remained in effect pending the disposition of this appeal. Since we have denied appellants permission to bring their action in the District of Columbia and have suggested the jurisdictions that we believe are proper, the issuance of the mandate in this case is stayed for a period of thirty days to permit appellants to take whatever action they deem appropriate in light-of our decision.
The action of the District Court in dismissing petitioners’ suits for lack of jurisdiction, for the reasons stated in our opinion herein, is
Affirmed.
. 28 U.S.C. § 2243 (1970).
. See generally, Developments in the Law —Federal Habeas Corpus, 83 Harv.L.Rev. 1038, 1160-65 (1970). For examples of a functional approach to determining the proper forum in other areas of the law see R. Weintraub, Commentary On The Conflicts Of Laws (1971).
. 410 U.S. 484, 93 S.Ct. 1123, 35 L.Ed. 2d 443.
. Id. at 1129.
. If the civilian Secretaries are the “custodians” of inactive reservists it seems only reasonable to assume that they are the “custodians” of all military personnel. There has been no suggestion that the Secretaries assume a position in relation to inactive reservists that they do not have with all other members of the military. If inactive reservists may proceed against the Secretaries because the latter are their custodians, we cannot see why any other member of fhe military should not be permitted so to proceed.
Furthermore, consider what appellants’ theory of jurisdiction based on location of the “ultimate custodian” would do if applied in criminal cases. In almost every federal case in which imprisonment or probation is decreed, at time of sentence the District Judge habitually remands the convicted defendant “to the custody of the Attorney General.” Thereafter, the place of confinement and the treatment the prisoner receives is the responsibility of the Attorney General. He is the “ultimate custodian,” just as the armed service Secretaries arp in regard to all in the military under their orders. It would be disruptive of the'entire criminal habeas corpus process to create in the District of Columbia an alternative jurisdiction for habeas purposes for every federal prisoner. The argument for so doing in administrative habeas cases involving the military rests on little more logic.
. Strait v. Laird, 406 Ü.S. 341, 92 S.Ct. 1693, 32 L.Ed.2d 141 (1972). The import of this opinion is discussed in Part IV-C of this opinion.
. Ibid.
. Ibid.
. See Kafka, The Trial 268-278 (Knopf 1937).
. 28 U.S.C. § 2241(c)(3) (1970).
. The statute provides, for example, that a prisoner convicted by a state court may seek relief in either the jurisdiction where he is being held or in the jurisdiction where he was convicted and sentenced. 28 U.S.C. § 2241(d) (1970).
. 28 U.S.C. § 2243 (1970). Another provision in the statutory scheme provides that the application for a writ shall “allege the facts concerning the applicant’s commitment or detention, the name of the person who has custody over him and by virtue of what claim or authority, if known.” 28 U.S.C. § 2242 (1970).
. Wales v. Whitney, 114 U.S. 564, 571-572, 5 S.Ct. 1050, 29 L.Ed. 277 (1885); See Developments in the Law — Federal Habeas Corpus, 83 Harv.L.Rev. 1038, 1073-74 (1970).
. Some early cases held that an action would not lie in a particular jurisdiction because the proper — i. e., “immediate”— custodian was not present. E. g., McGowan v. Moody, 22 App.D.C. 148, 158-164 (1903). In these cases, however, the petitioner was in actual physical custody in another jurisdiction. The court could have, therefore, reached the same result by saying that the court did not have territorial jurisdiction over the petitioner.
. 335 U.S. 188, 68 S.Ct. 1443, 92 L.Ed. 1898 (1948).
. Id. at 190-191, 68 S.Ct. 1443; Braden v. 30th Judicial Court of Kentucky, 410 U.S. 484, 93 S.Ct. 1123, 35 L.Ed.2d 443 (1973).
. The Court’s reasons for its holding are all based upon the location of the petitioner :
Although the writ is directed to the person in whose custody the party is detained, 28 U.S.C. § 455, the statutory scheme contemplates a procedure which may bring the prisoner before the court. . . . For § 458 provides that “The person making the return shall at the same time bring the body of the party before the judge who granted the writ.” See Walker v. Johnston, 312 U.S. 275, 61 S.Ct. 574, 85 L.Ed. 830. It would take compelling reasons to conclude that Congress contemplated the production of prisoners from remote sections, perhaps thousands of miles from the District Court that issued the writ. The opportunities for escape afforded by travel, the cost of transportation, the administrative burden of such an undertaking negate such a purpose. These are matters of policy which counsel us to construe the jurisdictional provision of the statute in the conventional sense, even though in some situations return of the prisoner to the court where he was tried and convicted might seem to offer some advantages.
335 U.S. at 190-191, 68 S.Ct. at 1444.
. The Court begins its discussion of why the lower court did not have jurisdiction with the observation that “It is not sufficient in our view that the jailer or custodian alone be found in the jurisdiction.” Id. at 190, 68 S.Ct. at 1444. The possibility that the Court in Ahrens did not consider the location of the “immediate custodian” of great importance is supported by the fact that some of the lower court cases which the Court cited in support of its outcome had used the “immediate custodian” rationale to determine jurisdiction. E. g., McGowan v. Moody, 22 App.D.C. 148, 158-164 (1903). Thus, the Supreme Court had available to it authority that would have supported a disposition on the basis of the absence of the “immediate custodian” of the petitioner, but it specifically stated, “. . . we do not reach the question whether the Attorney General is the proper respondent. ...” Id., 335 U.S. at 193, 68 S.Ct. at 1446. The Supreme Court’s decision not to use the “immediate custodian” rationale even though it was available is of some significance.
Our interpretation is also supported by the fact that the dissenters in Ahrens criticized the place of petitioner rule established by the majority. 335 U.S. at 193, 68 S.Ct. 1443. Justice Rutledge argued vigorously that the proper forum should be determined by the location of the jailer or “custodian.” The dissenters felt that the majority’s rule might mean that an action would not be permitted in certain situations where the court had jurisdiction over the petitioner but for some reason did not have territorial jurisdiction over the “custodian.” Id. at 195-197, 68 S.Ct. 1443. The majority did not speak to this argument in their opinion. It seems unlikely, however, that the Court would have wanted their opinion to produce such an obviously unjust result. It, therefore, seems likely that the Ahrens Court did not feel that the location of the “immediate custodian” should be a decisive factor in determining the proper forum or that failure to have jurisdiction over the “immediate custodian” would necessarily bar an action.
. See, e. g., Sanders v. Bennett, 80 U.S.App.D.C. 32, 148 F.2d 19 (1945); Jones v. Biddle, 131 F.2d 853 (8th Cir. 1942); McGowan v. Moody, 22 App.D.C. 148 (1903).
. 371 U.S. 236, 83 S.Ct. 373, 9 L.Ed.2d 285 (1963).
. Id. at 240 and 243, 83 S.Ct. at 376, 377.
. See, e. g., Benson v. California, 328 F.2d 159 (9th Cir. 1964), cert. denied, 380 U.S. 951, 85 S.Ct. 1086, 13 L.Ed.2d 970 (1965).
. New York ex rel. Williams v. New York State Addiction Control Comm’n, 288 F.Supp. 171 (S.D.N.Y.1968) (escape from civil commitment).
. Walker v. North Carolina, 262 F.Supp. 102 (W.D.N.C.1966), aff’d per curiam, 372 F.2d 129 (4th Cir.), cert. denied, 388 U.S. 917, 87 S.Ct. 2134, 18 L.Ed.2d 1360 (1967).
. See, e. g., Duncombe v. New York, 267 F.Supp. 103, 109, 109 n. 9 (S.D.N.Y.1967) (dictum). Many cases, however, have held that one on bail is not in custody.
E. g., Allen v. United States, 349 F.2d 362 (1st Cir. 1965).
. 28 U.S.C. § 2241 (1970); 28 U.S.C. § 2255 (1970).
. 406 U.S. 341, 92 S.Ct. 1693, 32 L.Ed. 2d 141 (1972).
. “The most realistic approach is to recognize that custody as a prerequisite for habeas corpus simply does not exist for an unattached reservist who is under virtually no restraints upon where he may live, work, or study, and whose only connection with the Army is a future obligation to enter active duty.” Id. at 350, 92 S.Ct. at 1698.
. See text accompanying footnotes 15-19, supra. When Ahrens, supra, was originally decided, its rationale of jurisdiction in the location of the petitioner’s confinement was applicable to all types of habeas actions. This rule, however, was overruled in part by acts of Congress. 28 U.S.C. § 2241(d) (1970). In the area of “administrative custody,” the Ahrens opinion is still the law.
. See cases cited in footnote 19, supra.
. See discussion in Part III of this opinion.
. See, e. g., Bortree v. Resor, 144 U.S. U.S.App.D.C. 292, 443 F.2d 707 (1971); United States ex rel. Barr v. Resor, 143 U.S.App.D.C. 292, 443 F.2d 707 (1971); Day v. Wilson, 101 U.S.App.D.C. 69, 247 F.2d 60 (1957). See also, Burns v. Wilson, 346 U.S. 137, 73 S.Ct. 1045, 97 L.Ed. 1508, and opinion of Mr. Justice Frankfurter at the denial of a rehearing, 346 U.S. 844, 851-852, 74 S.Ct. 3, 98 L.Ed. 363 (1953).
. Our reasoning here raises the interesting but not highly relevant issue of precisely when the 'petitioners became “in custody.” A criminal petitioner is apparently “in custody” merely by virtue of being a prisoner. 28 U.S.C. § 2241 (c)(1) (1970). We do not believe, however, that an inactive reservist is “in custody” merely because he is a part of the military. We conclude this because of the wording of the statute that permits such persons held in administrative custody to seek relief. It requires that the petitioner be “in custody in violation of the Constitution or laws or treaties of the United States . . . . ” 28 U.S.C. § 2241(c)(3) (1970). Thus there must be a violation of the law in order for one to be “in custody” under this provision. We would, therefore, conclude that the petitioners hero came into “custody” at the point that their applications for release were denied.
. 401 U.S. 487, 91 S.Ct. 995, 28 L.Ed.2d 251 (1971).
. Id. at 389-392, 91 S.Ct. 995.
. 406 U.S. 341, 344, 92 S.Ct. 1693, 1695, 32 L.Ed.2d 141 (1972).
. Id.
. Id. at 343, 92 S.Ct. at 1694.
. In Strait the Supreme Court used the word “home” to describe the factor that it felt was important in determining whether California was the proper forum. It is clear, however, that the Court did not simply mean that it was significant that Strait was living in California at the time. The relationship described by the Court was of a more lasting nature and was more analogous to the legal concept of “domicile” than to mere residence. We, therefore, employ the concept of domicile as that term is used in a technical sense as the test to be applied to inactive reservists. We note also that the headnote writer for Strait used the word “domicile,” not “home.”
. 406 U.S. at 344-345, 92 S.Ct. 1693.
. Our reasoning in this case raises the issue of who should be named in the petition as the “person” having custody over the petitioner. Two provisions of the statutory scheme require that the application for a writ “name the person who has custody over” the petitioner and that “[t]he writ, or order to show cause shall be directed to the person having custody of the person detained.” 28 U.S.C. § 2242 (1970); 28 U.S.C. § 2243 (1970). This problem is relatively minor and has not caused courts a great deal of trouble in situations in which the “immediate custodian” has clearly not been before the forum court. See cases cited in footnote 32, supra; cf. Ex parte Endo, 323 U.S. 283, 305, 65 S.Ct. 208, 89 L.Ed. 243 (1944). In this situation it might be proper for the petition to “name” the officer who signed the order denying the petitioner release from the military. Another possible alternative would be to “name” the highest ranking military offieer of that branch of the Armed Services of which petitioner is a part who can be found in the forum court’s jurisdiction.
. Our decision is that the U.S. District Courts in New York and Massachusetts would have jurisdiction over these actions, if brought by Eisel and Gelber in those respective forums. We couch this part of our decision as a holding, because it is essential to our rationale here; we would not hold that the U.S. District Court for the District of Columbia does not have jurisdiction if we could not point to a forum which did have.
In so doing, we recognize that this holding does not bind the U.S. District Courts in New York and Massachusetts. Each , may independently determine its jurisdiction differently from our reasoning here; if such disparate decisions result, there may be produced a conflict between Circuits which only the Supreme Court can resolve.
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f2d_477/html/1267-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "JAMES M. CARTER, Circuit Judge:",
"license": "Public Domain",
"url": "https://static.case.law/"
} |
Petition of NORTHERN FISHING & TRADING COMPANY, INC., a corporation, owners of the FISHING VESSEL NORTH SEA, and Aleutian King Crab, Inc., a corporation, charterer of the fishing vessel North Sea, for Exoneration from or Limitation of Liability, Petitioners-Appellees, v. Sophie M. GRABOWSKI, Individually, as personal representative of the Deceased, Edwin T. Grabowski, and as guardian of the Estate of the minor children of Edwin T. Grabowski, Claimant-Appellant.
No. 71-2475.
United States Court of Appeals, Ninth Circuit.
April 23, 1973.
Rehearing Denied June 21, 1973.
Gale P. Hilyer, Jr. (argued), Hilyer & Levinski, Seattle, Wash., for claimant-appellant.
Donald P. Marinkovich (argued), Detels, Draper, & Marinkovich, Robert V. Holland (argued), Bogle, Gates, Dobrin, Wakefield & Long, Seattle, Wash., for petitioners-appellees.
OPINION
Before CARTER, CHOY and GOODWIN, Circuit Judges.
JAMES M. CARTER, Circuit Judge:
This case arises from the loss of the wooden fishing vessel NORTH SEA off the southwest coast of Unimak Island, Alaska, on December 12, 1968. Captain Grabowski, the skipper, and two other crew members were drowned. The deck hand, Golodoff, survived.
Appellant Sophie M. Grabowski, the widow of the Captain, was the claimant, individually, and as the personal representative of Captain Grabowski, and as the guardian of their minor children.
The appellees, petitioners for exoneration from or limitation of liability, are Northern Fishing & Trading Company, Inc., the owners of the NORTH SEA, and Aleutian King Crab, Inc., the charterer of the NORTH SEA.
The Issues
Although appellant raises other contentions to some of which we shall later advert, we view the important issues to be these:
1. Does the evidence support Finding No. 20 that the loss of the vessel resulted from the factors set forth in Findings Nos. 16 thi'ough 19?
2. Does the evidence support Finding No. 20 that the claimant failed to establish by a preponderance of the evidence a breach of the warranty of seaworthiness implied in the charter to Captain Grabowski of July 1, 1968, or that unseaworthiness of said vessel was a proximate cause of his death ?
3. Did the trial court properly place the burden of proof on the claimant, appellee? We affirm.
In 1967, Northern Fishing bareboat chartered the vessel to Captain Grabowski for a term from July 20, 1967, to April 30, 1968. On January 1, 1968, Northern Fishing again bareboat chartered the vessel to Aleutian for a term from January 1, 1968, to December 31, 1968.
On July 1, 1968, Aleutian sub-bare-boat chartered the vessel to Captain Grabowski for the period of July 1, 1968, to April 30, 1969. Thus, at the time of the loss of the vessel, Aleutian had a bareboat charter from Northern Fishing, and Captain Grabowski had a sub-bareboat charter from Aleutian.
The only direct evidence as to the storm and the loss of the vessel were two depositions of the surviving crew member, Golodoff.
We summarize briefly the events leading to the loss of the vessel. It had been fishing for crab in Unimak Pass, off the southwestern coast of Unimak Island. The vessel had been returning for anchorage at night in either Akun or Trident Bay on the southwest side of Unimak Pass.
On December 11, 1968, the vessel moved its fishing gear to the slime banks about ten miles from Cape Sari-chef, off the southwest coast of Unimak Island. After a day of fishing, adverse weather was encountered in the area of Cape Sarichef. The Captain elected to proceed for anchorage at Urilla Bay on the north central coast of Unimak Island. During the night and early morning the wind increased and swung around more out of the northwest, so that Urilla Bay no longer provided effective protection from the storm. The vessel left the Bay on December 12, proceeded northwesterly to deep water about seven or eight miles northwest of Cape Sarichef, then turned southwesterly “on a ‘jogging’ zigzag course.” The storm had increased in volume, with winds from the west-northwest.
The trial court found that the storm was unusually severe, with turbulence not experienced during that particular season or for several years prior thereto. There was a full gale, with mountainous seas and winds of hurricane force.
The following five events preceded the loss of the vessel:
(1) Before the vessel left Urilla Bay, a water pipe broke in the engine room, partially flooding the bilge. The crew made emergency repairs.
(2) While proceeding southwesterly, the vessel took a sea which knocked off the forward starboard bulwark. In order to allow the crew to remove the debris, the Captain put his stern to the storm and proceeded toward Unimak Island. After the debris was removed, the Captain completed a 360° turn and again proceeded southwesterly.
(3) About an hour later another sea knocked off the false bridge in front of the pilot house. Again the vessel’s stern was put to the storm and the debris removed.
(4) As the vessel started again to resume a southwesterly course, a monstrous sea entirely wiped out the pilot house. The steering controls were gone; an electrical short charged the hand rails to the engine room with electricity; and a break in the ammonia pipe system flooded the engine room with ammonia. The propelling engine quit and the vessel was a powerless hulk.
(5) An hour or so later, as the vessel took more water and sank lower in the sea, the crew attempted to launch the life raft and were swept away by the waves. Golodoff, who survived, and the body of Captain Grabowski, were found on the southwest coast of Unimak Island at Sennet Point.
We note that the loss of the vessel did not result from destruction or disintegration of the hull, but from the events above and the seas taken upon and into the vessel.
The Findings
The pertinent findings of the trial court were as follows:
“11. That in accordance with paragraph 15 of the admitted facts of the Pretrial Order, the only relationship between Northern Fishing & Trading Company, Inc. and Aleutian King Crab, Inc. on one hand and Captain Grabowski on the other was that created in the demise charters of the vessel NORTH SEA, and there was no employer-employee relationship between the aforesaid parties at any time.
12. That on December 12, 1968, the fishing vessel NORTH SEA was lost at sea off the coast of Unimak Island, Alaska in the vicinity of Cape Sarichef during a storm that was unusually severe, the turbulence of which had not been experienced during that particular season and for several years prior thereto. The said storm, which could reasonably have been anticipated at that time of year, was a full gale with mountainous seas and winds gusting to hurricane force.
* * * * * *
15. That Edwin T. Grabowski had greater knowledge of the condition, strengths and weaknesses of the NORTH SEA than any other person and did not at any time rely on any warranty implied in the charter. That with such knowledge of the vessel he had undertaken repeated charters of the same.
16. That Captain Grabowski was an ambitious, courageous crab fisherman who had no fear of the sea. That during the period of charter he subjected the vessel to unreasonable use under extreme conditions of weather and sea and without proper regard for his own safety or that of the vessel.
17. That Captain Grabowski could have fully bunkered his vessel by taking on additional fuel to the full capacity of her tanks at Dutch Harbor on December 9, 1968, but he did not do so.
18. That while in the vicinity of Urilia [sic] Bay on December 12, 1968, Captain Grabowski was of the opinion that the vessel did not have sufficient fuel to permit his taking protective action by ‘jogging’ or otherwise proceeding seaward into deep water in a direction where the actions of wind and sea would have presented less of a threat to the safety of the NORTH SEA.
19. That instead of navigating his vessel as set forth in the last preceding paragraph he proceeded into the area of Unimak Pass and through an area where the combined conditions of wind, sea and tide exposed the NORTH SEA to extra hazardous and more violent conditions, and subjected the vessel to the utmost peril.
20. That the loss of the NORTH SEA proximately resulted from the factors set forth in paragraphs 16 to 19, inclusive, and claimant has failed to establish by a preponderance of the evidence that breach of a warranty of seaworthiness implied in the charter of July 1, 1968, the charter in effect at the time of the loss of the NORTH SEA, or that unseaworthiness of said vessel was a proximate cause of the death of Captain Grabowski.”
Discussion
A holder of a bareboat charter, who is the operator of the vessel so chartered, has a non-delegable duty to his employees to furnish a seaworthy vessel. Reed v. Yaka, 373 U.S. 410, 415, 83 S.Ct. 1349, 10 L.Ed.2d 448 (1963). Such a person was Captain Grabowski, but this leads us nowhere, since his widow and personal representative is the claimant and no claims are before us against Grabowski’s estate in behalf of the two crewmen who died.
“Whether a bareboat charter absolves the owner from liability on its warranty of seaworthiness is a question we also reserved in Guzman v. Pichirilo, 369 U. S. 698, 700 [82 S.Ct. 1095, 8 L.Ed.2d 205] (1962). We do not reach the question here.” Reed v. Yaka, supra, p. 411, n. 1, 83 S.Ct. p. 1351.
Nor do we need to reach it here, since Finding No. 20, expressly assumes such an implied warranty existed in the charter of July 1, 1968, from Aleutian to Captain Grabowski.
In this case we have the customary standard for review. Findings of fact as to the cause of the accident, here the loss of the vessel, will not be set aside unless clearly erroneous. The evidence must be reviewed in the light most favorable to the prevailing party and that party must be given the benefit of all inferences that may reasonably be drawn from the evidence. Sutherland v. Hudson Waterway Corp. (9 Cir. 1972) 468 F.2d 628.
The Findings of Fact Were Not Clearly Erroneous
As to Findings Nos. 16 through 19, without detailing the evidence, we conclude that the findings were not clearly erroneous.
As to the matter of unseaworthiness, considered in Finding No. 20, we have heretofore detailed the events leading to the loss of the vessel.
The testimony of the sole surviving crew member, Golodoff, described these events. There is no indication in the record that the vessel was taking water by reason of rotting planks or teredo holes. After the wheel house and false bridge had been wiped out by a series of mountainous waves, the vessel continued to take seas which eventually resulted in an extreme list during the last two-hour period.
Appellant relies almost solely on the testimony of Captain A. F. Raynaud, who inspected the vessel some three years and ten months before the loss. Appellant cites only a portion of his testimony in her Appendix “B”. That portion shows that Captain Raynaud examined only three or four planks. He noted some infestation in the horn timber and the lowest strake. But various parts of Raynaud’s testimony were ignored by appellant, including his comment that the rot in the keel did not appear to be too extensive; that he did not make any inspection above the main deck; that the keel was essentially sound; that he examined only two or three planks on the starboard side out of the eighteen or twenty-four; that his notes indicated only “scattered bug holes”; that the stem was in good, sound condition and that he had no way of knowing about the major structural members under the deck.
There was other evidence in the record. Some crew members observed defects and others observed none. The same is true as to the witnesses who were not members of the crew. Suffice it to say that although the evidence of the vessel’s condition was in conflict, it was sufficient to justify our conclusion that the trial court’s findings were not clearly erroneous.
II.
The Trial Court Applied the Proper Burden of Proof to the Claimant
By necessary implication, Finding No. 20 placed the burden of proof on the claimant to prove breach of the warranty of seaworthiness, and that unseaworthiness was the proximate cause of the loss of the vessel. The fact that this conclusion of law appears in a finding of fact does not change the situation.
Appellant cites only In re American Dredging Company (3 Cir. 1956) 235 F.2d 618, rev’d on other grounds sub nom. Kernan v. American Dredging Co., 355 U.S. 426, 78 S.Ct. 394, 2 L.Ed.2d 382 (1958). There, in a proceeding for exoneration, the Circuit stated that the district court “made findings of fact and concluded the petitioner [for exoneration] had sustained its burden of establishing that both it [the owner] and the master and crew of the tug were free from negligence and that the tug and tow were not unseaworthy.” 235 F.2d at p. 619. The Circuit cited the district court’s decision, In re American Dredging Co. (E.D.Pa.1956) 141 F.Supp. 582, and held that the findings of fact and legal conclusions were correct. No cases were cited, nor were any cases cited by the district court on the question of burden of proof.
Walston v. Lambertsen (9 Cir. 1965) 349 F.2d 660, 663, cert. denied, 382 U.S. 980, 86 S.Ct. 553, 15 L.Ed.2d 470 (1966), states: “In the admiralty proceeding in which a shipowner seeks to exonerate himself from liability or to limit his liability, the burden of proving negligence or unseaworthiness rests upon the claimant.” We could well stop at this point and rest upon the above holding except for the fact that the two cases cited in support of the statement are not exoneration or limitation of liability cases.
Appellees quoted the following from Gilmore & Black, The Law of Admiralty, 705, n. 106 (1957):
“While the shipowner must prove his freedom from privity or knowledge, the burden of proof as to negligence or other ground on which liability is based is of course on the libellants. See 3 Benedict, Admiralty § 489 (6th ed. 1940); Robinson, Admiralty 942 (1939).
* * * * * *
There is indeed language in the opinions to justify the commentator’s statement. It is believed that the rule should be as in the limitation cases: burden on the libellant to show negligence or fault; burden on the owner to show his (personal) freedom from ‘design or neglect.’ ”
Benedict states that the burden is on the libellant [claimant] to prove negligence or other ground on which liability is based. 3 Benedict, The Law of American Admiralty, § 524, pp. 557-58, and § 526, p. 560.
1 Edelman, Maritime Injury and Death 619 (1960) flatly states: “(1) the claimant has the burden of proving negligence or unseaworthiness; (2) then the shipowner must prove the absence of privity or knowledge.” (Footnotes omitted.)
One of the cases Edelman cites for the statement is The 84-H (2 Cir. 1923) 296 F. 427, 431, cert. den. sub nom. Randolph v. Bouker Contr. Co., 264 U.S. 596, 44 S.Ct. 454, 68 L.Ed. 867 (1924), which states:
“The whole doctrine of limitations of liability presupposes that a liability exists which is to be limited. If no liability exists there is nothing to limit. And in a proceeding to limit liability two duties are imposed upon the court. The first is to ascertain whether any liability exists. If it is found to exist the second duty arises, which is to ascertain whether the loss or damage was occasioned or incurred without the ‘privity or knowledge’ of the owner of the ship. If no liability is found to exist, the absence of all liability is to be decreed, and there the matter ends. If, on the other hand, liability is found and loss or damage is shown, and was not occasioned or incurred with ‘privity or knowledge’ of the shipowner, the limitation of liability should be decreed. See the decision of this court in The Rambler, 2 Cir., 290 F. 791, 1923 A.M. C. 618. Upon the issue of negligence, the claimant has the affirmative (The Titanic, 2 Cir., 225 F. 747, 748, 141 C.C.A. 19), and if negligence is found the petitioner has the burden of proof upon the further issue of the petitioner’s privity and knowledge as was held by this court in Re Reichert, 2 Cir., 251 F. 214, 217, 163 C.C.A. 370.”
The 84-H, supra, is a leading case for the proposition that in an exoneration or limitation case the burden is on the claimant to prove negligence or unseaworthiness. It has been followed in numerous cases: Binstock v. Friedman (2 Cir. 1964) 330 F.2d 267, 268; Southern Pacific Co. v. United States (2 Cir. 1934) 72 F.2d 212, 215; In re Pennsylvania R. Co. (2 Cir. 1931) 48 F.2d 559, 563, cert. den. sub nom. Long-Beach-on-the-Ocean v. Pennsylvania R. Co., 284 U. S. 640, 52 S.Ct. 21, 76 L.Ed. 544 (1931); In re Trawler Snoopy, Inc. (S.D.Me. 1967) 268 F.Supp. 951, 953; In re Marina Mercante Nicaraguense S.A. (S.D.N.Y.1965) 248 F.Supp. 15, 19, modif., 364 F.2d 118 (2 Cir. 1966), cert. den., 385 U.S. 1005, 87 S.Ct. 710, 17 L.Ed.2d 544 (1967); The Suduffco (S.D.N.Y.1929) 33 F.2d 775, 776. See Commercial Molasses Corp. v. New York Tank Barge Corp., 314 U.S. 104, 108, 110, 62 S.Ct. 156, 86 L.Ed. 89 (1941).
There is presented here no issue as to the proper order of proof. The appellant, as claimant, had the benefit of the implied warranty of seaworthiness. But she still had the ultimate burden of proof, after the conclusion of the testimony, to show a breach of that warranty or that unseaworthiness of the vessel was the proximate cause of the loss of the vessel. This she failed to do.
We conclude that the trial court applied the proper burden of proof.
III.
Other Contentions
We have held not to be clearly erroneous Finding No. 20, to the effect that the claimant had not sustained her burden of proof (1) that there was a breach of the implied warranty of unseaworthiness, and (2) that unseaworthiness of the vessel was a proximate cause of the death of Captain Grabowski. We have held that the court properly placed the burden of proof on the claimant.
Accordingly, appellant’s other contentions below, though interesting, have no merit:
(1) The statement in Finding No. 9, that the charter to Captain Grabowski included an agreement to hold the petitioner harmless against any claim arising out of his operation of the vessel.
(2) Finding No. 15, that Captain Grabowski did not at any time rely on any warranty implied in the charter. See Clarke S.S. Co. v. Munson S.S. Line (E.D.N.Y.1932) 59 F.2d 423, 427, aff’d, 64 F.2d 1011 (2 Cir. 1933) (per curiam), holding the charterer may waive the terms of a charter or a breach thereof.
(3) The contention that the trial court erroneously relied on the doctrine of assumption of risk.
(4) The reference in the trial court’s oral decision (but not in his formal findings and conclusions) “. . . that the doctrine of caveat emptor applies with respect to all patent defects but not to latent defects.” [This apparently in connection with the bareboat charter to Captain Grabowski.] See Sanford & Brooks Co. v. Columbia Dredging Co. (4 Cir. 1910) 177 F. 878, 882.
(5) The reliance on Walker v. Harris, (5 Cir. 1964) 335 F.2d 185, cert. den., 379 U.S. 930, 85 S.Ct. 326, 13 L.Ed.2d 342, which we do not find apposite.
The judgment is affirmed.
. The first case cited, Lieberman v. Matson Navigation Co. (9 Cir. 1962) 300 F.2d 661, was an action under the Jones Act and for unseaworthiness, where the burden of proving negligence or unseaworthiness was properly placed on the seaman. The second case cited, Ramos v. Matson Navigation Co. (9 Cir. 1963) 316 F.2d 128, was an action for damages, based on unseaworthiness, and negligence under the Jones Act, and for maintenance and care, where again the burden of proof was properly placed upon the seaman. Accordingly, we must look elsewhere for authority for the proposition stated in Walston, supra.
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f2d_477/html/1273-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "KENT, Circuit Judge.",
"license": "Public Domain",
"url": "https://static.case.law/"
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UNITED STATES of America, Plaintiff-Appellant, v. Anthony GIACALONE, Defendant-Appellee.
No. 72-1765.
United States Court of Appeals, Sixth Circuit.
Argued Feb. 9, 1973.
Decided May 2, 1973.
John T. Spotila, Crim. Div., U. S. Dept. of Justice, Washington, D. C., for plaintiff-appellant; Ralph B. Guy, Jr., U. S. Atty., Laurence Leff, Sp. Atty., Dept. of Justice, Detroit, Mich., Jerome M. Feit, Eugene M. Propper, Dept. of Justice, Washington, D. C., on brief.
Neil H. Fink, Detroit, Mich., on brief, for defendant-appellee; Joseph Louisell, Detroit, Mich., of counsel.
Before PECK and KENT, Circuit Judges, and YOUNG, District Judge.
Honorable Don J. Young, United States District Judge, for the Northern District of Ohio, sitting by designation.
KENT, Circuit Judge.
This is an appeal by the United States from the District Court’s order dismissing an indictment. The appeal is taken under the provisions of Title 18 U.S.C. § 3731.
The facts are relatively simple. On November 14, 1968, appellee and his brother, Vito Giacalone, were indicted by a Grand Jury sitting in the United States District Court for the Eastern District of Michigan. In that indictment appellee and his brother were charged with extortion in violation of Title 18 U.S.C. § 1951. In addition to the extortion charges appellee’s brother was charged with violation of the Income Tax laws. Appellee was not charged with any income tax law violation in the 1968 Indictment. On motion of the appellee’s brother the income tax charges were severed and there has been no trial on those charges. After a jury trial, and on June 4, 1971, all defendants charged with extortion, including appellee and his brother, were acquitted.
On January 6, 1972, a Grand Jury sitting in the same District returned an Indictment in which appellee and his brother were charged with violation of the Income Tax laws, 26 U.S.C. § 7201; 26 U.S.C. § 7206(1), and conspiracy to defraud the United States by violating the income tax laws in violation of 18 U.S.C. § 371. The charges in the January, 1972 Indictment were alleged to relate to and involve funds received by the appellee and his brother from one of the alleged extortion transactions upon which the 1968 Indictment was based. On appellee’s motion the 1972 Indictment was dismissed by the District Court after the Court concluded that the Government’s delay in presenting the income tax case against the appellee to the Grand Jury was unreasonable and unnecessary under Rule 48(b), Federal Rules of Criminal Procedure, and further on the ground that the delay in presentation of the income tax case had denied appellee due process of law under the Fifth Amendment. The District Court rejected appellee’s claim that he was denied a speedy trial in violation of the Sixth Amendment to the Constitution of the United States, relying upon United States v. Marion, 404 U.S. 307, 92 S.Ct. 455, 30 L.Ed.2d 468 (1971). The District Court, however, found that Rule 48(b) is broader than the Sixth Amendment when applied to the pre-indictment period and concluded that the Government had offered inadequate explanation for what the Court found to have been dilatory tactics.
We are of the opinion that the District Judge misapplied Rule 48(b). Clearly, the application of Rule 48(b) was not an issue in Marion. However, in the Marion decision, 404 U.S. at 312, 92 S.Ct. at 459, Footnote 4, the Court said:
“In any event, it is doubtful that Rule 48(b) applies in the circumstances of this case, where the indictment was the first formal act in the criminal prosecution of these appellees.”
and further at page 319, 92 S.Ct. at 463, the Supreme Court had the following to say in regard to Rule 48(b):
“No federal statute of general applicability has been enacted by Congress to enforce the speedy trial provision of the Sixth Amendment, but Rule 48(b) of the Federal Rules of Criminal Procedure, which has the force of law, authorizes dismissal of an indictment, information or complaint ‘[i]f there is unnecessary delay in presenting the charge to a grand jury or in filing an information against a defendant who has been held to answer to the district court, or if there is unnecessary delay in bringing a defendant to trial. . . . ’ The rule clearly is limited to post-arrest situations.” (Emphasis added.) Footnote omitted.
We point out that in this case appellee was not arrested for any violation of the income tax laws or conspiracy to violate such laws until after the Grand Jury had returned an Indictment for those offenses in January, 1972. Thus the appellee had not prior to the Indictment “been held to answer to the District Court.”
This Court has previously held that Rule 48(b) is not applicable until after defendant has been held to answer to the District Court. Hoopengarner v. United States, 270 F.2d 465, 469 (6th Cir. 1959):
“As to Rule 48(b) of the Federal Rules of Criminal Procedure, the District Court is authorized to dismiss the indictment, information, or complaint, providing there has been an unnecessary delay in presenting a charge to a grand jury or in filing an information against a defendant who has been held to answer to the District Court, or if there is unnecessary delay in bringing a defendant to trial. There was no unnecessary delay in the prosecution of defendant after he had been held to answer. As to delay from the time of the commission of the offense to the commencement of the criminal proceedings, that is controlled by the Statute of Limitations, which is not here in question.”
The other Circuits which have considered the issue have reached the same conclusion. United States v. Daley, 454 F.2d 505 (1st Cir. 1972); United States v. Iannelli, 461 F.2d 483 (2nd Cir. 1972), cert. denied, 409 U.S. 980, 93 S.Ct. 310, 34 L.Ed.2d 243 (1972); United States v. Grayson, 416 F.2d 1073 (5th Cir. 1969), cert. denied, 396 U.S. 1059, 90 S.Ct. 754, 24 L.Ed.2d 753 (1970); United States v. DeTienne, 468 F.2d 151 (7th Cir. 1972); Nickens v. United States, 116 U.S.App.D.C. 338, 323 F.2d 808 (1963), cert. denied, 379 U.S. 905, 85 S.Ct. 198, 13 L.Ed.2d 178 (1964); United States v. Dukow, 453 F.2d 1328 (3rd Cir. 1972), cert. denied, 406 U.S. 945, 92 S.Ct. 2042, 32 L.Ed.2d 331 (1972), and Benson v. United States, 402 F.2d 576 (9th Cir. 1968).
We agree with the language of the Seventh Circuit in DeTienne, 468 F.2d 151, 156:
“Similarly appellants fare no better under Rule 48 (b) of the Federal Rules of Criminal Procedure which authorizes dismissal of an indictment for unreasonable delay in presenting a charge to the grand jury because ‘[t]he rule is clearly limited to post-arrest situations.’ United States v. Marion, supra [404 U.S.] at 319, 92 S.Ct. at 463. The pre-indictment delay herein was well within the applicable statute of limitations, which remains the primary yardstick for measuring pre-accusation delays to prevent possible prejudice.”
We do not consider that the circumstances of this case or the alleged facts giving rise to the indictment require consideration of the conclusion reached by the Court of Appeals for the District of Columbia Circuit in Hanrahan v. United States, 121 U.S.App.D.C. 134, 348 F.2d 363 (1967). In Hanrahan the second indictment for fraudulent use of the mail involved the same scheme for which the appellants had been arrested and indicted almost five years earlier. The only variation between the two indictments was the individual mailings. Thus, the cases are readily distinguishable since the present indictment in this case charges an entirely different and separate offense, although based upon some of the same facts.
Having reached the conclusion that Rule 48(b) is not applicable to this case we must then determine whether there was a denial of due process of law within the meaning of the Fifth Amendment because of delay in bringing the case to the grand jury. At the outset we point out that no evidence was offered before the District Court to show any actual prejudice to the appellee’s defense because of the delay, and there has been no allegation of any actual prejudice but only general conclusory statements alleging prejudice but without facts in support of that claim.
In his motion before the District Court appellee made the following allegation:
“5. That because of the government’s unreasonable delay in presenting its case to the Grand Jury the defendant has been prejudiced by being unable during the intervening time to prepare a defense.” App. p. 21.
and in this Court the only statement as to prejudice resulting from the delay was as follows:
“In the instant case appellee Anthony Giacalone urges that the almost four-year delay in presenting the case to the Grand Jury inherently prejudices a defendant in the preparation of his defense and further that the Government delay can be considered nothing other than oppressive.” Plaintiff’s brief, p. 5.
In Marion the Supreme Court recognized the possibility that pre-indictment delay could amount to the denial of due process.
“* * * [I]t is appropriate to note here that the statute of limitations does not fully define the appellees’ rights with respect to the events occurring prior to indictment. Thus, the Government concedes that the Due Process Clause of the Fifth Amendment would require dismissal of the indictment if it were shown at trial that the pre-indictment delay in this case caused substantial prejudice to appellees’ rights to a fair trial and that the delay was an intentional device to gain tactical advantage over the accused. Cf. Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963); Napue v. Illinois, 360 U.S. 264, 79 S.Ct. 1173, 3 L.Ed.2d 1217 (1959). However, we need not, and could not now, determine when and in what circumstances actual prejudice resulting from pre-accusation delays requires the dismissal of the prosecution. Actual prejudice to the defense of a criminal case may result from the shortest and most necessary delay; and no one suggests that every delay-caused detriment to a defendant’s case should abort a criminal prosecution. To accommodate the sound administration of justice to the rights of the defendant to a fair trial will necessarily involve a delicate judgment based on the circumstances of each case.” 404 U.S. at 324-325, 92 S.Ct. at 465-466. (Footnote omitted).
In the instant case the trial judge concluded that the Government’s delay in presentation of the case to the Grand Jury was not justified, but we find no evidence that such delay was for the purpose of harassment or to enable the Government to gain some tactical advantage over the appellee. It does not appear that there was in this case the “prosecutorial gamesmanship” referred to by the Second Circuit in United States v. Iannelli, 461 F.2d 483, 485 n. 2.
Thus, we must accept the general rule that in the absence of a showing of intentional Government delay actual prejudice must be demonstrated in order to establish a violation of the Fifth Amendment. United States v. Capaldo, 402 F.2d 821 (2nd Cir. 1968), cert. denied, 394 U.S. 989, 89 S.Ct. 1476, 22 L.Ed.2d 764 (1969); United States v. Baker, 424 F.2d 968 (4th Cir. 1970); United States v. Golden, 436 F.2d 941 (8th Cir. 1971), cert. denied, 404 U.S. 910, 92 S.Ct. 236, 30 L.Ed.2d 183 (1971).
In United States v. Feinberg, 383 F.2d 60, 67 (2nd Cir. 1967), cert. denied, 389 U.S. 1044, 88 S.Ct. 788, 19 L.Ed.2d 836 (1968), the Court of Appeals for the Second Circuit had before it a case in which there were allegations that the pre-arrest delay was deliberate and thereby became unreasonable and oppressive. In concluding that deliberate delay, absent a showing of actual prejudice, was insufficient to constitute a denial of due process the court said at 383 F.2d at page 67:
“Inasmuch as we have observed that there is an absence of prejudice shown by this record, the remaining issue for our resolution is whether a delay in arrest, however unjustifiable or unnecessary, is sufficient to invalidate a conviction where the defendant has not shown that he was prejudiced by the delay. We hold that it is not, for ‘[T]he Constitution and Rule 48 (b) protect only against unreasonable and unnecessary delay * * *.’ (Emphasis added.) United States v. Simmons, supra [2 Cir.,] 338 F.2d 804, at 806; see Powell v. United States, 122 U.S.App.D.C. 229, 352 F.2d 705, 708 (1965). No case has been found holding a deliberate, unnecessary pre-arrest delay sufficient basis for reversal unless it also became unreasonable and oppressive by reason of prejudice to the accused.
“It would be unwise to impose upon the judiciary the inquisitorial function of scrutinizing the internal operations of law enforcement agencies when no possible prejudice to the accused has been shown. Acceptance of the proposition advanced by appellant would encourage hasty, less efficient investigation and premature deprivations of freedom, curtail the investigation of organized crime, and lodge with enforcement agents the procedural onus of recording in detail every event in the investigative process. In short, fear of forfeiting a prosecution would frequently induce unreasonable speed which 'would have a deleterious effect both upon the rights of the accused and upon the ability of society to protect itself.’ United States v. Ewell 383 U.S. 116, 120, 86 S.Ct. 773, 776, 15 L.Ed.2d 627 (1965).”
On the record before us we conclude that the appellee failed in his effort to show deliberate delay and we conclude further that there is no showing of prejudice because of the delay in the return of the indictment in January, 1972. Under such circumstances the provisions of Rule 48(b) are not applicable, and we find nothing to sustain a claim of a denial of due process within the meaning of the Fifth Amendment.
The judgment of the District Court is reversed and the case is remanded for reinstatement of the indictment.
. Ҥ 3731. Appeal by United States.
In a criminal case an appeal by the United States shall lie to a court of appeals from a decision, judgment, or order of a district court dismissing an indictment or information as to any one or more counts, except that no appeal shall lie where the double jeopardy clause of the United States Constitution prohibits further prosecution,”
. “Rule 48. Dismissal. * * *.
(b) By Court. If there is unnecessary delay in presenting the charge to a grand jury or in filing an information against a defendant who has been held to answer to the district court, or if there is unnecessary delay in bringing a defendant to trial, the court may dismiss the indictment, information or complaint.”
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UNITED STATES of America and United States Postal Service, Appellants, v. INTERNATIONAL TERM PAPERS, INC., et al., Appellees.
No. 72-1397.
United States Court of Appeals, First Circuit.
Heard March 5, 1973.
Decided May 3, 1973.
Frederic R. Kellogg, Asst. U. S. Atty., with whom Harlington Wood, Jr., Asst. Atty. Gen., James N. Gabriel, U. S. Atty., Robert E. Kopp, and Anthony J. Steinmeyer, Attys., Department of Justice, were on brief, for appellants.
Before COFFIN, Chief Judge, ALD-RICH and CAMPBELL, Circuit Judges.
COFFIN, Chief Judge.
The United States Postal Service seeks to invoke 39 U.S.C. § 3007 and Rule 65, Fed.R.Civ.P. to detain defendants’ incoming mail pending statutory proceedings under 39 U.S.C. § 3005. Defendants-appellees are four “term paper” companies, engaged in selling academic papers to students for submission to universities and other institutions as the work of the students. The question before the district court was whether there is probable cause to believe that appellees are “engaged in conducting a scheme or device for obtaining money or property through the mail by means of false representations”. 39 U.S.C. § 3005.
The district court, 351 F.Supp. 76, while recognizing that a companion criminal statute, 18 U.S.C. § 1341, might well embrace appellees’ conduct, held that, since there was no allegation that the mails were used to communicate with the persons intended to be defrauded, § 3005 did not apply and dismissed the complaint.
18 U.S.C. § 1341 makes it a federal offense to use the mails in connection with a scheme to defraud. It is not necessary that the mailing be between the perpetrator and the victim; any mailing in connection with the scheme is enough. Thus the use of the mails to realize on a check previously received from the victim satisfies the statute. Pereira v. United States, 347 U.S. 1, 74 S.Ct. 359, 98 L.Ed. 435 (1954). Of greater present relevancy, the mailing of a false medical certificate to a person who intends to commit fraud by posing as a licensed physician is a covered offense. Alexander v. United States, 95 F.2d 873 (8th Cir.), cert. denied, 305 U. S. 637, 59 S.Ct. 99, 83 L.Ed. 409 (1938).
We do not say that § 1341, more explicitly covering use of the mails in connection with schemes exploiting third party victims of false representations, who themselves may have had nothing to do with use of the mails, compels a similar interpretation of § 3005. But we see no bander, in construing this civil statute dealing with commercial fraud, to give it as broad an interpretation as the language can gracefully bear, particularly in the light of the general “purpose of Congress to utilize its powers, particularly over the mails and in interstate commerce, to protect people against fraud.” Donaldson v. Read Magazine, Inc., 333 U.S. 178, 190, 68 S.Ct. 591, 598, 92 L.Ed. 628 (1948). Cf. United States v. Seuss, 474 F.2d 385, p. 388 (1st Cir. 1973) (slip op. p. 5).
Concededly, all of the injunctive cases which have come to our attention have involved a seller of goods, investment opportunities, or services sending false information about them through the mails to the intended victims. But the technology of merchandising false representations is not confined to selling directly to the consumer. We can see no basis for a policy which would allow a § 3007 injunction against one who mails false advertising to a prospective buyer but would forbid an injunction against one who mails false advertising and fraudulent selling advice to sales representatives for use in calling on prospective buyers. Nor is the language of § 3005 limited to one who falsifies to another and subsequently receives money. Unlike the language in similar statutes aimed at preventing the use of the mails for fraudulent purposes, neither the timing, the source, nor the target of the false representation is here specified. The critical requirement here is that the scheme contemplate the receipt of money through the mail generated by means of false representations. That the student first pays for that which will enable him to make a subsequent false representation to his college does not affect the means-end relationship. That it is not the seller but the buyer who makes the false representation seems equally irrelevant. The reality is that the appellees receive money through the mail by means of assisting students to make false representations to universities.
We are aware of Congress’ intent, in amending this statute in 1968, to eliminate the requirement of proving the sender’s intent to deceive. P.L. 90-590, 82 Stat. 1153, 1968 U.S. Code Cong. & Admin.News, pp. 1327, 4290-4302. Lynch v. Blount, 330 F.Supp. 689, 693 (S.D.N.Y.1971) (three-judge court) aff’d, 404 U.S. 1007, 92 S.Ct. 673, 30 L.Ed.2d 676 (1972). This was sought to be accomplished by substituting “false representations” for “false or fraudulent pretenses, representations, or promises”, 1968 U.S.Code Cong & Admin.News, at p. 4297, while retaining the phrase “engaged in conducting a scheme or device”. In a two-party, sender-receiver situation, the requirement of a “scheme or device” offers no problem of proof; it is simply the intentional mailing-for-money transaction in which a false statement was sent. The Congressional purpose of imposing strict liability for even innocent falsehoods is thus not impeded by the reference to “scheme”. In a three-party situation — not, so far as we can discern, considered during the Congressional deliberations — the phrase “scheme or device” becomes important. Encyclopedia Britanniea could not be enjoined from distributing its sets simply because a student purchaser submits its essay on Jefferson as his own term paper. For the statute to apply to a sender, where a third party is deceived by a recipient, the sender must contemplate a “scheme” which involves a misrepresentation based on the materials which he sends. In such a case, therefore, the intent of the seller, in the sense of his knowing cooperation in a scheme, is, by the words of the statute, a necessary prerequisite for injunctive remedy — a prerequisite obviously present in this case.
Finally, it is clear that the fraudulent transaction need not itself be illegal to permit a postal injunction. Public Clearing House v. Coyne, 194 U.S. 497, 24 S.Ct. 789, 48 L.Ed. 1092 (1904); Durland v. United States, 161 U.S. 306, 16 S.Ct. 508, 40 L.Ed. 709 (1896); Harris v. Rosenberger, 145 F. 449 (8th Cir. 1906) and cases cited therein. Indeed, no such underlying illegality is required for conviction under the criminal mail fraud statute. Pereira v. United States, 347 U.S. 1, 74 S.Ct. 358, 98 L.Ed. 435 (1954). The purpose of both statutes was and is to protect the public against, fraud of all kinds, whether or not already legally condemned.
The judgment is vacated and cause is remanded for further proceedings consistent with this opinion.
. Nothing we say here is to be construed as deciding what connection between the mailing and the fraudulent scheme is necessary for conviction under the criminal statute. (Compare United States v. Maze, 468 F.2d 529 (6th Cir. 1972), pet. for cert. filed 41 U.S.L.W. 3530 (U.S. Apr. 3, 1973), with United States v. Thomas, 429 F.2d 407 (5th Cir. 1970).
. In the Investment Advisers Act, Congress made unlawful “by use of the mails directly or indirectly — (1) to employ any device, scheme, or artifice to defraud any client or prospective client.” 15 U.S.C. § 80b-6. [Emphasis added.] In the Federal Trade Commission Act, Congress explicitly limited a prohibition to direct misrepresentations by the sender to the recipient, by making it “unlawful for any person ... to disseminate any false advertisement — (1) by United States mails.” 15 U.S.C. § 52(a).
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UNITED STATES of America, Appellee, v. Jake Frank RICHARDSON, Appellant.
No. 72-1414.
United States Court of Appeals, Eighth Circuit.
Submitted March 14, 1973.
Decided April 20, 1973.
James R. Wyrsch, Kansas City, Mo., for appellant.
William A. Kitchen, Asst. U. S. Atty., Kansas City, Mo., for appellee.
Before VAN OOSTERHOUT, Senior Circuit Judge, HEANEY, Circuit Judge, and VAN SICKLE, District Judge.
District of North Dakota, sitting by designation.
HEANEY, Circuit Judge.
The defendant, Jake Frank Richardson, appeals from his conviction of possessing heroin with intent to distribute and distributing heroin, in violation of 21 U.S.C. § 841(a)(1). The defendant urges that he is entitled to a reversal of the conviction on the following grounds:
(1) That 21 U.S.C. § 841(a)(1) is unconstitutional. There is no merit to this contention. See, United States v. Scales, 464 F.2d 371 (6th Cir. 1972). See also, White v. United States, 399 F.2d 813 (8th Cir. 1968).
(2) That the trial court erred in: (a) neglecting to admonish the jurors at each recess with respect to their obligation not to discuss the case with others, and not to read published accounts of the trial; (b) not requiring the defendant’s presence during the conference on instructions; and (e) not requiring the defendant’s presence during the conference on the qualifications of prospective jurors and while the defendant’s trial attorney was making strikes. The defendant has not pointed to any specific instances of juror misconduct, and has not shown that he was prejudiced by his absence from the conferences. Under such circumstances, we find no merit to his contentions. Peterson v. United States, 411 F.2d 1074 (8th Cir.), cert. denied, 396 U.S. 920, 90 S.Ct. 247, 24 L.Ed.2d 199 (1969). Moreover, the record does not reflect that either the defendant or his attorney requested that the defendant be present at the conferences, nor were any objections to his absence made below.
(3) That the indictment was multiplicious and prejudiced the defendant before the jury as it charged both distribution and possession with intent to distribute. There is no merit to this contention as the evidence needed to prove possession with intent to distribute is different from that required to prove actual distribution. See, United States v. Funk, 412 F.2d 452 (8th Cir. 1969); Cardarella v. United States, 375 F.2d 222 (8th Cir.), cert. denied, 389 U.S. 882, 88 S.Ct. 129, 19 L.Ed.2d 176 (1967).
(4) That it was error to permit an informant to testify that the defendant had distributed heroin to the informant on occasions prior to the transactions for which the defendant was tried below and, alternatively, that it was error to admit this testimony without giving an instruction limiting the use of such evidence. We disagree. This evidence was properly admissible to show that the defendant had the requisite criminal intent and guilty knowledge. See, e. g., Dranow v. United States, 307 F.2d 545, 566 (8th Cir. 1962).
(5) That he was deprived of a fair trial because the prosecutor referred to, and had witness identify, his co-defendant who was present in the courtroom during the trial. There is no indication that this in any way prejudiced the defendant, and this contention is without merit.
(6) That there was insufficient evidence to sustain the conviction. We find no merits to this contention. The evidence was more than sufficient to sustain a conviction.
(7) That the trial court erred by permitting a federal narcotic’s agent to testify with respect to conversations between the agent and Frank Richardson, who was initially a co-defendant, because these conversations took place outside the presence of the defendant. Alternatively, he contends that it was error to admit this testimony without an instruction limiting its use by the jury.
We are persuaded that the narcotics agent’s testimony was properly admissible under the long-standing rule that a statement is not hearsay if it is a statement made during the course of and in furtherance of a conspiracy by the co-conspirator of a defendant. See, e. g., United States v. Schroeder, 433 F.2d 846 (8th Cir. 1970), cert. denied, 401 U.S. 943, 91 S.Ct. 951, 28 L.Ed.2d 224 (1971) and sub nom. Allen v. United States, 400 U.S. 1024, 91 S.Ct. 590, 27 L.Ed.2d 636 (1971). See also, Federal Rules of Evidence, Rule 801(d)(2)(E). This rule has been held to apply even in the absence of a conspiracy charge so long as there is independent evidence of concert of action. See, United States v. Sanders, 463 F.2d 1086 (8th Cir. 1972); United States v. Reed, 446 F.2d 1226 (8th Cir. 1971); United States v. Williams, 435 F.2d 642 (9th Cir. 1970), cert. denied, 401 U.S. 995, 91 S.Ct. 1241, 28 L.Ed.2d 533 (1971). Contra, United States v. Harrell, 436 F.2d 606 (5th Cir. 1970). Moreover, application of the rule has not been confined to those who are co-defendants at the same trial. United States v. Williams, supra, 435 F.2d at 645. See also, United States v. Sanders, supra.
There is testimony in the record, other than that which is argued to be inadmissible, which indicates that the defendant and the declarant, Frank Richardson, were acting in concert with respect to relevant transactions. It is also clear that the declarant’s statements —arranging for the January 3, 1973, heroin sale — served to further the joint venture of the two brothers. Accordingly, the court did not err by admitting the agent’s testimony.
We also reject the defendant’s alternative argument that the court erred by not giving a limiting instruction to the jury on this evidence. The defendant did not request such an instruction below, and he did not object when none was given. Thus, we are governed by the plain error rule on this issue. That rule is “to be sparingly applied and is to be invoked only to prevent a plain miscarriage of justice.” United States v. Reed, supra, 446 F.2d at 1230. No such miscarriage of justice has occurred here.
Affirmed.
. Jake Frank Richardson and Frank Richardson are brothers. They were charged in the same indictment and initially were to be tried in a common trial. A joint motion of the Richardsons, requesting a severance of their trials, was denied by the trial court. However, because Frank Richardson later changed his attorney, it was necessary to postpone his trial to a later date.
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f2d_477/html/1283-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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H. C. COLVIN, O. M. Prigmore, et al., Plaintiffs-Appellants, v. DEMPSEY-TEGELER & CO., INC., et al., Defendants-Appellees.
No. 72-2243.
United States Court of Appeals, Fifth Circuit.
April 20, 1973.
Rehearing and Rehearing En Banc Denied June 12, 1973.
Sam Rosen, Kleber C. Miller, Fort Worth, Tex., for plaintiffs-appellants.
Dean Shuman, Lubbock, Tex., for Bass.
Allen Butler, Barefoot Sanders, William L. Keller, Dallas, Tex., for Dempsey-Tegler and Harold Levitt.
Before GEWIN, GOLDBERG and DYER, Circuit Judges.
DYER, Circuit Judge:
Between December 19, 1968, and April 16, 1969, the eight plaintiffs purchased a total of 7,900 shares of Erie Technological Products, Inc. stock through the Lubbock, Texas, office of Dempsey-Tegeler & Company, Inc., a broker-dealer in securities. The market price of this stock subsequently dropped substantially and most of the 7,900 shares were sold at a considerable loss. The plaintiffs thereafter brought this suit against Dempsey-Tegeler and three of its employees, claiming that the misrepresentation of certain material facts and the omission of others had caused the purchase of the stock, which in turn resulted in plaintiffs’ damages.
After a trial before a jury and after receiving its answers to a complicated series of fact questions, the district court entered judgment for the defendants. Pursuing on appeal only two of their original four substantive theories, plaintiffs contend that the answers to the questions propounded to the jury dictate a finding of liability under section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.A. § 78j(b) and Rule 10b-5, 17 C.F.R. § 240.10b-5, and under the Texas Securities Act, article 581-33, subd. A(2), V.A.T.S. In the alternative they argue that the jury’s answers are irreconcilable and thus require a new trial in full or in part. Because we are of the opinion that the jury’s answers with respect to each of the plaintiffs are totally irreconcilable, we reverse and remand for a new trial.
The fact that this judgment was entered upon the jury’s answers to a series of questions from the court under Fed.R.Civ.P. 49(a) imposes special obligations on us as an appellate court. These requirements were recently discussed by this court in Griffin v. Matherne, 5 Cir. 1973, 471 F.2d 911.
The Seventh Amendment requires that if there is a view of the case which makes the jury’s answers consistent, the court must adopt that view and enter judgment accordingly. Atlantic & Gulf Stevedores v. Ellerman Lines, 369 U.S. 355, 364, 82 S.Ct. 780, 786, 7 L.Ed.2d 798, 806-807 (1962). This court has stated that the test to be applied in reconciling apparent conflicts between the jury’s answers is whether the answers may fairly be said to represent a logical and probable decision on the relevant issues as submitted, even though the form of the issue or alternative selective answers prescribed by the judge may have been the likely cause of the difficulty and largely produced the apparent conflict. R. B. Company v. Aetna Insurance Company, 299 F.2d 753, 760 (5th Cir. 1962). If on review of the district court’s judgment we find that there is no view of the case which makes the jury’s answers consistent and that the inconsistency is such that the special verdict will support neither the judgment entered below nor any other judgment, then the judgment must be reversed and the cause remanded for trial anew. Missouri Pacific Ry. Co. v. Salazar, 254 F.2d 847, 849 (5th Cir. 1958); Wright v. Kroeger Corporation, 422 F.2d 176, 178-179 (5th Cir. 1970).
471 F.2d at 915. Because none of the jury’s answers in this case specifically mentioned either of the securities acts now in question, it is incumbent upon us to consider separately how the questions as a whole relate to each act.
I. Securities Exchange Act
Rule 10b-5 of the Securities and Exchange Commission, promulgated under section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.A. § 78j(b), establishes, indirectly, private liability for certain proscribed acts done “in connection with the purchase or sale of any security.” If the other stated conditions are satisfied, the Rule makes it unlawful:
(a) To employ any device, scheme, or artifice to defraud,
(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. . .
The plaintiffs initially sought recovery under each facet of each clause in the Rule, but on appeal are claiming only under clauses (b) and (c).
A. Misrepresentations
The first possible avenue of recovery under clause (b) of Rule 10b-5 is based upon misrepresentations of material facts. Questions to the jury numbers 1, 2, and 3 and their subparts are addressed to this point, with each question referring to a different individual defendant. Question 3 identifies the problem in this area.
The answers to 3(a) show that defendant Levitt made material misrepresentations in connection with each plaintiff’s purchase, the responses to 3(b) establish that these misrepresentations caused each plaintiff to purchase shares of Erie Technological, and the answers to 3(d) show that these misrepresentations were made by Levitt with knowledge of their falsity or from a lack of due diligence. The irreconcilable feature of the jury’s answers, however, stems from the wording of and answers to Questions 3(c), 20, and 6A. Question 3(c) asks:
Do you find from a preponderance of the evidence that, in the light of the facts and circumstances existing at the time of the misrepresentations, that in the exercise of due care, Plaintiffs would have been entitled to rely upon the misrepresentations ?
Answer: (“Yes” as to each plaintiff).
The apparent inconsistency arises when, in response to the following question, the jury stated that none of the plaintiffs was entitled to any recovery.
Question No. 20
From a preponderance of the evidence state in dollars and cents the amount of damages, if any, incurred by each Plaintiff, as a result of such Plaintiff’s purchase of the Erie stock in question.
In answering this Question No. 20 you will include in the amount of damages only those losses on the shares of Erie Technological Product, Inc. stock which were purchased by each Plaintiff because of the misrepresentations, omissions, negligence or fraudulent scheme of the Defendants and none other.
Defendants try to reconcile these answers in two ways. First, they argue that Question 20 asks the jury to determine causation, and they conclude that a $0 answer is a finding that plaintiffs suffered no damages as a result of defendants’ alleged wrongdoing. However reasonable this interpretation might be when Question 20 is read separately, it fails to recognize that the answers to 3 (b) establish a causal relationship between the misrepresentations and the purchases, which would normally be enough to satisfy this aspect of a 10b-5 suit.
Secondly, they argue that 3(c) does not ask the jury to consider all of the factors that influenced the plaintiffs’ decision to purchase, but instead they suggest that the question, worded conditionally and in the subjunctive, instructs the jury to assume due care and to ignore such factors as the plaintiffs’ expertise, their sophistication in the industry, their knowledge of the stock market, and their ability to investigate the misrepresentations. As such, the defendants argue that the jury was entitled to rely upon its answers to Question 6A — which state that each plaintiff failed to exercise due care in the purchase of the stocks in question and that such failure was a proximate cause of any damages ■ — in finding $0 damages in Question 20. We disagree.
Although the defendants’ argument is one possible reconstruction of the jury’s thought processes used in answering the questions asked it, it is a possibility which we are not at liberty to consider. Question 3(c) and 3(d) were derived from Clement A. Evans & Co. v. McAlpine, 5 Cir. 1970, 434 F.2d 100, 103, cert. denied, 1971, 402 U.S. 988, 91 S.Ct. 1660, 29 L.Ed.2d 153 (relying on City National Bank v. Vanderboom, 8 Cir. 1970, 422 F.2d 221, 230, cert. denied, 399 U.S. 905, 90 S.Ct. 2196, 26 L.Ed.2d 560), both of which eases explained the proper meaning to be given these questions.
In McAlpine this court quoted with approval a commentator who argued that a bare showing that a plaintiff relied would not be sufficient for him to recover in the absence of a showing that the reliance was reasonable; an investor with “ ‘business sophistication,’ acumen, or ready access to the information involved” might then be denied recovery because he could reasonably be held to a higher standard of care and investigation. The court went bn, however, to say that step one of its test (Question 3(c) here) properly reflects these considerations and does not ignore them, as the defendants here suggest. 434 F.2d at 103-104. Consequently, the only interpretation we can give the answers to 3(c) is that, even if the plaintiffs had exercised due care (in light of all the circumstances and considering all of their sophistication in the stock market), the jury still felt the plaintiffs would have been entitled to rely on the misrepresentations. When interpreted in this light, the fact the jury found in Question 6A that the plaintiffs’ failure to exercise due care proximately caused any damages that occurred, becomes hopelessly inconsistent with 3(c). The plaintiffs’ negligence could not have been a proximate cause of any purchase if, in the absence of any such negligence, the plaintiffs would still have been entitled to make the same purchases.
An additional inconsistency becomes apparent by realizing that, in the context of these interrogatories, Questions 3(a)-(d) establish a prima facie case of liability, but that, without any valid defense being found, the jury returned a verdict of $0 damages. Defendant has attempted to reconcile this conflict by citing a series of cases which stand for the proposition that a general verdict for the plaintiff in the amount of $0 does not require a new trial. Wingerter v. Maryland Casualty Co., 5 Cir. 1963, 313 F.2d 754; see Fairmount Glass Works v. Cub Fork Coal Co., 1933, 287 U.S. 474, 53 S.Ct. 252, 77 L.Ed. 439; Joseph v. Rowlen, 7 Cir. 1970, 425 F.2d 1010; Association of Western Railways v. Riss & Co., 1962, 112 U.S.App.D.C. 49, 299 F.2d 133, cert. denied, 370 U.S. 916, 82 S.Ct. 1555, 8 L.Ed.2d 498. See also Spears v. Hough, 8 Cir. 1972, 458 F.2d 529, cert. denied, 409 U.S. 878, 93 S.Ct. 130, 34 L.Ed.2d 131.
Although we recognize the validity of this rule of law, it cannot be applied in this case. The judgment in each of the cases cited was returned in the form of a general verdict, whereas the case below involved the answers to a complicated series of specific questions asked in accordance with Fed.R.Civ.P. 49(a). One purpose of this latter procedure is to dispel a portion of the inscrutability inherent in broad general verdicts. Here, the jury's answers clearly demonstrate a misunderstanding of the precise meaning of the questions asked them and provide no basis for a $0 damages answer if the answer to 3(c) is correct. In this posture, a new trial is required.
B. Omissions
Our decision with respect to the second avenue of recovery under clause (b) of Rule 10b-5 — omissions of material facts — exactly tracks the above discussion about misrepresentations. Questions 4, 5, and 6 and their subparts were addressed to this point, and Question 6 fully identifies the problem here.
The answers to 6(a) show that, with respect to each plaintiff’s purchases, defendant Levitt failed to disclose certain material facts which should have been stated to prevent other information from being misleading, and the responses to 6(c) establish that these failures to disclose occurred with knowledge of the omitted information or from a lack of due diligence. The difficulty, however, arises from the answers to 6(b). The question read :
Question No. 6
* *
(b) Do you find from a preponderance of the evidence that such Plaintiffs, in light of the facts existing at the time of the non-disclosure which you have found in Question (a) above, and in the exercise of due care, would have been caused not to purchase the shares of Erie Technological Products, Inc., if the disclosures had been made rather than withheld ?
The jury’s answer was “Yes” as to each plaintiff.
Because the thrust of this language also was taken from McAlpine, 434 F.2d at 103, the meaning of it is subject to the same interpretation as was the misrepresentation question discussed supra. Consequently, the answers to Question 6 •generate the same irreconcilable conflict with Questions 6A and 20 as the answers to Question 3(c), and require a new trial.
C. Act, Practice, or Course of Business
Questions 10, 11, and 12 asked the jury to decide whether any of the three defendants had violated clause (c) of Rule 10b-5, which essentially proscribes any act, practice, or course of business that operates as a fraud. The responses establish that each defendant engaged in such conduct in connection with each plaintiff’s purchases of stock and that this conduct caused each plaintiff to purchase shares of Erie Technological.
The answers to these questions, which differ from Questions 1-6 in that they were not lifted from the McAlpine opinion, create inconsistencies similar to those surrounding the answers to the questions concerning misrepresentations and omissions. On their face Questions 10-12 are not literally consistent with Questions 6A and 20, contributory negligence not being a defense per se to a 10b-5 action. Nevertheless, several specific activities that would constitute common-law contributory negligence could also be defenses to a private 10b-5 action for damages. See generally McAlpine, supra. Thus, we choose not to rely on such potential inconsistency, but instead look at the basis for the finding that an illegal act, practice, or course of business was involved.
An examination of the pleadings and proof in the court below convinces us that the only foundation for finding such acts, etc. to have existed is the proof relevant to the alleged misrepresentations and omissions. As such, it is inconceivable that that proof and the jury’s answers relevant thereto, could take on any character other than the fatally defective inconsistency which we have concluded surrounds Questions 3 and 6. The confusion which resulted from the technical wording of Questions 1-6 and from the inappropriate inclusion, without limiting instructions, of 6A has rendered the jury’s answers on this aspect of the case wholly unreliable and irreconcilable, requiring a new trial.
II. Texas Securities Act
Article 581-33, V.A.T.S., provides in pertinent part:
A. Any person who
* * * * * *
(2) Offers or sells a security (whether or not the security or transaction is exempt under Section 5 or 6 of this Act) by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made not misleading (when the person buying the security does not know of the untruth or omission, and who in the exercise of reasonable care could not have known of the untruth or omission) is liable to the person buying the security from him. .
The plaintiffs claim, as they did under Rule 10b-5, that they are entitled to a judgment under the Texas Act based on the jury’s answers to the questions concerning misrepresentations and omissions. Even a cursory review of the questions to the jury and its answers, however, demonstrates' an almost identical irreconcilability.
Of the twenty-five questions, and their subparts, asked the jury, only the first six directly apply to misrepresentations and omissions. These were the questions whose language was drawn from the McAlpine opinion. Despite the fact that the questions had their source in a 10b-5 case and were drafted with that rule in mind, the jury was not asked to differentiate between the two theories of recovery and its answers to Questions 1-6 must be said to have the same meaning under the Texas Securities Act as they did under Rule 10b-5. Therefore, the jury concluded that each individual defendant made misrepresentations which caused purchases of stock, and decided that, even in the exercise of due care, the plaintiffs would have been entitled to rely on the misrepresentations. Additionally, the jury found that certain material facts, not disclosed by defendant Levitt, if disclosed, would have caused the plaintiffs not to purchase the shares if they had exercised due care.
If the remaining questions and answers were ignored, the answers to the misrepresentation and omission questions would establish a prima facie case under the Texas Securities Act, at least as against the individual defendant who acted knowingly or negligently. The existence of such a prima facie case raises the spectre of irreconcilability when compared with the jury’s answer of $0 damages in Question 20.
Defendants again seek to explain the difference by noting the jury’s answers to Question 6A, which state that each plaintiff failed to exercise due diligence in the purchases of his stock. This explanation is rooted in the Texas Act itself which precludes recovery if it is shown that the plaintiffs knew or reasonably could have known of the untruth or omission. Although Question 6A is not phrased in the words of the Act, it would be reasonable for us to infer that, because of the testimony offered at the trial, the jury concluded that the plaintiffs were negligent because they knew or could have known of the untruths or omissions.
Instead of resolving the conflict, however, this inference, necessary for the defendants to prevail, merely intensifies it. On the one hand the jury has said that the plaintiffs, even if careful, would have been entitled to rely on the misrepresentations and omissions, and on the other hand they might have been saying that the plaintiffs were negligent (in not finding out the truth) and that this negligence caused any damages which resulted. Regardless of whether the Texas Act has eliminated the requirement of a plaintiff’s reliance on a misrepresentation or omission, we think it beyond the limits of human credibility to suggest that this jury considered it reasonable for the plaintiffs to rely on misrepresented or omitted facts which were material, but nevertheless concluded that the failure to discover the true facts caused the damages which resulted from the reliance previously considered reasonable.
With no perceptible way to reconcile these answers we conclude that a new trial on the Texas Act is required.
III. Miscellaneous Errors
Plaintiffs assert that the submission of Question 25 — which inquires whether the defendants acted in good faith and with no intent to defraud— was erroneous. It seems fairly clear that, while perhaps not reversible error per se, the instruction has no place in this Rule 10b-5 case. See McAlpine, supra; SEC v. Texas Gulf Sulphur Co., 2 Cir. 1968, 401 F.2d 833, 862, cert. denied, 1969, 394 U.S. 976, 89 S.Ct. 1454, 22 L.Ed.2d 756; Kohler v. Kohler Co., 7 Cir. 1963, 319 F.2d 634, 637. Here the jury had already been specifically asked, in Questions 1-6, whether each defendant had acted knowingly or negligently.
Under the Texas Act, Question 25 read alone could have some relevance to the punitive or exemplary damages allowed in article 581-33, subd. A(2). However, because that Act allows such damages only if a defendant acts willfully and because Questions 21-23 asked whether each defendant acted willfully, Question 25 was at best redundant. As a result, if, on remand, the jury is questioned properly about the defendants acting knowingly, with lack of due diligence, or willfully, a further inquiry into good faith or intent to defraud would be improper.
Defendants also have raised two points, but they merit only brief attention. First, they argue that the district court should have asked the jury to consider whether the plaintiffs are barred from recovery because they were in pari delicto. Secondly, they contend that, as a matter of law, the district court did not have any personal jurisdiction over one of the defendants with respect to the Texas Act. Whatever the merits of these positions may be they are not properly before this court. Defendants filed no notice of cross-appeal as they are allowed to do under Fed.R.App.P. 4(a), and, in the absence of such an appeal, they will not be heard to question the district court’s judgment in this court. See United States ex rel. Goetz Construction Inc. v. Yorfino, 5 Cir. 1969, 412 F.2d 329.
IV. Scope of Remand
Because the inconsistencies in the jury’s answers described above require a new trial, we must determine the scope of the new trial. In one of their alternative prayers for relief, plaintiffs request that any new trial be on the issue of damages alone. In support of this position they argue that certain interrogatories clearly establish prima facie cases against certain defendants under one or both acts. Although this may be true when the questions are viewed separately, as we have indicated several times, we are not at liberty to so fragmentize the jury’s answers. We can no more be sure that the answers to Questions 3, 6, 10, 11, or 12 are the true expressions of the jury’s intent than we could be sure that the answers to Questions 6A and 20 express their final decision. In fact the complex wording and technical meaning of Questions 3(e) and 6(b) make it unlikely that the jury fully comprehended their meaning.
Consequently, unable to reconcile the jury’s answers and without authority under these facts to accept some answers and totally ignore others, we reverse and remand for a new trial on liability and damages.
Reversed and remanded.
. The misrepresentations and omissions alleged in the complaint concerned a proposed tender offer by International Systerns Corporation (ISC) to purchase the outstanding Erie Technological stock at a price well above the prevailing per share market price. This information, which was not otherwise fully disclosed to the investing public, was alleged to have come to the individual defendants from the president of ISC.
. The plaintiffs had also sought relief under section 12(2) of the Securities Act of 1933, 15 U.S.C.A. § 77l(2), and under the Texas common law of negligence. No error is raised with respect to the judgment on either of these theories and we need not consider them further,
. See Hooper v. Mountain States Securities Corp., 5 Cir. 1960, 282 F.2d 195, cert. denied, 1961, 365 U.S. 814, 81 S.Ct. 695, 5 L.Ed.2d 693; Reed v. Riddle Airlines, 5 Cir. 1959, 266 F.2d 314.
. The jury found that none of the defendants had “employed any device, scheme or artifice to defraud.” The correctness of this finding is not questioned on appeal.
. Question No. 3
(a) Do you find from a preponderance of the evidence that in connection with the purchase by any of the Plaintiffs of the shares of the stock of Erie Technological Products, Inc. the Defendant Harold E. Levitt made any untrue statement or misrepresentation of a material fact?
Answer: (“Yes” as to each plaintiff)..
(b) Do you find from a preponderance of the evidence that such untrue statement or misrepresentation made by Defendant Harold E. Levitt in answer to Question 3(a) above, caused any of the Plaintiffs to purchase shares of Erie Technological Products, Inc.?
Answer: (“Yes” as to each plaintiff) .
(d) Do you find from a preponderance of the evidence that the misrepresentations made were made by the Defendant Harold E. Levitt with knowledge on his part that same contained misrepresentations or untrue material facts or from a lack of due diligence in connection with the sale of the Erie stock to the Plaintiffs?
Answer: (“Yes” as to each plaintiff) .
It should be noted that the responses to Questions 1 and 2 establish that defendants Cornelius and Bass each made material misrepresentations which caused the plaintiffs to purchase Erie Technological stock, but also show that the jury concluded that neither of these defendants made the misrepresentations negligently or knowingly.
. The confusion which has resulted from the answers to the questions asked the jury in the case is largely attributable to two factors. First, the instructions on misrepresentations and omissions, taken straight from the legal tests adopted in McAlpine and not from the jury instruction upheld in that case, were probably less than perfectly clear to the average juror and, without some explanation, should not have been given in that form. Secondly, this confusion was magnified by letting the jury consider all the questions together even though some of them liad only limited applicability. For example, the question on plaintiffs’ contributory negligence (correct under the common law negligence claim and at least arguably relevant to the Texas Securities Act claim, see infra) was juxtaposed with the McAlpine questions on 10b-5, with respect to which it is totally irrelevant as the questions are presently worded and as they were answered.
. Although the exact damages suffered were not directly stipulated to, the value of the shares on the date of purchase and on the date of sale (or on the date of trial for the shares still held) was conceded and, in the absence of some reduced loss or shared blame for a portion of the loss, this stipulation would have precluded a $0 damages verdict if liability had been established.
. Questions 6(a), (b), and (c) concerned possible omissions made by one defendant. This is totally separate from and should not be confused with Question 6A, which concerned any contributory negligence of the plaintiffs.
. Question No. 6
(a) Do you find from a preponderance of the evidence that in connection with the purchase by any of the Plaintiffs of shares of the stock of Erie Technological Products, Inc. the Defendant Harold E. Levitt failed to state or reveal one or more material facts which would be necessary in order to prevent the statements which were made from being misleading, in light of the circumstances under which they were made?
Answer: (“Yes” as to each plaintiff) .
(c) Do you find from a preponderance of the evidence that the failure to disclose by the Defendant Harold E. Levitt was done with his knowledge of the existence of certain material facts which he withheld or from a lack of due diligence on his part?
Answer: (“Yes” as to each plaintiff).
Questions 4 and 5 asked the jury to decide whether either Cornelius or Bass failed to disclose any material information. It answered “No” as to each of these individual defendants and the correctness of these findings is not questioned on appeal.
. Question No. 10 is typical of these three questions.
(a) Do you find from a preponderance of the evidence that in connection with the purchase by Plaintiffs of shares of Erie Technological Products, Inc., the Defendant Tommie Lee Cornelius engaged in any act, practice or course of business which operated as a fraud or deceit upon any of the Plaintiffs.
Answer: (“Yes” ns to each plaintiff).
(b) Do you find from a preponderance of the evidence that such act, practice or course of business which operated as a fraud or deceit caused any such Plaintiff to purchase shares of Erie Technological Products, Inc.?
Answer: (“Yes” as to each plaintiff).
. Although we do not decide the question, it is possible that under the Texas Act, the plaintiffs have established a prima facie case concerning misrepresentations against the other two individual defendants as well, despite the jury’s finding that they did not act knowingly or negligently. Compare Article 581-33 (A) (2), V.A.T.S., with Uniform Securities Act § 410(a) (2). See also 2 A. Bromberg, Securities Law: Fraud § 8.4(210) (1971); Bordwine, Civil Remedies Under the Texas Securities Laws, 8 Houst.L.Rev. 657, 674 (1971).
. By indicating that the jury could have reasonably concluded that the plaintiffs knew or could have known, we are not expressing our view that the burden of showing the nonexistence of this knowledge is on the plaintiff nor are we saying that the burden of proving plaintiff’s knowledge as an affirmative defense is on the defendant. Compare 2 A. Bromberg, supra note 11 at § 8.4(220) and Comm, on Seo. & Inv. Banking of the Section on Corp., Banking and Business Law of the State Bar of Texas, Comment — 1963 Amendment 1B Vernon’s Texas Civ.Stat. 69 (1964) with Bordwine, supra note 11 at 661, 674. The resolution of that dispute will have to await another day.
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Torbin H. BRENDEN, Individually and as parent and natural guardian of Peggy Brenden, et al., Plaintiffs-Appellees, v. INDEPENDENT SCHOOL DISTRICT 742, and Independent School District 274, Defendants, and the Minnesota State High School League, Defendant-Appellant.
No. 72-1287.
United States Court of Appeals, Eighth Circuit.
Submitted Jan. 8, 1973.
Decided April 18, 1973.
Bernhard W. LeVander, Minneapolis, Minn., for defendant-appellant.
Thomas W. Wexler, Minneapolis, Minn., for plaintiffs-appellees.
Before LAY, HEANEY and STEPHENSON, Circuit Judges.
HEANEY, Circuit Judge.
This is a civil rights action brought under 42 U.S.C. § 1983 to enjoin enforcement of a rule promulgated by the Minnesota State High School League which bars females from participating with males in high school interscholastic athletics. The rule states:
“Girls shall be prohibited from participation in the boys’ interscholastic athletic program either as a member of the boys’ team or a member of the girls’ team playing the boys’ team.
“The girls’ team shall not accept male members.”
Minnesota State High School League Official Handbook, 1971-72.
Athletic Rules for Girls, Article III, Section 5.
The complaint charges that this rule discriminates against females in violation of the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution.
The plaintiffs are Peggy Brenden and Antoinette St. Pierre, female high school students at Minnesota public high schools. Brenden attends the St. Cloud Technical High School in Independent School District 742 and St. Pierre attends Hopkins Eisenhower High School in Independent School District 274. Neither school district has appealed the judgment below. The defendant and sole appellant, the Minnesota State High School League, is a non-profit corporation which claims the membership of the state’s 485 public high schools, including St. Cloud Technical High School and Hopkins Eisenhower High School.
The plaintiffs desired to participate in non-contact interscholastic sports: Brenden in tennis; St. Pierre in cross-country ' skiing and cross-country running. Neither of their schools provided teams for females in the respective sports. They did, however, provide such teams for males. Both plaintiffs would have liked to qualify for positions on the teams which have been established for males, but they were precluded from doing so on the basis of the above quoted rule. The trial court found that both were excellent athletes, and that neither would be damaged by competition with males.
The court, after a trial on the merits, granted relief stating:
“In summary, the Court is confronted with a situation where two high school girls wish to take part in certain interscholastic boys’ athletics; where it is shown that the girls could compete effectively on those teams; and where there are no alternative competitive programs sponsored by their schools which would provide an equal opportunity for competition for these girls; and where the rule, in its application, becomes unreasonable in light of the objectives which the rule seeks to promote. Brought to its base, then, Peggy Brenden and Tony St. Pierre are being prevented from participating on the boys’ interscholastic teams in tennis, cross-country, and cross-country skiing solely on the basis of the fact of sex and sex alone. The Court is thus of the opinion that in these factual circumstances, the application of the League rules to Peggy Brenden and Tony St. Pierre is arbitrary and unreasonable, in violation of the equal protection clause of the fourteenth amendment. For this reason, the application of the rule to these girls cannot stand. * * * To implement this decision, it is ordered. “1. That Peggy Brenden and Tony St. Pierre be declared eligible to compete on their respective teams at their respective high schools.
“2. That the Minnesota State High School League is enjoined from imposing any sanctions upon either St. Cloud Technical High School or Hopkins Eisenhower High School for compliance with this Court order, and that no sanctions are to be imposed on any other public high schools for engaging in interscholastic competition with St. Cloud Technical High School and Hopkins Eisenhower High School.”
Brenden v. Independent School District 742, 342 F.Supp. 1224, 1234 (D.Minn. 1972).
We affirm the decision of the trial court.
Having stated what this case is about, we would also like to emphasize what it is not about. First, because neither high school provided teams for females in the sports in which Brenden and St. Pierre desired to participate, we are not faced with the question of whether the schools can fulfill their responsibilities under the Equal Protection Clause by providing separate but equal facilities for females in interscholastic athletics. See generally, Note, Sex Discrimination in High School Athletics, 57 Minn.L.Rev. 339, 366-370 (1972). Second, because the sports in question are clearly non-contact sports, we need not determine if the High School League would be justified in precluding females from competing with males in contact sports such as football. See, Cynthia Morris et al., etc. v. Michigan State Board of Education et al., etc., 472 F.2d 1207 (6th Cir. 1973).
The High School League first contends that there is no jurisdiction over it under 42 U.S.C. § 1983 because it is a voluntary organization not acting under the color of state law. However, the trial court specifically held that:
“ * * * Although the Minnesota State High School League is a voluntary organization, the original allowance for public high schools to join such an association or organization is authorized pursuant to Minnesota law. Minn.Stat.Ann. Section 192.12. In addition, the rules governing League members are promulgated pursuant to a procedure which integrally involves the member school districts in the decision-making process. Beyond this, the ultimate enforcement of the rules becomes the responsibility of the member school and the public officials of those schools and school districts. In such a situation, where there is a tremendous public interest in educational functions, and where the public school machinery of the state is so involved in the effectuation and enforcement of rules which bind all public high schools in the state, the Court is left with no conclusion other than that defendant Minnesota State High School League and the defendant school districts are acting under color of state law. * * * ” (Footnote omitted.)
342 F.Supp. at 1229.
We agree with the trial court and affirm its decision in this regard. See, Mitchell v. Louisiana High School Athletic Association, 430 F.2d 1155 (5th Cir. 1970); Louisiana High School Athletic Ass’n v. St. Augustine High Sch., 396 F.2d 224 (5th Cir. 1968); Oklahoma High School Athletic Association v. Bray, 321 F.2d 269 (10th Cir. 1963); Reed v. The Nebraska School Activities Association, 341 F.Supp. 258 (D.Neb.1972); Sex Discrimination in High School Athletics, supra at 350.
We next turn to the merits. In evaluating a claim that state action violates the Equal Protection Clause, the following three criteria must be considered:
“* * * [I] the character of the classification in question; [II] the individual interests affected by the classification; [III] and the governmental interests asserted in support of the classification. * * * ”
Dunn v. Blumstein, 405 U.S. 330, 335, 92 S.Ct. 995, 999, 31 L.Ed.2d 274, 280 (1972).
I. Sex-Based Classifications.
In 1961, President Kennedy, having found that “prejudices and outmoded customs act as barriers to the full realization of women’s basic rights,” established the President’s Commission on the Status of Women. Executive Order 10980 (December 14, 1961). That Commission, the President’s Task Force on Women’s Rights and Responsibilities, congressional hearings and critical studies have confirmed the serious nature of discrimination on account of sex.
In recent years, Congress and the Executive have acted to eliminate discrimination based on “ ‘stereotyped characterizations of the sexes’,” Phillips v. Marietta Corp., 400 U.S. 542, 91 S.Ct. 496, 27 L.Ed.2d 613 (1971) (Marshall, J., concurring). See, Title VII of the Civil Rights Act of 1964, the Equal Pay Act, and Title IX of the Education Amendments of 1972. The jurisdiction of the Civil Rights Commission has been extended to include discrimination on the basis of sex. Finally, Congress has passed the Equal Rights Amendment and transmitted it to the states.
In recent years, courts, too, have become sensitive to the problems of sex-based discrimination. In 1963, the Presidential Commission on the Status of Women recommended that:
“Early and definitive court pronouncement, particularly by the United States Supreme Court, is urgently needed with regard to the validity under the Fifth and Fourteenth Amendments of laws and official practices discriminating against women, to the end that the principle of equality becomes firmly established in constitutional doctrine.”
There is no longer any doubt that sex-based classifications are subject to scrutiny by the courts under the Equal Protection Clause and will be struck down when they provide dissimilar treatment for men and women who are similarly situated with respect to the object of the classification. Reed v. Reed, 404 U.S. 71, 77, 92 S.Ct. 251, 30 L.Ed.2d 225 (1971). See, Moritz v. C.I.R., 469 F.2d 466 (10th Cir. 1972). Compare, Green v. Waterford Board of Education, 473 F.2d 629 (2nd Cir. 1973), and LaFleur v. Cleveland Board of Education, 465 F.2d 1184 (6th Cir. 1972), with Mrs. Susan Cohen v. Chesterfield County School Board et al., etc., 474 F.2d 395 (4th Cir. 1973) (en banc). Furthermore, discrimination on the basis of sex can no longer be justified by reliance on “outdated images * * * of women as peculiarly delicate and impressionable creatures in need of protection from the rough and tumble of unvarnished humanity.” Seidenberg v. McSorleys’ Old Ale House, Inc., 317 F.Supp. 593, 606 (S.D.N.Y. 1970).
In Sail’er Inn v. Kirby, 5 Cal.3d 1, 95 Cal.Rptr. 329, 340, 485 P.2d 529, 540-541 (Cal.1971) (en banc), the unanimous California Supreme Court succinctly summarized the nature of sex-based discrimination:
“Sex, like race and lineage, is an immutable trait, a status into which the class members are locked by the accident of- birth. What differentiates sex from nonsuspect statuses, such as intelligence or physical disability, and aligns it with the recognized suspect classifications is that the characteristic frequently bears no relation to ability to perform or contribute to society. * * * The result is that the whole class is relegated to an inferior legal status without regard to the capabilities or characteristics of its individual members. * * * Where the relation between characteristic and evil to be prevented is so tenuous, courts must look closely at classifications based on that characteristic lest outdated social stereotypes result in invidious laws or practices.
“Another characteristic which underlies all suspect classifications is the stigma of inferiority and second class citizenship associated with them. * * Women, like Negroes, aliens, and the poor have historically labored under severe legal and social disabilities. Like black citizens, they were, for many years, denied the right to vote and, until recently, the right to serve on juries in many states. They are excluded from or discriminated against in employment and educational opportunities. Married women in particular have been treated as inferi- or persons in numerous laws relating to property and independent business ownership and the right to make contracts.
“Laws which disable women from full participation in the political, business and economic arenas are often characterized as ‘protective’ and beneficial. Those same laws applied to racial or ethnic minorities would readily be recognized as invidious and impermissible. The pedestal upon which women have been placed has all too often, upon closer inspection, been revealed as a cage.” (Citations and footnotes omitted.)
In this case, it is unnecessary for this Court to determine whether classifications based on sex are suspect and, thus, can be justified only by a compelling state interest because the High School League’s rule cannot be justified even under the standard applied to test non-suspect classifications. See, Eisenstadt v. Baird, 405 U.S. 438, 92 S.Ct. 1029, 31 L.Ed.2d 349, 359 n. 8 (1972).
II. The Plaintiffs’ Interest in Interscholastic Athletics.
The High School League contends that relief under the Civil Rights Act is inappropriate because participation in interscholastic sports is a privilege and not a right. We disagree. The Supreme Court has rejected “the concept that constitutional rights turn upon whether a governmental benefit is characterized as a ‘right’ or as a ‘privilege.’ * * *". Graham v. Richardson, 403 U.S. 365, 374, 91 S.Ct. 1848, 1853, 29 L. Ed.2d 534 (1971). The question in this case is not whether the plaintiffs have an absolute right to participate in interscholastic athletics, but whether the plaintiffs can be denied the benefits of activities provided by the state for male students. See, Reed v. The Nebraska School Activities Association, supra, 341 F.Supp. at 262.
Discrimination in education has been recognized as a matter of the utmost importance. The Supreme Court has pointed out that:
“Today, education is perhaps the most important function of state and local governments. Compulsory school attendance laws and the great expenditures for education both demonstrate our recognition of the importance of education in our democratic society. It is required in the performance of our most basic public responsibilities, even service in the armed forces. It is the very foundation of good citizenship. Today it is a principal instrument in awakening the child to cultural values, in preparing him for later professional training, and in helping him to adjust normally to his environment. In these days, it is doubtful that any child may reasonably be expected to succeed in life if he is denied the opportunity of an education. Such an opportunity, where the state has undertaken to provide it, is a right which must be made available to all on equal terms.”
Brown v. Board of Education of Topeka, 347 U.S. 483, 493, 74 S.Ct. 686, 691, 98 L.Ed. 873 (1954). In particular, “[discrimination in education is one of the most damaging injustices women suffer. It denies them equal education and equal employment opportunity, contributing to a second class self image.” A Matter of Simple Justice, The Report on the President’s Task Force on Women’s Rights and Responsibilities 7 (April, 1970). See, American Women, The Report of the President’s Commission on the Status of Women (1963). The President’s Task Force also concluded that “discrimination based on sex in public education should be prohibited by the Fourteenth Amendment.” A Matter of Simple Justice, supra, at 8. Congress has also recognized the importance of all aspects of education for women by declaring :
“No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance, * * *."
Title IX of the Education Amendments of 1972, 86 Stat. 235, § 901(a), P.L. 92-318 (June 23, 1972) U.S.Code Cong. & Admin.News p. 444.
Discrimination in high school interscholastic athletics constitutes discrimination in education. The Supreme Court of Minnesota has stated that:
"* * * [I] nterscholastic activities * * * [are] today recognized * * * as an important and integral facet of the * * * education process, see, Bunger v. Iowa High School Athletic Assn, 197 N.W.2d 555 (Iowa 1972); Kelley v. Metropolitan County Bd. of Ed. of Nashville and Davidson County, 293 F.Supp. 485 (M.D.Tenn. 1968) * * *."
Thompson v. Barnes, 200 N.W.2d 921, 926 n. 11 (Minn.1972). The court in Thompson pointed out that this was also the position of the Minnesota High School League. See, Behagen v. Intercollegiate Conference of Faculty Rep., 346 F.Supp. 602 (D.Minn.1972). The National Federation of State High School Athletic Associations has taken the position that:
“Interscholastic athletics shall be an integral part of the total secondary school educational program that has as its purpose to provide educational experiences not otherwise provided in the curriculum, which will develop learning outcomes in the areas of knowledge, skills and emotional patterns and will contribute to the development of better citizens. Emphasis shall be upon teaching ‘through’ athletics in addition to teaching the ‘skills’ of athletics."
1970-1971 National Federation of State High School Athletic Associations Official Handbook 9.
Furthermore, the High School League recognizes that interscholastic sports are just as valuable for, females as for males. See, Haas v. South Bend Community School Corporation, 289 N.E.2d 495, 500 (Ind.1972).
The importance of interscholastic athletics for females as part of the total educational process has been recently emphasized by the Minnesota State Board of Education. Its recent statement of policy and proposed action, Eliminating Sex Bias in Education (September 1972), states that:
“* * * [O]ur educational system has helped perpetuate the division of the sexes into predetermined roles and has failed to provide freedom from discrimination because of sex * * *
“The practice of stereotyping and socializing men and women into ‘masculine’ ‘feminine’ roles has resulted in prejudice, dominance, discrimination and segregation harmful to the human development of both sexes.
* * * * * *
“The State Board of Education is concerned about four areas in particular: discrimination in hiring and promoting, sex requirements for boys and girls to participate in sports and extra-curricular activities, sex bias in curricular and teaching materials, and providing in-service training for administrators and teachers to overcome the habits and practices of teaching stereotyped social roles.” (Emphasis added.)
In view of these circumstances, we must conclude that at the very least, the plaintiffs’ interest in participating in interscholastic sports is a substantial and cognizable one. Thus, this case is properly before a federal court to determine if the High School League’s actions are in conformity with the Equal Protection Clause. See, Cynthia Morris et al., etc. v. Michigan State Board of Education, supra; Mitchell v. Louisiana High School Athletic Association, supra, 430 F.2d at 1158; Bucha v. Illinois High School Athletic Association, 351 F.Supp. 69 (N.D.Ill.1972); Reed v. The Nebraska School Activities Association, supra; Graves v. Walton County Board of Education, 300 F.Supp. 188, 199 (M.D.Ga.1968), aff’d, 410 F.2d 1152, 1153 (5th Cir. 1969). See generally, 36 Mo.L.Rev. 406-408 (1971).
III. The High School League’s Interest.
Because the defendant high schools have not provided teams for females in tennis and cross-country skiing and running, the effect of the High School League’s rule is to completely bar Brenden and St. Pierre from competition in these non-contact interscholastic sports, despite their being fully qualified. The High School League argues, however, that its rule is justified in order to assure that persons with similar qualifications compete among themselves. They state that physiological differences between males and females make it impossible for the latter to equitably compete with males in athletic competition.
In evaluating the High School League’s justification for their rule, we will, as we have indicated, apply the equal protection standard for evaluating non-suspect classifications. That standard is set forth in Reed v. Reed, supra 404 U.S. at 76, 92 S.Ct. at 254.
“* * * a classification ‘must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons in similar circumstances shall be treated alike.’ * * * ” (Citation omitted and emphasis added.)
It has been pointed out that in applying this standard, the Supreme Court’s definition of what constitutes a rational relationship has become more rigorous, and that the Court has become “less willing to speculate as to what unexpressed legitimate state purposes may be rationally furthered by a challenged statutory classification.” Green v. Waterford Board of Education, supra, 473 F.2d at 633.
We recognize that because sex-based classifications may be based on outdated stereotypes of the nature of males and females, courts must be particularly sensitive to the possibility of invidious discrimination in evaluating them, and must be particularly demanding in ascertaining whether the state has demonstrated a substantial rational basis for the classification. Compare, Reed v. Reed, supra, with Gunther, The Supreme Court, 1971 Term — Foreword: In Search of Evolving Doctrine on a Changing Court: A Model for a Newer Equal Protection, 86 Harv.L.Rev. 1, 34 (1972). See, Wark v. Robbins, 458 F.2d 1295, 1297 n. 4 (1st Cir. 1972); Sex Discrimination in High School Athletics, supra at 346-349, 370. This is especially true where the classification involves the interest of females in securing an education.
We believe that in view of the nature of the classification and the important interests of the plaintiffs involved, the High School League has failed to demonstrate that the sex-based classification fairly and substantially promotes the purposes of the League’s rule.
(A)
First, we do not believe the High School League has demonstrated a sufficient rational basis for their conclusion that women are incapable of competing with men in non-contact sports. The trial court specifically found that the plaintiffs were capable of such competition and the evidence indicates that the class of women, like the class of men, includes individuals with widely different athletic abilities. As the Fifth Circuit has recognized in activities requiring physical strength, technique may be just as important as physical capacity. Weeks v. Southern Bell Telephone Company, 408 F.2d 228, 236 (5th Cir. 1969). And, “[tjechnique is hardly a function of sex.” Ibid, at 236. Furthermore, the record indicates that in non-contact sports, such as those involved here, factors such as coordination, concentration, agility and timing play a large role in achieving success. No objective evL dence was introduced comparing males and females with respect to these factors. See, Sex Discrimination in High School Athletics, supra at 363.
Essentially, the testimony of those witnesses who concluded that females were wholly incapable of competing with men in interseholastic athletics was based on subjective conclusions drawn from the physiological difference between the sexes by individuals who were not themselves familiar with mixed competition. This subjective testimony is particularly susceptible to discrimination based on stereotyped notions about the nature of the sexes.
Furthermore, the High School League failed to show that it had established any objective nondiscriminatory minimum standards for evaluating qualifications for non-contact interscholastic athletics. The record indicates, in fact, that the schools had adopted no cut policies allowing male students, no matter how untalented, to participate in the non-contact interscholastic sports involved here.
We note that there is at least one systematic study of mixed competition in non-contact sports. In 1969, a rule of the New York State Department of Education prohibiting competition between males and females in non-contact sports was challenged. The Department reports :
“Faced with the need for valid supporting data, the Education Department gathered all the evidence it could find on the matter. Very little was reported in professional literature. In the limited number of experiences that came to its attention wherein girls competed on boys’ teams (primarily at the college level), the only negative factor reported was that it was not yet socially acceptable for a girl to defeat a boy in athletic competition. Discussion with various medical personnel elicited a unanimous expression that there are no medical reasons to prohibit girls from competing on boys’ teams in selected non-eon-tact sports. Thus, it became clear that the Department had little or nothing to support its traditional position. It was then suggested that a moratorium be declared on a decision until some evidence could be gathered through experience. Thus, the experimental project came into being.”
University of the State of New York, The State Department of Education, Division of Health, Physical Education and Recreation, Report on Experiment: Girls on Boys Interscholastic Athletic Teams, March 1969-June 1970, 1 (February, 1972).
The Department then conducted an experiment in which one hundred schools over a sixteen-month period maintained athletic teams on which both males and females participated. The results of the experiment were overwhelmingly favorable to continuing mixed competition:
“Should the practice of allowing girls to compete on boys’ athletic teams be continued? Eighty percent of the principals, directors, women physical educators, coaches, and physicians involved in the experiment voted in favor of continuing the practice, either as an experiment or as legal policy. Slightly more than 90 percent of the boy team members, girl participants, parents, coaches and opposing coaches also favored continuation of the practice. * * * ”
Id. at 4. As a result of the experiment, New York amended its rules to allow females to compete with males.
(B)
Second, even if we assume, arguendo, that, on the whole, females are unlikely to be able to compete with males in non-contact interscholastie sports, this fact alone would not justify precluding qualified females like Brenden and St. Pierre from such competition. Reed v. Reed, supra. Cf., Stanley v. Illinois, 405 U.S. 645, 92 S.Ct. 1208, 31 L.Ed.2d 551 (1972).
In Reed, the Court found unconstitutional a portion of the Idaho probate code which granted males a mandatory preference over females in competing for the right to administer an estate without regard for the individual qualifications of the female applicant. One of the reasons which the Idaho Supreme Court gave for upholding the statute was that the “legislature when it enacted the statute evidently concluded that in general men are better qualified to act as an administrator than are women.” Reed v. Reed, 465 P.2d 635, 638 (Idaho 1970). Because of this, in the Idaho Supreme Court’s opinion, eliminating females from consideration “is neither an illogical or arbitrary method devised by the legislature to resolve an issue that would otherwise require a hearing as to the relative merits * * * of the two or more petitioning relatives.” Id. at 638.
The United States Supreme Court did not discuss the validity of the assumption that women are less qualified than men to be administrators of estates. Nonetheless, it concluded that the preference for men was arbitrary:
“ * * * To give a mandatory preference to members of either sex over members of the other, merely to accomplish the elimination of hearings on the merits, is to make the very kind of arbitrary legislative choice forbidden by the Equal Protection Clause of the Fourteenth Amendment; * * *
“By providing dissimilar treatment for men and women who are * * * similarly situated, the challenged section violates the Equal Protection Clause. * * * ”
Reed v. Reed, supra 404 U.S. at 76-77, 92 S.Ct. at 254.
In our view, Reed precludes a state from using assumptions about the nature of females as a class, to deny to females an individualized determination of their qualifications for a benefit provided by the state.
In the present case, the underlying purpose of the High School League’s rule is, as we have indicated, to insure that persons with similar qualifications will compete with each other. Yet, females, whatever their qualifications, have been barred from competition with males on the basis of an assumption about the qualifications of women as a class. The failure to provide the plaintiffs with an individualized determination of their own ability to qualify for positions on these teams is, under Reed, violative of the Equal Protection Clause. See, Note, Sex Discrimination in High School Athletics, supra.
The High School League argues that invalidation of its rule will have an adverse impact on the future development of opportunities for females in interscholastic sports. This argument is too speculative to have merit, particularly in view of the recent statement of the Minnesota State Board of Education calling on its local boards- to provide equal education opportunity for females, see, Eliminating Sex Bias in Education, supra, and the League’s own stated commitment to interscholastic athletics for females. This argument certainly cannot be used to deprive Brenden and St. Pierre of their rights to equal protection of the law. With respect to these two females, the record is clear. Their schools have failed to provide them with opportunities for interscholastic competition equal to those provided for males with similar athletic qualifications. Accordingly, they are entitled to relief. See, Haas v. South Bend Community School Corporation, supra.
We are, of course, always reluctant to invalidate state and local action as unconstitutional. We have, however, no choice where a group of citizens has been deprived of the equal protection of the law. The likelihood of similar state action in this area being found unconstitutional in the future will be minimized if the League and the local school board affirmatively respond to the request of the Minnesota Department of Education to:
“ * * * Review all State Board rules and regulations and take steps to eliminate all sex-based requirements for courses and extra-curricular activities for students.
“[And] * * * Provide equal access for all pupils to local school facilities, programs, equipment, staff services, and financial resources.”
Eliminating Sex Bias in Education, supra at 6.
Affirmed.
. See, American Women, The Report of the President’s Commission on the Status of Women (1963) ; A Matter of Simple Justice, The Report on the President’s Task Force on Women’s Rights and Responsibilities (April, 1970) ; Discrimination Against Women, Hearings Before the Special Subcommittee on Education of the Committee on Education & Labor, House of Representatives, 91st Cong., 2nd Sess., on Section 805 of H.R. 16048 (1970); L. Kanowitz, Women and the Law (1964); 1969 Handbook on Women Workers, United States Department of Labor, Women’s Bureau Bulletin 294.
. 42 U.S.C. § 2000e, et seq.
. 29 U.S.C. § 206(d).
. Sections 901-907, P.L. 92-318, 86 Stat. 235 (June 23, 1972).
. Section 3, P.L. 92-496, 86 Stat. 813 (October 14, 1972).
. The failure to provide educational opportunity for women has long been criticized in this country. For instance, Abigail Adams, writing in revolutionary war America, “spoke often and sometimes sharply in her letters about the discrimination between boys and girls with respect to educational privileges, a disparity she could only attribute to men’s ‘ungenerous jealousy of rivals near the throne’.” Quoted in James & James & Boyer, Notable American Women 1607-1950: A Biographical Dictionary (1971).
. “ * * * As testified to by defendants’ expert witnesses, men are taller than women, stronger than women by reason of a greater muscle mass; have larger hearts than women and a deeper breathing capacity, enabling them to utilize oxygen more efficiently than women, run faster, based upon the construction of the pelvic area, which when women reach puberty, widens, causing the femur to bend outward, rendering the female incapable of running as efficiently as a male. * * * ”
Brenden v. Independent School District 742, 342 F.Supp. 1224, 1233 (D.Minn. 1972).
. New York has determined that:
“(4), Girls may participate on the same team with boys in interscholastie competition in the sports of archery, badminton, bowling, fencing, golf, gymnastics, riflery, rowing (but only as coxswain), shuffleboard, skiing, swimming and diving, table tennis, tennis, and track and field, provided the school attended by a girl wishing to participate in any such sport does not maintain a girls’ team in that sport. In exceptional cases, the principal or the chief executive officer of a school may permit a girl or girls to participate on a boys’ team in a designated sport or sports, notwithstanding the fact that the school maintains a girls’ team in that sport or sports.”
Section 135.4 of the Regulations of the Commissioner of Education.
New York is not alone in having concluded that mixed competition is feasible. A new Michigan statute states:
“Female pupils shall be permitted to participate in all noncontact interscholastic athletic activities, including but not limited to archery, badminton, bowling, fencing, golf, gymnastics, riflery, shuffleboard, skiing, swimming, diving, table tennis, track and field and tennis. Even if the institution does have a girls’ team in any non-contact interscholastie athletic activity, the female shall be permitted to compete for a position on the boys’ team. Nothing in this subsection shall be construed to prevent or interfere with the selection of competing teams solely on the basis of athletic ability.”
M.C.L.A. 340.379(2), Pub.Act No. 138 (Mich. May 22, 1972).
Even in Minnesota, mixed competition exists in St. Paul pursuant to an exemption from the usual League rule. See, Brenden v. Independent School District 742, supra 342 F.Supp. at 1234 n. 17.
In addition, recently groups such as the National Collegiate Athletic Association and the Big Eight Athletic Conference have eliminated provisions in their rules which prohibited females from competing in interscholastie activities with men.
. The District Courts are divided on the question of whether rules such as that promulgated by the Minnesota High School League are constitutional. These cases are listed anil discussed in some detail in Note, Sex Discrimination in High School Athletics, 57 Minn.L.Rev. 339 (1972).
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f2d_477/html/1303-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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J. P. STEED, Plaintiff, v. CENTRAL OF GEORGIA RAILWAY COMPANY, Defendant-Third Party Plaintiff-Appellee, v. RIEGEL TEXTILE CORPORATION, Third Party Defendant-Appellant.
No. 72-2609.
United States Court of Appeals, Fifth Circuit.
May 1, 1973.
James E. Clark, Birmingham, Ala., for appellant.
Will Sadler, Jr., W. J. Sullivan, Birmingham, Ala., for appellee.
Before RIVES, GOLDBERG and MORGAN, Circuit Judges.
RIVES, Circuit Judge:
In this diversity case, Riegel Textile Corporation appeals from a summary judgment granted against it for $403,105.60 on the motion of Central of Georgia Railway Company. We reverse.
The claim arises out of an accident that occurred on December 30, 1966, when J. P. Steed, a trainman-employee of Central, was injured while switching railroad cars for Central to the plant of Riegel in Trion, Georgia. A moving car, on which Steed was riding, derailed causing Steed’s legs to be pinned between the side of the car and the loading platform on Riegel’s premises. One of Steed’s legs was traumatically amputated approximately 3% inches below the knee and the other was severely injured.
On March 1, 1967, Steed filed a Federal Employer’s Liability Act suit against the Central of Georgia in the Circuit Court of Jefferson County, Alabama. On December 9, 1968, Central filed a third-party complaint in that case against Riegel seeking indemnification from Riegel in the event of a recovery by Steed against Central. The third-party complaint is based upon a written track agreement dated April 24, 1948, which was in effect between Riegel and Central at the time of the accident. The specific language in the agreement made the basis of the third-party claim reads as follows:
“The Tenant (Riegel) also agrees to indemnify and hold harmless the Railway (Central of Georgia) from loss, damage, or injury from any act or omission of the Tenant, its employees or agents, to the person or property of the parties hereto and their employees and the person or property of any other person or corporation, while on or about said track; and if any claim or liability other than from fire shall arise from the joint or concurring negligence of the parties hereto, it shall be borne by them equally.”
Two other provisions of the track agreement pertinent to the case read as follows :
“2. The Tenant (Riegel) will pay for, own and maintain the entire track from the point of the switch to the end of the track, or about 720 feet in length, as shown in green on said print.
* * * * * *
“4. If the Tenant fails to maintain said track in safe operating condition, as prescribed by the railway, the Tenant agrees that the railway may put it in repair at the Tenant’s expense or may discontinue operating thereover.”
On May 1, 1969, Riegel filed a petition for the removal of the entire case to the federal court. On May 2, 1969, the district court, on motion to remand, entered an order remanding the original complaint (Steed v. Central) to the state court, but retaining jurisdiction over this third-party complaint. That action of the district court was affirmed by the Fifth Circuit in Central of Georgia Railway Co. v. Riegel Textile Corp., 1970, 426 F.2d 935.
The trial of the FELA case in the state court occurred in June, 1969, resulting in a judgment in favor of Steed and against Central in the amount of $500,000. On November 21, 1969, the state trial judge entered a remittitur reducing the judgment to $300,000, and otherwise overruled Central’s motion for a new trial. The remittitur was accepted by Steed. On April 8, 1971, the Alabama Supreme Court affirmed in Central of Georgia v. Steed, 287 Ala. 64, 248 So.2d 110.
The third-party complaint against Riegel had been held in abeyance pending the final disposition of the primary case (Steed v. Central) in the state courts. The amount of Steed’s recovery from Central having been finally established in the state courts, the issue in the district court on the third-party complaint was whether Riegel should reimburse Central as to all, or one-half, or none of Central’s total outlay in the case. The parties stipulated that the matter of Riegel’s liability must be determined in accordance with the above-quoted provisions of the track agreement and with the laws of the State of Georgia where the accident occurred.
The parties further stipulated that, by certified mail on March 23, 1967, Central made a demand on Riegel based on the terms of the 1948 track agreement. However, Riegel contended that there was an obligation upon Central to promptly notify Riegel, as indemnitor, that an accident had occurred and that Central faced a loss which it expected Riegel to defend and indemnify. Riegel further contended that such notice and demand was not made by Central within a reasonable time after the filing of Steed’s complaint against Central. Central, however, took the position that regardless of when demand was made upon Riegel as indemnitor, Riegel had actual notice of the accident since it occurred on its premises. Riegel, nonetheless, claimed the right to contest the reasonableness of Central’s actions, and whether Central reasonably took steps to settle the case prior to suit being filed by Steed and demand being made by Central upon Riegel.
Central took the position that since it gave Riegel notice of the filing of Steed’s lawsuit and gave it an opportunity to defend, while Riegel refused, the final judgment in Steed’s ease is conclusive against Riegel to the effect that Steed was not furnished a safe place to work. On the other hand, Riegel contended that the judgment against Central in the state court is a prima facie showing that Central was negligent, and that there was at least joint and concurring negligence by Central and Riegel.
It was stipulated that either party may introduce into evidence any portion of the testimony of the witnesses or other evidence introduced at the trial of the case of Steed v. Central in the state court, and that either party may use or call as a witness any party who testified at the previous trial in the state court in lieu of, or in addition to, his testimony at said trial. In addition, extensive depositions were taken both by Central and by Riegel in this third-party action.
Central moved for summary judgment based on the record in the case of Steed v. Central of Georgia Railway Co., Case No. 16281, in the Circuit Court for the Tenth Judicial Circuit of Alabama, including the record on appeal therein and the opinion of the Supreme Court of Alabama, the pleadings and admissions, and all depositions taken in the case. Unfortunately, the district court provided no key as to the facts which it considered important, nor did it elucidate its rationale for granting Central summary judgment against Riegel for full indemnity. Rule 52(a), F.R.Civ.P., provides that findings of fact and conclusions of law are unnecessary on decisions of motions for summary judgment. Nonetheless, as Judge Hutcheson commented in United States for Use of Industrial Instrument Corp. v. Paul Hardeman, Inc., 5th Cir. 1963, 320 F.2d 115, 116:
“ * * * they are certainly permissible and the practice has been commended as greatly helpful to the appellate court in making clear the basis for the trial court’s decision. 3 Barron & Holtzoff, Federal Practice and Procedure, Sec. 1242 at 201 (Wright ed. 1958).”
On appeal from a summary judgment, the record must be viewed in the light most favorable to the party opposing the motion. The moving party bears the burden of showing both that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
This Court is not now called on to discuss and decide the many complex and difficult questions of fact and law remaining to be settled in this third-party action — such, for example, as the construction and application of the indemnity agreement; whether, as between Central and Riegel, the negligence of either has been conclusively established; if so, whether such negligence was sole, joint, or concurring; questions of proximate causation; and many other questions. Central simply has not met the heavy burden resting on it, as the party moving for summary judgment, to show as a matter of law that Riegel should reimburse Central for all, for one-half, or for any part of Central’s total outlay in the case. This Court makes no determination or intimation as to any of the questions. The judgment is reversed and the case is remanded for a trial on its merits.
Reversed and remanded.
. Poller v. Columbia Broadcasting System, 1962, 368 U.S. 464, 473, 82 S.Ct. 486, 7 L.Ed.2d 458; Pogue v. Great A&P Tea Co., 5th Cir. 1957, 242 F.2d 575, 576; 3 Barron & Holtzoff (Wright Rules ed.) § 1242, p. 198 n. 46.
. Rule 56(c), F.R.Civ.P.; Palmer v. Chamberlin, 5th Cir. 1951, 191 F.2d 532, 540.
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UNITED STATES of America, Plaintiff-Appellee, v. Arturo GARAY and Jose Medrano Torres, Defendants-Appellants.
No. 72-3537.
United States Court of Appeals, Fifth Circuit.
May 14, 1973.
Joseph J. Rey, El Paso, Tex., for defendants-appellants.
William S. Sessions, U. S. Atty., San Antonio, Tex., Ralph E. Harris, Asst. U. S. Atty., El Paso, Tex., for plaintiff-appellee.
Before TUTTLE, THORNBERRY and DYER, Circuit Judges.
PER CURIAM:
Garay and Torres appeal from their jury-trial conviction for possession of approximately fifty-two pounds of marijuana with intent to distribute, in violation of 21 U.S.C. § 841. Aside from two contentions that we view as merit-less, appellants argue that the trial court erroneously overruled their motion to suppress the marijuana and certain airline tickets, boarding passes, and baggage cheeks admitted against them. Finding that the marijuana was secured through an unlawful search, we reverse the convictions.
The events culminating in appellants’ arrest began on June 8, 1972, when a United States Customs Agent in Detroit notified Customs Agent Compton in El Paso that appellant Torres, a suspected narcotics trafficker, would soon transport a quantity of narcotics from El Paso to Detroit. The following day Compton went to El Paso International Airport, where he learned that' Torres and appellant Garay had made reservations together to fly to Detroit that day. By the time Compton made this discovery, Garay had already departed alone for Detroit; Compton observed Torres take a later flight to Detroit. Later that day, Customs Agent Yankowski watched Torres deplane in Detroit, and observed him waiting in the terminal building until Torres received a message over the public address system to “contact A. Garay or call A. Garay.” Torres returned to El Paso on June 13, 1972, and customs agents established intermittent surveillance of his activities there.
At about 2:45 p. m. on June 21, 1972, appellant Garay entered the El Paso International Airport carrying two suitcases. He purchased tickets for himself and appellant Torres for a Continental Airlines flight departing for Detroit via Chicago at 2:55 p. m. Carrying the suitcases, he hurried to the departure gate, but missed the 2:55 flight. The ticket, agent who sold him the tickets observed him leaving the airport shortly thereafter without the bags; presumably, he had checked them at a baggage area near the departure gate.
At 3:45 that afternoon, Agent Compton and five other customs agents arrived at the airport, having received word from a border patrolman stationed there that appellants Garay and Torres were preparing to return to Detroit. They had no warrants authorizing an arrest or search of appellants; but prior to their arrival at the airport they had telephoned a United States Magistrate in El Paso, informing him of the results of their investigation, and telling him that appellants’ imminent departure made it imperative to proceed without a warrant. The Magistrate agreed, and assured the agents that there was probable cause to conduct a search.
Later that evening appellant Garay entered the airport carrying a ticket, a boarding pass, and the baggage cheeks for the suitcases he had left at the departure area, and walked briskly toward the Continental Airlines boarding area where a flight was to depart momentarily for Detroit. Minutes later appellant Torres entered carrying his ticket. Compton and the other agents detained appellants, and took the tickets, boarding passes, and baggage checks from them. By this time the two suitcases had been loaded aboard the plane. A Continental employee removed them from the plane and gave them to Compton, who opened them and discovered that they contained a substance later determined to be marijuana. Appellants were then formally arrested.
Appellants contend that the warrantless search of the suitcases which yielded the marijuana was invalid under the Fourth Amendment. Subject only to a “few specifically established and well-delineated exceptions,” searches conducted without the prior issuance of a warrant are per se unreasonable. Katz v. United States, 389 U.S. 347, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967). The burden of demonstrating the availability of an exception to the warrant requirement is on the party seeking to validate the warrantless search. Coolidge v. New Hampshire, 403 U.S. 443, 455, 91 S.Ct. 2022, 2032, 29 L.Ed.2d 564 (1971). The Government, relying on Carroll v. United States, 267 U.S. 132, 45 S.Ct. 280, 69 L.Ed. 543 (1925), seeks to bring the instant case within the “exigent circumstances” exception by arguing that, at the time the border patrolman first informed the agents that appellants were preparing to return to Detroit, prompt action was required lest appellants depart for Detroit with the suitcases, thereby foreclosing any opportunity for a search.
While the exigencies of the situation may well have justified the warrantless detention of appellants, they cannot validate the search of the suitcases made at a time when appellants were under restraint, if not under formal arrest. At that point, appellants were incapable of concealing or destroying the suitcases or their contents. Nor was there any significant probability that the suitcases would escape search by being moved to Chicago or Detroit aboard the airplane, for the officers, through their possession of the baggage checks identifying the suitcases, had effective control over their movement. Even if the officers had been unable to retrieve the bags before the plane departed El Paso, they could have arranged with agents in Chicago or Detroit to intercept the bags there. Thus, the mobility of the bags at the time of seizure does not bring the instant case within the doctrine of Carroll, supra, because their mobility was at all pertinent times subject to the control of the arresting officers. In short, the officers could and should have held the bags until they obtained a warrant authorizing an examination of their contents.
Because the marijuana introduced at trial was the product of an unlawful search, the judgment is reversed and the case remanded for further proceedings.
. These contentions are (1) that the in(iietment was invalid because it was returned three days before laboratory tests definitely established that the substance in question was marijuana, and (2) that the trial court erroneously admitted prejudicial hearsay testimony,
. Testimony at trial did not establish whether the airline employee removed the suitcases at the direction of the customs agents. Nevertheless, the only reasonable hypothesis under these circumstances is that the agents directed him to remove the suitcases, which they identified by means of the baggage checks they had taken from appellants. The Government does not contend otherwise. Moreover, it is undisputed that the actual search of the suitcases was conducted solely by Government agents. The instant case therefore does not present the question whether the search was conducted by private citizens and thus was immune to Fourth Amendment restraints. See, e. g., Corngold v. United States, 9th Cir. 1966, 367 F.2d 1.
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UNITED STATES of America, Plaintiff-Appellee, v. Joe Leal MORALES, Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellee, v. Rudolfo Rodriguez GONZALES, Defendant-Appellant.
Nos. 72-2635, 72-2777.
United States Court of Appeals, Fifth Circuit.
April 18, 1973.
John M. Killian, San Antonio, Tex. (Court-Appointed), J. Douglas McGuire, San Antonio, Tex. (Court-Appointed), for defendant-appellants.
William S. Sessions, U. S. Atty., James F. Bock, Asst. U. S. Atty., San Antonio, Tex., for plaintiff-appellee.
Before RIVES, GOLDBERG and MORGAN, Circuit Judges.
RIVES, Circuit Judge:
Joe Morales and Rudolfo Gonzales, along with Andres Vargas, were tried jointly and each was found guilty of conspiring to defraud an agency of the United States Government, the Bureau of Narcotics and Dangerous Drugs (hereafter BNDD), by intentionally selling to a BNDD agent a nonnarcotic substance (wheat) which they represented to be heroin.
The fourth defendant, Juan Luis Davila, who planned the sale, pleaded guilty and testified as the principal government witness against each of his codefendants. Neither Gonzales nor Vargas testified on his own behalf. Morales did testify, admitting participation in the sale, but insisting that Davila deceived him into believing that the transaction was a normal sale of genuine heroin to a nonagent.
On appeal, Morales- argues (1) that the trial court erred in allowing the jury to convict on the strength of the uncorroborated, “incredible” testimony of Davila and (2) that admission of the extra-judicial confessions of Gonzales and Vargas violated the rule of Bruton v. United States, 1968, 391 U.S. 123, 88 S.Ct. 1620, 20 L.Ed.2d 476, by inculpating Morales without affording him the constitutional right to confront his accusers. Gonzales attacks the propriety of his conviction on the two grounds asserted by Morales and contends, in addition, that he was entrapped. We reverse Morales’ conviction, but affirm the conviction of Gonzales.
THE CONSPIRACY
By his own admission, Davila set in motion the bizarre chain of events, which culminated in the fraudulent sale. (Rec Vol. II, p. 181.) He contacted BNDD Agent Nattinger for whom he had worked as an informer in the past, identified himself, and promised to arrange a heroin purchase between an undercover BNDD agent and a notorious local pusher named Esquivel (see Agent Nattinger’s testimony at Rec. Vol. II, pp. 27-29). Davila had no direct contact with Esquivel; he lied to the government from the start.
According to the plan reached between Davila and the government, BNDD Agent Lozano would pose as an out-of-town buyer from Houston and rent a room at the Holiday Inn in San Antonio where the exchange with Esquivel would take place under heavy surveillance.
After the scheme was formulated, Davila enlisted the aid of appellants who agreed to help make the delivery. Gonzales accompanied Vargas who drove to the Holiday Inn parking lot on March 17, 1972. Gonzales handed the crucial package to Morales who was waiting in the parking lot. Morales then proceeded to the motel room and, posing as Esquivel, gave the package to Lozano in exchange for $3,000 (Rec. Vol. II, pp. 146-148). An analysis of the package contents immediately after the sale revealed that Agent Lozano had purchased wheat, not heroin. The four defendants were quickly apprehended and charged with defrauding the government.
MORALES’ CONVICTION
The only direct evidence linking either appellant with the “conspiracy” to defraud the government was the accomplice testimony of Davila. Both a dope addict and convicted felon (Rec. Vol. II, p. 202), Davila had worked as an informer for the BNDD in the past (Rec. Vol. II, p. 34). He testified that Morales and Gonzales discussed with him the possibility of “burning” Agent Lozano, that Gonzales agreed to construct the fake heroin package, and that both appellants knew Rudy Lozano’s true identity. According to Davila, the $3,000 purchase price paid to Morales by Agent Lozano was to be split three ways —one third for each appellant and one third for Davila.
In striking contrast to Davila’s tale, Morales testified that he did not know that Lozano was an undercover agent or that the package was a sham (Rec. Vol. II, p. 267). He insisted that he would never have knowingly delivered the package to a government agent.
(A) Davila’s Testimony
In Tillery v. United States, 5 Cir. 1969, 411 F.2d 644, 647, this Court held that,
“In determining whether there is substantial evidence in cases where a conviction rests upon the uncorroborated testimony of an accomplice, the general rule is that the uncorroborated testimony of an accomplice may support a conviction if it is not incredible or otherwise unsubstantial on its face [citing cases].”
Relying upon the rule in Tillery, coupled with the trial judge’s characterization of Davila’s testimony as “inconceivable,” Morales argues that the district court erred in allowing the jury to convict him on the strength of Davila’s unsupported testimony.
Although Davila’s testimony was both improbable and crucial to Morales’ conviction, the principles enunciated in Tillery, supra, do not dictate a reversal here. Tillery is distinguishable from the instant case in two important respects.
1) In Tillery the accomplice who uttered the damaging testimony had made earlier contradictory' statements about the crime. Thus, the testimony of the Tillery accomplice was both incredible and demonstrably unreliable. By contrast, Davila’s testimony, although dubious and at times ambiguous, was not rendered unreliable by any prior contradictory statements.
2) However, a more important distinction can be drawn. In Tillery, the trial court permitted the jury to decide the defendant’s guilt on the basis of accomplice Padgett’s unsupported story “without the benefit of an instruction that accomplice testimony should be received with caution and viewed with skepticism.” (411 F.2d at 646.) Such an admonition was direly needed in Tillery, and the absence of a proper limiting charge was the key reason for reversal in that case.
In the present case, the trial judge clearly instructed the jury “that the testimony of an accomplice should be closely examined, received with caution and weighed with great care.” His charge correctly placed Davila’s testimony under the harsh light required by Tillery. If, after viewing his testimony with a skeptical eye, the jury chose to believe Davila and base its verdict on his testimony alone, that was its prerogative. Diggs v. United States, 9 Cir. 1915, 220 F. 545, aff’d, 242 U.S. 470, 37 S.Ct. 192, 61 L.Ed. 442; Lyles v. United States, 5 Cir. 1957, 249 F.2d 744; Williams v. United States, 8 Cir. 1964, 328 F.2d 256.
Davila testified at trial that he was both a dope addict and a convicted felon (Rec. Vol. II, p. 202). That fact merited jury consideration, but did not, by itself, render Davila’s testimony legally insubstantial.
B) The BRUTON Rule Violation
During the course of the trial, two oral confessions attributed to Vargas and Gonzales respectively were admitted without objection by Morales.
Gonzales’ confession, uttered voluntarily after completion of the sale, was revealed by Agent Wood in the following exchange at trial:
“A. Mr. Gonzales stated to himself and Agent Nattinger that he had been approached by Mr. Morales and Juan Davila to make a turkey package.
“Q. Would you explain to the jury and to me please what a turkey package is?
“A. A. turkey package is a dumb package. In this case it would be, it was the heroin — it would be a dumb package of heroin which was the flour.
“Q. Did he tell you whether or not he was to receive anything for this?
“A. Yes, sir. He did. He said Mr. Morales and Mr. Davila were going to give him a thousand dollars for it.”
(Rec. Vol. II, p. 168.) Gonzales’ confession expressly charged Morales with knowledge that the package was fake, but not with knowledge of the agent’s identity.
Vargas’ “confession” consisted of the single, cryptic remark, “You have me in a conspiracy” (Rec. Vol. II, p. 86). Because of its ambiguity, that statement does not carry the incriminating force of Gonzales’ confession, and, by itself, constitutes an insignificant link between Morales and the fraud.
Morales contends that introduction of the confessions of Vargas and Gonzales, neither of whom testified at trial, violated his sixth amendment right to confrontation, recently delineated in Bruton v. United States, supra. We agree that admission of Gonzales’ confession violated Morales’ Bruton rights and, for that reason, reverse Morales’ conviction.
In Bruton the Supreme Court held that introduction of the extrajudicial confession of one codefendant which inculpated another violated the latter’s right to confrontation when the confessor chose not to testify. The Bruton Court openly rejected the rationale of Delli Paoli v. United States, 1956, 352 U.S. 232, 77 S.Ct. 294, 1 L.Ed.2d 278, that encroachment on the right - to confrontation could be avoided by an instruction to the jury to disregard the confessor’s statement incriminating the nonconfessor in determining the nonconfessor’s guilt. Instead, the Court ruled that such an admonition is intrinsically ineffective and held that admission of the codefendant’s inculpatory statement was reversible error in spite of the trial court’s cautionary charge.
In the present ease, the trial judge instructed the jury to disregard Vargas’ statement in determining the guilt of appellants. (Rec. Vol. II, pp. 377, 378.) Inexplicably, he did not make a similar charge with respect to the more damaging statement of Gonzales. It is clear, however, that even had the jury been warned to ignore Gonzales’ statement in determining Morales’ guilt, admission of that statement would have violated the Bruton rule.
In two recent decisions, Harrington v. California, 1969, 395 U.S. 250, 89 S.Ct. 1726, 23 L.Ed.2d 284, and Schneble v.Florida, 1972, 405 U.S. 427, 92 S.Ct. 1056, 31 L.Ed.2d 340, the Supreme Court refused to overturn petitioner’s conviction where a codefendant’s confession was introduced at trial in violation of the Bruton rule, because the overwhelming evidence of petitioner’s guilt rendered the Bruton violation “harmless error beyond a reasonable doubt.” While these decisions certainly confine the holding in Bruton, they do not dilute the admonition in Chapman v. California, 1967, 386 U.S. 18, 23, 87 S.Ct. 824, 17 L.Ed.2d 705, that constitutional errors affecting substantial rights cannot be considered harmless; and they are clearly inapplicable in a case such as this where the two extra-judicial statements constitute a significant portion of the evidence of guilt, supplemented only by the doubtful testimony of an accomplice.
Morales did not object to the introduction of Gonzales’ oral confession at trial. Thus, he cannot raise the issue of the Bruton violation for the first time on appeal, unless the introduction of Gonzales’ confession constituted plain error. Rule 52(b), F.R.Crim.P. In view of the importance attached to the right to confrontation by recent Supreme Court decisions, we hold that the denial of that right in this case was plain error.
Rule 52(b), F.R.Crim.P., states that, “Plain errors or defects affecting substantial rights may be noticed although they were not brought to the attention of the court.” Although several different definitions of “plain error” have been fashioned by the courts, the ultimate decision whether or not to take notice of an error not raised below must depend on the facts of the particular case. Dupoint v. United States, 5 Cir. 1968, 388 F.2d 39, 45; Sykes v. United States, 5 Cir. 1966, 373 F.2d 607, cert. denied, 386 U.S. 977, 87 S.Ct. 1172, 18 L.Ed.2d 138.
The Supreme Court has not had occasion to decide whether a Bruton violation constitutes plain error, but the language used in the Bruton line of cases demonstrates the Court’s strong commitment to correcting the “serious flaw” created by admission of a Bruton-type confession. In Bruton, supra, 391 U.S. at 137, 88 S.Ct. at 1628, the Supreme Court observed that “the introduction of Evans’ confession posed a substantial threat to petitioner’s right to confront the witnesses against him” [emphasis added], and the Court reiterated the importance of that right when it held the Bruton rule retroactive in Roberts v. Russell, 1968, 392 U.S. 293, 88 S.Ct. 1921, 20 L.Ed.2d 1100, stating that,
“Despite the cautionary instruction, the admission of a defendant’s confession which implicates a codefendant results in such a ‘serious flaw.’ The retroactivity of the holding in Bruton is therefore required; the error ‘went to the basis of fair hearing and trial because the procedural apparatus never assured the [petitioner] a fair determination’ of his guilt or innocence.”
(Emphasis added.) (392 U.S. at 294, 88 S.Ct. at 1922).
In view of the importance accorded the Bruton rule by the Supreme Court, coupled with the fact that Gonzales’ confession represents one of the chief links between Morales and the fraud, we hold that introduction of Gonzales’ confession seriously impaired Morales’ right to a fair trial and, therefore, was plain error.
GONZALES’ CONVICTION
A) The Accomplice Testimony
Gonzales, like Morales, contests the propriety of allowing the jury to convict on the uncorroborated testimony of Davila. For the reasons expressed previously, we believe the trial court properly followed the procedure set out in Tillery, supra, obviating any argument that Davila’s testimony was erroneously submitted to the jury.
B) Application of the BRUTON Rule
In his brief on appeal, Gonzales duplicates Morales’ argument and claims that both his own confession and that of Vargas were introduced in violation of the Bruton rule. However, Gonzales has no standing to attack the introduction of his own confession on Bruton grounds. The rule enunciated in Bruton stems from the right to confrontation and is designed to protect the nontestifying confessor’s codefendant, not the confessor himself.
Of course, Gonzales does have standing to question the' introduction of Vargas’ statement on Bruton grounds. But Gonzales did not object to the admission of Vargas’ statement at trial, and that statement added very little weight to the government’s case against Gonzales. For that reason, we hold that introduction of Vargas’ statement which, unlike that of Gonzales, only tenuously connected appellants with the crime, did not constitute a sufficiently serious flaw to rise to the level of plain error.
C) Entrapment
Gonzales raises the additional defense of entrapment. A careful study of the record indicates that Davila might have tricked his compatriots, but the facts do not suggest entrapment. No government official implanted in Gonzales’ mind the disposition to commit this crime. Sherman v. United States, 1958, 356 U.S. 369, 78 S.Ct. 819, 2 L.Ed.2d 848; Sorrells v. United States, 1932, 287 U.S. 435, 53 S.Ct. 210, 77 L. Ed. 413; 73 Harv.L.Rev. 1333 (1960). Nor does the factual pattern of this sale indicate impermissibly vigorous government involvement sufficient to constitute entrapment as a matter of law. United States v. Bueno, 5 Cir. 1971, 447 F.2d 903.
Accordingly, the judgment of conviction of Gonzales is affirmed, while the judgment of conviction of Morales is reversed, and the case as against Morales is remanded for another trial.
Affirmed as to Gonzales; reversed and remanded as to Morales.
. The indictment contained one count and charged six overt acts in furtherance of a conspiracy punishable under 18 U.S.C. § 371.
. One of the discussions supposedly took place at the Comet Drive-In, as revealed by the following colloquy :
“Q. What happened after you got there [Comet Drive-In] ?
“A. Joe [Morales] went and called Iludy [Gonzales] and Rudy crossed the street and started talking to Joe. Then I got into the conversation with them.
“Q. What were they talking about?
“A. About Rudy Lozano there.
“Q. What were they saying?
“A. Well, about, you know, about him having them $3,000 and all, figuring out a way of how to burn him.
“Q. What do you mean ‘burn him’?
“A. Trying to figure out how would be the best way to go about delivering something to where he would go for it without putting — having to put any heroin in front.”
Rec. Vol. II, pp. 189-190.
. Davila stated, at p. 190 of the Record, Vol. II:
“Well, that was going to be left up to Rudy Gonzales. He was going to fix that package up. AA’e didn’t know what was going to be in the package. AVe just knew it was going to be some kind of powder to where it looked like heroin.”
. When pressed on cross-examination about his earlier, equivocal assertion that Rudy Gonzales “knew more or less” that Lozano was an undercover agent, Davila replied: “Well, ‘more or less’ is the same thing, like knowing; to me, it is.” (Rec. Vol. II, p. 212.)
. After the sale, Morales was apprehended with $950 of the marked money on his person. This fact supports Davila’s assertion that the profits were to be evenly divided and belies Morales’ claim that lie was participating in the transaction as a favor to Davila, expecting only a fix and a little money for his efforts. (Rec. Vol. II, pp. 255, 256.)
However, Morales claimed that he was merely holding the money for Davila (Rec. Vol. II, p. 258), and in any event the ultimate disposition of the $3,000 does not directly bear on the critical issue — the extent of Morales’ involvement in the plot to defraud.
. Morales parried repeated leading questions by government counsel designed to elicit an admission, arguing quite logically that, in his view, delivery of either heroin or nonheroin to a government agent while under surveillance would be suicide.
. At one point during the trial, outside the presence of the jury, the trial judge openly expressed his disbelief in Davila’s story:
“I just can’t see, to save my life, why any people who are just reasonably intelligent would conspire to take money from a federal agent, that it is just so impossible and improbable and inconceivable to me that I just can’t — I just can’t visualize it in my mind.”
Rec. Vol. II, p. 316.
Later at the sentencing proceedings after trial, the trial judge reiterated his incredulity:
“I want to clarify my position. I still think it is a truth — is—stranger-than-fiction type of story. I was not the fact-finder. I wasn’t passing upon the credibility of either of the two witnesses [Davila or Morales]. I was just saying that probably what Mr. Morales said to the effect that there was no way in which he would have done what he was accused of having done, that this would comport more with my idea of what tlie situation might have been, but I didn’t want to, impliedly or otherwise, indicate that I was taking away from the jury the fact finding job.”
Rec. Vol. II, p. 398.
. Although the government contends that Davila’s testimony was buttressed by the extrajudicial confessions of Gonzales and Vargas, Gonzales’ confession was improperly admitted (see discussion of Bruton rule, infra), and Vargas’ “confession” was too ambiguous to represent any more than a weak implication that appellants knew of tlie plot to defraud. Hence, Davila’s testimony stands alone as evidence of appellants’ guilt.
At page 11 of its brief, the government argues that “there was strong corroboration of the accomplice’s testimony, provided by several narcotics agents who had witnessed tlie events outside the motel and bad participated in the arrests.” This statement misses tlie point. Appellants admit participation in the sale; they only deny knowledge of the fraud. The eyewitness testimony of the agents to which the government brief refers merely places the appellants at the scene of the crime; it does not establish their awareness of the plot to deceive — a necessary element of the crime for which they are charged.
. Prior to his testimony at trial in Tillery, the accomplice, Padgett, had given four different, contradictory statements regarding the burglary. This prompted the court in Tillery to observe that, “Padgett’s crucial testimony was extremely unreliable, if not incredible and unsubstantial, in view of his earlier contradictory statements in which he indicated less concern with the truth than with his own skin * * (411 F.2d at 648.)
. Recognizing the crucial importance of a limiting charge, the Tillery court observed that,
“by failing to warn the jury about Padgett’s reliability in this case, the trial court presented the evidence to the jury in an improper perspective, and the jury may have felt bound to accept it as true.”
411 F.2d at 648. The best indication that the Tillery court considered omission of an admonishing charge decisive was its holding that such failure was plain error (411 F.2d at 648).
In the earlier case of Williamson v. United States, 5 Cir. 1964, 332 F.2d 123, this Court established the rule followed in Tillery that failure to admonish the jury to narrowly scrutinize the testimony of an accomplice is plain error.
. The entire charge to the jury on accomplice testimony consisted of the following:
“All evidence from a witness whose self-interest or attitude is shown to be such as might tend to prompt testimony unfavorable to an accused should be considered with caution and weighed with great care.
“In this case one of the defendants, I previously told you, has entered a guilty plea and has testified. lie would fall under what we call the category of an accomplice. He was one who admittedly was involved in this affair, this offense. So, I charge you that an accomplice is one who voluntarily and with common intent participates with another person in the commission or planning of a crime. An accomplice does not become incompetent as a witness because of participation in the criminal act charged. On the contrary, the testimony of an accomplice alone, if believed by the jury, may be of such weight to sustain a verdict of'guilty even though not corroborated or supported by other evidence. However, the jury should keep in mind that the testimony of an accomplice should be closely examined, received with caution, and weighed with great care.
“On the other hand, if the jury believes the testimony of an accomplice to be true beyond a reasonable doubt, that testimony is sufficient to convict a defendant even though it is not corroborated by any other evidence. The jury should not convict a defendant upon the unsupported testimony of an accomplice unless it believes the unsupported testimony beyond a reasonable doubt.”
Rec. Vol. II, pp. 370-71.
. In Williams v. United States, supra, p. 259, the court stated:
“Miss Walker could be regarded as an accomplice in the commission of the offenses involved; she was a user of narcotics; she had a previous felony conviction for narcotic possession; and apparently the Government chose not to prosecute her in the present situation. These were matters which might influence her testimony. They would not, however, of themselves make her testimony so legally unsubstantial or lier credibility as a witness so legally infirm as to require reasonable doubt to be recognized as a matter of law.”
In the present case, the trial judge’s cautionary instructions to the jury on accomplice testimony adequately protected the defendants by subjecting Davila’s testimony to close scrutiny.
. Vargas’ confession is ambiguous because it could mean several different things: that Vargas was caught in a conspiracy to sell heroin, that he was caught in a conspiracy to defraud a nongovernmental agent, or that he was caught in a plot to defraud the government. In addition, the term “conspiracy” might refer to a combination of only two persons or to individuals entirely distinct from appellants. In other words, Vargas’ “confession” does not directly inculpate anyone.
. Improper admission of Gonzales’ confession in itself requires reversal of Morales’ conviction. Thus, the prejudicial effect of Vargas’ statement on the jury’s determination of Morales’ guilt is academic.
However, the admissibility of Vargas’ statement is important with respect to Gonzales’ conviction, because (for reasons to be explained subsequently) Gonzales had no standing to attack the admission of his own confession on Bruton grounds.
. In overruling Delli Paoli v. United States, the Court relied upon the principles expressed in Jackson v. Denno, 1964, 378 U.S. 368, 84 S.Ct. 1774, 12 L.Ed.2d 908, and adopted Judge Hand’s view that the limiting instruction is a recommendation to the jury to perform mental gymnastics beyond its powers.
. In both cases, ample evidence was available to demonstrate petitioner’s guilt without reliance upon his codefendant’s confession. In Harrington v. California the evidence against petitioner included the testimony of several eyewitnesses placing him at the scene of the murder. In Schneble v. Florida the petitioner himself made a detailed confession.
. See Wright, Federal Practice & Procedure: Criminal § 856, pp. 372, 373, where cases are cited variously defining “plain error” as, “ ‘error both obvious and substantial,’ 82 or ‘serious and manifest errors,’ 83 or ‘seriously prejudicial error,’ 84 or ‘grave errors which seriously affect substantial rights of the accusecl’,85
“82. Both obvious and substantial
Sykes v. United States, C.A.5th, 1966, 373 F.2d 607, 612.
“83. Serious and manifest
Feutralle v. United States, C.A.5th, 1954, 209 F.2d 159, 163.
“84. Seriously prejudicial
Cleaver v. United States, C.A.10th, 1957, 238 F.2d 766, 770. Himmelfarb v. United States, C.A.9th, 1949, 175 F.2d 924, 950, certiorari denied 70 S.Ct. 103, 338 U.S. 860, 94 L.Ed. 527.
“85. Grave errors affecting substantial rights
Wright v. United States, C.A.10th, 1962, 301 F.2d 412, 414.”
See also Moore’s Federal Practice § 52.02(2).
. In United States v. Davis, 1972, 459 F.2d 167, 172, the Sixth Circuit (in dictum) predicted our holding here, reasoning that,
“The Bruton rule, applied retroactively in Roberts v. Russell [citation omitted] seeks to avoid a serious flaw in the fact-finding process at trial. Any violation of that rule • might, therefore, present an appropriate occasion for the recognition of a plain error.”
. Since the existence of plain error depends on the facts of the particular case, our holding that introduction of Gonzales’ confession constituted plain error in no way creates a hard and fast rule. In another case, where the evidence of guilt is stronger or the incriminatory implication of the confession weaker, introduction of such a statement might not undermine the fairness of the trial.
. In his brief and argument on appeal, Gonzales does not question the voluntariness of his own confession, but instead mimics Morales’ argument that its admission violated the Bruton rule.
. Compare the situation in Bruton, supra, 391 U.S. p. 127, 88 S.Ct. p. 1623, where the Court noted that,
“Plainly, the introduction of Evans’ confession added substantial, perhaps even critical, weight to the Government’s case in a form not subject to cross-examination.”
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f2d_477/html/1317-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "TALBOT SMITH, Senior District Judge.",
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The DOW CHEMICAL COMPANY, Plaintiff-Appellee, v. William D. RUCKELSHAUS, Administrator Environmental Protection Agency, Defendant-Appellant.
No. 72-1441.
United States Court of Appeals, Eighth Circuit.
Submitted Jan. 9, 1973.
Decided April 19, 1973.
Michael C. Farrar, Environmental Protection Agency, Washington, D. C., for appellant.
Milton R. Wessel, New York City, for appellee.
Before MATTHES, Chief Judge, BRIGHT, Circuit Judge, and TALBOT SMITH.
Hon. Talbot Smith, Senior United States District Judge, Eastern District of Michigan, sitting by designation.
TALBOT SMITH, Senior District Judge.
The Dow Chemical Company (hereinafter Dow), aggrieved by an “Order and Findings of Fact of the Administrator Pursuant to Section 4(c), F.I.F.R.A.,” sought mandamus against William D. Ruckelshaus, Administrator, Environmental Protection Agency (hereinafter Administrator).
The litigation, of which this is only the most recent step, has had a lengthy and torturous history. It began back in 1970 (before the creation of the Environmental Protection Agency) when the Department of Agriculture suspended immediately the registration of 2, 4, 5 trichlorophenoxydeetic acid (a substance which will hereinafter be referred to as “2,4,5-T”) for some uses and issued cancellation notices respecting others. Cancellation does not become effective until the Administrator issues his final order. In the meantime the registrant may ship and sell the questioned product. Suspension is a far more drastic action. “Although cancellation notices should issue as soon as the Secretary finds a substantial question concerning the safety of a registered product, he reserves the suspension power for cases in which serious and irreparable harm to the public health is likely to occur before the conclusion of the ordinary cancellation process.” (Footnote omitted.) Wellford v. Ruckelshaus, 142 U.S.App.D.C. 88, 439 F.2d 598 (1971).
The Secretary’s actions were taken because of evidence indicating “that 2,4,5-T, as well as its contaminant, dioxins, may produce abnormal development in unborn animals. Nearly pure 2,4,5-T was reported to cause birth defects when injected at high doses into experimental pregnant mice but not in rats. No data on humans are available.” An additional statement of the Department of Agriculture described in detail the environmental impact, as well as stating that “The actions recommended for suspension and cancellation will minimize the probability of exposure of pregnant women to hazardous exposure of 2,4,5-T or contaminant dioxin around the home, in aquatic areas, and through food and water.”
The suspension orders were not contested, nor certain of the cancellation orders, but Dow did contest cancellation insofar as applied to use with relation to the production of rice, which brings us to the instant action.
A reference to the statutory framework is necessary for a delineation of the issues. FIFRA requires that all “economic poisons,” commonly known as pesticides, marketed in interstate commerce be registered with the Environmental Protection Agency. To be registered a pesticide must meet certain safety and efficacy standards. It cannot be registered if its labeling renders it misbranded. Misbranding occurs when (among other situations) its labeling does not contain directions or warnings which, when followed, render its use non-injurious to man and other vertebrate animals, and useful invertebrate animals, and vegetation (except weeds, in the case of herbicides ). Under certain conditions, unnecessary to explore here, it cannot be registered at all.
The entire process of registration, cancellation, and suspension is governed by section 4 of the Act (7 U.S.C. 135 b). If “it does not appear” to the Administrator that the article in question, or its labeling, complies with the Act he may refuse registration (Section 4(c), 7 U.S.C. § 135b(c) hereafter Section 4(c)). He may also, suspend or cancel “Whenever it does not appear that the article or its labeling or other material required to be submitted complies with” provisions of the Act. Upon notification of cancellation of an existing registration the registrant has 30 days before the cancellation becomes effective. In this period he may either make the necessary corrections, may request a public hearing, or may request referral to an Advisory Committee, which latter was Dow’s course of action. This request has the effect of suspending the cancellation, with the result that the product remains on the market.
The majority of the Advisory Committee recommended that the registrations in question be restored, with certain limitations. It also noted that “existing deficiencies in information relative to possible accumulation in the soil and possible magnification in the food chain of the dioxin TCDD be rectified by specific research directed to this end” and that “additional postregistration monitoring for adverse effects of agricultural chemicals be established,” as well as “consideration of the applicability of new methodology that may be evolved for specialized testing, e. g., for carcinogenesis [cancer generating], mutagenesis [mutation generating] or teratogenesis [birth defect generating effects].” The dissent characterized the majority report as “overoptimistic in assessing the implications of data,” spoke of the “uncertainty existing] about the teratogenic potential of 2,4,5-T” and closed with the observation that “It is always difficult to make decisions in the face of uncertainty” and that the committee had “labored honestly and conscientiously to deduce the best recommendations from a confused aggregate of observations.”
After receipt of the committee report the Administrator, in a lengthy “Determination and Order” of August 6, 1971, published in 36 Fed.Reg. 14777, reviewed the past procedures and the committee report, concluding that “For the foregoing reasons I have determined to continue the order of cancellation for use of 2,4,5-T on food crops for human consumption.” Dow asserted that the order did not comply with the requirements of Section 4(c), on the ground that it “was not the policy determination required by FIFRA” (since the record was regarded by the Administrator as incomplete) and that it “purported to order a public hearing” to gather further data, and that it did not “set forth the findings of facts” required by statute. Upon such grounds Dow filed a motion for what it regarded as appropriate relief.
The Administrator, noting that “[n] either the FIFRA nor this Agency’s rules make any provision for the type of relief requested by Dow” nevertheless treated Dow’s motion as a “petition for reconsideration” of the August 6 order and ruled thereon. He stated, in part, that
“The basis for my August 6 determination to continue the order of cancellation previously issued was the many questions I had concerning the safety of and need for 2,4,5-T. Specifically, that action was mandated by the following facts.” (Here the Administrator listed the ten items found in full in fn. 14 hereof.)
Dow remained dissatisfied with the order and chose to “stand by” its previously filed objections. It next filed the present action in the Eastern District Court of Arkansas.
The Bill of Complaint prayed for injunctive and other relief, and that the Administrator be ordered to withdraw his August 6 and November 4 rulings, and to issue “a new and proper order,” based and accompanied as described, and “in accordance with the recommendations of the Advisory Committee unless the Administrator can establish the existence of ‘other data’ which was not considered by the Advisory Committee and which would warrant reversal of the Advisory Committee’s conclusions.”
During argument in the District Court it was the suggestion of the Court that the Administrator enter an order “. . . as the statute requires of making findings from the Advisory Committee report and the conclusions then of the Administrator as to the decision that he makes and, therefore, the record can be put in the proper state, he can go ahead with the hearings as he intends . . . ”
Pursuant to the court’s suggestion, and within the 30 days allowed, the Administrator issued an additional order under date of April 13, 1972. In this order the Administrator stated:
“It is my purpose in entering this amendatory order to state explicitly, within one document, my decision and findings of fact under section 4(c) of the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. 135b(c) to continue the cancellation of the registrations of 2,4,5-T in question here after the submission of the Advisory Committee report. This order amends my orders of August 6, 1971 and November 4, 1971 in further response to the motion of the Dow Chemical Company filed October 1, 1971.”
The new order continued with a review of the Advisory Committee report, stated the Administrator’s determination that the cancellations of the registrations of 2,4,5-T be continued, made ten findings of fact, set forth in full in the margin hereof, and concluded that “These facts made it abundantly clear to me that the registrants have not met their burden of proof, i. e., their continuing obligation to establish the elements necessary to entitle their products to registration (see my Statement of March 18, 1971, at page 4). Accordingly the cancellations must be continued.” (App. Vol. I, p. 173.)
With respect to this latest order, of April 13, the district court concluded that the Administrator had “failed to enter an order and findings of fact on the basis of the Advisory Committee’s report and therefore abortive of the plain language of the statute.” (App. Vol. I, p. 182.) The Administrator was further directed either to enter a new order and findings, or to amend his “purported order and findings entered on April 13, 1972 in accordance herewith,” the new or amended order to (among other requirements):
“A. Set forth separately his findings of fact and his ultimate conclusions.
B. Include or be accompanied by a reasoned statement setting forth (i) the portions of the Advisory Committee Report and the ‘other data’ being relied upon; (ii) the manner in which defendant’s findings are based upon the Advisory Committee Report and such ‘other data’; and (iii) the manner in which defendant’s ultimate conclusions are derived from the findings.”
In addition it was directed that “While complying with this Order, defendant shall hold all administrative proceedings relating to 2,4,5-T in status quo.” This appeal followed.
The Administrator’s principal argument to us is that the District Court erred in enjoining the cancellation proceedings, that under the Act judicial review of the proceedings takes place only after the issuance of a final order, which this order was not, and then only in the Court of Appeals.
The statutory pattern respecting judicial review is set forth in Sections 4(c) and (d) of the Act. It is provided in Section 4(c) that
Final orders of the Administrator under this section shall be. subject to judicial review, in accordance with the provisions of subsection (d) of this section. (Emphasis ours)
and in subsection (d), in part, that:
In a case of actual controversy as to the validity of any order under this section, any person who will be adversely affected by such order may obtain judicial review by filing in the United States court of appeals for the circuit wherein such person resides or has his principal place of business, or in the United States Court of Appeals for the District of Columbia Circuit, within sixty days after the entry of such order, a petition praying that the order be set aside in whole or in part. . . . Upon the filing of such petition the court shall have exclusive jurisdiction to affirm or set aside the order complained of in whole or in part. (Emphasis ours)
These statutory provisions, taken together, provide for 1) a class of reviewable orders under Section 4(c), and 2) a delineation in 4(d) of the procedural aspects and standards of judicial review permitted by Section 4(c). Nor-Am Agricultural Products, Inc. v. Hardin, 435 F.2d 1151 (7th Cir., en banc, 1970). It is thus clear that only the final orders of the Administrator are reviewable, a conclusion supported by the legislative history of the Act, wherein Senator Ellender contrasted the old procedure with that contemplated by the Amendments under consideration:
“At present registration under protest provides a means by which an applicant for registration may appeal from a decision of the Secretary with which he disagrees. However, in order to take this appeal, he must take actions which subject him to penalties, the product to seizure, and the public to possible danger if the Secretary’s determination should prove to be correct.
In lieu of this unsatisfactory type of appeal, the bill provides for administrative and judicial appeals. An applicant or registrant who disagrees with the Secretary’s determination to refuse or cancel registration may request that the matter be referred to an advisory committee which would consider the matter and make recommendations which the Secretary could follow or not as he saw fit. The bill also permits the applicant or registrant to file objections and request public hearings, either after the Secretary has received and acted upon the advisory committee’s recommendations, or without having gone through the advisory committee procedure. The hearing would be followed by a final order of the Secretary, which would then be subject to judicial review.” (Emphasis ours)
The problem in the above lies in the content of the word “final.” It has been held that under FIFRA a refusal to suspend is a final order, reviewable immediately, and that a failure to act for an appreciable time on a request for suspension was “tantamount to an order denying suspension” and likewise reviewable. EDF v. Hardin, 138 U.S.App.D.C. 381, 428 F.2d 1093 (1970). Similar result as to refusal to suspend was reached in EDF v. Ruckelshaus, supra, 142 U.S.App.D.C. 88, 439 F.2d 598 (1971), on the ground that such orders are “sufficiently final” in their impact to warrant judicial review. On the other hand, an order of suspension was found by the Seventh Circuit in Nor-Am Agricultural Products, Inc. v. Hardin, supra, to lack the necessary finality, since such order would always be followed by further administrative proceedings (dictum contra in EDF v. Ruckelshaus, supra).
But the above cited decisions relate to orders of suspension, summary action taken when necessary to prevent imminent hazard to the public. However, an order of cancellation (which we have before us) involves less urgent considerations. The product involved stays on the market. The elaborate procedures heretofore outlined are initiated and carried forward step by step with definite time limitations on each. Thus it is that “turning from suspension to the question of cancellation notices . . . a decision of the Secretary to issue cancellation notices is not reviewable, because it merely sets in motion the administrative process that terminates in a reviewable final order.” A contrary holding at the District level is found in Pax Co. of Utah v. United States, 324 F.Supp. 1335 (D.Utah, 1970), based upon grounds such as that the Department (those of Agriculture) had not employed the procedures required by the Act, and that its actions were beyond its authority (and due process) because the grounds asserted were “legally insufficient.” The Court of Appeals, however, reversed, stating, in part, that:
“ . . . [CJourts ought not ordinarily to interfere with the administrative process in the absence of the most compelling reasons, and here there is no assurance from the proceedings taken and from those to be taken pursuant to the law that PAX will ultimately fail or that there will be a failure of justice. The Act after all provides for ultimate and orderly judicial review.” (Footnote omitted) 454 F. 2d at 96.
The court also noted that the procedure before it was
“. . . careful, deliberate and protracted so that no .product is cancelled unless there has been abundant and extensive due process. Also, while the administrative remedies are being pursued no action is taken which affects the product apart from the presence of the threat.” 454 F.2d at 96.
Dow’s answer to the above concerns principally its charge that the Administrator “has failed to perform his duty under FIFRA,” that “there is nothing discretionary . . . about the Administrator’s duty to make a decision” and, moreover, that there is required a “policy judgment and findings of fact” at the conclusion of Dow’s first-stage administrative appeal. Thus, it is asserted, the Administrator may be required by mandamus to perform his hitherto allegedly unperformed statutory duty.
In view of the fact that the Administrator has exercised his discretion in favor of cancellation, as hereinabove set forth, and has issued and re-issued ten reasons (denominated by him as his findings of fact) in support thereof, the charge made by Dow that he has failed in the performance of his duty evinces a construction of the statute at marked variance with that of the Administrator and one in complete disregard of the purpose of the Act and the burdens thereunder.
The basic error presented finds expression with respect to an early stage in the proceedings, i. e. when the Administrator received the report of the Advisory Committee. Dow argues that at this point “the Administrator had only two lawful options open to him,” 1) to cancel Dow’s registration if he believed that 2,4,5-T did not meet lawful safety standards, or, 2) to lift the original cancellation if he was without information sufficient to warrant cancellation. The rationale thus expressed does not accord with the Act. It goes back to the requirements of FIFRA prior to the 1964 amendment:—
“Prior to 1964, the FIFRA required the Secretary to register ‘under protest’ any pesticide or other item that failed to meet the statutory requirements. The product remained on the market, and the Secretary reported the violation to the United States Attorney for possible prosecution. In 1964 the statute was amended to eliminate the system of protest registration, and substitute the present administrative mechanism for cancelling registrations. The stated purpose of the amendment was to protect the public by removing from the market any product whose safety or effectiveness was doubted by the Secretary. The legislative history supports the conclusion that Congress intended, any substantial question of safety to trigger the issuance of cancellation notices, shifting to the manufacturer the burden of proving the safety of his product.34 (Emphasis ours, other
34. See 110 Cong.Rec. 2948-49 (1964 (remarks oí Congresswoman Sullivan) :
I am strongly in favor of the legislation now before you to require industry, rather than the Federal Government, to shoulder the burden of proof in connection with the marketing of pesticides which may be unsafe for use as intended.
* * * * *
The burden of proof should not rest on the Government, because great damage can be done during the period the Govment is developing the data necessary to remove a product which should not be marketed.
See also I-I.R.Rep. No. 1125, supra; S. Rep. No. 573, 88th Cong., 2d Sess. (1964). Our construction of the FIFRA also finds strong suport in a 1969 report of the House Committee on Government Operations, reviewing the administration of the statute. The Committee strongly criticized the administrators for failing to take ‘prompt or effective cancellation action in cases where it had reason to believe a registered product might be ineffective or potentially hazardous. ... A mistaken belief that positive evidence of hazard — rather than simply a lack of adequate assurance of safety — is necessary to support a cancellation action appears to have been a factor in [the] failure to initiate such action in cases where it was obviously justified.’ H.R. Rep. No. 91-637, 91st Cong., 1st Sess. 15-16 (1969).”
footnotes omitted) EDF v. Ruckelshaus, supra, 439 F.2d at 593.
It is not in accord with the statute as amended that the Administrator may issue a cancellation order only and solely upon proofs that the substance involved does not meet the statutory standards evolved for the safety of the public. This, of course, he may do. But he is not so restricted. Since the registrant has a continuing burden of proof to establish that its product is entitled to registration, Southern Nat’l Mfg. Co. v. EPA, 470 F.2d 194 (8th Cir. 1972), if the Administrator has a substantial doubt as to safety, it is his duty as well to issue the cancellation order. And the cancellation order will remain in effect until the registrant satisfies the Agency that registration is warranted.
Such were the actions here taken. The Administrator, under dates of August 6, November 4, and April 13, has exercised the discretion committed to him by the Act and has continued in effect the cancellation order. In the August 6th order he questioned the adequacy of the record before him, particularly with respect to “the benefit coefficient of the cancellation equation,” and although he did not use the word “findings” or spell out in detail more of his reasons therefor than the lack of adequate knowledge, his meaning was clear. He was not required to adopt the Advisory Committee findings. The November 6 order again continued the cancellation notices in effect and, in addition (but without using the word “findings”) stated that his previous action was “mandated by the following facts,” listing ten. On April 13th, following the District Court hearing, and at the court’s suggestion, he sought to bring his previous order in conformity with the Court’s thoughts thereon by stating “. . . explicitly, within one document, my decision and findings of fact under Section 4(c)”, then repeating the ten statements of fact which were contained in the November 4 order.
The April 13th order, however, received no better reception than its predecessors. Dow asserts that “the April 13 document added nothing to the two earlier orders, but merely consolidated them. All three documents add up to the same thing — a refusal to make a determination On the merits . . .”. The Administrator, it is argued, has “failed to perform his duty under the statute.”
We disagree. His duty at this point under Section 4(c) is to “make his determination and issue an order, with findings of fact, with respect to the registration.” This he has done. He has issued his order and he has stated as his factual conclusions such matters as the teratogenicity of dioxin, the possibility that even “pure” 2,4,5-T is a hazard to man and the environment, that the registrants have not established that the dioxin and 2,4,5-T do not accumulate in body tissues, as well as other matters which we have set forth hereinabove. At this point in the proceedings before us the statute does not require that he adduce the evidentiary support for the findings thus made and the fact that he does not do so does not bespeak a failure to do his duty under the Act, though the registrant may in due course challenge each fact so found, and though, indeed, the Administrator may ultimately confess error as to one or more. The statute envisions that if the registrant disputes the findings he may request an evidentiary hearing and, in this respect, we think it completely unjustified on the record to argue, for whatever purpose it may seem to serve, that the Administrator himself has mandated or ordered any hearings in violation of the Act.
The reason for the statutory framework is not difficult to comprehend. Without the full record contemplated by the statute for review of final orders a court is not in a position properly to evaluate the basic validity of such asserted facts as, for example, that first listed of the ten, namely: “A contaminant of 2,4,5-F — Tetraehlorodibenzoparadioxin (TCDD or dioxin) — is one of the most teratogenic [relating to birth defects] chemicals known” or to weigh its pro’s and con’s. All of this may be done in accordance with the statute, at a hearing preceded by the sharpening process of the Administrative prehearing. But this is not yet a final order, thus clearly distinguishable from cases hereinabove cited, such as EDF v. Hardin, supra, and Wellford v. Ruckelshaus, supra, wherein elaboration of reasons in final orders were required for the purpose of adequate judicial review thereof.
Under the view we have taken of the case it is unnecessary to elaborate on the exhaustion doctrine, its basic considerations being governed by what we have held. The prescribed administrative remedy is obviously not exhausted. Myers v. Bethlehem Corp., 303 U.S. 41, 58 S.Ct. 459, 82 L.Ed. 638 (1938); Adams v. Federal Trade Commission, 296 F.2d 861 (8th Cir. 1961). We have before us no mistaken interpretation of the law by the Administrator, no failure of duty by the Administrator, there is abundant administrative remedy, and there is no irreparable injury to Dow. In fact, any injury to Dow (as in The Pax case, supra) is at the most indirect for, under the law, the cancellation orders have no effect on Dow’s right to ship and market its product until the administrative cancellation process has been completed and the ultimate decision may not be adverse. We find nothing in Skinner and Eddy Corporation v. United States, 249 U.S. 557, 39 S.Ct. 375, 63 L. Ed. 772 (1919), or Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958) warranting a different result.
We here consider a recent and largely untested act, not without its ambiguities. We consider, as well, matters “as sensitive and fright-laden as cancer” and birth defects. It is a situation of extreme complexity, interweaving economic pressures with the most basic considerations of human safety. In this situation the Act, wisely we think, contemplates no interlocutory judicial jousting which experience has taught us can go on for years. It was the intent of the Congress that matters under the Act proceed expeditiously to a final order subject to judicial review and without judicial intervention prior thereto. Such is our ruling. We have, as yet, no final order within the contemplation of the Act.
We find the remaining issues raised by appellee to be without merit. The judgment of the District Court is reversed and the cause is remanded with instructions to vacate the injunction and dismiss the action.
. Federal Insecticide, Fungicide and Rodenticide Act [FIFRA], 7 U.S.C. 135 et seg.
. The action was brought under 28 U.S.C. § 1361, providing “The district courts shall have original jurisdiction of any action in the nature of mandamus to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff.”
. The functions of Agriculture in this respect have been transferred to the Environmental Protection Agency. Reorg. Plan No. 3 of 1970, Sec. 2(a)(8)(i), U.S. Code Cong, and Admin.News, pp. 6322, 6324, 91st Cong., 2d Sess. (1970).
. April 15, 1970 announcement of U. S. Dept. of Agriculture, U. S. Dept. of the Interior, U. S. Dept. of Health, Education and Welfare.
. U.S.D.A. Environmental Statement, undated, Exhibit D., Appendix Vol. I, p. 27.
. Id., p. 29.
. 7 U.S.C. § 135. For the purposes of sections 135-135k of this title — (a) The term “economic poison” means (1) any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating any insects, rodents, nematodes, fungi, weeds, and other forms of plant or animal life or viruses, except viruses on or in living man or other animals, which the Secretary shall declare to be a pest, and (2) any substance or mixture of substances intended for use as a plant regulator, defoliant or desiccant.
. 7 U.S.C. § 135(z) (2) (c), (d), (g).
. See summary of statutory scheme in Pax Company of Utah v. United States, 454 F.2d 93 (fn. 3) (10th Cir. 1972); EDF v. Hardin, 138 U.S.App.D.C. 381, 428 F.2d 1093 (fn. 2-4) (1970).
. P. 69, Exhibit Vol. I.
. This motion requested withdrawal of the August 6 order and the entry of a new order complying with the statute. Dow at this time also, under protest, filed objections to the order and requested a hearing.
. App. Vol. I pp. 93-95.
. App. Vol. II (Transcript) p. 121.
. “1. A contaminant of 2,4,5-T — tetraehlorodibenzoparadioxin (TODD, or dioxin) — is one of the most teratogenic chemicals known. The registrants have not established that 1 part per million of this contaminant — or even 0.1 ppm — in 2,4,5-T does not pose a danger to the public health and safety.
2. There is a substantial possibility that even ‘pure’ 2,4,5-T is itself a hazard to man and the environment.
3. The dose-response curves for 2,4,5-T and dioxin have not been determined, and the possibility of ‘no effect’ levels for these chemicals is only a matter of conjecture at this time.
4. As with another well-known teratogen, thalidomide, the possibility exists that dioxin may be many times more potent in humans than in test animals (thalidomide was 60 times more dangerous to humans than to mice, and 700 times more dangerous than to hamsters; the usual margin of safety for humans is set at one-tenth the teratogenic level in test animals).
5. The registrants have not established that dioxin and 2,4,5-T do not accumulate in body tissues. If one or both does accumulate, even small doses could build up to dangerous levels within man and animals, and possibly in the food chain as well.
6. The question of whether there are other sources of dioxin in the environment has not been fully explored. Such other sources, when added to the amount of dioxin from 2,4,5-T, could result in a substantial total body burden for certain segments of the population.
7. The registrants have not established that there is no danger from dioxins other than TODD, such as the hexa- and heptadioxin isomers, which also can be present in 2,4,5-T, and which are known to be teratogenic.
8. There is evidence that the polychlorophenols in '2,4,5-T may decompose into dioxin when exposed to high temperatures, such as might occur with incineration or even in the cooking of food.
9. Studies of medical records in Vietnam hospitals and clinics below the district capital level suggest a correlation between the spraying of 2,4,5-T defoliant and the incidence of birth defects.
10. The registrants have not established the need for 2,4,5-T in light of the above-mentioned risks. Benefits from 2,4,-5-T should be determined at a public hearing, but tentative studies by this agency have shown little necessity for those uses of 2,4,5-T which are now at issue.”
. 109 Cong.Rec. 20079. See also Senator Ribicoff, 109 Cong.Rec. 20080; U.S. Code Cong, and Admin.News, pp. 2166, 2167, 2169, 88th Cong., 2d Sess. (1964).
. EDF v. Ruckelshaus, supra, 439 F.2d p. 592.
. Pax Co. of Utah v. United States, 454 F.2d 93 (10th Cir. 1972).
. 40 CFR 164.32, 37 Fed.Reg. 9481. EDF v. Ruckelshaus, supra.
. With respect to the matter of a public hearing, the Administrator brings to our attention the Federal Environmental Pesticide Control Act of 1972 (the FEP-CA), P.L. 92-516, 86 Stat. 973. Under the imocedures of this Act the Administrator himself may now issue a notice of his intent to hold a hearing (resulting in a final order subject to judicial review) rather than to continue with cancellation proceedings. We do not have before us any issue as to the applicability of this Act to the present proceedings.
. 40 CFR 164.29.
. EDF v. EPA, 150 U.S.App.D.C. 528, 465 F.2d 528 (1972).
. E. g., Pax Co. of Utah v. United States, supra.
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Arthur Guy EAGLE THUNDER, Appellant, v. UNITED STATES of America, Appellee.
No. 73-1087.
United States Court of Appeals, Eighth Circuit.
Submitted May 18, 1973.
Decided May 21, 1973.
David A. Gerdes, Pierre, S. D., on brief for appellant; Arthur Guy Eagle Thunder, pro se.
William F. Clayton, U. S. Atty., and David R. Gienapp, Asst. U. S. Atty., Sioux Falls, S. D., on brief for appellee.
Before MATTHES, Chief Judge, and LAY and STEPHENSON, Circuit Judges.
PER CURIAM.
This appeal is from a denial of appellant’s 28 U.S.C. § 2255 motion below to vacate and set aside a five year sentence imposed following his guilty plea. Appellant was charged with assault with a dangerous weapon in violation of 18 U.S.C. § 1153 and South Dakota Compiled Laws § 22-18-11. Appellant originally entered a plea of not guilty to a three count indictment but was later allowed to enter a guilty plea to Count I. Counts II and III were subsequently dismissed.
Appellant claims that the trial judge failed to comply with Rule 11 of the Federal Rules of Criminal Procedure in that “At no time did the Court [inquire] personally of the defendant whether he understood the nature of the charge and the consequences of a plea of guilty to that charge.”
Rule 11 requires the trial court to not accept a plea of guilty “without first addressing the defendant personally and determining that the plea is made voluntarily with understanding of the nature of the charge and the consequences of the plea” and “unless it is satisfied that there is factual basis for the plea.”
The trial judge personally addressed the appellant and inquired whether appellant understood his right to a trial by jury; to have witnesses for his defense called at public expense; that the government would have the burden of convincing 12 jurors of appellant’s guilt beyond a reasonable doubt before he could be convicted; that no promises or threats had been made in exchange for a plea of guilty and that the plea was voluntary and of appellant’s own free will and accord; whether on the date charged “you did wilfully, knowingly and unlawfully assault Moses Anderson McBride with a dangerous weapon; did you do that?” Appellant answered affirmatively to these questions and additionally affirmed that he had struck the victim with a blunt instrument and that he intended to do bodily harm.
The trial judge did not specifically ask the appellant, as appellant contends he should have in order to comply with Rule 11, “Do you understand the nature of the charge against you and the consequences of a guilty plea to the charge?” Instead, the trial judge told the appellant what he was charged with and had the prosecutor announce the maximum penalty provided for the offense.
Compliance with Rule 11 depends in each case upon the complexity of the charge and the surrounding circumstances, including the defendant’s age and record and whether he was represented by counsel. McCarthy v. United States, 394 U.S. 459, 89 S.Ct. 1166, 22 L.Ed.2d 418 (1969); Sappington v. United States, 468 F.2d 1378 (CA8 1972); and State of Missouri v. Turley, 443 F.2d 1313 (CA8 1971). Indeed, the circumstances and claim here presented are virtually identical to those before the Court in Sappington, supra, where the Court stated:
Here the charge was a simple one, the defendant was represented by counsel, and the defendant was no stranger to the judicial process. The effort made on this motion ... is to transform an enunciation of general standards to an ever-lengthening list of specifics, the omission of any one of which will render the entire proceedings “an exercise in futility.”
But McCarthy imposes no requirement that the Judge mount the bench with a script in his hand. Nor does it impose a requirement . . . that the court follow an exact ritual, or that, in order to convey an understanding of the “nature of the charge” to the defendant, it is necessary to explain the “elements” of the offense. * * * It is essential that there be substantial compliance with Rule 11, Fed.R.Crim.P., United States v. Cody, 438 F.2d 287 (CA8 1971). 468 F.2d at 1379-1380.
We are satisfied that the trial judge complied with the requirements of Rule 11 before accepting appellant’s plea of guilty. The trial judge was dealing with a 33 year old defendant with three prior felony convictions as an adult and who was represented by counsel. Appellant was fully informed of his constitutional rights, the crime he was charged with and the penalty that may result from his plea of guilty to the charge.
Appellant also contends, pro se, that Rule 11 was not complied with in that he was not told that as a consequence of his guilty plea he may be punished by imprisonment in the county jail not exceeding one year. See S.D.C.L. § 22-18-11. Rule 11 requires an understanding of the maximum penalty possible for the offense. Stephen v. United States, 426 F.2d 257, 258 (CA5 1970). Accord, United States v. Myers, 451 F.2d 402, 404 (CA9 1972); Marshall v. United States, 431 F.2d 355, 358 (CA7 1970); Berry v. United States, 412 F.2d 189, 192-193 (CA3 1969) and Durant v. United States, 410 F.2d 689 (CA1 1969). Appellant was clearly advised of the maximum penalty possible as a consequence to his guilty plea, five years imprisonment plus a $500 fine.
Affirmed.
. Appellant does not claim that his plea was involuntary or without understanding of the nature of the charge or the consequences of a guilty plea. His sole claim is that Rule 11 was not complied with.
. ‘'Rule 11 proceedings are not an exercise in futility. Tlie plea of guilty is a solemn act not to be disregarded because of belated misgivings about the wisdom of the same.” United States v. Woosley, 440 F.2d 1280, 1281 (CA8 1971). See also, Brady v. United States, 397 U.S. 742, 90 S.Ct. 1463, 25 L.Ed.2d 747 (1970).
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UNITED STATES of America, Plaintiff-Appellee, v. Fred BERTRAM, Defendant-Appellant.
No. 72-1568.
United States Court of Appeals, Tenth Circuit.
Argued April 9, 1973.
Decided April 27, 1973.
William K. Hickey, First Asst. U. S. Atty. (James L. Treece, U. S. Atty., on the brief), for plaintiff-appellee.
Sheldon K. Ginsberg, Denver, Colo., for defendant-appellant.
Before PHILLIPS, HILL and DOYLE, Circuit Judges.
WILLIAM E. DOYLE, Circuit Judge.
This is a Selective Service prosecution in which the defendant-appellant was charged with having failed to register, thereby violating 50 U.S.C. App. § 462 (a). The registration requirement is contained in 50 U.S.C. App. § 453. Registration is required within five days after the individual reaches his eighteenth birthday. He was convicted of this offense by a jury and sentenced to two years in prison.
Appellant contended at trial and now contends, first, that the registration requirement violates his First Amendment rights; secondly, that the court erroneously refused to allow testimony concerning his religious beliefs and erroneously charged the jury that conscientious objection did not eliminate the duty to register; and, finally, that the registration requirement discriminates against members of the male sex.
It is undisputed that the defendant did indeed fail to register in accordance with law. Moreover, he unquestionably knew of the requirement, and he admitted receiving a letter from the Selective Service notifying him of his failure to register and ordering him to appear at once. He testified at the trial that his refusal was intentional, but was based on his religious beliefs.
The First Amendment to the Constitution prohibits Congress from making any law “respecting an establishment of religion, or prohibiting the free exercise thereof.’’ The right here granted is not, however, an unbridled one in that it is subject to the power of Congress to raise and support armies which is granted in Art. I, Section 8 of the Constitution. This court has recently ruled on the proposition here argued in the case of United States v. Koehn, 457 F.2d 1332, 1334 (10th Cir. 1972). The issue was resolved against the position which the appellant here takes.
Congress has tempered the above described conflict by providing in 50 U.S.C. App. § 456(j) that the conscientious objector is exempt from combat training and service, but this does, not reach the present contention that there is also an exemption from registration. In any event, the requirement does not infringe or curtail religious freedom since registering is not religious interference.
The court did not err in curtailing the defendant-appellant’s testimony as to the religious reasons for his failure to register. It was enough to allow him to state that his refusal was based on religion. Moreover, the court’s charge to the jury that the appellant’s religious beliefs did not constitute a defense was correct as was the court’s charge as to necessity for specific intent, and although evidence as to state of mind establishing that there was no criminal intent would be admissible, the religious beliefs do not serve to nullify the presence of intent where the defendant has acted knowingly. The defendant-appellant was not shown to have been suffering from any religious delusion. He acted knowingly and willfully.
Finally, we must reject the contention that there was unlawful discrimination. As of the present moment at least it is not arguable that Congress was powerless to adopt different requirements for men as opposed to women. The action of Congress in this regard is not to be regarded as arbitrary. See United States v. Camara, 451 F.2d 1122, 1125-1126 (1st Cir. 1971), cert. denied, 405 U.S. 1074, 92 S.Ct. 1513, 31 L.Ed. 2d 808 (1972).
The judgment is affirmed.
. See Warren v. United States, 177 F.2d 596, 599 (10th Cir. 1949), cert. denied, 338 U.S. 947, 70 S.Ct. 485, 94 L.Ed. 584 (1950).
. See Richter v. United States, 181 F.2d 591, 594 (9th Cir.), cert. denied, 340 U.S. 892, 71 S.Ct. 199, 95 L.Ed. 647 (1950); Gara v. United States, 178 F.2d 38, 40 (6th Cir. 1949), aff’d by an equally divided Court, 340 U.S. 857, 71 S.Ct. 87, 95 L.Ed. 628 (1950). Cf. Toussie v. United States, 397 U.S. 112, 117-119, 90 S.Ct. 858, 25 L.Ed.2d 156 (1970); United States v. O’Brien, 391 U.S. 367, 377, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1968).
. See 21 Am.Jur.2d Criminal Law §§ 41 and 92. See also Hotema v. United States, 186 U.S. 413, 420-421, 22 S.Ct. 895, 46 L.Ed. 1225 (1902); Reynolds v. United States, 98 U.S. 145, 161-168, 25 L.Ed. 244 (1879); United States v. Cullen, 454 F.2d 386 (7th Cir. 1971).
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George ROBINSON, Plaintiff-Appellant, v. The M/V MERC TRADER, her engines, tackle, furniture, etc., et al., Defendants-Appellees.
No. 72-3082
Summary Calendar.
United States Court of Appeals, Fifth Circuit.
May 7, 1973.
William S. Vincent, Jr., Clifton S. Carl, New Orleans, La., for plaintiff-appellant.
Robert C. Leininger, Jr., Thomas W. Thorne, Jr., New Orleans, La., for defendants-appellees.
Before THORNBERRY, GOLDBERG and RONEY, Circuit Judges.
Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York, 5 Cir. 1970, 431 F.2d 409, Part I.
PER CURIAM:
Plaintiff, George Robinson, was injured while engaged in the unloading of coffee sacks from the M/V Merc Trader, an ocean going vessel owned by Per Henriksen Partrederi and docked in New Orleans. The accident occurred when plaintiff was struck in the head by pallet bridles that were swinging from winches used to unload the cargo. Plaintiff brought this suit in federal District Court for damages against the ship in rem and the owner in personam, alleging that the ship was unseaworthy. After hearing plaintiff’s case on the liability issue, the court entered a judgment dismissing the complaint with prejudice pursuant to Rule 41(b), F.R.Civ.P. The District Court found that the only negligence that could have caused the accident was either that of plaintiff himself or the momentary negligence of one of his co-workers. The court further found that plaintiff had failed to prove any negligence whatsoever on the part' of the vessel owner. Plaintiff brings this appeal urging (1) that it was error to dismiss under Rule 41(b), and (2) that the court below erred in not finding the vessel unseaworthy. We affirm.
When the District Court dismisses an action pursuant to Rule 41(b) after plaintiff has presented his case, we can set aside factual findings only if they are clearly erroneous. Klein v. District of Columbia, 1969, 133 U.S.App.D.C. 129, 409 F.2d 164; B’s Co. v. B. P. Barber & Assoc., Inc., 4 Cir. 1968, 391 F.2d 130. Cf. White v. Rimrock Tidelands, Inc., 5 Cir. 1969, 414 F.2d 1336 (District Court findings held “clearly erroneous”). Here the District Court found that the accident was caused either by the negligence of plaintiff or by the momentary negligence of one of his co-workers. Extensive factual findings were entered on the record, concluding that the ship’s equipment was in good repair and that there was an adequate crew according to prevailing local standards. Those findings are well supported by the record and are therefore binding on this Court. See generally Wright & Miller, 9 Federal Practice & Procedure 248.
Plaintiff’s contention that the shipowner violated 29 C.F.R. 1918.-81(g) by failing to provide adequate lookout for the winch operator is without legal merit. The District Court found that no matter where the derricksman (lookout) was positioned, he would not be able to see everything but that as a factual matter, the ship’s usé of one derricksman was in accord with local standards. Under the District Court’s fact findings, had plaintiff been in the proper place and had the bridle been swung properly, the accident would not have occurred. Accepting the District Court’s fact findings, we refuse to hold that a ship is rendered unseaworthy simply because it utilized only one derricksman, as was the prevailing practice, and the derricksman did not have a view of 100% of the loading area 100% of the time, a feat that would be impossible on this and many other cargo ships. The District Court found that the lookout was doing everything that could reasonably have been expected of him. The fact that he did not spot an accident caused either by the plaintiff’s being in the wrong place or by the bridle’s swinging in the wrong place does not negate this finding.
In Usner v. Luckenbach Overseas Corp., 1971, 400 U.S. 494, 91 S.Ct. 514, 27 L.Ed.2d 562, the Supreme Court found that a ship is not rendered unseaworthy when the transitory negligence of a co-worker causes injury to a longshoreman. We find that this case is governed by Usner and that the District Court did not err in dismissing plaintiff’s suit under Rule 41(b) upon finding that the accident could have been caused only by the negligence of plaintiff or the momentary negligence of a co-worker and not by any condition on the ship.
Affirmed.
. Third-party claims involving plaintiff’s employer, J. P. Florio & Co., a stevedoring contractor, have been dismissed and are not at issue in this appeal.
. Rule 41(b) provides in pertinent part:
“ . . . After the plaintiff, in an action tried by the court without a jury, has completed the presentation of his evidence, the defendant, without waiving his right to offer evidence in the event the motion is not granted, may move for a dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. The court as trier of the facts may then determine them and render judgment against the plaintiff or may decline to render any judgment until the close of all the evidence. If the court renders judgment on the merits against the plaintiff, the court shall make findings as provided in Rule 52(a). Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join a party under Rule 19, operates as an adjudication upon the merits.”
. 29 C.F.R. 1918.81(g) provides:
“Mo draft shall be hoisted unless the winch or crane operator(s) can clearly see the draft itself or see the signals of any signalman associated with the operation.”
It is plaintiff’s argument that inherent in this provision is a requirement that the signalman (lookout) must also be stationed where he can see. While we express no disagreement with this thesis, the District Court found that the lookout was positioned so that he could see everything that he could reasonably be expected to observe, and we do not read the regulation as requiring anything more than that.
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Nelson C. and Adele B. ELAM, Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
No. 72-1836.
United States Court of Appeals, Sixth Circuit.
May 22, 1973.
William E. Martin, Nashville, Tenn., for petitioners-appellants; William Waller, Nashville, Tenn., on brief; Waller, Lansden, Dortch & Davis, Nashville, Tenn., of counsel.
Murray S. Horwitz, Tax Division, Dept. of Justice, for respondent-appellee; Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Grant W. Wiprud, Attys., Tax Division, Dept. of Justice, Washington, D. C., on brief; Lee H. Henkel, Jr., Chief Counsel, IRS, Washington, D. C., of counsel.
Before WEICK and EDWARDS, Circuit Judges, and WILSON , District Judge.
Honorable Frank W. Wilson, Chief Judge, United States District Court for the Eastern District of Tennessee, sitting by-designation.
PER CURIAM:
This is an appeal from a decision of the United States Tax Court disallowing a deduction for the reinvestment of the proceeds from the sale of the taxpayers’ home. The contention is made by the taxpayers that the Tax Court misconstrued Section 1034 of the Internal Revenue Code of 1954 (26 U.S.C. § 1034) by not allowing a reinvestment deduction to the extent that the gain from a home sale was reinvested within 18 months in the construction of a guest house and a main house where the guest house was completed and occupied within the allowable 18 month period, but where the main residence on the same premises remained unfinished and unoccupied at the expiration of the 18 month period.
The relevant facts may be stated briefly as follows. The appellant taxpayers received the sum of $93,333.33 from the sale of their residence. This sum included a gain of $45,314.00 realized upon the sale. Within 18 months of the sale the taxpayers reinvested a total of $83,276.-77 in the acquisition of land and the construction of two new residences. Of this sum $24,672.93 was invested in the acquisition of land, the building of outbuildings, and the building of a guest house. The guest house was completed and occupied by the taxpayers within the 18 month period as a temporary residence, pending completion of the main house. At the end of 18 months $58,-603.84 had been invested in the main house, but that residence was not completed or occupied by the taxpayers until some two years after the sale of the former residence. The Tax Court disallowed the claiming of any portion of the $58,603.84 reinvested in the main house as of the end of the 18 month period as an avoidance of gain deduction since the main house remained incomplete and unoccupied at that time. Rather, in applying the non recognition of gain strictures laid down in the statute, the Tax Court construed Section 1034 as requiring the exclusion of any funds invested in the incomplete and unoccupied main house.
Section 1034, abbreviated to those portions relevant to the facts of this case, reads as follows:
Sec. 1034. (a) Nonrecognition of Gain. —If property (in this section called “old residence”) used by the taxpayer as his principal residence is sold . and [within one year on replacement or 18 months on new construction] property (in this section called “new residence”) is purchased and used by the taxpayer as his principal residence, gain (if any) from such sale shall be recognized only to the extent that the taxpayer’s adjusted sales price ... of the old residence exceeds the taxpayer’s cost of purchasing the new residence.” (Emphasis supplied)
Stated quite simply, the issue is whether under the facts here presented the incomplete and unoccupied main house was to be included as a part of the “property . . . purchased and used by the taxpayer as his principal residence,” or whether, because of its unfinished and unoccupied status, it was to be excluded in determining the extent of deductible reinvestment accomplished within 18 months.
We conclude that it was not such “property” as to be entitled to nonrecognition treatment under the statute. We accordingly affirm the decision of the Tax Court.
In arriving at this conclusion recognition must be given to the well settled principle that statutes granting tax exemptions or deferments must be strictly construed. Commissioner v. Baertschi, 412 F.2d 494, 499 (C.A.6, 1969); Kentucky Utilities Co. v. Glenn, 394 F.2d 631 (C.A.6, 1968); Commissioner v. Jacobson, 336 U.S. 28, 69 S.Ct. 358, 93 L.Ed. 477 (1949); Helvering v. Ohio Leather Co., 317 U.S. 102, 106, 63 S.Ct. 103, 87 L.Ed. 113 (1942). Although the contention can be and is in fact made that the second residence or “main house” was but an improvement or appurtenance to the guest house, or vice versa, and therefore included with the “property” entitled to nonrecognition treatment, such a construction would serve to relax, not restrict, the thrust and meaning of the statute.
The main house was neither used nor available for use at the end of the statutory period. It was neither an environ, outbuilding or appurtenance to the guest house. Rather, the “property . purchased and used” by the taxpayers as their principal residence at the expiration of the statutory period included at most only the guest house and its environs, out-buildings and appurtenances.
The taxpayers have in effect invested in two residences, one completed and used within the statutory period and the other neither completed nor used during the statutory period. To permit a deduction under these circumstances would not only require an expansive reading of a statute meant to be strictly construed, but also could well lead to abuses not now perceived.
The decision of the Tax Court is affirmed.
. The Commissioner has taken the position upon this appeal that none of the costs incurred by the taxpayers may be offset against the adjusted sales price because the taxpayers at all times intended to use the main house as a principal residence and did not intend to so use the guest house. However, since no appeal was taken from the Tax Court’s decision in this regard, it is not properly before this Court and the Court expresses no opinion as to the correctness of this contention.
. For a general discussion of the statute here involved, see annotation “Construction and Application of § 1034 of Internal Revenue Code of 1954 (26 USC § 1034) Concerning Nonrecognition of Gain on Sale or Exchange of Residential Property,” 5 A.L.R.Fed. 205.
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TATE ENGINEERING, INC. v. The UNITED STATES and Severn Products, Inc., Third-Party Defendant.
No. 336-69.
United States Court of Claims.
May 11, 1973.
Robert C. Miller, Washington, D. C., for plaintiff; Robert F. Conrad, Fort Lauderdale, Fla., atty. of record; Shaffert & Miller, Washington, D. C., of counsel.
J. Walter Schilpp, Philadelphia, Pa., atty. of record, for third-party defendant.
Louise O’Neil, Washington, D. C., with whom was Asst. Atty. Gen. Harlington Wood, Jr., for defendant.
Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges.
OPINION
PER CURIAM:
This case comes before the court on plaintiff’s exceptions to a recommended decision filed August 1, 1972, by Trial Commissioner Joseph V. Colaianni pursuant to Rule 134(h). The court has considered the case on the briefs and oral argument of counsel. Since the court agrees with the decision, as hereinafter set forth, it hereby affirms and adopts the same as the basis for its judgment in this case. Therefore, it is concluded that plaintiff is not entitled to recover and the petition is dismissed.
OPINION OF COMMISSIONER
COLAIANNI, Commissioner:
This is a patent suit under 28 U.S.C. § 1498. Plaintiff, Tate Engineering, Inc., seeks “reasonable and entire compensation” for unauthorized use by the Government of plaintiff’s patented invention. Only the issue of liability is before the court; accounting, if any, is deferred to later proceedings. The patent in suit is U.S. Patent 3,236,018 (hereinafter the “Graham” patent), issued on February 22, 1966, to Donald C. Graham, Dale E. Hein and George H. Stram on an invention entitled “Load-Supporting Metallic Floor Panels.” All rights to the panel were assigned by the inventors to plaintiff on July 14, 1963, and plaintiff has continuously been the sole and exclusive owner of the patent.
Plaintiff moved to join Severn Products, Inc. (hereinafter “Severn”), on the ground that Severn allegedly supplied to the Government, under contract, products embodying the invention described and claimed in the Graham patent and actively induced infringement by the Government of the Graham patent. Severn entered the case as a third-party defendant and was represented by counsel during the entire pendency of the ease before this court. Shortly after issue was joined, Severn and the Government filed a joint motion for summary judgment on the grounds that the accused product sold by Severn to the Government did not infringe any of the claims of the Graham patent. The trial commissioner recommended that the motion be denied. Tate Engineering, Inc. v. United States, 166 USPQ 329 (1970). The court affirmed, Tate Engineering, Inc. v. United States, 193 Ct.Cl. 1088 (1970), and remanded the case “to the trial commissioner for further appropriate proceedings.”
This case raises the usual issues of infringement and validity. The Graham patent has eight claims, but plaintiff concedes that claims 1 through 4, 7 and 8 are not infringed by defendants. The issues to be decided include: (1) whether claims 5 and 6 of the Graham patent are infringed by the Severn product; (2) whether these two claims are invalid because they do not meet the standards set forth in 35 U.S.C. § 102 or § 103; (3) whether these claims are unenforceable and/or invalid by reason of plaintiff’s failure to disclose to the Patent Office during prosecution of the Graham patent allegedly pertinent prior art of which it had knowledge; and (4) whether the claims are invalid because the patent fails to “particularly point out and distinctly claim” the invention as required by 35 U.S.C. § 112.
During the trial, defendants introduced prior art which had not been considered by the Patent Office, and which was not relied upon in their motion for summary judgment. Defendants rely primarily upon this additional prior art to support their joint position relative to the above issues. For reasons expressed below, claims 5 and 6 are held to be not infringed.
Background
Prior to the invention of the Graham panel, plaintiff was not engaged in the manufacture and/or sale of elevated flooring, although several other firms were then in the field. Based on a market study, plaintiff decided to enter the field and contracted with Graham Engineering, Inc., a consulting engineering firm, to develop a unique floor panel. The Graham panel was invented under this contract by Graham Engineering employees, and all patent rights in the panel were assigned to plaintiff on July 15, 1963, one day before the Graham application was filed in the Patent Office. Plaintiff began manufacturing and selling the Graham panel in late 1962 or early 1963.
Patent in Suit
The invention disclosed by the Graham patent relates to a metal panel that can be combined with similar panels to form a load-supporting elevated floor. Individual panels, generally square in plan view, are usually supported above a sub-flooring by pedestals at each corner. The principal objective of such a panel is to support heavy loads without itself being of prohibitive thickness and weight. By way of example, elevated metal flooring is' frequently used in connection with computer installations. Heavy computer equipment is easily supported on the elevated flooring, and the many interconnecting power and signal-carrying cables are conveniently routed through the space provided between the elevated flooring and subflooring.
The panel disclosed by the Graham patent is formed from two superimposed flat metal sheets. The upper sheet is imperforate throughout its entire area and supports the load upon its top surface. In the preferred embodiment, however, a finishing material, such as linoleum or floor tiling, is affixed to the top surface. The lower sheet is positioned directly beneath the upper sheet and after a number of incisions and bends, a pattern of square openings arranged in parallel rows and columns is formed in the lower sheet. The rows and columns of square openings are separated by a gridwork of parallel rows and columns of straight metal tension strips that remain in the plane of the lower sheet. These tension strips extend between opposite edges of the lower sheet.
Furthermore, as a result of the incisions and bends, struts are provided at the edges of the openings. The struts project toward the upper sheet, and their terminal ends are bent for attachment to the undersurface of the upper sheet. By design, it is intended that loads applied to the upper sheet will be transmitted through the struts, to the tension strips of the lower sheet. The load-supporting capability of a panel is proportional to the cube of the distance between the upper and lower sheets. Thus, by increasing the length of the struts, the load-supporting capability of a panel will be increased. In addition, the strength of a panel is dependent upon the number of struts and amount of contact area between the struts and the undersurface of the upper sheet.
While the preferred embodiment of the Graham panel has struts formed integral with only two edges of each opening, alternate embodiments of the invention have struts formed integral with all four edges of the openings. However, in all cases no waste occurs and all of the material which is cut and bent in the formation of the openings is utilized.
The edge of the Graham panel is constructed such that an upper bracing flange is formed by bending the edges of the upper sheet toward the lower sheet, and, at the same time, a lower bracing flange is formed by bending the edges of the lower sheet toward the upper sheet. The patent drawings show (see Fig. 5 appended hereto) that the upper bracing flange fits inside of and, for purposes of rigidity and strength, is welded to the lower bracing flange. Finally, the terminal portion of the lower bracing flange is bent outwardly and upwardly to form a vertical rib extending about the periphery of the panel and spaced slightly from the upper bracing flange. In the instances where a finishing material is applied to the upper sheet, a channel-shaped finishing material can be mounted upon this projecting rib.
The desired goals of the patented invention, as expressed in the patent specification, include the provision of: (1) a structural panel of minimum thickness relative to load-sustaining area and having the capability of supporting substantial concentrated loads in comparison with the weight of such a panel, (2) a plurality of different patterns of struts cut from the lower sheet, and (3) continuous edge flanges on both upper and lower sheets connected together to provide stiffening of the edges of the panel, and, as well, to provide finished surfaces for the edges of the panel.
The Patent Claims
Claim 5 of the Graham patent reads:
5. A rigid metallic floor panel constructed to be supported in horizontal operative position at the edges or corners and sustain heavy floor loads without appreciable deflection, said panel comprising in combination,
a pair of substantially flat metal sheets arranged in superimposed vertically spaced relationship, the upper of said sheets being rigid and imperforate to bear and distribute loads supported by said panel and the lower sheet having a checkerboard grid comprising a first set of parallel, straight strips extending longitudinally substantially from edge to edge of said sheet
and a second similar set of parallel, straight strips extending transversely to said first set substantially from edge to edge of said sheet, said strips providing evenly arranged, parallel rows of openings therebetween,
strut members integral with certain edges of said grid strips and extending upwardly therefrom into firm engagement with the lower surface of the said upper sheet and fixed thereto to transmit load forces from said upper sheet to said lower tension-sustaining sheet,
the peripheral edges of at least one of said sheets being bent at right angles to the plane of said sheet to form a marginal bracing flange around all edges of said sheet and connected to the periphery of the other sheet,
the terminal edge of said bracing flange being bent out of the plane of said flange and arranged in conjunction with the periphery of the other sheet to form a narrow Iongitudinal rib extending around all sides of said panel,
a wear surface layer secured to the top of said other sheet,
and a channel-shaped finishing strip receiving said longitudinal rib within the channel thereof to secure said strip to said panel,
said finishing strip closely surrounding the edges of said wear surface layer and having its top surface flush with said layer.
Claim 6, which is dependent upon claim 5, reads:
6. The floor panel according to claim 5 in which said one of said panels having its peripheral edges bent at right angles to the plane thereof is the lower one having the checkerboard grid.
Infringement
Plaintiff contends that Severn has manufactured and sold elevated flooring to the Government within six years immediately preceding the filing of this suit, which allegedly infringes its patent. The Severn panel includes an upper imperforate metal sheet upon which is secured a finishing material and a lower perforate metal sheet spaced vertically from the upper sheet by metal struts. Four essentially triangular-shaped struts per square opening are formed by cutting and removing sections of metal from the lower sheet and bending the remaining metal toward the upper sheet. As a result of this operation, the lower sheet is made up of parallel rows and columns of square openings separated by parallel rows and columns of tension strips remaining in the plane of the lower sheet. The edge construction of the Severn panel is formed by first bending the peripheral edges of the lower sheet upwardly into a vertical bracing flange. The terminal portions of the vertical bracing flange are then bent outwardly from the interior portion of the panel flush with the under-surface of the upper sheet and attached thereto. In this manner, a peripheral horizontal lip or flange is formed. A channel-shaped finishing strip then is inserted over this horizontal flange so as to lie flush with the finishing material on the upper sheet.
In considering the question of infringement, it is necessary to initially establish the scope and breadth of the patent claims allegedly violated. In this particular instance, it is therefore necessary to establish the scope of claims 5 and 6 of the Graham patent so as to determine if the claims can be “read” on the accused Severn panel. A claim must be read in light of the specification. Seymour v. Osborne, 78 U.S. 516, 547, 11 Wall. 516, 20 L.Ed. 33 (1870); United States v. Adams, 383 U.S. 39, 49, 86 S.Ct. 708, 15 L.Ed.2d 572 (1966). Its scope, however, is not limited only to those specific embodiments actually disclosed, but is expanded under the doctrine of equivalents to include embodiments that perform substantially the same function in substantially the same way to produce substantially the same result as the disclosed invention. Graver Tank & Mfg. Co. v. Linde, 339 U.S. 605, 608, 70 S.Ct. 854, 94 L.Ed. 1097 (1950).
The range of equivalents to be accorded will depend upon whether the invention is a pioneer invention or merely a small advance over the prior art. If the former, a broad range of equivalents applies commensurate with the patentee’s contribution to the art. McCullough Tool Co. v. Well Surveys, Inc., 343 F.2d 381, 401 (10th Cir. 1965), cert. denied, 383 U.S. 933, 86 S.Ct. 1061, 15 L.Ed.2d 851 (1966); Priebe & Sons Co. v. Hunt, 188 F.2d 880, 881 (8th Cir. 1951), appeal dismissed per stipulation, 342 U.S. 801, 72 S.Ct. 92, 96 L.Ed. 607 (1951). If the latter, only a narrow range of equivalents applies. Soundscriber Corp. v. United States, 360 F.2d 954, 961, 175 Ct.Cl. 644, 652 (1966); Trusty v. United States, 132 F.Supp. 340, 344, 132 Ct.Cl. 192, 199-201 (1955), cert. denied, 350 U.S. 975, 76 S.Ct. 453, 100 L. Ed. 846 (1956); Richardson v. United States, 72 Ct.Cl. 51, 65 (1930), cert. denied, 285 U.S. 543, 52 S.Ct. 393, 76 L. Ed. 935 (1931). Furthermore, the range of equivalents may be limited under the doctrine of file wrapper estoppel if the patentee has narrowed his claims in order to avoid the prior art. Graham v. John Deere Co., 383 U.S. 1, 33, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966). Or, as this court has said in connection with an earlier consideration of these doctrines, “The doctrine of equivalence is subservient to file wrapper estoppel.” Autogiro Co. of America v. United States, 384 F.2d 391, 400, 181 Ct.Cl. 55, 67 (1967).
From a review of the prosecution history of the Graham application while it was pending in the Patent Office, and also taking into consideration the prior art references introduced during trial that were not considered by the Patent Office, it is concluded that the Graham patent is not a pioneer patent. Therefore, the claims of the Graham patent are not entitled to a broad full range of equivalents.
Establishing the correct scope of claims 5 and 6 of the Graham patent is of particular necessity in this case because of the reasons which defendants advance for their position of noninfringement. First, they contend, under the doctrine of file wrapper estoppel and also because the Graham panel is not a pioneer invention, that the recitation “strut members integral with certain edges of said grid strips” (emphasis added) in the claims must be narrowly construed to cover only those panels having strut members integral with less than all edges of the grid openings. Thus, they argue, since the Severn panel has strut members formed integrally with all edges of the grid openings, the limitations of the claims are avoided. This contention was thoroughly treated earlier in the commissioner’s opinion on defendants’ motion for summary judgment, Tate Engineering, Inc., supra, 166 USPQ at 333. There it was held that, in view of the specification and file history of the Graham patent, claims 5 and 6 are not restricted to a structure having less than four struts per grid opening. Since no additional evidence was presented at trial on this point, and since it is believed that our earlier holding was correct, it is concluded that claims 5 and 6 cover panels having four struts per opening. Therefore, the strut construction of the Severn panel is found to fall within the scope of the above-quoted language of claims 5 and 6.
Defendants next urge that the recitation:
the terminal edge of said bracing flange being bent out of the plane of said flange and arranged in conjunction with the periphery of the other sheet to form a narrow longitudinal rib extending around all sides of said panel,
found in the claims at issue, when construed in light of the edge structure disclosed by the Graham patent, does not cover the Severn edge structure. For reasons which are explained in more detail hereinafter in connection with the discussion and treatment of the validity of the Graham patent, it is concluded that if this claim recitation is construed narrowly enough to avoid invalidity of the claims, then the claims are not infringed by the accused edge structure. International Glass Co. v. United States, 159 USPQ 434, 442 (1968), aff’d per curiam, 408 F.2d 395, 405, 187 Ct.Cl. 376, 394 (1969); Farrell Marine Devices, Inc. v. United States, 152 USPQ 328, 329 (1966), aff’d per curiam, 377 F.2d 560, 561, 179 Ct.Cl. 790, 792-793 (1967).
This court has consistently avoided a broad construction of claims which would legally render them invalid. Instead, a narrow construction of patent claims, “so as to secure to the patentee the just fruits of his true invention,” has been resorted to. Dominion Magnesium Ltd. v. United States, 320 F.2d 388, 394, 162 Ct.Cl. 240, 249 (1963); International Glass Co., supra.
Validity
Defendants contend that claims 5 and 6 are invalid under 35 U.S.C. § 112 because they are indefinite. On the basis of the above-detailed consideration of the claims at bar, this contention can be quickly disposed of, and it is found that the claims are definite and comply with all the requirements of 35 U.S.C. § 112.
Defendants next urge that claims 5 and 6 are invalid under 35 U.S.C. § 102(a) as being anticipated by U.S. Patent 3,196,763 (hereinafter the “ ’763 Rushton" patent), which is described in considerable detail in finding 17. (See appendix.) The ’763 patent was not considered by the Patent Office during examination of the Graham patent application. This patent basically discloses a two-sheet metal panel that can be supported in an elevated position by pedestal mounts at its corners. The panel consists of an imperforate metal top sheet that is capable of having a finishing material, such as tile or linoleum, secured to its upper surface. The bottom metal sheet is formed, by a deep drawing operation, into a truss pan that consists of parallel rows and columns of inverted cups or pedestals. The metal between the cups is not displaced or disturbed by the drawing operation, but remains in the plane of the lower sheet to form parallel rows and columns of flat rim areas about the edges of the 'mps. The truss pan thus resembles a familiar cupcake pan. The bottoms of the cups are flat and are positioned flush with and welded to the undersurface of the top sheet.
The peripheral edges of the truss pan are bent at right angles toward the top sheet to form a vertical flange about the panel. Finally, the terminal portion of the vertical flange is bent outwardly from the interior portion of the truss pan, parallel to and flush with the undersurface of the top sheet. This portion then is spot welded to the undersurface of the top sheet to form a horizontal lip or flange about the periphery of the panel.
Defendants contend that claims 5 and 6 of the Graham patent are anticipated, in accordance with the provisions of 35 U.S.C. § 102(a), by the disclosure of the ’763 patent. To anticipate, a prior art reference must disclose each and every element of a claimed invention, or its equivalent, and the element must function in substantially the same way to produce substantially the same result. Palmer v. United States, 163 USPQ 250, 254, aff’d per curiam, 423 F.2d 316, 321, 191 Ct.Cl. 346, 354 (1970), cert. denied, 400 U.S. 951, 91 S.Ct. 242, 27 L.Ed.2d 258.
While there are similarities in overall appearance and function between the Graham and Rushton ’763 panels there is not the necessary identity of structure, purpose and result which is required to make out an anticipation within the meaning of 35 U.S.C. § 102. Straussler v. United States, 339 F.2d 670, 168 Ct.Cl. 852 (1964). Detailed differences between the ’763 Rushton patent and the Graham invention have been pointed out in finding 17. It is only necessary to here point out that the ’763 Rushton patent does not disclose “evenly arranged, parallel rows of openings” in the lower sheet, “a channel-shaped finishing strip” nor “a wear surface layer secured to the top of [the upper sheet] ” as called for by claims 5 and 6. These missing claimed elements prevent the Rushton patent from being an anticipation of the Graham patent within the meaning of section 102(a). Furthermore, no single reference cited by the Patent Office, or defendants, is found to disclose, as is necessary to make out a section 102(a) anticipation, all of the elements of claims 5 and 6.
Defendants also question whether claims 5 and 6 meet the statutory standards set forth in 35 U.S.C. § 103. Title 35 U.S.C. § 103 requires that in order for a patent to be granted on an invention, the invention must not be obvious to one of ordinary skill in the art at the time it was made. To establish if claims 5 and 6 define an invention that is obvious within the meaning of 35 U. S.C. § 103 requires a factual analysis of (1) the scope and content of the prior art, (2) the differences between the prior art and the claims in issue and (3) the level of skill in the pertinent art. Secondary considerations such as commercial success, satisfying long-felt need and failure of others may have relevance. Graham, supra; Palmer, supra; Martin-Marietta Corp. v. United States, 373 F.2d 972, 973, 179 Ct.Cl. 70, 72 (1967).
Defendants, in challenging the validity of claims 5 and 6 under 35 U.S.C. § 103, rely primarily on the ’763 Rushton patent, U.S. Patent 3,008,551 (hereinafter referred to as the “Cole” patent), and a brochure published by Washington Aluminum Co. (hereinafter referred to as “WACO”), a competitior of plaintiff in the elevated flooring business. The WACO reference and the ’763 Rushton patent were not cited by the patent examiner during prosecution of the patent application.
Defendants contend, inter alia, that if claims 5 and 6 of the Graham patent are construed broadly to read upon the accused Severn panel, they are invalid. Defendants particularly argue that the prior art references disclose all of the broadly construed elements of the claims, and thus the subject matter of claims 5 and 6, taken as a whole, would have been obvious to a person of ordinary skill in the panel art at the time that plaintiff’s panel was made.
The ’763 Rushton patent has already been briefly described in connection with defendants’ arguments of patent invalidity under 35 U.S.C. § 102. Defendants, in connection with their § 103 defense, argue that any difference between the patented panel and the prior art ’763 Rushton panel would have been obvious, at the time of the making of the Graham panel, to a person skilled in the prior art.
For example, defendants point out that the prior art ’763 panel does not have struts that are formed, as is the ease with the Graham panel, by cutting and bending material from the lower sheet. However, they contend that the upstanding pedestals of the ’763 patent serve the same function as the Graham struts, and can be replaced by struts such as those shown in the Cole patent. As explained in more detail in finding 15, the Cole patent teaches forming a metal panel having an imperforate upper sheet and a perforate lower sheet rigidly separated by struts. The struts are formed by incisions, and; after shaping, are attached to the undersurface of the upper sheet. There is no doubt that the Cole patent specifically addressed the problem of inherent depth limitations on drawn panels, such as the ’763 Rushton panel, and the following statement shows Cole’s appreciation of the advantages of a panel which is formed by cutting and drawing over one formed by merely a drawing process:
A further object of the invention is to monolithieally fabricate a core panel that is partly split and formed and partly drawn in such a manner as to permit a much greater panel depth than is possible to provide with rigidized cores which are dependent upon the maximum limits of the drawing ability of the metal for their maximum panel depths.
Plaintiff would brush aside defendants’ arguments relating to the ’763 Rushton and Cole patents and the WACO panel by pointing out that the edge construction called for by the Graham claims is not found in any of the prior art references. Indeed, the Cole patent does not show nor does it disclose the use of any type of edge construction. The WACO panel does disclose an edge structure. The edge construction of the two-sheet WACO panel is formed by first bending the periphery of the lower sheet toward the upper sheet. The terminal edges are then bent flush with the undersurface of the upper sheet to form in conjunction with the edges of the upper sheet, a horizontal lip or flange extending about the perimeter of the panel. Finally, the ends of the horizontal flange are bent upward at right angles into a vertical rib spaced slightly from the upper sheet and extending about the panel perimeter. A finishing strip can be secured to the top and inner surfaces of the vertical rib. However, due to inadequate strength in the horizontal flanges, the WACO panel was not capable of supporting heavy loads with only pedestal supports at each corner. Instead, the WACO panel was intended to be used with “stringers.” Stringers consist of horizontal support beams positioned under the horizontal edge flange of the panel so as to enable the panel to support heavy loads.
Plaintiff argues that its edge construction adds the necessary strength and rigidity to enable its panel to be supported in an elevated position by corner pedestal amounts. Moreover, plaintiff urges that none of the prior art panels, including the commercial form of the Rushton panel, can be satisfactorily supported by corner pedestal mounts. On the other hand, plaintiff points out that:
* * * both the patented and accused panels employed ribs as defined in the claims in combination with other structure to produce panels which were capable of support only at their corners * * *.
Plaintiff thus appears to be arguing that the claims of the Graham patent, for purposes of establishing infringement, cover panels having narrow, strength-reinforcing edge flanges or ribs, such as those employed on the Graham and accused Severn panels, but, in order to avoid invalidity, that the same claims do not read upon panels having somewhat wider, relatively weak edge flanges such as the prior art WACO and Rushton panels.
Plaintiff’s carefully reasoned argument is untenable for the following reasons: first, the prior art ’763 Rushton patent specifically states that the Rush-ton panels “can be supported by pedestal mounts at their corners”; second, the corner supports for the accused Severn panel are not placed under the narrow edge flange, but are placed under the outer corners of the tension strips in the lower sheet. Consequently, the Severn panel is not supported by its narrow edge flange. While the narrow Severn edge flange may be better able to resist vertical forces applied to the edges of the panel than the somewhat wider Rushton edge flange, this fact is completely unrelated and irrelevant to plaintiff’s claim that a narrow edge flange enables a panel to be supported by corner pedestal mounts, while a wide edge flange does not enable a panel to be so supported.
Defendants further point out that the horizontal edge flange of the ’763 Rush-ton patent is structurally identical to the horizontal edge flange of the Severn panel (see the drawing appended hereto), except that the former appears to be wider than the latter. Defendants then argue that a patent claim cannot be construed broadly for the purpose of establishing infringement and, at the same time, narrowly for the purpose of avoiding the prior art. Dominion Magnesium Ltd., supra; International Glass Co., supra. It is, therefore, necessary to determine whether claims 5 and 6, when broadly construed to read upon the accused Severn panel for the purpose of infringement, will not also read upon the prior art panels.
While it is absolutely essential to guard against a piecemeal reconstruction of the Graham invention by using the Graham patent as a blueprint, in this case the testimony of defendants’ expert greatly decreases the chances of such a hindsight reconstruction from happening. Based upon the testimony of defendants’ expert, and, as well, on the clear teaching of the prior art patents and the file history of the patent application, it appears to be a logical and obvious expedient to replace the drawn pedestals of the ’763 Rushton panel by struts such as those shown in the Cole patent which are formed by incisions made in the lower sheet.
Further, to one of ordinary skill in the elevated flooring art, it would be an obvious design expedient to mount a “channel-shaped” finishing strip, such as shown in the WACO panel, on the Rushton floor panel. Thus, the prior art discloses all of the broadly construed elements, or their equivalents, and the manner in which to combine the elements to form the structure defined by claims 5 and 6. Accordingly, it is concluded that claims 5 and 6 of the Graham patent contain limitations that must be narrowly construed to avoid reading on the prior art panels. Particularly, the limitation relating to the edge construction of the Graham panel is found to be limited to the structure shown in the patent drawings or reasonable equivalents thereof. In conclusion, it is specifically found that the claims cannot be read broadly to cover the accused Severn panel, for if the claims are broadly construed to read on the Severn panel, they would be invalid and obvious, within the meaning of 35 U.S.C. § 103, in view of the teachings of the ’763 Rushton and Cole patents and the WACO panel.
Fraud on the Patent Office
Defendants also vigorously assert that claims 5 and 6 should be held invalid and/or unenforceable by reason of plaintiff’s failure to disclose to the Patent Office during prosecution of the Graham patent the prior art WACO panel of which it had knowledge. In essence, defendants contend that plaintiff has perpetrated a fraud on the Patent Office, or is guilty of unclean hands in its dealings with the Patent Office.
Based on the finding that claims 5 and 6 are not infringed by defendants’ accused structure if the claims are narrowly construed to avoid invalidity, it becomes merely academic, and totally unnecessary, to also hold that plaintiff’s patent is unenforceable because of plaintiff’s fraud on the Patent Office.
Defendants, however, also contend that plaintiff’s patent should be found to be invalid because of plaintiff’s failure to call the prior art WACO panel to the examiner’s attention during the pendency of the application in the Patent Office. In support of its position, plaintiff relies on Norton v. Curtiss, 433 F.2d 779, 57 CCPA 1384 (1970), and Monsanto Co. v. Rohm & Haas Co., 312 F.Supp. 778 (E.D.Pa.1970).
As discussed hereinabove, the WACO panel was used, in conjunction with other prior art, to determine if the Graham invention would have been obvious, within the meaning of 35 U.S.C. § 103, to one of ordinary skill in the art. The WACO panel is clearly not an anticipation of plaintiff’s invention within the meaning of 35 U.S.C. § 102. Accordingly, this case is distinguishable from both the Norton and Monsanto cases, supra, and all other cases, where the information withheld from the Patent Office was found to be of such a nature that if it had been disclosed the patent would not have issued. Certainly, the information allegedly withheld, the WACO panel, is not so material that one can conclude that the Patent Office would have refused to issue plaintiff’s patent application if it had been aware of it. It is therefore concluded that defendants have failed to make out a case of fraud with the clarity and certainty required. See McCullough Tool Co., supra, at 394-395 (343 F.2d).
APPENDIX
. § 102. Conditions for patentability; novelty and, loss of right to patents.
A person shall be entitled to a patent unless—
(a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent, * * *.
. § 103. Conditions for patentability; non-obvious subject matter.
A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made.
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NATIONAL EASTERN CORPORATION v. The UNITED STATES.
No. 63-71.
United States Court of Claims.
May 11, 1973.
John C. Yavis, Jr., Hartford, Conn., attorney of record, for plaintiff. John S. Murtha, David C. Anderson and Murtha, Cullina, Richter & Pinney, Hartford, Conn., of counsel.
Sheldon J. Wolfe, Washington, D. C., with whom was Asst. Atty. Gen., Harlington Wood, Jr., for defendant.
Before DAVIS, Acting Chief Judge, DURFEE, Senior Judge, and SKELTON, NICHOLAS, KASHIWA, KUN-ZIG and BENNETT, Judges.
ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT UNDER RULE 163(b) AND DEFENDANT’S CROSS-MOTION FOR SUMMARY JUDGMENT
PER CURIAM:
This case comes before the court on request for review by plaintiff of a recommended decision filed August 16, 1972, by Trial Commissioner Louis Spec-tor, pursuant to Rule 166(c) wherein such facts as are necessary to the decision are set forth. The court has considered the case on the briefs and oral argument of counsel. Since the court agrees with the decision, as hereinafter set forth, it hereby affirms and adopts the same as the basis for its judgment in this ease. Therefore, plaintiff is not entitled to recover, plaintiff’s motion for summary judgment is denied, defendant’s cross-motion for summary judgment is granted and plaintiff’s petition is dismissed. Defendant’s counterclaim is dismissed as moot.
OPINION OF COMMISSIONER
SPECTOR, Commissioner:
On January 14, 1966, the Government negotiated a unit price contract with plaintiff for five million 20 mm. brass cartridge cases at a total cost of $1,350,000. It is apparent from the record that despite pre-award misgivings as to plaintiff’s financial and (to a lesser extent) technical ability to perform, the award was nevertheless made in pursuance of the Government’s policy of fostering small business, and its specific policy in this instance of broadening a very narrow procurement base for these shell cases which were urgently needed in Vietnam.
Following difficulties, hereinafter described in greater detail, the Government on June 14 and June 19, 1967, terminated this contract and plaintiff’s related “facilities” contract on the grounds of default. The propriety of those terminations under the “Default” clause of the contract is at issue.
Under that provision, should it be determined “for any reason that the Contractor was not in default under the provisions of this clause, or that the default was excusable under the provisions of this clause, the rights and obligations of the parties shall, if the contract contains a clause providing for termination for convenience of the Government, be the same as if the notice of termination had been issued pursuant to such clause.” Under the “Termination for Convenience” clause a contractor is essentially entitled to be reimbursed for its costs up to the date of termination. If, however, a default was not excusable, its costs are not reimbursable, and the contractor may be held liable for the excess costs of reprocurement.
Since one of the excuses for nonperformance relied upon by plaintiff was the Government’s decision to withhold, reduce, and finally to suspend payments under a “Progress Payment” clause, in alleged violation of the regulations governing the administration of that clause, the proper interpretation and application of this provision and its implementing regulations, are also at issue.
Following denial of its claim and appeal by the contracting officer and the Armed Services Board of Contract Appeals (ASBCA or board), plaintiff filed a petition here in two counts. The first asserts that the agency’s decision was not entitled to finality under the contract “Disputes” clause, and the second alleges a breach of contract in that its inability to perform “was the direct result of the Government’s breach of contract in improperly withholding, suspending and terminating progress payments.”
The issues of whether or not the contracting officer acted in conformity with the aforementioned “Progress Payment” clause, its extensive implementing regulations, and the other provisions above-referenced involve their interpretation and proper application and these are issues of law, or at least mixed questions of law and fact “in which the law ingredient is predominant, essential, and in all respects crucial.” Their prior determination by the agency is therefore not final and is subject to plenary Consideration herein. As will appear later herein, resolution of these issues is also dispositive of plaintiff’s count alleging a breach of contract.
Statement of Facts
Plaintiff was known as Connecticut Cartridge Corporation when awarded this contract. It is a small business concern which had no prior experience either as a Government contractor or as a manufacturer of 20 mm. brass cartridge cases. This item was in critically short supply and large quantities were needed for Vietnam. The Frankford Arsenal, U.S. Army, requested proposals on September 9, 1965, for a total of 26,300,000. Plaintiff proposed to supply five million at a unit price of 27 cents.
Prior to award the Government conducted a pre-award survey to determine plaintiff’s quality assurance standards and its production and financial capabilities. The survey disclosed the following:
Quality Assurance capability is presently unsatisfactory. However, bidder states that he will obtain the necessary inspectors, inspection and test equipment, and institute a quality control system * * * if awarded this contract.
The production capability has been determined satisfactory by technical representatives of Frankford Arsenal as stated in their letter of 8 Dec. 1965.
Part IV of the survey entitled “Financial Capability,” further demonstrated that plaintiff had deficits in both working capital and net worth, but that financing was contemplated by “use of contractor’s own resources” and “officer advances.” The use of progress payments, guaranteed loans and advance payments were clearly not intended at that time.
As part of the pre-award survey, Mr. Louis Toffolon, plaintiff's treasurer, sole voting stockholder, and holder of the majority of its stock, submitted a current personal financial statement and a letter dated December 16, 1965, in which he offered to personally guarantee performance of the contract, if necessary. He also stated his intention of transferring certain real property, plant, and machinery to plaintiff corporation in 1966, as part of the overall capitalization of the corporation. Since this letter played a critical role in the award of the contract, its contents are worth quoting in full:
Enclosed please find financial statements as requested in your letter of December 14, 1965.
I would like to point out, however, that although Connecticut Cartridge Corporation has been in business for several years, the operation was limited and it was only a year ago that the undersigned became financially interested in the company. Since that time, I have become the majority stockholder and undertook the responsibility of developing and expanding the company’s capacity. ■ Additional machinery has been purchased and recently installed at the plant worth in excess of $500,000.00.
The realty including the land and buildings were also purchased outright lately. Neither the machinery or the realty appear on the corporation’s financial statement. In order to facilitate legal and accounting requirements it was thought best to include the capitalization of these items on the company records commencing with the new year.
The above items have substantially increased the company’s capabilities for production and should presently be considered as part of the overall capitalization of the company.
In addition to the above, I am willing if necessary, to guarantee personally the performance of the subject contract and I am therefore enclosing a copy of my personal financial statement which illustrates conservatively a personal net worth of $2,215,250.00. •X- # *
I will be happy to furnish any additional informaron which you may require to prove my financial ability to perform the above contract.
The survey report also contained the following additional remarks concerning plaintiff’s financial reputation and condition :
Mr. George W. Tripp, Jr., Vice President, Connecticut Bank and Trust Company, West Hartford Branch reports having known the individuals involved in Connecticut Cartridge Corporation and specifically Louis Toffolon, the Treasurer and sole stockholder, for many years. Numerous dealings with affiliated concerns have always been handled in a satisfactory manner. Accounts are held in high regard. Individuals are well thought of.
Bank will loan the corporation $150,000.00 if endorsed by Louis Toffolon personally. Mr. Toffolon states he does not think it will be required.
* * * * *
* * * Whatever machinery and/or real estate values are incorporated into the corporation in January 1966 will be paid in stock certificates, no notes.
Long term liabilities of $82,352.97 of present balance will be subordinated until completion of contract.
If this R.F.P. [Request for Proposal] becomes a contract, the guarantees, etc., will be executed, prior to signature.
Based upon the foregoing, the contract was awarded January 14, 1966. Thereunder, plaintiff agreed to deliver 500,000 units in May and June 1966, and one million units per month thereafter until completion in October 1966.
During the early stages of performance in 1966, plaintiff encountered substantial technical difficulties in setting up its production line. As a result it failed to deliver a sample lot for testing and evaluation on or about February 28, 1966. Plaintiff’s problems stemmed from its inability to readily secure necessary materials, special equipment, tooling, and competent personnel. In addition, problems were experienced in adapting and modifying existing equipment to meet the new cartridge ease dimensions.
On March 21, 1966, plaintiff requested a 3-month extension of time for delivery of the sample lot, and an extension of the production delivery schedule. On that date and on April 14, 1966, it also expressed the need for specific Government-furnished equipment in order to complete its production line. In letter dated April 19, 1966, the Administrative Contracting Officer (hereinafter ACO), advised plaintiff that the Government was considering termination for default. The letter made particular reference to the “lack of positive decisions in regard to obtaining brass cups, equipment, prompt plant expansion, and obtaining operating personnel.”
Plaintiff replied on April 28, 1966, outlining the corrective steps it had taken, requesting further adjustments in the delivery schedule, and the negotiation of a so-called “facilities” contract. On May 19, 1966, the ACO advised plaintiff that authority had been granted by the Procuring Contracting Officer (hereinafter PCO), to revise the delivery schedule of both the sample lots and the production units, and that certain Government-furnished equipment would be made available. Contract modification No. 1 dated June 21, 1966, changed the date of submission of samples for testing and evaluation to September 30, 1966, and extended the first delivery of production quantities from May to October 1966, with deliveries to be completed by May 1967. In consideration of the above adjustments, the contract price was reduced by $10,335.
In June 1966, plaintiff hired an experienced production engineer as its general manager. He later testified at the ASBCA hearing that at the time he joined the company there “just wasn’t any production. * * * That’s why they hired me.” During July and August 1966, the Government also assisted plaintiff by furnishing 10,000 brass cups for use in manufacture of the sample lots. Plaintiff acknowledged this assistance in a letter to the ACO, dated August 30, 1966, in which it was explained that plaintiff had contacted numerous suppliers of 20 mm. brass cups, but had not yet been successful in securing a firm commitment.
. By the fall of 1966 plaintiff was making progress toward production, but was still experiencing difficulty in obtaining essential equipment and materials. When plaintiff failed to meet the extended October 1966 date for initial deliveries, the ACO issued a letter dated November 8, 1966, allowing plaintiff 10 days to show cause why the contract should not be terminated for default. During conferences held in the succeeding 10 days, the Government first learned that the aforementioned Mr. Louis Toffolon had died intestate on September 7, 1966.
The aforementioned land, plant, and machinery had not been transferred to the corporation as had been indicated in the above-quoted letter of December 16, 1965, and these assets and decedent’s stock interests in plaintiff corporation had passed by operation of law to the administrator of his estate. It was further learned in the course of these conferences that Louis Tgffolon’s personal guarantee of performance offered in that December 16 letter, “if necessary,” had never been executed by the decedent. Mr. Norman Toffolon, the decedent’s son, had taken charge of the management of the corporation.
Following the death of Louis Toffolon, plaintiff corporation was obliged to seek other sources of working capital. Bank financing had not been contemplated in the pre-award survey, and plaintiff’s normal banking source was no longer available since previous loans had been made on the strength of Louis Toffolon’s personal endorsement. The gravity of plaintiff’s financial condition was evidenced by a preliminary evaluation made at the administrator’s request. It disclosed that the corporation had a net worth deficit of approximately $160,000 on or about September 30,1966.
During the aforementioned conferences in early November 1966, Norman Toffolon requested some form of financial assistance from the Government. Although the record is not entirely clear on this point, he apparently represented that he would take steps to increase plaintiff’s net worth, presumably by seeking private sources of financing and by obtaining the heirs’ assent to transfer the real property, plant, and maehinery from the state to the corporation m exchange for capital stock, as had been promised by the decedent.
Although the estate itself had limited means with which to assist plaintiff, the administrator was successful in obtaining permission from the probate court to advance approximately $40,000 from the estate to the corporation to meet payroll expenses from October 1966 through the early part of February 1967. With the assent of the heirs, plaintiff was also allowed the continued use of the aforementioned real property, plant, and machinery on a deferred rental basis.
Based upon the statements and requests of Norman Toffolon, the above-described actions of the administrator, and a plant inspection report of November 14, 1966, indicating that plaintiff had acquired the necessary expertise and “know-how” to perform the contract, the defendant authorized the addition of the earlier mentioned “Progress Payment” clause to the production contract. The purpose of authorizing progress payments, according to the PCO, was to provide “an interim measure to help Connecticut Cartridge get over the financial straits they were in at the time.”
Contract modification No. 2, dated December 12, 1966, which added the “Progress Payment” clause, authorized progress payments of 70 percent of the contractor’s total incurred costs up to a maximum of 70 percent of the total contract price. It also contained an agreement by the Government to furnish 40,000 pounds of brass cartridge cups; and a revision in the production schedule to provide for deliveries beginning in December 1966, with a completion date in July 1967. In consideration of the above changes and revisions, the contract price was reduced by $2,000.
On December 12, 1966, plaintiff submitted its request for progress payment No. 1 in the amount of $206,509.72, and it received full payment about 3 days later. Shortly thereafter, a number of events occurred which imperiled plaintiff’s already precarious financial condition. The board opinion relates that;
* * * On December 15, 1966, its application for an $800,000 long term loan from the Connecticut Bank and Trust Company was rejected, and in January 1967 attempts to obtain debt financing of the realty and machinery through the Connecticut Industrial Building Commission and the Connecticut Development Credit Corporation encountered difficulties over uncertainties concerning the unity of the ownership interest. In the latter part of January, the Administrator advised that the Estate would no longer be able to contribute funds to enable appellant to meet its payroll, and that the assets held by the Estate could not be transferred to appellant without an adequate cash consideration. * * * [Footnotes omitted.]
During the period December 1966 through January 1967, plaintiff also continued to experience technical difficulty in producing an acceptable sample lot, and it failed to meet its extended December schedule for initial delivery. The January monthly production progress report indicates that a pilot lot was rejected in December 1966, and that a new pilot lot was submitted about January 20, 1967. The January pilot lot passed all test except those for hardness and ballistics, the latter tests not having been conducted. A new partial lot was being prepared for additional testing in February. Notwithstanding plaintiff’s failure to meet its revised delivery requirements, the Government provided further technical assistance on January 17, 1967, in the form of a “facilities” contract, making available certain Government-owned production equipment at a monthly rental rate. Meanwhile a Small Business consultant to DCASD contacted plaintiff by telephone on or about January 15, 1967, and advised that progress payments might or would be held up pending acceptance of a pilot lot.
On February 2, 1967, a meeting was held at DCASD, attended by Norman Toffolon, and various representatives of the defendant, including the Small Business consultant and the ACO. The purpose of the meeting was to discuss the specific subjects of pilot lot acceptance, progress payments, and financial developments. These topics were thoroughly explored but the record and exhibits do not clearly show whether or not the defendant intended to make further progress payments without satisfactory evidence of plaintiff’s resolution of its financial and production problems.
Plaintiff submitted its request for progress payment No. 2 in the amount of $125,731.47 on February 6, 1967. On February 9, 1967, the ACO advised plaintiff that the PCO would not approve the full amount requested, but would authorize a payment sufficient to cover 2 weeks’ payroll expenses. This action precipitated a subsequent meeting at the Frankford Arsenal, Philadelphia, Pennsylvania, on February 20, 1967, for the purpose of discussing plaintiff’s financial condition, and possible release of the full amount of the second progress payment.
At this meeting plaintiff presented the Government with an unaudited cash flow projection to demonstrate its financial ability to perform the contract. The projection had been prepared by the accounting firm of Arthur Andersen & Company to determine the financial position of the corporation on December 31, 1966, and its projected financial position on December 31, 1967. The validity of the projection depended upon a number of management assumptions, including the successful completion of the contract, and the award of a second contract in the approximate amount of $2,000,000.
As a result of this meeting, the Government representatives agreed to make a reduced progress payment in the amount of $65,000 provided, among other things, that plaintiff prepare and submit by February 27, 1967, a second cash flow projection based upon the existing contract alone. The second cash flow projected was submitted and reviewed by the parties between February 27 and March 2, 1967.
With respect to this review, the board expressed the following opinion:
* * * As a result of this consideration, it was concluded that a line of credit amounting to some $363,000 would be necessary to finance the purchase of materials not covered by the projected cash flow and that even if the Government continued to make progress payments there would be a cash deficit of $75,000 to $100,000 upon completion of the contract. * -x- * Furthermore, this projection did not assume acquisition of the realty and machinery from the estate nor any increase in the corporate equity. Nor could appellant have produced sufficient units to meet the accelerated delivery schedule upon which the cash flow was predicated. * * *
Appellant was also unable to establish that any supplier of brass would extend the credit upon which the projection of material costs was predicated. It was further evident that with a projected cash deficit of the dimensions indicated it would be necessary to operate on a C.O.D. basis with suppliers. The situation was next to impossible to work out. * * * [Footnotes omitted.]
In addition to reviewing the second cash flow projection, the Government explored various alternatives with the heirs, administrator, and outside banking sources, but no financing agreement could be reached. Based upon the above efforts, the financial data contained in the second cash flow projection, and the advice of his financial consultants, the PCO formally notified plaintiff in writing on March 2, 1967, that further progress payments would be withheld pending the completion of a Government audit, but that partial payments would be resumed if certain property were “made available as security to protect the government’s rights under the contract.” In this letter the PCO expressed his concern about plaintiff’s “insufficient cash flow and inadequate financial stability.”
The record and exhibits indicate that at this time the Government considered plaintiff technically capable of proceeding with the contract, although it was suffering from severe financial problems and had not complied with previous sample lot and production delivery schedules. The ACO authorized plaintiff by letter dated March 2, 1967, to proceed with production provided the “deviations occuring [sic] in the initial production samples are corrected.” The defects for the most part referred to the failure to comply with certain hardness requirements, as previously mentioned.
On March 3, 1967, the Government provided further assistance in the form of contract modification No. 4 which extended the production schedule to require delivery of 15,000 cartridge cases on April 30, 1967, with completion by January 31, 1968. The Government also agreed to furnish an additional 200,000 to 300,000 pounds of material in the form of brass cups in accordance with specified terms. As consideration for this extension of the delivery schedule, the total contract price was reduced by $2,500.
On March 7, 1967, the contracting officer requested an audit which was completed on March 16, 1967. In describing the results of this audit, the board opinion states:
* * * As adjusted, the audit showed an estimated cash flow deficit of $77,500. It also found there was no cash presently available as working capital, no prospective increase in corporate equity, and that on the basis of data provided by appellant it would incur an estimated loss on the contract of $345,000 or 26% of estimated costs to completion. Estimated costs included some $475,000 in preproduction costs for the period March 1966 through January 1967.
Appellant’s general manager and the Government’s financial and procurement analyst also felt that management’s assumption of a performance period of 35 weeks was unrealistic. In view of appellant’s lack of experience in producing cartridge cases, they felt that a performance period of 40 to 42 weeks, as provided for in Modification 4, was more realistic. This would have involved another $75,000 to $100,000 of additional cost. Thus, despite appellant’s best efforts at cost reduction, it was apparent that the contract would end up in a serious loss position and that * * * neither material suppliers nor any financial institution would extend a line of credit to permit continued production. As of the middle of March 1967, it was clear that despite the Government’s technical and financial assistance, appellant’s financial condition was such as to endanger continued performance' of the contract. [Footnote omitted.]
By letter dated March 23, 1967, the PCO notified plaintiff that pursuant to the “Progress Payment” clause, further progress payments were suspended based upon “data contained in the audit report recently completed which took into consideration information contained in your letter to the Procuring Contracting Officer dated 16 March 1967. * * * Notwithstanding the audit report, the Government may reconsider reinstatement of Progress Payments if the corporation’s net worth is improved so that the Government interests can be protected.”
On March 27, 1967, plaintiff dismissed its work force and ceased all operations. At that time it had produced 2,700 of the 15,000 units due in April 1967. The units produced still required testing for ballistic requirements. On April 3, 1967, plaintiff submitted its request for progress payment No. 3, claiming the unpaid balance of the second progress payment, plus $104,476.96 for work performed in February and March 1967. The ACO denied this request on April 5, 1967, stating that “no evidence has been furnished * * which would indicate improvement of the corporation’s net worth.” On April 7, 1967, plaintiff was asked to show cause why the contract should not be terminated for default.
Following further discussions and requests for extensions of time, the production contract was terminated for default June 14, 1967, on two stated grounds: (1) failure to deliver contract items within the time specified without an excusable delay; and (2) continued performance of the contract has been abandoned which was not due to an excusable cause. The related “facilities” contract was terminated June 19, 1967.
Discussion and Conclusions
By reason of the wording of the “Default” clause the issue in this case is essentially one of proximate cause. Plaintiff, in summary, urges that its inability to perform was 'caused by the death of Louis Toffolon, and the Government’s action in withholding, reducing and eventually suspending progress payments contrary to the governing contract clause and regulations. Both of these causes are offered as being “beyond the control and without the fault or negligence” of plaintiff corporation.
Although it is well settled that the mere financial incapacity of a contractor to perform is not a cause beyond its control and without its fault or negligence, it is equally well established that financial incapacity can be excusable when it was precipitated by causes beyond the control and without the fault or negligence of the contractor. This is a fortiori true when the precipitating causes are acts or omissions of the Government, the other contracting party. As a result, and as illustrated by the cited cases, closer issues are presented herein than would at first blush appear.
The record is replete with efforts by the Government to prop up plaintiff’s sagging fortunes. These efforts undoubtedly grew out of the long-established Government policy of fostering small business concerns, and its self-interest in broadening the procurement base for this critical item. In retrospect, these rescue efforts were not an unmixed blessing from the standpoint of plaintiff corporation. The efforts it expended and costs it incurred in reliance on that continuing indulgence, served to deepen its losses when the props were eventually removed. There can be little doubt that plaintiff would now be better off had it not been awarded this contract, in the face of serious misgivings regarding its ability to perform; and had it not been thereafter indulged with technical and financial support when grounds for termination first developed. Plaintiff in fact urges these factors now as constituting a waiver by the Government, and an estoppel. However, its argument is not persuasive.
Each time the Government’s representatives waived a failure to make progress, or to meet a delivery schedule, they substituted a new and reasonable schedule by agreement. It was only when there appeared strong evidence that plaintiff would be unable to meet the last-established completion schedule, that termination action was eventually taken.
Considering chronologically plaintiff’s proffered excuses for nonperformance, it states that it would not have been awarded nor would it have accepted this contract but for Louis Toffolon’s financial resources and support. This is undoubtedly true. It then urges that “the Government was at fault in failing to accept Mr. Toffolon’s offer to guarantee performance of the contract personally.” Thus, when he died intestate without having executed a guarantee binding upon his estate, and without having transferred to plaintiff-corporation the capital assets earlier described, his death became the cause of plaintiff’s financial difficulties, an event beyond the control and without the fault or negligence of plaintiff.
Although the record demonstrates that Louis Toffolon was closely identified with plaintiff, they were not identical legal persons. Louis Toffolon had agreed in that letter of December 16, 1965, to transfer realty and machinery to plaintiff-corporation at the beginning of the new year, 1966. His death occurred 8 months later than that, September 7, 1966, without the transfer having been made. That factor alone seriously weakened plaintiff’s financial position after his death since these substantial assets were not available to plaintiff as a source of commercial credit. The transfer was a matter wholly within the control of the transferor and the plaintiff-transferee, and both were very closely identified with one another during Mr. Toffolon’s lifetime.
Similarly, during that 8-month period, the execution of the personal guarantee of performance by Mr. Toffolon was within the control of the guarantor and the plaintiff whose performance was being guaranteed. Admittedly, it would have been preferable had it been requested by Government representatives, since the offer had been made on an “if necessary” basis, and it clearly anticipated a reply or a request. Yet that factor alone did not render the absence of the guarantee a matter beyond the control and without the fault or negligence of plaintiff, within the meaning of the “Default” clause. It could have been executed by the parties on their own initiative, and without an invitation from defendant. It follows, therefore, that Mr. Toffolon’s death in September 1966 was not the sole proximate cause of plaintiff’s failure to perform.
However, even assuming, arguendo, that it was, plaintiff did not cease performance on that ground and at that time. Instead, the parties entered into a new agreement providing for progress payments, a revised delivery schedule, and the furnishing of brass cups by defendant, actions designed to ease the impact of Mr. Toffolon’s death upon plaintiff’s ability to perform. That earlier misfortune was thereby merged -in and superseded by the new agreement. Plaintiff thereafter received progress payments under the new arrangement, and its earlier misfortune was no longer available to it as an excuse for nonperformance.
This brings us to plaintiff’s second ground for urging that this default termination should be converted to one for the convenience of the Government. It submits that nonperformance resulted from the contracting officer’s wrongful withholding, reduction, and eventual suspension of progress payments, contrary to a contract provision and its governing regulations. However, the terms of that clause and those regulations are not absolute. Plaintiff, on this record, failed to meet the conditions necessary to insure continuation of progress payments, and it is concluded as a matter of law that the contracting officer acted upon substantial evidence (within the terms of the pertinent clause), when he determined that plaintiff’s financial condition was so unsatisfactory as to endanger contract performance.
Plaintiff maintains that the “initial decision to withhold progress payments was based upon no evidence at all, while subsequent decisions were based upon only incomplete and inconclusive evidence.” There is no support for this assertion.
The PCO communicated his initial decision to withhold approval of the full amount of the second progress payment on or about February 6, 1967. At that time, his overriding concern was the financial condition of the corporation. By mid-January or the early part of February defendant’s representatives had learned through numerous meetings and correspondence with plaintiff that the estate would no longer be able to advance funds to the corporation; that the ■heirs had not agreed upon definitive measures to increase the net worth of the corporation; that a long-term loan application had been denied; that debt financing could not be arranged until the uncertainties concerning the unity of ownership interests were resolved; that other efforts to obtain outside private financing had not been successful; and that the assets held by the estate could not be transferred to the corporation without an adequate cash consideration. The evidence amply supported the PCO’s concern.
Following this initial decision, the parties held a meeting on February 20, 1967, to discuss plaintiff’s financial situation. As a result thereof, and the parties’ review of plaintiff’s unaudited cash flow projection, defendant agreed (among other things) to make a reduced payment in the amount of $65,000 provided that plaintiff prepare and submit a revised projection based upon the existing contract only. Defendant was dissatisfied with plaintiff’s second cash flow projection, and advised plaintiff on March 2, 1967, that its requests for further progress payments would not be granted until the completion of a Government audit. After reviewing the financial data contained in the audit, the contracting officer notified plaintiff in writing on March 23, 1967, that future progress payments would be suspended.
The two cash flow projections, the Government audit report, and the information available through correspondence and numerous conferences with plaintiff, constitute substantial evidence of unsatisfactory financial conditions. The PCO was cognizant thereof and he relied upon these data in reaching his decisions. Furthermore, the detailed evidence outlined earlier demonstrates that defendant complied with the requirements prescribed by the regulations that he discuss and fully explore the “contractor’s financial condition, existing or available credit arrangements, projected cash requirements, effect of progress payment reduction on the contractor’s operations” and the general equities of the situation.
Plaintiff also argues that the Government should have considered the actual state of production prior to the suspension of progress payments, rather than limiting its inquiry to financial projections alone. Plaintiff asserts that it was about to commence full production when it was forced to shut down on March 27, 1967, by the suspension of progress payments.
The board’s opinion does point out that in March 1967 Government representatives apparently did consider plaintiff technically capable of proceeding with the contract. That is not to say, however, that plaintiff was capable of meeting the amended delivery requirements set forth in the contract. In fact, as late as March 2, 1967, modification No. 4 had been executed to further extend the delivery schedule. Pilot lot samples had been approved, but were still subject to the correction of specific deficiencies. At the time plaintiff ceased its operations in late March, only 2,700 units of the 15,000 required in April, 1967 had been manufactured.
This record falls short of demonstrating the existence of an efficient, continuous, operating production line when progress payments were suspended on March 23, 1967. In any event, the status of production does not preclude the contracting officer from suspending payments pursuant to the express provisions on financial condition set forth in the “Progress Payment” clause. The contracting officer notified plaintiff in writing that pursuant to the “Progress Payment” clause, payments would be suspended on the basis of financial data contained in the audit report. This constituted a sufficient “finding” to satisfy the requirements of that clause.
Finally, plaintiff urges that certain of the subordinate findings of fact in the board’s opinion are not supported by substantial evidence. It argues that the Government’s rejection of its first cash flow projection (which assumed the award of a follow-on contract), was unreasonable. The board found that “a cash flow projection premised on the award of a second contract was unrealistic, in the light of known requirements, the availability of other sources, the demonstrated deficiencies in appellant’s performance, and the time-frame of the projection.” Plaintiff is taking issue with defendant’s evaluation of the projection, the purchase categories therein, and the other sources of supply. But it has failed to demonstrate in light of the facts outlined earlier, that there was no substantial evidence in the record to support the board’s finding on this point.
Plaintiff also contends the board improperly found, in plaintiff’s words, that the “Government did not impose the condition of pilot lot acceptance upon plaintiff’s right to receive further progress payments.” Plaintiff is apparently referring to the board’s finding that after March 2, 1967, “[tjhere is no evidence that the continued withholding of progress payments was due to appellant’s inability to produce an acceptable pilot lot.”
The purpose of the quoted excerpt was to point out that the decision to suspend progress payments was based entirely upon plaintiff’s unsatisfactory financial condition. Earlier in its opinion the board had recognized that plaintiff’s difficulty in producing an acceptable sample lot had some influence (in conjunction with the many financial factors), upon the contracting officer’s decision to withhold and reduce the second progress payment.
Finally, plaintiff argues that the board erred in making a finding to the effect that “representations were made on plaintiff’s behalf that outside financing could or would be obtained.” As earlier observed, the record is not entirely clear on this point. But there is evidence to support and sustain a finding regarding Norman Toffolon’s representations as to the availability of outside financing, and this issue of fact is in any event not essential to the decision to terminate.
In summary, it is concluded that the board’s decision is correct as a matter of law, and that its findings of fact in support of that decision have substantial support in the record.
All of the foregoing considered, it is concluded that plaintiff is not entitled to recover. Plaintiff’s motion for summary judgment is denied, defendant’s cross-motion for summary judgment is granted, and the petition is dismissed. The counterclaim is dismissed as moot.
. A “default” is excusable under this provision “if the failure to perform the contract arises out of causes beyond the control and without the fault or negligence of the Contractor. Such causes may include, but are not restricted to, acts of God * * * acts of the Government in either its sovereign or contractual capacity * * *." [Emphasis supplied.]
. “Progress payments shall be made to the Contractor as work progresses, from time to time upon request, in amounts approved by the Contracting Officer upon the following terms and conditions:
* * * * *
“(c) Reduction or Suspension. The Contracting Officer may reduce or suspend progress payments, or liquidate them at a rate higher than the percentage stated in (b) above, or both, whenever he finds upon substantial evidence that the Contractor (i) has failed to comply with any material requirement of this contract, (ii) has so failed to make progress, or is in such unsatisfactory financial condition, as to endanger performance of this contract, (iii) has allocated inventory to this contract substantially exceeding reasonable requirements, (iv) is delinquent in payment of the costs of performance of this contract in the ordinary course of business, (v) lias so failed to make progress that the unliquidated progress payments exceed the fair value of the work accomplished on the undelivered portion of .this contract, or (vi) is realizing less profit than the estimated profit used for establishing a liquidation percentage in paragraph (b), if that liquidation percentage is less than .the percentage stated in paragraph (a)(1).”
. Armed Services Procurement Regulations introductory paragraph E-524 provides, for example, that:
“In the process of reviewing individual progress payments already existing or hereafter established, action to reduce or slow down progress payments or to increase liquidation rates (unless justified on other grounds, such as overpayments or unsatisfactory performance) should be consistent with contract provisions, and never taken precipitately or arbitrarily. Any such reduction of progress payments on active contracts (other than normal liquidation pursuant to the contract) should be effected only after notice to and discussion with the contractor, and after full exploration of the contractor’s financial condition, existing or available credit arrangements, projected cash requirements, effect of progress payment reduction on the contractor’s operations, and generally on the equities of the particular situation. Where contract performance is satisfactory, and there is neither overpayment nor anticipated loss, proper progress payments, adequately verified, will be paid promptly when earned and billed in accordance with contract provisions, even though the terms of the particular contract may make the payment discretionary rather than mandatory, and such proper payments will not be held up or denied because of the contractor’s lack of need for the payment. E-510.1(c) and E-510.2(c) provide that progress payments may be suspended or their rate of liquidation may be increased, whenever any of the circumstances there described are found to exist. The rights reserved to the Government by those paragraphs are for the purpose of protecting the interests of the Government, fostering satisfactory contract performance, and guarding against overpayments and losses. Those paragraphs will be administered with these purposes in mind. Action taken pursuant to those paragraphs will be fair and reasonable under the circumstances of particular cases, and supported by substantial evidence. Findings made under those paragraphs will be in writing.”
. Plaintiff seeks recovery of an amount in excess of $500,000 which it claims were costs incurred during performance. In its answer herein, defendant asserts a counter claim in the amount of $177,135.73, made up of $271,509.72 in progress payments allegedly made to plaintiff, plus $25,336.40 worth of brass cups allegedly furnished by the Government, minus $119,710.49 representing the alleged value of certain items of property acquired from plaintiff. Defendant notes in its brief that this net sum of $177,135.73 has already been set off and retained by it under another contract. Since the amount of defendant’s counterclaim, plus applicable interest, has been so satisfied, defendant’s counterclaim is dismissed.
. Worded in conformity with 41 U.S.C. §§ 321-322.
. See Ray D. Bolander Co. v. United States, 186 Ct.Cl. 398, 404, 405, 415 (1968).
. See Paccon, Inc. v. United States, 399 F.2d 162, 168-169, 185 Ct.Cl. 24, 35 (1968); also, J. W. Bateson Co. v. United States, 450 F.2d 896, 196 Ct.Cl. 531 (1971), and Baldwin-Lima-Hamilton Corp. v. United States, 434 F.2d 1371, 193 Ct.Cl. 556 (1970).
. The Government had only two suppliers of 20 mm. brass cartridge cases and it was actively seeking other sources of supply.
. Contracting officer responsibilities were divided among individuals according to function. The ACO was in fact employed by another agency, Defense Contract Administration Services^ District (DCASD) at Hartford, Connecticut.
. Under which the Government would furnish certain equipment for the contractor’s use.
. The PCO testified at the board hearing that the standard form of guarantee had not been requested.
“Q. Was such a guarantee required in this case?
“A. We didn’t ask for it.
“Q. It was not asked for?
“A. No, sir.
‘•Q. Can you tell us why not?
“A. I guess we overlookd it.”
. Norman Toffolon did not testify at the ASBOA hearing. He had suffered a heart attack the previous week and was resting in the intensive care unit of the hospital.
. The source of the $40,000 was another company in which decedent had owned a substantial interest. The company was indebted to Louis Toffolon, and after his death the management repaid the obligation to the estate, which then advanced the funds to plaintiff.
. See note 1 supra, and text at tliat point.
. See, for example, Consolidated Airborne Systems, Inc. v. United States, 348 F.2d 941, 945-940, 172 Ct.Cl. 588, 590-597 (1965) ; Kennedy v. United States, 104 Ct.Cl. 507, 515 (1964) ; and Office Equipment Co., ASBCA No. 4048, 58-1 BCA 1f 1717.
. See Pilcher, Livingston & Wallace, Inc., ASBCA No. 13391, 70-1 BCA ¶ 8331; Coastal Mfg. Co., ASBCA No. 11516, 67-1 BCA ¶ 6378; Douglas Corp., ASBCA Nos. 3349, 3741, 58-1 BCA ¶ 1727; and Paromel Electronics Corp., ASBCA Nos. 4025, 4123, 57-2 BCA ¶ 1503.
. See Litchfield Mfg. Corp. v. United States, 338 F.2d 94, 107 Ct.Cl. 604 (1964); Brooklyn & Queens Screen Mfg. Co. v. United States, 97 Ct.Cl. 532 (1942); Suburban Contracting Co. v. United States, 76 Ct.Cl. 533 (1932); Pigeon v. United States, 27 Ct.Cl. 167 (1892); United States v. Lennox Metal Mfg. Co., 225 F.2d 302 (2d Cir. 1955); National Radio Co., ASBCA No. 14707, 72-2 BCA ¶ 9486; Pilcher, note 16 supra; R.H.J. Corp., ASBCA No. 9922, 66-1 BCA ¶ 5301; U. S. Services Corp., ASBCA Nos. 8291, 8433, 63 BCA ¶ 3703; Q.V.S., Inc., ASBCA No. 3722, 58-2 BCA ¶ 2007; Douglas, note 16 supra; George E. Martin & Co., ASBCA No. 3117, 56-2 BCA ¶ 1150. Cf. Preuss v. United States, 412 F.2d 1293, 188 Ct.Cl. 469 (1969); Davis v. United States, 180 Ct.Cl. 20 (1967); and Emsco Screen Pipe Co., ASBCA Nos. 11917, 12184, 69-1 BCA ¶ 7710.
. Citing Coastal, note 16 supra.
. He was, it will be recalled, sole voting stockholder; holder of a large majority of the stock; principal financial support; am! principal basis for any outside line of credit. There was, furthermore, no indication of financial distress on the part of plaintiff, prior to Louis Toffolon’s death.
. See cases cited in note 17 supra.
. See note 3 supra.
. Cf. Davis, note 17 supra.
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FORT SILL APACHE TRIBE OF the STATE OF OKLAHOMA et al. v. The UNITED STATES.
Appeal No. 2-72.
United States Court of Claims.
Decided May 11, 1973.
I. S. Weissbrodt, Washington, D: C., attorney of record, for appellants; David Cobb, Weissbrodt & Weissbrodt, Abe W. Weissbrodt, and Ruth W. Duhl, Washington, D. C., of counsel.
A. Donald Mileur, Washington, D. C., with whom was Asst. Atty. Gen., Kent Frizzell, for appellee.
Before COWEN, Chief Judge, DUR-FEE, Senior Judge, and DAVIS, SKELTON, NICHOLS, KUNZIG and BENNETT, Judges.
ON APPEAL FROM THE INDIAN CLAIMS COMMISSION
BENNETT, Judge,
delivered the opinion of the court:
The case now before the court presents several novel problems which do not appear to have been resolved before. The issues all revolve around the extent to which an Indian tribe may claim compensation for wrongdoing to the tribe unrelated to property rights, when the actual victims of the wrongdoing were the individual members of the tribe. For reasons to be detailed, the court affirms the decision of the Indian Claims Commission, 26 Ind.Cl.Comm. 281 (1971), in which it dismissed the claim without trial on the grounds of lack of jurisdiction over the subject matter, section 2, clause (2), and for failure to state a claim upon which relief could be granted under section 2, clause (5), of the Indian Claims Commission Act, 60 Stat. 1049, 1050, 25 U.S.C. § 70a(2), (5). The pertinent facts need to be outlined before examining the issues and their resolution.
The Chiricahua Apache Tribe, which is the predecessor to the appellants now before the court, originally occupied ancestral lands covering large portions of the States of Arizona and New Mexico, along with portions of the Republic of Mexico. In the years 1876 and 1877, the tribe was officially removed from its ancestral tribal lands to the San Carlos Indian Reservation in Arizona. It is clear, however, that the Government authorities were less than successful in getting all of the Chiricahuas to stay on the reservation. The result was that at various times, several groups of aggressive, warlike Chiricahuas continued to occupy portions of the ancestral tribal lands, thereby coming in sporadic conflict with white settlers, miners, and ranchers. The hostile relations which existed between the Indians and the settlers reached a critical stage by 1886 when it became apparent that there was an urgent need to end the forays of the hostile groups of Apaches and attempt to bring peace to the Southwest.
There were several conflicting proposals presented for bringing about the desired peace. General Nelson Miles prepared a plan which, in part, called for relocating the Apache reservation to an area in the Oklahoma Indian territory, as a means of moving the tribe far enough from its original homelands to discourage further wanderings from the reservation. The plan ultimately adopted, however, was presented by General Sheridan and resulted in the wholesale relocation in 1886 of the entire Chiricahua Apache Tribe, men, women and children then at the San Carlos Reservation to Fort Marion near St. Augustine, Florida, where they were interned as prisoners of war. The hostile bands were likewise rounded up, one at a time, and removed to Florida. The surrender in Mexico, September 4, 1886, of Gerónimo, Natchez, and other Apaches classified as hostile, represented the end of the forays by the Chiricahuas. Mangus, Gerónimo, Natchez, and their followers were confined at Fort Pickens, Florida. In 1887 and 1888, the prisoners were moved to the Mount Vernon Barracks near Mobile, Alabama. It will be assumed for the purposes of this appeal, that this confinement constituted a wrongful arrest, imprisonment, and excessive punishment of some individual Indians.
During the first 31/2 years of captivity, approximately 119 of the 498 Apache prisoners died, some apparently due to the effects of being moved from a high, very dry climate to a very low, humid climate. One hundred twelve of the Indian youth were sent to the Indian school at Fort Carlisle, Pennsylvania, where 30 died despite good sanitary conditions. Consumption was the principal cause of death. In the prison camps living conditions were bad. One Army report indicated the 6.8 percent death rate (as against a normal 2 percent) was aggravated among the young children by “their parents’ neglect of the simplest instructions of physicians and the murderous quackery of old squaws.” There was a high birthrate among the Indians in captivity so that their net loss in the first 3% years was 38 of the original 498. The population, however, continued to decline over-all.
In October 1894, the 259 remaining Chiricahuas were again moved; this time to the Fort Sill Military Reservation in Oklahoma. They were kept at Fort Sill as prisoners of war until April 2, 1913, when they were finally released. After the period of internment, the majority of the members of the tribe went to the Mesealero Reservation in New Mexico, while the rest stayed at the Fort Sill Reservation.
In their petition before the Indian Claims Commission (ICC), the plaintiffs alleged that the 27 years of internment suffered by the members of the tribe gave rise to a cause of action under both 25 U.S.C. § 70a(2) for a cause sounding in tort [the clause 2 claim], and under 25 U.S.C. § 70a(5) for a claim based on the absence of “fair and honorable dealings” [the clause 5 claim]. It is important to note that the appellants in this case are now asserting only a tribal claim for injuries to the tribe’s traditional power and structure resulting from the years of internment. The appellants are not seeking damages for false arrest and imprisonment of each member of the tribe, apparently recognizing that these would be little more than multiple individual claims and therefore outside the jurisdiction of the Indian Claims Commission. See, Cherokee Freedmen v. United States, 161 Ct.Cl. 787 (1963); Minnesota Chippewa Tribe v. United States, 315 F.2d 906, 161 Ct.Cl. 258 (1963). In seeking tribal damages for this type of injury, appellants are presenting a novel argument. They allege that the wrongful imprisonment of the members of the Chiricahua Tribe, simply because they were members, constituted a compensable injury to the tribe as well as to the individual Indians involved. They argue that the internment of the tribe’s members took from the tribe its power to hold territory, its power to gather and accumulate food, horses and other resources necessary to its communal existence, and its power to govern its people. The loss of these powers, the appellants contend, constitutes a separate and distinct compensable injury to the tribe, recoverable under both clause 2 and clause 5 of 25 U.S.C. § 70a.
Any solution to the problem posed by the appellants requires the court to construe the pertinent sections of the Indian Claims Commission Act of August 13, 1946, ch. 959, 60 Stat. 1049, 25 U.S. C. § 70. On this matter the court has said:
* * * it should be possible to construe the statute liberally to affect its remedial purpose and intent, and strictly to limit undue abrogation of fundamental rights or to prevent undue extension of extraordinary remedies. [Otoe & Missouria Tribe v. United States, 131 F.Supp. 265, 271, 131 Ct.Cl. 593, 602, cert. denied, 350 U.S. 848, 76 S.Ct. 82, 100-L.Ed. 755 (1955).]
In order to determine if the claim presented by the appellants represents an undue extension of an extraordinary remedy, the court must consider separately each of the possible bases for granting the ICC jurisdiction of these claims.
The primary ground on which jurisdiction might rest is the language of clause (2) of 25 U.S.C. § 70a. The appellants have attempted to characterize a series of multiple torts committed on the individual members of this tribe as also constituting a tort against the tribe itself making clause 2 applicable. There is a separate cause of action resting with the tribe only if the Act can be read to recognize a distinct right in the tribe to foster and protect its own form and structure. The focal point here is whether clause 2 recognizes such a protectible right in the tribe.
As support for its assertion that clause 2 does cover these facts, the appellants point to Baltimore & Potomac R.R. v. Fifth Baptist Church, 108 U.S. 317, 2 S.Ct. 719, 27 L.Ed. 739 (1883). The church in that case sued the railroad for disrupting its services and destroying the value of its property for church purposes by building and operating a locomotive storage and repair shop immediately adjacent to the church. The facility was found to be noisy, smoky, smelly, and dirty. After finding that the defendant’s shop constituted a private nuisance, the Court stated:
* * * The plaintiff was entitled to recover because of the inconvenience and discomfort caused to the congregation assembled, thus necessarily tending to destroy the use of the building for the purposes for which it was erected and dedicated. * * * the congregation had the same right to the comfortable enjoyment of its house for church purposes that a private gentleman has to the comfortable enjoyment of his own house, and it is the discomfort and annoyance in its use for those purposes which is the primary consideration in allowing damages. * * *. [108 U.S. at 335, 2 S.Ct. at 731.]
The appellants contend that this case recognizes a right in the church to sue for the thwarting of its common purposes and the annoyance and discomfort of its members, and therefore has important parallels to the case at hand. Characterized as the appellants have done, the Baltimore & Potomac R.R. case might serve as authority for the proposition that wrongdoing with respect to the individual members of the group also results in a distinct injury to the organization itself. The court does not read the cited case in that way, however. It seems clear that the Supreme Court was not awarding damages to the church because the members of the congregation were inconvenienced by the defendant nor because the number of people in the congregation declined due to the defendant's operation, but because defendant’s actions constituted a nuisance which served to interfere with the use of the church’s property. The church was asserting a property right of its own, not a right of the individual parishioners.
A situation somewhat more analogous to the facts at hand can be found in Cherokee Freedmen v. United States, supra. There the appellants were not listed on the rolls of the Dawes Commission Report as officially being members of the Cherokee Tribe, and as a result, they were denied a pro rata portion of an award obtained by the tribe from the United States. The court found that the resolution of the appellants’ claim would depend on individual proof of each Freedman’s right to be enrolled. There was no group interest or common right among the appellants. The court summarized by saying:
* * * Since the claims are individual, they could be prosecuted singly, in a proper forum, without involving other Freedmen or any entity; combining them into one proceeding does not transform such individual claims into group claims cognizable by the Claims Commission, or change their basic individual character. [161 Ct.Cl. at 789.]
But, the Cherokee Freedmen case, relied upon by the Government, seem to miss the mark of the appellants’ argument, since it does not address in depth the critical issue of whether there is a distinct cause of action and right resting with the tribe itself. In that case the appellants were joining, into one claim, many individual claims which contained common elements of proof. The court found this to be impermissible under the Act, as it would be if our appellants were merely seeking to claim damages on behalf of the individual members of the tribe for their false arrest and imprisonment. With respect to the crucial issue now before the court, it simply stated there was no group interest or right being asserted by the Cherokee Freedmen appellants. While that was true under those facts, it provides little assistance in attempting to determine under the facts now before the court, whether the claim of these appellants is a valid assertion of a group interest or right which the court might recognize within the language of the Act.
The court is faced with the resolution of this problem under circumstances in which the legislative history has a bearing on interpretation of the statute. For the following reasons, it finds that the ICC Act was not intended to cover, under clause (2), claims of the type now being pressed by the appellants. One of the problems the court has with the appellants’ position is illustrated by the facts in Gila River Pima-Maricopa Indian Community v. United States, 427 F.2d 1194, 190 Ct.Cl. 790, cert. denied, 400 U.S. 819, 91 S.Ct. 37, 27 L.Ed.2d 47 (1970). A portion of the appellant’s claim in Gila River was based on the allegation that “damage was caused by the Government when it ‘undertook to, and did, subjugate petitioner under wardship to a stagnation of self-expression * * * [and] bridled petitioner into cultural impotency.’ ” 427 F.2d at 1195, 190 Ct.Cl. at 792. For the purposes of that decision, the court assumed that this was a tribal claim and went on to dismiss the claim on other grounds. Both in Gila River and in the case now before the court, the tribes were seeking recovery for essentially the same type of injury. Each felt Government action caused damage to the power structure and viability of the tribal unit; that is, damage to Indian peoplehood in general. Opening the door to appellants in this case would leave it open for a multitude of other claims based on facts more closely akin to those in Gila River. While the court recognizes that a variety of injustices have been inflicted upon Indians both before and after they were relocated on the reservations, it nonetheless does not appear that Congress in 1946 thought this type of injury would come within the coverage of the Claims Commission Act. It has been noted that the Act “is a synthesis of those ‘ * * * classes of cases * * * which have heretofore received congressional consideration in the form of special jurisdictional acts. * * *.’ ” Gila River, 427 F.2d at 1200, 190 Ct.Cl. at 801. The court has not been made aware of any of the special jurisdictional acts which were intended to cover tribal injuries of the type presented here. The apparent view of the Congress in 1946 was that these claims would be “for specific deprivations of land or property or rights protected by treaty, statute, or then-existing law. The instances cited in the Congressional history are of that kind.” 427 F.2d at 1200-1201, 190 Ct.Cl. at 802. H.R.Rep. No. 1466, 79th Cong., 1st Sess. (1945).
There. can be no doubt that the Apache Tribe did not prosper from the injuries suffered by its constituent members. But, the injury to the tribe is subsumed by the multitude of individual claims. As in Cherokee Freedmen, supra, the measure of damages for any tribal injury arising out of the imprisonment of the Apaches would seem to be the cumulative damage to the individual victims of imprisonment who did not contest their imprisonment by seeking writs of habeas corpus. We need not at this late date conjecture whether such efforts would have been successful, but the legal remedy was there. The significance is, however, that had the remedy been invoked successfully we would not have the instant claim. The question now is whether the Indian Claims Commission Act has given the Commission jurisdiction to award damages to the tribe for wrongs sufféred by individual Indians who were allegedly falsely arrested and imprisoned. Twice before the Commission has answered this question in the negative. Confederated Tribes of the Colville Reservation v. United States (Docket No. 186), 25 Ind. Cl.Comm. 99 (1971); Fort Sill Apaches v. United States (Docket No. 30), 1-A Ind.Cl.Comm. 137, 143 (1949). The court agrees with the Commission, reads clause (2) of 25 U.S.C. § 70a as a whole, and determines as a matter of law that the Act does not recognize in the tribe a separate and distinct right to recover for injuries so closely tied to those suffered personally by individual Indians, which injuries are the whole basis for any damage to the tribe as such. The jurisdiction of the Commission is only over claims by the tribes, bands, or other identifiable groups of American Indians which have group rights. There is no grant of jurisdiction to hear claims on behalf of individual Indians. The legislative history as well as the language of the Act makes this clear.
Appellants also rely upon clause (5) of 25 U.S.C. § 70a, the “fair and honorable dealings” clause, as a basis for arguing that the ICC has jurisdiction over its claim. The claim presented by the appellants under clause (5) is identical to that presented ana discussed with respect to clause (2), and suffers from many of the same weaknesses. The court has said that the reach of the “fair and honorable dealings” clause is limited to somewhat fewer situations than a literal reading would imply. More specifically, the United States is held liable under this “fair and honorable dealings” clause where “by its own acts, it has undertaken special duties which it has failed to fulfill.” Lipan Apache Tribe v. United States, 180 Ct.Cl. 487, 502 (1967). The issue therefore, under the clause 5 portion of the appellants’ claim, is whether the United States has undertaken a special duty to protect and foster the traditional power and structure of the tribal organization. We think it has not done so.
The appellants point to the language in the Treaty of July 1, 1852, 10 Stat. 979, and the Indian Trade and Intercourse Act of June 30, 1834, ch. 161, § 12, 4 Stat. 730, 25 U.S.C. § 177, as creating just such a special duty on the part of the United States, which duty was breached by the internment of the members of the tribe under conditions which eroded the structure and power of the tribe. The Treaty of 1852 was, however, a treaty of peace, which fact this court recognized in Lipan Apache Tribe, supra at 501. The Commission described the 1852 Treaty in Fort Sill Apache Tribe v. United States (Docket Nos. 30-A and 48-A), 19 Ind.Cl.Comm. 212, 238 (1968), stating:
* * * This negotiation was intended primarily as a treaty of peace, not a settlement of conflicting claims. Subsequently, all parties violated the terms of the Treaty of Santa Fe and no one is in position to assert any benefits or rights thereunder.
The court agrees with this assessment of the treaty so far as creating any viable “special relationship” on the part of the United States is concerned. Further, and specifically, it contains no language even implying a duty upon the United States to protect the structure and existence of the Chiricahua tribal unit.
The Indian Trade and Intercourse Act of 1834 suffers from the same failure to create a special relationship or duty under the circumstances of this case. The court held in Seneca Nation v. United States, 173 Ct.Cl. 917, 925 (1965), that the Act “created a special relationship between the Federal Government and those Indians covered by the legislation, with respect to the disposition of their lands, and that the United States assumed a special responsibility to protect and guard against unfair 'treatment in such transactions.” In short, the Indian Trade and Intercourse Acts have consistently been interpreted as creating obligations on the part of the United States to protect the Indian tribes in dealings involving the disposition of their lands. The special relationship created by this statute, as amended, has never been extended to the intangible factors of tribal well-being, cultural advancement, and maintenance of tribal form and structure. Nothing in the statute or its legislative history requires a contrary conclusion or modification of this view.
In this light, the court is constrained to agree with the decision reached by the ICC on this issue, finding that no special relationship existed between the Chiricahua Tribe and the United States sufficient to bring this claim within the “fair and honorable dealings” clause. It should be further noted that, given the discussion of the nature of the appellants’ claim with respect to clause (2), the court will not lightly imply a duty upon the Government of the type sought by appellants when the same claim is raised under the clause (5) language. This is not to preclude the possibility that under some treaty language the Government may have undertaken the responsibility of protecting the tribal structure of a given group, and have thereby created a definable group interest, damage to which would involve a breach of the “fair and honorable dealings” clause. Such a spe^ cial relationship, however, must be clearly indicated. This is not the situation in the case at hand where the pertinent treaty and Act of Congress do not deal with the matter at all. The court, therefore, finds that the appellants’ claim does not fall within the jurisdiction of the ICC under the “fair and honorable dealings” clause and the Commission was correct in holding that as to clause (5) the petition failed to state a claim upon which relief can be granted under the ICC Act.
Because we have disposed of the appeal on other grounds, it will not be necessary to discuss the arguments raised by defendant that the ease is barred as res judicata because it is alleged to be identical with ICC Docket No. 30, Fort Sill Apaches v. United States, 1-A Ind.Cl.Comm. 137, 139 (1949), wherein there was a claim involving the arrest and imprisonment of the Apaches as outlined in this case, ICC Docket No. 49. The Commission dismissed the claim in both dockets for similar reasons. However, it did not bar the claim in Docket No. 49 either for res judicata or collateral estoppel, assuming for the purpose of ruling on appellants’ motion for summary judgment that the parties were not identical and that the causes of action were different. However, the Commission did say Docket No. 30 was stare decisis to No. 49. Final judgment has been entered by the Commission in No. 30 and no appeal has been taken. ICC Docket No. 49 now before the court is our first contact with the problem. For the same reasons, it is not necessary to discuss the appellants’ argument that the internment of the Indians destroyed “sovereignty” of their tribe and that the United States has violated its “general duty” not to mistreat the tribe and has offended “basic principles of law, equity and morality” and has bordered on genocide with its tortious conduct. These and other arguments have been ably and forcefully presented by opposing counsel.
The story of the wars between the United States and the Apache Indians is one of harsh treatment on both sides. The Apaches raped, plundered, and murdered on a grand scale, “carrying death and fire and desolation over American and Mexican territory to an extent which is almost incredible.” Scott v. United States, 33 Ct.Cl. 486, 489 (1898). The Federal Government determined it to be necessary to field at one time an army of 5,000 men against the Apaches. The Mexicans had 4,000 soldiers in the field. Battles with Apaches went on for over 100 years. In 1886, when Gerónimo surrendered, the organized hostilities came to an end. This court described the final surrender as involving “more prolonged negotiation than the army of Burgoyne at Saratoga or of Lee at Appomattox, and concluded by the granting of terms that the surrender be ‘as prisoners of war to an army in the field’— terms which effectually removed the sagacious savage and his followers beyond the jurisdiction of the civil authorities.” Scott v. United States, supra at 488. We see then that the decision to put the Apache Indians in confinement in Florida was a military measure taken to prevent the possibility of a resumption of warfare. We do not consider the merits of that decision. The question now is not how mistreated the Indians were or how much provocation there was to explain the actions of the United States, but whether the Indian Claims Commission has jurisdiction of the claim.
With the perspective of history and the benefits of hindsight and ignorance of the temper, passions, and conditions of the times, it is easy to say that the actions of the United States were perhaps unwarranted and that reparations should be given to the Apache Indians for their suffering after surrender. The Congress knew all about the Apache wars and their aftermath when it enacted the Indians Claims Commission Act in 1946. This generous and remedial legislation did not, however, provide for claims by individual Indians, but only by tribes and identifiable bands and groups. We take the law as we find it.
The early bound Reports of the Court of Claims contain scores of cases wherein claims were made and judgments rendered under the so-called Indian Depredation Act of March 3, 1891, ch. 538, 26 Stat. 851. The United States was charged with defense of these claims wherein Indian tribes were joined as defendants. The statute reserved to the Government, and to the Indians themselves, all rights to “counterclaim, set-off, claim of damages, demand, or defense whatsoever of the Government or of the Indians * * *." Sec. 4, 26 Stat. 852. The various Apache tribes and bands appear repeatedly in the Reports.
Under the depredation statute, judgments were given only against Indian tribes living in amity with the Government. Where an outlaw band seceded from a tribe it was not held against the tribe. Scott v. United States, supra; Montoya v. United States, 32 Ct.Cl. 349 (1897), aff’d, 180 U.S. 261, 21 S.Ct. 358, 45 L.Ed. 521 (1901). But, where the entire Chirieahua Tribe at one time was at war with the United States, it could not be held liable in a suit at civil law for its depredations. In Dobbs v. United States, 33 Ct.Cl. 308 (1898). The answer given to such a problem was military in nature. It was the constant, overriding purpose of the Government to pacify the Indians and to make treaties which would bring them under the Nation’s laws. Whatever civil remedies are to be allowed, for adjustment of ancient, legitimate Indian grievances is, however, for Congress to say. It has not said anything which would permit recovery under the theories advanced by appellants under Docket No. 49. To grant appellants the relief demanded would be an undue extension of the extraordinary remedies allowed under the Indian Claims Commission Act. The decision of the Commission is, accordingly, affirmed.
Affirmed.
DAVIS, Judge
(concurring):
I join the court’s opinion which, as I understand it, holds that the tribe states no claim under the Indian .Claims Commission Act because (a) the claims asserted are essentially individual, rather than tribal, and therefore not cognizable under either Clause (2) or Clause (5) of Section 2 of the Act; (b) insofar as the tribe attempts to state a claim as a tribe it fails to allege any valid basis for believing that the Federal Government undertook to protect this tribe as a tribe —as distinguished from protecting individual members of the tribe from personal harm — from acts of the Federal Government which would injure or destroy the tribal structure or existence; and (c) the Indian Claims Commission Act does not attempt to redress any and all wrongs, to the tribe or its members, which a tribe may wish to present.
Though the “fair and honorable dealings” clause covers certain kinds of “moral claims” by a tribe for injury to itself, the effort to read that provision as encompassing any and all “moral claims” of whatever type was rejected by all the judges in Gila River Pima-Maricopa Indian Community v. United States, 427 F.2d 1194, 190 Ct.Cl. 790, cert. denied, 400 U.S. 819, 91 S.Ct. 37, 27 L.Ed.2d 47 (1970). I have no adequate reason to change my position. The legislative history is not entirely clear but in my view its balance swings against the position that Clause (5) was meant to be wholly unlimited and open-ended.
NICHOLS, Judge
(dissenting):
With all respect I am unable to join or agree with the majority. I think the claimant tribe was entitled to a hearing on the merits. It is not that I see it as certain or even probable that they would prevail. I know that one’s simplistic assessment of the rights and wrongs of this old case could suffer much transformation as the evidence unfolded. It is just that I fail to see this as the kind of case the Indian Claims Commission could refuse to consider at all, as wholly outside its statutory jurisdiction. I think, if claimants have their day in court, the purpose of Congress is better served, even if they lose.
The majority falls into three main errors, which I will take up in a different order than the court does, in order to present my own position more logically. They are: I, The Commission has no jurisdiction over claims rising out of or on account of acts of war by the United States armed forces; II, The Commission has no jurisdiction over wrongs to Indians on which the court says they could have sued individually; and III, Clause (5) of Section 2 of the Act, 25 U.S.C. § 70a, “claims based on fair and honorable dealings that are not recognized by any existing rule of law or equity” only applies to claims rising out of a “special relationship” assumed towards a tribe by the United States. I conclude with a Section IY which considers some techniques of interpretation of the statute which I believe we should employ, and the use of which supports my position.
I. Military operations. I have no doubt, as the court says, that the prolonged imprisonment of the claimant Apache Tribe rose out of the hostilities that had raged between them and the United States, and was an act of war. In Scott v. United States, 33 Ct.Cl. 486 (1898) we held that the state of affairs obtaining was war.
The parties, and the decision below, pass by this absolutely vital fact with no notice, although appellant does say in its brief, to do it justice, that the tribe was held from 1886 to 1913 as prisoners of war. That is a true statement, as shown below, and it implies the rest. The parties must have been aware of it, but doubtless did not see how to fit it into their theories of the case. The diligence of the court in sua sponte bringing the fact forward into notice and reasoning as to its legal consequences, can only be commended. However, it confronts us with a problem as to which we have not had the assistance of counsel. I put forward my own 2<¡¡ worth on the topic with some hesitation. If the case should be remanded for further consideration below, the Commission should not consider itself bound by anything we say on this topic.
We are dealing, then, with an act of war. The United States is not liable for acts of war in many circumstances where, in the absence of war, it would be. Juragua Iron Co. v. United States, 212 U.S. 297, 29 S.Ct. 385, 53 L.Ed. 520 (1909); United States v. Pacific R.R., 120 U.S. 227, 7 S.Ct. 490, 30 L.Ed. 634 (1887); Aris Gloves, Inc. v. United States, 420 F.2d 1386, 190 Ct.Cl. 367 (1970). However, war has or, in those days, had, its own laws. In United States v. Pacific R.R., supra, the Court said at p. 233 of 120 U.S., at p. 493, of 7 S.Ct.:
It has been held by this court in repeated instances that, though the late war [Civil War] was not between independent nations, yet, as it was between the people of different sections of the country, and the insurgents were so thoroughly organized and formidable as to necessitate their recognition as belligerents, the usual incidents of a war between independent nations ensued. The rules of war, as recognized by the public law of civilized nations, became applicable to the contending forces. Their adoption was seen in the exchange of prisoners, the release of officers on parole, the recognition of flags of truce, and other arrangements designed to mitigate the rigors of warfare. The inhabitants of the Confederate States on the one hand, and of the states which adhered to the Union on the other, became enemies, and subject to be treated as such, * *
Persons who violate such recognized rules of war are accountable. In re Yamashita, 327 U.S. 1, 66 S.Ct. 340, 90 L. Ed. 499 (1946). Officers of our own armed forces who breached the laws respecting civilian non-combatants would be accountable. In re Yamashita, supra, at p. 16, and fn. 3, 66 S.Ct. 340. Therefore, I conclude, for purposes of the present claim, the fact the parties were at war does not in and of itself license any sort of frightfulness, but only changes the standards of “fair and honorable dealings” from those of peace to those of war. It would be the duty of the Commission to establish what the standards were, whether of warfare between civilized nations generally, or special ones developed for frontier conflicts with savage tribes, and apply them to the history as proven. It appears from the Scott decision, supra, there were several other instances of Indian hostilities recognized as war, therefore standards there must have been. It is significant that, as stated in the Scott case, 33 Ct.Cl. at p. 495 the Government in 1886 allowed the Apaches to surrender “as prisoners of war to an army in the field.” This stipulation would have been meaningless unless rules such as are mentioned in the Pacific Railroad case existed. The report of the Commissioner of Indian Affairs, 1913, describing the release of the survivors, calls them still “prisoners of war”. The parties, arguing the case on their own chosen theories, have not told us what the rules were, but their existence can be assumed as a matter of judicial notice. Since 20th century combatants feel justified in perpetrating any horror, we assume too readily this was always so, but it will be conceded, I think, that a 19th century Indian claim ought to be evaluated according to the more civilized standards of the 19th century.
In the Apache war with its background of rape, plunder, and murder, death, fire, and desolation which the court alludes to, justifying the imprisonment may well prove easier than condemning it; in any case, we should not fear to cast the light of day on this murky chapter of our nation’s past, if Congress wished it.
II. Individual wrongs. The court supposes that individual imprisoned Apaches could have sued for habeas corpus, or something, and therefore, the wrongs were personal and individual, not to a tribe, band or other identifiable group. The claimants attempt to show damage to the tribe, as a tribe. I do not think these inquiries are relevant. Once we identify the mass imprisonment as a war measure, it falls into the category of issues which are typically and traditionally assigned for political, group settlement. If we conceive, as I think we should, that the Act intends the tribe, as a tribe, to prosecute claims a sovereign nation would typically prosecute, instead of its citizens, then claims for breaches of the laws of war are clearly in that class.
Consider, for example, the Alabama Claims. These were purely private and individual in the sense that the losses were all of privately owned ships and cargoes, taken and destroyed by Confederate cruisers, for whose depredations England was responsible because she had fitted them out in violation of her duties as a neutral, under international law or the laws of war. By the theory adopted by the majority here, the United States Government should have abstained leaving the shipowners to sue someone in England, or petition to Parliament. Of course we know nothing of that kind happened. Our Government asserted its claim by at times acrimonious diplomacy, obtaining ultimately a treaty, 17 Stat. 863, which submitted the issues to arbitration. The arbitrators awarded the United States $15,500,000, which England paid.
In United States v. Weld, 127 U.S. 51, 8 S.Ct. 1000, 32 L.Ed. 62 (1888), the Supreme Court was called upon to review a question of jurisdiction of the Court of Claims arising out of disputes about the distribution of the award thus received by the United States. As to the rights of individual citizens not specifically provided for in the Treaty, the Court said at p. 56, 8 S.Ct. at p. 1003:
* * The award of $15,500,000, directed to be paid by Great Britain, was to the United States as a nation. The text of the treaty itself speaks of the “claims on the part of the United States,” and in Article 7 the gross sum was “to be paid by Great Britain to the United States.” * * * The fact that the Congress of the United States undertook to dispose of this fund, and to administer upon it, in accordance with its own conceptions of justice and equity, precludes, at least for the purposes of this decision, judicial inquiry into such questions. The claimants had to rely upon the justice of the government, in some of its departments, for compensation in satisfaction of their respective claims; * * *
In another case, Williams v. Heard, 140 U.S. 529, at pp. 537-538, 11 S.Ct. 885, at pp. 886-887, 35 L.Ed. 550 (1891), where the Supreme Court was called upon to review the ultimate disposition of the award made by Great Britain, the Court stated:
It was held in United States v. Weld, 127 U.S. 51, [8 S.Ct. 1000, 32 L.Ed. 62], that this award was made to the United States as a nation. The fund was, at all events, a national fund to be distributed by Congress as it saw fit. True, as citizens of the United States had suffered in person and property by reason of the acts of the Confederate cruisers, and as justice demanded that such losses should be made good by the government of Great Britain, the most natural disposition of the fund that could be made by Congress was in the payment of such losses. But no individual claimant had, as a matter of strict legal or equitable right, any lien upon the fund awarded, nor was Congress under any legal or equitable obligation to pay any claim out of the proceeds of that fund.
Likewise in the cases involving French Spoliations, during the Napoleonic wars, it was recognized that the United States had the authority to “bargain” away certain of its Treaty obligations to France in exchange for France being free of compensation for damages done to individual Americans. This court in the case of Gray v. United States, 21 Ct.Cl. 340, 391-392 (1886) while considering claims of United States Citizens against the United States arising out of the Treaty of 1800 with France stated:
* * * All claims are “national” in the sense of the jus gentium, for no nation deals as to questions of tort with an alien individual; the rights of that individual are against his Government, and not until that Government has undertaken to urge his claim —not until that Government has approved it as at least prima facie valid —does it become a matter of international contention; then, by adoption, it is the claim of the nation, and as such only is it regarded by the other country. * * *
While the court in Gray advised Congress that it was of the opinion that the 1800 Treaty resulted in a Fifth Amendment taking by the United States, more recently in the ease of Aris Gloves, Inc., supra, this court held that loss of property by an American citizen as the result of the Second World War and transactions which followed it did not result in a Fifth Amendment taking by the United States. Because of the different factual situations, while the court reached different results, the eases are not inconsistent. Of import here, however, is the fact that in both cases this court recognized that claims by an individual citizen on account of war measures of other nations accrue to the state, and the individual has no direct claim against the other nation.
The court suggests, not citing authority, that the imprisoned Indians could have petitioned for habeas corpus. Just petitioned: it doesn’t say they would have gotten anywhere. Appellee in its brief cites for this United States ex rel Standing Bear v. Crook, 25 Fed.Cas. No. 14,891, p. 695 (C.C.D.Neb.1879), a most interesting case, in which Indians in military custody did indeed petition successfully for habeas corpus. However, the court expressly points out that Standing Bear’s tribe, the Poncas, were friendly, not at war with the United States, and the custody had to be defended under the civil laws, the Indian Affairs Commissioner having employed the military as mere policemen. A fair inference from this opinion is, if our imprisoned Apaches had petitioned for habeas corpus, and if the return to the writ had showed sufficiently that they were hostile Indians detained as prisoners of war under the war powers, the court would not have ordered them discharged from custody. In Ex Parte Milligan, 71 U.S. (4 Wall) 2, 18 L.Ed. 281 (1866) the Court found it relevant to hold that Milligan did not enjoy the rights of a prisoner of war, and therefore could not be saddled with the burdens, p. 131.
Thus I would hold, though the wrongful imprisonment of an individual Indian is an individual matter, the imprisonment of an entire tribe as a war measure generates a claim for the tribe. The tribe was, of course, not an independent sovereign nation, but I fail to see how that matters. That Act makes it like a sovereign in its control over claims justiciable under the Act. For a recent view of the nature of Indian sovereignty, see, McClanahan v. State Tax Commission, 411 U.S. 164, 93 S.Ct. 1257, 36 L.Ed.2d 129 (1973).
III. Clause 5 of Section %. A careful reading of the Lipan Apache Tribe v. United States, 180 Ct.Cl. 487 (1967), shows that the question of there having to be a “special relationship” for liability under that clause, was raised in the context of wrong having been done by third parties, the alleged dishonorable dealing by the United States being simply failure to protect. See p. 502. There is no suggestion there that the intentional infliction of harm by the directly employed agents of the United States is not dishonorable dealing. In Gila River Pima-Maricopa Indian Community v. United States, 427 F.2d 1194, 190 Ct.Cl. 790, cert. denied, 400 U.S. 819, 91 S.Ct. 37, 27 L.Ed.2d 47 (1970), we again considered the above clause. The claim was for furnishing of inadequate health care and education, but the claimants could prove no express undertaking by statute or by treaty to furnish any at all. The extended discussion of the clause, with its emphasis on the lack of a special relationship, must be read in light of the nature of the claim. Nowhere does Judge Durfee say that the intentional infliction of harm would be non-actionable in the absence of a “special relationship” other than the relationship of guardian and ward that exists towards all Indians. In that context, what more “special relationship” could one ask for ?
IV. How to Interpret the Statute. Our law has always recognized the possible existence of claims against the Government, based on moral considerations, “equity” in the broad sense, or justice, and the Supreme Court has held that Congress has power under the Constitution to pay them. United States v. Realty Co., 163 U.S. 427, 16 S.Ct. 1120, 41 L.Ed. 215 (1896). However, it added at p. 444, 16 S.Ct. at page 1127:
In regard to the question whether the facts existing in any given case bring it within the description of that class of claims which Congress can and ought to recognize as founded upon equitable and moral considerations and grounded upon principles of right and justice, we think that, generally, such question must, in its nature, be one for Congress to decide for itself. Its decision recognizing such a claim and appropriating money for its payment, can rarely, if ever, be the subject of review by the judicial branch of the government. * * *
In United States v. Choctaw Nation, 179 U.S. 494, at p. 532, 21 S.Ct. 149, at p. 164, 45 L.Ed. 291 (1900) Mr. Justice Harlan (the elder) said, that for the judiciary to attempt to correct an unjust Indian treaty
* * * would be an intrusion upon the domain committed by the Constitution to the political departments of the Government. * * *
In Northwestern Bands of Shoshone Indians v. United States, 324 U.S. 335, at p. 354, 65 S.Ct. 690, 89 L.Ed. 985 (1945), may be found a concurring opinion by Mr. Justice Jackson, in which Mr. Justice Black joined, which should be reread at least weekly by all judges and lawyers engaged in Indian claims litigation. Though all is good, I quote and emphasize from p. 355, 65 S.Ct. p. 700:
We would not be second to any other in recognizing that — judgment or no judgment — a moral obligation of a high order rests upon this country to provide for decent shelter, clothing, education, and individual advancement of the Indian. * * *
It is most unfortunate to try to measure this moral duty in terms of legal obligations and ask the Court to spell out Indian legal rights from written instruments made and probably broken long ago and to put our moral duty in figures as legal damages. The Indian problem is essentially a sociological problem, not a legal one. We can make only a pretense of adjudication of such claims, and that only by indulging the most unrealistic and fictional assumptions.
To what extent Jackson was a vox damantis in deserto may be judged by the expectations of Congress in enacting the Act, here to be construed, only two years later.
The express purpose of the 1946 Act was to provide a forum where all claims by Indian tribes could be heard so as to free Congress from consideration of individual bills which sought compensation for wrongs done to the Aboriginal American. As stated by the Chairman of the Committee on Indian Affairs, Mr. Jackson (a different Jackson, now Senator), during House consideration of the bill. 92nd Cong.Rec. pps. 5312-13, House Debate on HR 4497, May 20, 1946:
* * * In fact, since 1928 when at the suggestion, I believe, of President Hoover, a comprehensive study was made by the Brookings Institution of our Indian administration, every group, private or public, that has studied this Indian problem has come to the conclusion that there ought to be a prompt and final settlement of all claims between the Government and its Indian citizens, and that the best way to accomplish this purpose is to set up temporarily an Indian Claims Commission which will sift all these claims, subject to appropriate judicial review, and bring them to a conclusion once and for all. That, in brief, is what H.R. 4497 seeks to accomplish.
* * * * * *
* * * And let us make sure that when the Indians have their day in court they have an opportunity to present all their claims of every kind, shape, and variety, so that this problem can truly be solved once and for all without coming back to haunt us or our successors in the form of further bills to extend the jurisdiction that this bill would confer on an Indian Claims Commission.
* * * * * *
The most important section of the bill is section 2, which defines the jurisdiction of the claims and counterclaims that the Indian Claims Commission is to consider. It was the unanimous opinion of the committee that the jurisdiction of the Commission ought to be broad enough so that no tribe could come back to Congress 10 years from now and say that it had a meritorious claim which the Claims Commission was not authorized to consider.
This apparent desire to include all possible claims in the jurisdiction of the Commission is reflected in the House Report of the Bill.
H.Rep.No. 1466, 79th Cong., 1st sess. (1945), p. 2: * * * giving them a full and untrammeled right to have their grievances heard * * *; p. 3: Purpose of the Bill * * * It would require all pending Indian claims of whatever nature, contractual and noncontractual, legal and nonlegal, to be submitted * * *
Jurisdiction
In order that the decisions reached under the proposed legislation shall have finality it is essential that the jurisdiction to hear claims which is vested in the Commission be broad enough to include all possible claims. If any class of claims is omitted, we may be sure that sooner or later that omission will lead to appeals for new special jurisdictional acts. And if the class of cases omitted is one which the Congress has in the past declared to be worthy of a hearing, in one or more jurisdictional acts, it is probable that future Congresses will likewise grant a hearing to such claims, and the chief purpose of the present bill, to dispose of the Indian claims problem with finality, will have been defeated.
Testimony before the Senate by persons representing the Justice Department indicate that while that Department sought the amendment of the House version of the Bill, it recognized the expansive nature of the remedies afforded to Indian Tribes. Thus in testimony given before the Senate Committee, on Indian Affairs, 79th Cong., 2nd sess., July 1, 12 and 13, 1946, at pps. 54 and 58, Mr. Chambers of the Department of Justice testified as follows:
* -X- * *X* -X- -X-
Now, the third, the claims based upon fair and honorable dealings, was already in the bill, I believe, as No. 6, but the only change that we propose there is to indicate that those claims were in addition to the other two, that is to say, “that are not recognized by any existing rule of law or equity.”
Consequently, we felt that the Commission then would have jurisdiction over all legal and equitable claims and over all that might be called moral claims.
The CHAIRMAN. And what have you excluded?
Mr. CHAMBERS. We have excluded — we think we have excluded nothing, but removed questions of interpretation.
The CHAIRMAN. Well, for example?
Mr. CHAMBERS. For éxample, I can illustrate to you, Mr. Chairman. Take (4) there; line 11 is stricken through—
claims on account of any breach of duty committed to the injury of the claimant by any officer or agent of the United States while acting within the apparent scope of his authority.
Now, we figured that if you allow claims in tort with respect to which the claimant would be entitled to sue if the United States were suable, we had really covered that. So that (3) and (4) were, it seemed to us, covering somewhat the same ground, and it would be simpler to provide in the way we did.
* * * * * *
Mr. CHAMBERS. Mr. Chairman, may I say this: I cannot understand why, if we' provide, as we proposed here, to take in all cases in law and equity, including cases, to be safe, arising in tort, and then we say “all moral claims” — why anybody should have an objection on the ground that we have not included all types of claims.
* * * * * *
It should be noted that while the Senate version of the final Bill deleted certain provisions of the House Bill, the Conference Committee Report took care to state that “the change was not intended to deprive the claimants of the right to invoke the jurisdiction of the Commission in any case which would have been cognizable under the language of the bill as it passed the House” (H. Rep. 2693, p. 5, 79th Cong., 2nd sess. (1946)).
Of interest also though not strictly legislative history, is a statement made during the House debate by Congressman Case of South Dakota (Vol. 92, Pt. 4, Cong.Rec. 5319 (1946)):
WOUNDED KNEE CLAIMS
The bill will not remedy every wrong that has been done the Indian tribes of this country but its passage here and in the body at the other end of the Capitol and its signature by the President will open the door for the settlement of honest claims which have never had their day in court.
As an illustration, I might say that in my opinion this bill, if enacted into law, will make possible consideration of the claims of the Sioux Indians who were injured or suffered losses in the Wounded Knee massacre. That is an identifiable band or group of Indians whose claims have never been determined in court, although as the result of hearings which were obtained when I was a member of the Indian Affairs Committee, a few years ago, a bill for settlement was favorably reported.
We who have taken the oath and put on the robe can do no better, I think, than to shrug our shoulders, roll up our sleeves, and do our very best to justify the expectations of infallibility entertained of us. At the same time, it seems to me we must watch ourselves to avoid slipping into the excessive legalism we as lawyers, are normally prone to, wrongly limiting our task to the intellectual games so revolting to Mr. Justice Jackson. The Congress sought to put us on a broader plateau. It is error to pretend we face purely legal issues. Excessive legalism, a forgetting that the tribunal is called on not just for legal niceties, but statecraft too, produces such absurdities as Tlingit & Haida Indians v. United States, 389 F.2d 778, 182 Ct.Cl. 130 (1968), in which we denied these tribes of fishing Indians all compensation for their fisheries, but instead paid them for their gold mines they had never had. In deciding whether a claim is within or outside the Act, in doubtful cases, a valid technique is to consider whether any distinction exists, that would appeal to Congress, between the involved claim and those that are clearly covered. United States v. Native Village of Unalakleet, 411 F.2d 1255, 188 Ct.Cl. 1 (1969).
Turning again to the language of the Act and looking to how it has been applied by the Commission and the court it should be noted that the Act only permits claims by identifiable groups of Indians and not individual claims. However, the Act specifically provides for claims sounding in tort. A reasonable conclusion is that Congress intended that Tribes be able to claim compensation for tortious acts committed against them. In light of the legislative history of the Act it is also reasonable that such claims were to include that area of tort other than torts against property. The legislative history also indicates that claims arising under “fair and honorable dealings” were seen as being in addition to those provided for in the other sections of the Act. It appears that it was the intent of Congress to include in this clause the possibility of claims arising wholly on moral grounds. Finally, of interest also is the matter of set-offs. The Act permits set-offs of gratuitous expenditures made on behalf of the Tribe against a recovery by the Tribe. If the Government can set-off expenditures that do not involve property rights, it stands to reason that the Tribe can likewise make claims for deprivations which arose outside the scope of rights in tangible property.
The expansive nature of the claims which might be brought under the Act was recognized by this court in the case of Otoe & Missouria Tribe of Indians v. United States, 131 F.Supp. 265, 283-284, 131 Ct.Cl. 593, 621-622, cert. denied, 350 U.S. 848, 76 S.Ct. 82, 100 L.Ed. 755 (1955).
•» * -x- The legislative history of the Act establishes that from the beginning in 1928, certain members of Congress desired the enactment of a bill which would settle extra-legal or moral claims of Indians against the United States, including claims based on their Indian title property right in land which the Government had either taken without the formality of a treaty, or which the Government had acquired under ratified treaties procured by fraud, duress, unconscionable consideration, etc., or concerning which the Government had been guilty of dealings less than fair and honorable. This desire on the part of certain members of Congress became the desire of the majority of Congress and, with the passage of the Act in 1946, became the legislative intent expressed in clauses (3), (4) and (5) of section 2.
This meaning, or legislative intent, revealed by the legislative history, merely corroborates the literal meaning of those clauses and renders them consistent with each other and with the legislative purpose also revealed in the Act’s language and its history.
If the Congress intended that the Act be limited in scope to claim for land it would have so stated. On the contrary the Act contains the most expansive language to describe the types of claims which may be brought. Specifically, clause (2) of section 2 of the Act provides for “all other claims in law or equity, including those sounding in tort” and clause (5) of this same section provides for claims based upon “fair and honorable dealings that are not recognized by any existing rule of law or equity.” It is hard to imagine how Congress could have written a more broadly worded jurisdictional statute.
The idea that the Act was limited to land and property rights got its start, I believe, from President Truman’s ambiguous pronouncement upon signing the Act, in which he said the Act
* * * removes a lingering discrimination against our First Americans and gives them the same opportunities that our laws extend to all other American citizens to vindicate their property rights and contracts in the courts against violations by the Federal Government itself. (Ehrenfeld, Legislative Material on the Indian Claims Commission Act of 1946, p. 715.)
Immediately preceding (same volume, p. 713) is Interior Secretary Krug’s letter to the President recommending he sign the legislation. He says:
* * * For the future they will be permitted to sue on the same basis as their fellow citizens of other races to vindicate contract and property rights. * * * (Emphasis supplied).
Obviously Krug, and therefore Truman too, were referring to the post-1946 provision now codified as 28 U.S.C. § 1505. This is not as sweeping as the pre-1946 provisions and includes no clause relating to “fair and honorable dealings.” This court has never held, or has held only in dictum, that pre-1946 claims must relate to land or property. To the contrary, Judge Davis says, concurring in Gila River Pima-Maricopa, supra, 427 F.2d 1200-1201, 190 Ct.Cl. at 802:
* * * The Act was not designed to grant compensation for all the detriment accruing to the Indians by our ongoing policy toward them but, rather, had the more limited goal of paying for specific deprivations of land or property or rights protected by treaty, statute, or then-existing law. * * (Emphasis supplied.)
This clearly contemplates claims not related to land or property and if “then-existing law” includes the laws of war so far as they relate to hostilities with Indians, I believe it can be taken as correct, though I do , not exclude the possible existence of valid moral claims on other bases. Judge Durfee for the court in the same case refers to H.Rep. 1466, 79th Cong., 1st sess., as saying the jurisdictional section of the Act was a synthesis of cases which have heretofore received consideration under special jurisdictional acts, but he adds in a footnote 5, 427 F.2d p. 1200, 190 Ct.Cl. p. 801, the Report also says:
“* * * if any ciass of claims is omitted, we may be sure that sooner or later that omission will lead to appeals for new special jurisdictional acts. * * *”
It says more than that, as quoted above. I am certain the real intent was that a novel type of claim, if presented to the Commission, should be considered. If, as stated in the petition, it appealed to the Commission’s mind as one that had a foundation in justice and equity, it should proceed to trial and fact finding. If proof failed, that was that; if it succeeded, the Commission would have to find the facts and put itself mentally in the shoes of Congress and decide what Congress would have done with a special Act based on similar facts.
We have to consider frequent suits under 10 U.S.C. § 1552, for the correction of military records “to correct an error or remove an injustice.” This was passed by the same Congress in the same year and with a purpose in common with the Indian Claims Act, i.e., to get rid of a multitude of private bills. We encounter the same tendency of lawyers there as here, namely to focus on correcting error and forgetting all about removing injustice, without regard to what Congress might have done had it retained its original jurisdiction. See, e.g., Skaradowski v. United States, 471 F.2d 627, 200 Ct.Cl. - (decided January 18, 1973); and my comment on that case (concurring opinion) in Mayer v. United States, 201 Ct.Cl. - (decided March 16, 1973). There may be doubts about casting this kind of issue in a pseudo legalistic mold and assigning a part in it to an Article III court, but our role is only the traditional one of judicial review, and all we have to do is to consider the quasi-legislative duties and roles of the non-Artiele III factfinding bodies and take them into realistic account in arriving at our decisions.
The Commission held itself not bound by collateral estoppel or res judicata, but only stare ^decisis. We have not had a case like this before, so there is no stare decisis here. In my opinion the Indian Claims Commission had jurisdiction to consider this case and its holding it had not was reversible error.
DURFEE, Senior Judge, and KUN-ZIG, Judge, join in the foregoing dissenting opinion.
. The petition of appellants was filed by the Fort Sill Apaches of the State of Oklahoma and by three individual Indians in a representative capacity on' behalf, respectively, of the Warm Spring Band of Apaches, the Chiricahua Band of Apaches and the Fort Sill Apaches. All three groups are components of the aboriginal Chiricahua Apache Tribe.
. Now identified as the Chiricahua & Warm Spring Bands.
. Now identified as the Fort Sill Apaclie Tribe of the State of Oklahoma.
. See, 25 U.S.C. § 70a, § 70i. In a claim brought by the Fort Sill Apache Tribe for the false arrest and imprisonment of 450 members of the Warm Spring & Chiricahua Bands based on these same facts, tlie Indian Claims Commission dismissed the petition since it concerned the rights of the individual Indians and not the rights of the tribe. (Ind.Cl.Comm. Docket No. 30), 1-A Ind.Cl.Comm. 137, 141 (1949).
. “ * * * (2) all other claims in law or equity, including those sounding in tort, with respect to which the claimant would have been entitled to sue in a court of the United States if the United States was subject to suit; * * *."
. On legislative history, see the conversation between the Assistant Commissioner of the Bureau of Indian Affairs and Chairman Henry M. Jackson at the Hearings on H.R. 1198 and H.R. 1341 Before the House Committee on Indian Affairs, 79th Cong., 1st Sess., at 77 (March 28, 1945).
. Pursuant to clause (4) section 2, of the ICO Act, appellants in the instant case claimed a taking of their lands and were awarded $10,489,096 therefor, after deduction of offsets. Fort Sill Apache Tribe v. United States, 26 Ind.Cl.Comm. 198 (1971); 25 Ind.Cl.Comm. 352 (1971); 22 Ind.Cl.Comm. 527 (1970); 19 Ind. Cl.Comm. 212 (1968). Appeal by defendant from said award is pending before this court in Appeal No. 3-72. Also, a claim is presently pending before the Commission in Docket No. 182 for compensation for minerals, timber and other resources allegedly removed from the Apache lands prior to the date of the taking of the lands in 1886. The Apaches have been in litigation on these matters before the Commission continuously since 1948.
. I see no obligation or promise, for instance, which would have precluded the Congress, in the latter part of the 19th century, from unilaterally but peacefully disbanding the tribe and insisting that its members assimilate into the general population. Since we must disregard the personal injuries to individual Indians, a tribal claim based on such a peaceable dissolution of the tribe would stand on the same footing as the present claim which takes on irrelevant color from the inhumane conduct which is recited by appellants. Moreover, it seems to me immaterial whether the Federal Government was (or thought it was) at war with the Apaches, and I do not understand the court’s opinion as resting on any such ground.
. For me, there is not much help in the analogy to international claims. In peacetime as well as war, nations often espouse the individual claims of their nationals against other countries, but the Indian Claims Commission Act does not place Indian groups in a like position vis-a-vis their members; this court and the Commission have consistently held that individual claims are excluded from coverage even though espoused by the tribe.
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Application of Vernon J. VOGEL.
Patent Appeal No. 8937.
United States Court of Customs and Patent Appeals.
May 24, 1973.
Howard E. Moore, Dallas, Tex., Sidney W. Russell, Arlington, Va., attorneys of record, for appellant.
S. Wm. Cochran, Washington, D. C., for the Commissioner of Patents; Robert Edmonds, Oakton, Va., of counsel.
Before MARKEY, Chief Judge, RICH, BALDWIN, and LANE, Judges, and ALMOND, Senior Judge.
ALMOND, Senior Judge.
This is an appeal from the decision of the Patent Office Board of Appeals affirming the rejection of claims 1 and 2 of appellant’s application. No claims are allowed.
In his brief before the board appellant describes his invention with reference to Figure II, excerpted, and Figure IV as follows-
A multiple position valve [is disclosed] having an inlet passage 2 and outlet passages 5 and 9 such that rotatable plug 16 may be positioned to direct fluid through passage 20 to passage 19 to outlet passage 9 or through passage 19 to outlet 5. The passage 21 is closed by a resilient seal plug 22 slidably disposed therein, which has an annular head or flange 23 thereon which substantially fits in the recess 24 in passage 21 such that, as illustrated in Figure II, pressure of fluid entering the cavity 22a on extension 22c on the inner side of resilient seal plug 22 will move and press same outwardly to seal the arcuate surface 22b across the opening leading to the outlet passage 5. When the plug 16 is rotated in a counterclockwise direction from the position shown in Figure II, the lateral passage 19 is brought into alignment with the inlet passage 2 and outlet passage 5 so that fluid may flow therethrough while resilient seal plug 22 is disposed over the outlet passage 9 and is forced into sealing engagement thereabout so that communication between the inlet passage 2 and the outlet passage 9 is closed off.
An indexing lug 28, arranged to alternately contact the shoulders 27a and 27b, to limit the extent of rotation of plug 16, is provided on the outer end of plug 16. When the lug 28 contacts the shoulder 27b the transverse passage 19 is in alignment with the outlet passage 9, and when lug 28 contacts shoulder 27a the passage 19 is in alignment with inlet passage 2 and outlet passage 5.
Claims 1 and 2, the only claims, are reproduced below:
1. In a valve, a hollow body having an inlet passage and a plurality of outlet pasages; a transverse bore intersecting the inlet and outlet passages; a rotatable plug disposed in the transverse bore; a transverse passage extending through the plug; aligned transverse passages extending through the plug and intersecting the first named transverse passage at substantially right angular relationship thereto ; a resilient seal plug having a portion slidably extending and floating freely in one of the aligned transverse passages, and having a head thereon, arranged to be pressed and sealed about the openings to the outlet passages to close same when the plug is rotated to a position where the seal plug overlies the openings to said passages; slidable seals disposed about the plug and sealing between the plug and the wall of the transverse bore on opposite sides of the passages through the plug; and means to limit the rotation of the plug in the bore in both directions to selectively align the resilient seal plug with the outlet passages and selectively place the inlet passage in communication with the outlet passages.
2. The combination called for in Claim 1 wherein the means to limit rotation of the plug in the bore comprises, a relieved area in the end of the bore providing spaced shoulders therein, and a stop lug on the inner end of the plug arranged to contact the shoulders to limit rotation of the plug in both directions.
The references relied upon by the board are:
Strudel (Switzerland) 29,018 October 1,1903
Suczek (Austria) 57,684 February 10,1918
Lecq (France) 1,139,404 July 1,1957
Suczek discloses a multiple outlet valve shown in cross section in its Fig. 2 below:
The valve includes a hollow body having a rotatable plug (b) with passages which may be arranged to alternately direct the fluid to either outlet passage (bottom and left). Radially movable sealing element (d) mounted in a plug recess (c) seals the outlet not used and pressurized fluid entering plug passage (g) acts to urge the sealing element against that outlet to prevent leakage. In order to insure the seal being effective where back-pressure in the outlet may occur, conical pin (k) is provided. That pin exerts force on an extension (m) attached to the sealing element to exert additional bias on the sealing element.
Lecq discloses a single outlet valve shown in cross section in Fig. 5-6:
Pressurized fluid represented at “A” enters a valve housing and is blocked by a rotatable plug having a main passage (k) passing directly therethrough and an auxiliary passageway (r) at right angles thereto. In closed position, as illustrated, a sealing element (q, m), slidable in cavity (1), is acted on by pressurized fluid through (r) to urge it against the outlet to provide a seal. The valve is opened by rotating the plug to align passageway (k) with the inlet and outlet. Lecq states that the valve “include [s] a stop [not illustrated] to determine the open and close positions.”
Strudel discloses a single outlet valve with a means to limit rotation of its valve plug between its opened and closed positions. The rotation limiting means includes the same structural elements recited in appellant’s claim 2.
The board considered a rejection of both claims as unpatentable under Section 103 over Suczek and Lecq in view of Strudel to be the most comprehensive made by the examiner. In affirming, it reasoned as follows:
Suczek discloses a plug type valve structure having a single inlet and two outlet ports. The plug has passageways therethrough and a floating seal in one such passageway to selectively seal the outlet port not being used. Although the passageways through the plug do not have a right angular relationship, we do not consider this to be a patentable distinction. The reason why the passageways in the Suczek device are not at right angles to each other is the presence of the central support member “k”. A valve plug without such member, permitting right angularly related passageways, is illustrated by the Lecq patent. We consider the use of such a plug structure in the Suczek valve an obvious carrying forward of the teachings of the Lecq patent. Moreover, we consider the conversion of the Lecq valve structure to a two-outlet structure of the type suggested by the Suczek patent an obvious carrying forward of the teachings of the latter patent.
It further considered that it would have been obvious to add a rotation limiting means as disclosed by Strudel to either the Lecq or Suczek plug member.
OPINION
Appellant argues that the examiner and board relied on hindsight to reconstruct the invention. He goes on to mention features that each particular reference lacks rather than advance reasons why it would not have been obvious to supply those features from the references that do disclose them.
We find no merit in the charge of reliance on hindsight. Rather, we agree with the board that the modification of Suczek in the manner it pointed out would have been obvious and would provide the structure appellant claims.
For the foregoing reasons, the decision of the board is affirmed.
Affirmed.
. Serial No. 628,904 filed April 6, 1967.
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Application of Anderson D. WHITE and Allen E. Wisler.
Patent Appeal No. 8897.
United States Court of Customs and Patent Appeals.
May 24, 1973.
Robert A. Felsman, Fort Worth, Tex., attorney of record, for appellants. Donald L. Dennison, Dennison, Dennison, Townshend & Meserole, Arlington, Va., of counsel.
S. Wm. Cochran, Washington, D. C., for the Commissioner of Patents. Fred W. Sherling, Washington, D. C., of counsel.
Before MARKEY, Chief Judge, and RICH, ALMOND, BALDWIN and LANE, Judges.
BALDWIN, Judge.
This appeal is from the decision of the Patent Office Board of Appeals sustaining the rejection of claims 1-3 and 5-20 of appellants’ application. The application additionally contains claim 4, which was allowed by the examiner.
The Invention
The invention concerns hardfacing material which is useful in prolonging the life of the gage surfaces of rolling cutters of drill bits used in drilling through rock. Such a bit is shown in appellants’ figure 1:
The gage surfaces 15 are those surfaces which contact the sidewall of a drill hole as the cutters 11 roll over the bottom of the hole. The gage surfaces are cutting surfaces, whose function is to maintain the full gage of the borehole. Appellants’ specification states:
The importance of such gage-maintaining function in an oilwell can scarcely be exaggerated. Since all subsequent operations such as running in casing and cementing it in place depend on having a full gage hole, the customer demands and obtains it in one way or another. If a bit drills an undersize hole, the following bit must be used to ream the hole to full gage, even if in so doing the second bit becomes useless for further drilling. Needless to say, the bit which drilled the undersize hole will not be reordered if a better one is available.
Appellants further point out that the wear-resistance of the gage surfaces is more important than that of the surfaces of the bottom-cutting structure. Gradual wearing away of the bottom-cutting structure can be tolerated, as long as that structure continues to cut for an economical length of time. However, if any wear is allowed to take place on the gage surfaces, the diameter of the borehole will become smaller.
Tungsten carbide has been used as hardfacing for many drilling tools since as early as 1927 or 1928. Concerning that material, appellants’ specification states:
Broadly speaking, however, there are two basically different types of tungsten carbide, the cast carbide and the sintered or cemented carbide. Cast tungsten carbide is essentially a eutectic of the monotungsten carbide and the ditungsten carbide, WC and W2C, while sintered carbide in the past has been essentially pure WC. In the cast carbide, there is no additional material holding the grains of a granule together, while in sintered tungsten carbide granules each grain is surrounded by an iron group binder, such binder being a continuous phase which binds or cements the grains together. The usual binder has been cobalt, and it is usually added to form 3 to 15 percent of the total weight of the granule.
The cast carbide is actually the harder and more abrasive of the two, and when it can stand the impacts to which it is subject without undue crumbling it will protect against wear better than the sintered material. On the other hand, sintered carbide is tougher than cast carbide, and will withstand repeated impacts with less breakage and crumbling. For this reason sintered tungsten carbide is preferred for such shapes as inlays of massive carbide for drag bit teeth and inserts or compacts forming the cutting structure of “button” bits.
Appellants’ invention is to use as hardfacing the sintered tungsten carbide granules, bound to the tool by a matrix of alloy steel, preferably with some of the steel matrix being obtained from the tool itself. Patentability is argued for three aspects of appellants’ hardfacing material — the use of appellants’ alloy steel matrix to hold the hardfacing granules on the gage surface; the use of sintered tungsten carbide which contains both ditungsten carbide and mono-tungsten carbide; and the use of a binder material, for binding the tungsten carbide in the pellets, which includes an iron group metal other than cobalt. Claims 2, 16 and 18 are representative of the claims drawn to the various aspects of the invention:
2. An improved gage hardfacing on a rolling cone cutter of a rock bit consisting of granules of sintered tungsten carbide in an alloy steel matrix.
16. An improved hardfacing for cutting tools and abrasion resistant tools in general, said hardfacing comprising sintered tungsten carbide granules in an alloy steel matrix, said granules comprising grains of tungsten carbide cemented together with a binder consisting of at least two metals of the iron group.
18. An improved hardfacing for cutting tools and abrasion resistant tools in general, said hardfacing comprising granules of sintered tungsten carbide granules in an alloy steel matrix, said granules comprising a mixture of monotungsten carbide and ditungsten carbide.
Claims 1-3 and 6 deal with the sintered tungsten carbide and the stainless steel alloy matrix without recitations concerning the type of binder used or whether ditungsten carbide is present. Claim 5 and 18-20 require the sintered tungsten carbide to be a mixture of ditungsten carbide and monotungsten carbide. Claims 6-17, 19 and 20 contain restrictions on the binder used. In the view we take of the case it is unnecessary to deal separately with the various types of claims.
The References
The examiner rejected claims 1-3 under 35 U.S.C. § 103 as unpatentable over Payne in view of Rowley et al. (Rowley). Claims 5-20 were rejected under section 103 as unpatentable over Payne in view of Rowley and Owen.
Payne deals with improved gage cutting structure for earth boring drills, particularly for rolling cone cutters of the type dealt with by appellants. Payne states that, in order to overcome the lack of abrasion resistance of the cutter bodies:
[I]t has been proposed to superpose a layer of wear resistant metal upon the outer ends of the heel teeth and the adjacent metal of the cutter[,] such layer comprising a carbide, such as particles of tungsten carbide, secured in place by a matrix of suitable metal such as mild steel applied by a torch so that the matrix metal wets the surface of the base metal of the cutter and the carbides thus providing an effective interbond to hold the particles in place to serve their intended purpose.
Payne’s invention was to reinforce the hardfacing material by providing annular steel ridges between areas having hardfacing which was applied in the manner quoted above.
Rowley discloses improving the abrasion resistance of the gage surfaces of drill bits by using hardfacing. A drag type bit (not a rolling bit like appellants’) is provided with chips or particles of tungsten carbide or other material bonded to the gage surface by a matrix. Rowley states that the “chips or particles are preferably sintered tungsten carbide but other hard abrasion-resistant alloys may be employed.” Concerning the matrix, Rowley states :
The matrix employed to bond the chips or particles 18 to the steel blades is composed of one or more metals which melt below about 2,500 °F. and have the property of wetting both the steel and the carbide or other particles. Suitable matrix materials include copper, copper-nickel alloys containing up to about 60 percent nickel, copper-beryllium alloys containing up to about 3 percent beryllium, copper-cadmium alloys containing up to about 18 percent cadmium, and the like.
Owen is essentially similar to Rowley, and was relied on for additional disclosure concerning mixtures of monotungsten carbide and ditungsten carbide which it is unnecessary to detail here. Owen states the following with regard to the matrix material employed with his sintered tungsten carbide:
It is desirable in mounting the cutting elements * * * that the temperature be maintained below the melting point of the binder in order to avoid injurious grain growth of the carbide grains and/or injurious dilution of the cementing material with the matrix. Thus it is preferred to select a matrix 5 which has a melting point in a range from about 1600 °F. to 2450 °F. and therefore comfortably below the melting point of the binder 7 (2728°F. for cobalt).
The Rejection
The examiner considered that it would have been obvious to use sintered tungsten carbide as the hardfacing material in the steel matrix of Payne, in view of Rowley’s preference for it.
The examiner took this position despite the record of the parent of the present application, which contained, inter alia, an affidavit by patentee Payne to the effect that the gage surface of rolling cone cutters “is so altogether different in its manner of operating from other components of downhole drilling tools * * * that no person of average * * * skill in the art can apply the teachings of such [other] tools and components to the rolling cone gage surface,” and that while his patent did not specify which type of tungsten Carbide to be used on rolling cone gage surfaces, “the workable tungsten carbide known to me at that time were limited to the cast tungsten carbides * * which are what had been used on those devices ever since about 1929.
In the present application, after the examiner filed his answer, appellant introduced an affidavit by one Davidson, to the effect that appellants’ company had, through error, hardfaced a large number of drag bits with the same sintered tungsten carbide which had given excellent results on roller cutting bits, and that those drag bits became worn very quickly, the point being that this bolstered appellants’ position that a teaching that a material was good on one type of bit was not necessarily a teaching that it would be good on the other. In spite of the Davidson affidavit the examiner maintained his position.
The board generally agreed with the examiner’s position, although it additionally relied on a patent to Beeghly with regard to certain of the claims. In response to an argument that those skilled in the art would have considered the melting points of sintered tungsten carbide and alloy steel to be too close to allow alloy steel to be used as a matrix, the board stated:
Owen states that “it is preferred to select a matrix 5 which has a.melting point in a range from about 1600 °F. to 2450° F. and therefore comfortably below the melting point of the binder 7 (2728°F. for cobalt).” This is merely a statement of preference and not one of criticality. Steel alloys melt in the vicinity of 2700 °F. There is no evidence that one ordinarily skilled in the art would have considered it impossible to use Payne low carbon steel welding tubes with the ferromanganese and ferromolybdenum powders to create a matrix without excessively melting the binder or the sintered tungsten carbide of the granules. Assuming arguendo, that appellants are correct in contending that drag bit technology and roller cutter technology are materially different, that fact would lead one ordinarily skilled in the art to use the alloy steel matrix of Payne rather than the matrices of the other references in incorporating sintered carbides into roller cutters. We have carefully considered the affidavits in both the parent applications and in the instant application and are not persuaded thereby that in view of the admitted prior art and the documentary prior art, to one ordinarily skilled in the art there would be anything unobvious in substituting sintered tungsten carbide for the cast carbide of the prior Payne roller cutters.
Opinion
Concerning the Payne patent, the board stated:
The Payne patent (owned by appellants’ assignee) discloses a rolling cutter equipped with wear resistant faces consisting of cast tungsten carbide particles embedded in a matrix of “mold steel or a suitable alloy.”
Thus the board apparently accepted the Payne affidavit as sufficient to show that the disclosure of the Payne patent was limited to cast tungsten carbide and rolling cutters. While the solicitor argues that it is not so limited, our task is not to resolve any differences of opinion between the solicitor and the board, but rather to rule on the correctness of the rejection as the board presented it to the applicants.
Following the board’s interpretation of the Payne patent, we are of the opinion that the rejection before us must be reversed. The question is not whether there is “evidence that one ordinarily skilled in the art would have considered it impossible to use the Payne low carbon steel welding tubes with the ferromanganese and ferromolybdenum powders to create, a matrix without excessively melting the binder or the sintered tungsten carbide of the granules [emphasis added].” The question is whether it would have been obvious for one ordinarily skilled in the art to make the proposed combination of the sintered tungsten carbide with the steel matrix. We find the disclosure in Owen to be pretty solid evidence that one ordinarily skilled in the art would expect the binder for the sintered tungsten carbide to be adversely affected by the temperatures necessary to utilize the steel matrix of Payne. While the precise melting point given by the board for steel (2700°F.) is slightly lower than the melting point given by Owen for his binder (2728°F.) Owen uses matrix materials which are more than 200 degrees “comfortably below” the binder melting point. Likewise, Rowley uses a matrix which is “composed of one or more metals which melt below about 2,500 °F. * * again well below the binder melting point. Thus both of these references effectively teach against the use of high melting materials, such as steel, for the matrix material for sintered tungsten carbide, and we conclude that such use would not have been obvious to one of ordinary skill in the art.
The decision of the board is reversed.
Reversed.
. Serial No. 730,671, filed April 18, 1968, which is a continuation-in-part of Application Serial No. 515,603, filed December 22, 1965.
. U. S. Patent No. 2,939,684, issued June 7, 1960.
. U. S. Patent No. 3,120,285, issued February 4, 1964.
. U. S. Patent No. 2,833,520, issued May 6, 1958.
. U. S. Patent No. 3,165,822, issued January 19, 1965.
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William N. BENNETT, Appellant, v. Rudolph M. SEROTA, Appellee.
Patent Appeal No. 8782.
United States Court of Customs and Patent Appeals.
May 24, 1973.
Morris I. Pollack, attorney of record, for appellant.
John W. Renner, Charles B. Lyon, Donald D. Jeffery, Cleveland, Ohio, attorneys of record, for appellee.
Before MARKEY, Chief Judge, and RICH, ALMOND, BALDWIN and LANE, Judges.
ALMOND, Senior Judge.
This is an appeal from the decision of the Board of Patent Interferences awarding priority of invention to Serota, the junior party, as to two counts relating to an apparatus for heating a traveling web of dielectric material such as paper. We affirm that decision.
The senior party Bennett became involved in this interference on his application serial No. 368,455 filed May 15, 1964. Serota became involved on his application serial No. 499,754 filed October 21, 1965, a continuation-in-part of an earlier application, serial No. 385,130, filed July 27, 1964.
At final hearing before the board, the attorney for Bennett stated that Bennett relied for priority solely on the filing of his application. Accordingly, the board restricted him to his May 15, 1964 filing date for both conception and constructive reduction to practice. The board held that Serota, as junior party, had met his burden of proof by showing an actual reduction to practice- in January 1964. The board also held that Serota was entitled to prevail for the reason that Bennett was not an original inventor. In its view, the evidence was sufficient to show derivation of the invention by Bennett from Serota.
The Subject Matter
As originally declared, the interference involved a single count which corresponded to claim 34 of the Bennett application and claim 3 of Serota’s application. Later a second count was added at the instigation of Serota. This count is in some respects broader than count 1. Since it is our view that. Serota was entitled to priority as to count 1, we need not consider his allegation of an even earlier reduction to practice of count 2.
Count 1 reads as follows (subparagraphing ours):
1. Apparatus for heating a traveling web of dielectric material comprising
a grounded metal frame,
a first capacitor plate fixedly mounted on said frame,
a first series of horizontal electrode rods disposed transversely to the direction of travel of said web and carried by said first capacitor plate above the latter and in electrical connection therewith,
a second series of electrode rods interpose between and parallel to said first series of electrode rods and lying in the same horizontal plane, said second series of electrode rods being grounded to said frame,
means for vertically adjusting said frame and thus said electrode rods to .variably position the same relative to said traveling web,
a second capacitor plate mounted on said movable frame below said first capacitor plate, .
said second 'capacitor plate being connected to a source of high frequency electrical energy,
means for vertically adjusting said second capacitor plate relative to said first capacitor plate thereby to vary the current in said first capacitor plate and in said electrode rods.
A basic structure upon which this claim will read is shown in figures 1 and 2 of the Serota application which are reproduced below:
In those drawings rods 40 and 44 are electrodes. Rods 40 are grounded to the frame, whereas rods 44, in the same plane as rods 40, are connected to a fixed capacitor plate 42 which is insulated in its mounting in frame 10. There is also provided a second capacitor plate 46 which can be adjusted vertically to vary the distance between it and plate 42. The adjustable capacitor plate is connected to the ungrounded terminal of a source of high-frequency electrical energy. The frame itself can be raised or lowered relative to the web of dielectric material passing over it.
In operation, a high-frequency voltage is delivered to the adjustable plate which induces voltage in the fixed plate and rods 44. This voltage creates a difference in potential between rods 44 and 40 thereby generating an electric field between them which is in the same plane as a web (not shown) passing over the electrodes. This electric field creates the dielectric heating effect in the web.
Record
The record establishes that Serota began investigating the phenomenon of dielectric heating as early as 1959. During that time he designed a test apparatus for drying continuous webs of dielectric material. This apparatus was used to demonstrate to potential customers the feasibility of using dielectric heating for drying webs. Although not intended for commercialization, this test rig is the basis of Serota’s claim to a reduction to practice of count 2.
This apparatus was in fact a modified conventional dielectric oven. Two sets of electrode rods were assembled so that one set was interposed and in the same plane as the other, as is called for by count 1. The assembled electrodes were inserted in the oven in a way that one set was grounded and the other insulated from the oven which functioned as a frame. The electrode assembly included a capacitor plate located above and parallel to the plane of the electrode rods. It was electrically connected to one set of electrode rods and functioned in the same way as that of the first capacitor plate of count 1. However, it will be noted that in count 1 this plate is below the electrode rods. Above this plate was a second capacitor plate, a part of the oven, which could be energized and adjusted vertically relative to the first plate by means of a pulley arrangement. In operation the web to be dried passed over the electrode rods. The board said of this device:
* * * we find that the structure shown in those exhibits, shown in one exhibit in use with a conventional oven, does not support the counts here in issue. We note, however, that the applicator included a system of alternately grounded and energized electrodes all in a single plane disposed to one side of the web of material to be dried, as in the invention in issue.
In addition, we note that this structure also embodies the concept of a fixed capacitor plate in which a voltage can be induced by a movable capacitor plate. However, of necessity the web had to pass over the rods but under the first capacitor plate. That Serota was indeed the originator of this apparatus was corroborated by testimony of his assistant, Zimmerly.
The record further reveals that Serota traveled to the Fitchburg Paper Co., the assignee of the Bennett application, at its request to discuss the acquisition by Fitchburg of some radio frequency generating equipment from Young Brothers Co., Serota’s employer and assignee of his application. This trip took place on April 10, 1963.
Serota testified that on this visit he met Bennett, his adversary in this case, and learned that Bennett was constructing some sort of dielectric heating apparatus for Fitchburg that required the generating equipment referred to above. When it was learned that Young Brothers could not provide this equipment, Serota was engaged to be a consultant for Fitchburg.
Serota further testified that Bennett’s apparatus, which he saw on this or a later trip, was the same as that illustrated in a patent Bennett later acquired, U.S. 3,266,164 (Exh. 7). This device is quite different from that which is involved in this interference. In particular, the electrode rods do not lie in the same plane. Instead, they are in parallel rows and offset from each other. Because of this arrangement, the web to be dried had to pass between the rows of electrodes rather than over them. We also note that this apparatus did not use a pair of capacitor plates, one of which is movable relative to the other. That Bennett was engaged at this time in building such an apparatus is corroborated by the testimony of Bennett’s witness LaBlanc.
The record further reveals that Serota made numerous visits to Fitchburg after his retention as a consultant. LaBlanc testified that Serota went to Fitchburg over the years 30 or 40 times, and that their first meeting was in 1963. Serota testified that, as a result of his association with Fitchburg, it was decided that Serota and Young Brothers would “design and build” a unit to replace the one he had seen at Fitchburg, for the reason that the parties had been unable to make the Bennett apparatus work successfully.
Although Serota was unable to say precisely when this decision was made, he submitted various documents (Exhs. 11-15, 17, 18) to substantiate this claim and which indicate that an apparatus was eventually shipped to Fitchburg. The board summarized these exhibits as follows:
(1) A letter directed to Fitchburg, dated October 2, 1963, signed by Serota, confirms discussions had previously with respect to an applicator system with price quotations. (Exh. 15). This letter indicates that Young Brothers Company was
“to design and build an applicator which will have all electrodes under the paper —. Applicator to have variable output control Bottom section shall be capable of lowering —.”
(2) A purchase order No. 18485 by Fitchburg, (Exh. 13) dated October 22, 1963, directed to Young Brothers Co., referring to the above-noted letter of October 2, 1963, listing various items and finishing:
“All in accordance with your letter and discussion between our Mr. Bennett and your Mr. Serota.”
This bears an indication of receipt by Young Brothers Co. on October 25, 1963.
(3) and (4) Two sales orders (Exhs. 11, 12) on Young Brothers Co. forms, dated October 26, 1963, relating to the work to be done under the above-noted order,
(5) A letter (Exh. 17) dated December 24, 1963, from Serota to Schreiber of Fitchburg with respect to shipping a unit on Monday, December 30, 1963, to be delivered January 2, 1964
(6) Another letter (Exh. 18) from Brigham of the Traffic Department of Young Brothers Co., dated December 27, 1963, to Fitchburg referring to their order number 18485 and indicating shipment to be on December 30.
(7) An invoice (Exh. 14) from Young Brothers Co., No. 7063 dated December 31, 1963 referring to Fitchburg’s order, indicating that shipment had occurred.
Serota also testified regarding a drawing (Exh. 21) prepared by one Williamson and dated October 31, 1963. He identified the drawing ás “an assembly drawing of the prototype electrode system designed and built for Fitchburg Paper.” He further stated that it was a drawing of the apparatus shown in photographs taken before and after shipment from Young Brothers and installation at Fitchburg (Exhs. 16, 19, 20).
The board characterized this drawing as being identical to that of figures 1-3 of Serota’s application but for a minor omission and said:
We find further that the structure shown in detail in those figures of the Exhibit 21 drawing clearly and adequately support the language of both counts to the same extent that the structure illustrated in the application drawings does and we note that no question as to Serota’s right to make the counts in issue has been raised in this case.
It was after its review of the record, a more extensive one than our summary, that the board held that Serota had proved by a preponderance of the evidence that he had reduced the invention to practice in January 1964 and that Bennett had derived the invention from him. Appellant attacks this decision on the grounds that (1) Serota failed in his burden of proof in the sense that there was insufficient corroboration of his own testimony, (2) Serota failed to prove conception and reduction to practice, and (3) there was no basis for the board’s conclusion that Bennett had derived the invention from Serota.
Opinion
Inasmuch as we agree with the board that Serota proved a reduction to practice in January of 1964, we do not find it necessary to reach the question of derivation.
Appellant’s principal attack on the board’s decision is that it relied too heavily on Exhibit 21, the drawing by Williamson. It is apparently his view that the board regarded that drawing as proving Serota’s reduction to practice. We believe that this misconstrues the board’s decision.
We first note that the board referred to the reduction to practice as occurring in January 1964 and it is our opinion that there was clearly a reduction to practice at that time embodied in the unit installed and tested at Fitchburg. In fact, appellant’s preliminary statement relied upon that unit as a reduction to practice on his behalf and thus constitutes an admission that the unit supported the count, thus corroborating Serota’s testimony and exhibits notwithstanding the fact that appellant later chose to rely solely upon his application for priority.
It is our view that unlike the usual interference ease the question to be resolved is not whether there was a reduction to practice but whether the reduction to practice was Serota’s. Of course, for Serota to prevail this must be shown by a preponderance of the evidence and where that evidence relies upon Serota’s testimony, it must be corroborated. Rodin v. Spalding, 297 F.2d 256, 49 C.C.P.A. 870 (1962); Hasselstrom v. McKusick, 324 F.2d 1013, 51 C. C.P.A. 1008 (1963).
The evidence, when seen in perspective, we think is sufficient to meet appellee’s burden of persuasion which is to show by a preponderance of the evidence that the reduction to practice in January 1964 was of his invention. The record shows that Serota was early involved in the design of dielectric heating equipment and devised an apparatus similar in many respects to that shown in the drawings of his application. When Bennett arrived on the scene at a later date, the only device which the record shows to be his own was of a significantly different type from that involved in the counts.
The record further shows that Serota’s employer was requested to “design and build” an apparatus for Fitchburg when Bennett’s device could not be made to operate successfully. This request was followed by the reduction to practice already discussed above.
Corroboration included the testimony of Zimmerly and LaBlanc, the documents discussed by the board, and Williamson’s drawing. Appellant objected that Williamson himself was not called to corroborate the drawing. However, we note that there was no challenge to the authenticity of the drawing. Thus, considering the purpose for which the drawing was used in the evidentiary scheme, testimony by Williamson would be cumulative at best, and we consider this omission to be of no consequence.
From this evidence we think it was logical and, therefore, proper to infer that Serota was the inventor of the January 1964 device. Appellant argues that the corroboration is insufficient. However, this court observed in Hasselstrom, supra,
* * * the purpose of corroborative evidence is to confirm and to strengthen the testimony of the inventor. Obviously the amount and quality of corroborative evidence that is necessary in any given ease will vary with the facts of that ease. [Citation to footnote omitted.]
We are satisfied that were it not for the vendor-vendee relationship of the parties, the evidence produced by Serota would without question support his claim to priority. We see no reason to reach a different result merely because of that relationship. For his part, appellant, as noted by the board, has not put forth a case to contradict that put forth by Serota even though if contrary evidence existed it was peculiarly within his province to produce it. Furthermore, any additional corroborative evidence for Serota would no doubt have to come from appellant who is his adversary in this contest. A degree of corroboration that is impossible is not required. Hurwitz v. Poon, 364 F.2d 878, 53 C.C.P.A. 1502 (1966).
The “law” on what constitutes sufficient corroborative evidence is a rule of reason. Anderson v. Pieper, 442 F.2d 982, 58 C.C.P.A. 1221 (1971) and cases cited therein. We believe that application of that rule of reason to the facts of this case requires the conclusion that the evidence discussed above is sufficient corroboration of the testimony of Serota.
In view of the foregoing, we conclude that the board did not err in awarding priority to Serota. Accordingly, that decision is affirmed.
Taxation of Costs
Appellee in this case requested that the brief for Bennett before the Board of Patent Interferences be added to the record with the praecipe making the request. We do not believe that addition to the record was necessary for a fair understanding and consideration of the issues presented in this ease. Accordingly, the cost of printing this brief and praecipe is assessed against the party Serota.
Affirmed.
. Dielectric material is defined as “A material that can serve as an insulator because it has poor electrical conductivity. * * * A dielectric undergoes electric polarization when subjected to an electric field.” J. Markus, Electronics and Nucleonics Dictionary (3d ed. 1966).
. Dielectric heating is defined as “The heating of a nominally insulating material by placing it in a high-frequency electric field.” Id.
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Application of Daniel D. ROTH and Robert M. Hall.
Patent Appeal No. 8968.
United States Court of' Customs and Patent Appeals.
June 7, 1973.
Eugene F. Buell, Pittsburgh, Pa., Buell, Blenko & Ziesenheim, Pittsburgh, Pa., attorneys of record, for appellants.
S. Wm. Cochran, Washington, D. C., for the Commissioner of Patents. Jere W. Sears, Washington, D. C., of counsel.
Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Judges, and ALMOND, Senior Judge.
MARKEY, Chief Judge.
This appeal is from the decision of the Board of Appeals affirming the rejection of claims 1-6 of appellants’ application serial No. 328,772, filed November 20, 1968, entitled “Surgical Drills.” We affirm.
Appellants’ invention relates to an air-powered surgical turbine or drill. In particular, a brake means stops rotation of a turbine shaft upon release of an air valve lever controlling the driving of the drill. The details of the invention have been described in a previous interference with a patent to DeGroff, DeGroff v. Roth and Hall, 412 F.2d 1401, 56 CCPA 1331 (1969). The disclosure of DeGroff described in that opinion is substantially the same as the applicable portions of appellants’ present specification.
Claim 1, with pertinent portions underlined, is representative of the claims on appeal.
1. A surgical drill comprising an elongated housing, a shaft journaled axially in the housing, turbine means on said shaft within said housing, inlet means in the housing receiving air pressure from a source of high pressure air, valve means between said inlet means and said turbine means for regulating the flow therebetween, chuck means at one end of the shaft adapted to removably frictionally receive the shank of a cutting tool, brake means acting on the shaft normally engaging said shaft when the air valve is closed, valve operating means on the housing and cam means operated by the valve operating means to release the brake means substantially simultaneously as the .valve means is opened.
The pertinent portion of count 2 of the interference (claim 2 of the DeGroff patent) is:
a normally applied brake for said shaft, * * * [a valve] control lever upon initial depression cooperating with said brake to release the same and thereafter upon further pressure to open said control valve in proportion to the degree of pressure applied to said control lever * * *.
We determined in that interference, wherein the issue was originality, that appellants had disclosed to DeGroff the use of a hand-operated valve control lever as a throttle for the drill and had made “the suggestion that a brake be provided.” We further stated:
However, the disclosure was of such lever as a throttle only and not as a control for a brake also, much less as a means for providing the particular cooperative relationship of throttle and brake defined in the counts.
The sole issue determinative of this appeal is whether the DeGroff patent is available as a reference under 35 U.S.C. § 102(e). The board so held, giving as its reasoning:
-x- * * appellant has brought before us no claim which recites the brake means in terms sufficiently broad to be consistent with what the court held to be the scope of the invention which appellants transmitted to DeGroff. We agree with the examiner’s position in effect that all of the appealed claims recite the brake means in such details as to bring these claims within the scope of the court’s reasons for finding priority in DeGroff as to the interference counts.
OPINION
Appellants contend that they “were the first to conceive the generic invention involved in the claims here on appeal and that Roth et al. disclosed all of the generic invention to DeGroff.” As evidence that the subject matter of the appealed claims antedate the DeGroff patent, appellants assert that:
* * * the testimony and decisions of the Board of Interference Examiners and the Court of Customs and Patent Appeals and the Preliminary Statement of Applicants are equivalent for the purposes here involved of a Rule 131 Affidavit.
The solicitor states that “[t]he appealed claims do not recite a brake broadly in any ‘generic’ sense.” That is manifestly correct. Not only do the appealed claims recite a specific relationship between the “valve operator means” and a specific “brake means acting on the shaft normally engaging said shaft means,” but they additionally recite a “cam means” to effect this relationship.
The evidence in the previous interference was held to be insufficient to show appellants were the first to invent any specific brake details such as recited in the counts. In the present case we again find no factual showing that the specific brake details of the appealed claims were invented by appellants prior to the filing date of the reference patent. Appellants’ reliance on selected portions from the record of the previous interference plainly does not amount to the required factual showing. Accordingly, the disclosure of the DeGroff patent is available as a reference under 35 U.S.C. § 102(e) and as such, it anticipates the appealed claims.
The decision of the board is affirmed.
Affirmed.
. Patent No. 3,128,070, filed March 4, 1963, issued April 7, 1964.
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60 CCPA
Wayne WITHROW and Conrac Division of Giannini Controls Corp., Appellants, v. The UNITED STATES, Appellee.
Customs Appeal No. 5482.
United States Court of Customs and Patent Appeals.
May 24, 1973.
Glad & Tuttle, Los Angeles, Cal., attorneys of record, for appellants. Robert Glenn White, Los Angeles, Cal., of counsel.
Harlington Wood, Jr., Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, Gilbert Lee Sandler, New York City, for the United States.
Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Judges, and ALMOND, Senior Judge.
BALDWIN, Judge.
This appeal is from the decision and judgment of the Customs Court overruling appellants’ protest against the classification of merchandise comprising certain television picture tube glass bulbs, imported in 1965, 1966 and 1967, under item 547.37, TSUS, as glass envelopes, without fittings, for vacuum tubes. Appellants claim classification either as parts of cathode ray tubes under item 687.50, TSUS, when imported prior to December 5, 1965, the effective date of the Tariff Schedules Technical Amendments Act of 1965, Section 2(a), (Pub.L. 89-241) or as parts of other electronic tube^, under item 687.60, TSUS, when imported after the effective date of that amendment.
The pertinent statutory provisions are:
The pertinent statutory provisions are:
Classified under:
Tariff Schedules of the United States: Schedule 5, Part 3, Subpart C:
Glass envelopes (Including bulbs and tubes), without fittings, designed for electric lamps, vacuum tubes or other electrical devices:
* * * * * *
Item 547.37 Other ............25% ad val.
Claimed under:
Tariff Schedules of the United States: Schedule 6, Part 5:
Electronic tubes (except X-ray tubes); photocells; transistors and other related electronic crystal components; mounted piezo-electric crystals, all the foregoing and parts thereof:
Item 687.50 Cathode-ray tubes, and parts thereof ..........12% ad val.
Tariff Schedules of the United States: Schedule 6, Part 5, as amended by the Tariff Schedules Technical Amendments Act of 1965, T.D. 56511:
Electronic tubes (except X-ray tubes); photocells; transistors and other related electronic crystal components; mounted piezo-electric crystals; all the foregoing and parts thereof:
Television picture tubes
* * * * * *
Item 687.60 Other ...........12V2% ad val.
The merchandise consisted of funnel-shaped glass bulbs used to produce cathode-ray tubes used in the television industry. Fused in the funnel part was a button-sized piece of metal, known as an “anode button” and serving to permit passage of voltage into the cathode ray tube to supply an anode to be provided therein.
The sole issue is whether the imported bulbs were “without fittings” as required by the prefatory heading to Item 547.37.
Neither party has alleged that a commercial definition of “fittings” as used here either exists or controls. Nor is there any evidence in the legislative history of Item 547.37 of a particular meaning for the term. The common or dictionary meanings are relatively uninformative as evidenced by the following examples:
fitting la: something used in fitting up * * * b: a small often standardized part (as a coupling, valve, gauge) entering into the construction of a boiler, steam, water, or gas supply installation or other apparatus— usu. used in pi.; see GAS FITTING, PIPE FITTING * * *. [Webster’s Third New International Dictionary (1961).].
fitting n. 1. The act of adjusting or connecting properly. 2. Any article of permanent equipment or adjustment: used generally in the plural, as including fixtures and apparatus; as, gas-fittings; steam-fittings * * *. [Funk and Wagnalls New Standard Dictionary (1965).].
Each party called one witness. More-land, for appellant, was an official of the company who had wide experience with cathode ray tubes and their uses. Appellee’s witness, Steierman, was manager of the television products division of Owens-Illinois, a large producer of cathode ray tube bulbs, and was thoroughly experienced in his field. Both substantially agreed that completing the imported envelopes into cathode ray tubes included cleaning out the bulb; applying a phosphor to the inner face of the tube; applying a coating of aluminum over the inside; putting a conductive coating from the button down through the neck of the tube; assembling the electron gun structure into the neck of the tube and sealing it; and evacuating it.
In response to questioning concerning the anode button and the term “fitting,” Moreland testified:
Q. In the cathode ray tube industry is there anything on a cathode ray tube known as a fitting? A. There are on some tubes more than one thing. This is always called a fitting, this button. Sometimes the tubes have bases which are placed on them later and which is also considered a fitting.
Q. What do you consider a fitting to be in the electronic tube industry? A. A connecting means of some kind.
Q. What function does the button on Plaintiff’s Exhibit 1 serve? A. It connects, serves as a means of making an electrical connection through the glass of high voltage which is generated external to the tube to get that inside the tube.
Q. Will you tell me, is the purpose of that connection for means of manufacturing or for means of use with a tube after it’s completed? A. For the means of use of the tube after it’s completed.
Q. Have you had any experience with glass envelopes for electronic tubes other [than] cathode ray tubes? A. No direct experience. I have visited many plants where these tubes of various types are made and observe them. I have not been actually myself engaged in the manufacture of tubes other than cathode ray tubes.
Q. One last question: in your knowledge, your personal knowledge and experience in the industry, is the button on Plaintiff’s Exhibit 1 known as a fitting ? A. Yes.
Steierman expressed the opinion that the anode button is not “a fitting on a glass bulb,” giving as one reason that it is an “intrinsic portion” of the bulb itself. As examples of what he would consider fittings used in cathode ray tubes, the witness referred to a connector on the end of a wire for making contact with the outside of the button, “the kind of plastic cap which is frequently used to protect the lead of the electron gun” and a “glass panel cemented to the front surface to serve * * * the function of protection against implosion.” He further testified that the anode button is not known “as a fitting in the glass envelope industry” and that “the term fitting is [not] used as a word of art in the glass envelope industry.”
The Customs Court
The Customs Court found the testimony of both witnesses to be “couched in such diffident tones of unfamiliarity with the term ‘fittings’ in the glass bulb and cathode-ray tube industries as to be of little weight.” It further stated:
* * * Neither witness was able to identify, definitively or otherwise, the kinds of products that would or would not be considered fittings in the industry producing glass bulbs for cathode-ray tubes and in the industry producing cathode-ray tubes. Furthermore the testimony of the two witnesses is conflicting and, with respect to the term “fittings”, the testimony of one witness has the effect of negativing the testimony of the other witness.
* * * * * *
* * * But something which is integral to production of an article which is a part of the whole (as is the anode metal button fused into the glass bulbs in this case designed for cathode-ray tubes), in our opinion, is not per se a fitting in the tariff sense. The principal parts of a cathode-ray vacuum tube are an electron gun, the bulb, and a luminescent screen. Without evidence or technical expertise, we could not speculate as to whether those parts would be, as to each other, fittings. By the same token we cannot in the case at bar speculate that the metal button is or is not a fitting.
Opinion
We are not convinced that the Customs Court erred in finding that the record here did not rebut the presumptively correct classification of the merchandise by customs officials as glass envelopes “without fittings.” In addition to the conflicting testimony referred to by the court, questioning of both witnesses failed to bring to light the existence of any commercial cathode ray tube bulbs that did not have anode buttons or their metallic equivalent, as a wire providing a similar function. Appellee points out that it is stated that item 547.37 covers “Glass envelopes for * * * television tubes” in Tariff Commission, Tariff Classification Study, (1960), Schedule 5, Part 3, p. 144. It also notes that both witnesses clearly accepted that cathode ray tubes are used as the principal tubes in television sets. Appellee’s ultimate argument on this point is that exclusion of the present tube bulbs from item 547.-37 would mean that any commercial cathode ray tube bulb would be similarly excluded, a result it regards as inconsistent with the express intention of Congress.
This argument of appellee is not adequately answered by appellants. It is true that the record does not establish that the same conditions as regards commercial cathode ray tube bulbs necessarily existed in 1960 when the Classification Study, supra, was published as well as the later time when the testimony was given. However, the burden is on appellants to overcome the presumption that the classification was wrong and we agree with the Customs Court that it has not done so here.
The judgment of the Customs Court is affirmed.
Affirmed.
. 67 Cust.Ct. 219, C.D. 4277 (1971).
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60 CCPA
ALUMINUM COMPANY OF AMERICA, Appellant, v. The UNITED STATES, Appellee.
Customs Appeal No. 5501.
United States Court of Customs and Patent Appeals.
May 24, 1973.
Barnes, Richardson & Colburn, New York City, attorneys of record, for appellant; Joseph Schwartz, James S. O’Kelly, New York City, of counsel.
Harlington Wood, Jr., Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, James Caffentzis, New York City, for the United States.
Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Judges, and ALMOND, Senior Judge.
LANE, Judge.
This appeal is from the judgment of the United States Customs Court, 67 Cust.Ct. 400, C.D. 4303 (1971) overruling the importer’s protest against the classification of certain imported merchandise under item 522.21 TSUS as fluorspar containing not over 97% by weight calcium fluoride. The importer claims the merchandise is properly classifiable under item 522.24 TSUS as containing over 97% by weight of calcium fluoride. We reverse.
The fluorspar was imported from Spain in shipments entered at Point Comfort, Texas on September 6, 1967, and December 26, 1967. The record reveals that the importer had samples of the fluorspar taken from both shipments, which samples were subdivided into lots, identifiable as “Manisa” and “Allegra” shipments after the importing vessels. Some lots were sent to customs for laboratory analysis, while others were retained by the importer. Classification under 522.24 resulted from the customs laboratory analysis under Customs Method 207.1 reporting that both shipments contained close "o, but not over, 97 % of calcium fluoride.
In support of its protest, appellant introduced evidence to show the merchandise included over 97% calcium fluoride before being exported and that analyses made of the sample lots in its behalf showed over 97% calcium fluoride. Appellee countered with evidence regarding the customs laboratory tests.
The Evidence
Appellant’s first witness was Manuel Rodriguez, the director of the mines and mills of the Spanish producer of the imported fluorspar. He testified that fluorspar it produced and shipped to the United States is always produced under specifications requiring in excess of 97% calcium fluoride, that the mill employs numerous controls and tests and, if material is found to be running under 97% calcium fluoride, steps are taken to elevate the content before the material leaves the plant.
Walter Frederick, a chemical research technician in appellant’s laboratories, testified to analyzing two samples from each shipment following Customs Method 207.1. In the case of the Manisa shipment, Frederick found a calcium fluoride content of 97.32% and 97.48%, His results for the Allegra shipment were 97.79% and 97.25%.
Donald Maryak, a chemist employed by Booth, Garrett & Blair, Inc., commercial chemists, samplers and analysts, testified to analyzing samples of the importation by a modified Bureau of Standards testing method which he considered reliable and which had been used by the firm for over 15 years. His analyses showed a calcium fluoride content of 97.-37% for the Allegra shipment and 97.-14% for the Manisa shipment. Maryak also analyzed samples using Customs Method 207.1 with the results showing 97.11% for the Manisa shipment and 97.14% for the Allegra shipment.
Russell Eakin, a chemist employed by a company engaged in sampling and analyzing fluorspar and other materials, testified that he personally analyzed samples by Customs Method 207.1 and found a calcium fluoride content of 97.-32% for the Allegra shipment and 97.-05% for the Manisa shipment.
Paul Pittman and Harold P. Pastor, chemists at the customs laboratory, testified to conducting analyses by Customs Method 207.1. Pittman reported finding 96.58% and 96.51% calcium fluoride in samples from the Manisa shipment and 96.92% and 96.86% in samples from the Allegra shipment. Pastor testified he found 96.72% and 96.60% calcium fluoride for the Manisa shipment and a customs report in evidence shows an average of 96.87% for the Allegra shipment based on four tests, two by Pittman and two by Pastor.
The Customs Court’s Decision
The Customs Court observed that the customs chemists used Method 207.1, “a concededly reliable and accurate method when properly conducted,” to make their analyses. It further stated that the results they obtained, if not rebutted, áre presumed to be correct, citing Consolidated Cork Co. v. United States, 54 Cust.Ct. 83, C.D. 2512 (1965). It then noted that the customs chemists’ description of their tests omitted some steps and deviated from others that are prescribed in Customs Method 207.1. However, it found that appellant had not brought out evidence, either by cross-examination or rebuttal, to enable it to determine whether the omissions or deviations amounted to critical departures from Customs Method 207.1. It then concluded:
Since we find no evidence which rebuts “the reliability of the government’s methods and, in particular, its accuracy in these analyses”, T. H. Gonzalez v. United States, 54 CCPA 104, 107, C.A.D. 918 (1967), the presumption of correctness which attaches to the customs classification has not been overcome, and the protest is overruled.
OPINION
The Customs Court reached its decision on the basis of whether appellant had proved that the analysis made by the customs chemists were erroneous. Finding that it had not, the court ruled that the presumption of correctness attaching to the customs classification was not overcome. We think the court misapplied the reasoning of the Consolidated Cork case upon which it relied. In Consolidated Cork, the Customs Court correctly set forth the law applicable in cases like the present as follows:
It is well settled that the methods of weighing, measuring, and testing merchandise used by customs officers and the results obtained are presumed to be correct, United States v. Gage Bros., 1 Ct.Cust.Appls. 439, T.D. 31503; United States v. Lozano, Son & Co., 6 Ct.Cust.Appls. 281, T.D. 35506; Draper & Co., Inc. v. United States, 28 Cust.Ct. 136, C.D. 1400. However, this presumption may be rebutted by showing that such methods or results are erroneous. Sears, Roebuck & Co. v. United States, 3 Ct.Cust.Appls. 447, T.D. 33035; Gertzen & Co. v. United States, 12 Ct.Cust.Appls. 499, T.D. 40697; Pastene & Co., Inc. v. United States, 34 Cust.Ct. 52, C.D. 1677. Furthermore, the presumption does not have evidentiary value and may not be weighed against relevant and material proof offered by the plaintiffs. If a prima facie case is made out, the presumption - is destroyed, and the Government has the burden of going forward with the evidence. United States v. Edson Keith & Co., 5 Ct.Cust.Appls. 82, T.D. 34128; Hawley & Letzerich et al. v. United States, 19 CCPA 47, T.D. 44893; United States v. Magnus, Mabee & Reynard, Inc., 39 CCPA 1, C.A.D. 455; James Bute Company v. United States, 33 Cust.Ct. 130, C.D. 1644. [54 Cust.Ct. at 85.]
Appellants here submitted evidence of analysis they applied to the merchandise which gave a result different from that claimed by the Government. That evidence was sufficient to establish a prima fade case and require the Government to go forward with the proof. The Government did so. The issue then comes down to weighing the evidence, recognizing that the original presumption in favor of the appraisement does not have evidentiary value and may not be weighed against the proofs offered by appellant. Consolidated Cork, supra; United States v. Magnus, Mabee & Reynard, Inc., 39 CCPA 1, C.A.D. 455 (1951).
We think the preponderance of the evidence is in favor of the appellant’s position that the imported fluorspar contained over 97% calcium fluoride. The testimony that the producer always produced fluorspar for the United States under specifications calling for such a calcium fluoride content and that fluorspar was a stable material that would not change in that respect during importation is significant evidence in appellant’s favor. Also, the analyses on behalf of appellant were five in number for each shipment, were made in three different laboratories by two or three different methods by three different operators, and all showed over 97% calcium fluoride. The Government’s analyses showing less than 97% calcium fluoride totaled four on each shipment and all were made in the same laboratories by the same method, although two chemists participated. Moreover, the testimony of the customs chemists indicates that they omitted certain steps described in Customs Method 207.1 and deviated from others.
The Customs Court found that the record offered no basis on which it could “evaluate and weigh the customs chemists’ testimony vis-a-vis what they did in following Customs Method 207.1.” It stated:
What we must weigh is whether the customs chemists’ testimony of what they did in following Customs Method 207.1 for analyses of fluorspar affected the accuracy of the results stated in the laboratory reports. Plaintiff [appellant] did not cross-examine the customs chemists on any of the alleged omissions or deviations pointed up in its brief, nor is there any testimony that the alleged omissions or deviations constituted critical departures from Customs Method 207.1.
Cross-examination or testimony in rebuttal might have established that critical steps in Customs Method 207.1 were, indeed, omitted or significantly deviated from in the customs analyses. Customs Method 207.1 is a technical set of instructions for sampling fluorspar. The customs chemists described what they did following those instructions. Plaintiff [appellant], if inclined to challenge, could have cross-examined the customs chemists and tested what they testified to, paragraph by paragraph, and line by line, with the instructions set forth in Customs Method 207.1. Plaintiff [appellant], in the absence of a relevant searching cross-examination now asks us to evaluate and weigh technical testimony against technical instructions and determine that the instructions were not followed.
That approach of the Customs Court was clearly erroneous. The testimony of the customs chemists was Government evidence offered in rebuttal of the prima facie case of appellant. It was the responsibility of the Government to show that any deviation from Customs Method 207.1 did not impair the accuracy of the results. While we, like the Customs Court, find the record unconvincing on the question, the deficiency lessens the strength of the Government’s case. It does not weaken the case of appellant.
The Government does assert that there were some deviations from Customs Method 207.1 in Frederick’s analysis, particularly that he did not try to pass it through an 80 mesh screen. The importance of this seems minimal, however, since the record shows that the imported material was ground to 100 mesh in production. Overall, the absence of any substantial basis for questioning the accuracy of the analyses made on behalf of appellant, along with the uniform results (over 97% calcium fluoride) from analyses in different laboratories by different persons using different methods makes out a persuasive case for appellant.
The protest should have been allowed and the merchandise classified under item 522.24 TSUS. Accordingly, the judgment of the Customs Court is reversed.
Reversed.
. All references hereinafter to percentage of calcium fluoride will be by weight, whether or not so specified.
. A method of analysis fully described in a document of record,
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60 CCPA
The UNITED STATES, Appellant, v. HOWARD HARTRY, INC., also known as Howard Hartry Co. and Howard Hartry, Appellee.
Customs Appeal Nos. 5490, 5491.
United States Court of Customs and Patent Appeals.
May 17, 1973.
Harlington Wood, Jr., Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, Patrick D. Gill, for the United States.
Robert Glenn White (Glad & Tuttle), Los Angeles, Cal., attorney of record, for appellee.
Before MARKEY, Chief Judge, and RICH, BALDWIN, LANE, Judges, and ALMOND, Senior Judge.
ALMOND, Senior Judge.
These are appeals from the decisions and judgments of the United States Customs Court, 67 Cust.Ct. 284, C.D. 4286 (1971) and 67 Cust.Ct. 352, C.D. 4296 (1971). The two cases involved three protests which were consolidated for trial but thereafter one protest (67/60386) was severed from the others (protests 67/62901 and 67/65030), for reasons not material here, and decided as C.D. 4286.
The decision in C.D. 4286 sustained the appellee’s protest of the classification of merchandise invoiced as ALBIN Marine Diesel Engine type AD-2 with reverse and reduction gears, under item 696.15, Tariff Schedules of the United States (TSUS), as parts of yachts or pleasure boats and dutiable at 12 percent ad valorem. The court held the merchandise to be dutiable at 10 percent ad valorem under item 660.42, TSUS, as compression-ignition engines. The lower court subsequently held the decision in C.D. 4286 to be controlling in C.D. 4296 involving the two severed protests, since the marine engines involved in each case “are the same in all material respects.”
The pertinent portions of the statutes involved are:
Tariff Schedules of the United States:
Classified under-.
Yachts or pleasure boáj£ regardless of length or tonnage, whether motor, sail, or steam propelled, owned by a resident of the United States or brought Into the United States for sale or charter to a resident thereof, whether or not such yachts or boats are brought Into the United States under their own power; and parts thereof:
Yachts or pleasure boats:
* * * * * *
Item 696.15 Parts ..............12% ad val.
Claimed under:
Internal combustion engines and parts thereof:
Piston-type engines:
* * * * * *
Other:
Item 660.42 Compression-Ignition engines ............10% ad val.
Appellant contends that the imported engines with marine transmissions are more than engines and, therefore, the original classification should have been sustained.
The Customs Court held that classification under item 696.15 as parts of pleasure boats was improper as a matter of law. Its reason was that classification under that provision “is limited in its application to parts of yachts or pleasure boats which are either owned by a resident of the United States or are brought into the United States for sale to a resident of the United States.” Since, in its view, the merchadise was an article of commerce per se, the court held that the merchandise did not meet the requirements for classification under item 696.-15, citing its decision in Eaton Manufacturing Co. v. United States, 66 Cust.Ct. 293, C.D. 4207 (1971). The portion of that decision pertinent here was reversed by this court in Eaton Manufacturing Co. v. United States, 469 F.2d 1098, 60 CCPA -, C.A.D. 1076 (1972).
We adhere to our decision in Eaton. Therefore, the only issue remaining in this case is whether the imported engines with marine transmissions are “more than” engines as urged by appellant. The lower court held that they were not. We reverse as we agree with appellant that classification within item 660.42 would be improper.
The record here reveals that the engines in issue are used as marine auxiliaries, i. e., their normal use is to power sailboats in and out of channel and when there is no wind to afford propulsion. They are equipped with a component described as a marine transmission which is a forward, neutral and reverse clutching mechanism including forward and reverse gears. The transmission is joined to the engine in a housing and can be removed without affecting the operation of the engine by plugging up the oil sump to prevent loss of oil caused by the removal of the transmission. This removal, though possible, is not a practical operation.
The record also reflects that the involved engines could be used for purposes other than providing motive power for a boat. The gears serve to give higher torque at low vehicle speed or to give a change in torque but do not affect the horsepower or actual running of the engine. From the record we are convinced that a transmission, though in this case an integral part of the engine as imported, is not an essential part of an engine.
This court in Servo-Tek Products Co. v. United States, 416 F.2d 1398, 57 CCPA 13, C.A.D. 969 (1969), held that an item consisting of an electric motor and a gear train, fastened together to form a single operating suit, was “more than” a motor. More recently, in United States v. ACEC Electric Corp., 474 F.2d 1009, 60 CCPA -, C.A.D. 1091 (1973), a similar result was reached in a case where the imported item was an electric motor with which was integrally housed a clutch mechanism. In combination, these elements formed a single operating unit. In operation, the motor ran continuously while the clutch mechanism functioned to allow a drive pulley to be engaged and disengaged. Although the sole use to which the unit was put was as a power source for an industrial sewing machine, it was held to be “more than” a motor.
We think those decisions dictate a reversal of the lower court in this case. In each of those cases a basic engine, specifically an electric motor, was modified by the addition of components not essential to a basic engine. In ACEC, as is true here, the added components were integrated with the engine and dedicated it to a particular purpose, but these special features did not preclude a determination that it was “more than” an electric motor. We see no room for a different conclusion here.
In the instant case the engines are used as marine auxilaries to power sailboats. The transmission as a clutching mechanism for forward and reverse gears serves to adapt the basic engine to its intended use as part of a sailing vessel. Therefore, we think that the addition of transmissions to those engines made them “more than” compression-ignition engines for tariff purposes.
Accordingly, we reverse the decisions and judgments of the Customs Court and remand with directions that judgments be entered affirming the classifications under item 696.15, TSUS.
Reversed. |
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60 CCPA
BUSHNELL INTERNATIONAL, INC., Appellant, v. The UNITED STATES, Appellee.
Customs Appeals No. 5484.
United States Court of Customs and Patent Appeals.
June 7, 1973.
Stein & Shostak, Los Angeles, Cal., attys. of record, for appellant. James F. O’Hara, S. Richard Shostak, Los Angeles, Cal., of counsel.
Harlington Wood, Jr., Asst. Atty. Gen., Andrew P. Vance, Chief, Customs Section, John A. Gussow, New York City, for United States.
Before MARKEY, Chief Judge, RICH, BALDWIN and LANE, Judges, and ALMOND, Senior Judge.
BALDWIN, Judge.
This is an appeal from a judgment of the United States Customs Court, Second Division, Appellate Term affirming the judgment of a single judge sitting in reappraisement. The goods are optical goods including binoculars, which were manufactured by Toyo Jitsugyo KK, exported from Japan by Oriental Trading Co., Ltd., and imported into the United States during the period August 14, 1964, through October 14, 1964. The judgments of the Customs Court upheld the appraised values returned by Customs officials.
It is agreed that the proper basis of appraisal is export value as defined by section 402(b) of the Tariff Act of 1930, as amended by the Customs Simplification Act of 1956. The issue is whether certain charges paid to Oriental Trading Co., including commissions and inspection fees, were properly added to the invoiced ex-factory prices in obtaining the appraised value.
Both parties in their briefs quote the following excerpt from the opinion of the Appellate Term for a summary of the record:
The record consists of the testimony of David P. Bushnell, president of Bushnell International, Inc., the importer herein, and a number of documentary exhibits. From the evidence, it appears that Bushnell has been importing optical goods from Japan since 1948 and that in 1950 Oriental Trading Company, Ltd., was appointed its buying agent. A written agreement was entered into in 1955, according to which Oriental Trading was “to handle all the details concerning purchase of merchandise from factories on ex-factory basis, inspection at the Laboratory, export packing, storage, transportation to the port of shipment and shipping documentation” for which it was to receive a 5 percent commission on the ex-factory value of the merchandise (exhibit 1, attachment HY-1).
The Japanese name of Oriental Trading Company, Ltd., is Toyo Jitsugyo KK. The firm was formed in 1947 to serve as a buying agent. In 1956 it set up a factory branch at Kugahara, Japan. The Kugahara factory is registered as a manufacturer of binoculars and is referred to by the Japanese name of Toyo Jitsugyo KK. Oriental Trading Company, Ltd., is registered as an exporter and has retained its English name. However, Toyo Jitsugyo KK and Oriental Trading Company, Ltd., are not two separate companies; Oriental Trading is merely the export division of Toyo Jitsugyo KK.
Mr. Bushnell testified that he first became acquainted with the Toyo Jitsugyo Kugahara factory in 1956 when he was taken there on a visit to Japan. He understood that there were some common stockholders in Toyo Jitsugyo and Oriental Trading, but that in order to build a factory, additional capital was needed and other stockholders were brought in. He did not ask anyone about the specific relationship as he was interested only in getting good quality binoculars at a reasonable price. He did not learn that the Kugahara factory and Oriental Trading were related until 1966. In fact, in 1960, the working relationship between Bushnell and Oriental Trading was confirmed by a written agreement, which stated, among other things:
As our purchasing agent, you are to handle all of th'e details concerning the purchase of the merchandise we designate from the various factories that you deem most appropriate under the circumstances. Purchases are to be made on a freely offered ex-factory basis. You are to inspect every item to assure yourselves that each meets our high standards of quality. You are to supervise the export packing, arrange for outside storage and subsequent transportation to the port of export. You will pay all charges between the factory and the port of exportation. You are to prepare all export documentation.
All of your expenses, plus two percent (2%) for inspection fee and your five percent (5%) buying commission, are to be shown separately from the maker’s ex-factory prices for the merchandise. Your charges and the maker’s charges are to be shown on your invoices to us and collection made under our Letter of Credit established in your favor.
Mr. Bushnell negotiated with the Kugahara factory in the same manner as he dealt with other manufacturers at ex-factory prices. Sometimes a representative of Oriental Trading was present and sometimes not. Oriental Trading performed the same functions of inspection and shipment with respect to the merchandise manufactured by the Kugahara factory as it did with respect to merchandise manufactured by others.
An affidavit of Hideo Machiyama, chief of the Toyo Jitsugyo Kugahara factory (exhibit 2) states:
That Kugahara Factory set the sales price of its merchandise based upon its own determination of costs. That approximately 60% of the production of Kugahara Factory was sold for export to the United States to Bushnell International and was delivered through Oriental Trading Co., Ltd. That Kugahara Factory was not set up to export its merchandise, and purchasers in the ■ United States or in other countries required the services of some export agent to arrange for exportation of his merchandise. That in 1964 and before, the merchandise manufactured by Kugahara Factory was freely offered at the same ex-factory prices for like quantities with similar terms to United States importers through other buying agents. That offers at ex-factory prices such as those attached and marked Exhibit M-4 were also made directly by Kugahara Factory to purchasers from other countries who had export agents in Japan. * *K- *
Attached to the affidavit is a quotation given to Kuni Tsusho Co., Ltd., in May, 1964, setting forth unit prices for several types of binoculars and a bill to the same firm. According to an affidavit of K. Endo, president, Kuni Tsusho Co., Ltd., serves as a buying agent for American importers, had received ex-factory offers from Toyo Jitsugyo KK in June, 1964, and had made one purchase, for exportation to West Germany. (Exhibit 4.)
The appeal to reappraisement of the present goods was consolidated for trial with like appeals as to goods from two other manufacturers, Ohta Optical Co. and Meiji Seiko KK, with respect to which Oriental Trading Co. performed essentially the same services for appellant, for a like fee. Referring to the importations from all three manufacturers, the trial judge stated:
The appropriate officials of the manufacturers, in affidavits, and plaintiff’s president, in testimony, assert that the merchandise in question was freely offered for sale at ex-factory prices. The affidavits of the manufacturers including the supporting material attached thereto support the view that the merchandise they sold tó plaintiff and which is involved herein, was available to all purchasers at ex-factory prices. * * *
The trial judge was further satisfied that Oriental Trading Co. acted as a “genuine” buying agent for the goods of the other two manufacturers: As to. the present goods, the trial judge found “the essential fact” that Oriental Trading Co. is the export division of Toyo Jitsugyo KK caused him to take the “completely different view” that Oriental Trading was disqualified from being a bona fide buying agent. On that basis, he ruled that the fees paid to Oriental Trading as to the present goods were properly included in the purchase price of these goods and upheld the appraisement.
The Appellate Term agreed with the trial judge that Oriental Trading, as a division of the manufacturer, was not a bona fide buying agent in this case. It also discussed the evidence that appellant submitted with regard to offering of the goods at ex-factory prices but stated: -
In our view the evidence presented does not establish that Toyo' Jitsugyo freely sold or offered its merchandise to all purchasers on an ex-factory basis or that it offered the option of purchasing either ex-factory without the participation of Oriental Trading or on some other basis.
Opinion
The appraisements here were made on the basis of invoiced “ex-factory” prices plus the disputed charges and, as found by the trial judge, are separable. Accordingly, appellant need only prove the non-dutiable character of the disputed charges which include the commissions paid by it to Oriental Trading. Globemaster Midwest, Inc. v. United States, 68 Cust.Ct. -, R.D. 11758, 337 F.Supp. 465 (1971). See also United States v. Pan American Import Corp., 57 CCPA 134, 428 F.2d 848, C.A.D. 993 (1970).
The first question is whether the amounts paid to Oriental Trading were properly excluded from treatment as commissions so as not to be excludable from export value. The affirmative holding below on that point was based solely on the circumstance that Oriental Trading was a branch of the manufacturer. We'think the holding was not supported by substantial evidence and was erroneous as a matter of law. The evidence that Oriental Trading performed the same services with respect to appellant’s purchases from Toyo Jitsugyo as those from Meiji Seiko and Ohta Optical, which services unquestionably qualified as those of a buying agent as specifically recognized by the trial court, is uncontroverted. The fact that profits realized by Oriental Trading acting as buying agent would ultimately benefit the manufacturer does not in itself bar the commissions paid to Oriental Trading from exclusion from the dutiable cost. We see no controlling distinction between the relationship of the agent and the manufacturer here and the relationship in Kurt Orban Co. Inc. v. United States, 52 CCPA 20, C.A.D. 851 (1965), where the agent was owned by the principal mills for which it acted as agent. In accord with United States v. Tapetes Luxor S.A., 54 CCPA 116, C.A.D. 851 (1965), the business ties between the manufacturer and the agent are not necessarily determinative of the status of commissions the importer paid the agent but the question must be determined by the full circumstances as revealed by the evidence at hand. The case is clearly distinguished from B & W Wholesale Co. v. United States, 58 CCPA 92, C.A.D. 110 (1971), where there was substantial evidence that the importer did not have control over the factories from which the alleged agent ordered the goods as well as other aspects of the operation.
The remaining question is whether appellant demonstrated that Toyo Jitsugyo offered the goods at ex-factory prices. On this point, the affidavit of the chief of the Toyo Jitsugyo factory and the president of Kuni Tsusho which served as a buying agent amount to significant evidence that Toyo Jitsugyo’s goods was freely offered under circumstances that made evaluation here on the basis of ex-factory prices appropriate. The trial court discussed the evidence as follows:
Plaintiff’s president testified that during the period in question an agreement was in effect designating the Oriental Trading Co. as buying agent for plaintiff. Pursuant to said agreement, the purported buying agent accompanied plaintiff’s president to his negotiations with the manufacturers, interpreted when necessary, arranged for the transportation and exportation of the merchandise in question, and inspected it in accordance with rigorous inspection standards developed by plaintiff. For these services Oriental Trading Co. received a 5 percent buying commission and a 2 percent inspection commission. These services were provided in connection with merchandise purchased from Ohta Optical Co., Meiji Seiko KK and Toyo Jitsugyo KK.
The appropriate officials of the manufacturers, in affidavits, and plaintiff’s president, in testimony, assert that the merchandise in question was freely offered for sale at ex-factory prices. The affidavits of the manufacturers including the supporting material attached thereto support the view that the merchandise they sold to plaintiff and which is involved herein, was available to all purchasers at ex-factory prices. In addition, the record includes certain cost records kept by plaintiff’s president which were introduced in evidence for the purpose of demonstrating that the ex-factory price was the price utilized by him in his records of purchases. Certain discrepancies between the prices listed in these records and the invoice prices were adequately clarified in additional testimony as being the result of certain of the imported items ultimately being purchased without eases.
In finding of fact No. 6, the trial court found that “said merchandise,” apparently including that of all three manufacturers, “was freely offered for sale to all purchasers at ex-factory unit prices, which did not include inland freight or other charges, or the buying commission or inspection fees.”
We think the trial court’s analysis was correct and that appellant plainly overcome whatever presumption against Toyo Jitsugyo’s freely offering the goods at ex-factory prices might have arisen from the appraisement. On the other hand, the Appellate Term has not pointed to any substantial evidence to support its conclusion to the contrary and we therefore must find that its determination on the matter of ex-factory prices was erroneous as a matter of law. The appraisements being separable, the invoice prices of the imported goods represent the correct export value.
In sum, we find that on the particular facts of this case Oriental Trading Co. acted as a bona fide buying agent for appellant even though Oriental Trading was in fact the export division of the manufacturer, and that the merchandise was freely offered for sale on an ex-factory basis. Accordingly, the decision and judgment of the Customs Court is reversed.
Reversed.
. 67 Cust.Ct. 588, 331 F.Supp. 1378, A.R.D. 297 (1971).
. 64 Cust.Ct. 765, 314 F.Supp. 48, R.D. 11714 (1970).
. Export Value. — For the purposes of this section, the export value of imported merchandise shall be the price, at the time of exportation to the United States of the merchandise undergoing appraisement, at which such or similar merchandise is freely sold or, in the absence of sales, offered for sale in the principal markets of the country of exportation, in the usual wholesale quantities and in the ordinary course of trade, for exportation to the United States, plus, when not included in such price, the cost of all containers and coverings of whatever nature and all other expenses incidental to placing the merchandise in condition, packed ready for shipment to the United States.
. See definitions in section 402(f), Tariff Act of 1930, 46 Stat. 407, as amended by the Customs Simplification Act of 1956, 70 Stat. 944, 19 U.S.C. § 1401a (f).
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HOFFMANN-La ROCHE, INC., Petitioner, v. Richard G. KLEINDIENST, Attorney General of the United States, and John E. Ingersoll, Director, Bureau of Narcotics and Dangerous Drugs, United States Department of Justice, Respondents.
No. 71-1299.
United States Court of Appeals, Third Circuit.
Argued June 25, 1971.
Decided March 28, 1973.
As Amended July 3, 1973.
Thomas D. Finney, Jr., John J. Kovin, Thomas Richard Spradlin, Clifford, Warnke, Glass, Mcllwain & Finey, Washington, D. C., Ralph N. Del Deo, Crummy, O’Neill, Del Deo & Dolan, Newark, N. J., for petitioner.
Allan P. Mackinnon, U.S. Dept, of Justice, Washington, D. C., for respondents.
Before BIGGS and ROSENN, Circuit Judges, and KRAFT, District Judge.
. See § 702(e) of P.L. 91-513, Title II, Oct. 27, 1970, 84 Stat. 1283 (21 U.S.C. § 321 NOTE (1970)) which provides: “All administrative proceedings pending before the Bureau of Narcotics and Dangerous Drugs on the date of enactment of this Act shall be continued and brought to final determination in accord with laws and regulations in effect prior to such date of enactment. Where a drug is finally determined ... to be depressant [drug] . . . such d ¿g shall automatically be controlled un..er this, title by the Attorney General without further proceedings and listed in the appropriate schedule after he lias obtained the recommendation of the Secretary [Health, Education and Welfare].” (Emphasis added). The Secretary has recommended that Librium and Valium be placed on Schedule IV of 21 U.S.C. § 812.
OPINION OF THE COURT
BIGGS, Circuit Judge.
The petitioner, Hoffmann-La Roche, Inc. (Hoffmann), has brought this special statutory proceeding against the Honorable Richard G. Kleindienst, Attorney General of the United States, and John E. Ingersoll, Director of the Bureau of Narcotics and Dangerous Drugs of the United States Department of Justice (respondents), to review a Final Order issued by the Director, filed on February 5, 1971 (36 Fed.Reg. 2555 (1971)l. The proceedings were commenced pursuant to § 201 (v) of the 1965 Amendments to the “Federal Food, Drug, and Cosmetic Act and were proceeded with under the “Comprehensive Drug Abuse Prevention and Control Act of 1970.” Title II of the 1970 Act deals with the control of drugs and is separately entitled the “Controlled Substances Act,” 21 U.S.C. § 801 et seq. Review is sought pursuant to 21 U.S.C. § 371(f) and 5 U.S.C. § 706, formerly Section 10(e) of the Administrative Procedure Act.
Chlordiazepoxide (Librium) and diazepam (Valium) are described as a new class of drugs which differ chemically from barbiturates and other drugs known at the time of their synthesis. Librium has been in general medical use since 1960 and Valium since 1963. In 1966 at the original hearing before the Bureau it was estimated that over fifteen million patients had taken Librium and over five million patients had received doses of Valium. The 1965 Act set up special controls over the prescription and distribution of “depressant and stimulant drugs.” Depressant or stimulant drugs” were defined to include barbiturates, amphetamines, and any other drug which the Secretary of Health, Education and Welfare designated by regulation’ as having a notential for abuse because of its depressant or stimulant effect on the central nervous system.
The legislative history of the Act must be referred to. Very relevant to that history is the Final Report of the President’s Advisory Commission on Narcotics and Drug Abuse, at 2 (1963), which states: “When this report speaks of ‘drug addiction’ it is using the term in its full technical sense to include both the psychological and the physical dependence. When it speaks of ‘drug abuse’ it is referring to the broader problem which includes also those drugs which create only psychological dependency. We will use the term ‘drug abuse’ in this report as existing when an individual takes psychotoxic drugs under any of the following circumstances: (a) in amounts sufficient to create a hazard to his own health or to the safety of the community; or (b) when he obtains drugs through illicit channels; or (e) when he takes drugs on his own initiative rather than on the basis of professional advice. Drug abuse today involves not only the narcotic drugs and marihuana, but to an increasingly alarming extent other drugs such as the barbiturates, the amphetamines and even certain of the ‘tranquilizers.’ This latter group will be referred to in this report as the ‘dangerous drugs.’ ”
Regulation 21 C.F.R. § 166.2(e) (1967), follows the Final Report of the President’s Advisory Commission on Narcotics and Drug Abuse, supra at 2, and states in part as follows: “(e) The Commissioner may determine that a substance has a potential for abuse because of its depressant or stimulant effect on the central nervous system or its hallucinogenic effect if: (1) There is. evidence that individuals are taking the drug or drugs containing such a substance in amounts sufficient to create a hazard to their health or to the safety of other individuals or of the community; or (2) There is significant diversion of the drug or drugs containing such a substance from legitimate drug channels; or (3) Individuals are taking the drug or drugs containing such a substance on their own initiative rather than on the basis of medical advice from a practitioner licensed, by law to administer such drugs in the course of his professional practice * *
This case was begun by a proposed regulation filed by Acting Commissioner Rankin on January 17, 1966. 6*31 Fed. Reg. 565 (1966). The issues presented by this, the present proceeding, were stated to be as follows in the notice of May 16, 1966:1 “1. Whether there is evidence that individuals are taking the drug or drugs [Librium or Valium] containing such substances in amounts sufficient to create a hazard to their health or to the safety of other individuals or of the community; 2. Whether there is evidence of significant diversion of the drug or drugs [Librium or Valium] containing such substances from legitimate drug channels; 3. Whether there is evidence that individuals are taking the drug or drugs [Librium or Valium] containing such substances on their own initiative rather than • on the basis of medical advice from a practitioner licensed by law to administer such drugs' in the course of his professional practice; and 4. Whether, if chlordiazepoxide [Librium] has been the subject- of abuse, diazepam [Valium], a newer drug, is so related to it as to make it likely that the drug will have the same potentiality for abuse.” 31 Fed.Reg. 7174 (1966) The proceeding culminated in the Final Order of Director Ingersoll filed February 5, 1971, ruling that chlordiazepoxide and its salts, and diazepam, respectively Librium and Valium, were depressant drugs having a potential for abuse because of their depressant effect on the central nervous system. This is the order which we review here. If the order is sustained, Librium and Valium, already available only upon prescriptions of licensed physicians, will be subject to additional record-keeping, inspection, regulation, and labeling requirements by legitimate channels of distribution. Moreover, illicit, i. e., non-allowable, possession and distribution would be illegal and subject to criminal sanctions as is presently the case in respqet to barbiturates and amphetamines, commonly considered as “depressant” and “stimulant” drugs. Hoffmann concedes that Librium is a depressant drug. “The conclusion that Librium has a depressant effect is not controverted.” Hoffmann’s brief at 9. Hoffmann objected to Librium and Valium being made subject to regulation, filed its petition for review and injunctive relief, and this court stayed Director Ingersoll’s- Final Order until our disposition of the case.
The issues presented are rather hard to frame for they are differently stated by the parties. Hoffmann asserts in its brief at 1-2: “The issues are whether the order of the Director should be held unlawful and set aside because — (1) the order is in excess of statutory authority or limitation in that it employs a decisional standard different from that established by Congress; (2) the conclusions as to chlordiazepoxide (Librium) are not supported by adequate findings or substantial evidence on the whole record; (3) the listing of diazepam (Valium) cannot be based on the experience with Librium, and the conclusions as to Valium are not supported by adequate findings or substantial evidence on the whole record; and (4) the order was issued without observance of procedure required by law and due process.” The respondents’ “Counterstatement of the Issues Presented for Review” is as follows: “1. Whether the findings of the Director, Bureau of Narcotics and Dangerous Drugs, that Librium and Valium are ‘depressant drugs’ subject to control under the Drug Abuse Control Amendments of 1965, are supported by substantial evidence of record. 2. Whether the Administrative order listing Librium and Valium as drugs subject to control under the Drug Abuse [Control] Amendments of 1965 should be set aside on the ground that it was entered without due process of law.” Another issue which we disignate as “(3)” and which must be discussed is whether the proceedings before the Director were “rule making” or “adjudication,” as defined in 5 U.S.C. § 551(5) and 5 U.S.C. § 551(7)
I.
We deal first with this case on the basis of the evidence which was before the Director, without regard to the matters discussed under the later headings of this opinion. Hoffmann contends that the Director’s order is based on a deci-sional standard different from that established by the statute and that the agency has not met the requirements of the applicable statutes in that “ ‘[1] the agency must make findings that support its decision and [2] those findings must be supported by substantial evidence.’ [Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 [83 S.Ct. 239, 9 L.Ed.2d 207] (1962)] Moreover, mere ‘conclusionary statements . . . are not the sort of findings which enable [the Court] intelligently to pass upon the correctness of the judgment reached.’ ‘The agency’s findings must be sufficiently definite to enable the courts to perform the task of judicial review.’ [Braniff Airways, Inc. v. Civil Aeronautics Board [113 U.S.App.D.C. 132] 306 F.2d 739, 742 (D.C.Cir. 1962)].”
The applicable law is cogently set out by Judge Butzner in Carter-Wallace, Inc. v. Gardner, 417 F.2d 1086 (4 Cir. 1969), in which Carter-Wallace, Inc. attacked a Food and Drug Administration order subjecting meprobamate to control as a depressant drug. The court stated: “In selecting ‘potential for abuse’ as one of the criteria for subjecting a drug to special control, the House Committee did not intend this to be determined on the basis of the drug’s having a potential for isolated or occasional nontherapeutic purposes. Instead, the committee recommended that a drug’s potential for abuse should be determined ‘on the basis of its having been demonstrated to have such depressant or stimulant effect on the central nervous system as to make it reasonable to assume that there is a substantial potential for the 'occurrence of significant diversions from legitimate drug channels, significant use by individuals contrary to professional advice, or substantial capability of creating hazards to the health of the user or the safety of the community.”
The principles of law and criteria enunciated in Carter-Wallace, supra at 1090, we believe to be sound and we adopt them.
The “Conclusions of Law” reached by the Director are as follows:
“1. The Drug Abuse Control Amendments of 1965 were intended to protect the public health and safety by establishing special controls for depressant and stimulant drugs. This protection was to be accomplished through increased record keeping and inspection requirements, through providing for control over intrastate traffic in these drugs because of its effect on interstate traffic, and through making possession of these drugs, other than by the user, illegal outside of the legitimate channels of commerce.
“2. Chlordiazepoxide (Librium) and diazepam (Valium) are drugs with a depressant effect on the central nervous system. They may be legitimately dispensed only upon the prescription of a practitioner licensed by law to administer such drugs, and in full conformity with section 503(b) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. 353(b).
“3. The substantial, probative, and reliable evidence of record establishes that chlordiazepoxide (Librium) due to its depressant effect on the central nervous system has been abused in the past in the following ways:
“(a) There has been significant use of chlordiazepoxide (Librium) in amounts sufficient to create a hazard to the health of the individual and to the safety of other individuals and the community.
“(b) There has been significant diversion of chlordiazepoxide (Librium) from legitimate channels.
“(c) There has been significant use of Librium by individuals on their own initiative rather than on the basis of medical advice from a practitioner licensed by law to administer such drugs in the course of his professional practice.
“4. Due to the past history of abuse of chlordiazepoxide (Librium), because of its established capacity to substitute for other sedative drugs which are known to be abused and which are now subject to increased controls of the amendments, it is reasonable to conclude that the abuse of chlordiazepoxide (Librium) will continue to increase unless this drug is similarly brought under the control of the amendments.
“5. The substantial, probative, and reliable evidence of record establishes that diazepam (Valium) due to its depressant effect upon the central nervous system has been abused in the past in the following manner:
“(a) There has been significant use of diazepam in amounts sufficient to create a hazard to the health of the individual and to the safety of other individuals and the community.
“(b) There has been significant use of diazepam (Valium) by individuals on their own initiative rather than on the basis of medical advice from a practitioner licensed by law to administer such drugs in the course of his professional practice.
“6. Diazepam (Valium), the newer drug, is so related to chlordiazepoxide (Librium), a drug for which there is considerable evidence of continuing abuse as to make it likely that it will have the same potentiality for abuse.
“7. Due to past history of abuse of diazepam (Valium), because of its close relation to chlordiazepoxide (Librium), and because of its established capacity to substitute for other sedative drugs which are known to be abused and which are now subject to controls under the provisions of the Drug Abuse Control Amendments of 1965, it is reasonable to conclude that the abuse of diazepam (Valium) will continue to increase.
“8. Chlordiazepoxide (Librium) and diazepam (Valium) are drugs which because of their depressant effect on the central nervous system, have a substantial potential for significant abuse within the meaning of the Amendments, 21 U.S.C. 321(v)(3).
“9. Chlordiazepoxide (Librium) and diazepam (Valium) are ‘depressant or stimulant drugs’ within the meaning of 21 U.S.C. 321 (v), and are therefore subject to the provisions of 21 U.S.C. 360a. Any drug which contains any quantity of chlordiazepoxide or diazepam is a ‘depressant or stimulant drug’ within the meaning of 21 U.S.C. 321(v)(3) and is also subject to the provisions of 21 U.S. C. 360a.
“Therefore, it is ordered, That the stay of effectiveness announced May 17, 1966 (31 F.R. 7174), on the listing of chlordiazepoxide and its salts and diaze-pam in § 166.3(c)(1) [redesignated § 320.3(e)(1)] as a drug subject to control under the Amendments by the order of March 19, 1966 (31 F.R. 4679), be ended.”
The last paragraph of this order brought its terms into effect until stayed by the order of this court.
The amount of evidence presented in this ease has been enormous. The Findings of Fact contained in the Final Order of the Director, as set out hereinafter, and the references to their supporting evidence, we deem to be sufficient for the purposes of this opinion.
“1. The benzodiazepines, of which chlordiazepoxide (Librium) was the first synthesized, are a new class of drugs, different chemically from the barbiturates or any other drugs known at the time of their syntheses (Zbinden, Tr. 2080-84; R-142C; R-119; Lofft, Tr. 531).
“2. Chlordiazepoxide (Librium) is a benzodiazepine compound with the following chemical formula: 7-chloro-2-methylamino-5-phenyl-3H-l, 4-benzodi-azepine 4-oxide hydrochloride. It is a colorless crystalline substance; is soluble in water and its molecular weight is 336.22 (R-119).
“3. Diazepam (Valium) is a benzodi-azepine derivative with the following chemical formula: 7-ehloro-l, 3-dihy-dro-l-methyl-5-phenyl-2H-l, 4-benzodi-azepine-2-one. It is a colorless crystalline compound insoluble in water and its molecular weight is 284.74 (R-120).
“4. Experimental studies of their effects in animals were conducted by the Respondent. These tests indicated that Librium and Valium are depressant drugs having a marked calming action on the central nervous system at lower doses. An increase in dose resulted in more pronounced effects on the central nervous system, i. e., drowsiness, motor incoordination or ataxia, and sleep. On the basis of specially designed experiments whereby excitation was induced by surgical or chemical means, or by putting the animals under stressful conditioned behavior situations, the benzo-diazepines produced an antiexcitatory effect at dose levels below those that caused neurotoxicity or over-sedation, thus suggesting a usefulness in the treatment of anxiety and tension. The benzodiazepines are not generally recognized as effective sedative-hypnotic agents within the normal dosage range. (Zbinden, Tr. 2199-2204; R-142; Lang (1963), R-145; Heise (1961), R-146).
“5. The Respondent also presented evidence concerning the results of experimental tests on animals, designed to determine the primary site of action of the benzodiazepines. Primary site of action is defined to mean to location in the brain where a drug at the lowest dose will produce an effect. It is believed that the primary site of action of these drugs is in the subcoritical structures of the brain. The precise site of action cannot be determined with certitude. Dr. Gerhard Zbinden of Roche Laboratories stated that their tests showed it to be in the hippocampus (Tr. 2187-88). However, Dr. Harold Himwich, another Respondent witness, testified that his tests showed that the area most sensitive to low doses of Librium and Valium, was in the transmission from the amygdala to the hippocampus (Tr. 2677). Moreover a doubling of the dose in these tests done at Roche . Laboratories resulted in the drug effect spreading to the cortex, the area of the brain associated with judgmental functions. (Zbinden, Tr. 2187; R-142S). When the dose was further increased the whole brain was involved. (Tr. 2188).
“6. Librium and Valium are widely used in the treatment of anxiety and tension, as muscle relaxants, as anticon-vulsants, and as anti-depressants.
“7. Librium has been in general medical use since 1960. More than 6 billion capsules of the drug have been commercially distributed, and millions of patients have taken Librium since its approval by the Food and Drug Administration (Bennett, Tr. 4135-36; R-222).
“8. Librium is indicated whenever fear, anxiety and tension are significant components of the clinical profile.
“In low oral doses, the drug is effective in mild to moderáte anxiety and tension, tension headache, pre- and post-operative apprehension, premenstrual tension and menstrual stress, chronic alcoholism, behavior disorders in children, and whenever anxiety and tension are concomitants of gastrointestinal, cardiovascular, gynecologic or der-matologic disorders.
“Skeletal muscle spasticity (resulting from spinal cord injury, congenital or acquired brain damage) and other debilitating neuro-museular disorders such as dystonia and athetosis frequently respond to Librium. Painful muscle spasm associated with myositis, fibrosi-tis, bursitis, tenosynovitis, arthritis, fractures, intervertebral disc syndrome, whiplash injury, low back pain or postural strains is often benefited when emotional factors are present.
“In higher oral doses, Librium is of value in the more severe anxiety and tension states, agitated depression and ambulatory psychoneuroses (e. g., acute and chronic anxiety states, phobias, obsessive-compulsive reactions and schizoid behavior disorders). In addition, it may be useful in certain types of acute agitation due to chronic alcoholism or alcoholic withdrawal (including delirium tre-mens), hysterical or panic states, paranoid states and acute stages of schizophrenia (R-119).
“9. Diazepam (Valium) is of use in dealing with anxiety reactions stemming from stressful circumstances or whenever somatic complaints ' are concomitants of emotional factors. It is useful in psychoneurotic states manifested by anxiety, tension, fear and fatigue. Valium may also be useful in acute agitation due to alcohol withdrawal. Valium may be of use to alleviate muscle spasm associated with cerebral palsy and athe-tosis (R-119).”
Finding 15, 36 Fed.Reg., at 2556, states: “Substantial evidence of record establishes that individuals have developed psychic dependence to Librium and Valium. The uncontested testimony of physicians was that patients find the two drugs pleasant to take. (Murray, Tr. 364; Barten, Tr. 454; Evans, Tr. 813-15, 829-30). They provide an inner sensorial feeling that is gratifying to the patient (Uzee, Tr. 907). Patients were reported to have been apprehensive about being without their supply of the medication and expressed to their physicians a reluctance to come off the drugs. Individuals have attempted unsuccessfully to discontinue taking Librium and Valium when a dependency has developed. Still other patients have gone to excessive lengths to maintain their supply of the two drugs. (Lofft, Tr. 1560; Evans, Tr. 817, 825; Uzee, Tr. 905-06; Galen, Tr. 1443-48; Chelton, Tr. 1672; Williams, Tr. 1757-59; Guile (1963), G-14; Lingjerde (1965), G-55; Wenkstetten (1965), G-91, Table 3; Kranz (1965), G-94, pp. 8-9). This experience confirms the opinion expressed by experts that Librium and Valium are drugs to which individuals can and do develop psychic dependence. (Eddy, Tr. Í077; Isabell [sic], Tr. 1552-54; Eddy, et al. (1965), G-81, 727.” An examination of the citations of Finding 15 shows that there is substantial evidence that individuals have developed psychic dependence to Librium and Valium. Therefore, one of the elements necessary for a demonstration of “substantial potential for significant abuse” is present as found by the Director. True, there is evidence to the contrary, as the Director acknowledges in his Finding of Fact 16, but we are not judges of the evidence for the reasons set out hereinafter.
We think it is well established that drugs which are capable of producing euphoria are peculiarly susceptible to being abused. Finding of Fact 17 of the Final Order defines “Euphoria” as “an exaggerated sense of well being.” (21 C.F.R. 166.2(e)(2) (1967). “The evidence establishes that euphoria has been reported following use of Librium and Valium. (Barten, Tr. 454; Chambers, Tr. 1628; Domino, Tr. 4617; Zbinden et al. (1961), R-118, pp. 627, 634; Guile (1963), G-14, p. 57; Towler 'et al. (1962), R-73, 833; Darling (1963), G-48, p. 502.” 36 Fed.Reg., at 2556. Checking out these citations we find there is sufficient evidence to support the finding that Librium and Valium produce euphoria albeit the evidence in this respect cannot be characterized as very ample or very persuasive.
“Tolerance” is described in Finding of Fact 19 as “ . .’ . an adaptive process which contributes to abuse because, where it exists, a person tends continually to increase the amount of drug being taken. Tolerance has developed when, after repeated administration, a given dose of a drug produces a decreasing effect or conversely when increasingly larger doses must be administered to obtain the effects observed with the original dose (Jaffe (1965), R-113, p. 285; Deneau, Tr. 1009).” 36 Fed.Reg., at 2557. We accept this definition. Finding of Fact 22 states: “The evidence establishes that it is possible to develop tolerance to Librium and Valium but that it has not been frequently observed or reported.” But the same finding states: “There was . . . evidence that patients have increased their dosage in order to maintain relief of anxiety (Uzee, Tr. 913, 919; Mr. E, Tr. 494-95; Lingjerde (1965), G-55, p. 3). To date however, there have been few such reports in the medical literature and Respondent’s witnesses have testified that tolerance to Librium and Valium has not been encountered in extensive use over many years (Gibbs, Tr. 2263-64; D. Feldman, Tr. 2532-33; Bercel, Tr. 2653-54, 2657; Scherbel, Tr. 2821; Goldman, Tr. 2914; Friend, Tr. 2937; Cohen, Tr. 3218, 3220; Schwab, Tr. 3383-84; D. Feldman, Tr. 3682; Knott, Tr. 3716; D’Agostino, Tr. 3817; Stanfield, Tr. 3844; Snell, Tr. 3884; Smith, Tr. 3924; Schiele, Tr. 4033; Greenberg, Tr. 4060).” 36 Fed.Reg., at 2557. The evidence of tolerance developing from repeated doses of Librium and Valium is not too strong, and if we had this case de novo we would not make the finding as did the Director on the citations of evidence stated in the finding. However, the statement made by the Director in Finding 22 that the evidence does establish that it is possible to develop tolerance to Librium and Valium is supported by the record.
Another factor in determining a drug’s potential for abuse is the existence of withdrawal symptoms. As to withdrawal symptoms associated with Librium and Valium, Finding 34 seems to us to be conclusive. That Finding states: “Dr. John G. Lofft, a psychiatrist and specialist in the treatment of alcoholism and allied addictions, testified that the abstinence syndrome associated with Librium and Valium withdrawal compares to that experienced after abrupt withdrawal from barbiturates (Tr. 550). It is characterized in its mildest form by insomnia and increased anxiety (Tr. 548-49). When the patient has been taking elevated doses for long periods of time the withdrawal syndrome is marked by restlessness, tremulousness, muscle pains, perspiration, hallucinations, and sometimes, although not frequently, convulsive seizures (Tr. 540, 543, 547). The severity of the withdrawal is dependent upon the degree of dependence, and the amount of drug the person has been taking (Tr. 551-52; Jaffe (1965), R-133, p. 289). Librium-Valium withdrawal differs from the barbiturate withdrawal syndrome in that it persists over a longer period of time (Lofft, Tr. 550-51).” 36 Fed.Reg., at 2558. There is ample evidence to support this finding.
Finding 38 seems to supply a strong basis for the regulation proposed under the Drug Abuse Control Amendments of 1965. It is as follows: “There was some evidence indicating that Librium may produce a paradoxical rage reaction, i. e., an excitable and exhilarated state whereby the individual may become a danger to himself and to others. This reaction has been manifested in isolated instances by a hostile and irritable mood to a point where the person taking Librium has become violent and has physically threatened the lives of others (Murray, Tr. 355-56, 357-59, 360-63; Barten, Tr. 447; Lofft, Tr. 558; Gibbs, Tr. 2254-55; Stanfield, Tr. 3860-61; Murray (1962), G-24; Bowes (1965), G-44, p. 338; Krakowski (1963), G — 51, p. 49; Dean (1962), R-70, p. 4).” 36 Fed.Reg., at 2558. An examination of the citations supports the finding.
Is there a substantial potential for occurrence of significant divergence from legitimate drug channels, significant use by individuals of Librium and Valium contrary to professional advice, or substantial capability of creating hazards to the health of the user and the safety of the community? See again H.R.Rep. No. 130, 89th Cong., 1st Sess. 7 (1965), set out above.
There is evidence which supports Finding 40 that pharmacists are distributing amounts of Librium without authorization from physicians, i.e., substantial diversion from legitimate drug channels. Finding 40 is as follows: “The evidence indicates that some pharmacists are distributing amounts of Librium without authorization from physicians. During a 5-year period extending from 1961 through 1965, U.S. Food and Drug Administration records show that there were 35 completed prosecutions involving the drug chlordiazepoxide, all of which were terminated in convictions. These 35 eases involved 132 illegal buys of the drug, made either without a prescription or as requests for a refill when no refill was authorized. Investigations in three of these cases were initiated following complaints that a druggist had illegally dispensed Librium (Clevenger, Tr. 1846). At the close of the investigations in 14 of these cases, Food and Drug Inspectors checked the records, invoices, and prescription files of the drugstores involved. On the basis of investigation it was estimated that in each case between 47 percent and 100 percent of the pharmacies’ supply of chlordiaze-poxide had bgen dispensed without authorization of a physician. An average of 75 percent of the total amount of the drug dispensed by the pharmacists involved in these instances could not be accounted for. This amounted to over 54,000 capsules (Clevenger, Tr. 1799-1807, 1815, 1834-36; G-268). See also Ashcraft, Tr. 1158, 1519; Witness X, Tr. 1895-97 for other evidence to the same effect.” 36 Fed.Reg., at 2558. See also Findings 41 to 46, inclusive. 36 Fed.Reg., at 2559. All of these findings are amply supported by evidence.
Hoffmann places great emphasis on 5 U.S.C. § 706, formerly § 10(e) of the Administrative Procedure Act which provides that a reviewing court must “hold unlawful and set aside agency action, findings, and conclusions” found to be “contrary to constitutional right,” “in excess of statutory . . . authority,” “without observance of procedure required by law,” or “unsupported by substantial evidence.” The section further requires that, “In making the foregoing determinations, the court shall review the whole record. . . . ” We do not disagree, nor do the respondents, with the statement of the law. We have reached the conclusion that the Director’s Final Order and his Findings of Fact and Conclusions of Law are in accordance with 5 U.S.C. § 706, and we are compelled to the conclusion, as was he, that Librium is a drug having a depressant effect on the central nervous system (as conceded) and that it has a substantial potential for significant abuse. We believe that it must be conceded that Valium, a diazepam, has a stronger and more positive effect on persons ingesting it than does Librium. While Valium has a different chemical formula the differences are not qualitatively significant enough to cause us to conclude that the effects attributed to Valium would be other than of stronger potentialities than those attributed to Librium. We cannot conclude that Valium requires a separate hearing on a new and perhaps more detailed record than that which is presently before us.
II.
This opinion could have been terminated at the conclusion of the previous heading “I.” were it not that other points remain for discussion and disposition. Hoffmann asserts that the Director’s order was issued without observance of procedure required by law and without due process of law. This brings us to a critical issue in this case, whether the proceedings were “rule making” or “adjudication” as defined, respectively, in 5 U.S.C. § 551(5) or 5 U.S.C. § 551(7). Whether they were rule making or adjudication, the ultimate standard against which we must evaluate the fairness of the proceedings is due process of law. Permian Basin Area Rate Cases, 390 U.S. 747, 767, 88 S.Ct. 1344, 20 L.Ed.2d 312 (1968); Morgan v. United States, 304 U.S. 1, 18, 58 S.Ct. 773, 82 L.Ed. 1129 (1937).
(a) Hoffmann contends that the proceedings were essentially adjudicatory and that the participation of the Government’s trial counsel in the preparation of the Director’s tentative and final orders therefore contravened the separation of functions principle as enunciated by 5 U.S.C. § 554 and violated Hoff-mann’s right to due process. Section 554(d) contains the following language: “An employee or agent engaged in the performance of investigative or prosecuting functions for an agency in a case may not, in that or a factually related case, participate or advise in the decision, recommended decision or agency review. . . . ” Congress has limited the above restriction to adjudicatory proceedings, see 5 U.S.C. § 554(a), and “[t]he conclusion seems to be rather solid that no law requires the [Director] to separate functions in rule making for which on-the-record hearings are required.” The line dividing adjudication and rule making is, unfortunately, not always entirely clear, and this is true in the case at bar. However, consideration of the relevant factors leads us to conclude that the challenged procedures were rule making.
Here the final order will- apply across the board to all producers, wholesalers, and distributors of Librium and Valium, as well as to pharmacies and physicians. Hoffmann was not singled out for special consideration based on its own peculiar circumstances. The fact that Hoff-mann may be one of those adversely affected explains the highly adversary character of the proceeding but does not change the generalized nature of the order. Although the proceeding involved a concrete factual situation from which factual inferences provided the basis for the Director’s order, the facts and inferences therefrom were used to formulate a basically legislative-type judgment of entirely prospective application. Compare United States v. Florida East Coast Railway Company, 410 U.S. 224, 93 S.Ct. 810, 35 L.Ed.2d 223 (1973). Since the proceedings were thus in substance rule making, the separation of prosecuting and decision-making functions was not required. Willapoint Oysters, Inc. v. Ewing, 174 F.2d 676 (9 Cir.1949).
(b) Hoffmann contends that the Director relied on evidence not of record. On November 4, 1969, the day before oral argument was to commence before the Hearing Examiner, the United States Court of Appeals for the Fourth Circuit handed down its decision in Carter-Wallace, Inc. v. Gardner, supra, affirming the Commissioner’s use of “substantial potential for significant abuse” in determining whether or not Meprobamate should be listed. At the conclusion of the oral argument, at the Director’s order, Government counsel indicated a desire to submit additional evidence covering the three year period from the close of the original hearings, viz., November 18, 1966, to November 4, 1969. The Director requested counsel to attempt to arrive at a stipulation which would simplify any further proceedings. Such a stipulation was agreed to and presented to the Director in the form of a “Joint Recommendation” of counsel.
The stipulation recites that four categories of documents which the Government would offer are “substantially similar to evidence previously submitted.” The four categories were: “(1) Cases, evidenced by hospital records, medical records and reports, and police records and reports, involving intentional overdoses of Librium or Valium, alone or in conjunction with other drugs, in an apparent attempt at suicide or in a suicidal gesture, (2) A more limited number of cases of the kind described in Category (1), in which death is alleged to have resulted from an intentional overdose of Librium or Valium, most of which also involved simultaneous ingestion of other drugs. (3) Reports of audits of retail drugstores undertaken by Federal or State officials which have shown shortages of Librium or Valium, some of which have resulted in administrative action against the pharmacists involved. (4) Police reports showing instances in which a person arrested for drug violations or for other reasons was found to have Librium or Valium in his possession.”
The stipulation also provided, “The cases which would be evidenced by these documents appear to be substantially similar to those already in evidence in the prior hearing and do not appear to differ significantly in their nature or frequency of occurrence from those already in evidence. Therefore, this evidence seems cumulative, except to the extent that it indicates that instances of the kind already in evidence have continued to occur since the hearing.” The stipulation provided that the documents referred to were not to be put in evidence and that the supplemental hearing was to be limited to the question of the use of Librium and Valium in conjunction with the abuse of other drugs. The documents were not offered and are not of record.
Ploffmann asserts that all that is of record is the description of their nature and contents quoted immediately above but that nonetheless the Director’s Final Order refers to the Joint Recommendation and states: “ ‘As a consequence, evidence relating to intentional overdoses and attempted suicides; evidence concerning suicides and other deaths in which the drugs played a significant role; reports of audits of retail drugstores detailing significant shortages which could not be legitimately accounted for; and police reports showing instances in which the drugs were discovered by police during their investigation of drug and other criminal offenses suggesting use and distribution outside of the legitimate channels, were neither to be presented nor rebutted by either side. . . .’ (Emphasis added.)” The point made by Hoffmann is that the order, to quote its brief which states the petitioner’s position succinctly, “does not disclose how the Director, who is supposed never to have seen them, concluded that these documents showed that the deaths were ones ‘in which the drugs played a significant role’; or how he concluded that the audits of retail drugstores showed ‘significant shortages which could not be legitimately accounted for’; or how he concluded that possession of the drugs by persons arrested suggested' ‘use and distribution outside of the legitimate channels’ — since such characterizations do not appear in the stipulation.
“The comments indicate one of two situations: either the Director read and made an evaluation of the documents, without Roche [Hoffmann] having an opportunity to rebut them or offer evidence as to their significance, or the order was written by the attorneys who had collected the documents for use in their case in behalf of the Government. Neither circumstance is consistent with due process.” (Emphasis supplied), citing West Ohio Gas Co. v. Public Utilities Commission of Ohio, 294 U.S. 63, 55 S.Ct. 316, 79 L.Ed. 761 (1935); Ohio Bell Telephone Co. v. Public Utilities Commission of Ohio, 301 U.S. 292, 57 S.Ct. 724, 81 L.Ed. 1093 (1937).
The point asserted by Hoffmann is without merit. The emphasis put upon the word “significant” in the Director’s final order as quoted above is in fact nothing more than an echo, a reverberation of that adjective as used in the Hearing Examiner’s Supplemental Report of Findings and Conclusions Re Potential for Abuse of Librium and Valium used Conjunctively with Other Drugs, dated November 6, 1970, Preliminary Statement, “A. Scope of Supplemental Hearing,” where the limitations on the scope of the supplemental hearing are given as follows: “The limitations on the scope of the supplemental hearing were in direct response to a joint recommendation made to the Director by counsel for the Government and counsel for Hoffmann-LaRoche, Inc. (Respondent). As indicated in the joint recommendation, the presentation by the Government of other evidence of abuse, together with Respondent’s rebuttal evidence, would have inordinately protracted the hearings. Additionally, for the most part, such evidence would have been cumulative; that is, showing a continuation of circumstances existing at the time of the prior hearing in 1966. As a consequence, evidence relating to intentional overdoses and attempted suicides; evidence concerning suicides and other deaths in which the drugs played a significant role; reports of audits of retail drugstores detailing significant shortages which could not be legitimately accounted for; and police reports showing instances in which the drugs were discovered by police during their investigation of drug and other criminal offenses suggesting use and distribution outside of the legitimate channels, were neither presented nor rebutted by either side inasmuch as essentially the same type of evidence had already been adduced at the prior hearing.” (Emphasis added.)
The comments upon which Hoffmann rests its point included in the Proposed Supplemental Findings of Fact were not objected to in the exhaustive list of exceptions which Hoffmann later filed. Aside from the foregoing, the Director’s conclusions to which Hoffmann now objects are amply supported by the stipulation from the evidence of record in the original hearings. See letter of January 7, 1972, from Allan P. Mackinnon, Esquire, attorney for respondents, to Clerk Quinn, at 2.
The record therefore does not support Hoffmann’s contention that there was a surreptitious display of documents and evidence to the Director by his staff which enabled him to reach the conclusions respecting the three-year period from the close of the original hearing on November 18, 1966 to November 4, 1969, without Hoffmann having an opportunity to rebut the evidence or to offer evidence. And even if the staff attorneys who had collected the documents for use in their case on behalf of the Government had participated in preparing the Director’s order, such participation was not improper in connection with the rule making procedures involved here. See subsection (a) of II., supra. Hoffmann cannot support its assertion of lack of due process on these grounds.
(c) Hoffmann makes further weighty contentions that the proceedings were conducted without observance of procedure required by law and without due process of law. These contentions must be stated along with what we deem to be the law applicable thereto.
As we pointed out in our earlier opinion, § 706(d)(2) of the Federal Food, Drug and Cosmetic Act, 21 U.S.C. § 376(d)(2), provides that “any report, recommendations, underlying data, and reasons certified to the Secretary by an advisory committee . . . shall be made a part of the record of any hearing if relevant and material, subject to the provisions of section 7 (c) of the Administrative Procedure Act.” 464 F.2d 1068, 1069. The casual refusal of the Hearing Examiner to admit this material and the strong objection of the Government to making it part of the record seems without justification and we deem it to be totally unacceptable as a principle of law.
The Order, 21 C.F.R., Part 166, commencing the present proceedings regarding Librium and Valium, headed “Depressant and Stimulant Drugs; Proposed listing of Additional Drugs Subject to Control” states: “The Commissioner of Food and Drugs proposes, on the basis of his investigations and recommendations of an advisory committee appointed pursuant to section 511(g) (1) of the Federal Food, Drug, and Cosmetic Act, that the drugs set forth below be listed as depressant or stimulant drugs within the meaning of section 201 (v) of the Act. Therefore, pursuant to the provisions of the Federal Food, Drug, and Cosmetic Act (secs. 201 (v), 511, 701, 52 Stat. 1055, as amended, 79 Stat. 227 et seq.; 21 U.S.C. 321 (v), 360a, 371) and under the authority delegated by the Secretary of Health, Education, and Welfare to the Commissioner (21 CFR 2.90), it is proposed that Part 166 be amended by adding thereto § 166.-3(b) and (c), as follows: § 166.3 Listing of drugs defined in section 201 (v) of the act.
* *****
“(e) The Commissioner has investigated and designates all drugs, unless exempted by regulations in this part, containing any amount of the following substances as having a potential for abuse because of their:
“(1) Depressant effect on the central nervous system:
Established Name Some trade and other names
Chloral hydrate Chloral.
Chlordiazepoxide and its salts Librium.
Diazepam Valium.
Ethchlorvynol Placidyl.
Ethinamate Valmid.
Glutethimide Doriden.
Meprobamate Miltown, Equanil, Meprotabs.
Methyprylon Noludar.
Paraldehyde
“All ■ interested persons are invited to submit their views in writing regarding the proposal published herein.” (Emphasis added.)
At a pre-hearing conference of August 1, 1966, counsel for the petitioner stated to Examiner Buttle:
“Mr. Finney: I called to the attention of the presiding officer that in the order, the original order, listing these drugs, which I believe is the General Exhibit A, the Commissioner of Food and Drug recited as follows: ‘The Commissioner of Food and Drugs proposes, on the basis of his investigations and the recommendations of an advisory committee appointed pursuant to section 511(g)(1) of the Federal Food, Drug and Cosmetic Act, that the drugs set forth below be listed as depressant or stimulant drugs within the meaning of Section 201 (v) of the act’ [sic].
“In view of the fact that an advisory committee was utilized in this case under a specific section of the statute and the regulation we would like to move that the presiding officer require the Government to furnish us data as to that advisory committee.
“Specifically, we would like to have all the materials, information and data relevant to the listing of Librium and Valium as drugs having a potential for abuse, which was furnished to the advisory committee for its consideration or used by the advisory committee in its deliberations.
“Secondly, we would like to have the minutes of the advisory committee’s deliberations.
“Third, we would like to have a copy of the report of the advisory committee.
“Fourth, we would like to have any memoranda or other recommendations from the Bureau of Medicine to the Commissioner relative to the report of the advisory committee or the recommendations of the Bureau as to the reasons for the inclusions of Librium and Valium in the list of drugs having a potential for abuse.
“I would point out to the presiding officer that the section of the regulations which deals with the use of an advisory committee makes the delivery of these materials automatic. In the ease-where the original proposal for a rule comes from a party other than the Commissioner and he then elects to resort to an advisory committee then the regulation is very specific as to copies of all these documents being given to the person requesting them.
“In the case of an advisory committee that is appointed by the Commissioner of Food and Drug other than on the request of a party, the same automatic requirement does not exist in the regulations.
“However, there is this provision with respect to the Advisory Committee's report and the proper form of the Advisory Committee’s report. The regulation states, in Section 166.19(b)(3): ‘The [sic] Chairman shall certify to the Commissioner the report and recommendations of the Committee, including any minority report, together with all the underlying data and a statement of the reasons or basis for the recommendations. The report will include copies of all material considered by the Committee except that in the case of scientific literature readily available in scientific libraries proper reference may be made to it instead of furnishing actual copies.’
“This is the section that relates to the nature and the form of the Advisory Committee Report which is applicable in any case, whether the appointment of the committee was at the request of a party or at the voluntary election of the Commissioner.
“Our reason for requesting that is this: We are seeking and have sought informally, and unsuccessfully, from the Government for some time to get some factual information as to what were the considerations, what were the data, what was the rationale, on which these drugs were included in this list. It appears to us the best and most concise source of that would be, what did the Government deliver to the Advisory Committee, what did the Advisory Committee do about it in their deliberations, and what did they say about it in their report to the Commissioner?
‘‘We feel that having elected to use this procedure, and having then elected to go to hearing on our objections we are entitled to have that information.”
The following then ensued:
“Examiner Buttle: How about this?
“Mr. Phelps [counsel for the respondents] : We strenuously oppose any motion to lay bare the government’s files relating to this. I think these data, reports, minutes, and memoranda would be privileged matter. The Commissioner made his finding alone, based on recommendations given to him.
“True, he did review these reports.
“Examiner Buttle: How about counsel’s statement to the effect that they are entitled to them as a matter of course? Is there anything to that?
“Mr. Phelps: They are not entitled to them as a matter of course, because it is privileged matter.
“Examiner Buttle: Well, I do not see why respondents need them in this instance, because I have indicated that I am going to allow them to offer, and I will receive, evidence in accordance with the theory of their case, which would mean that I will have evidence before me, complete evidence before me, which will involve the respondent’s construction of the legislation, and rules issued under it for control.
“Since I am receiving such evidence and have indicated on the record that I intend to do so, I see no point in your having this information.
“What point is there for it?
“I am going to look at your whole case, as a matter of fact, completely in accordance with your theory, completely in accordance with what you say is what Congress meant when it passed the legislation it did pass. So what difference does it make what the Advisory Committee recommended, when now you are adjudicating the matter and we are going to have a complete report in addition to what the Advisory Committee considered ? What difference does it make what the Committee or Commissioner considered, insofar as this hearing is concerned?
“Mr. Finney: May I inquire whether the Presiding Examiner would feel the same way if we made a second request to be supplied only with a copy of the report of the Advisory Committee ?
“Examiner Buttle: What about the report of the Advisory Committee ?
“Mr. Phelps: We would oppose that also. I would have to look at that myself. I do not recall it, exactly.
“Examiner Buttle: Would you look into it?
“Mr. Phelps: I will.
“Examiner Buttle: If you feel free to do it voluntarily, I am anxious that you be as cooperative as you can.
“Mr. Phelps: Yes, sir.
“Examiner Buttle: But I am afraid if we get into all the underlying data with regard to wha<t the Advisory Committee considered it will merely confuse the issues that I’m going to consider.
“I am allowing you to adduce the entire theory of your case. I think it is only fair that I should. I do not see how those documents are necessary. But they can look at the report, and perhaps you can get together on that.
“Mr. Phelps: That could be one of the things we will discuss with them when we get together.
“Examiner Buttle: Yes. Discuss that between now and Friday.
“So your application is denied in that respect, for the reasons I indicated.
“Mr. Finney: Just in order that neither the Presiding Officer nor the Government’s counsel be under any misapprehension in this matter, because I do not want to induce their cooperation on the basis of any misunderstanding of our feeling about it, I would like to advise the Government and the Presiding Officer at this time that — based on what investigation we can make, we think in this case the Government purported to use an Advisory Committee and totally departed from its own regulations as to how that Advisory Committee should function, and the kind of documents that that Advisory Committee would provide to the Government.”
There is nothing in the record to suggest that Hearing Examiner Buttle examined the Shideman report or its underlying exhibits. In fact, a fair reading of the colloquy between him and counsel indicates that he did not read or examine the report and its underlying material.
Two statutes are involved.
21 U.S.C. § 874 provides: “The Attorney General may from time to time appoint committees to advise him with respect to preventing and controlling the abuse of controlled substances. ”
21 U.S.C. § 376(d)(2) provides: “[A]ny report, recommendations, underlying data, and reasons certified to the Secretary by an advisory committee appointed pursuant to subparagraph (D) of the subsection (b)(5) of this section, shall be made a part of the record of any hearing if relevant and material, subject to the provisions of section 1006(c) of Title 5. The advisory committee shall designate a member to appear and testify at any such hearing with respect to the report and recommendations of such committee upon request of the Secretary, the petitioner, or the officer conducting the hearing, but this shall not preclude any other member of the advisory committee from appearing and testifying at such hearing;
Despite the express provisions of the statutes referred to, the Hearing Examiner, counsel for the Department objecting to the admission of the report and its underlying material, refused to have them produced for the examination of the petitioner, first on the ground that the material was “confidential” and later on the ground that production would be useless. At long last, on July 10, 1972, pursuant to our direction, the report was produced and is attached to this opinion as Appendix “B”. The report in substance is merely a recommendation that certain drugs, including Librium and Valium, should be included in “the regulations implementing the drug abuse law” because, allegedly they have a “potential for abuse because of their depressant effect on the central nervous system . . . ” Without the underlying material the report was informa-tionally useless and the original material apparently was lost. However, to make a long and tortuous story short, the underlying material of the Shideman report has now been made available and stipulated into this record for the sole purpose of determining whether Hoff-mann was prejudiced by the failure of the Hearing Examiner to permit examination of the report and the underlying material on August 1, 1966. This issue has been briefed and the last memorandum, that of the respondents, was filed in this court on January 2, 1973. We are, therefore, able at long last to dispose of this case.
Hoffmann is very critical of the Shideman report and its underlying data, but nonetheless Hoffmann’s memorandum of December 12, 1972, respecting the report goes far afield. On the other hand, we must confess ourselves surprised as does Hoffmann by the paucity of supporting material for the report. It is also the case that the seven-man advisory committee met for only two days and considered Librium and Valium among many other drugs as hereinbefore set out in this opinion. See Order, 21 C.F.R., Part 166, supra,. The minutes of the meetings are indeed scanty and the material submitted by the' Executive Secretary, Dr. Cyrus H. Maxwell, of the FDA staff, which contains “background material” has little bearing on whether or not Librium or Valium should be listed. The first memorandum from Dr. Maxwell also submitted an agenda for the committee’s scheduled two-day meeting on December 27-28, 1965, and the data on individual drugs submitted to the committee for its consideration were contained in five exhibits attached to this agenda and dealt briefly with each drug to be considered by the committee. A subsequent memorandum dated December 13, 1965, from Dr. Maxwell distributed to the committee an index to three of these exhibits and brief supplements to two of them, together with the FDA’s data on the drugs to be considered. The minutes do not disclose the amount of time which was devoted by the committee to the consideration of each individual drug. Hoffmann insists that it is “obvious that the committee could not have devoted more than minutes to the discussion of each of the 18 drugs which they recommended be regulated, the 8 drugs which they recommended not be regulated, and the 30 drugs which they apparently considered but on which they deferred decision and asked for further information.” The committee’s report consists of a one-page memorandum, a copy of which accompanies this opinion and is marked Appendix “B”.
These criticisms, however, are beside the point for it was not incumbent upon the Commissioner even to have appointed a committee or that the form of its report should be perfect. However, having embarked upon the report its contents are material insofar as their non-disclosure affected the fairness of the hearing and prejudiced Hoffmann’s ease. In this connection, some very troublesome items appear. There were three documents in the report which, if they had been put before the Hearing Examiner and developed fully (and surely Hoffmann' would have called the Examiner’s attention most vigorously to them) might have persuaded the Examiner to recommend that the drugs not be listed, thereby affecting the final order of the Director. The facts concerning the first of these are as follows: A senior member of FDA’s Medical Staff, Dr. Dorothy S. Dobbs, submitted a report to the advisory committee dated August 9, 1965, concerning Librium. In the final paragraph of her report, Dr. Dobbs stated: “It is my conclusion, however, based entirely on the information described above, that evidence of abuse of this drug is minimal. It is equally clear that information from other sources may be quite different.” Surely Dr. Dobbs would have been an excellent witness for Hoffmann in the proceedings and we cannot assume Hoffmann would not have called her to testify in respect to her “minimal” conclusion. It would have been possible to show, according to Hoffmann, that Dr. Dobbs reviewed the volumes of “NDA 12-249”, the drug application filed covering Librium, and the “130.35B Report” as to adverse reactions of Librium. These documents could have enhanced the weight of her testimony but we do not have them before us. Dr. Dobbs was not called as a witness. Had Hoffmann known of her report and its conclusion so favorable to Hoffmann, one might well conclude that petitioner would have called her as a witness. The second item relates to the memorandum of Dr. N. N. Alberstadt of November 22, 1965, concerning Valium. This was addressed to Mr. Julius Hauser, Executive Officer, and is as follows: “The evidence gathered from the scientific literature and from reports recently submitted by the field districts is not sufficient to support a finding that diazepam has a potential for abuse because of its depressant effect on the central nervous system. Additional evidence may accrue in the future, however, so that such a finding can be supported.” What we have said about Dr. Dobbs’ report is equally applicable to that of Dr. Alberstadt. Had Hoffmann known of Dr. Alberstadt’s report and its conclusions favorable to Hoffmann, one might well conclude that Hoffmann would have called him as a witness. It should be pointed out that Dr. Alberstadt had the final responsibility for making the recommendation of the Division of Medical Review to the Medical Director and had access to all of the reports which had been collected by the Bureau of Medicine from FDA Field Offices. Certainly Hoffmann was entitled to have explored Dr. Alberstadt’s conclusions, and the basis for those conclusions. Third, and this seems to us to be of particular importance, the Medical Director, Dr. Joseph F. Sadusk, Director of the Bureau of Medicine, in a memorandum dated November 29, 1965, addressed to the Commissioner respecting the Drug Abuse Control Amendments of 1965, did not include Valium among the drugs that should be listed albeit he did include Librium. Dr. Sadusk’s memorandum and its contents were of course, not known to Hoffmann, and again, Dr. Sadusk would have been an excellent witness for the petitioner.
Our next reference must be to the Shannon and Yolles reports, Dr. James A. Shannon, Director of National Institute of Health, addressed to the Surgeon General, Public Health Service, a report dated July 1, 1965, which listed “a number of agents which [our staff] believe should be considered by the FDA for the list of drugs to be controlled.” There was also a memorandum from Dr. Stanley F. Yolles, Director of the National Institute of Mental Health, addressed to the Surgeon General, dated July 25, 1965, elaborating on the basis for recommending consideration of particular drugs. They are set out in the footnotes. Respecting the Shannon and Yolles reports, Hoffmann states in its final memorandum: “Perhaps the most significant documents from the standpoint of Petitioner’s ability to prepare its own case, as well as to conduct effective cross-examination, in the administrative hearing were two internal memo-randa of the Public Health Service which were forwarded to the FDA by the Surgeon General and furnished to the Advisory Committee as Exhibit E to the agenda. The first was a memorandum from Dr. James A. Shannon, the Director of the National Institute of Health, to the Surgeon General, dated July 1, 1965, listing ‘a number of agents which [our staff believes] should be considered by the FDA for the list of drugs to be controlled.’ The second was a memorandum from Dr. Stanley F. Yolles, the Director of the National Institute of Mental Health, to the Surgeon General, dated July 25, 1965, elaborating on the basis for recommending consideration of particular drugs. These memo-randa would have alerted Petitioner to the theory upon which the Government later contended that Librium and Valium had a potential for abuse- — a theory which, because these documents were not available, Petitioner was able to divine only after the hearing. In fact, the theory was not coherently stated until the testimony of Dr. Harris Isbell, the Government’s twenty-fifth witness, who was not called until August 29, 1966, and was not fully developed until the testimony of Dr. Edward F. Domino, the Government’s rebuttal witness, who was not called until October 26, 1966, after Petitioner had completed its ease. Dr. Shannon’s memorandum indicated the criteria which NIH had used in suggesting drugs to be considered for listing. It stated: ‘Our nominations fulfill one or more of the following criteria: (1) Clinical evidence of compulsive use; (2) evidence that physical dependence will develop with chronic use; and (3) evidence that the agent has a basic mode of action that is similar, if not identical, to agents that have been clearly demonstrated to produce physical dependence.’ ”
Hoffmann’s brief goes on to assert: “Knowing that there was no clinical evidence of compulsive use, and that the basic mode of action of Librium and Valium had been scientifically demonstrated to be quite different from those agents which had been abused, Petitioner’s cross-examinations and preparations would have been immediately focused on the apparent belief that physical dependence on these drugs ‘will develop with chronic use.’ For example, since the only instances of physical dependence on Librium were the patients in Dr. Hollis-ter's experiment, Petitioner would have been better able to develop by cross-examination and direct evidence the lack of relevance of this experiment to an assessment of abuse potential. That it could have done so in the original hearing is best illustrated by Dr. Hollister’s own testimony in the supplemental hearing.
“Equally useful in anticipating the Government’s theory and preparing Petitioner’s case would have been the memorandum of Dr. Yolles. It would have given Petitioner its first notice, prior to Dr. Deneau’s appearance as a witness, that the Government would argue for the listing of ‘all [sedative compounds] which have been shown by Dr. Gerald Deneau ... to effectively replace barbiturates and prevent withdrawal symptoms in dogs made physiologically dependent upon barbiturates.’ It also would have provided the conclusive rebuttal to the use of this standard, because the memorandum points out that other sedatives not proposed for control could also be expected to suppress the barbiturate abstinence syndrome, ‘since bromides are the only non-phenothiazine sedatives tested, to date, which have failed to suppress this syndrome.’ Since this test would result in regulation of practically all sedatives, it runs directly counter to the intention of the Drug Abuse Amendments, as clearly expressed by Commissioner Larrick in his testimony before the House committee: ‘Not every drug that would affect the central nervous system [e. g., every sedative] would come under this bill. It would have to not only affect the nervous system, but be a drug that is sought for non-medical purposes to produce these escapes from reality.’ ” (Star note omitted).
An examination of the record shows that Hoffmann makes some rather extravagant claims as to the assistance which the possession of the reports of Drs. Shannon and Yolles would have afforded it, but without burdening this already over-long opinion with the details of these claims it is sufficient to say that in our view Hoffmann would have been assisted in the preparation of its case had these reports been before it.
As to what effect the inclusion of this report and its supporting material would have had upon the Hearing Examiner and the Director in the formulation of his Final Order, one can only surmise. It seems clear from the record that the report and its material were never examined by the Hearing Examiner or by the Director. Some of its contents were potently in favor of Hoffmann’s position and there can be no doubt that there would have been substantial assistance to Hoffmann in the preparation of its case had the entire Shideman report and its underlying documents been made available to it when requested at the pre-trial proceeding. Accordingly, we deem the nondisclosure to be so egregious as to have tainted the entire procedure.
As we said in our previous opinion, 464 F.2d at 1072, “The objection of Hoffmann goes to the fairness of the hearing, and it should be noted that the denial of somewhat analogous reports have been treated as a lack of procedural due process even where the reports have not been mandatorily required by statute.” In support of our position we cited Gonzales v. United States, 348 U.S. 407, 75 S.Ct. 409, 99 L.Ed. 467 (1955) ; United States v. Cabbage, 430 F.2d 1037 (6 Cir. 1970); and United States v. Owen, 415 F.2d 383 (8 Cir. 1969).
The listing action set out in the Director’s Final Order will be vacated and set aside.
APPENDIX “A”
CHRONOLOGY OF PERTINENT EVENTS RELATING TO PROCEEDINGS TO DESIGNATE LIBRIUM AND VALIUM AS DRUGS SUBJECT TO CONTROL
July 15, 1965 — Drug Abuse Control Amendments of 1965 enacted into law. [Act of July 15, 1965, Pub.L. No. 89-74, 79 Stat. 226]
January 18, 1966 — Commissioner of Food and Drugs published in the Federal Register a proposal to amend Part 166 of the regulations [21 C.F. R. Part 166] under the Federal Food, Drug, and Cosmetic Act by listing Librium and Valium under Section 166.-3(c)(1) as “depressant or stimulant” drugs having a potential for abuse because of their depressant effect on the central nervous system. [31 Fed.Reg. 565]
January 27, 1966 — Commissioner published in the Federal Register a final order amending regulations under the Act to add a new Part 166 dealing with depressant and stimulant drugs and containing basic definitions and interpretive regulations. [31 Fed. Reg. 1071]
February 17, 1966 — -Respondent Hoff-mann-LaRoche Inc. (hereinafter “Roche”), manufacturer and distributor of Librium and Valium, submitted its comments on the proposed listing of the two drugs.
March 19, 1966 — Commissioner published in the Federal Register the order proposed on January 18, 1966, and provided that persons adversely affected might file written objections within thirty days. [31 Fed.Reg. 5679]
April 18, 1966 — Roche filed timely objections to the order of March 19, 1966, asserting that the listing of the two drugs was not justified on the basis of experience and would be contrary to the public interest.
May 17, 1966 — Commissioner published in the Federal Register an order and notice stating the effectiveness of the prior order with respect to Librium and Valium, finding that Roche’s objections stated reasonable grounds for a hearing, specifying the issues, and setting the matter for hearing. [31 Fed.Reg. 7174]
July 19, 1966 — Commissioner published in the Federal Register an order and notice designating a new Hearing Examiner. [31 Fed.Reg. 9725]
August 1, 1966 — Pre-hearing conference held.
August "5, 1966 — Second pre-hearing conference held.
August 8 to November 18, 1966 — Hearings and conferences held. [During this period there were forty-five days of hearings and conferences, the transcript of which covers 5,090 pages; thirty-four witnesses were called and forty-six articles or extracts from the medical literature were introduced by the Government; forty-three witnesses were called and fifty-five articles or extracts from the medical literature were introduced by the Respondent.]
January 31, 1967 — Roche submitted Respondent’s Proposed Findings of Fact and Proposed Conclusions of Law, accompanied by a Brief of Respondent in Support of Proposed Findings of Fact and Proposed Conclusions of Law.
February 9, 1967 — Roche submitted Respondent’s Supplemental Brief in Reply.
February 28, 1967 — Oral argument held before Hearing Examiner.
April 7, 1967 — Hearing Examiner issued Report Including Recommended Findings and Conclusions.
April 20, 1967 — Roche filed Motion to Disqualify Assistant General Counsel, Food and Drug Division, U. S. Department of Health, Education, and Welfare, seeking to prevent said counsel from participating or advising in the formulation of any tentative order, or in the decision on any motion in the case.
April 28, 1967 — Commissioner denied motion filed on April 20, 1967.
May 4, 1967 — Commissioner transmitted by letter to Roche the order denying the motion filed on April 28, 1967.
December 6, 1967 — Commissioner published in the Federal Register a final order listing Meprobamate as a drug subject to control. [32 Fed.Reg. 17473]
February 7, 1968 — President of the United States submitted to Congress Reorganization Plan No. 1 of 1968, transferring to the Department of Justice the functions of the Bureau of Narcotics and the Bureau of Drug Abuse Control. [33 Fed.Reg. 5611]
April 3, 1968 — Conference held between Commissioner and attorney for Roche.
April 8, 1968 — Reorganization Plan No. 1 of 1968 became effective.
May 21, 1969 — Director of the Bureau of Narcotics and Dangerous Drugs, U. S. Department of Justice, published in the Federal Register his Proposed Findings of Fact and Conclusions and Tentative Order, proposing to list Librium and Valium as drugs subject to control. [34 Fed.Reg. 7968]
August 19, 1969 — Roche filed Exceptions and Brief of Respondent, relating to the proposed order of May 21, 1969.
October 28, 1969 — Director published in the Federal Register a Notice of Oral Argument on Exceptions to Tentative Order Placing Librium and Valium under Control.
November 4, 1969 — United States Court of Appeals for the Fourth Circuit issued its decision in Carter-Wallaee, Inc. v. Gardner, 417 F.2d 1086 (4th Cir. 1969).
November 5, 1969 — Oral argument held before Director.
February 27, 1970 — Further conference held before Director.
April 1, 1970 — Counsel signed Joint Recommendation of the Bureau of Narcotics and Dangerous Drugs and Hoff-mann-LaRoche Inc., in the Matter of Listing Librium and Valium as Drugs Subject to Control.
April 8, 1970 — -Director published in the Federal Register a Notice of Supplemental Hearing, announcing that the hearing was to receive evidence bearing on the use of Librium and Valium in conjunction with, or related to, the abuse of other drugs, including rebuttal evidence from Roche. [35 Fed. Reg. 5695]
April 13, 1970 — Pre-hearing conference held.
April 22, to June 15, 1970 — Supplemental hearings and Conferences held [During this period there were fourteen days of hearings and conferences, the transcript of which covers 938 pages; six witnesses were called by the Government; eighteen witnesses were called and four articles from the medical literature were introduced by the Respondent.]
July 6, 1970 — Post-hearing conference held.
September 11, 1970 — Roche submitted Supplemental Brief of Respondent, accompanied by Respondent’s Proposed Supplemental Findings of Fact and Proposed Conclusions of Law.
September 21, 22, and 28, 1970 — Oral arguments held before Hearing Examiner on proposed findings of fact.
October 27, 1970 — Comprehensive Drug Abuse Prevention and Control Act of 1970 enacted into law. [Act of October 27, 1970, Pub.L.No. 91-513, 84 Stat. 1236]
November 6, 1970 — Hearing Examiner submitted his Supplemental Report of Findings and Conclusions Re Potential for Abuse of Librium and Valium Used Conjunctively with Other Drugs.
November 9, 1970 — Roche filed Motion to Disqualify Counsel, Bureau of Narcotics and Dangerous Drugs, seeking to prevent said counsel from participating or advising in the formulation of any tentative order, or in the decision on any motion, in this case.
November 17, 1970 — Director denied motion filed on November 9, 1970.
November 24, 1970 — Director published in the Federal Register his Proposed Supplemental Findings of Fact, relating to alleged use of Librium or Valium in conjunction with, or related to, the abuse of other drugs. [35 Fed. Reg. 17998]
January 6, 1971 — Roche filed Exceptions of Respondent to Proposed Supplemental Findings of Fact, including request for oral argument before the Director.
January 13, 1970 — Acting Director denied request for oral argument filed on January 6, 1971.
February 6, 1971 — Director published in the Federal Register a Final Order, Findings of Fact and Conclusions of Law, to become effective on May 7, 1971, listing Librium and Valium as drugs subject to control. [36 Fed. Reg. 2555]
APPENDIX “B”
UNITED STATES GOVERNMENT
Memorandum,
TO: DR. JOSEPH F. SADUSK, JR. MEDICAL DIRECTOR
FROM: Dr. Frederick F. Shideman, Chairman Advisory Committee
SUBJECT: Abuse of Depressant and Stimulant Drugs
After due deliberation it is the unanimous opinion of this committee that there is sufficient evidence at this time to support a finding of “potential for abuse” with respect to the drugs listed below. Accordingly, it is our recommendation that such drugs be included in the regulations implementing the drug abuse law.
I. Drugs having a potential for abuse because of their depressant effect on the central nervous system:
glutethimide (Doriden) chlordiazepoxide (Librium) meprobamate (Miltown, Equan-il, etc.) ethchlorvynol (Placidyl) chloral hydrate diazepam (Valium) ethinamate (Valmid) methyprylon (Noludar) paraldehyde
II. Drugs having a potential for abuse because of their stimulant effect on the central nervous system. In addition, these drugs may also be designated as habit forming because of their stimulant effect on the central nervous system.
“d” and “dl” methamphetamine hydrochloride phenmetrazine hydrochlorade (Preludin)
III. Drugs having a potential for abuse because of their hallucinatory effect:
d-lysergic acid diethylamide
(LSD-25)
peyote
dimethyltryptamine (DMI)
psilocyn
psilocybin
DEPARTMENT OF HEALTH, EDUCATION AND WELFARE
Exhibit No.....................
Hearing ........................
Offered by:.....................
Date .........................
Reporter ..............'.........
We reproduce the Memorandum in the form in which it was submitted to us. There are imperfections in the Memorandum but we think that it is sufficiently clear to demonstrate the report of which it is a copy.
. Cited in Hoffmann’s Appendix, Vol. I, at 391 as “February 6, 1971” and “35 Fed. Reg.”
. Section 201 (v) of the 1965 Amendments, 21 U.S.C. § 321(v) (1965), provided in part as follows: “The term ‘depressant or stimulant drug’ means — -(1) any drug which contains any quantity of (A) bar-bituric aoid * * * ; (2) any drug which contains any quantity of (A) amphetamine * * *; (3) any drug which contains any quantity of a substance which the Secretary, after investigation, has found to have, and by regulation designates as having, a potential for abuse because of its depressant or stimulant effect on the central nervous system * *
The provisions of the 1970 Act are not markedly different in respect to the issues before us from the 1965 Act. Section 102 (9) (D) defines a depressant or stimulant drug as: “any drug which contains any quantity of a substance which the Attorney General, after investigation, has found to have, and by regulation designated as having, a potential for abuse because of its depressant or stimulant effect on the central nervous system or its hallucinogenic effect.” 21 U.S.C. § 802(9) (D) (1970).
. See H.R.Rep.No.130, 89th Gong., 1st Sess. 13 (1965), stating in part: “The committee considered the advisability of specifically designating meprobamate, glutethimide, ethinamate, ethehlorvynol, methyprylon, and chlordiazepoxide as ‘depressant or stimulant drugs.’ It was decided that this should not be done because the Secretary of Health, Education, and Welfare will, under the provisions of proposed section 201 (v) (3) of the Federal Food, Drug, and Cosmetic Act, consider designating these drugs as ‘depressant or stimulant drugs’ and that it would be inadvisable to single out these drugs while leaving out others having substantially similar abuse potentials. The committee expects the Secretary to take early action with respect to the consideration of the listing of these six drugs. (Emphasis added).
. Cited in Hoffmann’s appendices as “January 18, 1966.”
. Cited in Hoffmann’s appendices as “May 17, 1966.” '
. See note 1, supra.
. Order of April 20, 1971.
. The record in this case is large. Without counting exhibits the record exceeds 10,000 pages, much of which is printed. The exhibits contain several hundred printed pages. The task of examining this very large record has been made more difficult by the fact that many of the references in Hoffmann’s brief have been paginated to the transcripts, not paginated to the appendices, which consist of four large volumes, not counting a large volume of exhibits, and other pertinent materials.
. Note 7, which immediately follows the word “community” in Judge Butzner’s opinion, refers again to the Final Report of the President’s Advisory Commission on Narcotics and Drug Abuse.
. 36 Fed.Reg. 2555, 2560-61 (1971).
. 36 Fed.Reg., at 2555-56.
. Findings 34 and 35, 36 Fed.Reg., at 2558, we believe may be deemed to be generally illustrative of the close relationship of the effects of the respective drugs:
“34. Dr. John G. Lofft, a psychiatrist and specialist in the treatment of alcoholism and allied addictions, testified that the abstinence syndrome associated with Librium and Valium withdrawal compares to that experienced after abrupt withdrawal from barbiturates (Tr. 550). It is characterized in its mildest form by insomnia and increased anxiety (Tr. 548-49). AVhen the patient has been taking elevated doses for long periods of time the withdrawal syndrome is marked by restlessness, tremulousness, muscle pains, perspiration, hallucinations, and sometimes, although not frequently, convulsive seizures (Tr. 540, 543, 547). The severity of the withdrawal is dependent upon the degree of dependence, and the amount of drug the person has been taking (Tr. 551-52; Jaffe (1965), R-133, p. 289). Librium-Valium withdrawal differs from the barbiturate withdrawal syndrome in that it persists over a longer period of time (Lofft, Tr. 550-51).
“35. The evidence also indicates that those individuals who showed signs of Librium or Valium dependence usually had experienced difficulty with similar drugs before — most often alcohol (Lofft, Tr. 553; Evans, Tr. 820; Uzee, Tr. 905; Chambers, Tr. 1626-29; Chelton, Tr. 1670, 1674). These ‘dependent personalities’, as they have been characterized, look for chemical solutions to a variety of problems. They will reduce a dependency on alcohol by moving to a different but related dependency (Lofft, Tr. 552-53). Sometimes the pattern of dependency is multiple in nature, e. g., Librium and alcohol together, Librium and a barbiturate, etc. (Lofft, Tr. 536; Evans, Tr. 819-20; Uzee, Tr. 907; Isbell, Tr. 1558; Chambers, Tr. 1632; Chelton, Tr. 1671; Williams, Tr. 1741).”
See further Findings of Fact 59 to 63, inclusive, 36 Fed.Reg., at 2560.
See also Conclusions of Law 5 to 7, inclusive, 36 Fed.Reg., at 2561.
. The proceedings were conducted on behalf of the Bureau by three attorneys, one of which was the Chief Deputy Counsel and the other two were of the Staff of the Chief Counsel. Hoffmann moved to disqualify these attorneys on November 9, 1970, seeking to prevent them from participating or advising the formulation of any tentativo order or in the decision of any motions. See Appendix to Petitioner’s brief at 293. The Director denied this request and the counsel named in the brief continued in the case. Attached to this opinion as Appendix “A” is a chronology of the pertinent events relating to the proceedings at bar which may be of help in understanding what was before the Bureau and is now before this court.
. Davis, Administrative Law Treatise, 1970 Supplement, p. 443.
. The “Joint Recommendation” is in effect a stipulation and is binding on both the parties and the Commissioner. Hack-feld & Co. v. United States, 197 U.S. 442, 25 S.Ct. 456, 49 L.Ed. 826 (1905) ; Osborne v. United States, 351 F.2d 111 (8 Cir. 1965) ; Burstein v. United States, 232 F.2d 19 (8 Cir. 1956) ; United States v. Kahriger, 210 F.2d 565 (3 Cir. 1954).
, The word used in the Petitioner’s brief is “recommended” but it is the understanding of the court that the Joint Recommendation is in law a stipulation which was binding upon the parties and upon the Director.
. Appendix, Yol. I, pp. 391-392.
. Petitioner’s Brief, p. 97.
. Appendix, Vol. I, 309, 310, 318-387.
. “. . . [Specifically this evidence is as follows:
Conclusions (a) : Evidence concerning suicides and other deaths in which the drugs played a significant role—
Reference: Finding 51 (App. I p. 407) Spellman Tr. 634-685 Snoddy Tr. 1132-1140 G-99(a-ü), G — 121, G-150, G-157 G-170, G-183, G-190, G-221(a)-(i) G-225B (10), G-226BG), (2), (3), (4) G-241 (G-99v), G-261 (1 case) G-288 (G-99-S), G-289 (G-99E) G-290
Conclusions (b) : Reports of audits of retail drugstores detailing significant shortages which could not be legitimately accounted for—
Reference: Findings 40, 41 (App. I p. 404)
Clevenger Tr. 1796-1863 Ashcraft Tr. 1157-1158, 1517-1519 Witness “X” Tr. 1895-1897 G-268
Conchisions (c) : Police reports showing instances in which the drugs were discovered by police during their investigation of drug and other offenses suggesting use and distribution outside of the legitimate channels—
Reference: Finding 45 (App. I p. 405) Bonder Tr. 754-771, 794-796 Conen, Sheldon Tr. 880-897 G-101, G-112, G-113, G-178, G-193, G-265, G-266, G-270, G-271, G-272”
. It is probable that the inquiry into Librium and Valium was inspired, as also was that into Meprobamate and certain other drugs, by Congress. See Finding of Fact No. 63 of the Final Order of the Director as follows: “The legislative history of the Amendments reflects the expectations of Congress, in enacting this legislation, that Librium and similar tranquilizing drugs, would be expeditiously brought under the control of the Amendments because of their potential for abuse. Testimony taken before the House Committee on Interstate and Foreign Commerce demonstrated the need for bringing Librium under these controls. (House Report No. 130, 89th Congress) This Committee considered the advisability of listing chlordiazepoxide (Librium) among others by name, but decided not to single out this or any other drug. The Committee, however, stated that it expected the Secretary of Health, Education, and Welfare to take early action with respect to the consideration of bringing Librium and other drugs within the controls of the Amendments. A similar expectation was expressed by the Senate Committee on Labor and Public Welfare. (Senate Report No. 337, 89th Congress) (6-228, pp. 2-3; G-229, p. 13; G-230, pp. 24, 33, 38, 43-53, 54-56, 91-92, 101-105, 115-121).” 36 Ped.Reg., at 2560.
We cannot agree, however, with Hoff-mann’s contention that the Congressional Report influenced the Director’s decision. Congress suggested an inquiry which the Bureau of Narcotics and Dangerous Drugs made in due course and by accustomed procedure.
. Tr. 04-71.
. This section is referred to in the answer of file respondents to our order to show cause of March 17, 1972 as to why the report, recommendations and underlying data and reasons certified to the Secretary by the advisory committee should not be made available to the peti- . tioner for examination by it, as 21 U.S.C. § 360a (g)(1). It is presently set out in the Comprehensive Drug Abuse Prevention and Control Act of 1970, 21 U.S.C. § 874.
. In this connection we refer to our Per Curiam opinion in Hoffman-LaRoche, Inc. v. Kleindienst et al., 464 F.2d 1008 (3 Cir. 1972). IVe in effect ordered production of the report and its underlying material. Cf. Environmental Protection Agency, et al., v. Mink et al., 410 U.S. 73, 93 S.Ct. 827, 35 L.Ed.2d 119 (1973). Indeed, the right to examine statements which might have been false or twisted such as an investigator’s testimony is material and is not privileged. See N.L.R.B. v. Capitol Fish Co., 294 F.2d 86S, 872 (5 Cir. 1961). In fact, the respondents do not assert privilege in this court.
A photostatic copy of the report was finally found and is attached to this opinion as Appendix “B”. The report is addressed to Dr. Joseph F. Sadusk, Medical Director, from Dr. Frederick E. Shideman, Chairman, Advisory Committee. Tiie underlying material contained in the Joint Supplemental Appendix filed November 29, 1972 was procured from a member of the advisory committee who had retained possession of the supporting documents.
. In our previous opinion, 464 F.2d 106,8, 1073, we stated: “We do not know, of course, the length of the report of the advisory committee or the amount of data upon which it was based, but we think we can safely assume that it was not inconsiderable.” Our assumption apparently was incorrect.
. Supp.Appendix, at 36.
. See Supp.Appendix, at 45-58.
. There was information from other sources. See this opinion under heading “I.1
.
UNITED STATES GOVERNMENT
Memorandum
Date: July 1, 1965
To: Surgeon General, PHS
From: Director, NIH
Subject: Drug Abuse Control Amendments of 1965
In reference to your memorandum on the same subject to the Bureau Chiefs, dated June 7, members of our staff have identified a number of agents which they believe should be considered by the FDA for the list of drugs to be controlled.
We have applied the following criteria for drugs with amphetamine-like action to be listed under Section 201 (v) (2): (1) Evidence that the drug has been used compulsively; (2) the drug produces sensation and feelings of wellbeing; and (3) chronic abuse of the agent can produce a toxic psychosis. The following agents fulfill one or more of these criteria:
diethylpropion (Tenuate)
methentermine (Wyamine)
methylphenidate (Ritalin)
phenmetrazine (Preludin)
pipradrol (Meratran)
Our nominations for inclusion under Section 201 (v) (3) are listed below and fulfill one or more of the following criteria: (1) Clinical evidence of compulsive use; (2) evidence that physical dependence will develop with chronic use; and (3) evidence that the agent has a basic mode of action that is similar, if not identical, to agents that have been clearly, demonstrated to produce physical dependence,
carisoprodol (Soma)
ehlordiazepoxide (Librium)
diazopam [sic] (Valium)
ethchlorvynol (Placidyl)
ethinamate (Valmid)
glutethimide (Doriden)
meprobamate (Miltown, Equanil, Meprospan, Meprotabs)
methyprylon (Noludar)
We also expect that LSD-25, psilocin, and mescaline will be included on the list of drugs to be regulated. We hope that Papaverine will be exempted from regulation.
Attached is a memorandum from the Director of NIMH setting forth a thoughtful consideration of this problem.
/s/ J. A. SHANNON James A. Shannon, M.D.
Attachment
.
UNITED STATES GOVERNMENT
Memorandum
Date: June 25, 1965
To: The Surgeon General
Through: Director, NIH
From: Director, National Institute of Mental Health, NIH
Subject: Drugs to be included under the Drug Abuse Amendments of 1965
I have reviewed the Drug Abuse Control Amendments and Commissioner Lar-rick’s memorandum to you of May 26, 1965. Before giving a list of drugs, 1 would like to make a few comments about a central issue in all this, namely the definition of “potential for abuse.” If one assumes that all agents with pharma-eological actions similar to those of the barbiturates and amphetamines have a potential for abuse, one arrives at a rather long list of drugs, some of which may rarely, if ever, be abused in practice, although one can conceive that such agents could possibly satisfy the needs of an individual who is dependent upon barbiturates or amphetamines. For example, paraldehyde is occasionally used by desperate alcoholics in lieu of alcohol and could be similarly used by a barbiturate addict. However, its unpleasant odor and taste would probably make it an unlikely choice of such an individual and its liquid form might make it unsuitable for dispensing on a blackmarket basis. Some of the other compounds which could be listed, for example hydroxyphenamate (Listica), are relatively little used in medicine generally. Someone inclined to abuse sedatives might not have heard of such a drug and thus not be likely to seek it out. On the other hand, it is possible that-individuals now abusing barbiturates which they are obtaining illegally might turn to over-the-counter preparations such as Sominex if their illicit supplies of barbiturates are cut off. If the broad range of sedative prescription drugs are to be brought under control, perhaps consideration should be given to the status of the over-the-counter preparations with sedative properties which may be as likely candidates for use in lieu of barbiturates as are nonbarbiturate sedatives available only on prescription.
In addition, the whole question of the availability of bromides on an over-the-counter basis could be re-evaluated, since these agents can be used by individuals who wish to feel sedated and prolonged use can produce a bromide psychosis.
In developing our list of sedative compounds we have included all those which liave been shown by Dr. Gerald Deneau in the Department of Pharmacology at the University of Michigan to effectively replace barbiturates and prevent withdrawal symptoms in dogs made physiologically dependent upon barbiturates. Two drugs meprobamate and glutethimide, have also been shown to produce barbiturate-like addiction in dogs.
In considering amplietamine-like drugs, we have concluded those with amphetamine-like effects in man in which there have been reported cases of psychic dependence and abuse.
Several of the sedative-tranquilizer drugs have also been reported to cause either physiological abstinence syndromes or to be abused for their sedative properties. A detailed list of bibliographic references relating to abuse, dependence and abstinence syndromes or, in the case of the stimulants, drug-induced psychoses, is being prepared by the National Clearinghouse for Mental Health Information and will be transmitted next week.
It should be noted that the major tranquilizers useful in the treatment of schizophrenia, principally the phenothiazine derivatives and the rauwolfia alkaloids, are not included in the listing because these agents are generally found unpleasant by drug-abuse-prone individuals and are not, to my knowledge, subject to abuse.
I have not specifically addressed myself to the preparations which could be considered exempt because they include both drugs with a potential for abuse and other drugs which would be likely to make the abuse of the combination preparation unlikely. However, if Commissioner Larrick would be willing to provide me with a listing of the multitudinous preparations of this type and their constituents, I could attempt to provide opinions concerning the potential for abuse of these specific preparations.
In addition to the barbiturates, the following sedative drugs should certainly be under control since they not only, can prevent barbiturate withdrawal symptoms but also have been reported to cause physical dependence in man; meprobamate (Miltown, Equanil, Meprospan, Meprotabs),; glutethimide (Doriden); ethinamate (Valmid); ethchlorvynol (Placidyl); methyprylon (Noludar), and chlordiaze-poxide (Librium).
In addition the following drugs have been shown to substitute for barbiturates in barbiturate-dependent animals and should probably be under control: chloral hydrate, paraldehyde, carisoprodol (Soma) and bromural.
The following compounds are sedative but have not been tested in dogs: diaze-pam (Valium); hydroxyphenamate (Listica); hydroxyzine (Atarax, Vistaril); phenaglycodol (Ultran).
In my opinion they might also be shown to suppress the barbiturate abstinence syndrome since bromides are the only nonphenothiazine sedatives tested, to date, which have failed to suppress this syndrome.
Abuse of the following stimulants in an amphetamine-like manner has been reported, either in England or the United States: methylphenidate-HCl (Ritalin) and phenmetrazine-HCl (Preludin).
The following compounds have amphetamine-like actions and might possibly be abused; pipradol-HCl (Meratrain) and diethylpropion-HCl (Tenuate).
All non-phenothiazine and non-rauwolfia sedatives or tranquilizers could be considered for inclusion as could all stimulants and anorexegenic agents.
Direct evidence of abuse or dependence in man would be a more restrictive and possibly cleaner basis for making decisions about the inclusion of drugs under control. By this criterion, meprobamate, glutethimide, ethinamate, ethchlorvynoi, methyprylon, chlordiazepoxide, methylphenidate and phenmetrazine should be under control while other sedatives and stimulants should be watched for evidence of abuse.
I have not included any of the hallucinogenic drugs in that list (such as LSD [lysergic acid diethylamide] or psilocybin) since they are investigational new drugs (IND) and therefore are not available on prescription.
I hope the above information is of assistance to Commissioner Larrick and will be helpful to you in preparing your reply.
/s/ Stanley E. Yolles Stanley E. Yolles, M.D.
. See Final Memorandum of Hoffmann, pp. 20-23.
. 21 U.S.C. § 371(f) (3) (1971).
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Robert RUIZ, Plaintiff, v. HAMBURG-AMERICAN LINE, a corporation, et al., Defendant-Third-Party Plaintiff-Appellant, v. JONES STEVEDORING COMPANY, Third-Party Defendant-Appellee.
No. 71-1247.
United States Court of Appeals, Ninth Circuit.
April 23, 1973.
Francis L. Tetreault (argued), William E. Kane, Paul A. Dezurick, Graham & James, San Francisco, Cal., for appellant.
Robert Sikes (argued), Sikes, Pinney & Matthew, North Hollywood, Cal., for appellee.
Before WRIGHT, KILKENNY, and CHOY, Circuit Judges.
EUGENE A. WRIGHT, Circuit Judge:
This was a typical three-party suit arising from an injury to a longshoreman. Ruiz, employed by Jones Steve-doring (Jones), was injured while working on a vessel, the M.V. Koln, owned by Hamburg-American (Hamburg). As a Sieracki seaman, Ruiz sued Hamburg, alleging unseaworthiness of the vessel. Hamburg brought a third-party action seeking indemnity from Jones, alleging (1) that Jones breached his Ryan warranty of workmanlike performance, and (2) that Jones was obligated under an express contractual provision to hold Hamburg harmless against any claim for personal injury arising out of Jones’ work on the vessel.
The two actions were tried together. Ruiz was awarded a favorable verdict, and has since settled his claim against Hamburg. His claim is not before this court. The indemnity action resulted in a jury verdict against Hamburg.
The Hamburg-Jones contract provided indemnity to the shipowner for claims arising from injuries to longshoremen, other than those due to the “sole fault” of Hamburg. Hamburg attempted to prove fault or negligence of Jones as the cause of the accident and its evidence was substantial.
On the final afternoon of a ten-day trial, Jones introduced its defense theory. With circumstantial evidence it attempted to show that members of the ship’s crew had removed a safety device and that this was the sole cause of the injury to Ruiz.
Ruiz, a member of the longshore gang working around Hatch Number 3, was injured when the hatch cover fell on him. It had been stored vertically and had to be lowered and pulled over the empty hatch with a cable. The leading edge fell on Ruiz as he stood on the hatch coaming trying to locate the end of the cable which he was to fasten to the cover.
Jones’ witnesses, produced at the end of the trial, provided some evidence that members of the ship’s crew were near Hatch 3 from 30 to 45 minutes before the accident and that the longshoremen had not worked at that hatch from 5:30 p. m. to 6:45 p. m. The accident occurred shortly after 6:45 p. m.
Sehoder, a superintendent for Jones, testified to a conversation with the ship’s chief officer about 5:45 p. m. The mate had asked if the ship’s crew could close Hatch 3, and Sehoder firmly refused permission, as long as there were longshoremen aboard the vessel. Sehoder added that the mate then spoke in German to a junior, officer who went in the direction of the ship.
On the night of the accident, said Sehoder, the ship’s officers and crew “were very anxious to sail” to avoid possible fog conditions. Another longshoreman testified that, when he left the hatch area at 5:30 p. m., some 3% feet of cable was hanging from the winch platform in the direction of the hatch. Ruiz and others added that, when they arrived later, the cable was hanging much lower and into the hatch opening.
After all parties had rested and before oral argument, counsel for Hamburg moved to reopen and for a continuance, in order that he might bring from Germany to testify crew members who had been aboard the ship on the day of the accident. Counsel claimed surprise because he had been misled by answers to interrogatories which indicated that Jones did not contend that crew members had handled any ship’s gear at Hatch 3. The motions were denied and the trial was concluded with closing arguments.
In argument, counsel for Jones urged repeatedly that Hamburg had failed to call any members of the crew to refute the story of crew involvement as testified to by the longshoremen. Footnote 7 details some of the remarks.
After the adverse jury verdict, Hamburg moved for a new trial on these grounds: (a) surprise, (b) prejudicial misconduct of opposing counsel in oral argument and (c) insufficiency of the evidence to justify the verdict. The trial court denied the motion and we granted leave for it to consider Hamburg’s motion under Civil Rule 60(b) for relief from judgment because of newly discovered evidence, surprise and misrepresentation by Jones.
The trial court denied this motion, finding that Hamburg had not exercised due diligence. From this denial, Hamburg has appealed and its appeal has been consolidated under Rule 3(b) of Federal Rules of Appellate Procedure with the appeal from the denial of motions for directed verdict, judgment n.o. v. and new trial.
In considering motions for a continuance, new trial, and for relief of judgment under Rule 60(b), the trial court is free to exercise its discretion, and its decision will be overturned on appeal only for abuse of that discretion. In States Steamship Co. v. Philippine Airlines, 426 F.2d 803, 804 (9th Cir. 1970), we said:
“Whether the judge misused or abused his discretion, of necessity, depends upon the facts of each case. This court has never attempted to fix guidelines, although a good rule of thumb might be to follow Judge Ma-gruder’s oft-quoted phrase in In Re Josephson, 218 F.2d 174, 182 (1st Cir. 1954), that the exercise of discretion of the trial judge should not be disturbed unless there is ‘a definite and firm conviction that the court below committed a clear error of judgment in the conclusion it reached upon a weighing of the relevant factors.’ ”
DENIAL OF CONTINUANCE
Given the obvious genuine surprise to Hamburg’s counsel when Jones introduced its “crew involvement” defense on the afternoon of the last day of trial, coupled with the misleading nature of Jones’ reply to interrogatory No. 22, it does not seem to us that a request for a continuance was unreasonable. Had the members of this panel been in a position to exercise the discretion reposing in the trial judge, we would have granted the continuance in the interest of justice.
However, we cannot say that the action of the district judge was so unreasonable and arbitrary as to amount to an abuse of his discretion. The trial had already taken ten days, and Hamburg had rested. Further, the record shows no mention by Hamburg’s counsel, in his informal request for a reopening and a continuance, of the length of time it would take to produce the German witnesses. We recognize the desire of the trial judge to conclude expeditiously an already lengthy case. The calendar congestion in the district courts is well known, and we do not wish to discourage conscientious attempts to reduce it. Under these circumstances, therefore, we are unwilling to find an abuse of discretion.
NEW TRIAL BASED UPON SURPRISE, MISREPRESENTATION, AND PREJUDICIAL ARGUMENT BY COUNSEL FOR JONES
The trial court characterized Jones’ replies to the interrogatories of Hamburg as “ambiguous” on the issue of crew involvement. Jones argues that its answer to interrogatory No. 22 was true since, at best, it had only circumstantial evidence of crew involvement. We do not find this distinction between direct and circumstantial evidence compelling. The interpretation of knowledge and information urged by Jones would substantially subvert the purposes underlying the discovery devices of the Federal Rules of Civil Procedure, i. e., “to reduce the amount of litigation, to narrow the issues and to avoid surprises and to promote justice.” Dill Mfg. Co. v. Acme Air Appliance Co., Inc., 2 F.R.D. 151, 153 (E.D.N.Y.1941).
Our analysis of Jones’ replies to Hamburg’s interrogatories leads us to conclude that Jones misrepresented its position. Thus Hamburg was justifiably surprised at trial when a new defense was offered. Some courts have gone so far as to hold that failure to disclose a defense before trial warrants a new trial. See, e. g., Burton v. Weyerhaeuser Timber Co., et al., 1 F.R.D. 571 (D.Ore.1941); Jones v. Pennsylvania R.Co., 35 F.Supp. 1017 (E.D.N.Y.1940).
We need not go so far in our holding that when a party in its answers to interrogatories misleads another party into believing that a defense will not be offered at trial, the later introduction of that defense will support a motion for a new trial. Misleading and evasive answers to interrogatories justify the court’s viewing with suspicion the contentions of the party so answering. See, e. g., Alamo Theatre Co., Inc., et al. v. Loew’s Inc., et al., 22 F.R.D. 42 (N.D.Ill.1958); Zielinski v. Philadelphia Piers, Inc., 139 F.Supp. 408 (E.D.Penn. 1952).
The trial court, finding the answers to the interrogatories merely ambiguous, exercised its discretion in denying the motion for a new trial. In addition to our conclusion that the answers were unequivocal and not ambiguous, we note that counsel for Jones made extensive use in closing argument of the fact that Hamburg failed to call members of the crew in rebuttal.
Counsel even went so far as to intimate, falsely, that prior to the trial Hamburg was aware of the testimony one of Jones’ key witnesses would give. Although generally comment on the failure to call available rebuttal witnesses is proper, under these circumstances, in light of Jones’ misrepresentation in the answers to interrogatories and its incorrect intimation, as noted above, we are convinced that the judgment cannot stand.
The Supreme Court has said that discretion “[w]hen invoked as a guide to judicial action . . . means a sound discretion . . . exercised . with regard to what is right and equitable under the circumstances and the law, and directed by the reason and conscience of the judge to a just result.” Langnes v. Green, 282 U.S. 531, 51 S.Ct. 243, 75 L.Ed. 520 (1931). We are not bound to stay our hand and place our stamp of approval on a result which we deem unjust. Commercial Credit Corp. v. Pepper, et al., 187 F.2d 71 (5th Cir. 1951).
Accordingly, we conclude that the combination of all the errors below, when considered in light of the exceedingly thin evidence in support of the verdict, dictates a conclusion that the trial court abused its discretion in denying the motion for a new trial. We cannot escape the “definite and firm conviction that the court below committed a clear error of judgment.”
The judgment is reversed and the case remanded for a new trial. We deny Hamburg's request that we direct a verdict in its favor, since we are not convinced that “the evidence is such that without weighing the credibility of the witnesses there can be but one reasonable conclusion as to the verdict.” Brady v. Southern R. R., 320 U.S. 476, 479, 64 S.Ct. 232, 234, 88 L.Ed. 239 (1943).
Reversed.
KILKENNY, Circuit Judge
(dissenting) :
Inasmuch as I do not have a definite and firm conviction that the trial judge committed a clear error of judgment in the conclusions which he reached, I would hold that he did not abuse his discretion and would affirm the judgment.
. Seas Shipping Co. v. Sieracki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099 (1946).
. Ryan v. Pan-Atlantic Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956).
. The contract between Hamburg and Jones included the following clause:
The stevedoring company agrees to indemnify and hold harmless the steamship company against any claim or action whatever, which may be made or brought by an employee of the steve-doring company, or any other person or persons, for personal injury or death sustained on or around the company’s vessels arising out of the work of the stevedoring company, excepting where such injury or death is caused solely by the fault of the ship’s officers, crew, or equipment.
. Hamburg claimed Jones was at fault in four respects: (1) in failing to properly inspect the work area; (2) in failing to instruct its longshoremen on the proper operation of the hatch in question; (3) in using an improper work method in closing the hatch; and (4) in failing to close the hatch before commencing to wing in a shoreside boom.
Hamburg’s presentation was highly persuasive. The evidence was undisputed that the longshore gang of which Ruiz was a member was unaware of the type of hatch cover on the No. 3 hatch. The gang boss, Harrison, and the other longshoremen testified that they were operating under the impression that the hatch cover had a leading full lid instead of the leading half that it actually had. Further, it was uncontroverted that Jones had failed to instruct its crew on the proper way to close a hatch with a leading half lid. It was also undisputed that the gang boss did not inspect the working area of the No. 3 hatch prior to attempting to close the hatch.
. 22. Do you, your attorneys or your representatives have knowledge and/or information that any member of the crew of or any officer of the M. V. Koln touched, handled, or in any way worked any of the ship's gear or equipment used to raise and secure and/or lower and secure the Xo. 3 MacGregor hatch cover on said vessel?
A. Xo.
. In denying the motion for relief of judgment, the trial judge placed special emphasis on Jones’ answer to the following interrogatory:
5. State the names, addresses, employers and positions with same of all persons who you, your attorneys or persons acting on your behalf know or believe to have knowledge or information of the facts concerning the injury which is the subject of this action. A. See the answer to Interrogatory No. 1 [which listed the names of 21 longshoremen and Jones’ employees]. In addition, it is believed that officers, crew members, or representatives of [Hamburg] have such knowledge or information.
The trial judge concluded that this answer, coupled with Jones’ reply to Interrogatory No. 9 wherein it contended that the hatch was designed, maintained, and operated by Hamburg in an unsafe manner, constituted notice to Hamburg that Jones considered the issue of crew involvement still very much alive despite its answer to Interrogatory No. 22.
In so finding, the trial court overlooked Jones’ answers to the following interrogatories :
9. With respect to your allegation in your Answer and Counterclaim to Third-Party Complaint that [Hamburg] is barred from any indemnity from you by its conduct or that of its officers, employers or representatives, which was a material breach of the stevedoring contract, please set forth each and every fact upon which you base your allegation.
A. [Hamburg] provided a hatch, hatch coverings, and attendant mechanisms that were not in a condition fit for safe stevedoring of the vessel, particularly at the No. 3 hatch, in that said gear and equipment was defectively designed, maintained, and operated in an unsafe manner, in a way that was not apparent to [Jones] in the course of it’s [sic] stevedoring duties.
10. Please set forth the name, address, position and employer of each and every person you, your attorneys or persons acting on your behalf know or believe to have knowledge of the facts set forth in your answer to interrogatory No. 9.
A. See those persons named in the answer to Interrogatory No. 1.
15. If you contend that the injury which is the subject of this suit was caused solely by the fault of the ship’s officers, crew or equipment, please set forth each and every fact upon which you base your contention.
A. See the answer to Interrogatory No. 9.
16. Please set forth the name, address, position and employer of each and every person you, your attorneys or your representatives know or believe to have knowledge of the facts set forth in your answer to the preceding interrogatory.
A. See tiie answer to Interrogatory No. 1.-
In these answers, Jones specifically disclaimed any “knowledge or belief” that members of the ship’s crew had knowledge that the injury was caused by the ship’s officers, crew or equipment. These answers, and the answer to Interrogatory No. 22, are not made “ambiguous” by a general reference that crew members have “knowledge or information of the facts concerning the injury.” We find instead that by its answers Jones misled Hamburg into believing that the issue of crew involvement was not involved in the suit at the time of the interrogatories.
. We quote at some length portions of counsel’s closing argument:
H? sfc % %
“Anyway, another clue in this is when a party in the trial does not bring in evidence to counter something that is going to come against them. You know, as reasonable people you can certainly infer that, well, either they didn’t have the evidence to bring in or it was not good evidence.
“Now that is a reasonable assumption. All of us are attorneys and supposed to be knowing what we are doing.
* ¡i! * 5ÍÍ *
“But now, let’s go even a step further: When you don’t have eye witnesses, you have something that can be called physical evidence, or it can be called circumstantial evidence. It has all kinds of names, the loudest and strongest evidence in this entire case from my client Jones Stevedoring Company is silence. Silence on the part of the ship owner.
“Now picture this : This case has been going on for almost two years. This ship owner, the HAMBURG AMERICAN LINE, secured the services of Graham and James. They are sued. Let’s just see what their frame of mind might be back in March of 1968. They are sued for a quarter of a million dollars, and they have hatch logs, they obtain them from us, hatch logs as to what went on here.
“As soon as they looked at the hatch logs, any reasonable lawyer or any reasonable office or the HAMBURG AMERICAN LINE themselves would have said immediately, ‘There is a gap here. These longshoremen were not at that place between 5 :30 and 6:45. What did go on at this crucial time? We have got to show that our ship’s crew was not there, so let’s contact the offices immediately, the ship’s crew, run them down, talk to them, find out what happened at that Hatch No. 3. Let’s take their positions if they are not here, let’s get them in here and show' that we were not there.
“Wo have got $250,000 at stake here. Better, yet, we have so many ships coming in here all the time with all these names — just have them come over here, just have one of them, even, the Chief Officer. The expenses wouldn’t make any difference with this type of a lawsuit.
“So who appears for the ship owner here to testify? ‘Yes, I was the mate on duty. I was the boatswain. I was in charge of the deck crew of the vessel. My men did not work the No. 3 and were not up there between 5:30 and 6:45 — and my record is proven.’
“Who is here to say that? Silence.
“Now it seems logical that if you are defending the case, you would have somebody .here. That is the way it appears to me. That is the way I would be defending it, that is either good or bad, but there is silence.
“Who appeared here to say, ‘Well, we were not in a hurry to get away by 7:00 o’clock p. m. We had no reason to. The fog was not coming in. We had no reason to get that hatch closed as soon as possible.’ Who came in and said that? Silence.
* *
“Now why wouldn’t you bring in somebody? As a lawyer, there are only two reasons why, maybe there is only one. If you bring him in, the truth is going to come out — we don’t want him in here, and did you notice that in the record here, in the evidence in this trial, which is all any of us can consider, nowhere has there ever been any excuse in the record made at all why these men were not here. Nothing has been said that they all died or they are all in prison — nothing.
“Now, one other thing, it is sort of like the first reason, T just hate to submit him to cross-examination.’
“Now all our men were in here, you noticed that. He picks out some little thing here and some little thing there that does not fit exactly, some of the longshoremen see things a little differently. If they were all telling precisely the same story you better watch out for this type of thing, but we had them all here, everybody could talk to them, examine them. But I would have loved to have started in on the ship’s officer — but I didn’t have any chance. Why? They were not here.
“Had they been in California or somewhere and I had subpoenaed them, they would be here — but they are not.
“Owning all of the ships, that list that he went through, I am sure that HAMBURG AMERICAN could have had at least one of their mates here to testify. The silence is deafening and you are reasonable people and practical people as to what really goes on in these things.”
|
f2d_478/html/0035-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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UNITED STATES of America, Appellee, v. Nicholas R. FINO et al., Appellants.
Nos. 500, 561 to 566, Docket 72-2017, 72-2054 to 72-2059.
United States Court of Appeals, Second Circuit.
Argued Jan. 26, 1973.
Decided May 1, 1973.
Frederick W. Read, III, U. S. Dept, of Justice, Washington, D. C. (John T. Elfvin, U. S. Atty., Buffalo, N. Y„ Sidney M. Glazer, Dept, of Justice, Washington, D. C., on the brief), for appel-lee.
Peter L. Parrino, Buffalo, N. Y. (Par-rino & Cooper, Buffalo, N. Y., on the brief), for appellants Nicholas R. Fino, Rosalie L. Fino, Joseph M. Giallella, Nicholas Alberti and Anthony J. Tripi.
Joseph D. Bermingham, Jr., Buffalo, N. Y. (Doyle, Diebold & Bermingham, Buffalo, N. Y., on the brief), for appellant Joseph Randazzo,
James P. Renda, Buffalo, N. Y., for appellant Gaetano C. Agro.
Before MOORE, HAYS and FEIN-BERG, Circuit Judges.
HAYS, Circuit Judge:
These are appeals from convictions entered after a trial by jury in the United States District Court for the Western District of New York on charges of conducting a gambling business in violation of 18 U.S.C. § 1955 and of conspiracy to commit that offense in violation of 18 U.S.C. § 371. All the appellants were convicted on the substantive count and all but Agro and Randazzo on the conspiracy count.
Nicholas Fino was sentenced to concurrent terms of three years and to fines totalling $30,000; Rosalie Fino and Agro to two years probation; Gial-lella, Alberti, Randazzo and Tripi to 18 months imprisonment and, in the case of Agro and Tripi, to fines respectively of $5,000 and $10,000.
Most of the relevant facts .are undisputed. Nicholas Fino supervised a large-scale gambling operation in the Buffalo, New York area. The location of the betting office to which “writers” who accepted bets on horse races telephoned their bets changed frequently. At one time it was at the home, of Agro and at a later time at the home of Nicholas Fino. Gialella Tripi and Rosalie Fino took bets over the betting office telephones from the “writers” who reported the bets in code. Fino, Alberti, Tripi and Randazzo from time to time computed the balances in the accounts of the individual “writers.”
Much of the evidence against the appellants consisted of recordings of conversations overheard in the course of court-authorized wiretaps.
The appellants contend (1) that the use of the wiretap evidence was improper in several respects; (2) that 18 U.S. C. § 1955 is unconstitutional; (3) that the court erred in permitting the jury to consider events occurring before the effective date of 18 U.S.C. § 1955; (4) that the court erred in submitting both counts of the indictment to the jury; (5) that the court erred in its charge to the jury by defining the word “conduct” too broadly; and (6) that the convictions of Agro and Randazzo were “contrary to law and against the weight of the evidence.”
(1) The Wiretaps. 1
Appellants’ first contention with respect to the wiretap evidence is that Section 2518 of Title 18, authorizing court-approved wiretaps, is unconstitutional. In United States v. Tortorello, 480 F.2d 764 (2d Cir. 1973) this Court upheld the constitutionality of that statute. In the Tortorello case the court ruled specifically on each of the areas in which these appellants challenge the statute, particularity, notice and duration and found no constitutional defect. See also United States v. Cox, 449 F.2d 679 (10th Cir. 1971), cert. denied, 406 U.S. 934, 92 S.Ct. 1783, 32 L.Ed.2d 136 (1972); United States v. Cox, 462 F.2d 1293 (8th Cir. 1972); United States v. Cafero, 473 F.2d 489 (3d Cir. 1973).
Appellants also argue that § 1955(e) creates an unconstitutional presumption. That section states that if a gambling operation is shown to have had five or more persons involved in conducting it in violation of state law and has operated for two or more days then for the purposes of probable cause for the issuance of warrants, the statutory requirement of a gross daily revenue of $2000 shall be deemed to have been satisfied. We would uphold that presumption for the purposes of probable cause, see United States v. Palmer, 465 F.2d 697, 699 (6th Cir. 1972), cert. denied, 409 U.S. 874, 93 S.Ct. 119, 34 L.Ed.2d 126 (1972), but even without it there was abundant evidence to establish the probable cause required for the issuance of the orders in this case.
Appellants’ argument with respect to probable cause for the issuance of the wiretap orders is not directed at the factual basis for the issuance of these orders. The facts alleged were, as we have said, abundantly sufficient to justify the orders. What appellants seek to attack is the statutory provision that requires “a full and complete statement as to whether or not other investigative procedures have been tried and failed or why they reasonably appear to be unlikely to succeed if tried or to be too dangerous.” Appellants argue that the facts presented in the affidavits on which the wiretap orders were based try to show that there was insufficient basis for the issuance of a search warrant. By reason of this showing, say the appellants, the government having conceded the absence of probable cause for one type of search, cannot claim the existence of probable cause for another type, i. e., the wiretap. However the appellants’ conclusion does not follow from their premises. It is entirely reasonable to require, as the statute does, that the government show its reasons for not proceeding by way of search warrants without thereby establishing the absence of probable cause for a wiretap. This is exactly what the government did in the present case.
Appellants’ objections to the procedure employed by the Department of Justice for authorizing the wiretap must fail. See United States v. Pisacano, 459 F.2d 259 (2d Cir. 1972); United States v. Becker, 461 F.2d 230 (2d Cir. 1972); United States v. Fiorella, 468 F.2d 688 (2d Cir. 1972).
Appellants urge that the wiretap orders conferred broader powers than are authorized by the minimization requirements of 18 U.S.C. § 2518, and that the agents in executing the wiretaps exceeded the limits imposed by the orders. As to the scope of the orders the appellants’ principal point is that the orders did not specify in detail the exact methods the agents should use in minimizing interception of communications of which the interception was not authorized. The orders did in fact contain a considerable amount of specification (for example as to hours of the day when the telephones could be tapped). Appellants do not suggest what additional specification should have been included. As the government points out it was impossible for the court to provide detailed definitions of the types of conversations which should be intercepted, since the exact contents of the conversations could hardly be known in advance of listening to them at least in part. Under these circumstances general instructions on minimization are to be considered as compliance with Section 2518.
The nature of the appellants’ objections to the alleged failure of the agents to observe the minimization limitations imposed by the orders can be gathered from the appellants’ claim that incoming calls were monitored under the first of the wiretap orders although that order authorized the tapping of outgoing calls only. Examination of the order and the papers on which it was based demonstrates clearly that the order contemplated tapping of incoming as well as outgoing calls, as, in common sense it must have done, with respect to a gambling operation of the type here involved.
Appellants claim that many telephone calls having nothing to do with gambling operations were monitored by the agents. The figures show, however, that only a very small proportion of the recorded calls (about two percent) were not concerned with gambling. We accept the finding of the district court that “the evidence established a good faith effort on the part of the monitoring agents to discontinue all calls believed to be of a non-pertinent nature.”
(2) Constitutionality of Section 1955.
This court has ruled that Congress did not exceed its constitutional authority under the Commerce Clause in enacting Section 1955. United States v. Becker, 461 F.2d 230 (2d Cir. 1972). See also United States v. Riehl, 460 F.2d 454 (3d Cir. 1972); United States v. Harris, 460 F.2d 1041 (5th Cir. 1972), cert. denied, 409 U.S. 877, 93 S.Ct. 128, 34 L.Ed.2d 130 and Schneider v. United States, 459 F.2d 540 (8th Cir. 1972), cert. denied, 409 U.S. 877, 93 S.Ct. 129, 34 L.Ed.2d 131.
(3) The Ex Post Facto Claim.
Appellants’ contention that the admission of certain evidence relating to events prior to the effective date of 18 U.S.C. § 1955 constitutes a violation of the ex post facto clause of the Constitution is without merit. Evidence of behavior antedating the adoption of the statute was admissible as bearing on the existence and purpose of the conspiracy and the significance of later behavior. See United States v. Smith, 464 F.2d 1129, 1133 (2d Cir. 1972). The district court received the testimony subject to an entirely appropriate limiting instruction.
(4) Submission of Both Substantive and Conspiracy Counts to the Jury.
The contention that it is error to submit to the jury counts under both 18 U.S.C. § 371 and § 1955 was raised and rejected by this court in United States v. Becker, supra, where the court said, 461 F.2d at p. 234:
“as long as the conspiratorial concert of action and the substantive offense underlying it are not coterminous and fewer participants are required for the commission of the substantive offense than are named as joining in a conspiracy to commit it, there is no infirmity in the conspiracy indictment.”
(5) Definition of “conduct” in the Trial Court’s Charge to the Jury.
The trial court’s definition of “conduct” in its charge to the jury was entirely correct. See United States v. Becker, supra.
(6) Sufficiency of the Evidence as to Agro and Randazzo.
The evidence against Agro and Randazzo was sufficient to support their convictions. '
The evidence showed that the betting office was operated at Agro’s house during a part of the period covered by the indictment. There was evidence based on monitored calls that on at least two occasions Agro accepted bets over the telephone listed in his name.
The evidence against Randazzo showed that on at least two occasions he did the computations at the weekly accounting of the “writers.”
Since we find no infirmity in the convictions, we affirm. |
f2d_478/html/0039-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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COMMERCIAL IRON & METAL CO., Plaintiff-Appellant, v. BACHE & CO., INC., and Irving J. Louis, Jr., Defendants-Appellees.
No. 72-1383.
United States Court of Appeals, Tenth Circuit.
Argued and Submitted March 27, 1973.
Decided April 26, 1973.
Rehearing Denied May 22, 1973.
David G. Palmer, Denver, Colo. (Edwin S. Kahn and James C. Bull, Denver, Colo., on the brief), for plaintiff-appellant.
George H. Colin, New York City (Raymond J. Turner, Denver, Colo., on the brief), for defendants-appellees.
Before PICKETT, HILL and BARRETT, Circuit Judges.
HILL, Circuit Judge.
Appellant Commercial Iron & Metal Co. (Commercial) brought suit in Colorado federal district court to recover money damages against or rescind its contract with the metals department of Bache & Co., Inc. (Bache). Commercial is a limited partnership engaged in the metal and iron business in Denver, Colorado. Bache is a Wall Street corporation which, among other things, engaged in the metals business and has its principal place of business in New York City. Jurisdiction was invoked under diversity of citizenship, 28 U.S.C. § 1332, and the exclusive jurisdiction of federal courts over securities violations, 15 U.S.C. § 78aa. The trial court, after viewing the pleadings, affidavits and exhibits, granted Bache’s motion for summary judgment on the ground that Commercial’s action in federal district court was improperly brought since the parties mutually agreed in their contracts to submit disputes to arbitration.
The principal parties in this action are Morey S. Duman (Duman), the sole general partner of Commercial, and Irving J. Louis, Jr. (Louis), a first vice president of Bache and head of its metals department. During May, 1969, Louis telephoned Duman to urge him to open an account with Bache. Duman followed this suggestion and traded in general commodities through Commercial’s margin account. Duman later switched the account to one not requiring marginal deposits and traded in electrolytic copper. During the four month period from April 7 to August 7, 1970, Bache sold three million pounds of electrolytic copper to Commercial at an average price of nearly 66 cents per pound, a financial undertaking of two million dollars. Between April and the first scheduled delivery in December, 1970, copper prices plunged. As a result Commercial refused to accept delivery of the shipments. Bache thereafter liquidated the contracts at a loss of $537,175.
Commercial promptly instituted this action. Its position was that Louis on behalf of Bache induced Commercial to enter into a discretionary account with Bache in early 1970 by means of untrue and misleading representations. Commercial alleged these misrepresentations to be: (1) the price of copper was bound to rise; (2) Louis had special information and contacts which would assure Commercial a profit; and (3) the account would be carefully managed and supervised in all respects by Louis and Bache. Commercial further alleged that while Louis was buying the electrolytic copper for Commercial he failed to disclose that: (1) from a technical standpoint it appeared likely that copper prices would fall rather than rise; (2) from a fundamental standpoint it appeared likely that copper prices would fall rather than rise; (3) Bache’s sophisticated customers were generally selling rather than buying copper; and (4) Bache and Louis failed at any time up through December 14, 1971, to hedge or close out plaintiff’s open position, despite the fact that primary and other copper prices had experienced the sharpest decline in years. Commercial charges that Louis’ misrepresentations violate Rule 10B-5(1), (2) and/or (3) and were perpetrated by use of the mails and interstate telephone calls. Commercial further asserts that Louis’ wrongful conduct violated the fiduciary duty of a broker to his customers, and violated New York’s Blue Sky Law (the Martin Act).
Appellees in their answer deny acting as broker for Commercial during the period in qúestion. Bache contends that it sold as principal to Commercial the electrolytic copper; in support of this assertion it introduced the 15 contracts between Bache and Commercial for the copper. These contracts, all of which are identical and are signed by Duman,' expressly and unequivocally identify Bache as seller and Commercial as buyer. In corroboration of the charge that Commercial understood the buyer-seller relationship, a contract identical to those in dispute was introduced showing that in 1969 Commercial purchased and accepted delivery on electrolytic nickel cathodes from Bache. Other exhibits were introduced demonstrating that on previous occasions Commercial had accepted delivery on electrolytic copper. Finally appellees attacked the jurisdiction of a federal district court to hear the action since all the contracts in dispute provide for arbitration of any claim or controversy arising out of or in connection with the agreement.
The trial court after reading through the pleadings, exhibits and affidavits held there was no genuine issue of material fact with respect to (a) federal jurisdiction and the arbitration clauses contained in the contracts; (b) the execution and delivery of the 15 contracts; and (c) the absence in the transactions between the parties of discretionary authority or dealings and of the common enterprise and promotional efforts, necessary to find an “investment contract.” As no material issues of fact were alleged, summary judgment for appellees was accordingly granted.
Our court has been explicit in defining under what conditions summary judgment may be granted. The ultimate purpose of summary judgment is to pierce the allegations of the pleadings to show there are no genuine issues of material fact. If there is an absence of material issues then the movant is entitled to judgment as a matter of law. 6 J. Moore, Federal Practice, fl 56.02 [10], at 2043 (2d ed. 1972). Because the effect of summary judgment is a judgment in bar, however, the courts should be careful in granting such motions.
. [W]hile it is the duty of the trial court to grant a motion for summary judgment in an appropriate case, the relief contemplated by Rule 56 is drastic, and should be applied with caution to the end that litigants will have a trial on bona fide factual disputes. Under the rule no margin exists for the disposition of factual issues, and it does not serve as a substitute for a trial of the case nor require the parties to dispose of the litigation through the use of affidavits. The pleadings are to be construed liberally in favor of the party against whom the motion is made.
Machinery Center, Inc. v. Anchor National Life Insurance Co., 434 F.2d 1, 6 (10th Cir. 1970); Bushman Construction Co. v. Conner, 307 F.2d 888 (10th Cir. 1962).
The lower court, in granting summary judgment, was forced to determine whether the disputes arising out of the contracts signed by Bache and Commercial would be resolved in federal court or by arbitration as provided by the United States Arbitration Act of 1925, 9 U.S.C. §§ 1-14. If the contracts are no more than contracts to purchase copper at a future date, the arbitration clause found in each contract is binding on our court and precludes us from exercising jurisdiction. See Caloric Stove Corp. v. Chemical Bank & Trust Co., 205 F.2d 492 (2d Cir. 1953). If the contracts are investment contracts, however, the judicial forum cannot be waived by the contracting parties. Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953).
Determining what constitutes an investment contract is no easy matter. As used in the Securities Acts, “investment contract” is a “nebulous' term, difficult of definition and even more difficult of application.” Belhumeur v. Dawson, 229 F.Supp. 78, 81 (D.Mont.1964). Its purpose is “to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.” SEC v. W. J. How-ey Co., 328 U.S. 293, 299, 66 S.Ct. 1100, 1103, 90 L.Ed. 1244 (1946). The Court has defined investment contract as:
a contract, transaction or scheme. whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party, it being immaterial whether the shares in the enterprise are evidenced by formal certificates or by nominal interests in the physical assets employed in the enterprise.
SEC v. Howey, supra at 298-299, 66 S.Ct. at 1103.
Commercial takes the position that commodities transactions may be the subject matter of an investment scheme which is itself an investment contract and security. It necessarily follows that if the' investment scheme constitutes an investment contract it falls within the definition of a security as provided in § 3'of the Securities Exchange Act, 15 U. S.C. § 78e(a)(10). Commercial also urges since the facts alleged in its complaint and Duman’s affidavit establish an investment scheme by Louis, the lower court erred in granting a motion for summary judgment.
Bache contends there is no investment contract under the Howey definition because the parties entered into individual, direct transactions involving the purchase and sale of copper. It is their position that elements of general offering, common enterprise, and reliance on the efforts of a manager or promoter for the achievement of profit are lacking. Appellees therefore urge us to accept the reasoning in Sinva, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 253 F.Supp. 359 (S.D.N.Y.1966), where it was found that a sugar futures contract was not a securities contract. It was simply an agreement for the delivery of a specified quantity of a commodity at a given future time.
We do not agree with Bache’s position that Commercial raised no material issues with respect to the securities laws. In Sinva the issue was whether sugar futures contracts were securities. In our case the issue is whether the investment scheme of Louis constitutes an investment contract. If Louis’ statements to Duman, as alleged in appellant’s complaint, implied that all investment decisions would be made by Louis, while promising Commercial large profits, we might have a discretionary account constituting an investment contract even though the copper contracts which lay behind the arrangements are not themselves securities. See Continental Marketing Corp. v. SEC, 387 F.2d 466 (10th Cir. 1967), cert. denied, 391 U.S. 905, 88 S.Ct. 1655, 20 L.Ed.2d 419 (1968); Berman v. Orimex Trading, Inc., 291 F.Supp. 701 (S.D.N.Y.1968); Maheu v. Reynolds & Co., 282 F.Supp. 423 (S.D. N.Y.1967).
Commercial in its complaint and Du-man in his affidavit allege that Louis stated: (1) he had special information and contacts which would assure Commercial a profit and (2) that he would carefully manage and supervise Commercial’s account in all respects. As the court emphasized in Maheu v. Reynolds & Co., supra at 429:
The line [between what is a security and what is not] is drawn where neither the element of a common enterprise nor the element of reliance on the efforts of another is present.
Appellant’s complaint raises an issue as to Commercial’s reliance on Louis’ representations which must be resolved before a court can determine the status of Bache and Louis.
Appellees and the lower court relied heavily on the fact that Commercial signed contracts which identified Commercial as the buyer and Bache as the seller, thereby proving that the contracts were purchase contracts with all terms and conditions stated in the instruments. We do not place such reliance on these written “purchase contracts.” Although Duman signed each contract upon receiving it from Bache’s office in New York City, Louis admitted in his deposition that it was Bache’s procedure to close the balancing transaction on the same day they received the order; it was not their policy to wait for a written contract before entering into the balance of the transaction. Duman also stated that he considered the contract completed over the phone. The terms and conditions of the contract were therefore made over the telephone rather than stated in the written contract. Under these conditions it is necessary for us to look outside the written document to determine the agreement between both parties. SEC v. C. M. Joiner Leasing Corp., 320 U.S. 344, 64 S.Ct. 120, 88 L.Ed. 88 (1943); Anderson v. Francis I. duPont & Co., 291 F.Supp. 705 (D. Minn.1968).
The lower court erred in granting ap-pellee’s motion for summary judgment at this stage of the proceeding. There are issues of material fact which cannot be determined by reading over the pleadings, affidavits and exhibits. Commercial’s allegations cannot be proved unless it is given an opportunity to present evidence backing up its assertions. For the court to grant summary judgment at this stage of the proceeding effectively denies Commercial the opportunity to prove its charges of fraud. Commercial’s allegations in its complaint are stringently denied by Bache and Louis. The affidavit of Duman and Louis are contradictory in material respects, and the only way to sift through these contradictory statements is by allowing Commercial to present evidence on its charges.
We must emphasize that we are in no manner implying that Commercial’s agreement with Bache constituted an investment contract. At this stage of the proceedings we do not have the evidence before us to make such a determination. Our decision only states that appellant’s complaint and affidavit allege issues of material fact which cannot be resolved without further proceedings.
The order granting summary judgment is set aside, and the action is remanded for further proceedings consistent with this opinion.
. Rule 10B-5 Employment of Manipulative and Deceptive Devices.
It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails, or of any facility of a national securities exchange,
(1) to employ any device, scheme or artifice to defraud;
(2) to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, not misleading, or
(3) to engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person,
in connection with the purchase or sale of any security.
. The term “security” means any note, stock, treasury stock, bond debenture, certificate of interest or participation in any profit sharing agreement or in any collateral-trust certificate, preorganization-certifieate or subscription, transferable share, investment contract, voting trust certificate, certificate of deposit for a security, or in general, any investment commonly known as a “security”. .
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f2d_478/html/0043-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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UNITED STATES of America, Plaintiff-Appellee, v. Curtis Howe SPRINGER (a/k/a Curtis H. Springer) and Helen Springer, husband and wife, et al., Defendants-Appellants.
No. 71-2309.
United States Court of Appeals, Ninth Circuit.
Nov. 30, 1972.
Rehearing Denied March 5, 1973.
George W. Nilsson (argued), Monta W. Shirley, Los Angeles, Cal., for defendants-appellants.
Carl J. Strass, Atty. (argued), Edmund B. Clark, Atty., Kent Frizzell, Asst. Atty. Gen., Washington, D. C., Ernestine Tolan, Asst. U. S. Atty., William D. Keller, U. S. Atty., Los Angeles, Cal., for plaintiff-appellee.
Before HAMLEY and WRIGHT, Circuit Judges, and POWELL, District Judge.
The Honorable Charles L. Powell, United States District Judge for the Eastern District of Washington, sitting by designation.
PER CURIAM:
The United States brought this action against Curtis Howe Springer and others for ejectment, an injunction, and damages in connection with defendants’ use of their unpatented mining claims on real property owned by the United States in San Bernardino County, California.
The United States moved for a partial summary judgment permanently enjoining defendants from using the real property in question for any purpose other than prospecting, mining or processing of minerals, and uses reasonably incident thereto. The district court held that while the Government was not entitled to a permanent injunction at that stage of the proceedings, it “may well be entitled to an injunction pendente lite” enjoining defendants from using the property for non-mining and non-prospecting purposes. United States v. Springer, 321 F.Supp. 625, 627 (C.D.Cal.1970).
The court noted in its opinion that, for many years, defendants have been using the property for the purpose of operating a resort hotel with related facilities, for the manufacture of “health” foods, and for such other purposes as the preparation of printed materials and tape recordings for radio broadcasts. The court also observed that defendants were maintaining on the property “four guestroom buildings aggregating 59 units, a dining room with kitchen facilities, an administration building, a chapel-meeting room, indoor and outdoor mineral baths, a number of out buildings, electrical facilities and various other structures and facilities.” 321 F.Supp., at 626.
The district court entered the partial summary judgment on December 18, 1970. In reliance thereon the Government, on December 29, 1970, filed a motion for an injunction pendente lite. Such an injunction was entered on June 18, 1971. It enjoins defendants pending disposition of the action or further order of the court from engaging in ten classified activities, as set out in the margin. Defendants have appealed from the entry of this injunction pen-dente lite.
An injunction pendente lite is, in essence, a preliminary injunction. See Rule 65, Fed.R.Civ.P. “Ordinarily, the grant or denial of a preliminary injunction is a matter within the discretion of the district court, and it will not be reversed absent an abuse of that discretion.” Douglas v. Beneficial Finance Co. of Anchorage, 469 F.2d 453 (9th Cir. 1972).
Defendants present a variety of arguments why the district court erred in entering the injunction pendente lite. Insofar as they pertain to the limited issues relevant here as to what use one who has unpatented mining claims may make of the land, and whether these claimants are making impermissible use of such lands, we think these arguments are fully answered in the opinion of the district court. We adopt the district court’s reasoning as our own, reject defendants’ arguments, and hold that the district court did not abuse its discretion.
“3. Letting, renting or leasing rooms, quarters or facilities to any person or persons, or entity or entities, not engaged in the prospecting for, mining or processing of minerals and uses reasonably incident thereto.
“2. Inviting or permitting, or in any manner inducing, any person or persons, whether or not for money, to come onto or be on said real property and premises or to live on said real property and premises other than those persons employed or acting in the prospecting for mining or processing of minerals and uses reasonably incident thereto.
“3. Operating, using, maintaining, repairing or constructing any improvements, buildings, structures, fixtures, facilities or equipment of any kind on said real property and premises, except such as are used in the prospecting for, mining or processing of minerals and uses reasonably incident thereto, and operating an electrically driven hammer mill referred to as the ‘grist mill.’
“4. Building, maintaining or repairing roads or airplane landing strips or runways on said real property and premises, for any use other than in the prospecting for, mining or processing of minerals and uses reasonably incident thereto.
“5. Preparing, mixing, blending, packaging, or preparing for mailing, selling or giving away, or receiving contributions for any food, foods or food products on said real property and premises, whether known by the name Basic Foods, Basie Food Products, Zzyzx or Zzyzx Brand, or any other name.
“6. Preparing, printing, binding, distributing, or preparing for mailing, at said real property and premises, any written or graphic material of any kind whatever, however produced or reproduced, except insofar as the same is used in the prospecting for, mining or processing of minerals and uses reasonably incident thereto.
We have set out above only the tip of the iceberg with regard to the proceedings which have been had, or are in progress, concerning this controversy. It is to be expected that defendants will, as they have in the past, seek stays from any available court or judge in an effort to keep their operations on these Government lands in progress as long as possible. For the assistance of any court or judge which is hereafter asked to grant such a stay, we here set out in the margin the long history of such efforts in this court to date.
“7. Preparing, recording, reproducing, distributing, or j)reparing for mailing, at said real property and premises, any sound recordings of any kind whatever, for radio broadcast or otherwise.
“8. Constructing, using, maintaining, operating or repairing, any pools, lakes, baths or devices of any kind to contain water on, in or under said real property and premises, except insofar as the same may be used in the prospecting for, mining and processing of minerals and uses reasonably incident thereto.
“9. Drilling or in any manner constructing any wells on, in or under said real property and premises, or using, operating, maintaining or repairing any presently existing wells thereon, therein or thereunder, except insofar as the same is used in the prospecting for, mining or processing of minerals and uses reasonably incident thereto.
“10. Extracting, mining, processing or using sand and gravel found on said real property and premises for the purposes of operating, maintaining, repairing or constructing improvements, buildings, structures, fixtures or facilities of any kind on said premises, except insofar as is necessary in the prospecting for, mining and processing of minerals and uses reasonably incident thereto.”
The stay entered on October 16, 1972, is vacated. The order granting an injunction pendente lite is affirmed.
ON PETITION FOR REHEARING AND SUGGESTION FOR REHEARING IN BANC
The petition for a panel rehearing is denied.
Pursuant to Rule 35(b), Federal Rules of Appellate Procedure, appellant’s suggestion for a rehearing in banc was transmitted to the judges of the court who are in regular active service. One such judge requested a vote on the suggestion, but only this judge voted for an in banc rehearing. The suggestion for a rehearing in banc has therefore been rejected.
CHAMBERS, Circuit Judge
(dissenting from the refusal of the court to take the case en banc).
Springer is operating some kind of a health spa on mining claims on government land.
This involves several buildings built on the claims and the use of some spring water claimed to contain health-giving minerals. It is not contended the business is an unlawful one.
What the panel has done is to approve the granting of a temporary injunction where no final judgment or decree has been entered. No threatened irreparable injury was ever proved. Certainly by final judgment a landowner is entitled to have one adjudged to be on the land improperly and is entitled to have the defendant put off by mandatory injunction, but not now.
What we do is to approve the practice of giving the government “two bites at the cherry,” — one is on preliminary injunction and the second is on trial on the merits.
There was no balance of convenience here in favor of government. Any damage done was when the establishment was erected. It is not suggested that any real damage has been done since then.
Although the case is not mentioned, the panel has quietly overruled such cases as McCarthy v. Bunker Hill and Sullivan Mining and Concentrating Company, 164 F. 927 (9th Cir. 1908), a case that has stood for 65 years. There, mines were polluting the Coeur d’Alene River. On a temporary injunction request, this court said “no.” Comparatively the damage in the McCarthy case was horrendous. Here, no present damage is shown.
It is very troublesome that the panel opinion refers to the fact that Springer has been convicted of a number of offenses. I thought the day was long past when we forfeited a man’s legal rights because he had been previously convicted of a crime or crimes.
. Defendants are enjoined, pending disposition of the action or further order of the court, from:
. There are now pending before the Department of the Interior two complaints in contests filed by the Bureau of Land Management against the mining claims here in issue. There have also been contempt proceedings in the district court, and an eviction order. Springer has made several attempts to obtain title or possession under non-mining laws, as follows: Desert Land Application — Los Angeles Nos. 087266 and 087267, July 12, 1951, finally rejected in Decision A-27305, September 25, 1957; Recreation and Public Purposes applications Nos. LA-0153617 and LA-0158843, November 14, 1957, and June 17, 1958, final appeal dismissed November 18, 1964; non-mineral application No. R-07418, January 10, 1966, appeal denied April 28, 1970.
Springer has been convicted of various offenses in connection with the use of these lands, some on pleas of guilty. These convictions include eighteen counts of false advertising concerning remedies for hemorrhoids, heart disease, “nerves,” thyroid and goiter; and violations of the California State Health and Safety Code pertaining to misbranding foods.
. On August 19, 1971, a judge of this court granted Springer a stay of the district court injunction pendente lite, to September 2, 1971. On August 26, 1971, a two-judge panel of this court granted Springer a further stay, reserving the right of the Government to move for reconsideration. The Government moved for reconsideration and, on September 9, 1971, a two-judge panel of this court denied reconsideration. Early in 1972, the Government renewed its motion to lift the stay of the district court’s injunction. On January 31, 1972, a two-judge panel of this court set aside the stay.
On February 10, 1972, a two-judge panel of this court denied Springer’s motion to stay the district court injunction. On February 18, 1972, the same panel denied Springer’s renewed petition for a stay. On September 5, 1972, another two-judge panel of this court denied Springer’s motion to stay district court contempt hearings, but expedited the hearing of this appeal. On October 6, 1972, the district court entered an order of eviction from the premises, except as to those engaged in mining operations including maintenance work and cooking for workers. On October 16, 1972, a judge of this court stayed the enforcement of the eviction order pending the hearing of the appeal calendared for November 1, 1972.
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f2d_478/html/0047-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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ETHYL CORPORATION, Appellee, v. ENVIRONMENTAL PROTECTION AGENCY, Appellant (two cases).
Nos. 72-2355, 72-1005.
United States Court of Appeals, Fourth Circuit.
Argued Feb. 6, 1973.
Decided May 10, 1973.
William Kanter, Atty., U. S. Dept, of Justice (Harlington Wood, Jr., Asst. Atty. Gen., Brian P. Gettings, U. S. Atty., and Walter H. Fleischer, Atty., U. S. Dept, of Justice, on brief) for appellant.
E. Milton Farley, III, Richmond, Va. (Joseph C. Carter, Jr., David F. Peters, T. S. Ellis, III, Carl W. Tobias, Hunton, Williams, Gay & Gibson and Frederick P. Warne, Richmond, Va., on brief) for appellee.
Before BUTZNER, RUSSELL and WIDENER, Circuit Judges.
DONALD RUSSELL, Circuit Judge:
The Administrator of EPA resists an application by Ethyl Corporation filed under the Freedom of Information Act, to require the production of seven documents containing medical and scientific data and considered by him in connection with the issuance of proposed lead regulations under the Clean Air Act. He contended initially that the documents were exempt from production by the terms of Section (b)(5) of the Act. When the District Court, after hearing testimony and considering affidavits submitted, expressed the intention to require production of the- strictly factual parts of the documents, the Administrator requested a continuance in order to permit him to consider whether to claim “executive privilege”. The continuance was granted and the Administrator did file thereafter with the Court an affidavit in which he claimed “executive privilege”. Despite this claim by the Administrator, the District Court examined the documents in camera, determined that parts thereof contained purely factual material not inextricably intertwined with policy-making processes, and ordered the same produced. The Administrator has appealed and, pending appeal, secured a stay of the order.
We affirm.
The Freedom of Information Act was intended to express in statutory form the firm obligation of governmental agencies to make disclosure to “any person” of identifiable information and facts in their possession, limited only by certain specific exemptions. Specifically, it denied the federal agency any right to “refuse disclosure of materials covered by the Act for any reason other than one contained in the exclusionary section of the legislation.” The legislative history of the Act makes it clear that the obligation to produce thereby mandated is to be construed broadly and the exemptions from such obligation narrowly. In short, the Act makes disclosure the rule and secrecy the exception. And, lest the Congressional purpose be thwarted by the inevitable tendency of the agency towards secrecy, Congress, discarding the usual principle of deference to administrative determinations, provided for any “aggrieved citizen” denied disclosure a judicial remedy in the District Court, which was directed to “determine the matter de novo”, with the burden on the agency itself “to sustain” its claim for exemption. By-such provision, Congress imposed on the federal courts “the responsibility of determining the validity and extent of the claim [of exemption], and insuring that the exemption is strictly construed in light of the legislative intent.”
The specific exemption on which the Administrator relies authorizes non-disclosure of “inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency.” This exemption has been authoritatively construed as differentiating in treatment between “materials reflecting deliberative or policy-making processes on the one hand, and purely factual, investigative matters on the other”, between material that deals “solely with matters of law or policy” and those that are “matters of a factual nature”. The Act never “intended to place ‘factual material’ within the coverage of the fifth exemption.” ******Simply because a document contains both purely factual material and “materials reflecting deliberative or policy-making processes” does not render the document automatically exempt from discovery. Congress never “intended to exempt an entire document merely because it contained some confidential information.” And this construction of the exemption was given authoritative approval in Mink when Justice White said that “in the absence of a claim that disclosure would jeopardize state secrets, see United States v. Reynolds, 345 U.S. 1 [73 S.Ct. 528, 97 L.Ed. 727] (1953), memoranda consisting only of compiled factual material or purely factual matetial contained in deliberative memoranda and severable from its context would generally be available for discovery * * 410 U.S. at 87, 93 S.Ct. at 836. In that case, Justice White stated that Exemption 5 of the Act was not to be applied “woodenly” as authorizing the “withholding of factual material otherwise available on discovery merely because it was placed in a memorandum with matters of law, policy or opinion.” He pointed out that the proper application of the exemption makes discoverable factual material in memoranda, even though the memoranda include protected law, policy, or opinion or recommendations, if the “purely factual material appearing in those documents [is] in a form that is severable without compromising the private remainder of the documents.”
Ordinarily, when the issue of severa-bility, as stated in Mink, arises, the Court will review in camera the documents in controversy. But, as Mink declares, such in camera review “need not be automatic”. If the agency is able to establish, whether “by surrounding circumstances” or otherwise, that the documents “are purely advisory and contain no separable, factual information” or if the agency discloses “the factual portions of the contested documents” and shows “that the excised portions constitute the bare bones of protected matter”, in camera inspection may be avoided.
In this case, it is freely conceded by the Administrator that the documents in question contain in part scientific, medical, economic and technological data of a purely factual nature. The District Court found from an in camera review of the documents that such factual data were “severable without compromising the private remainder of the documents.” That this conclusion is correct was substantiated by the subsequent concession made by the Administrator himself. Thus, the District Court permitted the Administrator to, and the Administrator did, “select from the documents that the Court has [had] examined en camera [sic], those matters which they [he] would agree are purely factual or scientific, as distinguished from advice, recommendations, opinions and other material reflecting deliberative and policy making processes.” After receiving this compilation by the Administrator, the District Court commented that there were few or no significant differences between the material in the documents found by him to be purely factual and not intertwined with the decisional processes of the Administrator, and those agreed by the Administrator to be so purely factual. The Administrator does not dispute this statement of the District Court. We assume, therefore, there is no substantial difference between the material found by the District Court to have been “purely factual” and severable from protected material and that so found by the Administrator’s own representative. Under those circumstances, it is thus incontestable that in a substantial sense the material, the disclosure of which he resists, is not within Exemption 5 both under the findings of the District Court’s in camera inspection and under the admission made by the Administrator’s representative at trial.
As a last-line defense to disclosure, however, the Administrator invokes “executive privilege”. Such privilege was well recognized long before the enactment of the Freedom of Information Act. The extent and scope of the privilege, which is regarded as in part constitutional in origin and in part common law, have been explicated in the numerous decisions in which the issue has arisen. While the claim is one to be asserted initially by “the head of the department which has control over the matter” inquired into, resolution of the right to secrecy is not left to “the caprice of executive officers”; rather, it is for the courts to “determine whether the circumstances are appropriate for the claim of privilege.” United States v. Reynolds (1953) 345 U.S. 1, at 8-10, 73 S.Ct. 528, at 532, 97 L.Ed. 727.
In determining when the claim may be properly invoked, the Courts have for long classified the information sought under two broad headings. This was the procedure followed by Justice White in Mink. The first classification relates to what has been often described as “state secrets” or matters relating to national security, either military or diplomatic. The second classification consists of “official information”, represented in this case by “intra-office advice on policy.” The right to disclosure differs markedly with the two classifications. Because they pose patent dangers to the public interest, “(Disclosures that would impair national security or diplomatic relations are not required by the courts.” And while courts are “to determine whether the circumstances are appropriate for the claim of privilege” on this ground, the judgment of the Executive that disclosure might impair “national security or diplomatic relations” is conclusive, unless the Court finds that the privilege is asserted arbitrarily or capriciously; and, in considering the issue or arbitrariness or capriciousness, the Court is not ordinarily entitled to examine in camera the contested documents. The second classification, on the other hand, as it relates to this case, applies to “official information”, and covers “materials reflecting deliberative or policy-making processes,” as distinguished from purely factual material. The disclosure of such materials involves a far lesser danger to the public interest than the disclosure of “state secrets” and has always been sub-jeet to a much less stringent rule for discovery and a broader scope of judicial review. In camera examination by the Court of the contested documents in order to determine the acceptability of the claim is generally an accepted practice in this situation.
Congress was obviously aware of these two broad classifications of material, over which the claim of “executive privilege” might be asserted and, in the Freedom of Information Act, attempted to give to each classification its precise, established judicial right of immunity from discovery. Thus, in Subsection (1) of the Exemptions, the Act invested with immunity from disclosure all matters “specifically required by Executive order to be kept secret in the interest of the national defense or foreign policy.” As Mink makes clear, the test whereby disclosure of these “state secrets” is to be governed under the Act “was to be simply whether the President has [had] determined by Executive Order that particular documents are to be kept secret.” This was in keeping with established precedent. But, so far as government documents not qualifying as “state secrets” are concerned, the Act, as authoritatively construed in Mink, merely codified the existing law by granting protection only to those portions of a government document that were a part of the “deliberative or policy-making processes” of government and not to those portions that constituted the “purely factual” material therein, “sev-erable without compromising the private remainder of the documents.”
The claim of “executive privilege” in this case is no more than a restatement of the Administrator’s claim for exemption under Section (b) (5) of the Act and no broader than the rights given the Administrator under that Section. As the Court recognized in Philadelphia Newspapers, Inc. v. Department of H. & U. D. (D.C.Pa.1972) 343 F.Supp. 1176, 1178, the right of immunity, as asserted by the Administrator in this case, is the same, whether it be claimed as an exemption under Section (b) (5) or under the heading of “executive privilege”. Thus, the claim of “executive privilege” gives no added stature to the Administrator’s claim of exemption under Exemption 5 and is equally unavailing as a basis for reversal of the District Court’s conclusion.
Affirmed.
. Environmental Protection Agency.
. 5 U.S.C. § 552.
. 42 U.S.C. § 1857f-6e.
. Sterling Drug, Inc. v. F.T.C. (1971) 146 U.S.App.D.C. 237, 450 F.2d 698, 703.
. Hawkes v. Internal Revenue Service (6th Cir. 1972) 467 F.2d 787, 792, n. 6.
. Soucie v. David (1971) 145 U.S.App.D.C. 144, 448 F.2d 1067, 1080; Wellford v. Hardin (4th Cir. 1971) 444 F.2d 21, 25 ; Fisher v. Renegotiation Board (1972) 153 U.S.App.D.C. 398, 401, 473 F.2d 109, 112.
. Section 552(a)(3), 5 U.S.C.; Soucie v. David, supra.
. Bristol-Myers Company v. F.T.C. (1970) 138 U.S.App.D.C. 22, 424 F.2d 935, 938, cert. den., 400 U.S. 824, 91 S.Ct. 46, 27 L.Ed.2d 52.
. Environmental Protection Agency v. Mink (1973) 410 U.S. 73, 89, 93 S.Ct. 827, 837, 35 L.Ed.2d 119.
. Ackerly v. Ley (1969) 137 U.S.App.D.C. 133, 420 F.2d 1336, 1341, n. 7.
Wu v. National Endowment for Humanities (5th Cir. 1972) 460 F.2d 1030, cited by the Administrator, illustrates the distinction. In that case, the contested documents consisted of “opinions, not facts, and are thus protected by exemption (5)” (at 1033). The decision, however, very clearly recognized that “purely factual material, * * * is not protected from disclosure * * (at 1032)
. Consumers Union of U. S., Inc. v. Veterans Admin. (D.C.N.Y.1969) 301
See, also, Bristol-Myers Company v. F.T.C., supra, at 939 (424 F.2d) :
“Purely factual reports and scientific studies cannot be cloaked in secrecy by an exemption designed to protect only ‘those internal working papers in which opinions are expressed and policies formulated and recommended.’ ”
. Grumman Aircraft Engineer Corp. v. Renegotiation Bd. (1970) 138 U.S.App.D.C. 147, 425 F.2d 578, 580; Simons-Eastern Company v. United States (D.C. Ga.1972) 55 F.R.D. 88, 89; Fisher v. Renegotiation Board, supra, at 115 (473 F.2d) ; see, also, Sterling Drug, Inc. v. F.T.C., supra, at 704 (450 F.2d), where the Court remanded the proceedings to permit the District Court to review the materials in question and determine whether it contained factual material that was properly discoverable.
In Wellford v. Hardin, supra, at 770 (315 F.Supp. 768), the Court said:
“It is a violation of the Act to withhold documents on the ground that I)arts are exempt and parts non-exempt. In that event, ‘suitable deletions’ may be made; * *
. Mink, supra, 410 U.S. at 91, 93 S.Ct. at 838.
S.Rep. No. 3219, 88th Cong., 2d Sess., 13-14:
“Exception No. 5 [of the Freedom of Information Act] would exempt ‘intra-agency or interagency memoranda or letters dealing solely with matters of law or policy.’ * * * Exception No. 5 has been included to cover this situation, and it will be noted that there is no exemption for matters of a factual nature.” (Italics added.)
. Sterling Drug, Inc. v. F.T.C., supra, at 703 (450 F.2d.).
. Mink, supra, 410 U.S. at 93, 93 S.Ct. at 839.
. Cf., Ackerly v. Ley, supra, at 1340 (420 F.2d):
“Again, however * * *, we confess to a considerable lack of enthusiasm for the caliber of the Commissioner’s performance in this seemingly erratic discharge of his responsibilities under the Freedom of Information Act.”
See, also, M. A. Schapiro & Co. v. Securities and Exchange Com’n. (D.C.D.C.1972) 339 F.Supp. 467, 469, where the Court remarked that the subsequent release of parts of the contested material "is an indication on their jiart as to the merits of their initial assertions.”
. Davis, The Information Act: A Preliminary Analysis, 34 U. of Chi.L.Rev. 761, 764 (1967).
. United States v. Reynolds, supra, at 7 (345 U.S.), 73 S.Ct. 528; Totten, Administrator v. United States (1875) 92 U.S. 105, 107, 23 L.Ed. 605; Note, Administrative Law — Freedom of Information Act, 25 Vand.L.Rev. 397, 400 (1972).
. See, Carl Zeiss Stiftung v. V. E. B. Carl Zeiss, Jena (D.C.Cir. 1966) 40 F.R.D. 318, 324, n. 15.
. Kaiser Aluminum & Chemical Corp. v. United States (1958) 141 Ct.Cl. 38, 157 F.Supp. 939 at 944-945. See, also, United States v. Marchetti (4th Cir. 1972) 466 F.2d 1309, 1317, cert. denied 409 U.S. 1063, 93 S.Ct. 553, 34 L.Ed.2d 516.
. United States v. Reynolds, supra, at 7 (345 U.S.), 73 S.Ct. at 532.
. Epstein v. Resor (9th Cir. 1970) 421 F.2d 930, 7 A.L.R.Fed. 870, cert. denied, 398 U.S. 965, 90 S.Ct. 2176, 26 L.Ed.2d 549.
Mink, supra, 410 U.S. at 93, 93 S.Ct. at S39.
. See, Pilar v. SS Hess Petrol (D.G.Md. 1972) 55 F.R.D. 159, 162:
“ * * * by its terms and tenor, the statute [Freedom of Information Act] creates no new exemption for agency files; in the several exemptive provisions it merely recognizes and codifies the existing judicially and congres-sionally created exemptions.”
. Mink, supra, 410 U.S. at 82, 93 S.Ct. at 833.
Soucie v. David, supra, at 1079, n. 48 (448 F.2d) puts it:
“But to qualify for the first exemption, the Government need show only that the record is ‘specifically required * * * to be kept secret’ pursuant to an Executive order; review of the propriety of keeping it secret is then limited to determining that the administrative decision was not arbitrary and caxjricious.”
See, also, Committee for Nuclear Responsibility, Inc. v. Seaborg (1971) 149 U.S.App.D.C. 393, 463 F.2d 796, 798.
. Mink, supra, 410 U.S. at 91, 93 S.Ct. at 838.
See, Soucie v. David, supra, at 1077 (448 F.2d).
It is of interest, too, that the proposed Rules of Evidence for the United States Courts and Magistrates make this same distinction between “state secrets” and “official information” and establish the same rules governing the production of such materials as are set forth in the Freedom of Information Act (Rule 509). This similarity was noticed by the Court in Mink. 410 U.S. at 89, n. 16, 93 S.Ct. at 837.
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f2d_478/html/0053-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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GENERAL ELECTRIC CREDIT CORPORATION, Plaintiff-Appellant, v. T. R. GRUBBS, d/b/a T. R. Grubbs Tire & Appliance, Defendant-Appellee.
No. 29961.
United States Court of Appeals, Fifth Circuit.
April 13, 1973.
Rehearing Denied May 14, 1973.
Hubert D. Johnson, Dallas, Tex., for plaintiff-appellant.
J. R. Cornelius, Bill J. Cornelius, Jefferson, Tex., for defendant-appellee.
B. A. Britt, Jr., Texarkana, Tex., for Goodyear Tire & Rubber Co.
Roby Hadden, U. S. Atty., Tyler, Tex., for United States.
Before GEWIN, THORNBERRY and CLARK, Circuit Judges.
THORNBERRY, Circuit Judge:
General Electric Credit Corporation (GECC), plaintiff below, appeals from a judgment denying it recovery on a note and awarding defendant-appellee Grubbs a $20,000 recovery on his counterclaim. We reverse the judgment below.
Grubbs operated an appliance store in Jefferson, Texas, and sold General Electric products. He financed his purchases of inventory by means of two distinct arrangements with GECC, a wholly-owned subsidiary of General Electric Corporation. Pursuant to the first of these arrangements, known as trust receipts financing or “floor planning,” he paid ten percent of the price of inventory purchased from General Electric, and borrowed the balance from appellant. Merchandise purchased under this arrangement was held by Grubbs in trust, and he was to pay GECC the balance of the purchase price promptly upon sale of the merchandise to a customer. Should Grubbs fail to pay the balance promptly upon sale to the customer, the sale was referred to as a “sale out of trust.”
Under the second financing arrangement — the one giving rise to the note upon which appellant brought suit— Grubbs sold to GECC chattel mortgages, notes, and other accounts generated by his sales to customers. The 1955 agreement governing these sales of “chattel paper” obligated GECC to purchase only those accounts that it deemed “acceptable.” If a customer defaulted on two or more installments under an account sold to GECC, Grubbs was required, upon demand by GECC, to repurchase that account for cash. If, thirty days after GECC had demanded the repurchase of a defaulted account, Grubbs had not repurchased it, then Grubbs became obligated to repurchase all of the accounts he had sold to GECC, whether they were in default or not.
By March 1964, ninety-four of the accounts that Grubbs had sold to GECC, amounting to roughly $67,000, were in default by two or more installments, and Grubbs had not repurchased them as required by the 1955 agreement. Rather than forcing Grubbs to repurchase all of the outstanding accounts sold to GECC (which by this time numbered 671 and amounted to roughly $270,000, exclusive of the ninety-four defaulted accounts), or suing him on his repurchase obligation, GECC proposed that Grubbs execute a note representing the amount due in cash under the repurchase obligation ($67,000) payable in monthly $1500 installments beginning on April 11, 1964. Grubbs and his wife signed the note, telling GECC representatives that they “owed it and had to pay it anyway.” Grubbs and his wife testified that appellant induced them to sign the note by assuring them that they would have the sole right to make collections and repossessions under the ninety-four accounts, and by promising to continue purchasing Grubbs’ customers’ accounts “as before,” which Grubbs understood to mean that appellant would purchase substantially all of the chattel paper he tendered. GECC officials, however, testified that Grubbs’ obligation to pay the note was not contingent upon GECC’s continued purchase of chattel paper. It is clear, nonetheless, that even if appellant did undertake to “continue” purchasing chattel paper from Grubbs “as before,” this would obligate appellant to purchase only the accounts it considered “acceptable”: appellant promised to do nothing more than it was required to do under the 1955 agreement, and that agreement was not materially modified by the March 1964 note.
After paying the first $1500 installment on April 11, 1964, Grubbs refused to make further payments; and GECC sued to recover the balance on September 3, 1964. In October 1966 Grubbs amended his answer in several material respects. First, he asserted that the note was unenforceable because of fraudulent inducement and total failure of consideration. Secondly, he asserted a “cross-action” (actually, a counterclaim against appellant and a third-party action against General Electric Corporation) alleging that appellant and General Electric had violated federal and Texas antitrust laws and that they had embarked upon a scheme resulting in the total destruction of Grubbs’ business. The trial judge, sitting without a jury, heard testimony for two days, and then declared the note unenforceable for fraud and failure of consideration, awarded Grubbs a $20,000 recovery against GECC alone on his claim of “destruction of his business,” and denied all other claims for relief (including the alleged antitrust violations).
The Note
On appeal, Grubbs reiterates three theories advanced in the court below in support of his claim that the note was unenforceable because of total failure of consideration. First, he argues that he was required to pay the note only if appellant continued to purchase and pay him for chattel paper tendered to it, and that GECC breached this obligation while the note was still current. As mentioned earlier, it is not at all clear what appellant promised in return for Grubbs’ signing the note, but in no event did it undertake more than to continue purchasing only “acceptable” paper, as it had done under the 1955 agreement. In any event, after Grubbs had made the first payment on April 11, 1964, he tendered approximately $2600 in accounts to GECC, who at first refused to accept them because they were unacceptable credit risks, but who later accepted accounts worth approximately $1580. Rather than sending Grubbs the cash, however, appellant credited this amount to reserve accounts (established to insure Grubbs’ performance of his obligations under the financing arrangements) to cover some $1700 in worthless checks (drawn by Grubbs and by his customers) that Grubbs had tendered as customer payments on accounts sold to GECC and as remittances from Grubbs in payment for trust receipt merchandise. Since the financing arrangements required Grubbs to cover any worthless checks he sent to GECC, there was no practical difference between sending Grubbs the cash and crediting his account to cover the checks. This incident, therefore, was not a failure of consideration. Likewise untenable is the claim that the note was induced by a fraudulent promise to continue purchasing Grubbs’ chattel paper. In refusing to accept some accounts, and in crediting the proceeds of others to the reserve accounts, GECC did no more than it had a right to do under the original agreements with Grubbs.
The second alleged instance of failure of consideration was appellant’s sending “direct pay” notices to Grubbs’ customers, instructing them to make remittances directly to GECC. Appellant was authorized to make collections on accounts that it had purchased; but Grubbs argued that in some cases a notice was sent to a customer, one of whose accounts had been purchased by GECC but whose other account either had not been sold to GECC or had been charged back to Grubbs pursuant to the March 1964 note. These customers, unable to distinguish between accounts owed to GECC and accounts owed to Grubbs, simply stopped paying Grubbs altogether, although Grubbs allegedly was to have the sole right to make collections and repossessions on the ninety-four defaulted accounts represented by the March note. As of August 1964, when the direct pay notices were sent, however, Grubbs was in default on the note, having repudiated it in May or June; and Grubbs will not be heard to justify that repudiation by events occurring months later. It is even possible that sending the direct pay notices to the ninety-four defaulted accounts was not in violation of the March agreement, because GECC officials testified that Grubbs was to have a right to make collections on those accounts only if he continued paying the note.
Thirdly, Grubbs contends that termination of trust receipts financing before his franchise expired was a failure of consideration. But there is absolutely no evidence that continuation of trust receipts financing was promised in consideration for the note. Moreover, when trust receipts financing was terminated in August 1964, Grubbs was “short” by over $6,000 due to “sales out of trust,” and admittedly could not make up the shortage.
In summary, the trial court erred by denying recovery to GECC on the note. Appellant is entitled to recover the balance due under the note, plus reasonable attorneys’ fees (Vernon’s Tex.Rev.Civ. Stat.Ann. art. 2226).
The Counterclaim
Here we are concerned only with GECC’s alleged liability for the acts it committed pursuant to the scheme to “totally destroy” Grubbs’ business. The trial court exonerated General Electric Corporation, and denied Grubbs’ claims under the antitrust laws; and Grubbs does not allege that that part of the judgment was erroneous.
Besides the conduct which we have seen to be authorized by Grubbs’ agreements with GECC, the allegedly wrongful acts fall roughly into four categories: (1) failure to credit Grubbs for the price of some inventory removed from his floor when trust receipts financing was terminated; (2) “slanderous accusations” by GECC employees that Grubbs had cheated both his customers and GECC by failing to remit customer payments on accounts purchased by GECC; (3) the mailing of “direct pay” notices to accounts that Grubbs had the exclusive right to collect; (4) appellant’s wrongful repossession from customers of merchandise on which it had no lien, and its sale of that merchandise without giving Grubbs the right to bid.
“Slanderous Accusations”: Several of Grubbs’ customers testified that men who “represented themselves to be” or “purported to be” GECC employees visited them in 1964 and 1965, and said that Grubbs had swindled them and cheated GECC by failing to remit to GECC customer payments collected by Grubbs and owed to GECC under accounts GECC had purchased. In order to hold GECC liable for these statements, Grubbs of course had the burden of proving that the men were in fact GECC employees and that the statements were made in the course of their employment; but we have combed the record in vain for competent proof of either of these elements. The customers’ recollections of what the men represented themselves to be was hearsay, and Texas courts hold that such testimony, even if admitted without objection, is no proof at all of agency or scope of employment. Lewis v. J. P. Word Transfer Co., 119 S.W.2d 106 (Tex.Civ.App., Dallas 1938, writ ref’d). Even if the “men” themselves had testified, their testimony standing alone would not have supported a finding of agency. Robertson Tank Lines, Inc. v. VanCleave, 468 S.W.2d 354 (Tex.1971). Grubbs was not entitled to any recovery for the allegedly “slanderous accusations” made to his customers.
“Direct Pay" Notices: From our review of the record, we cannot say that the trial court clearly erred in determining that GECC was liable to Grubbs for the injury caused by sending “direct pay” notices to customers some of whose accounts were owed solely to Grubbs. We are, however, unable to determine how many of Grubbs’ (as distinct from GECC’s) accounts were sent the notices, or to determine the amount of customer payments that Grubbs lost when his customers stopped paying in reliance on the notices. We accordingly remand to the court below for determination of the amount of damages due Grubbs for GECC’s mailing the direct pay notices.
Wrongful Repossession and Sale: Again, appellant does not seriously dispute Grubbs’ claim of damages for GECC’s repossession from customers of merchandise on which GECC had no lien. Some of the repossessed merchandise had been purchased from Grubbs on open account, and Grubbs had not financed his purchase of the merchandise with GECC. Other repossessed merchandise was covered by the ninety-four defaulted accounts represented by the March 1964 note, and we cannot say that the trial court clearly erred in finding that Grubbs had the sole right to make collections and repossessions on these accounts. GECC disposed of this repossessed merchandise in two sales. During the first, Grubbs and his wife’s brother-in-law were permitted to bid on the merchandise after opening the bids of other prospective purchasers. Grubbs was not, however, permitted to bid at the second sale. But again we are compelled to remand to the court below for a precise determination of the amount of damages caused by the wrongful repossessions and sale.
Needless to say, we cannot accept the trial court’s award of $20,000 as a blanket recovery for “destruction of Grubbs’ business.” The evidence tended to show that Grubbs had been operating at a loss prior to the events giving rise to the instant suit, and that it was only a matter of time until his business failed. On remand, Grubbs’ recovery is to be limited to (1) credit for “trust receipt” merchandise which was not credited to him when trust receipts financing was terminated, (2) Grubbs’ losses on accounts which he had the sole right to collect, caused by the mailing of the “direct pay” notices, and (3) credit for merchandise wrongfully repossessed from Grubbs’ customers and sold.
In summary, we reverse as to the trial court’s failure to award GECC a judgment on the note; we reverse the award of $20,000 in damages on Grubbs’ counterclaim, and remand for a precise determination of damages on his counterclaim.
Costs shall be taxed to appellee.
Reversed and remanded.
. Under the “floor plan” agreement, GECC had the right to accept the customer’s account in lieu of Grubbs’ payment of the balance.
. In 1963, Grubbs had executed another note to GECC, representing his liability to repurchase $69,000 in defaulted paper sold to GECC.
. GECC had brought suit in state court in Marion County, Texas. By his amended pleading, Grubbs made the United States a party to the suit, in order to obtain a determination of priorities among a number of judgment lienholders including the United States (which had obtained judgment under a note assigned to the Small Business Administration). The United States removed the suit to the United States District Court for the Eastern District of Texas.
. As to tiie acts committed in furtherance of this scheme, Grubbs claimed that GECC had refused to purchase any chattel paper from him after execution of the March 1964 note; that GECC employees had repossessed merchandise covered by some of the ninety-four defaulted accounts charged back to Grubbs pursuant to the note, and in so doing had slandered Grubbs; that GECC had notified Grubbs’ customers not to make further payments to him; and that GECC had wrongfully terminated trust receipts financing before Grubbs’ franchise had expired. Many of the acts alleged as a basis for recovery under the counterclaim against GECC were also asserted as defenses to the note.
. Under Texas law, Grubbs’ pre-existing repurchase obligation was itself sufficient consideration for the 1964 note. Tex.Rev.Civ.Stat.Ann. (Bus. & Comm.) arts. 3.303, 3.408, V.A.T.S.; West Coast Mining Co., Inc. v. Security National Bank, 442 S.W.2d 821 (Tex.Civ.App., Amarillo, 1969, writ ref’d n. r. e.).
. In response to a hypothetical question, a GECC official testified that GECC violated the March 1964 agreement by crediting $1530 to Grubbs’ reserve account instead of sending him the cash. But the hypothetical question made no reference to the worthless checks that Grubbs had sent to GECC; thus, this testimony affords no basis for finding failure of consideration in appellant’s crediting the money to the reserve account.
. Although Grubbs sought affirmative recovery for appellant’s failure to purchase and pay for some customers’ accounts and for terminating trust receipts financing in August 1964, the foregoing discussion has shown that none of these acts was improper under Grubbs’ agreements with GECC.
. Appellant concedes that Grubbs is entitled to credit for such merchandise. The trial produced only a rough estimate (approximately $1,000) of the amount of this credit, and on remand the trial court must establish precisely the amount of credit due Grubbs.
. Appellant contends that these statements, made between July 1964 and January 1965, give rise to a cause of action in slander ; since recovery was not' sought for them until October 1966, when Grubbs amended his pleading, Grubbs’ recovery for these statements is, says appellant, barred by the Texas one-year statute of limitations applicable to slander. On the other hand, Grubbs argues that the statements were merely part of a scheme designed to ruin his business, and that the one-year statute is inapplicable under Brown v. American Freehold Land Mortgage Co., 97 Tex. 599, 80 S.W. 985 (1904). Owing to the approach we take to this part of Grubbs’ counterclaim, we intimate no view as to this controversy.
. None of these men testified at trial.
. The representations of agency cannot even be brought within the amorphous confines of Texas’ “res gestae” exception to the hearsay rule. Grubbs made no attempt to show that the purported agents were “in the instant grip of violent emotion, excitement or pain,” 1 McCormick & Ray, Texas Law of Evidence 684 (2d ed. 1956), while “representing” themselves to be GECC agents.
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f2d_478/html/0059-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "CASTLE, Senior Circuit Judge. PELL, Circuit Judge",
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UNITED STATES of America, Plaintiff-Appellee, v. Abraham Frank ZIMMERMAN and Sylvia Zimmerman, Defendants-Appellants.
No. 72-1148.
United States Court of Appeals, Seventh Circuit.
Argued Feb. 26, 1973.
Decided April 30, 1973.
Anna R. Lavin, Joseph M. Solon, Chicago, III., for defendants-appellants.
Scott P. Crampton, Asst. Atty. Gen., Murray S. Horwitz, Atty., Tax Division, Department of Justice, Washington, D. C., James R. Thompson, U. S. Atty., William T. Huyck, Asst. U. S. Atty., Chicago, 111., for plaintiff-appellee.
Before CASTLE, Senior Circuit Judge, and KILEY and PELL, Circuit Judges.
CASTLE, Senior Circuit Judge.
■On October 29, 1971, the district court entered its decision reducing to judgment certain assessments for unpaid income taxes against Abraham Zimmerman for the' years 1923 to 1931, and holding Abraham and Sylvia Zimmerman jointly and severally liable for income tax liabilities for the years 1959 through 1962. On this appeal Sylvia Zimmerman seeks relief from the joint liability imposed upon her for 1959-1962 taxes because of the amendment of the internal revenue statute upon which her liability was originally based.
Apparently the Zimmermans filed suits in the Tax Court of the United States during 1966 for a determination of their tax liabilities. (Cases Nos. 1374-66 and 1375-66.) While these suits were still pending, the United States filed an action in district court pursuant to 26 U.S.C. § 7402(a) (1964) which sought to reduce certain tax assessments against the Zimmermans to judgment. Count I of the government’s complaint alleged deficiencies for the years 1923 through 1931, and Count II alleged unpaid liabilities for the years 1959 and 1961. The Zimmermans filed their answer denying the allegations of these two counts, and they asserted the statute of limitations and the alleged failure of Counts I and II to state a cause of action. The district court litigation then became drawn out due to a series of postponed pretrial meetings, continuances, and motions for partial summary judgment. In the meantime, the Tax Court rendered a decision in cases Nos. 1374-66 and 1375-66 on July 8, 1970 “pursuant to agreement of the parties.” The decision in 1374-66 determined that the deficiencies in the income tax payments of Abraham Zimmerman for 1959, 1960, 1961 and 1962 amounted to $26,441.98, $54,096.48, $62,216.32 and $5,073.80 respectively, and that he also owed the government various additional sums for the years in question pursuant to 26 U.S.C. § 6653(b). The decision in 1375-66 found Sylvia Zimmerman liable for the same deficiencies and penalties owed by her husband for the years 1959-1962.
On August 12, 1970 the government moved to amend its complaint in the district court action “to permit all issues between the interested parties to be litigated in one action thus saving unnecces-sary litigation.” Its motion granted, the government struck Count II and alleged that the July 8 Tax Court decision had determined the assessments against the Zimmermans for 1959-62 and that the Zimmermans had refused to pay these assessments. The prayer of relief for the amended Count II sought an adjudication that:
. the defendants, Abraham F. and Sylvia Zimmerman, are jointly and severally liable and indebted to the plaintiff, United States of America, for unpaid taxes, penalties and interest assessed against them in the amount of $304,233.56, plus interest according to law.
The Zimmermans then filed their answer to the amended Count II and admitted that they owed $304,233.56 to the government. Their answer also admitted “that the United States of America is entitled to the relief prayed under Count II of the Complaint.”
After a trial on only the first count of the complaint (the liability for taxes for 1923 to 1931), the district court adjudged that the government was entitled to the relief it asked for in both Count I and Count II. Regarding Count II of the complaint, the Trial Court found:
13. The taxpayers, Abraham F. Zimmerman and Sylvia Zimmerman, cannot relitigate the taxes assessed against them on July 13, 1970 for the years 1959, 1960, 1961, 1962. These liabilities are the result of decisions of the Tax Court of the United States, which are res judicata as to the question of the liability of the defendants. On this appeal Sylvia Zimmerman
asserts that her tax liability as determined by the Tax Court and confirmed in the district court was based on a statute which subsequently has been significantly modified. Prior to January 12, 1971, a husband and wife filing a joint return were automatically jointly and severally liable for income tax deficiencies and fraud penalties incurred even though the deficiencies and penalties were due to misstatements by one spouse and the other spouse was innocent. 26 U.S.C. §§ 6013 and 6653 (1964). Public Law 91-679 amended §§ 6013 and 6653 to allow an innocent spouse to escape joint liability under certain specified circumstances. These amended statutes became effective on January 12, 1971, six months after the Tax Court decision against Sylvia Zimmerman was rendered, and at least three months before the trial of the district court action. Appellant submits that the judgment of the district court on Count II should be reversed and remanded because of this intervening change of law between the dates of the Tax Court and district court decisions. She has also attacked the finding by the district court that the prior Tax Court decision is res judicata and prevents a relitigation of her tax liabilities for 1959 through 1962.
We find that the two arguments advanced by appellant are interrelated, for she cannot avail herself of the protection of the amended statutes if the 1970 Tax Court decision is res judicata as to her tax liability for 1959 through 1962. In enacting the amendments to §§ 6013 and 6653, Congress provided:
This bill, of course, does not open a year which has been closed by the statute of limitations, res judicata or otherwise.
S.Rep.No.91-1537, 91st Cong., 2d Sess. 4 (1970), U.S.Code Cong. & Admin.News, p. 6093. If the Tax Court decision is res judicata as to her tax liabilities, the amended statutes are inapplicable to her liability.
Appellant argues that the determination of her tax liability for 1959 through 1962 cannot be res judicata because the doctrine applies only to points or questions actually litigated and determined in a prior action. United States v. International Building Co., 345 U.S. 502, 504-505, 73 S.Ct. 807, 97 L.Ed. 1182 (1953). She extends this argument to contend that, since the amended statutes allowing an innocent spouse relief from the misstatements on a joint return did not exist at the time of the Tax Court decision against her, she should now be given an opportunity to litigate the rights made available to her by the amendments which she could not litigate in the prior action.
We believe her attempt to avoid the consequences of the doctrine of res judicata is unacceptable for two reasons. First, appellant has based her argument on the assumption that the amended statutes have given her a “right” to litigate which she did not possess prior to the amendments. Her assumption, of course, would be erroneous if Congress did not give her a “right” to seek a relitigation of tax liabilities which have already been conclusively determined. We conclude, for reasons set forth below, that no new litigable right was given to the appellant by the amendments which she can now assert. Secondly, her argument claims too much. Pushed to its limits, it would reduce the above-quoted language from the Senate Report to a nullity, for this argument would allow the reopening of any determination of tax liability, no matter whether a final determination of this liability had been reached or not. We believe that the correct interpretation of congressional intent — in line with the principle of statutory construction that congressional intent should not be read in a way that will reduce it to a nullity, First National Bank v. Walker Bank & Trust Co., 385 U.S. 252, 261, 87 S.Ct. 492, 17 L.Ed.2d 343 (1966) — is that the amendments to §§ 6013 and 6653 do not give any “rights” to taxpayers to relitigate their tax liabilities if these taxes have been determined through a conclusive final judgment rendered against the taxpayer. Thus, the key issue in light of this interpretation of congressional intent is whether the Tax Court decision rendered in 1970 was a conclusive determination of appellant’s tax liability.
Our interpretation of congressional intent is supported by case law. In United States v. Maxwell, 459 F.2d 22 (5th Cir. 1972), the government sued in district court to reduce assessments against a taxpayer set by a decision of the Tax Court to judgment. The taxpayer claimed in defense that the amendment to § 6013 relieved her from joint liability with her husband. The fifth circuit rejected this argument, finding that the decision of the Tax Court, which became final when the taxpayers failed to take an appeal, was res judicata of the wife’s tax liability and precluded relitigation of this liability. Similarly, in Sylk v. United States, 331 F.Supp. 661 (E.D.Pa.1971), the taxpayers sought to enjoin the government from exposing the wife’s property to sale on the theory that the amendment to § 6013 after the Tax Court decision setting her liability relieved her of liability. The court rejected this argument, finding that the Tax Court decision was res judicata. The court also found that res judicata was applicable despite the claim by the taxpayer that the amendment to the statute gave her rights which she did not have at the time of the Tax Court adjudication. The court noted that Congress could properly grant only partial retroactive relief, and that the taxpayer in effect did not possess any rights at the time of her appeal different from those which she had at the time of the Tax Court decision.
The appellant seeks to distinguish the present case from the two above-cited decisions on the ground that the district court in the present case assumed the position of an “appellate court” by accepting the government’s amendment to its complaint (which asserted the Tax Court judgments) before the expiration of the time to appeal from the Tax Court decision. We cannot accept the argument that the district court became an appellate court which assumed the power to review the correctness of the Tax Court decision, and that consequently the Tax Court decision was not res judicata. Congress has plainly provided that all appeals from Tax Court decisions are to be determined directly by the circuit courts of appeal. 26 U.S.C. § 7483 (1970). Clearly the district court did not have jurisdiction to pass upon the merits of the Tax Court decision. The record also indicates that appellant consented to entry of judgment against her by the Tax Court by signing a stipulation that the court could enter the decision against her. It has been repeatedly held that consent to entry of judgment against oneself waives one’s right to challenge the judgment through any sort of appeal. Thonen v. Jenkins, 455 F.2d 977 (4th Cir. 1972), Stanford v. Utley, 341 F.2d 265, 271 (8th Cir. 1965), Stewart v. Lincoln-Douglas Hotel Corp., 208 F.2d 379, 381 (7th Cir. 1953), 9 Moore’s Federal Practice 23.06 at 719 (2d Ed. 1972). Thus, the judgment of the Tax Court became final when appellant consented to the entry of judgment against her, and the district court could assume no appellate jurisdiction over this judgment.
The appellant also attempts to distinguish the Maxwell and Sylk decisions on the ground that both cases involved a “break” in time between the Tax Court decision and the pendency of the district court proceedings. She notes that no “break” was involved in the instant case because the district court action was commenced prior to the time the Tax Court rendered its decision, and because the government promptly amended its complaint to seek to reduce the assessments determined by the Tax Court to judgment. We fail to see the implications of this attempted distinction for avoiding the effect of res judicata.
The judgment of the district court is affirmed.
Affirmed.
PELL, Circuit Judge
(concurring).
While I am of the opinion that in all probability the majority opinion has reached a correct result on this appeal, I am troubled by certain aspects of the litigation below and the application of the principles of res judicata therein. I have phrased the matter in terms of “probability” because the matter of the nature of the litigation in the district court which has proved troublesome to me was not explored in the briefs or arguments of the parties. My own independent research merely confirms that the Internal Revenue Code possesses labyrinthine aspects into which one ventures with some uncertainty as to the correctness of his course.
The litigation between Sylvia Zimmerman and the Government apparently was proceeding in side-by-side eases in the Tax Court and the district court. When suit was originally filed in the district court the Government sought to recover in Count II a judgment for the years 1959 and 1961. I am unable to understand how these two years could properly have been the basis for the Government’s seeking a judgment in the district court when those two years plus 1960 and 1962 were in litigation in the Tax Court. 26 U.S.C. § 6213(a) would seem to state that no “proceeding in court” for a collection should be prosecuted “if a petition has been filed with the Tax Court, until the decision of the Tax Court has become final.” Although a decision was entered in the Tax Court on July 8, 1970, for the four years in question, the decision of the Tax Court under 26 U.S.C. § 7481 would not become final until the expiration of the time allowed for filing an appeal. Apparently the Government waited 30 days and, no notice of appeal having been filed, then filed its motion to amend the district court complaint “to permit all issues between the interested parties to be litigated in one action thus saving unnecessary litigation.” [Emphasis supplied.] In the amendment to the complaint accompanying the motion to amend, the Government prayed as follows:
“(a) That this Court adjudge and decree that the defendants, Abraham F. and Sylvia Zimmerman, are jointly and severally liable and indebted to the plaintiff, United States of America, for unpaid taxes, penalties and interest assessed against them in the amount of $304,233.56, plus interest according to law.”
The amount specified was that which was claimed to be due for the four years covered by Count II, and the amendment to the complaint concerned Count II only. All of the language in the Government’s motion and the amended complaint appears to be couched in terms of some sort of a new action in which the Government is seeking a judicial determination that a deficiency was owing by the Zimmermans for the four years in question.
Taking the Government’s allegations at face value, if there was new litigation it would appear to me that res judicata would not be applicable because a change of law had occurred. The general principle thus applicable is set forth in 50 C.J.S. Judgments § 650, at 95 (1947) as follows:
“In accordance with the general rule stated supra this section that the estoppel of a judgment extends only to the facts and conditions as they were at the time the judgment was rendered, it has been broadly held that res judicata is no defense where, between the time of the first judgment and the second, there has been an intervening decision or a change in the law creating an altered situation, as where the second suit seeks an adjudication of rights under a statute enacted subsequent to the determination of the first action.” [Footnotes omitted.]
It seems clear that the Zimmermans intended the decision of the Tax Court entered July 8, 1970, to be a final decision, although Sylvia Zimmerman was not aware of the “innocent spouse” statute at that time because it had not yet become law. The stipulation which she signed reads in part as follows:
“It is further stipulated that, effective upon the entry of this decision by the Court, petitioner waives the restrictions, if any, contained in the applicable Internal Revenue laws on the assessment and collection of the deficiencies, plus statutory interest.”
This stipulation would seem to be a waiver of her rights under 26 U.S.C. § 6213(d) to assert the restrictions provided for in 26 U.S.C. § 6213(a).
Nevertheless, if the amended complaint in the district court was in the nature of a second or new suit it would appear that she should be entitled, pursuant to the principle set forth herein-before, to assert the “innocent spouse” statute as being applicable to her without being barred by res judicata.
I have been unable to discern from the statutes the exact purpose of the proceedings in the district court since the Government already apparently had a final decision in the Tax Court. It would appear, however, taking the reference in 26 U.S.C. § 6213(a) to “proceeding in court for its collection” and noting the general pronouncements of district court jurisdiction in tax matters both in 26 U.S.C. § 7402, and 28 U.S.C. § 1340 and § 1345, that the litigation in the district court subsequent to the filing of the amendment to the complaint was in essence nothing more than an effort to enforce the collection of what was tantamount to a final judgment. To reach this result it is, of course, necessary to ignore the plain language of the prayer to the amendment to the complaint, but since the amount of the deficiency in taxes for the four years in question had already been determined with the decision having become final nothing more remained for the Government to do except to seek a district court judgment enforcing payment since the taxpayer had declined to pay voluntarily.
To the extent that it is arguable that there was new litigation here which would have permitted the assertion of the “innocent spouse” statute in the proceedings in the district court, it is to be noted that although the statute had become effective at the time the district court entered its judgment the statute was not asserted in the district court. In my opinion, the contention should not be permitted to be asserted for the first time on this appeal.
For the reasons hereinbefore set out, I concur in the result reached in the majority opinion of this court.
. Despite the fact that both Abraham and Sylvia Zimmerman have appealed, it appears that the only real appellant here is Sylvia Zimmerman, for this appeal seeks only to reverse the judgment that she is jointly and severally liable for the tax deficiencies and penalties incurred by her husband. If Sylvia were to prevail here and ultimately to prove sufficient facts to enable her to escape liability under the amended versions of 26 U.S.C. §§ 6013 and 6653, Abraham Zimmerman would then be liable for the full amount of $304,233.56.
. We recognize that this principle of law may exist as an alternative ground for our decision affirming the judgment of the district court. Since appellant filed an answer which admitted her liability under Count II and which Consented to entry of judgment against her for the amount requested by the government, she in effect waived all rights to appeal the decision on Count II.
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f2d_478/html/0064-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "EUGENE A. WRIGHT, Circuit Judge: DAVID W. WILLIAMS, District Judge,",
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UNITED STATES of America, Plaintiff-Appellee, v. Einer KETOLA, Defendant-Appellant.
No. 71-2285.
United States Court of Appeals, Ninth Circuit.
March 28, 1973.
As Amended on Denial of Rehearing May 3, 1973.
John J. Cleary (argued), Robert A. Weninger, Federal Defender, Warren R. Williamson, San Diego, Cal., for defendant-appellant.
Catherine A. Chandler, Asst. U. S. Atty. (argued), Harry D. Steward, U. S. Atty., Donald F. Shanahan, Stephen G. Nelson, Asst. U. S., Attys., San Diego, Cal., for plaintiff-appellee.
Before WRIGHT and GOODWIN, Circuit Judges, and WILLIAMS, District Judge.
Of the Central District of California.
EUGENE A. WRIGHT, Circuit Judge:
This appeal is again before us following a remand from the Supreme Court. We affirmed the conviction of appellant on January 25, 1972, 455 F.2d 83 (9th Cir. 1972). A writ of certiorari was sought and granted on the Solicitor General’s concession that Ketola should have a copy of portions of the transcript not previously made available to him. Ketola v. United States, 409 U.S. 815, 93 S.Ct. 139, 34 L.Ed.2d 72 (1972). The transcript has been filed pursuant to the mandate of the Supreme Court and the parties have submitted supplemental briefs which have been considered, the court having dispensed with further oral argument.
Of the three issues presented by appellant, two were disposed of in our prior opinion. The supplemental transcript made available to appellant was in no way relevant to those issues, and, although counsel for appellant has ably re-argued them, we have concluded that our prior disposition of them was correct. The evidence was sufficient to support the conspiracy conviction, and we employ the concurrent sentence doctrine and decline to rule on counts two through five.
The government’s case against appellant was based in the main on the testimony of two eodefendants, although the government also introduced evidence of appellant’s involvement six months earlier in the same type of activity, using a similar modus operandi, as the crime here charged. Appellant did not take the stand and offered no evidence to contradict that of the government.
We have said that a conviction in a federal court may be based on the uncorroborated testimony of an accomplice, if the testimony is not “incredible or unsubstantial on its face.” Darden v. United States, 405 F.2d 1054, 1056 (9th Cir. 1969).
We have also said in DeCarlo v. United States, 422 F.2d 237, 241 (9th Cir. 1970) that:
“Nor was the court required, in the absence of a special request, to instruct the jury as to how to view such [accomplice] testimony. .
“There was considerable evidence reflecting upon the motives and credibility of the [accomplices], and counsel attacked their credibility in argument. We find no plain error.”
Appellant relies on language from United States v. Marsh, 451 F.2d 219, 221 (9th Cir. 1971):
“A cautionary instruction must be given if requested. United States v. Davis, 439 F.2d 1105, 1106-1107 (9th Cir. 1971). And failure to give such an instruction may be plain error if the need for the instruction is sufficiently clear (United States v. Griffin, 382 F.2d 823, 829 (6th Cir. 1967), but this is not such a case.”
We have examined the record and the supplemental transcript in an effort to determine if the need for such an instruction was clear. It was not. At the start of the trial, the trial judge gave some general instructions and discussed with the jury the matter of determining credibility. He appealed to the common sense of the jurors, mentioned possible bias and prejudice of witnesses and said that the jurors could disregard the entire testimony of a witness found not to be telling the truth.
In his closing argument to the jury, defense counsel focused on the testimony of the accomplices. He asked the jurors whether they could rely on what either accomplice had to say. He asked them to scrutinize the testimony of one accomplice, Morisch, in particular. Mo-risch had testified that he had had 20 or 25 beers during the three or four hours preceding the agreement with appellant. Counsel urged that there was a general unreliability about the kind of testimony coming from such a person. Counsel further urged that because appellant had previously been convicted of a similar offense, it was logical that Morisch would try to implicate him, to try to minimize his own involvement and to shift the responsibility for the crime to another person.
The court’s instructions to the jury included the following language:
“As you judge the credibility of witnesses and what weight is to be given to their testimony, you must consider such things as the manner in which they testify, the character of their testimony, evidence to the contrary of what they say. You should consider a witness’ intelligence, his motive, state of mind, his demeanor — all of these things and anything else which comes to your mind as a reasonable way of ascertaining where the truth is.”
We conclude that the jury was properly and adequately instructed. No cautionary instruction was requested by defense counsel and no exception taken to the instructions as given. It was not plain error for the trial judge to fail to give, sua sponte, the admonition now suggested.
Affirmed.
DAVID W. WILLIAMS, District Judge,
dissents in part for the reasons stated in his dissent to the panel’s earlier opinion, United States v. Ketola, 455 F.2d 83, 85 (9th Cir. 1972). |
f2d_478/html/0067-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "McCREE, Circuit Judge.",
"license": "Public Domain",
"url": "https://static.case.law/"
} |
UNITED STATES of America, Plaintiff-Appellee, v. Leroy EDDINGS, Defendant-Appellant.
No. 72-2162.
United States Court of Appeals, Sixth Circuit.
Argued April 12, 1973.
Decided May 10, 1973.
Pierce Winningham, Jr., Jackson,, Tenn., (Court appointed), for defendant-appellant.
Callis L. Childs, Asst. U. S. Atty., Memphis, Tenn., for plaintiff-appellee; Thomas F. Turley, Jr., U. S. Atty., Memphis, Tenn., on brief.
Before PECK, McCREE and KENT, Circuit Judges.
McCREE, Circuit Judge.
Appellant was convicted by a jury of two counts of possession and transportation of non-tax-paid whiskey, in violation of 26 U.S.C. § 5604(a)(1). On appeal, he contends that he was entrapped as a matter of law; that he was denied the opportunity to present an effective defense by the failure of the Government to disclose to him, both before and during trial, the name of an informer who allegedly sold him the whiskey; and that the court erred in its charge to the jury and in its refusal of his proffered special instructions.
The Government’s first witness at trial was Robert H. Golson, Special Agent of the Alcohol, Tobacco and Firearms Division of the Treasury Department. He testified on direct examination that early in the afternoon of May 22, 1972, he received information from a confidential informer who had (according to Golson) proved reliable in the past that appellant would pick up 50 gallons of liquor on Law Road near Interstate 40, about twelve to fifteen miles east of Jackson, Tennessee. Golson contacted agents Hopkins and Braxton, and the three agents, along with agent Peach and Peach’s brother, set up a surveillance that night in the area described by the informer. Agent Golson, on foot, heard a car coming down a side road in the area and radioed agent Peach, in a truck, to follow it. Peach followed the car for about a mile but was then told by Golson to come back because he had heard a car being loaded in the woods nearby. Golson then saw a car come down a side road and onto Law Road, and then travel with its lights off about 100 yards. Golson was then picked up by agent Braxton and the agents began to follow the second car toward the highway. As they came up behind the car, Golson recognized appellant, whom he had arrested before. The cars of agents Braxton and Hopkins followed appellant onto the highway, and the truck of agent Peach succeeded in getting ahead of appellant, and the caravan then proceeded a few miles until the agents decided to make the arrest. The agents stopped the car in which appellant was riding, and arrested appellant and three others — appellant’s codefendant Edward Smith and two women. In response to a question by Golson, appellant stated that the liquor was in the trunk. An examination of the trunk revealed 50 gallons of non-tax-paid whiskey. Golson testified that he did not know who had sold the liquor to appellant.
On cross-examination, Golson testified that he knew nothing of any telephone call to appellant on May 22, and defense counsel then asked him where he had obtained his information about the liquor sale. At this point the Government objected to revealing the name of its informer, and the objection was sustained. Golson thereafter testified that the informer was paid on a contingent basis —the larger the “catch,” the larger the fee. The informer did not, Golson stated, indicate to Golson how he had secured his information about appellant’s planned purchase of whiskey that night, and did not, to Golson’s knowledge, meet with appellant that night. Near the close of cross-examination, defense counsel again asked for the name of the informer, and the court again sustained an objection by the Government.
Following the testimony of agent Gol-son, agents Peach and Hopkins testified to essentially the same events described by Golson. They knew nothing about the source of Golson’s information, and they described their roles in the surveillance and apprehension of appellant. In addition, agent Hopkins read from defendant’s police record that Eddings had had two convictions for violating a local liquor ordinance within three years of the trial.
Following the close of the Government’s proof, appellant took the stand in his own behalf. He claimed that at 11:00 a.m. on May 22, he received a telephone call .from a man he did not know. The caller wanted to meet appellant at a filling station to discuss “selling me this merchandise, which was alcohol.” Appellant agreed to meet the man at noon at a filling station in Jackson. The meeting occurred, and the man at the station, whom appellant had never seen before, offered to sell him 50 gallons of whiskey that night. The two agreed to meet at 8:30 that night on Law Road,' although appellant testified that he waited until 9:30 to arrive at the meeting-spot in case there was a trap. He came to the agreed-upon place accompanied by Edward Smith and two women, none of whom, according to appellant, knew that appellant was to pick up whiskey. When he arrived at the designated site, he saw two men, one of whom was the man he had met at the filling station that afternoon. He inspected the liquor and then paid the other man $300. He then loaded the liquor into the trunk of the car and drove off. He testified that he had told no one about his plans to obtain the whiskey.
On cross-examination, appellant freely admitted that he never goes on time to buy liquor because he is wary of traps; that he did not like the Law Road meeting place because “[a] million have been caught on that road”; that agent Hopkins had arrested him “dozens” of times; and that he had planned to sell the whiskey he bought on May 22.
Following appellant’s testimony, Edward Smith and the two women who were in the car with appellant on the night of May 22 testified. They indicated that they had no idea that appellant was going to pick up whiskey that night until he began to load the liquor into the car, at which time they began to suspect that they were not merely on a detour to the drive-in movie to which they thought they were headed. They knew nothing about appellant’s prior arrangements with the mystery caller.
About two months before trial, appellant moved for an order requiring the Government to furnish him with “the names and addresses of all agents, Federal and State, who participated in the investigation and arrest in this case, including those who contacted this Defendant prior to and at the time of the arrest as a part of the investigation.” The court granted the motion, and subsequently denied a motion by the Government to reconsider. Shortly before trial, defense counsel was contacted by telephone by an assistant United States Attorney, who stated that the only names and addresses subject to the discovery order were those of agents Gol-son, Hopkins, Braxton, and Gary Peach. The Government accordingly did not supply the name of the informer in response to the court order, and did not claim a privilege for the nondisclosure. The record reveals no reference to this noncompliance at trial, except for appellant’s in-trial request for the name of the informer.
As stated above, appellant’s only defense was entrapment. The jury convicted appellant on both counts of his indictment but acquitted Edward Smith. Appellant was sentenced to 18 months’ imprisonment on one count and three years’ probation on the second count, the sentences to run consecutively.
Passing, for the moment, appellant’s contention that he was entrapped as a matter of law, we consider his claim that the court erred in refusing to order the Government to disclose to him the name of the informer who had alerted agent Golson. Resolution of this claim is governed by the decision of the Supreme Court in Roviaro v. United States, 353 U.S. 53, 77 S.Ct. 623, 1 L.Ed.2d 639 (1957), in which an informer had notified federal and state agents that he intended to purchase narcotics from the defendant and subsequently made the buy while under police surveillance. The informer was the only person present during the actual exchange of narcotics, although a federal agent was concealed in the trunk of the car in which the exchange took place. In holding that the trial court had erred in refusing to require the Government to divulge the name of the informer upon request of the defense, the Court stated:
A further limitation on the applicability of the privilege arises from the fundamental requirements of fairness. Where the disclosure of an informer’s identity, or of the contents of his communication, is relevant and helpful to the defense of an accused, or is essential to a fair determination of a cause, the privilege must give way. In these situations the trial court may require disclosure and, if the Government withholds the information, dismiss the action. .
-X- -X- -X- -X- * *
We believe that no fixed rule with respect to disclosure is justifiable. The problem is one that calls for balancing the public interest in protecting the flow of information against the individual’s right to prepare his defense. Whether a proper balance renders nondisclosure erroneous must depend on the particular circumstances of each case, taking into consideration the crime charged, the possible defenses, the possible significance of the informer’s testimony, and other relevant factors.
353 U.S. at 60-62, 77 S.Ct. at 628-629. As the Court has more recently put it, the informer’s “identity cannot be concealed from the defendant when it is critical to his case.” Branzburg v. Hayes, 408 U.S. 665, 698, 92 S.Ct. 2646, 2664, 33 L.Ed.2d 626 (1972). See also McCray v. Illinois, 386 U.S. 300, 310-311, 87 S.Ct. 1056, 18 L.Ed.2d 62 (1967).
We have twice applied the above test either to reverse a district court’s decision not to require the Government to disclose the name of its informer or to require a court to hold an in camera hearing to determine whether the circumstances of the case dictated disclosure. United States v. Barnett, 418 F.2d 309 (6th Cir. 1969); United States v. Lloyd, 400 F.2d 414 (6th Cir. 1968). In both cases the informer was an eyewitness to, and in fact a participant in, the exchange of contraband by the defendant seller (Barnett involved moonshine; Lloyd involved narcotics). In both the sales were witnessed by Government agents who were the key prosecution witnesses at trial. In Lloyd, the defendant asserted that she did not have the requisite guilty knowledge; in Barnett, the defendant sought the opportunity to controvert the Government agent’s version of the transaction. We held in Barnett that the informer’s testimony would likely have been relevant and helpful to the defense and, accordingly, that the informer’s privilege had to give way. In Lloyd we remanded for a determination whether in fact the informer’s testimony would have been relevant and helpful.
Appellee urges that the facts of this case are sufficiently distinguishable from those in Barnett and Lloyd to justify refusal to divulge the informer’s identity in this case. Specifically, the Government contends that there is no proof that the informer who gave agent Golson the tip about appellant was the person from whom appellant bought the whiskey. Golson testified that he did not know who had sold appellant the whiskey, and he stated that he knew nothing about any telephone call appellant might have received on May 22.
We are unpersuaded by appellee’s argument. First, it ignores appellant’s uncontroverted testimony that he told no one about the proposed transaction and that the deal was made at noon on May 22. Thus, either the informer was the person with whom appellant negotiated and then consummated the sale or else he was in such close contact with that person that the inference arises that the two were working together. Second, if the seller of the liquor was not the informer, there is no evidence in the record to explain why the agents did not seek to apprehend the seller or at least to ascertain his identity. There is testimony that a car emerged from the woods near Law Road shortly before appellant’s car did, and that agent Peach followed this car for a few minutes until he was told that it was not Eddings’ vehicle (which agent Golson knew because he allegedly heard car doors and a trunk slam). It is logical to suppose that if the agents were in doubt about the identity of the seller, they would have attempted to discover who was driving this other vehicle, would have attempted to surveil the actual sale, or would otherwise have attempted to trap all parties to the exchange, yet the agents evinced no concern about the source of the whiskey.
Further, if the informer truly had nothing to do with the actual negotiation and consummation of the sale — a fact peculiarly within the capacity of the Government to establish — evidence of this could have been presented to the District Court in camera so that it would have been clear that the informer had nothing to offer that would have been relevant and helpful to the entrapment defense. Instead, the Government refused to comply with a pretrial discovery order that it reveal the names of all the agents who participated in the investigation of the case, and it objected at trial to disclosing the name of the informer without citing any reason other than the need to protect the confidentiality of its sources. When the evidence suggests, as here, that it is reasonably probable that the informer can give relevant testimony, the burden should be on the Government to overcome this inference with evidence that the informer cannot supply information material to the defense. See United States v. Skeens, 145 U.S.App.D.C. 404, 449 F.2d 1066, 1072 (1971) (Bazelon, C. J., dissenting); Rules of Evidence for United States Courts and Magistrates rule 510(c)(2) (1972).
Notwithstanding the foregoing, and despite the failure of the Government to come forward with any evidence of the lack of materiality of the informer’s testimony, we conclude that the court did not err in refusing to order disclosure. Not only do we disagree with appellant’s argument that the proof established entrapment as a matter of law, we believe that the proof approaches establishing predisposition as a matter of law. Appellant appears to be under the impression that entrapment is established if the accused shows only that the criminal scheme originated in the mind of the Government agent. Such is not the law. In Sorrells v. United States, 287 U.S. 435, 451-452, 53 S.Ct. 210, 216, 77 L.Ed. 511 (1932), the Court stated that
the defense of entrapment is not simply that the particular act was committed at the instance of government officials. That is often the case where the proper action of these officials leads to the revelation of criminal enterprises. . . . The predisposition and criminal design of the defendant are relevant. But the issues raised and the evidence adduced must be pertinent to the controlling question whether the defendant is a person otherwise innocent whom the government is seeking to punish for an alleged offense which is the product of the creative activity of its own officials. If that is the fact, common justice requires that the accused be permitted to prove it. The government in such a case is in no position to object to evidence of the activities of its representatives in relation to the accused, and if the defendant seeks acquittal by reason of entrapment he cannot complain of an appropriate and searching inquiry into his own conduct and predisposition as bearing upon that issue. If in consequence he suffers a disadvantage, he has brought it upon himself by reason of the nature of the defense.
“To determine whether entrapment has been established, a line must be drawn between the trap for the unwary innocent and the trap for the unwary criminal.” Sherman v. United States, 356 U. S. 369, 373, 78 S.Ct. 819, 821, 2 L.Ed.2d 848 (1958).
In this case, appellant readily admitted on direct examination that he had been previously convicted in federal court for violation of federal liquor laws, that he met the anonymous caller at the filling station and agreed to purchase the 50 gallons about which the caller had spoken, and that he purposely arrived late to pick up the whiskey because if there was a “set up,” the federal agents would probably have departed. He indicated no hesitation in accepting the offer to purchase. To the contrary, he agreed to meet a complete stranger to strike up a bargain on the sale of whiskey. He went out to Law Road after having all day to consider whether he really wanted to consummate the sale, and he was so eager to purchase the whiskey that he went through with it even though he did not like both the fact that the sale was to take place on Law Road and the fact that he allegedly recognized agent Hopkins near the rendezvous point. On cross-examination, he testified that he does not like to arrive on time to these meetings because he fears “set-ups”; that agent Hopkins had arrested him many times; and that he intended to sell the whiskey he purchased from the stranger. In addition, one of the women arrested with appellant on the night of May 22 testified that she had heard that appellant was “a whiskey man”; several agents also testified to this effect; and there was evidence that appellant had had two recent convictions for violation of a local liquor ordinance.
Thus, although in the ordinary case the testimony of the informer would have been material to presentation of the entrapment defense, we do not believe that the informer's testimony in this case could have created in the minds of the jurors a reasonable doubt whether appellant was predisposed to commit the offense. On balance we believe that the record does not indicate that the informer’s testimony would have been relevant and helpful to the defense. Accordingly, the District Court’s refusal to order disclosure was not erroneous.
With respect to appellant’s contentions about the court’s charge to the jury, we do not believe that the court committed reversible error in refusing appellant’s special instructions or that the charge when taken as a whole erroneously described the respective burdens in the case. We believe that the charge did adequately inform the jury that the Government had the ultimate burden of proving beyond a reasonable doubt that appellant was not entrapped, although it would have been preferable for the court to have been explicit on this point in accord with appellant’s first special request. See Martinez v. United States, 373 F.2d 810, 812 (10th Cir. 1967); Notaro v. United States, 363 F.2d 169, 174-175 (9th Cir. 1966). Defendant was also entitled to an instruction that the jury could acquit him on the basis of circumstantial evidence, although again on the facts of this case, we do not consider it reversible error for the court to have refused appellant’s special request on this point.
The judgment is affirmed.
. That portion of the charge concerning entrapment is as follows :
Now, if you ladies and gentlemen entertain a reasonable doubt about any of the contentions of either or both of the defendants or if you entertain a reasonable doubt about the contentions of the government, or if you feel that the government has not proven the charges made against the defendants beyond a reasonable doubt, in any of those instances, you should return a verdict of not guilty as to any defendant about who you entertain a reasonable doubt.
Now, the Defendant Eddings asserts that he was the victim of entrapment as to the crime charged in the indictment.
Where a person has no previous intent or purpose to violate the law, but is induced or persuaded by law enforcement officers, or their agents, to commit a crime, he may be a victim of entrapment, and the law, if that were the case, as a matter of policy, would not permit a conviction in such a case if and when a jury would find that entrapment does exist as to a particular defendant.
On the other hand, where a person already has the readiness and willingness to break the law, the mere fact that a government agent provided what appears to be a favorable opportunity, is not entrapment.
For example, when the government suspects that a person is engaged in illicit sale of narcotics, it is not entrapment for a government agent to pretend to be someone else and to have information either directly or through an informer, or other person, to purchase narcotics from a suspect.
If the jury should find beyond a reasonable doubt, from the evidence in this case, that before anything at all occurred respecting the alleged offense of violating the liquor law, as is involved in this case, that Eddings was ready and willing to commit a crime such as charged in this indictment, whenever the opportunity was afforded, or that he had the disposition to commit such a crime, and that the government officers or their agents did no more than offer the opportunity to catch him in the act of the crime, then the jury should find that the defendant is not a victim of entrapment.
If the evidence in this case should leave you with a reasonable doubt as to whether the defendant had the previous intent or purpose or predisposition to commit a liquor law violation of the character charged, and did so only because he was induced, or persuaded, or corroborated [sic] by some officer or agent of the government, then in that event you would acquit the defendant.
Now, the function of the law enforcement is the prevention of crime. In apprehension of criminals, criminal activity is such that requires undercover work, use of informers, whether paid or unpaid, and strategy are [sic] necessary weapons in the arsenal of the police officers, particularly in illegal liquor and narcotic cases, because of their very nature. However, a policeman may not originate a criminal design. An official of the government may not implant in the mind of an otherwise innocent person the disposition to commit an offense and to induce its commission in order that they may prosecute. However, the fact that government agents merely afford opportunities or facilities for the commission of an offense does not in and of itself constitute entrapment. Entrapment occurs only when the criminal conduct was the product of creative activity, procurement, corruption and inducement on the part of law enforcement official; thus, the claimed defense of entrapment brings about the alleging >of the conduct of the government agent. At the same time, one claiming entrapment will be subject to an appropriate inquiry into his own conduct and predisposition. Therefore, the reputation, past criminal activities, if any, and the conduct of, and attributable to the Defendant Eddings, pertaining to his criminal defense, intention or disposition, is a relevant consideration for the jury to determine in connection with this claim of entrapment by the defendant, Eddings, in this ease; all to the end of your determining whether or not the government has carried its burden of proof to establish every essential element of the charge of possession and transportation of illegal whiskey, including the showing that it has not corruptly implanted in the mind of the Defendant Eddings a predisposition to commit this alleged offense and to induce and persuade him improperly to do the things with which he is charged.
|
f2d_478/html/0073-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "TUTTLE, Circuit Judge: \n SIMPSON, Circuit Judge",
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Judith Ann PETERSEN et al., Plaintiffs-Appellants, v. TALISMAN SUGAR CORPORATION et al., Defendants-Appellees.
No. 72-2057.
United States Court of Appeals, Fifth Circuit.
May 3, 1973.
Joseph C. Segor, Miami, Fla., Timothy Dyk, Washington, D. C., for plaintiffs-appellants.
William N. Lobel, Miami, Fla., Erie Phillips, Charles Kelso, Atlanta, Ga., for Talisman.
Kirk Sullivan, West Palm Beach, Fla., for Heidtman.
Before TUTTLE, WISDOM and SIMPSON, Circuit Judges.
TUTTLE, Circuit Judge:
Talisman Sugar Corporation, a sugar cane grower and producer, paid passage for approximately 1,000 Jamaican workers to work at and live on its sugar plantation from November, 1971 to March, 1972. The Jamaicans were hired under a contract complying with federal regulations, and were brought to live in a camp near Belle Glade, Florida.
The camp consisted of housing for 1050 in the form of concrete block buildings. It had kitchen facilities, a mess hall, recreation facilities, a chapel, an infirmary, a laundry, and a store. Twice a week, the company brought in a minister to conduct religious services. In the store, it carried a general line of merchandise, including food and sundry items such as clothing. Traditionally municipal functions such as fire protection, sewage disposal, and garbage collection were handled by Talisman. There was a post office in the camp, but there was no public telephone of any kind. Though the company has telephones at its office some six miles from the camp which it allows anybody to use for an emergency, the workers cannot use these phones if they wish to make social or business calls.
The camp is almost totally isolated from the outside world. There are either fences or canals completely surrounding the 38,000 acre tract upon which it is located. Eight miles from the nearest highway and six miles deeper into Talisman’s property than the sugar mill, the camp is twenty-five miles from South Bay, the nearest town. Four or five miles beyond South Bay lies the somewhat larger community of Belle Glade. Only .one road leads from the camp to the highway, and this road is guarded by company employees. Though persons are admitted if brought to the camp on company business or if they come as friends or relatives of the migrant workers, Talisman has pursued a policy of excluding those it deems “inappropriate.”
Every other Saturday, the company furnished transportation to those workers wishing to go into the town of Belle Glade. The sole description of the town on these Saturdays was as follows:
“The streets ... on Saturday might have half the population of Belle Glade on them . . . 12,000, 15,000 people, something like that; and heaven knows how many of this six to eight thousand Jamaicans that are employed by the various sugar companies are there.”
Due to lack of their own transport and the language barrier which confronted them in Belle Glade, as well as their limited financial resources, few Jamaicans left the camp except on these biweekly excursions.
In addition to the Jamaicans, Talisman employed domestic workers including field equipment operators. Some of these field equipment operators requested that Talisman recognize the International Association of Machinists as their bargaining representative. When Talisman refused, on the grounds that many other employees did not support the unionization drive, the field equipment operators struck. When Talisman hired strike replacements, the strikers began picketing the company’s property. Shortly thereafter, members of the United Farm Workers Union joined the picket lines outside Talisman’s plantation.
Plaintiff-appellants Judith Ann Petersen, Florida counsel to the UFW, David Hernandez, Associate Director of the UFW Ministry, a religious group, and Franklin P. Smith, a Methodist minister associated with the Florida Christian Migrant Ministry, sought to visit the Jamaican cane-cutters during the course of the UFW-Talisman dispute. Miss Petersen was seeking to substantiate reports that the company had been illegally using the Jamaican cane-cutters as field equipment operators.0 The other two named plaintiffs were supporting this inquiry and wished additionally to present the workers with information concerning their religious organizations.
On February 1, 1972, plaintiffs, accompanied by Father Kerry Robb, an Episcopalian minister, appeared at the entrance of Talisman’s property and requested permission to talk with the Jamaican workers in the labor camp. The gatekeeper, defendant Sergio De la Vega, informed them that they would not be permitted to enter without Talisman’s permission. After apparently placing a call, De la Vega told the plaintiffs that permission had been denied. Nevertheless, asserting a right to visit the workers in their living quarters, plaintiffs proceeded to drive down the access road toward the camp. Other employees of the company followed them and said that Talisman’s general manager, defendant Miguel Cervera, had forbidden them from entering the camp.
Plaintiffs thereupon returned to the main entrance and waited inside the gate on company property until a deputy of defendant William D. Heidtman, Sheriff of Palm Beach County, arrived. The deputy informed the plaintiffs that it was the policy of the Sheriff’s office to arrest persons trespassing on labor camp property after being warned off. He said he was acting pursuant to Florida Statute § 821.01, F.S.A., which he read to the plaintiffs as follows:
“Whoever wilfully enters into the enclosed land and premises of another, or into any private residence, house, building or labor camp of another, which is occupied by the owner or his employees, being forbidden so to enter . shall be punished by imprisonment not exceeding six months, or by fine not exceeding one hundred dollars.”
Although the plaintiffs pointed out that the phrase “or labor camp” has been excised from the statute by the Florida Legislature in 1969, the deputy said that the protection given to “enclosed land” was enough, without more, to justify the arrest. The plaintiffs were arrested at this time, but no charges were pressed. However, after notice of appeal was filed in this case, an information was brought charging plaintiffs with trespass on Talisman’s property. The trial judge dismissed the charges on the ground that “to prevent their entry might lead to a condition where employees are subjected to a form of involuntary servitude, wherein the masters decide who may communicate with the servants.” State v. Petersen et al., Case No. 72M-8209, filed in the Small Claims-Magistrate Court, Criminal Division, in and for Palm Beach, Florida.
On February 7, 1972, plaintiffs instituted this class action in federal court, seeking a declaratory judgment and an injunction establishing the right of themselves and others similarly situated to visit the Talisman labor camp. Both compensatory and punitive damages were also sought against the defendants. Following a hearing on March 3, 1972, the district court entered an order dismissing the complaint. It held that Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971) barred relief, and that plaintiffs were not proper class representatives, had no right to access to the labor camp under the Sugar Act and the Wagner-Peyser Act, had no standing to assert First Amendment rights of the Jamaican workers to receive information, and had no right of access to the camp under the First and Fourteenth Amendments.
Since the initiation of this suit, Talisman has spent over one million dollars on cane cutting machines, has given up its Labor Department certification for the importation of Jamaican workers, and has offered assurances that no workers will henceforth reside in the camp. The work force allegedly will be reduced permanently from 1,000 to 50 and the workers will commute except when there is reason to stay over. Though the buildings of the camp will not be destroyed, the services formerly provided will be discontinued. The gate will remain guarded, however, and access will continue to be granted only to those having direct business with the company or visiting employees “and those visits are desired by these employees.”
I. MOOTNESS
Plaintiffs sought not only declaratory and injunctive relief from the trial court, but requested that monetary damages be awarded for injury done under color of law. 42 U.S.C. § 1983. Though the damages action has been dismissed as to the Sheriff, the claim for damages against defendants other than the Sheriff is still a live controversy. Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1956) and Powell v. McCormack, 395 U.S. 486, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1968) recognize that even if the injunctive and declaratory relief sought is moot, the courts retain jurisdiction to decide upon the appropriateness of awarding damages.
Moreover, the operational changes effected by Talisman do not moot even the declaratory and injunctive relief requested. A discontinuance of wrongful conduct does not alone warrant denial of injunctive relief, for the appropriateness of granting an injunction against now-discontinued acts depends upon the bona fides of the expressed intent to comply, the effectiveness of the discontinuance, and, in some eases, the character of past violations, United States v. W. T. Grant Co., 345 U.S. 629, 73 S.Ct. 894, 97 L.Ed. 1303 (1953). Where “the underlying question persists and is agitated by the continuing activities and program” of the defendant, Carroll v. President & Commissioners of Princess Anne, 393 U.S. 175, 179, 89 S.Ct. 347, 350, 21 L.Ed.2d 325 (1968), a controversy is not moot.
Though Talisman has spent substantial sums on mechanical harvesting equipment and has relinquished its permit to import Jamaican laborers, the harvesting equipment is experimental and might have to be abandoned for manual labor if weather conditions become adverse. The permit can be renewed at any time, and there has been no change in the domestic labor situation which would lead the Labor Department to deny Talisman another permit this year. Though barren at the moment, the camp still stands and can be instantly resuscitated should the company require more labor.
II. ABSTENTION
The principle of comity announced in Younger v. Harris applies only to the portion of this suit in which Sheriff Heidtman is the defendant. It does not preclude relief in federal court against Talisman Sugar Corporation and its employees.
At the time this suit was filed, the plaintiffs had been arrested by a deputy of Sheriff Heidtman, but no criminal trespass charges had been filed. After the appellants had filed notice of appeal to this court, an information was sworn out accusing appellants of criminal trespass in violation of F.S. § 821.01, F.S.A. A hearing was later held on this charge in state court. Since we have held that Younger v. Harris is applicable not only to pending state court prosecutions, but to threatened future state prosecutions, Becker v. Thompson, 459 F.2d 919 (5 Cir. 1972), we hold that abstention in this case was proper insofar as the relief sought in federal district court was against the Sheriff. The proper forum for the plaintiffs to use to challenge the application of the criminal trespass statute to themselves was the court which dismissed these charges.
The doctrine of abstention is irrelevant to the other defendants in this case. Talisman and its employees were not parties to the state court prosecution, and they did not purport to act as officials of the State of Florida when they denied access to the appellants. Talisman’s denial of entry, while backed up by the deputy’s arrest, occurred both as a matter of company policy and as a matter of specific application to appellants even before the deputy sheriff arrived at the gate of the plantation.
In short, the state court prosecution could have no bearing upon whether or not Talisman’s guards continued to deny admission to the plaintiffs. As to the aspects of this case in which Talisman is the defendant, therefore, the relief sought is not “against any pending or future court proceedings as such.” Fuentes v. Shevin, 407 U.S. 67 at 71 n.3, 92 S.Ct. 1983 at 1989, 32 L.Ed.2d 556 (1971) (emphasis added).
III. STATUTORY RIGHT OF ACCESS
Plaintiffs argue they are accorded an implied right to communicate with Talisman’s workers on company property by the Sugar Act and the Wagner-Peyser Act, analogizing this right to the right of access which has been implied to protect organizational rights under the National Labor Relations Act. An evaluation of this claim requires scrutiny of both the right of access which has been implied under the NLRA and of the purposes of the Sugar Act and Wagner-Pey-ser Act.
As the Supreme Court noted in Central Hardware Co. v. National Labor Relations Board, 407 U.S. 539, 92 S.Ct. 2238, 33 L.Ed.2d 122 (1971), the Section 7 right to form, join, or assist labor organizations “includes both the right of union officials to discuss organization with employees, and the right of employees to discuss organization among themselves.” 407 U.S. at 542, 92 S.Ct. at 2241. To insure that employees can learn the advantages and disadvantages of organization, the courts have implied a right of access for nonemployee union organizers during organizational campaigns to the extent necessary to facilitate the exercise of employees’ Section 7 rights.
The principle that the employer affected by the NLRA cannot so effectively isolate his employees that they are prevented from having contact with organizational groups is simpler to state than it is to apply. Compare NLRB v. Lake Superior Lumber Corp., 167 F.2d 147 (6 Cir. 1948) with NLRB v. Tamiment, Inc., 451 F.2d 794 (3 Cir. 1971). Were the UFW involved in an organizational campaign seeking to reach the Jamaican migrants and were such agricultural workers covered by the NLRA, we would be persuaded to follow the Lake Superior Lumber decision; if access to a lumber camp once a week and the provision by the employer of a recreation hall for discussion of union organization was too severe a limitation on the Section 7 rights of employees, access to workers once every two weeks while dispersed in town would surely be insufficient to insure the workers’ rights. However, since this is not a labor dispute governed by the NLRA, but a problem arising under the Sugar Act and the Wagner-Peyser Act, it is to these Acts that we must turn to see whether á statutory right of access should be implied to the plaintiffs over Talisman’s property.
The Sugar Act of 1948, 7 U.S.C. § 1100 et seq. provides for payments by the Secretary of Agriculture to producers of sugar. However, these payments are conditioned upon the employer meeting certain standards such as payment in full at reasonable rates of all sugar cane workers. 7 U.S.C. § 1131(c)(1). The congressional intent of this conditional payments scheme was that sugar cane workers receive minimum wages to be set by the Secretary. See Salazar v. Hardin, D.C., 314 F.Supp. 1257 (1970).
Contrary to plaintiffs’ contention, there is no evidence that Congress was primarily interested in the wages of domestic as opposed to foreign workers in cane fields when it enacted the Sugar Act. Nor have adequately-paid domestic employees hired by the same employer paying foreign employees at substandard levels been afforded protection under the regulations issued by the Secretary. The wage requirements apply with equal force to both foreign and domestic workers, the employer is required to keep records demonstrating that “each worker has been paid in full,” and that “any person who believes that he has not been paid in accordance with this part may file a wage claim.”
The basic objective of the Wagner-Peyser Act was to establish an interstate system for the recruiting and transfer of labor. 29 U.S.C. § 49(b). As we said in Gomez v. Florida State Employment Service, 417 F.2d 569, at 571-572 (5 Cir. 1969), the act was also intended to protect employees who move around the country to meet the needs of employers who use federal resources to secure workers. To fulfill this Congressional intention, we held in Gomez that the statute impliedly created a private civil remedy exercisable by the migrants against employers and officials charged with protecting their interests. We noted that it would have been unthinkable that Congress, “obviously concerned with people, would have left the Secretary with only the sanction of cutting off funds to the state.” 417 F.2d at 576.
The principal beneficiaries of both these Acts, therefore, are the Jamaican migrants living in Talisman’s labor camp, not the UFW organizers seeking access to them. In order to rely upon these laws, the UFW would have had to show that access by them is required to effectuate the migrant workers’ statutory rights. No such showing has been made.
We conclude that plaintiffs had no statutory right of access under the Sugar Act or the Wagner-Peyser Act. We must, therefore, face the broader constitutional question posed by this litigation.
IV. FIRST AMENDMENT RIGHT OF ACCESS
The district court’s dismissal of this action was in part premised upon the theory that, even if the company were subject to First Amendment strictures, the plaintiffs were not proper parties to represent the alleged right of the migrant workers to receive information. The court did not consider the propriety of the plaintiffs asserting a First Amendment right to bring information to the migrants and enter into discussions with them. While we agree that the standing of the plaintiffs to assert the rights of the Jamaicans is far from clear, see Lamont v. Postmaster General, 381 U.S. 301 at 307-308, 85 S.Ct. 1493, 14 L.Ed.2d 398 (concurring opinion), even if we ignore the divergence of interests discussed above we pretermit this question since in our view plaintiffs have standing on another ground.
Two cases reaching opposite conclusions on the merits are instructive on the question of the standing of a dis-seminator of information to sue to protect his own First Amendment rights. In Martin v. Struthers, 319 U.S. 141, 63 S.Ct. 862, 87 L.Ed. 1313 (1943), a city ordinance prohibiting persons from distributing handbills, circulars, or other advertisements door-to-door was held unconstitutional. The plaintiffs, accorded standing to question the ordinance’s conformity to the First Amendment, were disseminators of religious information who had been arrested for door-to-door soliciting. In Breard v. Alexandria, 341 U.S. 622, 71 S.Ct. 920, 95 L.Ed. 1233 (1951), in which an ordinance barring door-to-door commercial solicitation was upheld, the plaintiff magazine sales representative was held to have standing to assert his own right to distribute his wares although he could not represent the rights of housewives to receive his products. Similarly, the plaintiffs here have standing to sue as members of the public who have sought to communicate with the workers living on the company’s plantation.
Turning to the merits, we must decide (1) whether sufficient state action exists to subject Talisman to the restraints of the First Amendment and (2) if so, whether the company’s restraints on the rights of the plaintiffs to talk with the migrants were a reasonable exercise of its Fifth and Fourteenth Amendment property rights.
We begin with the proposition that “the First and Fourteenth Amendments safeguard the rights of free speech and assembly by limitations on state action, not on action by the owner of private property used nondiscriminatorily for private purposes only.” Lloyd Corp. v. Tanner, 407 U.S. 551, at 567, 92 S.Ct. 2219, at 2228, 33 L.Ed.2d 131 (1971). While a “special solicitude” has been shown for the guarantees of the First Amendment, the Supreme Court “has never held that a trespasser or an uninvited guest may exercise general rights of free speech on property privately owned and used nondiscriminatorily for private purposes only.” 407 U.S., at 568, 92 S.Ct. at 2228. However, neither is property insulated from the strictures of the First Amendment merely because it is owned by an individual or a company rather than a formally incorporated governmental unit. Marsh v. Alabama, 326 U.S. 501, 66 S.Ct. 276, 90 L.Ed. 265 (1946). Our inquiry, therefore, must be directed at whether or not Talisman Sugar Corporation occupies the shoes of the state for First Amendment purposes vis-a-vis these workers and the plaintiffs who seek access to them.
Mr. Justice Black in Marsh described Chickasaw, Alabama, a company town wholly owned by Gulf Shipping Corporation, as follows:
“Except for [ownership by a private corporation] it has all the characteristics of any other American town. The property consists of residential buildings, streets, a system of sewers, a sewage disposal plant and a ‘business block’ on which business places are situated. A deputy of the Mobile County Sheriff, paid by the company, serves as the town’s policeman. Merchants and service establishments have rented the stores and business places on the business block and the United States uses one of the places as a post office from which six carriers deliver mail to the people of Chickasaw and the adjacent area. The town and the surrounding neighborhood, which can not be distinguished from the Gulf property by anyone not familiar with the property lines, are thickly settled, and according to all indications the residents use the business block as their regular shopping center. To do so, they now, as they have for many years, make use of a company-owned paved street and sidewalk located alongside the store fronts in order to enter and leave the stores and the post office. Intersecting company-owned roads at each end of the business block lead into a four-lane public highway which runs parallel to the business block at a distance of thirty feet. There is nothing to stop highway traffic from coming onto the business block and upon arrival a traveler may make free use of the facilities available there. In short the town and its shopping district are accessible to and freely used by the public in general and there is nothing to distinguish them from any other town and shopping center except the fact that the title to the property belongs to a private corporation.” 326 U.S. at 502-503, 66 S.Ct. at 277.
The Court proceeded to hold that Gulf Shipping could not prohibit the plaintiff, a Jehovah’s Witness, from distributing literature on the streets of Chickasaw.
Like Chickasaw, the Talisman labor camp consisted of residential areas, streets, a store, eating facilities, a post office, and even a chapel. It was a self-contained community in which municipal services were afforded for a thousand migrants during the cane-cutting season, from fire protection and postal services- to sewage, garbage disposal, and electric services.
The labor camp here is more closely analogous to the traditional “company town” than were the shopping centers in Amalgamated Food Employees Union v. Logan Valley Plaza, 391 U.S. 308, 88 S.Ct. 1601, 20 L.Ed.2d 603 (1968) and Lloyd Corporation v. Tanner, 407 U.S. 551, 92 S.Ct. 2219, 33 L.Ed.2d 131 (1971). While both these centers had numerous stores, parking and walking areas, and guards performing functions similar to those of city police, neither was located on a tract of land nearly as large as Talisman’s plantation nor did either provide the municipal facilities which normally accompany residential areas, such as postal services and garbage collections. In short, Talisman’s labor camp is more like a “company town” than either of the shopping centers which were subjected to First Amendment restraints on the theory that “where private interests were substituting for and performing the customary functions of government, First Amendment freedoms could not be denied where exercised in the customary manner on the town’s sidewalks and streets.” 407 U.S., at 562, 92 S.Ct., at 2225.
The threshold question of state action having been satisfied, the final inquiry under the First Amendment becomes the reasonableness of the owner’s restraints on the petitioners’ free speech rights. It is our obligation to accommodate the Fifth and Fourteenth Amendment rights of this property owner with the First Amendment right of those desiring access to the labor camp located within the plantation. The balancing of these various Constitutional rights, as the Supreme Court suggests in Lloyd Corporation, centers upon (1) the availability of alternative avenues of communication and (2) the use to which the property is put by the owner.
As our analysis of the statutory issue indicates, there are no effective alternatives open to the plaintiffs for communicating with the Jamaicans other than through access to the living area of the labor camp. The biweekly trip into Belle Glade is insufficiently frequent and otherwise inadequate to afford ^a reasonable opportunity for discussions between the plaintiffs and the workers. Nor is it reasonable to require the plaintiffs to sue the company for violating the Sugar Act and the Wagner-Peyser Act in order to obtain court orders permitting depositions to be taken from particular migrants. While we hold that Talisman must grant the plaintiffs access to the migrants in the labor camp, we nevertheless observe that the owner-employer may establish reasonable rules for granting access to prevent unnecessary interference with its business activities. Cf. Central Hardware Co. v.
NLRB, 407 U.S. 539, 92 S.Ct. 2238, 33 L.Ed.2d 122 (1971).
The use to which Talisman has put its property also indicates that denial of access is an unreasonable restraint on the plaintiffs’ rights. While general access to the public, standing alone, may in certain cases require that the owner allow the exercise of free speech on those parts of his property which are dedicated to public use, see Flower v. United States, 407 U.S. 197, 92 S.Ct. 1842, 32 L.Ed.2d 653 (1971), the mere fact that the owner has sequestered its employees from general social intercourse with mankind can afford it no immunity from the prohibitions of the First Amendment. After all, many state-operated enterprises such as municipally-owned beaches and other recreational facilities are open only to town residents, but are nonetheless subject- to the First Amendment’s ambit. While openness to the public may prohibit the owner from excluding “those members of the public wishing to exercise their First Amendment rights on the premises in a manner and for a purpose generally consonant with the use to which the property is actually put,” Logan Valley Plaza, 391 U.S., at 319-320, 88 S.Ct., at 1608 cited with approval in Lloyd Corporation, 407 U.S., at 560, 92 S.Ct. 2219, mere enclosure of a “company town” does not make it less of a town. By using its property as a round-the-clock habitat for its employees, Talisman has forfeited the broad right which the owner of sawgrass and marshes alone would have to enforce strictly a “No Trespassers” policy. Having located the functional equivalent of a thousand-resident municipality in the midst of its property, the company must accommodate its property rights to the extent necessary to allow the free flow of ideas and information between the plaintiffs and the migrants.
V. CLASS ACTION
The district court ruled that the plaintiffs had failed to show that, under Rule 23, “the class was so numerous that joinder of all members is impractical, that there are common questions of law and fact common to the class, that the plaintiffs fairly and adequately represent the purported class, and that the prosecution of this action will avoid the possibility of the prosecution of separate actions by individual members of the class.” However, this finding was premised upon the incorrect assumption that only through humanitarian concern for and representation of the interests of the migrant workers would the plaintiffs have a right of access. Having held that the plaintiffs as members of the public desiring to communicate with the migrants cannot be subjected to such restraints upon their First Amendment rights, we further find it altogether appropriate that the plaintiffs represent members of the public claiming a right to communicate with the workers.
As a practical matter, the class action aspect of this case is unimportant. Our order holding that the company cannot totally isolate its employees from such outsiders as the plaintiffs should operate equally to foreclose Talisman from so barring other visitors, be they labor organizers, church-affiliated personnel, or newspaper reporters. It is only to clarify our position that any member of the public is entitled to access insofar as is necessary to insure contact with the workers that we mention the class action issue at all.
The judgment of the trial court is reversed and the case is remanded to the trial court for further proceedings not inconsistent with the decision herein.
SIMPSON, Circuit Judge
(dissenting) :
I respectfully dissent.
Talisman has abandoned its migrant labor camp operation in favor of mechanical harvesting equipment for which it has spent more than a million dollars, and has not renewed its permit to import Jamaican laborers. These circumstances render extremely tenuous any supposition that the former labor camp operation will ever be renewed. Nonetheless, says the majority, the camp still stands and can be instantly resuscitated should the company require more labor. For this reason and because of asserted residual questions of damages the majority refuses to dismiss the appeal as moot. Perhaps this is correct, although the question is not without difficulty.
Assuming then that we should consider the appeal on the merits, I agree with the lower court’s conclusion that the plaintiffs had no standing to maintain this suit, and further that upon the facts and the law they were not entitled to the relief sought, either pendente lite or permanently. I would affirm the lower court’s dismissal of the complaint at the cost of and with prejudice to the plaintiffs. The unpublished order of the district court is reproduced as Appendix A to this opinion.
APPENDIX A
United States District Court Southern District of Florida Judith Ann Petersen, Franklin P. Smith and David Hernandez,
Plaintiffs,
versus No. 72-198-Civ-CF Defendants.
Talisman Sugar Corporation, etc., William D. Pawley, Miguel Cervera, Sergio De la Vega, and William Heidtman, Sheriff of Palm Beach County, Florida,
Defendants.
ORDER
This cause came before the Court upon plaintiffs’ motion for a prelimi- •' nary injunction. Although the Court was of the opinion that this cause was dismissable upon defendants’ motion to dismiss, out of an over-abundance of caution this matter was scheduled for a hearing upon plaintiffs’ application for injunction, and upon stipulation of counsel, this cause was consolidated with the hearing of the injunction application and was fully tried on its merits as to all issues, except the claim for damages, at the time of the injunction hearing. Rule 65(a)(2), Fed.R.Civ.P.
This is an action brought by an attorney, employed by the United Farm Workers, AFL-CIO, a domestic farm labor union, and two ministers, one the associate director of the National Farm Worker’s Ministry and the other a staff member of the Florida Christian Migrant Ministry, on behalf of themselves and a purported class they represent. It is claimed by the plaintiffs that their purpose is to improve the economic and social conditions of agricultural workers and that their purpose has been frustrated by the defendants who have denied them free ingress and egress to the defendant Talisman’s labor camp to visit with, meet with, and interview certain Jamaican farm laborers.
The defendant Talisman Sugar Corporation is a Florida corporation engaged in the growing, processing, and sale of sugar cane. In its business Talisman employs agricultural workers, both domestic and foreign. Because there are no domestic farm workers available to fill certain of its available positions, specifically sugar cane cutting or harvesting, defendant Talisman employes foreign laborers pursuant to various federal statutes and regulations, including but not limited to the Wagner-Peyser Act, 29 U.S.C. § 49 et seq. Defendant Pawley is the President of the defendant corporation; defendants Cervera and De la Vega are employees of Talisman. William Heidtman, Sheriff of Palm Beach County, Florida, has been joined as a defendant because he and his staff are authorized to enforce the various Florida criminal statutes, including § 821.01, trespass after warning. At this time, members of the United Farm Workers who operate heavy equipment and machinery at Talisman Sugar Corporation are striking Talisman. Picketing outside Talisman has been occurring for some time.
This action has been brought pursuant to a multitude of Federal Statutes and United States Constitutional provisions. The jurisdictional bases which the plaintiffs allege for this action are as follows:
1. The First Amendment of the United States Constitution, freedom of speech, religion, and assembly ;
2. The Fifth and Fourteenth Amendments to the United States Constitution, due process clause;
3. The Thirteenth Amendment to the United States Constitution, abolition of slavery;
4. 42 U.S.C. § 1983, civil rights actions for deprivation of rights under color of law, and 28 U.S.C. § 1343, jurisdiction over civil rights actions;
5. 18 U.S.C. § 245, criminal statute dealing with threatened or forceful interference with the exercise of certain civil rights;
6. 28 U.S.C. § 1331, federal question jurisdiction;
7. 28 U.S.C. § 1337, original jurisdiction of any civil action arising under Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies;
8. 29 U.S.C. § 49 et seq., Wagner-Peyser Act, establishing United States Employment Service;
9. 20 C.F.R. §§ 602, 604, and 620, Regulations promulgated under the Wagner-Peyser Act; and
10. 7 C.F.R. 863, Regulations promulgated under the U.S. Sugar Act.
As stated, the plaintiffs claim that theirs is a charitable purpose — to aid the plight of agricultural workers, particularly, in this case, the imported, temporary Jamaican farm workers employed by Talisman, and that this purpose cannot be accomplished without the defendant Talisman permitting the plaintiff and others to freely come and go into the Talisman labor camp. It is claimed that various rights of the plaintiffs have been improperly denied by Talisman’s barring the plaintiffs’ entry upon Talisman land and by the Sheriff’s enforcement of Florida Statute § 821.01, F.S.A., trespass with warning. It is further alleged that the Jamaican workers-housed upon Talisman land are being enslaved and held in some sort of bondage or involuntary servitude by reason of Talisman’s refusal to permit entry onto Talisman land of the plaintiffs who wish to meet with the Jamaican workers.
This matter is alleged to be an emergency matter. It is alleged by the plaintiffs that they seek immediate entry into the Talisman camp so that they might “investigate” certain charges that the defendant Talisman has been utilizing the Jamaican laborers in jobs other than those for which they were brought to this country. The plaintiffs allege that it has been reported to them that the Jamaican laborers are performing jobs which were being performed by the striking farm workers — operation of farm equipment and machinery. The striking workers are members of the United Farm Workers. The plaintiffs wish to accomplish this investigation before the end of the harvesting season, because at the end thereof the foreign workers are sent back to their country. The season will end within a matter of days.
As stated, the plaintiff .Petersen is counsel for the United Farm Workers, and one of the plaintiff ministers testified that 50 to 60 per cent of his time was spent advocating and furthering the cause of this union. Furthermore, the plaintiffs testified that they have participated in the ongoing picketing at Talisman, either by carrying pickets or by giving moral support and other aid to the picketers.
During the trial of this cause, it rapidly became clear that the plaintiffs’ purpose was and is not to help these foreign farm laborers. The investigation which the plaintiffs wish to conduct and the information they wish to obtain therefrom could not benefit the Jamaican workers. Assuming there have been violations of law in the assignment of jobs to the Jamaicans, and that has never been proven, such information could only detriment the Jamaicans. If it was found that Jamaicans were being used in unauthorized positions, the defendant Talisman would lose the right to employ these workers, and the workers would be immediately deported. All this would be of benefit to the United Farm Workers, which apparently wishes to man these Jamaican-held positions with their own union workers — at a higher wage, of course — or, alternatively, wishes to cause the defendant Talisman, against whom the union is already on strike, further economic hardship. But this would be of no benefit to the foreign agricultural workers. Furthermore, if the plaintiffs were truly concerned about the Jamaican farm workers’ welfare, it should not be a cause for their concern that these workers may be performing tasks easier than cutting sugar cane with a machete in a burned over field filled with snakes and rats.
Obviously, this case is nothing more than a tactic utilized by the union in an ongoing and heated labor dispute. This is not a suit brought to accomplish anything more than a result favorable to the union in this dispute. There has been no evidence to the contrary.
On the basis of these facts, the first and foremost question is the standing of the plaintiffs to bring this action. This is not a suit brought by the farm workers themselves such as Gomez v. Florida State Employment Service, 417 F.2d 569 (5th Cir. 1969). Plaintiffs allege, as one of the bases for jurisdiction in this case, the Thirteenth Amendment to the United States Constitution, abolition of slavery. But the plaintiffs are not persons affected by any sort of bondage. They have apparently asserted this Amendment only on behalf of the Jamaican workers employed by Talisman. None of the workers themselves have complained of enslavement, and there has been no showing whatsoever that these workers are serving in bondage or under conditions of involuntary servitude.
Standing has traditionally been held to mean that a party may only rely on those constitutional rights in which he has a personal interest. Tileston v. Ull-man, 318 U.S. 44, 63 S.Ct. 493, 87 L.Ed. 603 (1943). Under traditional rules of standing, there must appear a “logical nexus between the [plaintiffs’ status] and the claim sought to be adjudicated.” Flast v. Cohen, 392 U.S. 83, 101, 88 S.Ct. 1942, 1953, 20 L.Ed.2d 947 (1968). The party seeking relief must have a personal stake in the outcome of the controversy and concrete adverseness must be shown. Troutman v. Shriver, 417 F.2d 171 (5th Cir. 1962).
In this instance, it is clear that the plaintiffs have no personal stake in the rights of these Jamaican workers and may not rely on the Jamaicans’ alleged constitutional rights as a basis for this lawsuit. The plaintiffs have no standing to assert these rights.
As stated, the present objective of the plaintiffs is to gain access to these foreign workers to investigate whether these workers are performing non-authorized jobs contrary to the Wagner-Peyser Act, 29 U.S.C. § 49 et seq., and the regulations thereunder. The plaintiffs, however, are not employees of any State, Federal, or Jamaican administrative agency authorized to conduct such investigations. Testimony given at the trial of this cause indicated that there are numerous agencies which regulate the employment of foreign laborers and, according to plaintiffs’ complaint, defendant Talisman’s business is highly regulated. Apparently, charges of violations of the Wagner-Peyser Act were filed with the appropriate State and Federal agencies and an administrative hearing was held with regard to these charges, but there has been no finding by any investigative body, nor at the administrative hearing of any such violations. Nor were any violations proved to this Court. Furthermore, there has been no showing that the plaintiffs have any right to conduct yet another investigation into this matter.
It is also claimed by the plaintiffs that Florida Statute § 821.01, F.S.A., is not enforceable against the plaintiffs to prevent their entry into labor camp grounds. It is alleged that this is so because in 1969 the statute was amended and the words “labor camp” were deleted therefrom. Armed with this newly amended statute, the plaintiffs entered Talisman’s land, refused Talisman’s request to leave, refused repeated requests by the Sheriff to leave, and finally submitted themselves to arrest for trespassing.
The plaintiffs now seek a declaration from this Court that labor camps are no longer private property for the purposes of enforcing the Florida trespass laws. This is a Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971) situation. What the plaintiffs seek is an injunction of some sort of the state prosecution for trespass. The Court finds no reason why plaintiffs’ claim— that § 821.01 does not apply to labor camps and entry thereon — could not be asserted in State Court as a defense to the trespass charges, however. Furthermore, were the Court to rule upon this question, as requested, the plaintiffs have made no showing that the legislature intended to alter the law of property with regard to labor camps nor that trespass is not still a crime where it concerns enclosed lands in the form of labor camps.
Plaintiffs have brought this action in their own behalf and on behalf of all those similarly situated. Plaintiffs, however, have failed to make any showing under Rule 23, Fed.R.Civ.P., that the class is so numerous that joinder of all members is impracticable, that there are questions of law and fact common to the ■ class, that the plaintiffs fairly and adequately represent the purported class, and that the prosecution of this action will avoid the possibility of the prosecution of separate actions by individual members of the class.
It would be difficult if not impossible to find any other parties with the same interests as these plaintiffs — being neither members of the United Farm Workers nor Jamaican laborers nor persons who truly wish to aid, comfort, and benefit the Jamaican workers. Thus, this is clearly not a proper class action nor, as stated, háve plaintiffs laid a proper predicate to make it one.
Plaintiffs allege that they were deprived of certain constitutionally guaranteed rights; however, there has been no evidence to prove such claims. This suit is nothing more nor less than a labor dispute. The plaintiffs, on behalf of the United Farm Workers, are seeking here to use the civil rights laws and the First, Fifth, and Fourteenth Amendments to foster the Union’s cause. In deciding this case, the Court is not unmindful of Folgueras v. Hassel, 331 F.Supp. 615 (W.D.Mich.1971), Exhibit D to plaintiffs’ motion for preliminary injunction. However, the facts of this case are entirely different from those presented in Folgueras. The plaintiffs in Folgueras were members of a federal program, the Economic Opportunity Act program established for the purpose of aiding farm workers. Justice and equity alone demands a different decision in this ease.
In order to afford plaintiffs an opportunity to fully present their ease and so that a complete record could be developed, the Court denied defendants’ early motion for dismissal of the complaint and reserved ruling upon defendants’ motion for involuntary dismissal under Rule 41(b), F.R.Civ.P., after plaintiffs had presented their evidence. Pursuant to stipulation of counsel, approved by the Court, the cause has been tried upon the merits, except for the issue of damages.
The Court having found and concluded that the plaintiffs have no standing to maintain this case; and that upon the facts and the law the plaintiffs are not entitled to the relief sought, either pen-dente lite or permanently. It is thereupon
Ordered, adjudged and decreed that the complaint herein be and the same is hereby dismissed at the cost of and with prejudice to plaintiffs.
Done and ordered at West Palm Beach, Florida, this 10th day of March, 1972.
/s/ CHARLES B. FULTON Chief Judge
cc: Joseph C. Segor, Esq.
Judith Ann Petersen, Esq.
Mershon, Sawyer, Johnston, Dun-wody & Cole Charles Kelso, Esq.
. These workers were employed under a contract between the British West Indies Central Labor Organization and the Florida Sugar Producers Association which reflected the requirements of regulations issued under the Sugar Act, 7 U.S.C. § 1100 et seq. and the Wagner-Peyser Act, 29 U.S.C. § 49 et seq. The employment was further governed by a temporary immigration permit issued by the Secretary of Labor under the Wagner-Peyser Act that domestic labor was not available to work as sugar cane cutters. By the terms of this permit and the regulations under the Wagner-Peyser Act, the Jamaicans were limited to working as sugar cane cutters and were forbidden to replace striking agricultural workers.
. The UFW had filed a complaint alleging such violations with the Division of Labor, Department of Commerce of the State of Florida.
. By stipulation of the parties, the plaintiffs dismissed their claims for damages against one defendant, Sheriff Heidtman.
. The NLRA does not apply to agricultural workers such as those involved in this litigation. See 29 U.S.C. § 152(3).
. 7 C.F.R. § 863.29.
. 7 C.F.R. § 863.31 (emphasis added).
. 7 C.F.R. § 863.33 (emphasis added).
. The fact that only male Jamaicans lived in the camp is irrelevant; nothing in the First Amendment can he construed as providing protection for families, but not for individuals living separately from their families.
. The migrant workers here have neither invited nor rejected the plaintiffs, though as occupants of dwellings they clearly have the right to repudiate solicitors. See Martin v. Struthers and Breard v. Alexandria, supra. All we hold today is that the owner of the property cannot exercise for the workers the decision to remain totally isolated from outside influences.
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f2d_478/html/0088-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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Will Allen SMITH, Petitioner-Appellant, v. STATE OF MISSISSIPPI, Respondent-Appellee.
No. 72-1325.
United States Court of Appeals, Fifth Circuit.
May 7, 1973.
John W. Prewitt, Vicksburg, Miss., court-appointed, for petitioner-appellant.
A. F. Summer, Atty. Gen. of Miss., John M. Kinard, Sp. Asst. Atty. Gen., Timmie Hancock, Asst. Atty. Gen., Jackson, Miss., for respondent-appellee.
Before JOHN R. BROWN, Chief Judge, and GODBOLD and SIMPSON, Circuit Judges.
SIMPSON, Circuit Judge:
■ Presented by the appeal in this federal habeas corpus action is the single question whether petitioner Will Allen Smith is wrongfully incarcerated in the Mississippi State Penitentiary under the U. S. Constitution’s Fourteenth Amendment due process clause by reason of violation of the Fifth Amendment’s proscription against double jeopardy. The question arises because a mistrial was declared at Smith’s first state court trial by reason of a trial juror’s comment to a bailiff regarding a central issue of the defense prior to the receipt of any evidence.
We hold that no Fifth Amendment double jeopardy rights of Smith were violated, and accordingly affirm.
I
On July 19, 1965, the petitioner, Will Allen Smith, was brought to trial in the Circuit Court of Warren County, Mississippi under an indictment for murder. Jury selection was not finished at the end of the first day of the trial. Since Smith’s primary defense was to be insanity the prospective jurors were questioned individually regarding their knowledge of the case and their views of that defense. Twelve jurors were seated and accepted by the court but not sworn when it adjourned for the night to reconvene the next day for the selection of an alternate juror. Under proper instruction of the trial judge, and in the charge of two bailiffs, the provisional jury was sequestered for the evening.
On the following morning one of the two bailiffs and one of the selected jurors were in the bathroom of the courthouse shaving prior to reporting to court. They had been acquainted for several years. The juror, John L. McKnight, told the bailiff, A. H. Koerper, in the form of a “passing comment”, that from observing the defendant in the courtroom during the selection of the jury the previous day he was of the opinion that “the poor man was crazy” and “didn’t know what he was doing.”
When Koerper saw one of the state’s prosecutors upon the latter’s arrival at the courthouse that morning, he told him of the bathroom incident with McKnight. Koerper made no disclosure as to the juror’s statement to either the judge or defense counsel, despite a specific inquiry to him by defense counsel as to the jury’s well-being.
Court was opened, the alternate juror was selected and the whole panel of twelve jurors and one alternate juror was sworn. Immediately thereafter and before any evidence was introduced, the state prosecutor moved for a mistrial stating his belief that the statement of juror McKnight to bailiff Koerper indicated that McKnight held an opinion which would preclude the state from receiving a fair trial.
The trial judge excused all of the jurors except juror McKnight from the courtroom and heard argument as to the state’s motion. At the hearing both Koerper and McKnight testified. They were in agreement that juror McKnight did not express any prejudgment as to the defendant’s guilt or innocence during the bathroom conversation. McKnight assured the trial judge that he had no prejudgment or fixed opinion as to the matter. The trial judge granted the state’s motion and declared a mistrial for reasons not articulated with precision. The judge appeared to treat juror McKnight’s statement to Koerper as an expression of his opinion of the defendant’s guilt or innocence, and to feel that since the juror had stated an opinion prior to final deliberation and without ’ hearing testimony, the totality of these circumstances would militate against the state receiving a fair and impartial trial. **8
Since these events took place near the end of the July term of court the case was continued to the next, the December term of the court. The petitioner was remanded to the county jail without bond to await trial.
When the December, 1965 term opened petitioner contended by plea in bar that he was being denied due process of law and being placed in jeopardy twice for the same offense in violation of his state and federal constitutional rights. The plea in bar was overruled after argument and Smith was then tried on the original indictment. The jury found him guilty of murder as charged with a recommendation of mercy and he was sentenced to imprisonment for life. On appeal the Mississippi Supreme Court affirmed the trial court as to the double jeopardy issue, but reversed the case on other grounds and remanded for a new trial. Smith v. State, 198 So.2d 220 (Miss.1967)
Smith was again in July, 1967 tried before a jury on the same charge, again found guilty and again sentenced to life imprisonment. On appeal the Mississippi Supreme Court again reversed the conviction on grounds other than the double jeopardy issue and again ordered a new trial. Smith v. State, 220 So.2d 313 (Miss.1969).
In March, 1970, petitioner was brought to trial for the fourth time, was again found guilty by a jury and again sentenced to a term of life imprisonment. On appeal the Mississippi Supreme Court affirmed the trial court and directed that Smith begin serving his sentence. Smith v. State, 245 So.2d 583 (Miss.1971). Petition for rehearing was denied by the Mississippi Supreme Court, as was a petition for leave to file a petition in the trial court for Writ of Error Coram Nobis. State remedies were exhausted at this point, as we explicate infra, Note 6.
Smith then applied to the court below for habeas corpus relief asserting denial by Mississippi courts of his federally guaranteed constitutional rights. The application was denied after hearing. From that denial the petitioner brought the instant appeal.
II
Petitioner contends there was no “manifest necessity” for the trial judge to declare a mistrial in the July 1965 proceedings and further that the ends of public justice would not have been otherwise defeated had he not so ruled. He asserts that absent such considerations the trial court erred in declaring a mistrial; jeopardy had attached; and that the subsequent trials were each in violation of his rights under the Fifth Amendment to the U. S. Constitution.
Mississippi counters that petitioner was not “put to trial” and did not otherwise suffer public humility by virtue of his presence in the courtroom pursuant to the aborted trial; that he was in no way prejudiced by the dismissal of the proceedings before testimony was presented; that in any event the trial judge acted within his discretion in declaring a mistrial when he concluded the state would not receive a fair and impartial trial because the juror Me-Knight had expressed an opinion as to the primary issue of the case prior to the reception of any testimony or evidence; and that jeopardy had not attached because there was no abuse of discretion by the trial judge in his effort to ensure a fair trial “designed to end in just judgment”. Accordingly, says the respondent, the district court's denial of petitioner’s application for writ of habeas corpus was correct and is due to be affirmed.
III
The respondent’s contention that petitioner was not “put to trial” or was in no way prejudiced by the dismissal of the proceedings before testimony was presented has been decided adversely to it by the Supreme Court in Downum v. United States, 1963, 372 U.S. 734, 83 S.Ct. 1033, 10 L.Ed.2d 100, and recently reaffirmed in Illinois v. Somerville, 1973, 410 U.S. 458, 93 S.Ct. 1066, 35 L.Ed.2d 425. In both cases the Supreme Court held that jeopardy attached when the first jury was selected and sworn. The mere introduction of evidence has no spontaneous effect on a defendant which can be said to automatically charge him with an appreciable degree of insecurity once he has made the preparations for trial and selected those of his peers who will determine his fate.
But the conclusion that jeopardy attached once the jury was selected and sworn simply begins, rather than ends, the inquiry as to whether the Double Jeopardy Clause bars retrial. It is that examination in the context of this case with which we proceed.
IV
Unquestionably society has strong interests in ensuring that its criminal laws are vigorously enforced so as to prevent the guilty from going free, and further, under a system of justice under law that both sides to a criminal prosecution in fact receive the fair trial to which each is entitled. There are equally important countervailing considerations that an accused be not harassed by a series of aborted criminal proceedings which necessarily entail financial, physical and psychological burdens of enormous dimensions and which give rise to danger that with enough opportunities the prosecution will convict the innocent. It is further necessary to prevent an unscrupulous prosecution from avoiding an unwanted judge or jury or the consequences of damaging testimony by precipitating a mistrial. Recognition of these competing interests prompted the Fifth Amendment’s proscription that no person be subject for the same offense to be twice put in jeopardy of life or limb. This “fundamental ideal in our constitutional heritage” is fully applicable to the states through the Fourteenth Amendment and is to be applied retrospectively. Benton v. Maryland, 1969, 395 U.S. 784, 794-796, 89 S.Ct. 2056, 2062-2063, 23 L.Ed.2d 707, 715-717; North Carolina v. Pearce, 1969, 395 U.S. 711, 89 S.Ct. 2072, 23 L.Ed.2d 656. See also Ashe v. Swenson, 1970, 397 U.S. 436, 437 n. 1, 90 S.Ct. 1189, 1191, 25 L.Ed.2d 469, 472.
We turn to the relevant case law to examine how the Court has implemented these policies.
Early in its development of constitutional standards, the Supreme Court was asked to formulate rules based on categories of circumstances which would permit or preclude retrial and thus provide a clear line with which to mark the limits of the conflicting policies behind the Fifth Amendment. The Court, in a passage by Mr. Justice Story which has become the touchstone for determining when reprosecution may follow an aborted trial, expressly declined to set forth the requested guidelines. But in doing so the Court articulated some broad principles for the resolution of future problems:
“We think, that in all cases of this nature, the law has invested Courts of justice with the authority to discharge a jury from giving any verdict, whenever, in their opinion, taking all the circumstances into consideration, there is a manifest necessity for the act, or the ends of public justice would otherwise be defeated. They are to exercise a sound discretion on the subject; and it is impossible to define all the circumstances which would render it proper to interfere. To be sure, the power ought to be used with the greatest caution, under urgent circumstances, and for very plain and obvious causes; and, in capital cases especially, Courts should be extremely careful how they interfere with any of the chances of life, in favor of the prisoner. But after all, they have the right to order the discharge; and the security which the public have for the faithful, sound, and conscientious exercise of this discretion, rests, in this, as in other cases, upon the responsibility of the Judges, under their oaths of office.”
United States v. Perez, 1824, 22 U.S. (9 Wheat.) 579, 6 L.Ed. 165.
This formulation has been consistently adhered to by the Supreme Court in subsequent decisions and, as Mr. Justice Rehnquist noted in the Court’s latest discussion of this aspect of the Fifth Amendment,
“ . . . abjures the application of any mechanical formula by which to judge the propriety of declaring a mistrial in the varying and often unique situations arising during the course of a criminal trial.” Illinois v. Somerville, supra.
Concentration, then, has focused on the propriety of the trial judge’s exercise of his discretion, taking into account all circumstances relevant to the particular trial involved, to determine whether the declaration of a mistrial was required by “manifest necessity” or by the “ends of public justice.”
While meaningful categories of circumstances have been consistently difficult to distinguish and apply, Wade v. Hunter, 1949, 336 U.S. 684, 690-691, 69 S.Ct. 834, 838, 93 L.Ed. 974, 978-979, one line of cases emerges where the declaration of a mistrial was based on a rule or a defective procedure lending itself to prosecutorial manipulation. In Downum v. United States, supra, the prosecution asked that the jury be discharged because its key witness was not present although it had earlier indicated readiness to proceed to trial and had allowed the jury to be selected and sworn. The trial judge granted the request even though the absent witness was essential for only two of the six counts against defendant and denied the defendant’s motion, opposed by the prosecution, to dismiss those two counts and proceed to trial on the other four. The prosecution had allowed the jury to be impaneled knowing that its witness had not been served with a subpoena and could not be found, thus knowingly lacking sufficient evidence to go to the jury on the two counts. The Supreme Court reversed the second conviction because the dismissal of the first jury was not manifestly necessary to proceed with the prosecution once the jury had been impaneled, and because the mistrial was grounded on bad-faith prosecutorial conduct aimed at obtaining another day in court when it might produce sufficient evidence to convict.
Considerably closer to the case before us is a line of eases involving the proper exercise of the trial judge’s discretion to declare a mistrial when it becomes obvious that an impartial verdict cannot be reached, or when, although a verdict might be reached, a conviction would require reversal on appeal due to an obvious procedural error in the trial. Illinois v. Somerville, supra, (reprosecution on substitute indictment held not barred when trial aborted because a defect was found to exist in the indictment that was, as a matter of state law, not curable by amendment); Lovato v. New Mexico, 1916, 242 U.S. 199, 37 S.Ct. 107, 61 L.Ed. 244 (reprosecution held not barred when jury discharged after prosecution realized defendant had not been re-arraigned after his demurrer to indictment was overruled); and Thompson v. United States, 1894, 155 U.S. 271, 15 S.Ct. 73, 39 L.Ed. 146 (reprosecution held not barred when mistrial declared upon the trial judge’s learning after one government witness had testified that one of the jurors was disqualified, because he was a member of the grand jury that indicted the defendant and defendant’s counsel moved for discharge of the jury) are examples of this line of authority.
In United States v. Jorn, 1971, 400 U.S. 470, 91 S.Ct. 547, 27 L.Ed.2d 543, the first of the government’s witnesses at a criminal tax fraud trial was warned of his constitutional rights by the trial judge at the suggestion of the government before being questioned. He was called to testify to the submission of false income tax returns prepared by the defendant in the defendant’s trial for willfully assisting in the preparation of those fraudulent returns. Pursuant to his premonishing the witness of his rights, the trial judge formed a belief that none of the government’s witnesses had been adequately forewarned that they might themselves incur criminal liability by their testimony. The judge, sua, sponte, discharged the jury and declared a mistrial to give witnesses the opportunity to consult with their attorneys. The Supreme Court concluded that the trial judge abused his discretion in aborting the trial because he completely failed to consider the possibility of less extreme methods to cure the defect, for example, the granting of a continuance to allow the witnesses to consult with counsel, and at tjie same time, to protect the defendant’s interest of being able, once and for all,
“to conclude his confrontation with so- „ ciety through the verdict of a tribunal he might believe to be favorably disposed to his fate.” 400 U.S. at 486, 91 S.Ct. at 558.
Defendant’s right to have his case decided by that jury should not have been denied him by the trial judge’s total abdication of his responsibility to exercise sound discretion in abruptly ordering the mistrial without consideration of the countervailing interests involved. Such arbitrary action could not support a finding of the “manifest necessity” required under Jorn, supra. 400 U.S. at 486-487, 91 S.Ct. 547.
Gori v. United States, 1961, 367 U.S. 364, 81 S.Ct. 1523, 6 L.Ed.2d 901, also involved a trial judge’s sua sponte declaration of a mistrial. There the trial judge withdrew a juror and declared a mistrial during the direct examination of the fourth witness for the government. The Second Circuit Court of Appeals, en banc, branded such action as “overassiduous” and criticized it as premature, United States v. Gori, 2 Cir. 1960, 282 F.2d 43, 46, and the Supreme Court indicated it was not clear what reasons caused the trial judge to take such action. Still, the Supreme Court agreed with the Court of Appeals’ af-firmance of the conviction at a later trial in recognition of the extremely wide range of discretion allowed to the trial judge in determining whether a mistrial is appropriate—
“a responsibility which ‘is particularly acute in the avoidance of prejudice arising from nuances in the heated atmosphere of trial, which cannot be fully depicted in the cold record on appeal . . . ”
367 U.S. at 366, 81 S.Ct. at 1525, 6 L.Ed.2d at 903. Neither the Second Circuit nor the Supreme Court was willing to reject the rule of discretion in the trial judge to declare a mistrial. 367 U.S. at 368, 81 S.Ct. at 1526, 6 L.Ed.2d at 904; 282 F.2d at 47. See also Brock v. North Carolina, 1953, 344 U.S. 424, 73 S.Ct. 349, 97 L.Ed. 456; Lovato v. New Mexico, supra.
We think that the facts of the instant case bring it under Gori, rather than under Jorn. The Court below made no finding of prosecutional misconduct or manipulation. Such a finding would not have been justified on this record so that this case does not fit the line of cases exemplified by Downum, supra.
V
We recognize that the petitioner was deprived of the opportunity to have his fate determined by the jury first impaneled. Jorn, supra. This is significant in the context of this case, keeping in mind the nature of the defense and the apparent predisposition of juror McKnight to conclude that the defendant was, or at least appeared to be, “crazy”. The determination by the trial judge to abort the proceeding was not one to be lightly undertaken. Illinois v. Somerville, supra.
Immediately upon being informed of the conversation between one of the selected jurors and the court’s bailiff regarding an aspect of the case, the trial judge made every effort to ascertain what exactly had transpired in the bathroom of the courthouse that morning. Proceedings were held in chambers to explore the possible prejudicial effects the encounter might have on the trial. This inquisition proved not to be fully satisfactory, whereupon the trial judge separated juror McKnight from the remainder of the jury in order more fully to determine what had transpired. The decision to declare the mistrial was based upon the trial judge’s conclusion that juror McKnight had prematurely formed and held an opinion about an important element in the case without the prosecution having an opportunity to submit its evidence and further in the belief that the separation of the jury might cause other jurors to become overly concerned over the purpose of the brief interruption and separation of juror McKnight, thus raising questions in their minds wholly irrelevant to the merits of the case and, perhaps, inimical to the ends of justice.
The care with which the state trial judge attempted to learn and to weigh properly the full import of what had transpired distinguishes this case from Jorn, supra, where no such inquiry was undertaken. The trial judge made a sincere effort to determine whether “the ends of public justice,” Perez, supra, would be better obtained by declaring a mistrial and beginning anew. He was sensitive to the opposing requirements on his discretion. It is of no particular concern, whether we would or would not have reached a different result as a trial court. What is of controlling importance is that the state trial judge first painstakingly weighed all the factors present and thereupon exercised the discretion invested in him. His declaration of a mistrial was not unreasonable. The subsequent retrials did not violate Smith’s Fifth Amendment Due Process and Double Jeopardy rights as applied to the State of Mississippi through the Fourteenth Amendment.
Affirmed.
. This incident is related in the text recounted by the bailiff Koerper. It was solely on the basis of his testimony that the trial judge declared the mistrial. See text, infra. Juror McKnight testified that bailiff Koerper:
started the conversation . . . and was telling me about the eccentricity of the defendant, about him eating only meals that were a day old, you know, cooked today and eaten tomorrow, and how he — when he first came into the jail how he tried to bribe the deputy to get his belt to be hung. And that brought on my conversation and answer to these statements by the bailiff. Now I will assure you I haven’t prejudged the case, but as per the instructions of the District Attorney I have observed the defendant for future use in my deliberations about the matter. But I have a free mind and I have ho fixed opinion about this matter. I’m waiting for testimony from this box.
BY THE COURT: Did you make the statement to the bailiff that he just made that he was crazy and that—
A. I didn’t think I said crazy. I said I didn’t think that a man on trial for his life would show the non-interest, Judge, that my observation of the defendant led me to believe.
I don’t believe I said crazy. I don’t recall that.
* * * * *
I just told him that I didn’t think that the defendant had shown a lot of intelligence in the proceedings, in his following the proceedings, his, you might say, interest. That’s roughly what I said. And that’s all I said. .
Wlien recalled to the stand, bailiff Koerper denied having initiated the conversation with juror McKnight.
. The trial transcript indicated that before the bailiff and juror were questioned the state made an in-chambers motion to disqualify and dismiss juror McKnight. Defense counsel responded by urging the court, based upon his understanding of what the testimony would be, to declare a mistrial in the event the court should rule in the state’s favor and dismiss juror McKnight.
The trial judge at this time neither ruled on the defense motion nor expressly reserved the right to do so. Neither brief discusses the failure to rule. Nor was it considered by the federal habeas court.
We accordingly treat defense counsel’s motion for mistrial as defunct. We also disregard failure of the record to show absence of a defense objection to granting the state’s motion for mistrial. Neither the briefs of the parties nor the district court made an issue of this point. On the contrary it is repeatedly asserted without denial that the motion was granted over defense counsel’s objection. We think it probable that the objection was voiced out of the hearing of the court reporter, when the court suggested a brief conference in chambers with counsel immediately after presentation of the state’s motion for mistrial. The record indicates that a brief conference occurred at that time.
We have noted these inconsistencies upon our inspection of the record, but think that the agreement of the briefs disposes of them without the need for further consideration by us.
. “BY DEFENSE COUNSEL: I’ll ask you this, would you state whether or not Mr. McKnight made any statement as to his prejudging the case, had any opinion whether the man was guilty or innocent?
BAILIFF Koerper: He did not.” And see fn. 4, infra.
. “JUROR McKnight: . . . Now I will assure you I haven’t prejudged the case ... I have a free mind and I have no fixed opinion about this matter. I’m waiting for testimony from this box.
* * *
BY THE STATE: Did you go into the question of whether or not he was able to distinguish right from wrong? JUROR: I did not.
* * * Sit *
BY THE STATE: Well, weren’t you prejudging the case, then and there, before you heard a word of testimony?
JUROR: No, I was not. I was doing what you asked me to do, observe the man.” ;
. “BY THE COURT :
And as harmless as the juror, Mr. McKnight, thinks his actions are in tire premises, yet the expression of an opinion by a juror as to either guilt or innocence ... A juror has no right to express an opinion and to go into the trial of a case without hearing a witness having made any such expression. And, of course, I realize people are prone to chat and to talk, but its quite important in a criminal case, particularly in a capital case, that a juror refrain from any expression until it is time to go into a final deliberation. So I think on the basis of what transpired in this case, I think possibly the motion for mistrial ought to be granted and that this matter be terminated at this time in a mistrial and reset for trial. . . . . it is an expression of opinion here prior to hearing any testimony, which, I think, would be quite prejudicial to the State of Mississippi in the presentation of the case.
* * * * *
. . '. I think under the law, the law which requires that the jury not have made any expression as to guilt or innocence, either one, of a defendant in the trial of a lawsuit, I think that its just going to require that we have the mistrial in the case. And that’s without any particular criticism about it, but I think that it is going to have to be the requirement.”
. As an alternativo, ground below, the respondent state contended and the district court held that as a matter of law a federal district court lacked jurisdiction to entertain Smith’s petition for writ of habeas corpus because petitioner failed to exhaust available state remedies in that he did not apply to the Governor of Mississippi for executive clemency and did not petition the United States Supreme Court for a writ of certiorari to consider the Mississippi Supreme Court’s rejection of his Fifth Amendment claim. From the closing portion of respondent’s brief it appears that this argument has not been abandoned: “Appellant has yet to exhaust his available state remedies and cannot seek Federal Court relief until having done so.” Respondent’s brief, page 15. This is puzzling in view of the following stipulation filed with the district court on December 10, 1971, ten days before it rendered its decision, and signed by both parties:
. . . Petitioner herein, Will Allen Smith, has fully pursued and exhausted all State and administrative remedies that are available and open to him under the laws of the State of Mississippi. the Petition for Writ of Ha-beas Corpus filed before the United States District Court for the Southern District of Mississippi, Western' Division by Petitioner was the sole and only remedy at this time available to him in this cause.
Although federal jurisdiction may not be conferred by stipulation of the parties, several observations are in order.
We consider it settled, first of all, that failure to apply to the United States Supreme Court for a writ of certiorari to the Mississippi Supreme Court’s affirmance as to the double jeopardy issue is not a bar to federal habeas relief. Fay v. Noia, 1963, 372 U.S. 391, 435-438, 83 S.Ct. 822, 847-848, 9 L.Ed.2d 837, 867-868; Pleas v. Wainwright, 5 Cir. 1971, 441 F.2d 56, 57; Makarewicz v. Scafati, 1 Cir. 1971, 438 F.2d 474, 477, cert. denied, 402 U.S. 980, 91 S.Ct. 1685, 29 L.Ed.2d 145; Hedberg v. Pitchess, 9 Cir. 1966, 362 F.2d 511; Whippier v. Balkcom, 5 Cir. 1965, 342 F.2d 388, 390.
Fay v. Noia, supra, also held that the exhaustion of remedies doctrine is a rule of comity only and not a jurisdictional requirement as it merely “relates to the appropi-iate exercise of power.” 372 U.S. at 420, 83 S.Ct. at 839, 9 L.Ed.2d at 858.
Further, under the teachings of Brown v. Allen, 1953, 344 U.S. 443, 447-450, 73 S.Ct. 397, 402-404, 97 L.Ed. 469, 484-485, state remedies! were exhausted when the federal constitutional questions were decided adversely to petitioner on direct appeal, without any necessity for pursuing any collateral or post-conviction remedy. Cf. Wilwording v. Swenson, 1971, 404 U.S. 249, 92 S.Ct. 407, 30 L.Ed.2d 418.
Finally, any failure to seek executive clemency or pardon, clearly an act of grace, from tlie governor of Mississippi has not the slightest relation to questions involving the assertion of constitutionally guaranteed rights. The single case noted in this connection by the district judge, Shaver v. Ellis, Mgr., 5 Cir. 1958, 255 F.2d 509, held only — in connection with affirming the denial of last minute habeas relief to a prisoner under death sentence —that the Texas executive clemency procedures met due process requirements.
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f2d_478/html/0096-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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NATIONAL LABOR RELATIONS BOARD, Petitioner, v. MEDICAL ANCILLARY SERVICES, INC., Respondent.
No. 72-1732.
United States Court of Appeals, Sixth Circuit.
Argued Feb. 13, 1973.
Decided April 30, 1973.
Jerome H. Brooks, Director, Region 7, N. L. R. B., Detroit, Mich., Roger Har-tley, Atty., N. L. R. B., Washington, D. C., for petitioner; Peter G. Nash, Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Allison W. Brown, Jr., Atty., N. L. R. B., Washington, D. C., on brief.
Robert S. Rosenfeld, Southfield, Mich., for respondent; Keywell & Rosenfeld, James DiMeglio, Southfield, Mich., on brief.
Before CELEBREZZE, MILLER and LIVELY, Circuit Judges.
PER CURIAM.
The case is before the Court upon the petition of the National Labor Relations Board for enforcement of its order of February 1, 1972, finding the Medical Ancillary Services, Inc. (company) in violation of the National Labor Relations Act by its refusal to bargain with the union (Office and Professional Employees International Union, Local 10, AFL-CIO) as the certified representative of the company’s employees.
On July 8, 1971, pursuant to a Stipulation for Certification Upon Consent Election executed by the company and the union, an election was conducted among the company’s employees. Fifty-one ballots were cast for representation by the union and 49 were opposed to such representation. Following objections to the election filed by the company the Regional Director, pursuant to the Board’s rules and regulations, conducted an administrative investigation during which the parties were afforded an opportunity to submit evidence bearing on the issues. The evidence consisted of five affidavits submitted by the company and 10 written statements taken from witnesses by the Regional Director (not of course in the presence of any representative of the company). The Regional Director on July 28, 1972, informed the company that absent withdrawal of the objections he would issue a report recommending to the Board that it overrule the company’s objections. The company declined to withdraw the objections and on August 3 the Director issued his Report recommending that the company’s objections be overruled in their entirety and that the Board certify the union as the exclusive bargaining representative of the company’s employees. The company’s motion for reconsideration filed on August 4, supported by affidavits from two employer representatives, was overruled by the Regional Director on August 5, upon the ground that the proffer of new evidence was untimely and would not in any event warrant a result contrary to the result reached in the Director’s August 3rd report. The company filed with the Board exceptions to the Director’s report, supported by the affidavits presented to the Director and by four additional employees’ affidavits, requesting that the election be set aside and a new election ordered. The Board on November 15 adopted the Regional Director’s report and recommendations and certified the union. It concluded that the company’s exceptions raised no substantial issue of fact or law to warrant reversal of the Regional Director’s report. The company, commencing about October 12, refused to bargain with the union and in answer to an unfair labor practice complaint issued against it by the Board admitted its refusal to bargain, but defended on the ground that the certification was invalid for the reasons urged in its objections to the election. General Counsel in the unfair labor practice proceeding moved for summary judgment on the pleadings which the Board granted. At the same time it found that the company had violated § 8(a)(5) and (1) of the Act by its refusal to bargain. We are of the opinion from an examination of the record and applicable authorities that the Board erred in failing to find that the company was entitled to a hearing before the Board on its exceptions to the election, and consequently in finding the company guilty of violating the Act.
We are aware that the Board has a wide discretion in determining whether a hearing is required to review the administrative findings of the Regional Director in cases of consent elections. Yet this discretion is subject to judicial review where the exceptions to the Director’s report raise “substantial and material factual issues.” This subject was fully covered by the opinion of this court in N. L. R. B. v. Tennessee Packers, Inc., 379 F.2d 172 (6th Cir.), cert. denied 389 U.S. 958, 88 S.Ct. 338, 19 L.Ed.2d 364 (1967), from which we quote:
“The exceptions must state the specific findings that are controverted and must show what evidence will be presented to support a contrary finding or conclusion. N. L. R. B. v. National Survey Service, Inc., supra [361 F.2d 199 (7 Cir.)]; N. L. R. B. v. J. R. Simplot Company, supra [322 F.2d 170 (9 Cir.)]; Macomb Pottery Company v. N. L. R. B., supra [376 F.2d 450 (7 Cir.)]. Mere disagreement with the Regional Director’s reasoning and conclusions do not raise 'substantial and material factual issues.’ This is not to say that a party cannot except to the inferences and conclusions drawn by the Regional Director, but that such disagreement, in itself, cannot be the basis for demanding a hearing. To request a hearing a party must, in its exceptions, define its disagreements and make an offer of proof to support findings contrary to those of the Regional Director. The Board is entitled to rely on the report of the Regional Director in the absence of specific assertions of error, substantiated by offers of proof.
The purpose behind the rule which requires a hearing only when “substantial and material factual issues” are raised is to avoid lengthy and protracted proceedings, and eliminate unnecessary delays in certifying the results of an election. If a hearing is required to be held on all exceptions to an election or report of a Regional Director, it would unduly lengthen and prolong labor unrest, contrary to the very purposes of the National Labor Relations Act. The cases relied upon by respondent in support of its contention that it is entitled to a hearing, all deal with cases in which the court determined that ‘substantial and material factual issues’ were raised, and therefore held that the Board erred in not ordering a hearing. United States Rubber Company v. N. L. R. B., 373 F.2d 602 (C.A.5); N. L. R. B. v. Capital Bakers, Inc., 351 F.2d 45 (C.A.3); N. L. R. B. v. Joclin Mfg. Co., 314 F.2d 627 (C.A.2); N. L. R. B. v. Lord Baltimore Press, Inc., 300 F.2d 671 (C.A.4) ; N. L. R. B. v. Dallas City Packing Co., 230 F.2d 708 (C.A.5); N. L. R. B. v. Poinsett Lumber and Mfg. Co., 221 F.2d 121 (C.A. 4). In N. L. R. B. v. Sidran, 181 F.2d 671 (C.A.5),.cited by respondent, the Court could only have held that the Board erred in denying a hearing if ‘substantial and material factual issues’ were raised.” 379 F.2d at 178.
We interpret this decision and the authorities cited as requiring the Board to grant a hearing if the exceptions do indeed raise substantial and material issues of fact and “show what evidence will be presented to support a contrary finding or conclusion.” If these criteria are met no formalistic “request” for a hearing is necessary. In such cases it is our view that a request for a hearing is necessarily implied.
In this case the company’s exceptions are detailed, specific and factual as to material issues. They also proffer specific evidence to be relied upon. We think this is self-evident from the exceptions themselves which we reproduce in their entirety in the appendix to this opinion together with the accompanying additional affidavits.
Being of the opinion that the company’s exceptions fully complied with the standards for a Board hearing prescribed by its own Rules and Regulations as well as by the applicable authorities, the Board’s application for enforcement of its order of February 1, 1972 is denied, the said order and the order approving and adopting the Regional Director’s Report, are vacated, and the action is hereby remanded to the Board with directions that the company be afforded a full adversary hearing upon its exceptions to the Regional Director’s Report either before the Board itself or a hearing officer. Any findings emerging from such hearing shall be subject to applicable review procedures.
APPENDIX
EMPLOYER’S EXCEPTIONS TO REGIONAL DIRECTOR’S REPORT AND RECOMMENDATIONS ON OBJECTIONS
STATEMENT OF FACTS
Pursuant to a Stipulation for Certification Upon Consent Election executed by the parties and approved by the Regional Director for the Seventh Region of the National Labor Relations Board on June 17, 1971, an election by secret ballot was conducted on July 8, 1971, among the employees of the Employer.
Upon the conclusion of the election a Tally of Ballots was served upon the parties which showed the following results: One hundred (100) valid votes were counted. Fifty-one (51) votes were cast for the Union. Forty-nine (49) votes were east against the Union. Thus, one (1) vote was the deciding factor in this election.
On July 15, 1971, the Employer filed Objections to Conduct Affecting the Results of Election and attached the affidavits contained in Appendix 1-5. The Employer’s objections were as follows:
1. That on July 8, 1971, immediately prior to the election, union supporter Larry Kuzak stated to various employees eligible to vote in the election that Yvonne Tilwick, a fellow employee who was off because of illness, was not going to receive the disability insurance which the employee handbook stated she was entitled to.
2. That on July 8, 1971, immediately prior to the election, union supporter Mary Tavtigian stated to various employees eligible to vote in the election that:
(a) Yvonne Tilwick was not being paid the disability insurance she was entitled to because the company deliberately “screwed up” her claim so that she would not be paid.
(b) That Elisabeth Rohrmaier telephoned this same Yvonne Tilwick and ordered her to vote or else be discharged.
(c) That Norma Harvey, an employee in the designated bargaining unit was not paid for a day off, July 6, 1971, and was given no reason for not being paid.
(d) That some of the girls in her department had worked over forty (40) hours in a week and had not received overtime pay for doing so.
3. That these statements were a substantial departure from the truth.
4. That the two individuals who made these statements had no factual bases on which to make such statements and, therefore, made them with the deliberate intention of misleading voters.
5. That these material misrepresentations were intentionally made immediately prior to the election when the Employer was unable to effectively neutralize them.
6. That these misrepresentations materially affected the attitude of several voters, in that they caused them to doubt the integrity of the Company and, thus, influenced their vote creating a significant impact on the outcome of the election.
As a result of the filing of these objections, an investigation was conducted under the direction and supervision of the Regional Director. The Regional Director, in his “Report and Recommendations on Objections” dated August 3, 1971, concluded that the Employer’s objections should be overruled in their entirety, and that the Board should issue a Certification of Representation reflecting that the petitioning union had received a majority of the valid ballots cast in the election. It is to this Recommendation that the Employer takes exception, on the basis that the Regional Director’s conclusion cannot be sustained by the evidence and, furthermore, that new evidence was discovered by Company investigators subsequent to the Regional Director’s investigation which, when examined, requires a contrary conclusion.
EXCEPTIONS
EXCEPTION 1
The employer’s Objection No. 1 states that on the day of the election Larry Kuzak, an employee and widely known union supporter, informed various employees that employee Yvonne Tilwick was not going to receive the disability insurance which the Employer had promised to provide for her, and that this statement was a substantial departure from the truth which had a significant impact upon the election.
The Regional Director states that his investigation disclosed that, on the day of the election, Kuzak approached two employees and commented to them that he had heard that Tilwick had not received her disability insurance, and that this was a statement of fact since Til-wick did not receive her first check until July 9, 1971, the day after the election. The Regional Director then stated that Kuzak was merely repeating what he had heard from others, which was clearly hearsay and not a material misrepresentation of fact; and, since this was not a substantial departure from the jtruth, the Objection should be overruled.
The evidence submitted by the Employer, in the form of the two affidavits of the employees Kuzak talked to, demonstrates that Kuzak did not merely state that Tilwick had not as yet received her disability insurance, but that he represented the fact to be that she was not going to receive the disability pay which the Company had promised to pay employees. (Appendixes 1 and 2) Thus, Kuzak attacked the credibility of the Company, a major issue in any organization drive. Where Kuzak got the idea to make this statement is of no consequence. The fact was, as is demonstrated by the attached affidavit, that Yvonne Tilwick has and will continue to receive all the benefits she is entitled to. (Appendix 5) The employees to whom this statement was made possessed no independent knowledge of the facts surrounding it. They believed it and it affected their vote. (Appendixes 1 and 2) This misrepresentation of fact was spread by Kuzak at a time so close to the time set for the election that the Employer had no opportunity to reply and negate the effects of it. This statement, which admittedly affected the votes of at least two employees in an election in which the outcome could have been changed by one vote, was certainly material in that, if true, it would have demonstrated a lack of credibility on the part of the Employer. The fact that it was proven false makes it a misrepresentation. Kuzak made a statement which was a substantial departure from the truth and, thus, was a material misrepresentation of fact to employees voting in an election at a time when the Employer was unable to make an effective reply; and this misrepresentation was one which not only could reasonably be expected to have significant impact upon the election, but which, indeed, did have such an impact. Hollywood Ceramics Company, Inc., 140 NLRB 221 (1962), 51 LRRM 1600.
EXCEPTION 2
The Employer’s Objection No. 2 stated that on the day of the election Mary Tavtigian, an employee who had identified herself as strongly favoring the union, made several statements to various employees which were substantial departures from the truth and which had a significant impact upon the outcome of the election.
Mary Tavtigian stated that Yvonne Tilwick, who was ill, had received no disability payment from the insurance company because Medical . Ancillary Services, Inc. had deliberately “screwed up” her claim so that she would not be paid.
The Regional Director states that his investigation disclosed that Tavtigian informed several employees that Yvonne Tilwick had not yet received her disability insurance check, but he declares that there is no substantial proof to indicate that any comment was made to the effect that the Employer was deliberately trying to prevent Yvonne Tilwick from receiving her benefits. It is difficult to understand how the affidavit of a fellow employee can be summarily dismissed by the Regional Director. (Appendix 3) Moreover, other employees have since come forward and have signed affidavits that they were also told that the Company was deliberately not going to pay Yvonne Tilwick the disability insurance benefits to which she was entitled. (Appendixes 10 and 11) The statement is false; as previously stated, it has been established that the Company has provided the insurance to which Yvonne Tilwick is entitled.
The Regional Director states that his investigation revealed that Tavtigian commented to several employees that the Employer had talked .with Tilwick and asked her to vote in the election if it was possible, but that Tavtigian did not attribute to the Employer any threat of discharge to Tilwick if she did not vote.
However, an employee has stated in her affidavit that she was told by Tav-tigian that a telephone conversation had taken place between Elisabeth Rohr-maier and Yvonne Tilwick, during which Elisabeth had informed Yvonne Tilwick that, if she did not come in to vote, the Company would find some way to get rid of her. (Appendix 3) Another employee also stated that she had been told that Elisabeth Rohrmaier had threatened Yvonne Tilwick by telling her that, if she did not come in to vote, the Company would find a way to discharge her. (Appendix 8) This fact was demonstrated by affidavit to be untrue. (Appendix 5)
There is clear evidence contrary to the findings of the Regional Director that Mary Tavtigian did attribute to the Employer the threat of discharge to Yvonne Tilwick if she did not vote.
In response to the Employer’s charge that Tavtigian had stated that one of the employees, Norma Harvey, had not been paid for a day for which she should have been paid, even though she had taken the day off, the Regional Director stated that, “Tavtigian merely made the comment to one employee that several of the employees in her department were upset because Harvey had not been paid for a day for which she believed she should have been paid.”
However, another employee, in her affidavit, states that what Tavtigian told her was that Norma Harvey was not paid for the day, was not given any reason why she was not paid, and had told Tavtigian that she was glad that Friday was her last day. (Appendix 3) Another employee subsequently stated that she had been told this as well. (Appendix 11)
The Regional Director states that his investigation revealed that “Tavtigian merely stated to at least two employees that four of the nine employees in the. Evaluation Department felt that they had not received all of the pay which was due to them.”
The affidavit of one employee makes it clear that what was said was that four out of nine girls were paid what they were entitled to and the rest were not. (Appendix 3) The affidavit of another employee supports this. (Appendix 4) Other employees also have subsequently informed the Employer’s investigators that they were told that employees had not received the overtime pay to which they were entitled. (Appendixes 9, 10 and 11) This was not true. Employees did receive all overtime payments to which they were entitled. (Appendix 5) The Regional Director’s finding, again, runs contrary to the evidence in his possession at the time he made his conclusion, as well as the newly discovered evidence.
The Regional Director goes on to state that elections are not only invalidated because of the conduct of the parties, but also because of third-party conduct which interferes with the rights of the employees in the selection of a bargaining representative. He states, however, that normally the conduct of individual employees will be deemed interference sufficient to set aside an election only when they are acting as a representative of, or with knowledge and consent of one of the parties to the election. If there is no showing of agency, the Regional Director states that, if the conduct of an employee, as a third party, creates an atmosphere incompatible with the employees’ freedom of choice and there is such a general atmosphere of confusion and fear of reprisal as to render impossible the rational, uncoerced selection of a bargaining representative, then the election may be set aside.
The Regional Director concludes that the conduct of Mary Tavtigian did not create such an atmosphere of confusion as to render impossible the holding of a free and untrammelled election.
The statements made by both Kuzak and Tavtigian did create such an atmosphere. The affidavits attached hereto clearly indicate that the statements they made were false statements of fact and influenced the votes of individuals in several cases: indeed, in far more cases than were actually needed to alter the outcome of the election.
The theory behind the rule not requiring an agency relationship to set aside an election, if a general atmosphere of confusion and fear are created, is based on the premise that, regardless of who created such an atmosphere or who has knowledge of it, it has presumably destroyed the integrity of the election and has, thus, disrupted the laboratory conditions which a fair election necessitates. Here we do not need such a presumption that the election was interfered with. The evidence demonstrates that such was the case. Thus, the election should be set aside, regardless of whether or not an agency relationship is present.
Furthermore, what had not been divulged in any previous investigation was subsequently learned by Company investigators, that is that Mary Tavtigian was the Union’s Chief Stewardess, a fact previously undiscovered not only by the Company investigators, but also by the Regional Director. Thus, Tavtigian was acting as a representative of the Union at the time she made the statements set out in the Employer’s Objections. The agency relationship which the Regional Director found lacking has, thus, been established and Mary Tavtigi-an’s conduct, by itself, is enough to set aside the election. (Appendixes 6 and 7) Vicker’s, Inc., 152 NLRB No. 84 (1965), 59 LRRM 1196. This status of Tavtigian was unknown with certainty until after August 3, 1971, when Sandra Malone was made a supervisor and advised the Company investigators of this fact.
The statements made, as demonstrated by the attached affidavits, represented facts as being other than they were and, thus, were a departure from the truth. They were clearly material misrepresentations, in that they caused several individuals to alter their votes in reliance upon them.
These were far more than the inar-tistically or vaguely worded messages described in Hollywood Ceramics Company, Inc., supra, as being inefficient [sic] to warrant the setting aside of an election.
The statements made were moré than minor distortions which did not have a significant impact on the election. In essence, they were untrue statements, which, if taken as true by those to whom they were related and who had no independent knowledge of the incidents described to them, indicated that the Employer did not keep its word, treated its employees in a malicious manner, threatened its employees, and cheated them when the opportunity arose for it to do so. Several employees have indicated that these statements materially affected their attitude toward the Company when they voted. (Appendixes 1, 2, 8, 9, 10 and 11)
The Regional Director states that the statements made by Mary Tavtigian were not made by her alone and that others in the office discussed these subjects. This is of consequence only as far as it admits that others in the office were deeply concerned about the statements Tavtigian was making. The Regional Director states that statements such as these are typical in an election. To the contrary, such misrepresentations are not typical pre-election experience. Moreover, the crux of Hollywood Ceramics Company, Inc. is not whether conduct is typical, but whether it is such that the integrity of an election has been impaired. Here it was.
The Regional Director assumes that the employees had independent knowledge of the facts with respect to the statements made and would doubt the validity of such statements, and that, even if they did not possess such knowledge, they would certainly have investigated the validity of the statements.
This assumption flies in the face of the evidence. There is no indication that any employee had independent knowledge of the statements made to them. In fact, there is evidence that several employees believed the statements and did not learn of their falsity until after the election. As stated in the attached affidavits, employees did not cheek these statements for two reasons: (a) they were nervous about doing so; and (b) they had insufficient time in which to do so since the statements were made so close to the time the polls opened. (Appendixes 8 and ID
EXCEPTIONS 3, 4, 5 and 6
The Regional Director refers to paragraphs 3, 4, 5 and 6 of the Employer’s Objections as objections and states that they are merely conclusionary statements and support the two previously discussed objections. He states that they lack the specificity required of objections and, thus, recommends that they be overruled.
These paragraphs were never intended to operate as separate objections. The fact that the statements made in the previous objections were a substantial departure from the truth, that there was no factual basis for them, and that they were made immediately prior to the election when the Employer was unable to effectively neutralize them, and that these statements resulted in a change in the attitude of several voters causing them to alter their vote, thus creating a substantial impact on the election and, therefore, impairing its integrity, are the' only conclusions which the evidence will allow one to reach.
WHEREFORE, it is prayed that the National Labor Relations Board set aside the election of July 8, 1971, and order a new election.
Respectfully Submitted, KEYWELL AND RO-SENFELD
/s/ Robert S. Rosenfeld Attorneys for Employer, Medical Ancillary Services, Inc. 26300 Telegraph Road Southfield, Michigan 48076 313-352-8500
Dated: August 18,1971 [Proof of Service]
APPENDIX 8
AFFIDAVIT
GAYLE FRITSCH, being first duly sworn, deposes and says:
1. That I am an employee of Medical Ancillary Services, Inc., a Michigan corporation.
2. That I was eligible to vote in the election held on Thursday, July 8, 1971, to decide whether a majority of employees of Medical Ancillary Services who were in the designated bargaining unit desired to be represented by the Office and Professional Employees International Union.
3. That on Thursday, July 8, 1971, just prior to the commencement of the election, I heard that Elisabeth Rohr-maier, Vice President in charge of production and quality control, had called a sick employee, Yvonne Tilwick, at her home and threatened that if she did not come in to vote, the company would find a way to discharge her.
4. That on Thursday, July 8, 1971, just prior to the election, I heard that certain employees had not received the overtime pay to which they were entitled.
5. That I believed these statements, and they had a substantial effect upon my view of the company, and thus greatly affected my vote' in the election.
6. That I did not check these statements at the time I heard them because I was nervous about doing so, and I did not learn that they were untrue until subsequent to the election.
Further, affiant saith not.
Gayle Fritsch
Subscribed and sworn to before me this . . day of August 1971.
Notary Public, Oakland County, Michigan
My commission expires . . ------
APPENDIX 9
AFFIDAVIT
LINDA McLATCHER, being first duly sworn, deposes and says:
1. That I am an employee of Medical Ancillary Services, Inc., a Michigan corporation.
2. That I was eligible to vote in the election held on July 8, 1971, to decide whether or not a majority of myself and the other employees in the designated appropriate bargaining unit desired the Office and Professional Employees International Union to collectively bargain with our Employer as our representative.
3. That on July 8, 1971, I heard that several employees in the Evaluation Department had not received the overtime to which they were entitled.
4. That I believed this and felt it was unfair, and this materially affected my attitude toward the company when I voted.
5. That subsequent to the election, I learned that this was not true.
Further, affiant saith not.
Linda McLatcher
Subscribed and sworn to before me this ------ day of August, 1971.
Notary Public, Oakland County, Michigan
My commission expires-------
APPENDIX 10 AFFIDAVIT
JUDY EATMON, being first duly sworn, deposes and says:
1. That I am an employee of Medical Ancillary Services, Inc., a Michigan corporation.
2. That I was eligible to vote in the election held on July 8, 1971, to determine whether a majority of the employees of Medical Ancillary Services who were in the designated bargaining unit desired to be represented by the Office and Professional Employees International Union.
3. That on Thursday, July 8, 1971, prior to the election, I was told that Yvonne Tilwick, a fellow employee, had not yet been paid and was not going to be paid the disability insurance benefits to which she was entitled as an employee of Medical Ancillary Services.
4. That I heard that certain employees had not received all the overtime pay to which they were entitled.
5. That these statements created doubts in my mind about the kind of company I was working for at the time I voted in the election.
Further, affiant saith not.
Judy Eatmon
Subscribed and sworn to before me this ------- day of August, 1971..
Notary Public, Oakland County, Michigan
My commission expires .....
APPENDIX 11 AFFIDAVIT
LINDA PAWLOWSKI, being first duly sworn, deposes and says:
1. That I am an employee of Medical Ancillary Services, Inc., a Michigan corporation.
2. That I was eligible to vote in the election held on July 8, 1971, to determine whether a majority of the employees of Medical Ancillary Services who were in the designated bargaining unit desired to be represented by the Office and Professional Employees International Union.
3. That on Thursday, July 8, 1971, immediately prior to the commencement of the election, I was told that the company was deliberately not going to pay Yvonne Tilwick, a fellow employee, the disability insurance benefits to which she was entitled.
4. That some employees in the Evaluation Department had not been paid all the overtime pay to which they were entitled.
5. That Norma Harvey, a fellow employee, had not been paid for a day off for which she was entitled to be paid and that she was not given any reason as to why she was not paid.
6. That at the time I was told of these statements, I did not check to verify their truth, since I did not have time before going to vote in which to do so. These statements affected to a high degree my attitude toward the company and caused me to alter my vote.
7. That I did not find out that these statements were untrue until subsequent to the election.
Further, affiant saith not.
Linda Pawlowski
Subscribed and sworn to before me this .... day of August, 1971.
Notary Public, Oakland County, Michigan
My commission expires ......
. The Board’s decision and order are reported at 195 NLRB, No. 50 (1972).
. This was true even though the Board did not have before it any of the state-meats or affidavits upon which the Direc- ' tor relied in recommending certification.
. A request for a hearing should be readily inferred in a case, such as the present one, where the exceptions to the Director’s Report are not only specific but are supported by a proffer of evidence and where the Board has merely adopted the recommendation of the Director without having before it any of the evidence upon which the Director relied. Under such circumstances it is difficult to see how the Board could achieve fundamental fairness in discharging its responsibility to review the Director’s recommendation without according an adversary hearing.
. Appendixes 1 through 5 were signed and submitted to the Regional Director at the time the Objections were filed on July 15, 1971.
Appendixes 6 and 7 contain evidence which, in part, could only have been discovered by company investigators subsequent to the Regional Director’s investigation and were submitted to the Regional Director on August 4, 1971.
Appendixes 8, 9, 10 and 11 contain evidence newly discovered from employee statements subsequent to the reeeipt oí the Regional Director’s Decision, and are submitted to the National Labor Relations Board for the first time as such.
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UNITED STATES of America, Appellee, v. James Seth STEWART, Defendant-Appellant.
No. 719, Docket 73-1036.
United States Court of Appeals, Second Circuit.
Argued March 23, 1973.
Decided April 25, 1973.
Frederick B. Boyden, New York City, for defendant-appellant.
George E. Wilson, Asst. U. S. Atty. (Whitney North Seymour, Jr., U. S. Atty., S. D. N. Y., Richard J. Davis, Asst. U. S. Atty., New York City, of counsel), for appellee.
Before SMITH, FEINBERG and MANSFIELD, Circuit Judges.
MANSFIELD, Circuit Judge:
James Seth Stewart, Jr., appeals from a judgment of conviction for willful refusal to submit to induction in the Armed Forces, 50 U.S.C. App. § 462(a), entered after a trial in the United States District Court for the Southern District of New York before Judge Charles L. Brieant, Jr., sitting without a jury. Appellant was sentenced on December 14, 1972, as a young adult offender, 18 U.S. C. §§ 4209, 5010(d), to a term of nine months, but was released on bail pending his appeal. In this court he challenges, as he did below, the validity of the underlying induction order, which followed in due course the rejection by the Selective Service System of his claim for exemption from combatant and noncombatant training and service in the Armed Forces as a conscientious objector. See 50 U.S.C. App. § 456(j). Finding error in the administrative proceedings that culminated in denial of Stewart’s request for classification as a conscientious objector, we reverse his conviction.
The essential facts are not disputed. Appellant duly registered with Local Board No. 10 in Mount Vernon, New York, on July 28, 1966. He was thereafter classified II-S (student deferred from military service) from September 26, 1966, to August 19, 1970, as a result of his full-time undergraduate attendance at Stanford University. On February 6, 1970, he requested from the Local Board Selective Service Form 150, the application form for classification as a conscientious objector to combatant training and service (I-A-0 status) or to both combatant and noncombatant training and service (1-0 status). He thereafter received the form, filled it out, and returned it to the Board on March 26, 1970. In his application for 1-0 status, Stewart stated that he was “conscientiously opposed to participation in war in any form, . . . further opposed to participation and service in the Armed Forces . . . , but prepared to perform civilian alternative service if called.” He submitted a six-page essay in fulfillment of the requirement that he offer certain specified information to substantiate his conscientious objector claim. In it he expressed his beliefs that “God is the creator of life, and his power is Love; love transforms the mystery and contradictions in the human experience into a process of holiness”; and that “war is not fit for men.” He further stated:
“Since I will never be persuaded that the destruction of life ever enhances the quality of life, my beliefs insist that I not only never kill, but also that I never ask anyone to kill for my sake. ... I also oppose by the nature of my beliefs any decision made of who is to kill and be killed. I therefore cannot serve the war machine of my country in any way.”
The source of his beliefs he described as his faith in Christianity and his loving, Christian family background, including the influence of his father, grandfather and uncle, all of whom are ministers. However, he professed to some doubts of his own religious orthodoxy, which had in part prevented him, erroneously, from seeking conscientious objector status at an earlier date. He went on to explain in further detail why his conscientious objection had not surfaced earlier. In answer to the question of whether he had given expression to his views, he cited “many long talks about war and loyalty, peace rallies, a sit-in, and work on the Moratorium. But mainly, I have been concerned. And I also hope that refusing to go to war can be seen as a daily event in my life.”
In support of his application, friends and relatives of Stewart submitted eight letters generally noting his integrity and his sincere commitment to his religious beliefs in peace and non-violence.
On August 19, 1970, the Local Board granted appellant a 10-minute discretionary pre-classification interview, at the beginning of which he submitted an additional typewritten statement reiterating that “God is the creator of life, and his power is love” and that “my beliefs insist that killing and war is wrong, and that I not do it.” The Local Board denied his request for 1-0 classification and reclassified him from II-S to I-A (available for induction) by a unanimous 3-0 vote. In its summary the Board explained its action by concluding :
“Registrant is not a genuine conscientious objector based on the norms set forth in LBM #107 in that registrant’s objection is not to all war but to the present specific war.”
The Executive Secretary of the Local Board summarized in longhand the oral information given by appellant, noting on the summary sheet, among other things, that “Registrant said he could understand World War 2 but this war (Vietnam) he cannot serve.”
At the bottom of the summary of oral information provided by the registrant the following appeared:
“Board’s Note: Registrant stated that he would have served in a war like World War 2, but under no circumstances would he be involved or serve in the present type of war.”
On August 27, 1970, the day after appellant was notified of the denial of his claim, he reviewed his file. In a letter delivered to the Board on September 10, he appealed the I-A classification, denied having said that he “would have fought in World War II,” and requested a personal appearance to discuss the reason for the denial of his application for I — 0 status. On November 18, 1970, appellant appeared as a matter of right before the Board, again seeking a 1-0 classification. He submitted a statement explaining his beliefs and describing the misunderstanding about what he had said at the August 19th interview in the following manner:
“I was asked, ‘How do you think W.W. II compares to the present war?’ I responded that I could understand how a man of conscience could have fought in that war, but that I couldn’t understand how someone could in the present war.
“I said that because I know men in my family of great morality who felt at the time that it was their duty to fight, and from my understanding of those times I can sympathize with the dilemma they responded to.
“However, their times and experiences are not mine. I was raised with a different perspective on war.
“There is no contradiction in my mind: to understand the dilemma under which someone once acted with concience [sic] does not obligate one to commit himself to that action, or in any way invalidate the sincerity of one’s intention.”
The Board's summary of the November 18 appearance reflected appellant’s denial that he had ever said he would have fought in World War II, his version of what he had said, and the following:
“The board asked registrant is he a man of conscience. Registrant answered he is. Registrant said that he cannot throw himself back in World War #2, he is against all wars. . Registrant said he could not understand why the board felt that he is not sincere. He is prepared to do alternate service.”
The Board did not indicate wnether or concience [sic] does not obligate one how it reconciled the factual inconsistency between Stewart’s version and its Executive Secretary’s summary version of the August 19 interview. Instead, the Board members again unanimously denied appellant a 1-0 classification with the bare conclusion that “the Local Board is not convinced of the sincerity of registrant’s claim as a conscientious objector.” As Judge Brieant noted in his opinion “[t]he Local Board indicated no specific fact or reason which led to its conclusion that defendant was insincere. . . .”
Stewart appealed his I-A classification on January 4, 1971. He also wrote letters to the Local Board on January 4, 6, and 14 attempting to clear up the apparent misunderstanding and convince the members of his sincerity, but the clerk did not bring any of these letters to their attention and no action was taken on them. On February 18, the Appeal Board unanimously sustained the Local Board’s classification of appellant as I-A, without stating any reasons for its decision, during a one-hour meeting in which the classifications of 102 registrants were reviewed and determined. Of these, 89 classifications were sustained and 13 were reversed, though none of the 6 conscientious objector appeals was granted. The Appeal Board members did not have the registrants’ files before them until the meeting, and there was uncontradicted testimony that they sometimes did, and sometimes did not, review the files but that in the former case they did not make any notation of files reviewed. They did receive summaries of the files about two weeks in advance of the meeting, but these were customarily discarded later and appellant’s was never found.
On November 10, 1971, appellant refused to submit to induction. His indictment and conviction followed. Judge Brieant held that there was a “basis in fact,” Estep v. United States, 327 U.S. 114, 122, 66 S.Ct. 423, 90 L.Ed. 567 (1946), for the I-A classification given appellant by the Local Board after his November 18 appearance. He further concluded that the. failure of the Board members to give reasons for their conclusion that Stewart had not convinced them of the sincerity of his claim as a conscienious objector did not invalidate the I-A classification he was given, since Judge Brieant was able to infer the existence of legally sufficient reasons which appeared to have a factual basis in the record. He explained:
“A reasonable interpretation of the material set forth in his Form 150, taken together with the results of his prior appearance before the same Board, compared with the circumstances of his second appearance, are sufficient to lead a reasonable man to the conclusion that defendant’s response was something which had occurred because of the lack of justice in the Viet Nam War, and was not a conscientious objection to all wars. If the Board believed, as I find that it did, based on its colloquy and summaries, and a fair reading of Form 150, that defendant, if the Hitler holocaust were revisited on us today, would have done just as his father and uncles did, then it was justified in finding him insincere in his claim to conscientious objection. ■
■>:• *
“The local board was justified in concluding that defendant adjusted his viewpoint about World War II slightly, claiming that with today’s beliefs he would not have fought in yesterday’s war, and doing so was a recent contrivance, solely for the purpose of gaining a valid basis for 1-0 classification.”
It is settled that conscientious objector status may be denied to a registrant found to oppose only a particular war as “unjust” rather than all “war in any form.” Gillette v. United States, 401 U.S. 437, 447, 91 S.Ct. 828, 28 L.Ed.2d 168 (1971). However, before determining whether that principle applies here, we are confronted with a preliminary, but nevertheless crucial, question. Despite the district court’s interpretation of the material before it, it is undisputed that nothing Stewart had said or done was in fact suggested by the Board as the basis for its rejection of Stewart’s claim. The district court reached its conclusion only through the process of assuming what the Board would have said if it had articulated the factors relied upon as the basis for its decision. The issues squarely presented upon this appeal, therefore, are (1) whether the Board’s failure to specify the reasons for its action is fatal, and (2) if not, whether there was a factual basis for the denial of Stewart’s claim.
Until very recently there was some precedential support in this Circuit, apparently relied upon by Judge Brieant, for the proposition that a local draft board, prior to the 1971 amendment noted in the margin, was “not required to give any reasons for its decisions,” United States ex rel. Zelman v. Carpenter, 457 F.2d 621, 622 n. 1, 624 (2d Cir. 1972), and that where the board failed to specify its reasons other than in general conclusory terms the court could independently search the record to determine whether there was a basis in fact for the board’s decision, see Weissman v. Officer of the Day, 444 F.2d 1326, 1328 (2d Cir. 1971); Rosengart v. Laird, 449 F.2d 523, 529 (2d Cir. 1971), vacated and remanded, 405 U.S. 908, 92 S.Ct. 931, 30 L.Ed.2d 779 (1972). The reasoning behind this approach, as the district court here recognized, was that a group of voluntary laymen cannot be expected to make detailed findings or statements of reasons of the type usually expected of professionals well versed in legal requirements for administrative review, see United States v. Aull, 341 F.Supp. 389, 394, aff’d, 469 F.2d 151 (2d Cir. 1972). However, at the same time there have been those who have consistently expressed apprehension lest the “mere ipse dixit of lack of sincerity from the Local Board or the hearing officer would create serious possibilities of abuse,” United States v. Corliss, 280 F.2d 808, 814 (2d Cir.), cert. denied, 364 U.S. 884, 81 S.Ct. 167, 5 L.Ed.2d 105 (1960), and who have emphasized that while “boards of volunteer laymen cannot be expected to express themselves with the elaboration of expert regulatory agencies” it is important for a reviewing court to know the grounds upon which the board acted. Paszel v. Laird, 426 F.2d 1169, 1175 (2d Cir. 1970). A serious claim of conscientious objection, it was observed, “deserved something better than an ambiguous checkmark,” id. See also United States v. Deere, 428 F.2d 1119 (2d Cir. 1970); United States v. Lenhard, 437 F.2d 936 (2d Cir. 1970). At least five other circuits, moreover, concluded, prior to more recent Supreme Court decisions on the subject (discussed below), that a local board’s failure to state the reasons for its action constituted a denial of due process requiring reversal, in such instances, of a conviction based upon the refusal to obey the board’s induction order. United States v. Edwards, 450 F.2d 49 (1st Cir. 1971); United States v. Speicher, 439 F.2d 104 (3d Cir. 1971); United States v. Broyles, 423 F.2d 1299 (4th Cir. 1970) (en banc); United States v. Stetter, 445 F.2d 472, 481-85 (5th Cir. 1971); United States v. Jamison, 463 F.2d 1219 (9th Cir. 1972).
Any uncertainty as to whether a local board’s failure to articulate its reasons for denial of conscientioüs objector status calls for reversal of the applicant’s later conviction was eliminated by the Supreme Court’s recent decisions in Joseph v. United States, 405 U.S. 1006, 92 S.Ct. 1274, 31 L.Ed.2d 473 (1972), and in Lenhard v. United States, 405 U.S. 1013, 92 S.Ct. 1296, 31 L.Ed.2d 477 (1972). In Lenhard, which went to the Supreme Court from this Circuit, the local board had, without stating any reasons, denied appellant’s application for status as a conscientious objector and classified him I-A, following which he failed to respond when called for induction. After Lenhard was convicted we, upon appeal, remanded the case to the district court to determine whether there was a factual basis for the board’s classification. The district court, following a hearing in which board members testified as to their reasons for concluding that Lenhard was insincere, reinstated the conviction. We affirmed.
Upon Lenhard’s petition to the Supreme Court for a writ of certiorari the Solicitor General filed a memorandum requesting that the writ be granted, the judgment vacated, and the conviction reversed on the ground that since Len-hard’s application had made out a prima facie claim for classification as a conscientious objector the failure of the local board to state its reasons for its denial of his claim precluded meaningful administrative review as mandated by Mulloy v. United States, 398 U.S. 410, 416, 90 S.Ct. 1766, 26 L.Ed.2d 362 (1970). With respect to the requirement that the board state its reasons the Solicitor General’s memorandum stated:
“[W]e are unable to subscribe fully to the Second Circuit’s remand procedure in the circumstances of this case. It is here undisputed that petitioner stated a prima facie case for conscientious objector status, that the local board regarded the claim as sufficient to warrant a reopening of the classification (Mulloy v. United States, 398 U.S. 410, 90 S.Ct. 1766, 26 L.Ed.2d 362), and that, therefore, reasons should have been stated by the board in support of its decision (see Gov’t. Mem. on Merits in Joseph v. United States, No. 70-251, this Term, pp. 18-23). Only in this way can a registrant, whose claim has ‘met the statutory criteria’ (Parrot v. United States, 370 F.2d 388 (C.A.9)), and whose ‘veracity * * * is the principal issue’ (United States v. Washington, 392 F.2d 37, 39 (C.A.6)), be assured of a ‘meaningful review’ (cf. Gonzales v. United States, 348 U.S. 407, 415, 75 S.Ct. 409, 99 L.Ed. 467) of the administrative determination, not only by the courts (see, e. g., Scott v. Commanding Officer, 431 F.2d 1132 (C.A.3); United States v. Haughton, 413 F.2d 736 (C.A.9.)), but also by the State Appeal Board (see, e. g., United States v. Speicher, 439 F.2d 104 (C. A.3); United States v. Broyles, 423 F.2d 1299 (C.A.4)).
* * # * *
“Our difficulty is ... at the administrative review level; we agree with the dissent below that the belated revelation at the hearing following the trial of the local board’s reasons does little to make the earlier review of the claim by the State Appeal Board any more meaningful. While that review is de novo, the Selective Service regulations provide that the one taking an administrative appeal shall have an opportunity to submit a written statement to the State Appeal Board setting forth in what manner he believes the local board erred (32 C.F.R. 1626.12). As this Court recognized many years ago in Gonzales v. United States, supra, 348 U.S. at 415, 75 S.Ct. 409, ‘the right to file a statement before the Appeal Board includes the right to file a meaningful statement, one based on all the facts in the file and made with awareness of the recommendations and arguments to be countered.’ This, we think, requires, at the very least, knowledge of the grounds for the local board’s decision. See, e. g., United States v. Broyles, supra, 423 F.2d at 1305-1306; United States v. Washington, supra, 392 F.2d at 39.”
The Supreme Court thereupon remanded both Lenhard and Joseph, a similar case, “for consideration in the light of the position now asserted by the Solicitor General.” 405 U.S. 1006, 1013. Upon remand we reversed Lenhard’s conviction. 461 F.2d 1268 (1972).
We interpret the Supreme Court’s decisions in Lenhard and Joseph as dictating that where an applicant states a prima facie case for classification as a conscientious objector and the local board fails to state its reasons for denial of the application, thus precluding meaningful administrative review, a conviction based upon the board’s I-A classification must be reversed. United States v. Holby, 477 F.2d 649, 651, 656-657 (2d Cir. 1973). Accord, United States v. Hulsey, 463 F.2d 1071, 1075 (7th Cir. 1972); United States v. Hanson, 460 F.2d 337, 342-343 (8th Cir. 1972). An independent review by the district court to determine whether a “basis in fact” existed for the local board’s action is not an adequate substitute for the board’s failure to articulate its premises. Aside from the questionable propriety of a court’s substitution of its speculation for the board’s silence, see SEC v. Chenery Corp., 318 U.S. 80, 94, 63 S.Ct. 454, 87 L.Ed. 626 (1943), the court’s findings, which occur after the administrative review, come too late to enable the applicant to rebut or refute them upon review by the Appeal Board.
We have further recognized recently, in considering the “reasons” requirement in connection with review of an ROTC cadet’s application for discharge as a conscientious objector, that the requirement is not satisfied by a board’s mere conclusory statements of insincerity. The facts or factors relied upon by the board must be stated. United States ex rel. Checkman v. Laird, 469 F.2d 773, 785 (2d Cir. 1972); see United States v. Andersen, 447 F.2d 1063, 1065 (9th Cir. 1971). Otherwise the reviewing board cannot know whether the local board based its decision on valid or invalid grounds. Furthermore, in view of our recent holding that the appeals board may affirm the findings of the subordinate board without restatement of the reasons for its decision, United States v. Orr, 474 F.2d 1365, 1369 (2d Cir. 1973), it becomes all the more important that the local board specify the facts forming the basis of its decision.
Application of these principles here mandates a reversal. The Local Board concluded summarily that it was “not convinced of the sincerity of Registrant’s claim.” In the words of the district court, the Board “indicated no specific fact or reason which led to its conclusion.” Although the Board had stated in its earlier rejection that Stewart was “not a genuine conscientious objector ... in that [his] objection is not to all wars but to the present specific war” he promptly objected to the clerk’s handwritten summary of the earlier courtesy interview, which apparently was the basis for the Board’s action, as inaccurate. He further affirmed in person and in writing that he at no time stated that he would have fought in World War II. He contended that what he had said was that, assuming he had lived in the days of World War II (which he had not) and had been raised in the same beliefs as people in that era, he probably would have signed up, but that he had been raised in a different era, with a different perspective on war and a different understanding of war’s influences and, as a consequence, was sincerely opposed to war generally.
Confronted with this issue as to what had been said by Stewart, the Board owed a duty to be more specific in stating the reason for its action, particularly since it was now summarizing a decision based upon the interview to which Stewart was entitled as a matter of right, as distinguished from the earlier “courtesy” interview. Instead of specifying the basis of its November 18 decision, however, the Board issued a cryptic, conclusory sentence which leaves us to speculate as to the reasons for the denial of the application. Some of those possible reasons might have been valid, others invalid. The Board may have concluded, for instance, that its record of the first interview was accurate and that it did not believe Stewart’s version of his earlier oral statement to the Board or his professed opposition to all war. On the other hand, it may have decided that its clerk’s earlier longhand notes were inaccurate and that Stewart had in fact consistently maintained his objection to all wars at both hearings, but nevertheless have concluded that he should be denied conscientious objector status because of his statement that under the hypothetical conditions assumed by him, he probably would have signed up in World War II. Or the Board may have acted because it believed his profession of conscientious objection to be a recent contrivance by a “glib college kid.” If the Board had articulated any of these premises, Stewart would at least have had a chance upon administrative review to demonstrate either the falsity or the invalidity of the Board’s reasoning. In the absence of any specification by the Board of the factual basis for its decision, however, he was deprived of that opportunity.
Even assuming arguendo that the Board based its decision on the ground that Stewart was opposed to war on a selective, rather than on a general, basis we seriously question whether there is a sufficient factual basis to support that conclusion. The record reveals that Stewart repeatedly expressed himself, both before and after both interviews, as being opposed to war in any form. The view that he “would have served in a war like World War 2” appears to have been based on a misunderstanding as to the hypothetical nature of the assumptions which underlay his views with respect to that war. What he appears to have said was that if he had lived in the era of World War II (which he had not) and if he had been exposed to the same influences as had his father prior to and during that war (which he had not been) he probably would have served in World War II, just as his father had done. This frank concession is hardly inconsistent with his current opposition to all wars, including World War II if it were presently being conducted. However, since Stewart’s conviction must be reversed because of the Board's failure to state its reasons, we need not pursue the subject further except to note that the very uncertainty and speculation engendered by the Board’s cryptic disposition of the case points to the wisdom of the Supreme Court’s recent imprimatur on the rule requiring that reasons be stated for the Board’s denial of a registrant’s claim to be classified as a conscientious objector.
Stewart further urges that he was denied due process because of the Appeal Board’s failure to state the reasons for its affirmance of the local board’s I-A classification and because of the Appeal Board’s inadequate consideration of his ease. The first of these contentions has been rejected in a recent decision of this court, to which we adhere. United States v. Orr, supra. The second presents a more serious issue. The Appeal Board was required to give Stewart’s appeal such consideration as would satisfy due process requirements and permit a full and fair disposition of his contentions. Mulloy v. United States, 398 U.S. 410, 416, 90 S.Ct. 1766, 26 L.Ed.2d 362 (1970); Mintz v. Howlett, 207 F.2d 758, 762 (2d Cir. 1953). That Board’s minutes, however, reveal that in a period .of one hour on February 18, 1971, it reviewed 102 local board classifications, including that of Stewart, of which 89 were sustained and 13 were reversed. None of the six conscientious objector appeals was granted.
These facts may raise a due process question. However, since we have concluded that the conviction must be reversed for the reasons already stated, it becomes unnecessary to remand for resolution of the issue raised as to the adequacy of administrative review of Stewart’s classification. For the same reason, it is unnecessary to discuss appellant’s final argument, that the failure of the clerk of the Local Board to transmit to Board members any of appellant’s post-November 18 communications denied him due process.
The conviction is reversed and the case is remanded with directions to dismiss the indictment.
. “I don’t know what I was thinking when I registered for the draft — maybe the approach of college was on my mind, and my father had always assured me that I would not have to go to war. However, though I am not aware of the exact timetable which brought me to this stance, I do sense a continuing logic towards it. The war in Viet Nam of course forced me to become outraged, and its existence demanded that I formulate my response. . I know I decided . . . that I somehow could not cooperate with our military effort.”
. “The board asked registrant had any of his family been in service. Registrant said yes — his father and uncles served in the military. Also what did registrant think of World War 2, would he have served. Registrant said he could understand World War 2 but this war (Vietnam) he cannot serve. He stated that there are different ways to defend the country. He said he would serve alternate service, such as working in a hospital.”
. “I have read my file, and the report of 'my interview indicates that I said I would have fought in World War II. At not [sic] point was I asked that question, nor did I say that. Since the decision was made on the grounds that I said something I did not say, I feel certain that there was a confusion during the interview which I would like to correct with the personal appearance.”
. Section 101(a) (36) of Public Law 92-129, enacted September 28, 1971, and codified at 50 U,S.C. App. § 471a (b) (4) (1972 Supp.), requires that pursuant to such rules and regulations as the President may prescribe, “[i]n the event of a decision adverse to the claim of a registrant, the local or appeal board making such decision shall, upon request, furnish to such registrant a brief written statement of the reasons for its decision.” See 32 C.F.R. § 1623.4(c) (1972).
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Abraham COHEN and Esther Friedlander, Co-Executors of the Last Will of Raphael Cohen, Deceased, Plaintiffs-Appellants, v. FRANCHARD CORPORATION et al., Defendants-Appellees, and Joseph E. Low et al., Defendants.
No. 359, Docket 72-1724.
United States Court of Appeals, Second Circuit.
Argued Jan. 17, 1973.
Decided April 11, 1973.
Irving Bizar, New York City (Ira Jay Sands, Barbara P. Sugarman and De-mov, Morris, Levin & Shein, New York City, on the brief), for plaintiffs-appellants.
Roy L. Reardon, New York City (Peter J. Schlesinger and Simpson, Thacher & Bartlett, New York City, on the brief), for defendant-appellee Franehard Corp.
Irving Parker, New York City (I. Michael Bayda and Jacobs, Persinger & Parker, New York City, on the brief), for defendants-appellees Louis A. Siegel and Seymour Young.
Before FRIENDLY, Chief Judge, and OAKES and TIMBERS, Circuit Judges.
TIMBERS, Circuit Judge:
This is a striking example of a case that never should have been claimed for jury trial, as plaintiffs’ counsel did. That, coupled with what appears to have been a lack of preparation in addition to visibly inept trial conduct on the part of plaintiffs’ counsel, is about all that distinguishes this from what otherwise would be an uncomplicated appeal.
We cannot emphasize too strongly our disapproval of the dubious judgment of counsel in claiming for jury trial a case involving such issues as “scienter” and “reliance” under the antifraud provisions of the federal securities laws. It is one thing to try such cases before our district judges who have become knowledgeable and experienced in dealing with such difficult problems. But it is quite another thing to expect a jury to comprehend such issues, even assuming an utterly perfect charge.
Plaintiffs, representing a class of purchasers of shares in a limited partnership, appeal from a judgment entered on a jury verdict in the Southern District of New York, Lloyd F. MacMahon, District Judge, in favor of defendants Franchard Corporation, Louis A. Siegel and Seymour Young on the issue of liability in a class action brought to recover damages for alleged violations of Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) (1970), of Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5 (1972), and of Section 352 of the N.Y. General Business Law (McKinney 1968).
The chief issue raised on appeal is the propriety of the trial judge's charge to the jury. Subordinate issues are raised with respect to the judge’s conduct of the trial.
We affirm.
I.
EVENTS LEADING TO INSTANT LITIGATION
Louis Gliekman is a well known real estate syndicator. He was responsible for the creation of the many Gliekman enterprises and was founder and first president of the Association of Real Estate Syndicators, Inc. Although not named as a defendant in the instant action, he was involved in the syndicate which is at the center of this action.
Franchard Corporation (Franchard) is a New York corporation. It was organized in 1960 for the purpose of taking over the ownership and operation of many properties previously owned and operated by entities in the Gliekman organization, as well as real estate syndicates formed by the Gliekman organization. It was known as the Gliekman Corporation until 1963. The takeover by Franchard was accomplished by the various Gliekman enterprises exchanging their holdings and assets for stock in Franchard. Additional Franchard stock was sold to the public. Gliekman himself became a principal stockholder, president, and director of Franchard.
Wedgwood House Associates (Associates) is a limited partnership syndicate organized under New York law to acquire ownership of two New York City properties — Wedgwood House, a residential apartment building on Fifth Avenue, and land on 34th Street upon which was to be built Warren House, another apartment building. Associates also was to build Warren House.
Gliekman Corporation of Nevada (Venada) is a Nevada corporation wholly owned by Gliekman. It became the net lessee of both Wedgwood and Warren Houses.
Louis A. Siegel and Seymour Young, together with Gliekman, were the general partners in Associates. Siegel and Young also were senior vice president and vice president, respectively, directors and shareholders of Franchard. They also were officers and directors of Vena-da.
In October 1960, Gliekman conceived the idea of syndicating the purchase of Wedgwood House and Warren House. At that time Wedgwood House had almost been completed. The construction of Warren House had not yet begun, the land on which it was to be built not even having been cleared of existing structures. Venada entered into a contract for the purchase of Wedgwood House and the land on which Warren House was to be built. A limited partnership, Associates, was then formed. See N.Y. Partnership Law, Art. 8, § 90 et seq. (McKinney 1948). It consisted of three general partners — Glickman, Siegel, and Young — and an original limited partner, Joseph E. Low. Glickman subscribed to 17 general partnership units, Siegel and Young each subscribed to 1% general partnership units, and Low subscribed to one limited partnership unit. Each unit represented a capital contribution of $5,000. Thus, the total capital contribution of Glickman, Siegel, Young and Low was $105,000.
In order to raise the additional $6,645,000 necessary to assume the Ven-ada purchase contract, to construct the buildings, and to pay all expenses connected with the acquisition and formation of Associates itself, Associates offered to the public units and half-units of limited partnership interests at $5,000 and $2,500 per unit, respectively. The general partners, together with various experts such as architects, engineers, and attorneys, prepared literature to promote the sale of the limited partnership interests in Associates. A flyer and a brochure served as the selling documents from October 1960 to December 31, 1960.
On January 1, 1961, Section 352-e of the New York General Business Law became effective. Section 352-e required that, before an offering concerning the syndication of real estate could be made to the public, a “prospectus” or “offering statement” must be filed with the state Attorney General containing specified information. N.Y.Gen.Bus. Law § 352-e(l)(a), (b) (McKinney 1968). It also required that all advertising in connection with the offering be consistent with the information set forth in the prospectus and that all advertising literature be filed with the Attorney General pi’ior to dissemination. Section 352-e(l)(c), (5). To comply with this provision, Associates prepared and filed a new prospectus. This new prospectus and a new flyer served as the selling documents from January 1, 1961 until February 1961, by which time all the units had been sold.
The selling documents represented, among other matters, that it was “anticipated” that distributions to partners would amount to an 11% per annum return on their investment; that the two apartment houses were to be operated by Venada as net lessee and not by Associates; that Venada’s net lease required it to pay to Associates an amount sufficient to cover the mortgages and taxes on the two properties, plus sufficient funds to make distributions to the partners at the anticipated rate; that Fran-chard had been engaged to maintain Associates’ books and records and to employ independent certified accountants; and that Glickman, Siegel, and Young were officers and directors of Fran-chard and Venada. The selling documents also set forth the income to be received by Venada from rental of the Associates’ buildings, the proposed expenses of operation, and the expected profit. The projections were made “on the basis of the rentals provided in leases already signed by tenants of Wedgwood House, the prevailing rental rates and expenses in substantially comparable buildings, the knowledge and experience of the management and engineering staff of Glickman Corporation of Nevada and other appropriate investigation and analysis.” Brochure dated September 12, 1960 at 9; - Prospectus dated January 1, 1961 at 11.
Beginning January 10, 1961, distributions were paid to the partners of Associates at the rate of 11% per annum on the original capital contributed. Distributions on this basis were made monthly throughout 1961 and 1962. In January 1963, however, Venada defaulted in its obligations under the net lease. In March 1963 it was evicted.
Venada’s default under the lease can be traced to events beginning in October 1960. At that time, Glickman began se-cretely ‘borrowing” Franchard’s funds to cover on a short term basis his personal obligations as well as those of Venada. From October 31, 1960 to December 1960, Venada defaulted in rent payments due to three other Glickman syndications in amount of $296,329. These funds were “borrowed” from Franchard. Franchard then was repaid and a new cycle of borrowing began. Venada also would have defaulted on its first rent payment to Associates, but was able to borrow the necessary funds from Franchard.
This “borrowing” continued undiscovered until May 1962. At that time Glickman became unable to cover up the loans because, among other reasons, his holdings in various enterprises declined substantially in value. On May 3 and 4, a meeting of Franchard’s board of directors was called to discuss Glickman’s questionable use of Franchard’s funds. Stringent limitations were imposed on Glickman to insure that he would not engage in any further “borrowing” of Franchard’s funds. When it was discovered in December 1962, however, that Glickman had violated his commitments to the board, he was forced to resign as an officer and director of Franchard. He thereafter also resigned as a general partner in Associates.
Venada’s financial condition worsened so that in February 1963 it filed a petition for an arrangement under Chapter 11 of the Bankruptcy Act. Shortly thereafter it was evicted as net lessee of Wedgwood and Warren Houses.
After Venada was evicted, Siegel and Young found a new net lessee that agreed to pay a net rental sufficient in amount to allow, after payment of total expenses, distributions at the rate of 4% per annum on the capital contributed. Finally, in 1968, the properties were sold and $4,562,800 of the sale proceeds was distributed to the partners.
Going back to November 1967, appellants. Cohen and Friedlander, owners of limited partnership shares in Associates, commenced this class action on behalf of all the limited partners in Associates seeking damages against Franchard, Siegel and Young, among others. The complaint set forth three separate counts. The first count alleged violations of Section 17(a) of the Securities Act of 1933, 15 U.S.C. § 77q(a) (1970), of Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) (1970), and of Rule 10b-5, 17 C.F.R. § 240.10b-5 (1972). The second count alleged violations of Section 352 of the New York General Business Law (McKinney 1968). The third count, “brought derivatively in the right of and for the benefit of Associates . . . . ”, alleged common law fraud.
Before the case was submitted to the jury, as a result of a conference between court and counsel at the conclusion of the evidence and prior to the charge, there emerged an agreement pursuant to which various allegations of misrepresentations and omissions were abandoned, thus leaving, so far as the issues on this appeal are concerned, only the allegations of paragraphs 8, 9 and 11 of the first count of the complaint (the Section 10(b) and Rule 10b-5 count). Paragraph 8 alleged certain affirmative statements made by Associates in the .sales materials. Paragraph 9 alleged that these affirmative statements were false and misleading because of Associates’ failure to disclose certain facts described in paragraph 9. Paragraph 11 alleged that the named plaintiffs and members of the class relied upon these false and misleading representations in purchasing partnership shares.
Plaintiffs first moved for an order designating the action a class action, consisting of the 1330 purchasers of limited partnership interests. On September 23, 1970, this motion was granted. 51 F.R.D. 167. Although the terms of Judge Tenney’s order are not clear from the opinion, it appears from the latter, 51 F.R.D. at 174, that “individual issues such as ‘reliance’ and the quantum of damages” were to be litigated as to each purchaser, and only the issue of fraud was to be litigated as a class. As will appear in the course of this opinion, however, Judge MacMahon, whether on express consent of the parties or through their inadvertence, proceeded to put the issue of reliance before the jury in the class action.
The nine day trial began on April 27, 1972 and concluded on May 10. Only the issue of liability was tried. The court had ruled that if the jury should find in favor of plaintiffs on the issue of liability, the issue of damages would be tried immediately thereafter to the same jury. The jury returned a verdict in favor of defendants Franchard, Siegel and Young on the issue of liability.
II.
JURY CHARGE
Appellants’ chief claim on appeal is that the jury charge was substantially incorrect in several respects with regard to what appellants were required to establish in order to recover on their Rule 10b-5 claim. Specifically, appellants contend that the court erred in charging on the legal principles of scienter and reliance, and in failing to instruct the jury that Franchard was charged with the knowledge of its agents.
Appellants did not object to the charge on these issues before the jury retired to consider its verdict as required by Fed.R.Civ.P. 51. Before we may consider the sufficiency of the charge, therefore, we must determine whether what occurred immediately prior to the charge made it unnecessary for appellants to take exceptions or, alternatively, whether we should rule on appellants’ claims under the “plain error” rule.
Court’s Rulings On Requests To Charge
The events regarding the court’s charge to the jury may be briefly summarized. The court ordered that all requests to charge be submitted in advance of trial. This order was substantially complied with by both sides. As the trial neared completion, the court scheduled a robing room conference with counsel on May 8 to consider the requests to charge. The night before the conference, appellants left in the judge’s chambers supplemental requests to charge consisting of 14 additional items. The judge did not have an opportunity to study these requests and informed counsel that he intended to reject them. Appellants’ counsel assured the court that he “could not and would not make any exception to the Court’s charge based on these [supplemental] requests” because they were untimely.
In their timely requests to charge submitted in advance of trial, appellants requested the court to charge on the issue of scienter as follows:
“Plaintiff’s Request to Charge — No. 5
Under Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, the defendants may be held liable to plaintiff if defendants knew or should have known that one or both of the Wedgwood prospectuses were misleading or if defendants knew of the existence of facts which, if, disclosed, would have shown other facts to be misleading, .
Plaintiff’s Request to Charge — No. 6
You may hold the defendants liable to plaintiff and members of his class if you find defendants made false and misleading statements and omitted to state material facts about the Wedgwood House Association syndication, notwithstanding defendants’ claim of ignorance of the falsity of the representations if you find they could have ascertained the true facts by the exercise of the degree of care expected of a reasonably prudent person . . . . ”
After a full discussion with counsel at the robing room conference, the court declined to charge on the issue of scien-ter in accordance with requests 5 and 6, or requests 3 and 4.
On the issue of reliance, appellants asked (in their request 19) for a charge which would have dispensed with the requirement of actual reliance. The court did not consider this request, since it was one of those submitted late. The requested charge on reliance was not even discussed at the robing room conference. The court proposed, however, to charge reliance in the language of the complaint. Counsel accepted this proposal. Accordingly, the court read to the jury as part of its charge paragraph 11 of the complaint as follows:
“Without knowledge of the true facts and in reliance upon the false and misleading representations and statements, plaintiff and members of the class made the purchases [of limited partnership interests in Associates] hereinbefore described.”
Appellants did not request the court to charge that if Bernard Mann, Fran-chard’s treasurer, had knowledge of material misstatements or omissions, such knowledge should be imputed to Fran-chard under agency principles.
Following the charge, the court asked counsel if they had any exceptions. Appellants’ counsel took exception to three matters, none of which has anything to do with the issues raised on appeal.
Reliance and Imputed Knowledge
It is clear that appellants have not preserved for appeal the claims they now seek to raise with respect to reliance and Franchard’s imputed knowledge.
As to reliance, appellants argue before us that in a case of nondisclosure, as opposed to a case of affirmative misrepresentation, a plaintiff need only show that the facts withheld were material. They urge us to reverse the judgment entered on the verdict in favor of defendants on the ground that the court charged that appellants had to show actual reliance.
While appellants’ request 19 did ask for a charge which keyed liability to materiality, without a requirement of actual reliance, the court properly refused to consider this request because it was not timely submitted. The charge appellants agreed to accept, based on paragraph 11 of the complaint, instructed the jury in effect that it must find actual reliance before it could return a plaintiffs’ verdict. Appellants’ prior acquiescence in this portion of the charge, coupled with their failure to object to it as given, precludes them from raising the issue of reliance on appeal. United States v. Heyward-Robinson Co., 430 F.2d 1077, 1083-85 (2 Cir. 1970), cert. denied, 400 U.S. 1021 (1971), and cases cited at 1084; Kane v. American Tankers Corp. of Delaware, 219 F.2d 637, 640 (2 Cir. 1955); Westmoreland Asbestos Co. v. Johns-Manville Corp., 136 F.2d 844 (2 Cir. 1943).
As to Franchard’s knowledge, appellants contend that the court should have charged the jury that, if they found that Bernard Mann, treasurer of both Fran-chard and Venada, had knowledge that certain material facts were not being disclosed to the public, such knowledge must be imputed to Franchard according to general agency principles. Since appellants totally failed to request any such instruction, either before or after the charge was given, the issue has not been preserved for appeal. Pauling v. News Syndicate Co., 335 F.2d 659, 668-70 (2 Cir. 1964).
Scienter
Appellants’ claims with respect to scienter are on a different footing. In their requests to charge submitted both in advance of trial and at the robing room conference, appellants’ counsel indicated substantially the same position they now assert before us, namely, that the jury should have been instructed that defendants might be held liable if the jury found that they had negligently omitted to disclose material facts.
We hold, under the circumstances of this case, that appellants’ failure to object after the court omitted from its charge an instruction on liability based on defendants’ alleged negligent omissions does not preclude appellants from raising the issue on appeal. The purpose of a timely exception at the conclusion of the charge is to inform the trial judge of possible errors so that he may have an opportunity to reconsider his charge and, if necessary, to correct it. The provision of Rule 51 which requires timely exceptions is designed to prevent unnecessary new trials because of errors the judge might have corrected if they had been brought to his attention at the proper time. There is no need for an exception after the charge has been given where, as here, the court had been fully informed in advance of the charge as to appellants’ contention and it was clear that further efforts to persuade the court would have been unavailing. Steinhauser v. Hertz Corp., 421 F.2d 1169, 1173 (2 Cir. 1970); Sweeney v. United Feature Syndicate, 129 F.2d 904, 905-06 (2 Cir. 1942); Sessoms v. Union Savings & Trust Co., 338 F.2d 752 (6 Cir. 1964), cert. denied, 382 U.S. 821 (1965). Accordingly, we hold that appellants’ claims with respect to scien-ter have been preserved for appeal. We now turn to this issue on its merits.
Appellants’ essential claim is that the court should have charged that each of the defendants might be held liable if there were material misstatements or omissions in the sales materials, even though defendants did not have knowledge of these misstatements or omissions. Appellants contend that, since Siegel and Young were promoters of the syndication, they had the opportunity and were under a duty to investigate Venada, Glickman, and any other matters which affected the investment value of Associates. Appellants also argue that Franchard, allegedly “the vortex of the syndication activity”, should not be permitted to escape liability on the ground that it did not know that a fraud was being committed. In short, appellants claim that defendants should be held liable for mere negligence in allowing the dissemination of allegedly false and misleading offering materials.
The court rejected appellants’ request to charge with regard to scienter on this theory. It charged in substance that, in order for appellants to recover against defendants, they had to prove actual knowledge of falsity or reckless disregard for the truth:
“Guilty knowledge is the key to your decision in this case. The plaintiffs must establish that the defendant whom you are considering had knowledge and intended to defraud these plaintiffs, or that he acted in reckless disregard for the truth, or that he knowingly used a device, scheme, or artifice to defraud.”
We uniformly have held that a party cannot be held liable in a private suit for damages under Rule 10b-5 for mere negligent conduct. See, e. g., Chris-Craft Industries, Inc. v. Piper Aircraft Corp., 480 F.2d 341, 363 (2 Cir. 1973), slip op. 4897, 4931 (March 16, 1973) (elements of Rule 10b-5 and § 14(e) causes of action are the same); SEC v. Manor Nursing Centers, Inc., 458 F.2d 1082, 1096 n. 15 (2 Cir. 1972); Shemtob v. Shearson, Hammill & Co., 448 F.2d 442, 445 (2 Cir. 1971). Although it is unnecessary to prove the specific fraudulent intent essential to a claim of common law fraud, it must be established that the defendant was to some extent cognizant of the misstatement or omission. Globus v. Law Research Service, Inc., 418 F.2d 1276, 1290-91 (2 Cir. 1969), cert. denied, 397 U.S. 913 (1970); Heit v. Weitzen, 402 F.2d 909, 913-14 (2 Cir. 1968), cert. denied, 395 U.S. 903 (1969). The standard for determining liability under Rule 10b-5 essentially is whether plaintiff has established that defendant either knew the material facts that were misstated or omitted and should have realized their significance, or failed or refused to ascertain and disclose such facts when they were readily available to him and he had reasonable grounds to believe that they existed. See ChrisCraft Industries, Inc. v. Piper Aircraft Corp., supra, 480 F.2d at 363, slip op. at 4932-33. It is not enough for plaintiff to show that defendant failed to detect certain material facts when he had no reason to suspect their existence.
Appellants urge that we adopt a standard that failure to discover material facts when such facts could have been ascei-tained without inordinate effort is enough to establish a private action under Rule 10b-5, “particularly where fiduciary relationships require attention”. We decline the invitation.
Accordingly, since the court in substance charged actual knowledge of falsity or reckless disregard for the truth —in language that conveyed the essence of the standard stated above — we hold that its charge on scienter was essentially correct.
Plain Error
But this does not end our inquiry. Our Court and other courts of appeals have recognized an exception to the rule that, absent objection in the district court, an appellate court necessarily is precluded from considering alleged errors in the jury charge. An appellate court on its own initiative may reverse on the ground of plain error in a jury charge that was not objected to when such reversal is necessary to correct a fundamental error or to prevent a miscarriage of justice. Curko v. William Spencer & Son Corp., 294 F.2d 410, 413-14 (2 Cir. 1961); Delancey v. Motichek Towing Service, Inc., 427 F.2d 897, 901 (5 Cir. 1970); Ramsey v. Travelers Ins. Co., 317 F.2d 300, 302 (4 Cir. 1963). Upon our own initiative, therefore, we turn to the question whether the judgment entered on the jury verdict below should be reversed on the ground that the court’s charge on reliance and its failure to charge on Franehard’s imputed knowledge were plain error.
With regard to the issue of reliance, the court charged that appellants could recover only if they could prove that “the omitted fact must have been a substantial, factor in plaintiff making a choice as to whether or not to buy.” While this “actual reliance” standard finds support in our opinion in List v. Fashion Park, Inc., 340 F.2d 457, 462 (2 Cir.), cert. denied, 382 U.S. 811 (1965), we are aware that in two recent Supreme Court decisions involving fraudulent nondisclosure it was held that proof of actual reliance was not essential to a claim for damages. It therefore is arguable that the court erred with respect to this portion of its charge, and that it should have charged that the knowledge which Mann, the treasurer of Franchard and Venada, had of Venada’s distressed financial situation should have been imputed to Franchard. Dawn Donut Co. v. Hart’s Food Stores, 267 F.2d 358, 363 (2 Cir. 1959).
After careful review of the entire record, however, we are convinced that these alleged errors do not warrant our invoking the plain error rule. In our view, appellants’ claims do not demonstrate that a substantial miscarriage of justice has occurred. Granted that the alleged errors relate to important elements in appellants’ case, we do not believe that the plain error rule demands that every alleged error, even on a significant aspect of a case, requires reversal despite failure to comply with Rule 51. Troupe v. Chicago, Duluth & Georgian Bay Transit Co., 234 F.2d 253, 260 n. 10 (2 Cir. 1956). See Nimrod v. Sylvester, 369 F.2d 870, 873 (1 Cir. 1966). Intervention by us to correct such questionable errors under the plain error doctrine would undercut the salutary rule that claims must be raised in and ruled upon by the trial court before they are ripe for appellate review. As Professors Wright and Miller have stated, “[i]f there is to be a plain error exception to Rule 51 at all, it should be confined to the exceptional case where the error has seriously affected the fairness, integrity, or public reputation of judicial proceedings.” 9 Wright & Miller, Federal Practice and Procedure § 2558, at 675 (1971).
Appellants also assert that “[t]he Court ignored the fact that this was a class action and there were other buyers involved as well.” As indicated above, it is possible that the terms of the order designating the class eliminated, pursuant to Fed.R.Civ.P. 23(e)(4), the issue of reliance for determination as to the entire class. However, the judge clearly proceeded on the assumption that the issue of reliance was to be decided with the issue of liability, and the record is utterly devoid of any objection or contrary suggestion by trial counsel for appellants.
We hold upon the entire record that this is not an appropriate case for exercising our discretionary power to review errors not preserved by proper objection in the trial court.
III.
CONDUCT OF TRIAL
Appellants’ claims regarding the trial judge’s conduct of the trial merit only brief mention.
Essentially appellants have engaged in a broadside attack upon the judge’s rulings on evidence, oral and documentary; his comments to the jury; the “unevenness” of his rulings in favor of defendants; and his creation of prejudice in favor of defendants.
Suffice it to say that our careful examination of the entire trial transcript of this nine day trial leaves us with the firm conviction that appellants’ claims of misconduct on the part of the judge are wholly without merit.
In the first place, the conduct complained of was far from unprovoked. The alleged improper acts strike us as appropriate responses by a conscientious judge in handling difficult situations created largely by the lack of preparation for trial and evasive attitude toward the judge by appellants’ counsel.
Secondly, our scrutiny of the record discloses that in every instance complained of the judge was doing his very best to clarify the issues and assist the jury in understanding the evidence in a case which, but for the judge’s intervention, could have baffled even the most conscientious jury.
Finally, we do not find a single instance of conduct on the part of the judge which in any way prejudiced appellants or displayed the slightest bias toward them.
In short, we hold that there is no merit whatsoever in appellants’ claims of misconduct on the part of the trial judge, for we can say with fair assurance, “after pondering all that happened without stripping the erroneous action from the whole, that the judgment was not substantially swayed by the error . . . . ” Kotteakos v. United States, 328 U.S. 750, 765 (1946); United States v. McCarthy, 473 F.2d 300, 308 (2 Cir. 1972); United States v. Ellis, 461 F.2d 962, 970 (2 Cir.), cert. denied, 409 U.S. 866 (1972).
Affirmed.
. Low originally was named as a defendant in this action. At the close of plaintiffs’ case, however, plaintiffs consented to a dismissal of the complaint against Low.
. The issuer of the limited partnership interests, Glickman Servicing, Inc., was a corporation owned by Glickman. It was not named as a defendant in the instant action.
. It was disclosed that partnership distributions were to be pro-rated in proportion to original capital contributions. However, 80% of the distributions of the partnership’s net cash receipts, as defined in the partnership agreement, in excess of $742,500 in any year was to be prorated among all partners in the same proportion, with the balance going to the general partners.
. Franchard also reported the matter to the Securities and Exchange Commission and retained Simon H. Rifkind, Esq. to study the situation and to determine whether Franchard had suffered any loss.
. The total distribution to partners in 1961 was $707,104; in 1962, $742,500; in 1963, $225,000; in 1964, $266,600; in 1965, $266,600; in 1966, $267,500; in 1967, $268,400; and in 1968, not including proceeds from sale of the properties, $111,832.
. Plaintiffs abandoned the claimed violations of the 1933 Act prior to submission of the case to the jury.
. The third count was dropped by plaintiffs prior to trial. In their brief on appeal, plaintiffs do not claim error with respect to the matters alleged in the second count.
. In light of the issues raised on appeal and our rulings thereon, we find it unnecessary to discuss any of the allegations of omissions and misrepresentations set forth in the complaint.
. In their requests 3 and 4 (also submitted in advance of trial), appellants referred to the issue of scienter, but in a more opaque manner:
“Plaintiff’s Request to Charge — Xo. 3 Plaintiff may recover against defendants participating in the acts complained of if you find that said defendants did not adhere to the special duty imposed upon them, based upon their claimed expert knowledge in syndica-tions, not to take advantage of plaintiff’s ignorance of the risks involved in the Wedgwood syndication. Plaintiff’s Request to Charge — Xo. 4 If you find that defendants in the sale of Wedgwood securities made false and misleading statements to plaintiff and members of his class and omitted to state material facts, you may hold the defendants liable, even if you find that defendants had an honest belief in the ultimate success of the Wedgwood venture. . . . ”
. The three matters to which appellants’ counsel excepted were: (1) a date used by the court in its recitation of the facts which counsel claimed was incorrect; (2) the court’s reference to named plaintiff Cohen’s purchase in 1964 of an additional unit of limited partnership interest in Associates ; and (3) whether the charge sufficiently stated that individual purchasers had signed documents claiming that they had relied on the brochure.
. See ALI, Federal Securities Code, § 251A, Tentative Draft No. 2 (March 1973), which reads as follows:
“Sec. 251A. [Knowledge.] “When reference is made to this section, a misrepresentation is known by a person to be a misrepresentation if he (a) knows or believes that the matter is otherwise than represented, (b) does not have the confidence in its existence or non-existence that he expresses or implies, or (c) knows that he does not have the basis that he states or implies he has for his belief.”
. In Mills v. Electric Auto-Lite Co., 396 U.S. 375, 385 (1970) (Section 14(a)), and Affiliated Ute Citizens v. United States, 406 U.S. 128, 153-54 (1972) (Rule 10b-5), the Supreme Court held that, under the circumstances of those two cases, it was unnecessary to prove actual reliance. It was enough that there were material misrepresentations in solicitation documents which were “an essential link in the accomplishment of the transaction.” 396 U.S. at 385. The full implications of those decisions have not yet been determined. See Chris-Craft Industries, Inc. v. Piper Aircraft Co., supra, 480 F.2d at 373, slip op. at 4951-59; Crane Co. v. Westinghouse Air Brake Co., 419 F.2d 787, 796 (2 Cir. 1969), cert. denied, 400 U.S. 822 (1970) ; Kohn v. American Metal Climax, Inc., 458 F.2d 255, 288-91 (3 Cir.), cert. denied, 409 U.S. 874 (1972). We decline to hold on tlie present state of the law that it was plain error for the district court in the instant case not to have instructed the jury according to the Mills and Ote formulations.
We also note that several commentators have questioned the application of the hist standard in nondisclosure cases. See 6 Loss, Securities Regulation 3879 (2d ed. 1969) ; 1 Bromberg, Securities Law: Fraud — SEC Rule 10b-5, at 212 (1969) ; Note, Civil Liability Under Section 10(b) and Rule 10b-5: A Suggestion for Replacing the Doctrine of Privity, 75 Yale L.J. 658, 688 (1965).
|
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UTAH INTERNATIONAL, INC., Petitioner, v. ENVIRONMENTAL PROTECTION AGENCY, Respondent, and Jicarilla Apache Tribe of Indians, Intervenor Respondent.
No. 72-1575.
United States Court of Appeals, Tenth Circuit.
Argued and Submitted Jan. 11, 1973.
Decided April 27, 1973.
Harry L. Bigbee, Santa Fe, N. M., and Richard N. Carpenter, New York City, for petitioner.
Bradford E. Whitman, Atty., Dept, of Justice, Kent Frizzell, Asst. Atty. Gen., Edmund B. Clark, Chief, App. Section, Land and Natural Resources Div., and Eva R. Datz, Atty., Dept, of Justice, for respondent.
Daniel H. Israel, and Joseph J. Brechen, Boulder, Colo., for intervenor respondent.
Before HILL, SETH and' Mc-WILLIAMS, Circuit Judges.
PER CURIAM.
Utah International, Inc., seeks direct review by us of an order of the Environmental Protection Agency entered on July 27, 1972, concerning the State of New Mexico’s Implementation Plan as such relates to the attainment and maintenance of national ambient air quality standards for sulphur oxides in the New Mexico portion of the Four Corners Interstate Air Quality Control Region. The order complained of now appears at 37 Fed.Reg., page 15080, et seq. (1972). Background information need only be developed on a limited basis, as we are convinced we are without jurisdiction.
Pursuant to applicable statute the State of New Mexico on January 19, 1972, submitted to the Environmental Protection Agency, hereinafter referred to as the E.P.A., an implementation plan for meeting national primary and secondary air quality standards for six air pollutants, said standards having been theretofore promulgated by the E.P.A. This state plan was approved in part and disapproved in part by the E.P.A. on May 31, 1972. See 37 Fed.Reg. at pages 10842, 10881, et seq. (1972).
On July 27, 1972, the EPA on the basis of further review and evaluation of the plan disapproved certain other provisions of the plan which had been previously approved. At this same time, the E.P.A. also published a notice of proposed rule-making concerning suggested implementation plans to be substituted for the state implementation plans to the extent that the state plans had been thus disapproved.
It was in this setting that Utah International, Inc., hereinafter referred to as Utah, initiated the present proceeding in this court. Utah seeks review of the E. P.A.’s order of July 27, 1972, insofar as that order disapproves certain portions of the New Mexico Implementation Plan which had previously been approved by the E.P.A. In this regard, Utah complains that the E.P.A. did not afford the interested parties a hearing before entering its order disapproving that which it had previously approved.
Utah also complains about that portion of the order of July 27, 1972, wherein the E.P.A. proposed certain regulations to be substituted for the portions of the state plan which had been disapproved. In this regard Utah disclaims any attack on the contents of the regulations proposed by E.P.A., but purportedly seeks only a review of the order proposing the substitute regulations, which order, it is said, would be of no effect if the order of the E.P.A. disapproving certain additional parts of the state plan be held improper.
E.P.A. and the Jicarilla Apache Tribe of Indians, as intervenors, have filed a motion to dismiss, alleging that this court is without jurisdiction to entertain Utah’s petition for review. This motion to dismiss having been fully briefed, as well as orally argued, we are convinced that it is well taken and that the petition should be dismissed.
The provisions of the Clean Air Act relating to certain administrative proceedings and judicial review thereof are found in 42 U.S.C. § 1857h-5. Specifically, 42 U.S.C. § 1857h-5(b)(1) provides, in pertinent part, that a “petition for review of the Administrator’s action in approving or promulgating any implementation plan * * * may be filed only in the United States Court of Appeals for the appropriate circuit [and] [a]ny such petition shall be filed within 30 .days from the date of such promulgation or approval, or after such date if such petition is based solely on grounds arising after such 30th day.” (Emphasis added).
It is the position of E.P.A. and the Ji-carilla Tribe that as concerns implementation plans the Clean Air Act only provides for judicial review of an E.P.A. order which either approves a state implementation plan or promulgates a plan of its own. In this regard it is asserted that the E.P.A. order of July 27, 1972, neither “approved” a state plan nor “promulgated” one of its own. On the contrary, asserts the E.P.A., the order of July 27, 1972, “disapproved” portions of New Mexico’s Implementation Plan and then notified all interested parties of “proposed” regulations which would, if eventually promulgated, replace the parts of the state plan disapproved by the E.P.A. Accordingly, it is argued, the statute in question does not provide for judicial review by us of the E.P.A.’s order of July 27, 1972, since the order complained of did not approve the state plan nor did it promulgate a plan in lieu of the disapproved portion of the state plan. We generally agree with this reasoning.
The statute providing for judicial review of orders of the E.P.A. relating to implementation plans is obviously designed to provide for judicial review of final administrative action. Hence, an order approving a state plan is subject to review, for by approving a state plan the E.P.A. thereby places the state plan into effect. However, an order disapproving a state plan is not subject to review, because by the mere act of disapproval no plan is placed into effect and the administrative process is simply reactivated.
In other words, the effect of a disapproval order under the Clean Air Act is to reopen the administrative process to the end that if the state in question does not thereafter come up with a revised plan of its own which is acceptable to the E.P.A., then the E.P.A. will promulgate a plan of its own. Accordingly, in the instant case until such time as the E.P.A. promulgates its own plan, after allowing the state an opportunity to come up with a revised plan of its own, there is no final and applicable order under the statute. It is on this basis that we conclude that the present petition to review is not permitted by 42 U.S.C. § 1857h-5 (b)(1) and that we are without jurisdiction.
Utah alternatively suggests that we have jurisdiction under the Administrative Procedure Act. We think not. In Amerada Petroleum Co. v. F.P.C., 231 F.2d 461 (10th Cir. 1956), we held that the Administrative Procedure Act provides for a right of judicial review in a proper court of final agency action where other statutory authority for judicial review of administrative action is absent or inadequate. As applied to the instant case, we certainly cannot say that the judicial review provided by the Clean Air Act itself after approval of a state plan or promulgation of an implementation plan by the E.P.A. is inadequate. Additionally, it is doubtful that the present matter, being interlocutory in nature, is “ripe” for judicial review under the rationale of such cases as Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967), and Toilet Goods Ass’n, Inc. v. Gardner, 387 U.S. 158, 87 S.Ct. 1520, 18 L.Ed.2d 697 (1967). We are accordingly of the firm view that the Administrative Procedure Act does not confer jurisdiction on this court to review the order about which Utah here complains.
Petition dismissed. |
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UNITED STATES of America, Plaintiff-Appellee, v. Stephen Irving TASHMAN and Andrew Goldberg, Defendants-Appellants.
No. 72-2273.
United States Court of Appeals, Fifth Circuit.
May 18, 1973.
Daniel S. Pearson, Arthur B. Cunningham, Philip T. Weinstein and Bruce S. Rogow, Miami, Fla., for defendants-appellants.
Robert W. Rust, U. S. Atty., Barbara E. Vicevich, Asst. U. S. Atty., Miami, Fla., for plaintiff-appellee.
Before JOHN R. BROWN, Chief Judge, and WISDOM and AINS-WORTH, Circuit Judges.
AINSWORTH, Circuit Judge:
Andrew Goldberg and Stephen Tash-man, appellants, along with Ronald Os-brach, codefendant, were jointly indicted for violations of 21 U.S.C. §§ 841(a)(1), 846, and 18 U.S.C. § 2. Count I charged conspiracy to possess, with intent to distribute, quantities of marijuana. Count II charged possession of 140 pounds of marijuana with intent to distribute.
The case was called for trial on May 17, 1972. Prior to empanelling the jury, the district judge, on request of counsel for codefendant Osbrach, ordered that the courtroom be cleared except for Os-brach, his counsel and counsel for the Government. Counsel for Goldberg and Tashman requested that the district judge allow him to remain in the courtroom, but his request was denied.
The courtroom was then cleared as ordered and the following proceedings were conducted: Counsel for Osbrach announced that in agreement with the Government for a joint recommendation to the court, Osbrach would plead guilty to Count I of the indictment. The recommendation, which was subsequently honored by the court, was for a sentence to two years’ probation under the Youth Corrections Act, 18 U.S.C. § 5005 et seq., contingent upon Osbrach’s change of plea, his testimony against his codefend-ants Goldberg and Tashman, and the giving by him of “valuable” information to the Government. After having ascertained that Osbrach’s plea of guilty was voluntary, the district judge at the request of counsel for Osbrach ordered the transcript of the proceedings sealed. The case was then again called for trial and the district judge explained to- the jury that they were to disregard the fact that Osbrach was named in the indictment as a defendant. The jury subsequently found appellants guilty on both counts. Goldberg was sentenced to four years on each count and Tashman to thirty months on each count, sentences of both defendants to run consecutively. This appeal followed. We reverse and remand for a new trial because of the “secret” proceedings referred to from which appellants and their counsel were excluded, and which we hold resulted in substantial prejudice to the rights of appellants.
On March 26, 1972, Goldberg, Tash-man and Osbrach were arrested by United States Customs Agents at an airport at Homestead, Florida. Goldberg had arrived at the airport in a Cadillac. Tashman and Osbrach were occupying a Dodge Charger. The federal agents observed the transfer of three large bundles from an aircraft parked on the airstrip to the trunk of the Cadillac. They then saw Osbrach leave the Dodge and approach the Cadillac. All three defendants were then arrested. The bundles, one of which was observed on the front seat of the Cadillac, contained marijuana.
Goldberg and Tashman both testified at the trial. Osbrach also testified but as a Government witness, according to the agreement reached during the secret proceedings. Goldberg’s defense was based principally on the theory that his participation in the events at the airport was the result of his honest belief that he was assisting the Government as a special employee or undercover agent. He testified that within the three months preceding his arrest he had on various occasions in New York, Maryland, Virginia and Toronto, Canada, been used by the Government in its investigations of drugs and counterfeit checks. Not only was this testimony not disputed, it was substantially corroborated by the testimony of United States Customs Agents Murphy and Woods, called 'by the Government as rebuttal witnesses. Agent Murphy testified that he had spoken by telephone with Goldberg about four or five days prior to the arrest herein, that the subject of the conversation was the interception of marijuana at Miami, that Goldberg asked for the name of an agent in Miami to contact in the event that there was “something doing,” and that as a result of that conversation Murphy telephoned Agent Scrip in Miami. Scrip testified that he called Goldberg on March 22 as a result of Murphy’s call to Scrip’s office concerning Goldberg. Agent Woods testified that Goldberg asked that he accompany him to Miami in connection with a marijuana, transaction. Goldberg testified that records, tapes and photographs were made by the Government of his meetings with “contacts.”
Goldberg also defended on the ground of entrapment. Tashman defended on the theory that he was assisting Goldberg, although reluctantly, in his efforts to cooperate with the Government. Os-brach’s testimony in essence placed both appellants in the role of purported buyers of the imported marijuana with intent to distribute.
Appellants’ counsel contend that prior to the trial defense counsel was not informed that an agreement had been reached between the Government and Osbrach during the secret proceedings and that consummation of the Government’s part of the agreement was contingent upon the value of Osbrach’s testimony against appellants. The Government contends that defendants were not entitled to the information and the nature of the closed proceedings and then inexplicably avers that appellants’ counsel knew, in toto, what transpired at Osbrach’s plea. The action of counsel for Osbrach and the Government, acquiesced in by the trial court, was so prejudicial to appellants as to require a new trial. Being unaware of what had occurred behind the closed doors of the courtroom, appellants had no effective way of combating the damaging testimony elicited by the Government from Osbrach. Faced with an apparent hostile witness, defense counsel elected to forego cross-examination of Osbrach. As the Supreme Court said in Napue v. People of the State of Illinois, 360 U.S. 264, 269, 79 S.Ct. 1173, 1177, 3 L.Ed.2d 1217 (1959), “The jury’s estimate of the truthfulness and reliability of a given witness may well be determinative of guilt or innocence, and it is upon such subtle factors as the possible interest of the witness in testifying falsely that a defendant’s life or liberty may depend.” Under the circumstances, the jury had no way of knowing what interest Os-brach had in testifying.
We need not speculate on what effect knowledge of the secret contingent agreement would have had on the jury. The Supreme Court has made it clear that the failure of the Government to disclose to a jury plea-bargaining negotiations with a key witness deprives a defendant of constitutional due process.. In Giglio v. United States, 405 U.S. 150, 92 S.Ct. 763, 31 L.Ed.2d 104 (1972), the Supreme Court reversed a conviction because of nondisclosure by the Government of its promise to a testifying accomplice that he would not be prosecuted in return for his cooperation. In remanding for a new trial, the Supreme Court said:
“Here the Government’s case depended almost entirely on Taliento’s testimony; without it there could have been no indictment and no evidence to carry the case to the jury. Taliento’s credibility as a witness was therefor an important issue in the case, and evidence of any understanding or agreement as to a future prosecution would be relevant to his credibility and the jury was entitled to know of it.” (Emphasis added.)
405 U.S. at 153, 92 S.Ct. at 766.
The Supreme Court also said in Washington v. State of Texas, 388 U.S. 14, 22-23, 87 S.Ct. 1920, 1926, 18 L.Ed.2d 1019 (1967):
“Common sense would suggest that he [an alleged accomplice] often has a greater interest in lying in favor of the prosecution rather than against it, especially if he is still awaiting his own trial or sentencing. To think that criminals will lie to save their fellows but not to obtain favors from the prosecution for themselves is indeed to clothe the criminal class with more nobility than one might expect to find in the public at large.”
The Government’s case here depended largely on the testimony of Osbrach, who testified to the participation of the two appellants in a plan to purchase marijuana and of being “cut in” on the deal by both of them. With the exception of Osbrach’s testimony and certain hearsay evidence, discussed infra, which was erroneously admitted, the Government’s evidence in chief consisted almost entirely of the activities at the airport shortly prior to and at the time of the arrest. Osbrach’s credibility was, therefore, of critical importance.
■ Because of our decision to remand for a new trial it is unnecessary that we consider specifically other errors urged by appellants, except to set out the following directions for the guidance of the district court on retrial.
The Government should be required to produce, prior to trial, all of the documents, records, photographs or related tangible material evidence in existence which pertain to Goldberg’s employment by the Government. Production of evidence favorable to an accused is required where the evidence is material either to his guilt or punishment, and this is so irrespective of the good or bad faith of the prosecution. Brady v. State of Maryland, 373 U.S. 83, 87, 83 S.Ct. 1194, 1196-1197, 10 L.Ed.2d 215 (1963). Goldberg, having defended primarily on the theory that he was acting in the capacity of an informer with intentions to turn over the marijuana to the Government, is entitled to the production of such evidence for whatever significance it may have in determining his innocence or guilt before a jury. Tashman, whose defense is encompassed within that of Goldberg’s, is likewise entitled to the benefit of such evidence. For similar reasons Goldberg’s request for jury instructions relative to his two theories of defense must be granted. The trial judge’s instruction on entrapment did not also encompass the separate agent-of-the-Government theory. The trial court’s failure to instruct on this theory also effectively denied Tashman the right to have the jury consider his theory of defense, i. e., his belief that he was assisting a Government agent. Where the evidence presents a theory of defense which has been called to the court’s attention, refusal to charge on that defense is reversible error. Strauss v. United States, 5 Cir., 1967, 376 F.2d 416, 419. This is the established rule of this Circuit. In United States v. Megna, 5 Cir., 1971, 450 F.2d 511, we said:
“Nearly fifty years ago the Circuit Court of Appeals for the Fifth Circuit laid down the rule that ‘Where the evidence presents a theory of defense, and the court’s attention is particularly directed to it, it is reversible error for the court to refuse to make any charge on such theory.’ ”
450 F.2d at 513.
As we said in Strauss, supra, “The jury did not have to believe the defenses, but it should.have been given the opportunity.” 376 F.2d at 419.
Finally, the trial judge should not permit a repetition of the hearsay testimony of Agent Wurster to the effect that he instructed Customs Agent Scrip to go to the Kendall Airport because of information from an undisclosed source regarding the arrival and description of the airplane carrying marijuana, and the description of the vehicles and occupants thereof who were to meet the airplane. It cannot be fairly said that the hearsay testimony was harmless. Cf. Favre v. Henderson, 5 Cir., 1972, 464 F.2d 359. To the contrary, it, along with the testimony of Osbrach, constituted the core of the Government’s case. This does not mean that the Government is precluded on retrial from using Osbrach as a witness or from introducing proper testimony relative to the information to which Wurster testified. What it does mean is that the proper constitutional safeguards must be applied to the circumstances of this case.
Reversed and remanded for a new trial for both defendants.
. It was not until this Court on appeal ordered that the transcript be unsealed that appellants became fully aware of its contents.
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f2d_478/html/0133-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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UNITED STATES of America, Plaintiff-Appellant, v. WESTCHESTER FIRE INSURANCE COMPANY, Defendant-Appellee.
No. 414, Docket 72-2015.
United States Court of Appeals, Second Circuit.
Argued Feb. 15, 1973.
Decided April 30, 1973.
William S. Estabrook, III, Atty., Tax Div., Dept, of Justice, Washington, D. C. (Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks and Grant W. Wiprud, Attys., Tax Div., James M. Sullivan, U. S. Atty., N. D. N. Y., Eugene Welch, Asst. U. S. Atty., of counsel), for plaintiff-appellant.
Vincent A. O’Neil, Syracuse, N. Y. (Costello, Cooney & Fearon, Syracuse, N. Y., of counsel), for defendant-appel-lee.
Before FRIENDLY, Chief Judge, OAKES, Circuit Judge, and DAVIS, Judge.
Of the United States Court of Claims, sitting by designation.
DAVIS, Judge:
This action by the Federal Government against a surety on a New York probate-administration bond concerns the estate of Louis Abronzino, a New York resident who died intestate in May 1962. About a month later, appellee Westchester Fire Insurance Company issued the administration bond for the sum of $30,000 to Frances Abronzino, the intestate’s widow, who was appointed administratrix by the Surrogate’s Court for Broome County, New York. The suretyship agreement stated that Westchester Fire was jointly and severally bound with the administratrix, but the bond was conditioned as follows:
if the above bounden Frances Abron-zino shall faithfully execute the trust reposed in her as Administratrix of all and singular the goods, chattels and credits of Louis Abronzino late of Broome County, deceased, and obey all lawful decrees and orders of the Surrogate’s Court of the County of Broome touching the administration of the estate committed to her then this obligation to be void, else to remain in full force or virtue.
According to the Government’s complaint, in June 1964 the Internal Revenue Service assessed both husband and wife for joint income tax deficiencies totaling $5,638.77, and served notice of these assessments. The complaint goes on to allege that Mrs. Abronzino, knowing of the federal claim against her husband’s estate, proceeded to dissipate fraudulently the assets of the estate to the point of insolvency. She subsequently died in June 1965, while acting as ad-ministratrix. It is admitted that, as yet, neither the Surrogate’s Court nor any other judicial tribunal has determined that Mrs. Abronzino violated her trust as administratrix or failed to obey any decree or order of the Surrogate’s Court.
Without seeking any determination against Mrs. Abronzino (or her estate), or against Mr. Abronzino’s estate, the United States brought this suit (in 1970) in the District Court for the Northern District of New York directly against the appellee surety, on the bond, for the tax deficiencies said to be owing. That court granted summary judgment to Westchester Fire, holding that the Government had failed to meet the requirement of the bond, and of New York law, that the fiduciary’s liability must first be ascertained and determined by the Surrogate’s Court before the surety’s liability can attach under the bond. We concur that the condition precedent of a judicial determination of the principal’s responsibility has not as yet been satisfied, and therefore affirm.
If this were an action against the administratrix, Mrs. Abronzino, or her estate, the United States would undoubtedly have solid footing (if it proved its claim). Rev.Stat. § 3467, now section 192 of Title 31 of the United States Code, makes an administrator liable personally to the Government if he pays another estate debt before one due the United States. The purpose of this provision “is to make those into whose hands control and possession of the debt- or’s assets are placed, responsible for seeing that the Government’s priority is paid.” This element of control determines the class potentially liable under the section. King v. United States, 379 U.S. 329, 337, 85 S.Ct. 427, 431, 13 L.Ed.2d 315 (1964). Actions can be maintained against members of that class irrespective of the outcome of any prior proceedings in probate court. See United States v. Snyder, 207 F.Supp. 189, 191 (E.D.Pa., 1962); United States v. Weisburn, 48 F.Supp. 393, 397 (E.D.Pa., 1943). Nor need the United States initially bring suit against the party primarily liable before proceeding against the executor, administrator, assignee, “or other person” who pays a debt for another. In United States v. Fairall, 16 F.2d 328 (S.D.N.Y., 1926), Judge Learned Hand made it quite clear that, at least in the case of transferees, “[the] rule that you must get judgment and issue execution against a debtor as a condition precedent to following his assets into the hands of transferees is not absolute.” Equity did not insist upon “such an idle formality” in the face of impossibility of judgment or futility of execution. Id. See Commissioner v. Kuckenberg, 309 F.2d 202, 206 (C.A. 9, 1962), cert. denied, 373 U.S. 909, 83 S.Ct. 1296, 10 L.Ed.2d 411 (1963); United States v. Garfunkel, 52 F.2d 727, 729 (S.D.N.Y., 1931); Drew v. United States, 367 F.2d 828, 831, 177 Ct.Cl. 459, 462 (1966). Similarly, the United States, in collecting taxes, is not always “expected ... to follow the procedural intricacies of every one of the fifty states,” Commissioner v. Kuckenberg, supra, 309 F.2d at 207, again at least when concerned with transferees.
These are the controlling rules when litigation is had against the administrator or executor upon whom section 192 imposes a direct statutory liability to the United States. But appellee Westchester Fire is not an administrator, executor, assignee or otherwise within the coverage of the statute. It did not pay a non-federal debt of Louis Abronzino’s estate before satisfying one due the United States — nor was it in a position to do so. Its liability does not flow from this federal statute but from the terms of the particular obligation it undertook. This would be true if the bond had been directly given to secure payment of a federal tax — in that case the surety’s obligation creates “a new cause of action distinct from that on the taxpayer’s obligation”, an obligation which is “contractual * * * , and the suit against [the surety] is for a debt, ex contractu, due and owing in conformity to the terms of the bond.” Royal Indemnity Co. v. United States, 313 U.S. 289, 293-294, 295, 61 S.Ct. 995, 996, 997, 85 L.Ed. 1361 (1941). All the more so where, as here, the surety’s responsibility is on a general administration bond, issued for normal probate purposes, and not directly involving the Federal Government or accepted by it.
The bond which Westchester Fire gave to cover Mrs. Abronzino’s performance as administratrix — a form obviously used regularly by the appellee — was historically and integrally bound up with the particular provisions of New York probate law dealing with the liability of sureties. One of the two stated conditions, expressly required by the Surrogate’s Court Act, was that the principal “obey all lawful decrees and orders of the Surrogate’s Court of the County of Broome touching the administration of the estate committed to her.” When the instrument was issued in 1962, two other provisions of the same Surrogate’s Court Act indicated as clearly as possible that the surety would not be pursued until the principal’s default had been established.®
Behind these specific directives of the Surrogate’s Court Act there lay more than a century of history in the state forbidding an action against the surety of an executor or administrator until the latter’s liability had been determined. The New York statutes required as early as 1837 that “before any action can be maintained against the sureties, there must be a decree against the executor, a refusal or neglect to perform it, or an execution returned unsatisfied, and an order of the surrogate authorizing the prosecution of the bond.” The surrogate formally assigned the bond to the person in whose favor the decree was made, but such an assignment only granted permission to prosecute the bond. “[N]otwithstanding the assignment, the surrogate retains the custody of the bond for the common benefit of all persons having claims against the estate * * Hood v. Hood, 85 N.Y. 561, 573 (1881). Compliance with the statutory regulations was necessary for any action upon the bond. Id. at 573-574. By having an accounting in Surrogate’s Court, the liability of a surety could be limited “to the amount of the assets which have, or should have, come into the hands of the administrator.” In re Kraft’s Estate, 167 Misc. 16, 18, 3N.Y.S.2d 426, 427-428 (Sur.Ct., 1938); see French v. Dauchy, 134 N.Y. 543, 547, 31 N.E. 1041, 1042-1043 (1892).
^There have been some statutory alterations, e. g. the requirement of formal assignment was dropped, but the general rule has remained unchanged. In re Sullard, 114 Misc. 288, 297, 186 N.Y.S. 251, 256-257 (Sur.Ct., 1921) ; see Hood v. Hayward, 124 N.Y. 1, 9, 10, 26 N.E. 331, 332, 333 (1891). Section 115-a, supra note 6, was added to the Surrogate’s Court Act in order to eliminate some of the procedural complexity once there was an initial judgment of liability by the surrogate. Before its passage a claimant against an estate frequently discovered that, after his demand had been adjudicated in Surrogate’s Court, with the surety company as a party to the action, the claimant (creditor or dis-tributee) “was compelled to go before another tribunal to enforce his unquestionable rights against the surety * * *. This was an unnecessary and intolerable burden which the Legislature * * * wisely removed” as part of its general intent to concentrate jurisdiction of decedent’s estates matters in the Surrogate’s Court. In re Gellis’ Estate, 141 Misc. 432, 440, 252 N.Y.S. 725, 735 (Sur.Ct., 1931). The occurrence of the events necessary for maturation of a right against the surety was to be the same under both section 113 and section 115-a. See In re Stern’s Estate, 161 Misc. 272, 275, 291 N.Y.S. 732, 737 (Sur.Ct., 1936); In re Reppucci’s Estate, 145 Misc. 671, 674, 261 N.Y.S. 213, 217 (Sur.Ct., 1932).
Thus, the New York administration surety’s obligation is more a guaranty of collection (with conditions precedent to liability of the guarantor) than a guaranty of payment. See McMurray v. Noyes, 72 N.Y. 523, 524-525 (1878). Conversely, a corollary of the state’s double mandate that collection be attempted first from the principal and that the principal’s responsibility be established before the surety is pursued, is that the latter may then proceed (if it can) to collect over from the former the amount paid the creditor without the principal’s being in a position to contest his default under the bond. That liability will already have been decided in a proceeding binding on the principal.
The Hood v. Hood opinion, supra, mentioned the possibility of special exceptions to the general rule requiring court proceedings to come first. However, the examples of exceptional circumstances were very unusual, and this possibility of limitations on the general rule was early criticized. See Perkins v. Stimmel, 114 N.Y. 359, 367, 21 N.E. 729, 731 (1889). Certainly, the mere fact that the administratrix is dead is insufficient to waive an initial proceeding against her estate. In Perkins, a suit was dismissed against the sureties of a prior guardian who had died after only two inventories — it did not qualify as an exception. French v. Dauchy, supra, applied the same rule to the bond of a deceased receiver. Salisbury v. Van Hoesen, 3 Hill. 77 (discussed in Hood v. Hood) held that sureties could not be sued until there were an accounting by a guardian or, if dead, by his personal representatives. See Hood v. Hood, supra, 85 N.Y. at 576. Moreover, the terms of the bond in the present case bound the heirs, administrators, and successors of each of the parties, and the United States would therefore not lose its right against the surety by proceeding initially against Mrs. Abronzino’s representative.
In the light of this firm and imbedded practice, fusing the surety’s obligation with the special requirement of New York law, we construe appellee’s bond as implicitly incorporating that requirement as a condition of the obligation, just as if it had been spelled out explicitly in words. This is undoubtedly what the appellee reasonably understood when it gave the bond. It had the full right to expect that its obligation to pay would not ripen until there had been a court determination that Mrs. Abronzino did not “faithfully execute the trust reposed in her” or did not “obey all lawful decrees and orders of the Surrogate’s Court” relating to her husband’s estate.
It is unnecessary to decide now whether the principal’s default must always be confirmed in the Surrogate’s Court, as the New York legislation obviously contemplates, or whether such a prior determination in a suit in federal court against the executor-administrator under Rev.Stat. § 3467, 31 U.S.C. § 192, note 2, supra, could be sufficient. Here there has as yet been no determination by any tribunal that Mrs. Abronzino defaulted, and no such finding to which she or her estate or representative was a party. If the United States were allowed to proceed in this case and then prevailed, the appellee-surety might be forced to contest, all over again, the issue of Mrs. Abronzino’s responsibility in an action against her estate to recover the amount paid over to the Federal Government.
The federal decisions on which appellant primarily relies (United States v. Summerlin, 310 U.S. 414, 60 S.Ct. 1019, 84 L.Ed. 1283 (1940); Commissioner v. Kuckenberg, supra, 309 F.2d 202 (C.A. 9, 1962), cert. denied, 373 U.S. 909, 83 S.Ct. 1296, 10 L.Ed.2d 411 (1963)) involved procedural requirements of state probate or transferee law which, it was held, the United States was not compelled to follow. The difference from the present case is, as we have said, that the New York requirement is not a mere procedural step but an ingrained part of the surety’s substantive obligation. The surety does not breach, and is not liable on, its bond until the administratrix’s wrongdoing has been judicially established in a proceeding — not yet had — to which she (or her representative) is a proper party.
Affirmed.
. The District Court had jurisdiction under 28 U.S.C. §§ 1340, 1345, and 26 U.S.C. § 7402.
. Every executor, administrator, or as-signee, or other person, who pays, in whole or in part, any debt due by the person or estate for whom or for which he acts before he satisfies and pays the debts due to the United States from such person or estate, shall become answerable in his own person and estate to the extent of such payments for the debts so due to the United States, or for so much thereof as may remain due and unpaid.
. It may he that an action invoking section 192 may be jointly brought against both the principal-executor and the surety if the latter’s obligation encompasses the Government’s claim. See United States v. Rose, 227 F.Supp. 259 (E.D.Pa., 1964) (surety’s joinder apparently not questioned), aff’d on other grounds, 346 F.2d 9S5 (C.A.3, 1965), cert, denied sub nom. Aetna Ins. Co. v. United States, 382 U.S. 979, 86 S.Ct. 551, 15 L.Ed.2d 469 (1966).
. The formal obligee of the bond was the “People of the State of New York."
. Section 121 of the Surrogate’s Court Act (13-A Gilbert-Bliss, Civil Practice of New York Annotated 208, 227) :
“Before letters are issued to an administrator he must file his official oath, and execute to the people of the state, and file with the surrogate, the joint and several bond * * *. The bond must be conditioned that the administrator will faithfully discharge the trust reposed in him as such and obey all lawful decrees and orders of the surrogate's court touching the administration of the estate committed to him.”
. These two sections were as follows:
§ 113 Where an execution, issued upon a surrogate’s decree, against the property of an executor, administrator, testamentary trustee, or guardian, has been returned wholly or partly unsatisfied, an action to recover the sum remaining uncollected may be maintained upon his official bond by and in the name of the person in whose favor the decree was made. * * *
§ 115-a(l) Where a decree has been made in any proceeding directing payment by an executor, administrator, temporary administrator, testamentary trustee or guardian, and execution against the property of such fiduciary has been returned wholly or partly unsatisfied, a petition may be presented by any person interested to the surrogate and citation issued to the surety * * or the representatives of a deceased surety, to show cause why the liability of the surety * f * should not be fixed and determined. ® * Where the executor, administrator * * has died before or after the making of the decree directing payment, the issuance of execution shall not be required. * * «
13A Gilbert-Bliss, Civil Practice of New York Annotated 208, 211 (3d ed. 1953). Section 113 dealt with suit in a state court other than the Surrogate’s Court. Section 115-a provided a parallel route in Surrogate’s Court. These wore the relevant sections at the time of the execution of the bond.
In 1966, the Surrogate's Court Act was replaced by the Surrogate’s Court Procedure Act and the material provisions were altered to omit the requirement of attempted execution before suit against the surety. Now, the action can be brought upon permission of the court. See N.Y. Surr.Ct.Proc.Law § 809 (McKinney 1967). The new statute does not apply to ’bonds executed before passage. See N.Y.Surr.Ct.Proc.Law § 810 (McKinney 1967).
. Under § 115-a (1) of the Surrogate’s Court Act, supra note 6, execution against the administrator-executor was dispensed with if he had died.
. At least one other federal court has faced a similar problem and reached the same conclusion. In United States v. Giger, 20 F.Supp. 624 (W.D.Ark.1939), the deceased was indebted to the Federal Government for an agricultural loan. After the original administrator resigned, the Government sought to hold the sureties personally liable. The court dismissed the action against the sureties for failure to state a cause for relief:
I do not think the statute [3 U.S.C. §§ 191 and 192] has anything to do with personal liability of sureties on bonds. If the sureties on the bonds are liable to the Government, it seems to me this action is premature. While it has been held that local laws cannot interfere with the priority given in this statute, yet the decisions of our [Arkansas state] courts are uniform in holding that “an action in such court of law on the (administrator’s) bond is not sustainable until the probate court has adjusted the accounts of the administrator and has ordered him to pay over amounts found to be in his hands.” 26 F.Supp. at 625.
. Gases such as Downer v. United States Fidelity & Guaranty Co., 46 F.2d 733 (C.A.3 1931), involved other types of surety bonds in which the obligation was not conditioned on a prior court determination of the principal’s default.
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f2d_478/html/0139-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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Robert Michael WOOSLEY, Defendant-Appellant, v. UNITED STATES of America, Plaintiff-Appellee.
No. 71-1691.
United States Court of Appeals, Eighth Circuit.
Submitted Nov. 15, 1972.
Decided April 24, 1973.
Dale L. Rollings, St. Charles, Mo., for defendant-appellant.
Robert E. Grote, Asst. U. S. Atty., St. Louis, Mo., for plaintiff-appellee.
Before MATTHES, Chief Judge, VAN OOSTERHOUT, Senior Circuit Judge, and MEHAFFY, GIBSON, LAY, HEANEY, BRIGHT, ROSS and STEPHENSON, Circuit Judges.
BRIGHT, Circuit Judge.
Upon this rehearing en banc of the instant appeal we grant relief to Robert Michael Woosley, a Jehovah’s Witness, from a five-year prison sentence for refusing induction into the military service in violation of 50 U.S.C. App. § 462.
Appellant was convicted on his guilty plea, which the district court refused to permit him to withdraw. Woosley then appealed the conviction. We sustained this ruling of the district court and affirmed the conviction in United States v. Woosley, 8 Cir., 440 F.2d 1280, cert. denied, 404 U.S. 864, 92 S.Ct. 53, 30 L.Ed.2d 108 (1971). Thereafter, Woosley petitioned the district court under Rule 35, Fed.R.Crim.P. for reduction of his sentence. The court, without a hearing, denied the petition on November 5, 1971, and on November 23, 1971, again without a hearing, denied appellant’s motion to reconsider. Woosley now brings this timely appeal from those orders.
At the time of sentencing, the record showed appellant Woosley to be 19 years of age, married, steadily employed, and a prospective father of a child to be born within two months. His difficulties with the Selective Service System from his sincere religious beliefs as a Jehovah’s Witness, which beliefs do not permit him to take up and bear arms against other people nor permit him to perform civilian service as a conscientious objector at the order of a Selective Service Board, an arm of the military in the view of Jehovah’s Witnesses. Thus he did not ask his draft board to classify him as a conscientous objector but did request a ministerial classification. The Board declined this request and thereafter ordered Woosley, a resident of Springfield, Illinois, to report for induction. He declined induction at the induction station in St. Louis, Missouri, and prosecution followed in the United States District Court for the Eastern District of Missouri. The district judge described Woosley as “a fine young man,” and from the testimony adduced at the hearing on motion for withdrawal of the guilty plea, the court noted that “[T]his young man should have desired to obtain a conscientious objector status.”
Without doubt the evidence available to the district court showed Woosley to be a sincere and religiously motivated conscientious objector who failed to qualify for an exemption from military service solely because his religious tenets forbade him to apply for and perform civilian work as a conscientious objector. Notwithstanding this showing, the court pronounced a five-year sentence, the maximum prison term authorized by law. Our reading of the record discloses no indication of the reasons for the severity of the sentence, except a comment made by the court at an earlier hearing on July 10, 1970, when the court, in response to counsel’s plea for probation, stated:
THE COURT: Mr. Woosley, I have examined the probation report and these letters very carefully. I have decided what I’m going to do with you today. I am not going to sentence you today. But I want to be right certain that you understand what you are going to do. It has been my policy, and I don’t intend to change it at this point, first of all, you have not even asked for a conscientious objector status. I think the reason is obvious, because, apparently, it is your belief that in the event you are classified as a conscientious objector, you would not serve in any noncombatant work. Is that correct ?
DEFENDANT WOOSLEY: That is correct, sir.
THE COURT: So I am going to have you surrender to the custody of the marshal this morning. I am going to have sentencing next Friday at ten o’clock. You think carefully about what you are going to do in this week’s time. In the meantime I want to discuss it with your counsel further. [Transcript of proceedings, July 10,1970 (emphasis added).]
On this appeal, Woosley urges these propositions:
(1) The district court did not resort to appropriate standards in imposing sentence but utilized a “mechanical” and automatic • approach in giving him a maximum prison sentence, as evidenced by the sentencing judge’s similar treatment of all selective service violators who refused induction regardless of the circumstances of the violation or of the violator;
(2) That the trial court abused its discretion in not granting Woosley probation and in refusing a hearing on his postconviction application for reduction of the sentence under Rule 35.
We hold Woosley is entitled to relief and remand for resentencing under standards enunciated herein.
I.
LIMITED REVIEW OF SENTENCES
The federal courts have uniformly agreed that “a sentence imposed by a federal district judge, if within statutory limits, is generally not subject to review.” United States v. Tucker, 404 U.S. 443, 447, 92 S.Ct. 589, 591, 30 L.Ed.2d 592 (1972); see, e. g., Gore v. United States, 357 U.S. 386, 393, 78 S.Ct. 1280, 2 L.Ed.2d 1405 (1958) ; Blockburger v. United States, 284 U.S. 299, 305, 52 S.Ct. 180, 76 L.Ed. 306 (1932); Gurera v. United States, 40 F.2d 338, 340-341 (8th Cir. 1930).
This circuit has generally adhered to the principle that a sentence within statutory limits should not be disturbed if the district court has exercised discretion in imposing the sentence. United States v. Smallwood, 443 F.2d 535, 543, cert. denied, 404 U.S. 853, 92 S.Ct. 95, 30 L.Ed.2d 93 (1971); United States v. Dennison, 437 F.2d 439, 440 (1971) ; Cassidy v. United States, 428 F.2d 585, 588 (1970). Yet, in. fact, this court has undertaken to review the severity of sentences following a district court’s denial of a reduction under Rule 35, Fed. R.Crim.P., although we found no abuse of discretion on the part of the district court. Hood v. United States, 469 F.2d 721 (8th Cir. 1972); United States v. Anderson, 466 F.2d 1360 (8th Cir. 1972). If we possess the power to review the severity of the sentence or the appropriateness of the sentencing procedure, this appeal from the denial of relief under Rule 35 properly places these issues before us.
The Supreme Court support for the rule that federal appellate courts generally may not review a sentence is pure dicta, 2 C. Wright, Federal Practice and Procedure § 533 at 451-52 (1969). See, e. g., Tucker, supra, 404 U.S. 443, 92 S.Ct. 589, 30 L.Ed.2d 592; Gore, supra, 357 U.S. 386, 78 S.Ct. 1280, 2 L.Ed.2d 1405; Blockburger, supra, 284 U.S. 299, 52 S.Ct. 180, 76 L.Ed. 306. However, in a contempt case, Yates v. United States, 356 U.S. 363, 78 U.S. 766, 2 L.Ed.2d 837 (1958), the .Court not only reviewed the severity of the sentence imposed by the district court, but also set it aside and imposed its own sentence. The Court observed:
Reversing a judgment for contempt because of errors of substantive law may naturally call for a reduction of the sentence based on an extent of wrongdoing found unsustainable in law. Such reduction of the sentence, however, normally ought not be made by this Court. It should be left, on remand, to the sentencing court. And so, when this Court found that only a single offense was committed by petitioner, and not eleven offenses, it chose not to reduce the sentence but to leave this task, with gentle intimations of the necessity for such action, to the District Court. However, when in a situation like this the District Court appears not to have exercised its discretion in the light of the reversal of the judgment but, in effect, to have sought merely to justify the original sentence, this Court has no alternative except to exercise its supervisory power over the administration of justice in the lower federal courts by setting aside the sentence of the District Court.
* * * Not unmindful of petitioner’s offense, this Court is of the view, exercising the judgment that we are now called upon to exercise, that the time that petitioner has already served in jail is an adequate punishment * * * and is to be deemed in satisfaction of the new sentence herein ordered formally to be imposed. Accordingly, the writ of certiorari is granted, and the judgment of the Court of Appeals is vacated and the cause remanded to the District Court with directions to reduce the sentence to the time petitioner has already been confined in the course of these proceedings. [Id. at 366-367, 78 S.Ct. at 768-769.]
From our review of the cases, we think it clear that the repetitive pronouncement of the general rule of unreviewability of sentences imposed within statutory limits does not insulate from review every sentence within statutory limits.
II.
MECHANICAL SENTENCE
We believe that we have the power to examine and review a sentence if it is shown to have been imposed on a mechanical basis. Appellant asserts that the district judge in referring to “my policy” in the sentencing proceeding held on July 10, 1970, (see p. -140, supra) clearly meant that he sentenced all defendants convicted of refusing induction to a maximum five-year prison term. Although the record does not clearly disclose this meaning, counsel for appellant states in his brief that his examination of the district court records uncovered no selective service case where this district judge imposed less than the maximum term of imprisonment for refusing induction under § 462. At oral argument the United States Attorney referred to his research into sentences pronounced by the district judge for defendants who have refused induction into military service. Restricting consideration to sentences in the Eastern Division of Missouri, we understand the statements of the government attorney to indicate that this sentencing judge' sentenced eight violators who refused induction to maximum prison terms, although one sentence permitted possible early parole under § 4208(a). Clearly, the judge’s policy in the' St. Louis (Eastern) Division called for five-year sentences for all young men convicted of refusing induction into the military.
The general rule precluding review of a sentence within statutory limits is not dispositive of the problem we confront here. We do not deal here with a sentence imposed in the informed or sound discretion of a trial judge after consideration of all the circumstances surrounding the crime. See Tucker, supra, 404 U.S. at 447, 92 S.Ct. 589; Williams v. Oklahoma, 358 U.S. 576, 585, 79 S.Ct. 421, 3 L.Ed.2d 516 (1959). Instead, we deal with a predetermined sentence resting upon a policy followed by the trial judge in certain selective service cases. A mechanical approach to sentencing plainly conflicts with the sentencing guidelines announced by the Supreme Court in Williams v. New York, 337 U.S. 241, 69 S.Ct. 1079, 93 L.Ed. 1337 (1949), and Williams v. Oklahoma, supra, 358 U.S. 576, 79 S.Ct. 421, 3 L.Ed.2d 516. In Williams v. New York, supra, the Court stated:
A sentencing judge * * * is not confined to the narrow issue of guilt. His task within fixed statutory or constitutional limits is to determine the type and extent of punishment after the issue of guilt has been determined. * * *
Undoubtedly the New York statutes emphasize a prevalent modern philosophy of penology that the punishment should fit the offender and not merely the crime. * * * The belief no longer prevails that every offense in a like legal category calls for an identical punishment without regard to the past life and habits of a particular offender. [337 U.S. at 247, 69 S.Ct. at 1083.]
Later, in Williams v. Oklahoma, supra, 358 U.S. at 585, 79 S.Ct. at 427, the Court reaffirmed these principles, saying:
Necessarily, the exercise of a sound discretion in [sentencing] required consideration of all the circumstances of the crime, for “[t]he belief no longer prevails that every offense in a like legal category calls for an identical punishment. . . .” Williams v. New York, supra, [337 U.S.] at 247 [69 S.Ct. at 1083, 93 L.Ed. 1337]. In discharging his duty of imposing a proper sentence, the sentencing judge is authorized, if not required, to consider all of the mitigating and aggravating circumstances involved in the crime.
A mechanical approach to sentencing, such as that used here, ignores the Supreme Court’s decree that sentences be tailored to fit the offender. We reject the view that in all cases the trial judge’s action is immune from review simply because we do not ordinarily review sentences within statutory limits. Although a trial judge possesses wide discretion in sentencing, he is not free to ignore sentencing guidelines established by the Supreme Court.
The Sixth Circuit has reached the same conclusion. United States v. McKinney, 466 F.2d 1403 (1972) ; United States v. Charles, 460 F.2d 1093 (1972); United States v. Daniels, 446 F.2d 967 (1971). Before imposing sentence in Daniels, the trial judge said that he had imposed the maximum sentence in selective service cases for over 30 years. Faithful to his policy, the trial judge then imposed the maximum sentence. The Sixth Circuit held that it did possess the power to review such a sentence. In vacating the sentence and remanding for resentencing, the court commented :
[Wje are seriously perturbed about the trial judge’s avowal that since 1938 or 1939, his court has * * * sentenced to five years in the penitentiary every young man who has refused to obey an order of a draft board. * * i:'
A trial court which fashions an inflexible practice in sentencing contradicts the judicially approved policy in favor of “individualizing sentences.” Williams v. New York, 337 U.S. at 248 [69 S.Ct. 1079, 93 L.Ed. 1337] * * *. Moreover, such an inflexible sentencing practice is incompatible with the United States Supreme Court’s declaration in Williams v. Oklahoma * * *. [446 F.2d at 971.]
In Charles, supra, 460 F.2d at 1094-1095, the court noted its problems with sentencing procedures in selective service cases in one of its districts and observed :
Yet, as we have had occasion to point out in the past, the Courts in one District within this Circuit have persistently disregarded this individual sentencing approach with respect to one category of offenses — violations of the Selective Service laws. With very rare exceptions, the judges in the Eastern District of Kentucky have consistently meted out five year prison sentences to draft offenders regardless of the circumstances of the particular offender. We have had occasion to criticize this practice in the past. United States v. Daniels, 429 F.2d 1273 (6th Cir. 1970); United States v. Daniels, 446 F.2d 967 (6th Cir. 1971); United States v. McKinney, 427 F.2d 449 (6th Cir. 1970); United States v. McKinney [466 F.2d 1403 (6th Cir. 1971)]; we have not changed our policy on this matter.
In McKinney, supra, 466 F.2d 1403, the court itself set the sentence after its mandates on two earlier remands were ignored in United States v. McKinney, 427 F.2d 449 (6 Cir. 1970) and United States v. McKinney, 466 F.2d 1403 (6 Cir. 1971).
We agree with the reasoning of the Daniels case and its progeny. The rule against review of sentences is founded primarily upon the premises that a trial judge, who has the best opportunity to. observe the defendant and evaluate his character, will exercise discretion in imposing sentence. See Briscoe v. United States, 129 U.S.App.D.C. 146, 391 F.2d 984, 986 (1968). On that assumption we ordinarily defer to the trial court’s judgment. However, where as here, the district court has not exercised discretion in imposing sentence, there is no reason for us to defer to the trial court’s judgment. In reviewing such a sentence, we would not be usurping the discretion vested in trial judges; rather we would be according the defendant the judicial discretion to which he is entitled. See Gryger v. Burke, 334 U.S. 728, 734, 68 S.Ct. 1256, 92 L.Ed. 1683 (1948) (Rutledge, J., dissenting).
III.
FAILURE TO GRANT PROBATION
What we have already said makes it abundantly clear that by resorting to “policy” in sentencing, the district judge gave no consideration to Woosley’s claim for probation.
Appellant had earlier stated that, because of his religious beliefs, he could not comply with a draft board order to work in alternative service as a conscientious objector, but that he would perform such service in compliance with a court order. Such a request is not unusual from Jehovah’s Witnesses who find their religious tenets in conflict with requirements of Selective Service laws. Judge Solomon, as Chief Judge of the United States District Court in. Oregon, adopted and enunciated an enlightened solution.
The great majority [of Selective Service violators placed on probation] are Jehovah’s Witnesses who were classified as conscientious objectors. They refused to report for alternative service because they regard the Selective Service System as an arm of the military. To perform work directed by the military would compromise their religious convictions.
A few years ago, I stumbled onto the idea that Jehovah’s Witnesses would do alternative service if I ordered it because I am not in military. Romans XIII teaches that the orders of those in civil authority are equivalent to the orders of God.
I know that Selective Service is happy about this solution, and a number of courts throughout the country are using the same technique. [Solomon, Sentences in Selective Service and Income Tax Cases, 52 F.R.D. 481, 487 (1970).]
See Daniels, supra, 446 F.2d at 969, 972.
Judicial recognition has been given to statistical evidence showing “[that] Jehovah's Witness violators have regularly been included in the group toward whom an increasing number of judges have shown a growing lenience.” United States v. McCord, 466 F.2d 17, 20 (2d Cir. 1972).
The Supreme Court long ago made clear that federal appellate courts have the power to review a trial judge’s refusal to grant probation. Burns v. United States, 287 U.S. 216, 221-223, 53 S.Ct. 154, 77 L.Ed. 266 (1932). In Burns, the Court described the standard for appellate review as follows:
The question is simply whether there has been an abuse of discretion and is to be determined in accordance with familiar principles governing the exercise of judicial discretion. That exercise implies conscientious judgment, not arbitrary action. * * * It takes account of the law and the particular circumstances of the case and is “directed by the reason and conscience of the judge to a just result.” * * * While probation is a matter of grace, the probationer is entitled to fair treatment, and is not to be made the victim of whim or caprice. [Id. at 222-223, 53 S.Ct. at 156.]
This circuit has acknowledged the power of appellate courts to review a trial judge’s refusal to grant probation. See United States v. Alarik, 439 F.2d 1349, 1351 (8th Cir. 1971); Berra v. United States, 221 F.2d 590, 598 (8th Cir. 1955), aff’d, 351 U.S. 131, 76 S.Ct. 685, 100 L.Ed. 1013 (1956). In other circuits, cases acknowledging this power of review are legion.
Under these circumstances, the trial judge’s refusal to consider probation as a reasonable alternative in his sentencing procedures was error.
IV.
EXCESSIVENESS OF SENTENCE
Aside from the district court’s failure to utilize its discretion in the sentencing process, i. e., its imposition of five-year sentences as a mechanical and automatic policy, we next consider whether the imposition of a maximum sentence was in itself an abuse of discretion under the circumstances presented here.
Appellant’s crime was a crime of conscience. He expressed his willingness to serve his country in a civilian capacity if ordered to do so by the district judge. The privilege of civilian service is afforded others "who, by reason of religious training and belief, [are] opposed to participation in war in any form.” 50 U.S.C. App. § 456(j). Thus, Woos-ley’s transgression rested upon a technical violation of the law. The circumstances of the crime and the character of the criminal dictated leniency of treatment but produced the maximum prison sentence.
An examination of cases in which federal appellate courts have reviewed sentences falling within the statutory maximum discloses the underlying fact in each was a sentence which was greatly excessive under traditional concepts of justice or was manifestly disproportionate to the crime or the criminal. McKinney, supra, 466 F.2d 1403; Daniels, supra, 446 F.2d 967; United States v. Wiley, 278 F.2d 500 (7th Cir. 1960); see United States v. Walker, 469 F.2d 1377 (1st Cir. 1972); McGee v. United States, 465 F.2d 357 (2d Cir. 1972); Charles, supra, 460 F.2d 1093; United States v. McCoy, 139 U.S.App.D.C. 60, 429 F.2d 739 (1970). Other cases have indicated that the courts possess the power to review a sentence when there has been a gross abuse of discretion. Hood, supra, 469 F.2d 721, 722; United States v. King, 420 F.2d 946, 947 (4th Cir.), cert. denied, 397 U.S. 1017, 90 S.Ct. 1253, 25 L.Ed.2d 432 (1970) ; United States v. Weiner, 418 F.2d 849, 851 (5th Cir. 1969); United States v. Latimer, 415 F.2d 1288, 1290 (6th Cir. 1969); United States v. Holder, 412 F.2d 212, 214-215 (2d Cir. 1969). See generally, 2 C. Wright, Federal Practice and Procedure § 533 (1969). In Holder, supra, 412 F.2d 212, 214-215, the court noted:
If the sentence could be characterized as so manifest an abuse of discretion as to violate traditional concepts, it is possible that we might, pursuant to our power to supervise the administration of justice in the circuit, overturn our long established precedents of non-intervention and intervene.
We hold that we possess the power to review the severity of a criminal sentence within narrow limits where the court has manifestly or grossly abused its discretion. This is such a case. The severity of the sentence shocks the judicial conscience. The sentence greatly exceeds penalties usually exacted against Jehovah’s Witnesses, and the record completely fails to justify, nor has the district judge undertaken to explain, the imposition of a maximum penalty under the circumstances presented here.
Moreover, we take judicial notice of statistical data showing that in the year in which sentence was first assessed (1970) and in the year in which the district court refused Rule 35 relief (1971), most convicted violators of the draft laws received probation, and only a minute number of offenders received the maximum prison terms (4.4 percent in 1970; 2.8 percent in 1971). These statistics disclose nothing of the character of the offender, but they do indicate the increasing tendency of the courts to afford leniency to a high percentage of violators of the draft laws.
We find it difficult to conceive of a situation offering more compelling circumstances to justify leniency than that in the instant case. Referring to a similarly situated offender, the Sixth Circuit said in Daniels, supra, 446 F.2d at 972:
The imprisonment of Appellant can hardly be deemed helpful in reforming a young man of concededly “good character” and “model behaviour.” Imprisonment cannot serve as protection for society because the immediate release of Appellant poses no risk to society’s safety. Moreover, disciplining or punishing the Appellant by imprisonment would seem to be an inappropriate rationale for sentencing where, as here, a young man has devoutly adhered to his religious beliefs without impeding the rights of others. Finally, under the limited factual circumstances of this case, the issuance of an order probating the Appellant subject to his performance of the identical work demanded of him by the Selective Service is not the kind of sentencing which would induce widespread disobedience of the orders of local Selective Service boards.
We can find no basis by any rational criteria to justify Woosley’s punishment in this case. Neither society nor the individual stands to gain any benefit therefrom. Nor is there a deterrent effect since Jehovah’s Witnesses have stood steadfastly by their religious convictions, whatever the potential sentence. The broad and unreviewable discretion possessed by federal district courts in matters of sentencing does not extend to the meting out of punishment manifestly disproportionate to the nature of the crime and the character of the criminal.
V.
We believe it appropriate to remand this case to the district court for resen-tencing. The district judge is an experienced and able trial judge. We know that he will give Woosley fair consideration under the standards promulgated here. In selective service cases, the district judge may have followed a policy initiated by other judges, and this court has not previously commented upon that policy. Moreover, the district judge may appropriately evaluate Woosley’s changed family circumstances which may disclose additional considerations dictating leniency of treatment.
Reversed and remanded. Release bond to continue until final disposition.
MATTHES, Chief Judge
(concurring) .
After weighty consideration of all relevant circumstances I have concluded to concur in the majority opinion.
Recognizing the firmly entrenched rule that appellate courts generally will not interfere with the sentence imposed if it is within statutory limits, I am nevertheless persuaded to conclude that, like many rules, it has exceptions. This case is the exceptional one justifying remedial action.
It is hardly debatable that implicit in the imposition of a sentence is the exercise of sound discretion by the sentencing judge. Such exercise encompasses consideration of all relevant factors such as the nature of the offense, the history and background of the defendant, and of course the interest and concerns of society, to mention only a few.
I have been unable to escape the conclusion that the maximum sentence imposed here was the product of an inflexible policy rigidly applied to all offenders of the Selective Service Laws. Such a policy is difficult to defend and condone just as imposition of the maximum sentence on every Dyer Act violator regardless of attending circumstances would be subject to condemnation.
VAN OOSTERHOUT, Senior Judge,
with whom MEHAFFY and STEPHENSON, Circuit Judges, join (dissenting).
I respectfully dissent. I would affirm the trial court’s order denying relief under Rule 35. The sentence of five-years imprisonment was imposed upon the defendant following the acceptance of his voluntary plea of guilty to a charge of failure to submit for induction in violation of 50 U.S.C. App. § 462. This is the maximum penalty provided for the offense committed.
The majority opinion concedes that this court, as well' as others, has repeatedly held that a sentence imposed by a district judge which is within statutory limits is not subject to review. In Gu-rera v. United States, 40 F.2d 338, 340-341 (8th Cir. 1930), this court held:
“If there is one rule in the federal criminal practice which is firmly established, it is that the appellate court has no control over a sentence which is within the limits allowed by a statute. If Congress had intended to change that rule in regard to violations of the liquor laws, we would have expected a very clear and definite expression of that intent and a workable expression of the rules which should guide the trial courts in assessing punishments and the appellate courts in reviewing such assessments.”
The Supreme Court in the recent case of United States v. Tucker, 404 U.S. 443, 447-448, 92 S.Ct. 589, 591, 30 L.Ed.2d 592 (1972), holds:
“It is surely true, as the government states, that a trial judge in the federal judicial system generally has wide discretion in determining what sentence to impose. . . . The government is also on solid ground in asserting that a sentence imposed by a federal district judge, if within statutory limits, is generally not subject to review. Gore v. United States, 357 U.S. 386, 393 [78 S.Ct. 1280, 1284, 2 L.Ed.2d 1405]. Cf. Yates v. United States, 356 U.S. 363 [78 S.Ct. 766, 2 L.Ed.2d 837].”
The Tucker Court goes on to hold that a. remand for resentencing was proper because the record showed that the trial court at the time of the sentencing was not aware of the fact that two prior convictions of the defendant called to its attention were constitutionally infirm because the defendant was not represented by counsel in such eases.
Subsequent to Tucker this court in Hood v. United States, 469 F.2d 721, 722 (8th Cir. 1972), summarily affirmed the trial court’s denial of a motion to reduce sentence, stating:
“In United States v. Tucker, 404 U.S. 443, 447, 92 S.Ct. 589, 591, 30 L.Ed.2d 592 (1972) the Supreme Court observed: 1 * * * that a sentence imposed by a federal district judge, if within statutory limits, is generally not subject to review.’ We fail to find any abuse of discretion on the part of the trial court in denying the motion to modify or set aside the sentence.”
In United States v. McCord, 466 F.2d 17 (2d Cir. 1972), the court affirmed the denial of a Rule 35 motion to reduce a sentence imposed on a selective service violation. In doing so, the court cites and relies upon Tucker. The court recognizes that many judges have pronounced sentences in Jehovah Witness type draft cases of the type advocated by the majority opinion and holds that such evidence does not require a remand for resentencing.
There is no statute nor rule which expressly confers jurisdiction on Courts of Appeal to review sentences within statutory limits imposed upon a lawful conviction. Legislation to confer such appellate jurisdiction has been frequently proposed but has not yet been enacted. See ABA project “Appellate Review of Sentences”, tentative draft 1967, pp. 86-90.
In Gore v. United States, 357 U.S. 386, 393, 78 S.Ct. 1280, 1285, 2 L.Ed.2d 1405 (1958), the Court in affirming an order denying a petition to review sentence imposed within statutory limits states and holds:
“In effect, we are asked to enter the domain of penology, and more particularly that tantalizing aspect of it, the proper apportionment of punishment. Whatever views may be entertained regarding severity of punishment, whether one believes in its efficacy or its futility, see Radzinowicz, A History of English Criminal Law: The Movement for Reform, 1750-1833, passim, these are peculiarly questions of legislative policy. Equally so are the much mooted problems relating to the power of the judiciary to review sentences. First the English and then the Scottish Courts of Criminal Appeal were given power to revise sentences, the power to increase as well as the power to reduce them. See 7 Edw. VII, c. 23, § 4(3); 16 & 17 Geo. V, c. 15, § 2(4). This Court has no such power.” (Emphasis added.)
As set out in the majority opinion, we have in a number of cases purported to review a district court’s denial of a Rule 35 motion to reduce a sentence but have denied relief on the basis that there has been no abuse of discretion. Such holding is technically inconsistent with the established law that sentences imposed within the statutory limit are not reviewable. However, the result is the same.
8A Moore’s Federal Practice 2d Ed. § 35.02(4) states:
“Since the motion for reduction of sentence is a plea for leniency, decision on the motion is as close to being a matter of pure discretion as any other under the Rules, with the exception of the sentence itself. It might be argued that such a determination should therefore not be reviewable by way of appeal. Apparently, no court has gone this far, although reversal of an order denying reduction is extremely rare.”
If we assume for the purposes of this case without so deciding that the abuse of discretion standard applies, we are satisfied that the defendant has failed to establish that the court abused its discretion in imposing the five-year sentence. This is not a case where the court acted on any relevant misinformation in imposing the sentence. The record reflects that the court was fully informed on all factors relevant to appropriate punishment. He had carefully considered the probation report, he knew defendant had sought a ministerial classification which was rejected by the Draft Board, and that the defendant had never applied for a conscientious objector classification. The court was aware of the reasons assigned by the defendant for not applying for the conscientious objector classification and stated that he recognized that the defendant was a fine young man.
A wide discretion is vested in the trial court with respect to imposition of sentence within statutory limits. A heavy burden rests on a party asserting abuse of discretion. A reviewing court is not justified in substituting its discretion for that of the trial court who had the benefit of seeing and hearing the defendant. See 5A C.J.S. Appeal and Error § 1583; United States v. McCord, supra; McGee v. United States, 462 F.2d 243 (2d Cir. 1972); Burns v. United States, 287 U.S. 216, 222-223, 53 S.Ct. 154, 77 L.Ed. 266 (1932).
In Delno v. Market St. Ry. Co., 124 F.2d 965, 967 (9th Cir. 1942), the court in defining discretion states:
“Discretion, in this sense, is abused when the judicial action is arbitrary, fanciful or unreasonable, which is another way of saying that discretion is abused only where no reasonable man would take the view adopted by the trial court. If reasonable men could differ as to the propriety of the action taken by the trial court, then it cannot be said that the trial court abused its discretion.”
In our present case there is nothing in the record to indicate that the trial court acted upon any misinformation with respect to the defendant’s character and background. Judges vary greatly as to sentences imposed, not only in selective service eases but in all types of cases, particularly those involving nonviolent crimes such as income tax evasion, and embezzlement. Defendant’s crime is more than a technical one. His plea of guilty admits all essential elements of the offense charged. Defendant has no constitutional right to a conscientious objector classification or to be excused from military service obligations. The exemption of conscientious objectors from military service is a matter of legislative grace and does not rise to a constitutional command. United States v. Crocker, 308 F.Supp. 998 (D.Minn.), aff'd 435 F.2d 601 (8th Cir. 1971).
Probation for a convicted defendant is a matter of grace and not a matter of right. No defendant has an absolute right to probation. Burns v. United States, 287 U.S. 216, 220, 53 S.Ct. 154, 77 L.Ed. 266; United States v. Alarik, 439 F.2d 1349,1351 (8th Cir. 1971).
Defendant has failed to establish his right to exemption from military service by failing to follow the reasonable procedures prescribed by the statutes and regulations for asserting exemption. Defendant by failing to report for military service as ordered has created unnecessary confusion in the administration of the draft law and has made it necessary for some other person to take his place and expose himself to the possible hazard of Vietnam conflict.
While imprisonment may not be necessary to rehabilitate the defendant, the deterrent effect upon others is always a proper item for consideration in imposing sentence. See Williams v. New York, 337 U.S. 241, 248-249 n. 13, 69 S.Ct. 1079, 93 L.Ed. 1337. It cannot fairly be said on the basis of the record in this case that the public interest does not require a fair enforcement of the selective service laws and that reasonable men could not differ on the propriety of the sentence imposed.
The issue of mechanical sentencing discussed by the majority was never presented in the trial court and hence such court had no opportunity to consider the issue. Issues not raised in the trial court cannot properly be considered on appeal. Smith v. American Guild of Variety Artists, 368 F.2d 511, 514 (8th Cir. 1966).
In any event, I believe that the majority has misconceived the trial court’s statement with respect to his policy. There is nothing in the court’s statement which explicitly describes the policy to which he refers. Inasmuch as sentence has been deferred, it would appear that the policy was to give the defendant an opportunity to reconsider reporting for induction before sentence was imposed. There is nothing in the record to indicate that the defendant has been denied due process in connection with his sentencing or Rule 35 proceedings. Defendant and his attorney were afforded a full opportunity to present anything they desired to support the claim for leniency and probation made prior to sentence. The present petition and the application for reconsideration do not reveal that the defendant had anything to present which had not previously been presented to the court in connection with his pre-sentence request for parole. Under such circumstances the trial court did not abuse its discretion in not affording a hearing.
The result reached by the majority is supported by the Sixth Circuit cases cited and relied upon. For reasons herein-above stated, I do not agree with the reasoning upon which such decisions are based. The majority opinion departs from the long-established rule in effect in this circuit and generally elsewhere-that sentences within the statutory limits are not subject to appellate review and in effect opens the gate to appellate review of all sentences. Such a drastic change in the law in my view requires appropriate Congressional action. Gore v. United States, supra.
I would affirm the order denying defendant’s,, Rule 35 motion.
. Initially, a divided panel denied Woosley relief from this sentence. Woosley v. United States, No. 71-1691, May 26, 1972 [unpublished].
. Pending the disposition of this appeal, a majority of this court authorized AYoos-ley’s release from prison on his personal recognizance bond. At the time of his release Woosley had served approximately eight months of his sentence.
. Until the jurisdiction of the original circuit courts was transferred to the circuit courts of appeals in 1891, federal appellate courts reviewed sentences under the authority of the Act of March 3, 1879, ch. 176, § 3, 20 Stat. 354. See United States v. Wynn, 11 F. 57 (C.C.E.D.Mo.1882) ; Bates v. United States, 10 F. 92, 96 (C.C.N.D.Ill.1881). Federal courts have disclaimed the authority to review sentences since that statute was repealed, on the assumption that the power of review does not exist without statutory authority. See Gore v. United States, 357 U.S. 386, 393, 78 S.Ct. 1280, 2 L.Ed.2d 1405 (1958) ; Freeman v. United States, 243 F. 353, 357 (9th Cir. 1917). It has been suggested that such statutory authority does exist under 28 U.S.C. § 2106. See Smith v. United States, 273 F.2d 462, 468-469 (10th Cir. 1959) (Murrah, J., dissenting) ; United States v. Rosenberg, 195 F.2d 583, 604-607 (2d Cir.), cert denied, 344 U.S. 838, 73 S.Ct. 20, 97 L.Ed. 652, rehearing denied, 344 U.S. 889, 73 S.Ct. 134, 97 L.Ed. 687 (1952).
A few courts, without referring to statutory authority, have indicated that federal appellate courts possess the power to review a sentence imposed within the statutory maximum if it appears that the trial judge plainly abused his discretion. See United States v. Hetherington, 279 F.2d 792, 796 (7th Cir.), cert. denied, 364 U.S. 908, 81 S.Ct. 271, 5 L.Ed.2d 224 (1960) ; Livers v. United States, 185 F.2d 807, 809 (6th Cir. 1950) ; Tincher v. United States, 11 F.2d 18, 21 (4th Cir.), cert. denied, 271 U.S. 664, 46 S.Ct. 475, 70 L.Ed. 1139 (1926) ; Goldberg v. United States, 277 F. 211, 220 (8th Cir. 1921).
Finally, the Sixth and Seventh Circuits have reviewed and vacated sentences imposed within the statutory maximum. See United States v. McKinney, 466 F.2d 1403 (6th Cir. 1972) ; United States v. Charles, 460 F.2d 1093 (6th Cir. 1972) ; United States v. Daniels, 446 F.2d 967 (6th Cir. 1971) ; United States v. Wiley, 278 F.2d 500 (7th Cir. 1960) ; cf. United States v. McCoy, 139 U.S.App.D.C. 60, 429 F.2d 739 (1970) ; Leach v. United States, 118 U.S.App.D.C. 197, 334 F.2d 945 (1964). The Second Circuit has examined what it has termed the “integrity” of the sentencing process. McGee v. United States, 465 F.2d 357 (1972) ; cf. United States v. Brown, 470 F.2d 285 (1972). The First Circuit has expressed some dissatisfaction with the severity of a sentence in a selective service case. United States v. Walker, 469 F.2d 1377 (1972).
. Some question may be raised whether the severity of a sentence, if reviewable under any circumstances, should be raised on direct appeal or by post-appeal application for relief under Rule 35, Fed.R.Crim.P. Both Hood and Anderson raised the sentence question on their second appeal, as does Woosley here. The government raises no question as to the appropriateness of the appeal. Since a trial court retains the power under Rule 35 to reduce a sentence within 120 days after final direct review of a conviction, the sentence does not become firmly fixed until the trial court has acted or declined to act under Rule 35.
. In requesting probation, the transcript discloses the following:
[THE COURT:] Do you know of any reason why sentence should not be imposed this morning?
MR. JACOBS [Attorney for Woosley]: I know of none, Your Honor.
THE COURT: All right. Will you stand up, Mr. Woosley?
MR. JACOBS: I would like to state, Your Honor, that based upon the Court’s finding I would make a motion for pre-sentence investigation and leave to apply for probation.
THE COURT: I don’t think that will be necessary.
Mr. Woosley, do you have anything to say to the Court before sentence is imposed?
THE WITNESS : No, Your Honor.
THE COURT: Does your attorney have anything further to say?
MR. JACOBS: I would like to ask the defendant one question, Your Honor.
(Thereupon, there was a conference between the defendant and his counsel out of the hearing of the reporter and off the record.)
MR. JACOBS: Your Honor, I would, in renewal of my motion for probation, like to state that the defendant is, as the Court is well aware, an ordained minister and has pursued it diligently except to the extent that he is necessarily—
THE COURT: No, I’m not well aware that he is an ordained minister. That is his notion of what he is. But it does not comply with what the rules and regulations of the Selective Service System require. I am aware that he is a fine young man. And I regret very much that he is making this decision. But it is his decision.
MR. JACOBS: Well, Your Honor-
THE COURT: Go ahead.
MR. JACOBS: The decision that brings him here is one of refusing induction under the Selective Service Act. There is a 1-A registrant. 1-Iis classification is one that he has strenuously opposed. The Selective Service file reflects that he attempted to obtain a ministerial classification.
THE COURT: I understand that.
MR. JACOBS: I think there would be little question that his refusal to induction in the Armed Forces is because of his conscientious conviction that he will not take up arms and bear arms against other people. On the question of his conscientious objection I think it should be perfectly clear that it is not a position of the Jehovah’s Witnesses that they will not do hospital work or something of a humane nature. The repugnant nature of it is doing it under the forcible order of a Selective Service Board which is appointed primarily under a military act. Therefore their conscience carries to that extent. Their entire life, however, is devoted toward performing service of a ministerial and humane nature. If there ever was a ease which warranted a person who is not a threat to the public or a danger to the xtublic, which would warrant probation, I would certainly think it is one in which the background of the person is as thorough and clear and as much of a contribution to the public welfare as it has been on the part of this man.
THE COURT: Have you anything further?
MR. JACOBS: No, Your Honor.
THE COURT: On your plea of guilty this Court will sentence you to five years in the custody of the Attorney General. Probation will be denied. [Tr. 18-21.]
. See United States v. Birnbaum, 402 F.2d 24, 30 (2d Cir. 1968), cert. denied, 394 U.S. 922, 89 S.Ct. 1181, 22 L.Ed.2d 455 (1969) ; United States v. White, 147 F.2d 603 (3d Cir. 1945) ; Mann v. United States, 218 F.2d 936, 939 (4th Cir. 1955) ; Hoopengarner v. United States, 270 F.2d 465, 472 (6th Cir. 1959) ; United States v. Wiley, 267 F.2d 453, 455-456 (7th Cir. 1959) ; United States v. Borgis, 182 F.2d 274, 277 (7th Cir. 1950) ; Burr v. United States, 86 F.2d 502, 503 (7th Cir. 1936), cert. denied, 300 U.S. 664, 57 S.Ct. 507, 81 L.Ed. 872 (1937) ; United States v. Taylor, 449 F. 2d 117, 118 (9th Cir. 1971) ; Whitfield v. United States, 401 F.2d 480, 482 (9th Cir. 1968), cert. denied, 393 U.S. 1026, 89 S.Ct. 630, 21 L.Ed.2d 570 (1969) ; Longknife v. United States, 381 F.2d 17, 19 (9th Cir. 1967), cert. denied, 390 U.S. 926, 88 S.Ct. 859, 19 L.Ed.2d 987 (1968) ; Jordan v. United States, 370 F.2d 126, 129 (10th Cir. 1966), cert. denied, 386 U.S. 1033, 87 S.Ct. 1484, 18 L.Ed.2d 595 (1967) ; Dodd v. United States, 213 F.2d 854, 855 (10th Cir. 1954) ; Sullivan v. United States, 212 F.2d 125, 128 (10th Cir.), aff’d, 348 U.S. 170, 75 S.Ct. 182, 99 L.Ed. 210 (1954) ; Humes v. United States, 186 F.2d 875, 878 (10th Cir. 1951).
. Federal Offenders in the United States Distriet Courts, Administrative Office of the U. S. Courts at 188 (1970) (containing criminal sentence analysis 1967-71).
AATe note the wealth of statistical data collected from the United States courts relating to sentencing by categories of federal crimes. See, e. g., Annual Report of the Director, Administrative Office of the United States Courts (1972). It would seem that if such data were collected and disseminated in a more useable form, it might serve as a helpful guide to sentencing judges to avoid greatly disparate sentences for offenders of cornparatively equal status. See generally Frankel, Lawlessness in Sentencing, 41 Cincinnati L.Rev. 1 (1972) (discussion of sentencing in the United States),
. Appellant’s counsel lias filed a petition in this court stating that appellant’s wife was killed in an automobile accident on April 29, 1972, while enroute to the federal penitentiary to visit appellant. Tims, according to the petition, appellant’s infant son is “in temporary custody of relatives who are not properly equipped to continue caring for the child.”
. In 2 Wright Federal Practice and Procedure § 533, p. 455, the following appears : “Reasonable men may well wonder whether the greater uniformity in sentences expected from appellate review will in fact materialize, and whether it will simply add a new burden to appellate courts that are already overworked.” Additional problems presented by appellate review of sentencing are ably set out in United States v. Wiley, 184 F.Supp. 679 (N.D.Ill.1960).
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Robert J. BENSON, Plaintiff-Appellant, v. AMERICAN EXPORT ISBRANDTSEN LINES, INC., Defendant-Appellee, v. ATLANTIC & GULF STEVEDORES, INC., 3rd Party Defendant.
No. 72-1463.
United States Court of Appeals, Third Circuit.
Argued April 5, 1973.
Decided May 4, 1973.
George J. O’Neill, Philadelphia, Pa., for plaintiff-appellant.
John P. Penders, Marshall, Dennehey & Warner, Philadelphia, Pa., for defendant-appellee.
Before McLAUGHLIN, ADAMS and ROSENN, Circuit Judges.
OPINION OF THE COURT
ADAMS, Circuit Judge.
In this appeal, Robert J. Benson, plaintiff-appellant, a longshoreman who sustained serious injuries while working on a vessel, and who recovered what he believed to be an inadequate amount in the district court, contests the ruling of the trial judge permitting the jury to consider whether Benson was eontributo-rily negligent and thus, under admiralty law, subject to having his recovery reduced. Benson contends also that in the conduct of the damage part of the trial, the judge committed reversible error. We hold that it was error to allow the question of contributory negligence to go to the jury. Therefore, we reverse the district court in its denial of plaintiff’s motion for a directed verdict on the issue of contributory negligence and its reduction of the damage award based on the finding of contributory negligence.
Benson was injured on April 17, 1968, while helping to ready the N. S. Exchequer for cargo operations. The £. S. Exchequer, owned by defendant-appellee, American Export Isbrandtsen Lines, Inc., was berthed alongside a pier extending into the Delaware River from the Philadelphia shore. In preparing the S. S. Exchequer, Benson was working in the area of the forward-most hatch, the Number 1 hatch, on the shelter deck. As is the norm on freighters, the hatch was closed over with wooden hatch covers, boards about one foot wide and nine feet long, placed side by side, extending fore and aft. The ends of those boards rested, not on the edge of the hatch, but on two steel beams about three inches short of each edge. A third steel beam supported these boards at their midpoint. As part of the preparation, Benson was walking along the hatch cover, with two fellow workers, guiding into position a heavy steel plate being lowered by a crane. The steel plate was to be used to permit the operation of a forklift truck. One of the hatch covers suddenly “see-sawed” under Benson, flew up, struck the side of his head, and then fell through to a deck twenty feet below. Benson, by catching the boards on either side of the gap created by the now-fallen board, was able to keep from plunging the twenty feet himself. This hatch cover was never recovered. As a result of the mishap, Benson sustained serious back injuries, and subsequently brought suit in the district court.
The trial was bifurcated, the issue of liability being severed from the issue of damages. American Export conceded that the ship’s unseaworthiness was a cause of the injury, but contended that Benson’s own negligence contributed to his injury. After the presentation of the evidence relating to this allegation, Benson moved for a directed verdict on the issue of contributory negligence. This was denied by the trial court and the issue was submitted to the jury which found that plaintiff’s negligence was a 20% cause of his injury. Consequently, when the damage verdict was returned by the jury, it was reduced by one-fifth.
Contributory negligence is not a complete bar to recovery in an action based on unseaworthiness but a finding that a seaman, or one in his position, was contributorily negligent can be used to mitigate damages. As with the doctrine. in negligence actions, however, it is the burden of the defense to prove the contributory negligence of the plaintiff.
The parties advanced at trial several theories attempting to explain the board’s “see-sawing” action. Some of the theories postulated a defect that would be observable by the reasonably prudent longshoreman, others were bottomed on a latent defect. The trial judge held that, by adducing testimony that the defect might have been patent, the defense had supplied adequate evidence to avoid a directed verdict on the issue of contributory negligence. We disagree, and hold that the postulation of a series of theories does not satisfy the burden of proof required to permit an issue to be submitted to the jury. This is so especially when the article of evidence that might reveal the cause of the accident was not retrieved by the party bearing the burden of proof, and the evidence presented demonstrates that there could be alternative causes of the accident, some of which under these circumstances would be a basis for imposing liability, others of which would result in a decision adverse to the one carrying the burden.
The plaintiff contends that he was prejudiced when defense counsel was permitted to cross-examine Benson on compensation he received in violation of the “collateral source” rule. That rule provides that, in general, knowledge of receipt of workmen’s compensation, or similar benefits, should be kept from the jury, lest such data be used to diminish the plaintiff’s recovery. Here, however, the information concerning compensation benefits was introduced during cross-examination to refute the impression created by the plaintiff that he had very reluctantly submitted to a painful, exploratory back operation in order to cooperate with the physicians. Defendant, in refutation, attempted to show that Benson’s motivation was not a desire to cooperate with his doctors, but a fear of having his workmen^ compensation benefits terminated. Under these circumstances, we do not find that permitting this questioning constituted reversible error.
Benson further asserts that the trial judge’s repeated admonitions to his counsel to refrain from coaching the witnesses, and the ultimate holding that counsel was in contempt unfairly prejudiced the plaintiff. While our review of the transcript indicates some question whether counsel’s conduct was objectionable or contemptuous, we do not find that the trial judge’s warnings were so prejudicial as to constitute reversible error. Moreover, when counsel was advised that he was being held in contempt, it was done at sidebar, out of earshot of the jury. Therefore, we reject these contentions.
It is also suggested by Benson that by erroneously permitting the issue of contributory negligence to be submitted to the jury, the district court prejudiced the amount Benson ultimately recovered, beyond the percentage reduction directly attributable to the finding of contributory negligence. Since the trial was in two stages, the issue of damages was separated from the issue of liability. Thus, in considering the amount of the award the jury was not, at that time, focusing on the alleged contributory negligence of Benson. Rather, its award reflects nothing more or less than its attempt to calculate damages. Benson hypothesizes that the damage award would have been greater had the jury not been allowed in the first part of the trial to consider the possibility that Benson was contri'butorily negligent. To hold that such speculation requires a new trial on the issue of damages would be to put conjecture over consideration. This we decline to do.
Therefore, we reverse the district court insofar as it refused to direct a verdict on the issue of contributory negligence and reduced the damage award in consequence thereof. We remand the case to the district court for entry of a judgment in favor of the plaintiff, awarding the full amount found by the jury plus interest and costs. As to all other claims, we affirm the district court.
GERALD McLAUGHLIN, Circuit Judge
(dissenting).
The majority opinion asserts that upon the record of this appeal the trial judge committed legal error by refusing to conclude as a matter of law that the plaintiff-appellant was not eontributori-Iy negligent.
The court opinion puts the best possible face on its theory, but in view of the facts of the accident to the plaintiff it has taken on an impossible task in its self imposed proposition that appellant was completely free from contributory negligence. The court below did not claim that plaintiff was guilty of contributory negligence. It merely held that from the facts presented it was a jury question as to whether appellant was or was not guilty of contributory negligence. Admittedly, as stated in the court opinion that there was “the issue of contributory negligence”. The appeal record shows it to have been a very live issue which the district court rightly held was an important factual problem to be decided by the trial jury. The necessarily thin viewpoint that the question was one of law for the court is impossible to accept under the facts before us. I would affirm the judgment of the trial court.
. The distinction in maritime torts between unseawortliiness and negligence of the shipowner is not clear. For a full discussion of the doctrine of unseaworthiness, its origins and its differences from negligence, see e. g. Mitchell v. Trawler Racer, Inc., 362 U.S. 539, 550-570, 80 S.Ct. 926, 4 L.Ed.2d 941 (1960) (Frankfurter, J., dissenting).
. The doctrine of unseaworthiness was extended to protect longshoremen injured aboard ship in Seas Shipping Co. v. Sier-acki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099 (1946).
. Pope & Talbot v. Hawn, 346 U.S. 406, 74 S.Ct. 202, 98 L.Ed. 143 (1953).
. W. E. Hedger Transp. Corp. v. United Fruit Co., 198 F.2d 376, 379 (2d Cir.), cert. denied 344 U.S. 896, 73 S.Ct. 275, 97 L.Ed. 692 (1952).
. Among the possibilities raised were that the board was too short, that it was not properly resting on the steel beam, or that it was visibly rotted.
. These theories include the possibility that the board broke, that it was rotted beneath the metal cap at one end, that the middle beam was out of place, or that it was warped and shifted.
. Feeley v. United States, 337 F.2d 924, 926 (3d Cir. 1964). The basis of the rule is the refusal of the courts to permit the tortfeasor to be benefited by money or services received by the injured plaintiff from other sources intended to compensate plaintiff for his injury or loss.
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VENTURE INVESTMENT CO., INC., and James M. McPeek, Plaintiffs-Appellees, v. Paul A. SCHAEFER, a/k/a Paul Schaefer, Individually and d/b/a Continental Schools of America, Defendants-Appellants.
No. 72-1627.
United States Court of Appeals, Tenth Circuit.
May 10, 1973.
Dale Yoakum, Denver, Colo., for defendants-appellants.
Bernard Dan Steinberg, Denver, Colo., for plaintiffs-appellees.
Before HILL and BARRETT, Circuit Judges, and SMITH, District Judge.
Honorable Talbot Smith, United States District Judge, Eastern District of Michigan, sitting by designation.
HILL, Circuit Judge.
Venture Investment Company and its president, James M. McPeek, brought suit in Colorado federal district court against Paul A. Schaefer for fraudulent conduct and for violations of state and federal securities laws. Jurisdiction was founded on diversity of citizenship and the Securities Acts of 1933 and 1934. The trial court, after hearing all the evidence, determined that Schaefer had violated the Colorado securities laws, and awarded plaintiffs $9,990 plus $1,000 attorneys fees.
Schaefer operated a correspondence school in Englewood, Colorado, titled Continental Schools of America (CSA). On January 2, 1970, Schaefer sent MePeek, a Kansas citizen, a letter offering him a franchise with CSA in the Dallas-Houston region of Texas. Because this letter was instrumental in convincing appellees to purchase CSA franchises, we will set it out in detail. The letter began by glorifying CSA’s success in the correspondence business. It explained that CSA had been operating nearly 10 years and wrote up to $10,000 in business a month in an area no larger than the one intended for appellees. It suggested that appellees could reach that figure in as little as 60 days because CSA courses were “par excellence,” as attested by its license from the Colorado State Board of Education. The letter stated the result would be that from a monthly investment of around $150, nearly $6,000 could be generated in school contracts. To demonstrate the potential of CSA franchises, three pages of sales and profit projections were attached.
Appellees responded favorably and received a second letter which again expounded the virtues of CSA. This letter remarked that CSA was directed by a team of experienced, successful businessmen ; that in CSA’s effort to insure success, it hired the finest talent available in the Western United States to prepare its home study courses; and that as a result, franchisees could expect to reap around 45% net profits on all fully collected contracts.
Along with the second letter Schaefer sent a CSA brochure. This brochure told of Schaefer’s founding the company in 1959 and his making it a great success by selecting as his company officers businessmen who were officers and directors of successful companies prior to joining CSA. The brochure also stated that CSA unconditionally guaranteed a minimum sales quota. Finally, it asserted that CSA’s marketing program was so timely and effective that profits were unlimited.
Appellee MePeek was interested in the franchise so he visited Schaefer in Denver, Colorado. In reliance upon the aforementioned correspondence and conversations with Schaefer and his agents, ap-pellees purchased two franchise contracts for $10,700. The contracts granted ap-pellees exclusive rights over the Dallas-Fort Worth and the Houston areas, plus an option over the San Antonio area.
At this point problems arose. Schae-fer had promised to send a “sales training group” to assist appellees in their sales promotion, but no group appeared — ■ only Schaefer. He did not make his forty sales as provided in the two contracts. At most he generated eleven sales, and even then he failed to send ap-pellees their percentage from the sales. Several times Schaefer promised to help appellees rectify the existing problems, but this was never done.
Appellees finally gave up hope of ironing out their problems with Schaefer and sued in federal district court. Schae-fer’s testimony at trial indicated: that he did not know when the school was founded, but it became known as CSA in 1969; that CSA had no officers, but was a sole proprietorship owned by Schaefer; that no employees were directors of corporations prior to joining CSA, rather Schaefer used “director” to mean his employees directed the operations of other companys; and that his assertion in the letter of January 2, 1970, that a franchisee could reach figures of up to $10,000 in business a month within 60 days of start-up was based upon personal speculation rather than fact.
The trial court after hearing all evidence made the following relevant findings of fact: (1) CSA had been in business since 1969; (2) only eight other franchises had been sold and none enjoyed the monthly business promised by Schaefer; (3) the CSA courses had not been licensed by the State of Colorado; (4) CSA was basically a one-man operation and was not comprised of a team of successful businessmen; (5) Schaefer did not intend personally to secure the first twenty enrollments on each franchise; and (6) Schaefer knew his representations were false and intended ap-pellees to rely upon them.' The trial court therefore concluded the “franchises” were securities within the meaning of Colorado securities laws and were sold by use of misleading and untruthful statements.
We agree with the findings of fact and result reached by the trial court, but adopt another approach in reaching the same conclusion. The trial court found Schaefer’s misrepresentations to violate Colorado’s securities laws. We do not feel it necessary to determine the applicability of either the Colorado securities laws or the federal Securities Acts when it is clear from the evidence that Schaefer perpetrated common law fraud on appellees. Fraud as developed in the Colorado common law requires: concealment or misrepresentation of a material fact by the perpetrator; indifference or knowledge of the misrepresentation by the perpetrator; representation or concealment made with the intention that it be acted upon; and action on the misrepresentation or concealment resulting in damages. Morrison v. Goodspeed, 100 Colo. 470, 68 P.2d 458 (1937); Bemel Associates, Inc. v. Brown, 164 Colo. 414, 435 P.2d 407 (1967). All these elements are found in 'the present case. The evidence is replete with misrepresentations in Schaefer’s correspondence with McPeek. Although the trial court commented on appellees’ naiveté in taking Schaefer at face value, it nevertheless felt appellees relied on Schaefer’s representations in good faith and we find no error in this conclusion. It is apparent from the record that Schaefer had no intention of making appellees’ franchise a success. He promised them help in starting up the franchise but no real effort was made to follow through on this promise. Schaefer did generate a few enrollments but he failed to send appel-lees their percentage. The overall picture was one of fraud with the primary purpose being to divest appellees of their money.
Affirmed.
. Securities Act of 1933, 15 U.S.C. §§ 77b (1), 77e, 77k, 771, 77o, 77q, 77v; Securities Act of 1934, 15 U.S.C. § 78c (a) (10) and (11); 78j, 78aa; Rule 10b-5 of the Securities Exchange Commission, 17 C.F.R. § 240.10b-5.
. Colorado Licensing and Practice Act, C.R.S.1963,125-1-12 and 125-1-21.
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Cheryl WELLS, a minor by her father and next friend, Carroll G. Wells and Carroll G. Wells, Plaintiffs-Appellees, v. COLORADO COLLEGE, Defendant-Appellant.
No. 72-1390.
United States Court of Appeals, Tenth Circuit.
Argued and Submitted March 28, 1973.
Decided April 23, 1973.
Reed L. Winbourn, of Zarlengo, Mott & Carlin, Denver, Colo., for defendant-appellant.
John F. Bennett, of Bennett, Heinicke, Morrison & Holloway, Colorado Springs, Colo. (Howard Morrison, of Bennett, Heinieke, Morrison & Holloway, Colorado Springs, Colo., on the brief), for plaintiffs-appellees.
Before BREITENSTEIN and DOYLE, Circuit Judges, and KERR District Judge.
Sitting by designation.
WILLIAM E. DOYLE, Circuit Judge.
In this diversity action, the plaintiff, suing through her father, recovered a judgment against Colorado College in the amount of $150,000.00. In addition, her father, who was also maintaining an action in his own behalf for actual damages, recovered the sum of $15,742.43. The incident which gave rise to the injuries and to the lawsuit was an unusual one. Plaintiff was injured in the course of taking a judo lesson which was sponsored by the appellee college.
Plaintiff was shown to have resided in Illinois but was at the time enrolled as an undergraduate student at Colorado College. The judo class which the plaintiff was taking at the time of the injury had been arranged by the college as a self-defense measure for the students— there having been a number of incidents involving assaults which had occurred on the campus. The college employed two Colorado Springs police officers to conduct the classes. The students worked in pairs. After having received instruction, they practiced on one another. The particular exercise which allegedly produced the injury was a hip throw. The person executing the hip throw grasps the partner by the shoulders and turns quickly. By throwing the person grasped over the hip it causes her (or him) to lose balance. The person throwing eases the other to the mat. The plaintiff’s partner was unable to throw her and the policeman instructor demonstrated the throw on the plaintiff. She was thrown on her back but did not land on the mat. The two mats had, according to the evidence, come apart. Plaintiff’s back hit partly on the mat and partly on the floor.
Plaintiff testified to immediate awareness of back pain. She attempted to work out the injury by exercise and she also applied heat and rested it. None of this succeeded and although plaintiff tried to carry on normal activities including skiing, she was unable to do so and finally she visited an orthopedic surgeon, a Dr. Hauser, while on ■spring vacation at Evanston. He applied a body cast but this was also unsuccessful. Dr. Hauser diagnosed plaintiff’s injury as intervertebral disc in the lower back (between L4 and L5). During the following days she fell down while walking in her dormitory. She was unable (due to her weakened condition) to finish the semester. She returned home and thereafter was taken to Mayo Clinic. A laminectomy was performed on June 24, 1969. However, this operation did not alleviate her troubles. When she returned to school in the fall she continued to experience intense pain as a result of which further surgery became necessary. This was performed at the Mayo Clinic on February 6, 1970. Plaintiff was not released from the Clinic until March 29, 1970. This operation was more extensive than the first. The disc was operated on and the spine was fused at the place of the injury.
At the next semester plaintiff returned to school at Colorado College. The pain persisted but she completed the term and went on a summer trip to Europe. The trip was interrupted by severe back pains and muscle spasms causing plaintiff to be further hospitalized. After that she continued her studies at Northwestern University, finally completing them.
Plaintiff testified that as a result of her injury she lost a full year of college. The evidence also established that she had permanent disabilities. Although she had been an expert athlete excelling in ice skating, swimming, diving, skiing and horseback riding, she was unable, after the accident, to engage in anything more strenuous than walking. The pain was shown to have continued up to the time of trial. All of this, according to the evidence, had a serious psychological as well as physical effect on her.
In seeking a reversal of the very substantial judgments appellant raises numerous issues. Some of these are argued in the brief, while other points are merely mentioned. The points which are emphasized include:
1. The contention that it was error to instruct the jury on contributory negligence but for the court to refuse to instruct on voluntary assumption of risk.
2. Alleged excessiveness of the verdict.
3. Instructing on loss of earnings since plaintiff was a student.
4. Receiving medical bills after May 2, 1968 (immediately after the incident and following a supervening fall); instructing on expenditure for travel and subsistence of parents to Mayo’s.
5. Instructing on loss of enjoyment of life.
Appellant merely mentions the following:
6. Alleged error in denying the motions of appellant for a directed verdict, for a new trial and for judgment notwithstanding the verdict.
We have been unable to perceive merit in any of the above contentions and, therefore, we affirm the judgments.
I.
REFUSAL TO INSTRUCT ON ASSUMPTION OF RISK
The trial court charged the jury as to the standards applicable to contributory negligence, but determined that an instruction on assumption of risk was not appropriate. As noted, the appellant contends that it was prejudicial to refuse to give this requested instruction and this contention is the primary one advanced. This is not a case involving participation in a sport which activity is commonly associated with the assumption of risk doctrine. Rather, the plaintiff was participating in a scheduled class and was doing so for a very practical reason. But even if we were to consider it as a sport, the evidence presented would still be deficient to support assumption of risk because it is not shown that the plaintiff anticipated an extraordinary hazard such as that to which she was subjected. She had a right to expect that she would be thrown on the mat and not on the hardwood floor.
It is the law of Colorado, of course, which governs the question which we now consider, see Askin v. Dalgarno, 293 F.2d 424 (10th Cir. 1961), and the trial court’s view of state law within its district is to be upheld unless it is clearly erroneous.
The Supreme Court of Colorado considered this very question in Summit County Dev. Co. v. Bagnoli, 166 Colo. 27, 441 P.2d 658, 661-662 (1968). The court there held that the important aspects of assumption of risk are knowledge or awareness of a risk assumed and voluntary participation in it. The court in commenting on the extent of knowledge required to support assumption of risk quoted from Restatement of the Law of Torts Second 496, which states that the plaintiff must know the existence of the risk and must appreciate its unreasonable character. See also Appel-hans v. Kirkwood, 148 Colo. 92, 365 P.2d 233 (1961); Prosser, Law of Torts 461, 462 (3d ed. 1964).
Instruction on contributory negligence and assumption of risk given in the same case tend to confuse rather than to enlighten. See Summit County Dev. Co. v. Bagnoli, supra. A juror is apt to consider assumption of risk as a bar to recovery for an injury incurred in an activity such as that at bar regardless of whether the risk was one about which the plaintiff was aware or not. Thus, in a skiing case such as the Colorado Supreme Court had before it in Summit County Dev. Co. v. Bagnoli, supra, the jury might find that the plaintiff had assumed the risk by participating in the activity. Similarly here a jury could conceivably jump to the mistaken conclusion that one who takes part in judo lessons accepts all hazards seen and unseen. Accordingly, we are of the opinion that sound reason existed for the trial court’s rejection of this instruction.
II.
A. THE ALLEGED EXCESSIVENESS OF THE VERDICT
Appellant levels its attack against the award in the amount of $150,000.00 to appellee Cheryl Wells, contending that this amount was excessive in light of the injuries suffered and the extent of permanent disability. In order for this court to set aside the jury award it would have to be convinced that the jury was guilty of an abuse of discretion and the verdict was the result of bias, prejudice or passion. See 3 Barron & Holtzoff (Wright ed.) 1302.1. Such bias, prejudice or passion can be inferred from excessiveness. Earl W. Baker & Co. v. Lagaly, 144 F.2d 344, 347 (10th Cir. 1944). However, a ver-diet will not be set aside on this basis unless it is so plainly excessive as to suggest that it was the product of passion or prejudice on the part of the jury. See Snowden v. Matthews, 160 F.2d 130, 131 (10th Cir. 1947).
In the case at bar the injury was unquestionably severe. Notwithstanding two operations, the condition persisted and undisputedly plaintiff’s activities have been curtailed. Considering the duration time wise of her disability, the pain and suffering involved and her loss of one year of schooling, together with the fact that, at least from the indications, she is permanently disabled, we would not be justified in setting aside the award as excessive. The most that' can be said is that it is on the high side, but abuse of discretion is not apparent.
B. LOSS OF EARNINGS
Nor did the court err in instructing the jury on the loss of earnings, past and future. It is true that the evidence established that the plaintiff had not been employed — that she had been a student. But even assuming that the plaintiff had not established in specific terms her earning capacity, from that fact it does not follow that the jury was not entitled to consider her training, her athletic prowess, her personality before and after and other factors from which it was to be reasonably concluded that she had potential earning capacity and from concluding also that her earning capacity had been and now has been impaired. Cf. Thompson v. Tartler, 166 Colo. 247, 443 P.2d 365 (1968). See also Annot. 18 A.L.R.3d § 2 at 96.
C. LOSS OF ENJOYMENT
The trial court’s charge contained an instruction on past and future “pain, suffering and mental anguish.” The judge then went on to say:
In this connection you may take into account, and you should take into account, plaintiff’s interests and past way of life and you may allow for any loss of enjoyment of life for any emotional strain or any mental suffering which you find proximately resulted from the negligence of the defendant or its agents.
Accordingly, the element of loss of enjoyment was tied to emotional strain or mental suffering. As we view this, it was more an explanation of mental suffering than allowance of damages for loss of enjoyment of life as such.
The Supreme Court of Colorado has neither approved nor disapproved loss of enjoyment as an element, and so even if the instruction in question had not submitted loss of enjoyment as a part of pain and suffering, we are not saying that the instruction would have been invalid. It is unnecessary to pass on that. We note that a few cases have disallowed recovery for loss of enjoyment of life as a separate element of damages because of its vagueness. Nevertheless, a number of courts have recognized it. See the recent note in 15 A.L.R.3d 506, 511, 513. A number of courts have held that loss of the capacity to enjoy life, resulting from personal injuries, is a proper element of damages, separate and distinct from pain and suffering. See 15 A.L.R.3d § 5 at 514.
Accordingly, we are unable to agree with appellant that the instruction was erroneous.
III.
DENIAL OF MOTION FOR JUDGMENT NOTWITHSTANDING THE VERDICT
Notwithstanding that the appellee has not argued the present issue, we have carefully considered the evidence and are of the opinion that the plaintiff made out a prima facie case of negligence because the activity was a hazardous one; it was being performed by an expert and his duty of care was commensurate with the high degree of hazard and the likelihood of injury if the judo throw went awry.
We are of the opinion that the judgments of the district court should be and the same are hereby affirmed. It is so ordered.
. Plaintiff’s injury occurred on February 21, 1968, and according to her testimony she was continuing to suffer pain and disability on the date of the trial which was March 2, 1972.
. The author there states :
“Knowledge of the risk is the watchword of assumption of risk.” Under ordinary circumstances the plaintiff will not be taken to assume any risk of either activities or conditions of which he is ignorant. Furthermore, he must not only know of the facts which create the danger, but he must comprehend and appreciate the danger itself. “A defect and the danger arising from it are not necessarily to be identified, and a person may know of one without appreciating the other.” The standard to be applied is, in theory at least, a subjective one, geared to the particular plaintiff and his situation, rather than that of the reasonable man of ordinary prudence who appears in contributory negligence. If because of age or lack of information or experience, he does not comprehend the risk involved in a known situation, he will not be taken to consent to assume it. His failure to exercise ordinary care to discover the danger is not properly a matter of assumption of risk, but of the defense of contributory negligence.
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f2d_478/html/0163-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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UNITED STATES of America, Plaintiff-Appellee, v. Sam PRESLEY, Sr., et al., Defendants-Appellants.
No. 71-3577.
United States Court of Appeals, Fifth Circuit.
May 4, 1973.
Rehearing Denied June 27, 1973.
Roland J. Mestayer, Jr., Pascagoula, Miss.,' Thomas M. Haas, Mobile, Ala., for defendants-appellants.
Robert Hauberg, U. S. Atty., Jackson, Miss., Paul G. Kratzig, Sp. Atty., U. S. Dept, of Justice, New Orleans, La., Sidney M. Glazer, Shirley Baecus-Lobel, U. S. Dept, of Justice, Washington, D. C., for plaintiff-appellee.
Before JOHN R. BROWN, Chief Judge, and GODBOLD and SIMPSON, Circuit Judges.
SIMPSON, Circuit Judge:
In July, 1970, appellants and co-defendant Pat Presley, all Mississippi residents at the time of the alleged offenses, were indicted for offenses in connection with the operation of a gambling casino in Mississippi on various dates between July, 1965, and January, 1966. The appellant, Sam Presley, Sr. owned the Sage Patch Casino in Jackson County, Mississippi, and the other appellants were his employees. Count One charged a violation of 18 U.S.C. Section 371, by conspiring to use a facility of interstate commerce for the purpose of managing, establishing, carrying on, facilitating or promoting illegal gambling activities in violation of 18 U.S.C. Section 1952. Counts Two through Eight charged substantive violations of Section 1952. For purposes of this appeal, appellants admit that illegal gambling activities were conducted and that the interstate facility employed to promote their gambling activities was the collection by use of the mails, “of” out of state checks given them by their customers and deposited in a Mississippi bank.
Appellants were arraigned on August 10, 1970, and pled “Not Guilty” to all counts of the indictment. Various motions thereafter filed by appellants were heard and overruled in January, 1971, by the district judge in a written opinion. On March 9, 1971, appellants and their co-defendant Pat Presley were allowed to withdraw their pleas of “Not Guilty” and enter pleas of nolo contendere. Pursuant to Fed.R.Crim.P. II the court addressed each defendant personally in an effort to determine that the nolo con-tendere pleas were made voluntarily and with understanding of the nature of the charge and the consequences of the plea. Based upon the pleas of nolo contendere, and satisfied as to compliance with Rule 11, the court made a finding of “Guilty,” passed the case for sentencing at a future date, and requested a pre-sentence report.
On April 5, 1971, the United States Supreme Court by its opinion in Rewis v. United States, 1971, 401 U.S. 808, 91 S.Ct. 1056, 28 L.Ed.2d 493; interpreted Section 1952 as applying to situations which involved more than “merely conducting the illegal operation,” not where the interstate activity was purely incidental to the illegal operation. 401 U.S. at 813, 91 S.Ct. at 1060, 28 L.Ed.2d at 497. When Rewis came to the attention of their counsel, appellants filed a motion in the district court to dismiss the indictment on the ground of failure to charge a federal offense, relying on Rew-is. Hearing on the motion was set for November 8, 1971. In the meantime, notice was sent to each defendant to appear for sentencing November 9, 1971.
The hearing on the motion to dismiss was held as scheduled and the district court ruled the next day that appellants’ reliance on Rewis was misplaced and thus denied the motion. Immediately thereafter, still prior to sentencing, each defendant requested leave of court to withdraw his plea of nolo contendere substitute the plea of not guilty and an opportunity to present facts and legal argument in support of his motion. These requests were denied on the apparent basis that the assertion that a recent decision might affect the legality of the indictment was not sufficient ground to warrant further delay or withdrawal of pleas knowingly and voluntarily entered. Sentence was then imposed.
Following sentencing appellants filed a number of motions, of which the most significant here was a request for the court to reconsider its denial of their motions to substitute pleas of not guilty for their nolo contendere pleas. The district judge denied all motions and appellants appeal. We reverse.
Rule 32(d), Fed.R.Crim.P., provides safeguards against the consequences of an improvident plea of guilty or nolo contendere, as follows:
“Withdrawal of Plea of Guilty. A motion to withdraw a plea of guilty or of nolo contendere may be made only before sentence is imposed or imposition of sentence is suspended; but to correct manifest injustice the court after sentence may set aside the judgment of conviction and permit the defendant to withdraw his plea.”
This rule does not confer an absolute right to withdraw a plea of guilty or nolo contendere before the imposition of sentence, but leaves to the sound discretion of the trial judge the decision whether a defendant has met his burden of showing adequate cause for permitting withdrawal of the plea, as we have held in a number of cases. United States v. Valdez, 5 Cir. 1971, 450 F.2d 1145; United States v. Arredondo, 5 Cir., 1971, 447 F.2d 976; Kirshberger v. United States, 5 Cir. 1968, 392 F.2d 782. We have adhered nonetheless to the general principle that Rule 32(d) should be construed liberally in favor of the accused when a motion is made to withdraw before sentence is imposed. Kirshberger v. United States, supra, at 784, and cases cited therein. The right of jury trial is involved and that right has long held a favored place in our law.
As the rule itself implies, there is a different standard for granting the motion prior to sentencing as compared to after sentencing. Wrote Chief Judge Haynsworth of the Fourth Circuit in United States v. Roland, 4 Cir. 1963, 318 F.2d 406, 409:
“Such motions before sentence should be allowed with great liberality, but after judgment and the imposition of the sentence, the Rule gives the Court the power to grant such a motion if such action appears to be necessary ‘to correct manifest injustice’ ”.
We do not have a case where a defendant based his i*equest to change his plea on a mistake of fact, e. g. Arre-dondo, or on mere indecisiveness, e. g. Valdez, or on an intuitive skepticism as to whether a conviction could be obtained, or for alleged promises that remained unfulfilled when the defendant earlier assured the court that no promises had ever been made, e. g. Kirshberger. In these and similar situations reversals of the trial judge’s discretion are rare. Rather, this appeal goes to right of the district court even to hear the case. If the Rewis holding governs appellants’ factual situation then their offenses were beyond the limits of the criminal jurisdiction which Congress intended to confer on the federal courts. The Legislative history of Section 1952, commonly referred to as the Travel Act, has been interpreted to mean that sensitive federal-state relationships were not to be altered and that essentially minor state offenses were not to be transformed into federal felonies and thus over-extend federal police resources. The purpose of Congress, instead, was to reach criminal activities extending beyond the borders of a single state by providing federal assistance in situations where local law enforcement is likely to prove ineffective. Rewis, supra; United States v. Altobel-la, 7 Cir. 1971, 442 F.2d 310; United States v. McCormick, 7 Cir. 1971, 442 F.2d 316. In short, if this interpretation of Section 1952 fits appellants’ situation, they were refused their expressed desire to withdraw their plea of nolo contendere and to plead not guilty and thereupon sentenced for acts which may not have constituted a federal offense.
While guilty or nolo contendere pleas are generally viewed as a waiver of non-jurisdictional defects, including the right to assert certain constitutional rights, “[f]or this waiver to be valid under the Due Process Clause, it must be ‘an intentional relinquishment or abandonment of a known right or privilege.’ Johnson v. Zerbst, 304 U.S. 458, 464, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938).” McCarthy v. United States, 1969, 394 U.S. 459, 466, 89 S.Ct. 1166, 1171, 22 L.Ed.2d 418. In De Leon v. United States, 5 Cir. 1966, 355 F.2d 286, 289, we said:
“Courts must always be diligent to ascertain whether a plea of guilty was understandingly made, and when it appears before sentencing that such a plea was entered by a defendant who did not understand the charges or acted as a result of mistake, it is an abuse of discretion not to permit the plea to be withdrawn.” (Emphasis in the original.)
When the Rewis interpretation of the Travel Act was brought to the attention of the trial judge, it should have been clear that the admitted facts may not have been sufficient to warrant a federal charge of violation of Section 1952. There was no admission as to the nature or extent of appellants’ reliance on the use of the interstate facility in aid of their unlawful conduct. Altobella, supra, holds that the use of the interstate collection process for cheeks must be more than “purely incidental” to appellants’; illegal state activities. 442 F.2d at 315. Here, prior to sentencing, appellants called to the district court’s attention a Supreme Court decision which may substantially affect their legal rights, but was unknown to them— because not yet rendered — at the time they pleaded nolo contendere. This did not constitute such an “intentional relinquishment or abandonment of a known right or privilege” as to overcome the presumption against waiver of fundamental constitutional rights.
Upon a jury trial appellants may be able to persuade the court as a matter of the law that they come under the Rewis protective umbrella. Failing that, they would be entitled to have the question submitted for jury determination under appropriate instruction. At the least they were entitled to try to make a record in this respect.
Appellants raised the issue of the extent of coverage of Section 1952 at the earliest possible time after that defense became available to them, before sentence was actually imposed. There is no indication that the Government has been substantially prejudiced by reliance upon their pleas. We hold therefore that appellants should have been permitted to withdraw their pleas of nolo contendere and to go to trial before a jury on pleas of not guilty. The district court is reversed for its refusal to permit this to be done.
The indictment is not susceptible to outright dismissal at this stage because the facts have not been sufficiently developed to determine the extent and significance of the crossing of state lines to the furtherance of the operations of the illegal gambling casino. The gambling operation in Rewis was frequented by out-of-state bettors; there was no evidence that the operators had themselves used an interstate facility to further their activities. However, the Supreme Court said, “Still, there are cases in which federal courts have correctly applied Section 1952 to those individuals whose agents or employees cross state lines in furtherance of illegal activity. . . .” 91 S.Ct. at 1060. The Seventh Circuit in Altobella, 442 F.2d at 313, found there was “no evidence in the record of any actual or intended use of the mails by appellants with the single exception of their acceptance of their victim’s offer to cash a check for $100 at his hotel.” Thus, it is for the jury to weigh the number of incidents proved in which appellants employed interstate commerce to advance illegal activities and the degree of their significance to the operation of the casino. When those facts are developed, the trial court may be able to determine as a matter of law that no offense is made out under Section 1952, or it may be necessary to submit this issue to the jury.
Appellants raise several other grounds of appeal, none meritorious. We make brief reference to two of these contentions for the guidance of the trial court in the event of re-trial.
The claim is made that prejudicial error occurred in the denial below of motions to suppress statements given by appellants Sam Presley, Sr., Machefsky and Charles Ray Presley to agents of the Internal Revenue Service.
Machefsky and Charles Ray Presley appeared in response to administrative subpoena, under Sec. 7602 of the Internal Revenue Code of 1954, to testify as to Sam Presley, Sr.’s tax liability. The district court correctly held on the evidence produced that the statements were given voluntarily and in the presence of retained counsel. They were not misled as to the nature of the investigation. Donaldson v. United States, 1971, 400 U.S. 517, 91 S.Ct. 534, 27 L.Ed.2d 580, United States v. Tonahill, 5 Cir. 1970, 430 F.2d 1042, 1044-1045. Nor were the agents under duty to warn these appellants of the possibility of their prosecution under Section 1952 when the possible use of interstate facilities became apparent during the interview. Hoffa v. United States, 1966, 385 U.S. 293, 303, 87 S.Ct. 408, 17 L.Ed.2d 374. United States v. Prudden, 5 Cir. 1970, 424 F.2d 1021, 1025-1033; United States v. Stribling, 6 Cir. 1971, 437 F.2d 765, 772; United States v. Squeri, 2 Cir. 1968, 398 F.2d 785, 788.
As to Sam Presley, Sr. he attended the August 11 meeting of his own volition, accompanied by his accountant, as he had several other meetings with Internal Revenue Service agents earlier. He was not under compulsion either to attend or to 'make any statement. No Fifth Amendment Miranda situation was present. See United States v. Prudden, supra, 424 F.2d at 1025-1031.
Appellants further complain on Sixth Amendment speedy trial grounds, of the more than four years delay occurring between the date alleged as the end of the conspiracy as well as the dates of the substantive offenses, and the date of indictment.
This point is not well taken, inasmuch as no attempts were ever made by appellants to seek speedier trial, no prejudice is shown from delay, and the offenses occurred well within the statute of limitations. Barker v. Wingo, 1972, 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101; United States v. Marion, 1971, 404 U.S. 307, 92 S.Ct. 455, 30 L.Ed.2d 468; Kroll v. United States, 5 Cir. 1970, 433 F.2d 1282, 1286, cert. denied 1971, 402 U.S. 944, 91 S.Ct. 1616, 29 L.Ed.2d 112; United States v. Seay, 5 Cir. 1970, 432 F.2d 395, 403; United States v. Grayson, 5 Cir. 1969, 416 F.2d 1073, 1076-1077, cert. denied, 396 U.S. 1059, 90 S.Ct. 754, 24 L.Ed.2d 753 (1970) ; Bruce v. United States, 5 Cir. 1965, 351 F.2d 318, cert. denied, 384 U.S. 921, 86 S.Ct. 1370, 16 L.Ed.2d 441 (1966).
Reversed.
. Miss.Code 1942 Ann. tit. 11, eh. 1, Sections 2190 & 2192, classifies gambling as a misdemeanor.
. § 1952. Interstate and foreign travel or transportation in aid of racketeering enterprises
(a) Whoever travels in interstate or foreign commerce or uses any facility in interstate or foreign commerce, including the mail, with intent to—
(1) distribute the proceeds of any unlawful activity; or
(2) commit any crime of violence to further any unlawful activity; or
(3) otherwise promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on, of any unlawful activity,
and thereafter performs or attempts to perform any of the acts specified in sub-paragraphs (1), (2), and (3), shall be fined not more than $10,000 or imprisoned for not more than five years, or both.
(b) As used in this section “unlawful activity” means (1) any business enterful activity” means (1) any business prise involving gambling, liquor on which the Federal excise tax has not been paid, narcotics, or prostitution offenses in violation of the laws of the State in which they are. committed or of the United States, or (2) extortion, bribery, or arson in violation of the laws of the State in which committed or of the United States.
te) Investigations of violations under this section involving liquor or narcotics shall bo. conducted under the supervision of the Secretary of the Treasury.
Added Pub.L. 87-228, § 1(a), Sept. 13, 1961, 75 Stat. 498, and amended Pub. L. 89-68, July 7, 1965, 79 Stat. 212.
Subsequent to appellants’ indictment, Section 1952 was amended to cover the Controlled Substances Act, Title 21» U.S.C. Chapter 13, Subchapter I, Secs. 801-904, inclusive. The amendment in no way affects this case. It reads :
§ 1952. Interstate and foreign travel or transportation in aid of racketeering enterprises * * * * *
(b) As used in this section “unlawful activity” mean (1) any business enterprise involving gambling, liquor on which the Federal excise tax has not been paid, narcotics or controlled substances (as defined in section 102(6) of the Controlled Substances Act), or prostitution offenses in violation of the laws of the State in which they are committed or of the United States, or (2) extortion, bribery, or arson in violation of the laws of the State in which committed or of the United States.
(c) Investigations of violations under this section involving liquor shall be conducted under the supervision of the Secretary of the Treasury. As amended Pub.L. 91-513, Title II, § 701 (i) (2), Oct. 27, 1970, 84 Stat. 1282.
. Rule 11, Federal Rules of Criminal Procedure :
A defendant may plead not guilty, guilty or, with the consent of the court, nolo contendere. The court may refuse to accept a plea of guilty, and shall not accept such plea or a plea of nolo contendere without first addressing the defendant personally and determining that the plea is made voluntarily with understanding of the nature of the charge and the consequences of the idea. If a defendant refuses to plead or if the court refuses to accept a plea of guilty or if a defendant corporation fails to appear, the court shall enter a plea of not guilty. The court shall not enter a judgment upon a plea of guilty unless it is satisfied that there is a factual basis for the plea.
As amended Feb. 28, 1966, Eff. July 1, 1966.
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f2d_478/html/0169-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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UNITED STATES of America, Appellee, v. Kevin Patrick FORD, Defendant, Appellant.
No. 72-1376.
United States Court of Appeals, First Circuit.
Argued March 6, 1973.
Decided May 14, 1973.
Lawrence E. Katz, Cambridge, Mass., by appointment of the Court, with whom Haroz, Katz, Rockwell & Sager, Cambridge, Mass., was on brief, for appellant.
Robert B. Collings, Asst. U. S. Atty., with whom James N. Gabriel, U. S. Atty., was on brief, for appellee.
Before COFFIN, Chief Judge, ALD-RICH and McENTEE, Circuit Judges.
McENTEE, Circuit Judge.
This is an appeal from a conviction under 50 U.S.C. App. § 462 for refusing to submit to induction into the Armed Forces. Appellant contends that the validity of his induction order was vitiated by defective Selective Service procedures in processing his request for conscientious objector classification (I-O). For the reasons stated below, we affirm.
Appellant, Kevin Patrick Ford, first registered with Local Board No. 67 in Saugus, Massachusetts on August 7, 1967. After having had a series of classifications which we need not recount here, he was placed in Class I-A on September 8, 1970. On September 30, appellant submitted a written request for SSS Form 150 (Special Form for Conscientious Objector). This form was issued to him on the same date and was returned by him to his local board on October 29, 1970. In completing Form 150, appellant declined to sign either Statement A or B under Series I of the questionnaire, entitled “Claim for Exemption.” These statements provide the registrant with an opportunity to claim exemption from combatant service only, or from both combatant and non-combatant service, on the basis of a religiously grounded opposition to “war in any form.” Instead, appellant stated that “[a]s a Selective Conscientious Objector, I feel that neither of the two statements apply to me.” In elaborating the beliefs on which he based his claim to exemption, appellant reiterated that he was a selective conscientious objector and stated that his religious convictions prevented him from participating in “a war I believe to be unjust.” Appellant’s explanation of his beliefs also included the following statement:
“From my own perspective of the theory of proportionality, I firmly believe that the loss of human life, the human suffering, the atrocities committed by both sides, and the total destruction of much of the Vietnamese countryside, outweigh whatever vague good may or may not come from our involvement in Southeast Asia.
“With these as my moral and religious beliefs, I can in no way justify to God, or to myself, my participation, in any form, in the war effort in Southeast Asia.”
In addition to his Form 150, appellant submitted various letters of recommendation to the local board in support of his claim. Virtually all of these letters made some reference to the selective nature of his conscientious objection, i. e., his opposition to the war in Vietnam.
On November 17, 1970, appellant appeared before his local board for a courtesy interview. Without his knowledge, a summary of this meeting was prepared by the local board’s Executive Secretary and was placed in his file. He was never provided with a copy of this summary, which read as follows :
“Registrant was questioned as to his views and stated his stand that he was a Selective Conscientious Objector. He claimed that as a Catholic he didn’t believe that the war in Vietnam was just. The local board voted unanimously to classify the registrant in Class I-A.”
Following this interview, the local board reopened Ford’s classification and, without -stating any reasons for its action, reclassified him I-A. He thereupon notified the local board that he chose to exercise his right to a personal appearance. This second meeting with the board was held on January 26, 1971. A summary was again prepared by the Executive Secretary and was this time signed by Ford. A copy of the summary was placed in his file and read as follows:
“Registrant was questioned by the local board. Claimed as a Roman Catholic it is his right to feel as he does. Claimed that war is Evil and takes away the dignity of Human Beings. Would rather go to jail than to war. Decided to become a Conscientious Objector during the past year. Objects to participation in the Vietnam War — a particular war .... Board voted unaninimously [sic] to classify registrant in Class I-A.”
In reaffirming appellant’s I-A classification, the local board once again did not state any reasons for its denial of his conscientious objector claim. After receiving notification of the local board’s action, Ford took an administrative appeal. His file was accordingly forwarded to the appeal board on February 25, 1971.
Prior to the appeal board’s consideration of appellant’s claim, the clerk of the board prepared a summary of his case consisting solely of the words “selective C.O.” Neither this summary nor any part of his file was made available to the members of the board before their meeting of March 26, 1971. At that meeting, the appeal board considered his claim and voted unanimously to classify him I-A. No reasons were given for its action. Appellant subsequently failed to report for induction on May 6, 1971, and his indictment, trial and conviction followed.
Ford’s primary contentions on appeal relate to the failure of both draft boards to state their reasons for denying him conscientious objector status. In United States v. Edwards, 450 F.2d 49 (1st Cir. 1971), we held that where a prima facie case for conscientious objector classification has been stated, the local board must inform the registrant of its reason for denying his claim. Appellant first argues that his presentations to the local board made out such a prima facie claim, and that a statement of reasons was therefore required under Edwards. He further contends, however, that even if a prima facie claim was not made out, the local board’s de facto reopening of his classification was sufficient to bring the reasons requirement into play. Finally, he urges us to expand our holding in Edwards beyond the realm of prima facie claims to require a statement of reasons whenever a request for conscientious objector classification is denied by a local board.
We find considerable force in appellant’s third argument, which is supported both by logic and some authority. See United States v. Stephens, 445 F.2d 192, 199-200 (3d Cir. 1971) (Aldisert, J., concurring); United States v. Auger, 337 F.Supp. 342 (N.D.Cal.1972); United States v. Reese, 331 F.Supp. 1088 (N.D.Ga.1971); cf. SEC v. Chenery Corp., 332 U.S. 194, 196-197, 67 S.Ct. 1575, 91 L.Ed. 1995 (1947). The leading Supreme Court case concerning the reasons requirement, Clay v. United States, 403 U.S. 698, 91 S.Ct. 2068, 29 L.Ed.2d 810 (1971), may also be read as providing support for appellant’s viewpoint. But see Fein v. Selective Service System, 405 U.S. 365, 380, 92 S.Ct. 1062, 31 L.Ed.2d 298 (1972). Nevertheless, a number of considerations prevent us from accepting appellant’s invitation to depart from our holding in Edwards. First, our opinion in that case distinguished our earlier decision in United States v. Curry, 410 F.2d 1297 (1st Cir. 1969), precisely on the ground that, in Curry, a prima facie case for exemption had not been made out. Thus, the clear import of Edwards was that a statement of reasons would not be required in the absence of a prima facie claim. This was a proposition on which draft boards within this circuit were entitled to rely, and we would have difficulty in now ruling that they were incorrect in doing so. Nevertheless, we might undertake such a holding if it were necessary to effectuate a rule of law more in accordance with proper administrative procedure than the one we originally laid down in Edwards. In December of 1971, however, the Selective Service ■ System amended its own regulations to require that a statement of reasons be recorded in a registrant’s file whenever he is placed in a class other than the one he has requested. 32 C.F.R. 1623.4(c) (1972). In view of this amendment, the only effect of our departing from Edwards would be to vitiate an uncertain number of Selective Service prosecutions merely because of a local board’s reliance on a decision of this court. Moreover, the federal courts of appeals have been virtually unanimous in limiting the applicability of the reasons requirement to cases where a prima facie claim has been made out. See, e. g., Cale v. Volatile, 465 F.2d 1110 (3d Cir. 1972); United States v. Heigl, 455 F.2d 1256 (7th Cir.), cert. denied, 406 U.S. 925, 92 S.Ct. 1796, 32 L.Ed.2d 127 (1972) ; United States v. Wood, 454 F.2d 765 (4th Cir. 1972); United States v. Stetter, 445 F.2d 472 (5th Cir. 1971); United States v. Haughton, 413 F.2d 736 (9th Cir. 1969); but see United States v. Lenhard, 437 F.2d 936 (2d Cir. 1970) (no mention made of prima facie prerequisite). In view of these authorities, and the considerations discussed above, we hold that appellant’s draft boards were not obligated to state their reasons for denying his conscientious objector claim unless his entitlement to such classification was prima facie established.
Turning then to the prima facie validity of appellant’s application for conscientious objector status, we find that his claim clearly failed to meet the statutory criteria for exemption. See 50 U.S.C. App. § 456(j). In order to meet these standards, a registrant must be opposed to war in any form, Gillette v. United States, 401 U.S. 437, 91 S.Ct. 828, 28 L.Ed.2d 168 (1971), on the basis of “religious training and belief” as that term has been construed in United States v. Seeger, 380 U.S. 163, 85 S.Ct. 850, 13 L.Ed.2d 733 (1965) and Welsh v. United States, 398 U.S. 333, 90 S.Ct. 1792, 26 L.Ed.2d 308 (1970). We think that the appellant has indisputably failed to meet the first of these requirements; rather, by his own characterization, he is a “selective conscientious objector.” Nowhere in any of the documents submitted to the local board in support of his claim was there a clear statement of his opposition to war in any form. On the contrary, appellant’s Form 150 unambiguously limited the scope of his conscientious objection to the war in Vietnam and other wars which he thought to be unjust, and the supporting letters written in his behalf were totally consistent with this limitation. While his counsel has attempted to portray several of his isolated statements in his Form 150 as indicating a possibly universal opposition to war, we think that the form, read as a whole, presents an absolutely clear instance of selective conscientious objection. Furthermore, we do not believe that the statements contained in the summary of Ford’s personal appearance before his local board suffice to cure the deficiencies of his Form 150. That summary quotes appellant to the effect that “war is [e] vil” and that he “[w]ould rather go to jail than to war.” The summary also contains the notation, however, that he “[ojbjeets to participation in the Vietnam War — a particular war.” In view of the total lack of ambiguity in his Form 150, we will not contrive a pri-ma facie claim from these fragmentary comments.
Appellant contends, however, that even if a prima facie claim was not made out, a statement of reasons was still required in light of the local board’s reopening of his classification. He bases this argument upon the provisions of 32 C.F.R. 1625.4 and the Solicitor General’s confession of error in Joseph v. United States, 405 U.S. 1006, 92 S.Ct. 1274, 31 L.Ed.2d 473 (summary disposition) (1972). The above regulation provides in relevant part:
“When a registrant files with the local board a written request to reopen and consider anew the registrant’s classification and . . . the local board is of the opinion that such facts, if true, would not justify a change in such registrant’s classification, it shall not reopen the registrant’s classification.” (Emphasis added.)
Appellant thus argues that, since the local board was expressly prohibited from taking such action in the absence of a prima facie case for exemption, the presumption of administrative regularity now requires us to treat his claim as prima facie valid for purposes of applying the reasons requirement. This was essentially the position taken by the Solicitor in Joseph. In that ease, the Solicitor conceded that a statement of reasons was necessary under similar circumstances, although he maintained that the petitioner had not stated a prima fa-cie claim and that such a claim would ordinarily be the prerequisite to applying the reasons requirement. The government now seeks to distinguish Joseph, however, on a ground suggested by the Solicitor’s memorandum in that case. See Joseph v. United States, supra, Memorandum for the United States at 20-21. The government’s argument rests, rather anomalously, on its concession that the record reveals no basis in fact for questioning the sincerity of Ford’s beliefs. This being the case, the government reasons, we can know with certainty that the local board ultimately rejected appellant’s claim because of his failure to meet the statutory criteria for exemption. Since the local board could not have believed that a prima facie claim existed in reopening his classification, the syllogism continues, the presumption of administrative regularity is rebutted and Joseph thereby distinguished.
In all candor, we are not favorably impressed by this reasoning which, in our view, borders on the metaphysical. Given the fact that a local board has improperly reopened a classification to consider a non-prima facie claim, we can attach no importance to whether this action was taken in clear disregard of the regulations or because the local board erroneously believed that a prima facie case had been stated. Nevertheless, we cannot adopt appellant’s position and reverse his conviction on this ground. Notwithstanding, the Solicitor’s memorandum in Joseph, we are unable to perceive any logical connection between the reasons requirement as laid down in Edwards and the technical procedures followed by a local board in denying a conscientious objector claim. When we adopted the reasons requirement in Edwards, we emphasized that a registrant must be aware of the basis for the local board’s rejection of his claim if he is fo meaningfully exercise his right to an administrative appeal. We distinguished our earlier decision in Curry, however, on the ground that the non-prima facie registrant would not be prejudiced by an absence of reasons, since he would be unable, in any event, to submit additional and consistent information to the appeal board in support of his claim. If prejudice is indeed absent in this latter •situation, it is not supplied by the local board’s erroneous reopening of the registrant’s classification. Since the Supreme Court did not write an opinion in Joseph, but merely remanded for reconsideration in light of the Solicitor’s position, we are not bound by his reasoning in that case. Accordingly, we find appellant’s arguments on this point to be without merit.
Appellant also argues for reversal on the basis of the allegedly inadequate procedures followed by the appeal board in evaluating his request for conscientious objector status. First, he contends that the appeal board in effect failed to give de novo consideration to his classification by improperly relying on a summary of his case prepared by the board’s clerk and by devoting an average of only sixty-four seconds to each case it considered at its March 26 meeting; second, he argues that his appeal was prejudiced by the presence in his file of an unauthorized summary of his courtesy appearance before the local board. We shall consider these contentions in order.
There is no question but that the insertion into the file of the notation “selective C.O.” by the appeal board clerk violated 32 C.F.R. 1626.24(b), confining appeal board consideration to the local board record. The circumstances here presented, however, make this the rare case where we can say that the notation could not have been prejudicial to Ford. As discussed above, he characterized himself as a selective conscientious objector in completing Series I of his Form 150. Thus, the clerk’s summary did no more than accurately describe the basis on which appellant was seeking exemption. He argues, however, that the evidence indicates an undue reliance by the appeal board on this summary, and that the board failed to make an independent and complete evaluation of his file. While the clerk did testify that the members of the appeal board might not read a registrant’s entire file in a case characterized by her as “selective C.O.,” she also indicated that the registrant’s “statement” would invariably be considered. We understand the latter part of this testimony to be a reference to Series I of the Form 150. In the instant case, this was all that the board needed to consider. Having once determined, on the basis of appellant’s own unambiguous statement, that he did not meet the statutory criteria for exemption, the appeal board was not required to consider information relating to the sincerity and religious na.ture of appellant’s beliefs. This is not to say that we might not find prejudice from the appeal board’s failure to consider the entire file if anything contained therein tended to contradict the prima facie invalidity of the registrant’s claim. In the present case, however, all of the evidence presented by the appellant pointed inexorably to the fact that he was a selective conscientious objector, and thus not entitled to 1-0 classification.
We find a similar lack of merit in appellant’s argument that the appeal board devoted an insufficient amount of time to the consideration of his claim. Assuming arguendo that an average time statistic would provide a sufficient basis for reversing on this ground, but see United States v. Neckels, 451 F.2d 709 (9th Cir. 1971), we think that the obvious facial invalidity of appellant’s claim precluded prejudice in this instance. See United States v. Young, 824 F.Supp. 69, 71-73 (D.Minn.1970).
As to the matter of the unauthorized summary of appellant’s courtesy interview with the local board, we recognize that the presence of this summary violated 32 C.F.R. 1626.13(a) and 1624.2(b), which together require that any written summary of a personal appearance be prepared by the registrant. Nevertheless, we observe again that this statement contained no information beyond that presented by Ford in his Form 150. Moreover, the summary- of his subsequent personal appearance before the board, which was signed by appellant, repeated the possibly prejudicial information contained in the earlier summary — i. e., that his conscientious objection was aimed at a particular war. The cases cited by appellant are relevant, but nevertheless distinguishable. In United States v. Droge, 464 F.2d 439 (9th Cir. 1972), there was no question that the registrant’s claim to conscientious objector status was prima facie valid on its face. After an interview with the registrant, however, the local board concluded that his claim was based essentially on opposition to the war in Vietnam rather than on conscientious objection to war in any form, and accordingly classified him I-A. Without the registrant’s knowledge, an unauthorized summary of this interview tending to support the board’s conclusions was placed in his file. The registrant’s administrative appeal was subsequently denied without a statement of reasons. Characterizing the local board’s summary as “highly prejudicial” to the registrant, the court of appeals reversed his conviction. In the instant case, however, we find no prejudice because the summary of appellant’s courtesy interview was merely repetitive of the statements contained in his Form 150. United States v. Fisher, 442 F.2d 109 (7th Cir. 1971), is similarly distinguishable, since in Fisher the unauthorized summary was also highly prejudicial to the registrant and touched upon matters not discussed in his Form 150.
Little need be said with regard to appellant’s final contention that the evidence was insufficient to establish an identity of persons between himself and the registrant whose Selective Service records were introduced at trial. In addition to the existence of an identity of names, the Selective Service documents introduced into evidence contained a description of the age, race, height, hair color, eye color, weight and build of the registrant named therein. Under these circumstances, the trial court’s finding that the registrant Ford and the defendant Ford were one and the same person cannot be said to be without adequate support in the record.
Affirmed.
. Appellant argues, citing Welsh v. United States, supra, 398 U.S. at 341, 90 S.Ct. 1792, that his own characterization of his beliefs should not be determinative. Welsh, however, involved the interpretation of the “religious training and belief” requirement, a term notable for its all-embracing elasticity. See United States v. Seeger, supra; United States v. Welsh, supra. By contrast, we think that the meaning of the words “opposed to war in any form” should be perfectly clear to the average registrant. We therefore see no reason not to take appellant’s statements at face value.
. Appellant argues that the district court’s rejection of his motion for a judgment of acquittal on this ground was not based upon a factual finding that he was indeed the same person as the one whose records were introduced at trial, but rather upon an erroneous application of the doctrine of “idem sonans." The short answer to this contention is that the trial court’s reason for denying this motion does not appear in the record. Moreover, while a description of the defendant Ford also does not appear in the record, he was presumably present at the trial, and the district court had ample opportunity to compare his features with those of the registrant.
|
f2d_478/html/0176-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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UNITED STATES of America, Plaintiff-Appellee, v. Richard Floyd McCOY, Jr., Defendant-Appellant.
No. 72-1646.
United States Court of Appeals, Tenth Circuit.
Argued and Submitted Feb. 21, 1973.
Decided May 7, 1973.
James M. Dunn, Asst. U. S. Atty. (C. Nelson Day, U. S. Atty., on the brief), for plaintiff-appellee.
David K. Winder, Salt Lake City, Utah, for defendant-appellant.
Before SETH, McWILLIAMS and BARRETT, Circuit Judges.
McWILLIAMS, Circuit Judge.
Richard Floyd McCoy, Jr., was convicted by a jury of aircraft piracy under 49 U.S.C. § 1472(i)(l) and he now appeals his sentence of forty-five years. The only point raised on appeal concerns the validity of a search warrant which purported to authorize a search of McCoy’s home. In view of the narrow issue presented to us for review, background facts need not be developed in detail.
A United Airlines plane en route from Denver, Colorado, to Los Angeles, California, was taken over by a so-called sky-jacker who by virtue of threats caused the pilot to change his course and land in San Francisco, California. There, the passengers were permitted to deplane and, pursuant to further direction of the sky-jacker, $500,000 in currency and several parachutes were brought aboard the plane. Still acting under threats from the sky-jacker, the pilot then flew the plane back to Utah, with the sky-jacker apparently bailing out near Provo, Utah, taking the $500,000 with him.
Two days after the sky-jacking, McCoy was arrested at his home in Provo, Utah. McCoy was immediately taken before a magistrate who advised him of his various constitutional rights. At the same time and place an FBI agent named William J. Geiermann presented his affidavit to the magistrate and asked for the issuance of a warrant to search McCoy’s residence. The magistrate determined that probable cause was shown by Geiermann’s affidavit, and issued a search warrant. However, the warrant signed by the magistrate, through someone’s error or oversight, mistakenly identified the affiant as one Lote Kinney, Jr., also an FBI agent, instead of Geiermann. As indicated, Geiermann was the only one who had presented an affidavit to the magistrate in support of the request for a search warrant. The warrant itself was directed to Kinney, and he and others operating under his direction conducted the ensuing search of McCoy’s residence. The search disclosed, among other things, $499,970 in currency, parachute and harness, grenade, gun and ammunition, and the like.
Four days prior to trial, counsel for McCoy filed a motion to suppress the various articles taken in the search of McCoy’s home, alleging that the affidavit did not show “probable cause” for the issuance of a search warrant and that the search warrant itself was “insufficient on its face.”
The motion to suppress came on for hearing at the commencement of the trial proper. At the conclusion of the relatively short hearing, the trial court stated that it would defer its ruling till the matter came up during the course of the trial. In the course of the trial, then, the circumstances surrounding the issuance of the search warrant were fully explored, initially out of the presence of the jury, and the trial court then denied the motion to suppress. Accordingly, the articles seized in McCoy’s home by the FBI agents were received into evidence. As indicated, the only matter urged in this court concerns the propriety of the trial court’s denial of McCoy’s motion to suppress.
I.
As indicated, the affidavit upon which the issuance of the search warrant was based was that of agent Geiermann. McCoy’s complaint about the sufficiency of the affidavit relates to the fact that the statements contained therein were all based on information acquired by Geiermann from others. In other words, Geiermann himself had no so-called firsthand information, and his statements were all based on what he had been told by other FBI agents who in turn had themselves acquired their information from others. The affidavit, then, according to counsel, is one based on double hearsay, if not indeed triple hearsay, and for that reason alone was insufficient to permit a finding by the magistrate that probable cause did exist for the issuance of the search warrant. Let us examine the affidavit a bit more closely.
In his affidavit, Geiermann stated that he had been advised by a fellow FBI agent from San Francisco that a passenger aboard the hijacked plane had been interviewed and that this passenger had viewed a number of photographs presented to him by the FBI and had identified a picture of McCoy as being a picture of the sky-jacker.
Geiermann in his affidavit also stated that he had been advised by a fellow FBI agent who had interviewed a stewardess aboard the sky-jacked plane that he had received from the stewardess a hand printed note which the sky-jacker had sent the pilot during the flight, and that he had been since advised by a document examiner at the FBI laboratory in Washington, D. C., thát the writing on the hand printed note had been identified as being the handwriting of McCoy as contained in his official Army personnel records.
Also, in his affidavit, Geiermann stated that he had been advised by still another fellow FBI agent who had talked with a Utah state highway patrolman who served in the Air National Guard with McCoy and that the patrolman had informed him that McCoy was a sky-diver and that the two of them had discussion regarding á plane sky-jacking and that he had ascertained that on the night of the sky-jacking McCoy was not at home.
Without going into more detail, the foregoing is indicative of the type of information set forth in Geier-mann’s affidavit, which consisted of some six typewritten pages. It is correct to say that all of Geiermann’s statements were based on information relayed to him by fellow FBI agents who had in turn acquired their information from others interviewed in the course of their particular investigative endeavors. In this regard see United States v. Ven-tresca, 380 U.S. 102 (1965), where it was held at page 111, 85 S.Ct. 741, 13 L.Ed.2d 684 that observations of a fellow Government officer engaged in a common investigation may form the basis for a warrant applied for by one of their number. So, then, it is quite true that the affidavit contained some double hearsay, and perhaps even a bit of triple hearsay. However, such fact in and of itself does not render the affidavit insufficient. In determining the sufficiency of an affidavit, the test is whether the affidavit sets forth sufficient underlying facts and circumstances to the end that the magistrate can make a detached judgment as to the reliability of the various sources of the affiant’s information. The affidavit in the instant case easily measures up to that test.
That an affidavit for a search warrant may be based on hearsay is well established. United States v. Harris, 403 U.S. 573, 91 S.Ct. 2075, 29 L.Ed.2d 723 (1971), and Jones v. United States, 362 U.S. 257, 80 S.Ct. 725, 4 L.Ed.2d 697 (1960). Indeed, such is usually the case. As concerns so-called double hearsay, the Eighth Circuit has held that when a magistrate receives an affidavit which concerns hearsay on hearsay, he need not summarily reject this double hearsay information, but is rather called on to evaluate such information as well as all other information in the affidavit in order to determine whether the informant gathered his information in a reliable way and from reliable sources. United States v. Kleve, 465 F.2d 187 (8th Cir. 1972), and United States v. Smith, 462 F.2d 456 (8th Cir. 1972). We subscribe to the reasoning of those cases.
In evaluating the affidavit of Geier-mann, it should be noted that we are not here concerned with professional informers, identified or unidentified. Rather, we are concerned with information acquired by FBI agents from named persons who were either eye witness to the crime or had information acquired from McCoy himself. This we deem to be of considerable significance in connection with the magistrate’s determination as to the reliability of the affiant’s sources of information. In this connection it was held in United States v. Bell, 457 F.2d 1231 (5th Cir. 1972), that a supporting affidavit in an application for a search warrant must attest to the credibility of an informer and his information, but that such requirement did not extend to information acquired from an eye witness to a crime.
Without belaboring what we deem to be quite obvious, the affidavit of Geiermann in the instant case was amply sufficient to permit the magistrate to exercise his independent judgment as to the reliability of the various sources of information. Indeed, on the basis of the affidavit before him, the magistrate could only have concluded that probable cause did exist for the issuance of a search warrant.
II.
Through the error or oversight on the part of some person or .persons, the search warrant, as issued, named therein the affiant as Lote Kinney, Jr., instead of William J. Geiermann. Counsel asserts that this error renders invalid the warrant and the search based thereon. We disagree, as under the facts of this case we see no resulting prejudice to McCoy.
The Fourth Amendment requires that no search warrant shall issue except on probable cause, supported by oath or affirmation, but does not require that the name of the affiant be set forth in the warrant itself. So, we are not here concerned with any constitutional mandate. However, Fed.R.Crim.P. 41(c), before the recent amendment thereof, did direct that the warrant shall state the “names of the persons whose affidavits have been taken in support thereof.” That particular requirement has since been deleted from the rule, the official committee notes to the amendment stating that the requirement that the warrant itself should state the names of the affiants was being eliminated as “unnecessary paper work.” However, such requirement was in effect when the search warrant issued in the instant ease. Fed.R.Crim.P. 52 directs a trial court to disregard any error, defect, irregularity or variance which does affect a defendant’s substantial rights. And under 28 U.S.C. § 2111 an appellate court is directed to “give judgment after an examination of the record without regard to errors or defects which do not affect the substantial rights of the parties.” For reasons set forth below we do not believe the misidentification in the warrant of the affiant in anywise prejudiced McCoy.
The reason for the earlier requirement in the rule that the warrant name the affiant is said to be that someone must take responsibility for the facts which purportedly give rise to the probable cause for the issuance of the search warrant, and that the defendant should be apprised of the name of that person. Additionally, it has also been stated that another reason for naming the affiant in the warrant is to enable the aggrieved person to probe and challenge the legality of the warrant by challenging, in court, the affiant and his statements. United States ex rel. Pugh v. Pate, 401 F.2d 6 (7th Cir. 1968), cert. denied, 394 U.S. 999, 89 S.Ct. 1590, 22 L.Ed.2d 777 (1969), and King v. United States, 282 F.2d 398 (4th Cir. 1960). However, as we see it, McCoy was not prejudiced in either of those areas by the fact that Kinney, rather than Geiermann, was named in the warrant as the affiant.
Although we do not attribute great significance to it, the fact is that McCoy was present in the magistrate’s office at the very moment Geiermann presented his affidavit to the magistrate. This no doubt was just a coincidence. However, we are advised that a copy of the warrant, with Geiermann’s affidavit attached thereto, was presented to McCoy’s wife when the search was made of McCoy’s home. Thereafter, copies of the affidavit and the search warrant were on file in the magistrate’s office until the return thereon was made, at which time all papers were filed in the office of the clerk of the District Court.
Counsel for McCoy at an early time apparently had access to the affidavit, the warrant and return. At least we know that in explaining why they had delayed filing their motion to suppress till only a few days before trial, counsel candidly stated that it was not till then that they had themselves noted that the warrant named Kinney, rather than Geiermann, as the affiant.
Finally, out of the presence of the jury, there was an indepth inquiry of both Geiermann and Kinney, as well as others concerning the statements in the affidavit, and all the facts and circumstances concerning the issuance of the warrant were fully developed. It is this combination of facts and circumstances that leads us to conclude that McCoy was in fact nowise prejudiced by the misnomer in the warrant.
McCoy relies in this regard on Pugh v. Pate, supra, and King v. United States, supra. We do not regard those cases as having great applicability to the instant case. Each concerned an affiant who used a fictitious name and thereafter apparently disappeared. At least, in King, for example, which incidentally was cited and relied on heavily in Pugh, at the hearing on the defendant’s motion to suppress the affiant was among the absent and could not be subjected to examination. It was in this setting that the court in King held that the trial court erred in denying the motion to dismiss. Such is a far cry from the instant case. Nor are we persuaded by United States v. Carignan, 286 F.Supp. 284 (D.Mass.1967), even though the facts there are more akin to the facts of the present case. We are more impressed with the reasoning in United States v. Averell, 296 F.Supp. 1004 (E.D.N.Y.1969), which distinguished Carignan and held that the failure to designate the affiant in the search warrant was not fatal where no prejudice was shown.
In short, it would seem clear that under the facts and circumstances disclosed by the record before us, the error here complained of is indeed one that did not affect any substantial right and should accordingly be disregarded.
Judgment affirmed. |
f2d_478/html/0181-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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Christa Ruthe FAY, Plaintiff-Appellant, v. Thomas I. FITZGERALD, as Public Administrator of the County of New York, as Administrator of the Goods, Chattels and Credits of John Patrick Fay, also known as John P. Fay, Deceased, Defendant-Appellee.
No. 452, Docket 72-1817.
United States Court of Appeals, Second Circuit.
Submitted Feb. 13, 1973.
Decided May 8, 1973.
William G. Mulligan, New York City (Mulligan & Jacobson, New York City, of counsel), for plaintiff-appellant.
Joseph T. Arenson, New York City (Waldemar J. Dittmar, Philip Beker-man, and Elias Karban, New York City, of counsel), for defendant-appellee.
Before FRIENDLY, Chief Judge, OAKES, Circuit Judge, and DAVIS, Judge.
Of the United States Court of Claims, sitting by designation.
DAVIS, Judge:
John Patrick Fay, an elderly well-to-do resident of Manhattan, died abroad in 1972; he left no will and appellee, the Public Administrator of New York County, was designated by the Surrogate’s Court as administrator of his estate. Appellant, Christa Ruthe Fay, a non-resident alien, made claim on appel-lee as the decedent’s common-law widow, asserting that they were so married in Florida in 1960 when she was 23 and he 70. The other claimants to the estate were a resident of England who said she was the intestate’s half-sister and three French residents claiming to be nieces. Invoking diversity jurisdiction, appellant began this action in 1972 against the Public Administrator for a declaratory judgment that she was Fay’s wife, is his widow, and is entitled to the full estate (after expenses, debts and taxes). On the appellee’s motion, the District Court dismissed the complaint in the exercise of discretion “not to entertain this claim for reasons of judicial economy and efficiency and because persons interested in these issues, but who cannot be made parties to this action, have been parties in the State Court proceeding where the same issues will be decided.”
The Supreme Court has cautioned that “the propriety of declaratory relief in a particular case will depend upon a circumspect sense of its fitness informed by the teachings and experience concerning the functions and extent of federal judicial power” (Public Service Commission v. Wycoff Co., 344 U.S. 237, 243, 73 S.Ct. 236, 240, 97 L.Ed. 291 (1952)), and, more particularly, that “a federal district court should, in the exercise of discretion, decline to exercise [diversity] jurisdiction over a [declaratory judgment] action raising issues of state law when those same issues are being presented contemporaneously in state courts” (Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 126, 88 S.Ct. 733, 746, 19 L.Ed.2d 936 (1968), reaffirming on this point Brillhart v. Excess Ins. Co., 316 U.S. 491, 494-495, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942)).
At the time the court below acted, the only proceeding in the Surrogate’s Court was appellee’s application to sell the decedent’s cooperative apartment in New York. Appellant opposed that request on the double ground that she was the decedent’s widow and also that, during his lifetime, he had given her the apartment. She asked that the application be denied “without prejudice to renewal after determination of the rights of this respondent [appellant] to said property as herein set forth.” No determination had been made on this application when the complaint was dismissed below.
The main thrust of the appeal is that this state court proceeding should not be, and could not properly have been, the basis for a discretionary denial of declaratory relief since the issue of appellant’s status as wife and widow was not necessarily involved in that proceeding —it was entirely possible th'at the application to sell the apartment could be wholly determined on appellant’s alternative claim that she was the donee of the property, without ever reaching her claim as widow. Cf. Beach v. Rome Trust Co., 269 F.2d 367, 373-374 (C.A. 2, 1959).
However, we do not have to resolve the close issue of whether, when it acted, the District Court had adequate reason to withhold its hand in favor of the Surrogate’s Court. The additional state proceedings since the dismissal below convince us that it would now be a serious mistake to allow this competing action to continue. Very shortly after the District Court’s decision, appellant specifically moved the Surrogate’s Court to determine her status, and that of the rival claimants, as distributees of the estate. That court entertained this request but denied her demand for a jury trial (Matter of Fay, 70 Misc.2d 51, 332 N.Y.S.2d 322 (1972)). This ruling was affirmed by the Appellate Division in an order of February 22, 1973. 41 A.D.2d 703, 340 N.Y.S.2d 861. The issue of appellant’s status as wife and widow is therefore about to be tried (if it has not already been) and determined in the Surrogate’s Court.
It is appropriate for us to take account of these post judgment happenings and to place our decision on the propriety as of the present time of entertaining this declaratory judgment action. With respect to discretion under the Declaratory Judgment Act, as distinguished from other discretionary rulings, this court has held that the appellate court should exercise its own judgment and may substitute its own judgment for that of the lower court. Broadview Chemical Corp. v. Loctite Corp., 417 F.2d 998, 1000 (C.A. 2), cert. denied, 397 U.S. 1064, 90 S.Ct. 1502, 25 L.Ed.2d 686 (1970). In addition, in another instance of review of the exercise of discretion by the district court we have stated that “[s]ince our decision has to be forward-looking, determining the cast of the proceedings from now on, we must take account of this new situation, just as we would if we were considering an injunction for the future.” Korn v. Franehard Corp., 456 F.2d 1206, 1208 (C.A. 2, 1972).
With matters as they now stand, it is indisputable that the controversy over appellant’s rights as a distributee “can better be settled in the proceeding pending in the state court.” Brillhart v. Excess Ins. Co., supra, 316 U.S. at 495, 62 S.Ct. at 1176. The questions are not federal; preparations to determine them have gone forward in the Surrogate’s Court; the trial is even now’ impending there, if it has not already been held; the state tribunal has jurisdiction of the rival claimants, non-resident aliens who have participated in those proceedings, while the federal court does not. In this situation it would obviously be “uneconomical as well as vexatious” for the federal court to proceed in this declaratory judgment suit raising precisely the same issue which will necessarily be decided by the Surrogate’s Court. Brillhart v. Excess Ins. Co., supra, 316 U.S. at 495, 62 S.Ct. 1173; Abbott Laboratories v. Gardner, 387 U.S. 136, 155, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967); J. Moore, Federal Practice ff57.08[6].
Perhaps the district court could have stayed its proceedings to await the state determination, rather than dismiss outright (cf. Stansbury v. Koss, 10 F.Supp. 477, 479-481 (S.D.N. Y.1931)), but in the current circumstances there would be no point to such-an order. If it turns out unexpectedly that the plaintiff cannot get a reasonably prompt determination by the state courts of her status as widow, she can file again for a declaratory judgment. There would be no problem of limitations or of res judicata.
Affirmed.
. We are told that the trial has been adjourned to April 30, 1973, and that depositions of appellant and six of her witnesses have been taken in the state. proceeding.
. Appellant cites several decisions sustaining the jurisdiction of district courts to consider decedent’s estate problems which are not required by state law to be tried in probate courts, and will not interfere with that court’s control of the res. E. g., Waterman v. Canal-Louisiana Bank & Trust Co., 215 U.S. 33, 30 S.Ct. 10, 54 L.Ed. 80 (1909) ; McClellan v. Carland, 217 U.S. 268, 30 S.Ct. 501, 54 L.Ed. 762 (1960) ; Markham v. Allen, 326 U.S. 490, 66 S.Ct. 296, 90 L.Ed. 256 (1946) ; County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 192-193, 79 S.Ct. 1060, 3 L.Ed.2d 1163 (1959) ; Lamberg v. Callahan, 455 F.2d 1213 (C.A.2, 1972). These cases did not involve the separate issue of the discretion of a district court, having jurisdiction over the parties and subject matter, to decline to entertain the particular declaratory judgment action. The declaratory judgment opinions on which appellant also leans all concerned situations in which there was no pending state court proceeding which would determine all the issues tendered in the federal suit. See Telechron v. Parissi, 197 F.2d 757, 762 (C.A.2, 1952) (all claims then on trial together, and state court could not deal with patent claims intimately related to non-patent claims) ; Beach v. Rome Trust Co., 269 F.2d 367, 370, 371, 373-374 (C.A.2, 1959) (state court proceeding not yet instituted on issues involved in declaratory federal suit, and no showing that subsequently begun state proceeding would decide issues raised in federal case).
. There may possibly be a question whether a suit of this type in a district court against the Public Administrator, not raising any constitutional issue, is barred by the Eleventh Amendment. Cf. Knight v. State of New York, 443 F.2d 415 (C.A. 2, 1971). In all probability, the answer would be negative since the New York legislation treats the Public Administrator as an arm of the City of New York, and it is settled that a “suit agdinst a county, a municipality, or other lesser governmental unit is not regarded as a suit agains't a state within the meaning of the Eleventh Amendment.” H. M. Hart & H. Weeliler, The Federal Courts and the Federal System 690 (2d ed. P. Bator et al. 1973). The New York Surrogate Court’s Procedure Act, section 1110 (McKinney’s Consol.Laws, c. 59a, 1967), provides that the “city of New York shall be answerable for the faithful execution by the public administrator of all the duties of his office * * * ”, and also that any person aggrieved by an act of the Public Administrator “shall have each and every remedy against the city of New York as would be available against a fiduciary in like case and may initiate in the surrogate’s court having jurisdiction a proceeding for the enforcement of his claim or right and shall serve process thereon on the comptroller of the city. The public administrator then in office shall be a necessary party in such proceeding.” It is unclear whether this provision allows suit against the city (and the Public Administrator) in any appropriate forum, merely specifying a suit in surrogate’s court as one of “each and every remedy”, or whether the latter was intended as the exclusive method. In any event, since an agent of the city (not the state) is involved, even the second construction would probably not exclude an action in federal court. See Markham v. City of Newport News, 292 F.2d 711, 717 (C.A.4, 1961) ; Hart & Wechler, supra, 690. However, we need not definitely decide these questions; in view of our affirmance of the dismissal of the action, it is unnecessary to reach the Eleventh Amendment which, if it were applicable, would also lead to dismissal. Cf. Brooks v. Dewar, 313 U.S. 354, 359-360, 61 S.Ct. 979, 85 L.Ed. 1399 (1941).
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SOUTHWEST FOREST INDUSTRIES, INC., Appellant, v. POLE BUILDINGS, INC. and Hartford Accident & Indemnity Co., Appellees.
No. 71-1816.
United States Court of Appeals, Ninth Circuit.
May 7, 1973.
Rehearing Denied June 25, 1973.
Calvin H. Udall (argued), Stephen S. Case, Fennemore, Craig, Yon Ammon & Udall, Phoenix, Ariz., for appellant.
Warren E. Platt (argued), Snell & Wilmer, Phoenix-, Ariz., for appellees.
Before HUFSTEDLER and WALLACE, Circuit Judges, and GRAY, District Judge.
Honorable William P. Gray, United States District Judge for the Central District of California, sitting by designation.
WILLIAM P. GRAY, District Judge:
This is an appeal from the granting of summary judgment in favor of Hartford Insurance Company, a defendant in the action below. The sole question before this court is whether the claimed damage falls within one or more of the standard form exclusion clauses of the liability insurance policy issued by Hartford. We agree with the trial court that it does, and accordingly affirm.
In 1966, the appellant, Southwest Forest Industries (Southwest), contracted with Pole Buildings, Inc. to construct an industrial building on property owned by Southwest at McNary, Arizona. Pole agreed to obtain an insurance policy “insuring against the risks of injuries to persons and property arising out of the performance of this contract.” Pursuant to such agreement, Pole purchased the subject insurance policy from Hartford.
In the fall of 1966, the building was completed and Southwest took possession. In December 1967, the roof collapsed due to a heavy snow load, and Pole repaired the damage. On December 26, 1968, the roof collapsed again after a heavy snowfall. Southwest brought suit against Pole and Hartford in the Arizona state court, alleging breach of warranty and negligent construction by Pole. It claimed as damages only the cost of reconstructing the building. The action was removed to the United States District Court on the basis of the parties’ diverse citizenship, and that court granted summary judgment in favor of Hartford on the ground that its insurance contract with Pole did not cover the latter’s liability to Southwest.
The policy of insurance provided, in part, that “[t]he company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of [bodily injury or property damage] to which this insurance applies . . .’’ and “all sums which the insured, by reason of contractual liability assumed by him under any written contract . . . shall become legally obligated to pay as damages because of [bodily injury or property damage] to which this insurance applies. . . . ” For purposes of the summary judgment motion, and in oral argument before this court, the parties assumed that the building collapse would be covered under the policy unless that risk was excluded by one or both of the following clauses:
“This insurance does not apply:
-X- -X- * -X- * *
(l) to property damage to the named insured’s products arising out of such products or any part of such products;
(m) to property damage to work performed by or on behalf of the named insured arising out of the work or any portion thereof, or out of materials, parts of equipment furnished in connection therewith;”
With respect to exclusion (m), Hartford claims that this clause denies coverage for damage to the insured’s work product, whether completed or unfinished, where such damage results from a defect in the item constructed by the insured. In contrast, the appellant reads exclusion (m) to except from coverage damage to the building incurred during construction, but not damage to the building occurring after completion of the structure. The appellant achieves this result by interpreting the second use of the word “work” in the phrase “property damage to work performed . arising out of the work” to denote the activity of construction rather than the resulting structure. It contends that under its interpretation the clause is unambiguous and does not vitiate coverage for damage to its building; that under Hartford’s construction the clause is ambiguous when compared with other policy provisions; and that in the event of ambiguity, the questionable provision is to be construed in favor of the insured.
We cannot agree with the appellant’s reading of exclusion (m). When considered in context, the word “work” should be read as a noun, referring back to, and having the same meaning as, the phrase “work performed.” The section should thus operate to withdraw coverage for damage to the insured’s work product resulting from an inherent defect, even though construction is complete and the contractor has relinquished control. This interpretation is consistent with the construction accorded similar exclusion clauses in numerous other cases. See, e. g., Haugan v. Home Indemnity Co., 197 N.W.2d 18 (S.D.1972); Liberty Building Company v. Royal Indemnity Co., 177 Cal.App.2d 583, 2 Cal.Rptr. 329 (1960); Vobill Homes, Inc. v. Hartford Accident & Indemnity Co., 179 So.2d 496 (La.App.1966); Heyward v. American Casualty Co., 129 F.Supp. 4 (E.D.S.C.1955); Hartford Accident & Indemnity Co. v. Olson Bros., Inc., 187 Neb. 179,188 N.W.2d 699 (1971).
The appellant’s argument that the coverage provided by the policy under the “completed operations hazard” would be rendered nugatory if clause (m) is held to apply to completed projects is also unpersuasive. The additional coverage provided by the “completed operations hazard” includes:
“bodily injury and property damage arising out of operations or reliance upon a representation or warranty made at any time with respect thereto, but only if the bodily injury or property damage occurs after such operations have been completed or abandoned and occurs away from premises owned by or rented to the named insured. ‘Operations’ include materials, parts or equipment furnished in connection therewith.
******
Operations which may require further service or maintenance work, or correction, repair or replacement because of any defect or deficiency, but which are otherwise complete, shall be deemed completed.”
When considered with exclusion (m), the completed operations coverage would be limited only to the extent that damage to the insured’s completed work would not fall within the coverage of the policy. The risk of damage to persons or property other than that constructed by the insured would remain with the insurer.
The appellant contends further that its claim for damages based upon a breach of express and implied warranty falls within the “contractual liability” coverage part of Hartford’s policy and that an inconsistency would arise if exclusion (m) is interpreted to vitiate such coverage. This assertion must also be rejected, because the term “contractual liability” is defined in the policy to exclude claims based upon a warranty.2
If Southwest’s narrow reading of exclusion (m) were to be accepted, and if it were to be assumed further that no other exclusion is applicable, Hartford would be contractually obligated both to Pole and to its customers as a guarantor of the quality of Pole’s work in all respects. In light of the unambiguous language of exclusion (i), which expressly negates such broad coverage for damage to the insured’s “products,” we cannot infer that Hartford assumed a much greater risk with respect to “work performed” by the insured. Accordingly, since the appellant’s sole claim is for damages to the building itself and not for injury to persons or other property, we hold that exclusion (m) applies to release Hartford from liability.
Our decision with respect to exclusion (m) makes it unnecessary to determine whether the completed building is also a “product” within the meaning of exclusion (J).
Judgment affirmed.
. The italicized words in the portions of Hartford’s policy quoted here appear in this form in the original document to signify terms which are defined elsewhere in the policy.
. United American Life Insurance Co. v. Beadel, 13 Ariz.App. 196, 475 P.2d 288 (1970) ; Caballero v. Farmers Insurance Group, 10 Ariz.App. Cl, 455 P.2d 1011 (1969).
. “When used in reference to this insurance (including indorsements forming a part of the policy) :
“contractual liability” means liability expressly assumed [by the insured] under a written contract or agreement; provided, however, that contractual liability shall not be construed as including liability under a warranty of the fitness or quality of the named insured’s products or a warranty that work performed by or on behalf of the named insured will be done in a workmanlike manner;”
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f2d_478/html/0188-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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Larry STRADLEY, Appellant, v. Richard R. ANDERSEN, as Chief of the Division of Police, Department of Public Safety, City of Omaha, Nebraska, Appellee.
No. 72-1698.
United States Court of Appeals, Eighth Circuit.
Submitted April 12, 1973.
Decided May 17, 1973.
Bennett G. Hornstein, Omaha, Neb., for appellant.
Kent Whinnery, Omaha, Neb., for ap-pellee.
Before LAY and STEPHENSON, Circuit Judges, and TALBOT SMITH, Senior District Judge.
The Honorable Talbot Smith, Senior United States District Judge, Eastern District of Michigan, sitting by designation.
LAY, Circuit Judge.
The Omaha Department of Public Safety, Division of Police, acting by and through its Police Chief, Richard R. Andersen, has promulgated a general order relating to standards of appearance and hair style for police officers. The plaintiff, Larry Stradley, an officer in good standing, brought this action under Section 1983 of Title 42 of the United States Code, alleging that his constitutional rights were violated by enforcement of the order. He alleges that he wears his hair and clothing neatly and in a well-groomed fashion with a portion of his hair extending slightly below his ears. He asserts that this does not restrict or hamper him in any way in the performance of his duties. He brought the suit as a class action for himself and other officers similarly situated. The district court, after trial on the merits, found that the regulation was reasonable and calculated to achieve legitimate state interests. Stradley v. Andersen, 349 F.Supp. 1120 (D.Neb.1972). We affirm.
The regulation reads:
“This order pertains to Chapter I, Section 19, of the Rules and Regulations of the Police Division, ‘Unprofessional actions, or conduct, while on duty or in uniform.’
“All personnel shall be alert, efficient, neat and business-like before the public.
“Hair appearance has become quite a problem as far as appearance before the public is concerned within the Omaha Police Division.
“Numerous comments, complaints, and criticism have been directed
toward the Police Division based on outlandish types of hair styles. In order to reasonably conform with the general public, the following regulations shall be applicable, and shall be effective as of 1 June 1971, for all members of the Omaha Police Division.
“HAIR: Hair must be evenly tapered on sides and back. No hair will lap or curl over the ears or shirt collar. Hair style cannot interfere with the normal wearing of the uniform headgear. This means that the hat of the uniform, when properly worn, must be in the close proximity to both the ears and the eyebrows of the person wearing the hat in a standard appearing manner. “SIDEBURNS: Maximum length of sideburns will be to the bottom level of the ear lobe. No flair (muttonchops). Sideburns must be evenly tapered, cut parallel to the ground and can be no wider than one inch. “MUSTACHE: Mustaches must be neatly trimmed and tapered. Mustaches shall not extend beyond the corner of the mouth looking at a person directly to his face. No handlebar or Fu Manchu types of mustaches will be allowed. “GOATEE OR BEARD: Beards and Goatees will not be allowed under any conditions. The face must be clean shaven for working purposes other than specified above.
“Exceptions to these rules shall only be allowed for officers who are working in the undercover type of activity within and for the Omaha Police Division. The special exemptions for this purpose shall be by request and directive of the Deputy Chief in charge of the Criminal Investigations Bureau.” In essence, Chief Andersen testified that the purposes of the regulation were (1) the maintenance of an efficient and disciplined police force and (2) the maintenance of public confidence.
The order is not attacked as being unreasonable. The basis of plaintiff’s argument is that “[p]olicemen, like firemen, probation officers, teachers, other classes of public employees, public school students, and other persons have a federal constitutional right to choose their personal hair style and length.” The argument is made that the defendant has failed to sustain its burden that such an order is necessary to enable police officers to carry out the mission of a city police department.
The plaintiff further contends that this court’s opinion in Bishop v. Colaw, 450 F.2d 1069 (8th Cir. 1971), upholding the right of a school boy to wear whatever hair style he and his parents desired, is equally applicable to a police officer. We there found that the right involved, although not cognizable on a First Amendment ground, was based on the freedom to govern one’s personal appearance and commanded protection under the Due Process Clause of the Fourteenth Amendment. However, we acknowledged that recognition of this right was not unconditional and required us to weigh the competing interests asserted. We found that the school authorities failed to demonstrate any necessity of the regulation of hair length and style.
Appealing contrasts are urged to justify individual styling — thus plaintiff pleads that the order will allow mustaches “such as that of • Adolph Hitler, but not permit those modeled after Mark Twain, Dean Acheson or other prominent and respected persons.” We cite these comparisons because we think the essential weakness of the argument lies in this contrast — plaintiffs are not serving in the role of dictators, authors or statesmen, but rather, they have undertaken responsible roles in a disciplined organization as public officers to enforce and maintain law and order in a given community. Herein lies the distinction between weighing the competing interests of a school board and a school student.
Traditionally, the policeman has been a highly trained officer who is entrusted with a responsible and oftentimes dangerous role as a public servant. His work habits on active duty require disciplined conduct, regimentation and frequent strict adherence to regulation and authorized detail. His job is often a delicate and difficult task to lawfully act against those who are sometimes unwilling to recognize any rules or ethics. It is essential that a policeman’s training be such that he be taught to obey strict disciplinary procedure and rules in order to lend practical assurance that he will follow command and not abuse his awesome authority. As part of this discipline the police department has determined that an officer shall be neat in his appearance. There can be little argument that this requirement constitutes a legitimate departmental interest.
We reject the idea that community standards provide a legitimate basis in weighing constitutional rights guaranteed to the individual. Whether public acceptance or rejection of a particular hair style exists in one community or another should not be a standard of concern to a federal court. What ■ must be controlling to the court in evaluating competing interests is whether the policy of the state espouses a societal interest which outweighs the individual concern. Thus, what is essential here is that the Public Safety Department stresses the need for public respect of its officers and that it feels such respect flows in part from the officers’ individual appearance. If Chief Andersen misjudges, as plaintiff suggests, what necessary measures should be taken to achieve community respect, this basically must be the department’s concern, not ours.
One may argue that how one wears his hair has little to do with whether an officer might effectively apprehend criminals or otherwise fulfill his assigned mission as a policeman. This misses the mark. The critical factor is that police officialdom deems it necessary that the officer be well disciplined and that as part of that internal discipline, he be required to maintain a neat appearance. The degree of that appearance, as long as it is not arbitrary or unreasonable, should not be the court’s concern.
Unlike the school cases, those officials who have spent their life in police work, who are trained in law enforcement discipline, possess far better empirical judgment of what is essential to achieve an efficient and disciplined police force than the officers themselves, the public or the predeliction of individual judges. If this results in a problem of low morale of police personnel, which plaintiff contends, this too is Chief Andersen’s dilemma, not the courts’. This does not mean that the courts will ignore an arbitrary edict which might deprive a police officer of his sense of dignity or morality as a human being. But we are not dealing with arbitrariness — the only issue before us is the authority of a Public Safety Division of a municipality to set standards of neat appearance for its personnel balanced against the individual rights of a police officer to appear as he likes. In light of this competing and legitimate interest of the Public Safety Division, as weighed against the individual officer’s personal likes or dislikes, we sustain the regulation. In accord Greenwald v. Frank, 70 Misc.2d 632, 334 N.Y.S.2d 680 (Sup.Ct.1972); Dwen v. Barry, 336 F.Supp. 487 (E.D.N.Y.1971); cf. Doyle v. Koelbl, 434 F.2d 1014 (5 Cir. 1970), cert. denied, 402 U.S. 908, 91 S.Ct. 1380, 28 L.Ed.2d 649 (1971).
For the reasons herein stated, the judgment of the district court is affirmed.
. The district court’s earlier opinion requiring exhaustion of state remedies before federal trial, 334 F.Supp. 72 (D.Neb. 3971), was reversed and remanded for a plenary trial, 456 F.2d 1063 (8 Cir. 1972).
. Plaintiff urges that in the Dwen case the regulation applied only to uniformed officers. The present regulation encompasses all police department personnel with special exceptions allowed for those officers working in undercover activity. The district judge in Dwen expressed a concern that if applied to all members of the police force it might fall within constitutional prohibitions. By our holding and for the reasons we have generally discussed, we disagree.
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BANCO NACIONAL de CUBA, Appellant, v. The FIRST NATIONAL CITY BANK OF NEW YORK, Respondent.
Nos. 125-126, Dockets 32533, 33864.
United States Court of Appeals, Second Circuit.
Argued Jan. 30, 1973.
Decided May 11, 1973.
Victor Rabinowitz, New York City (Leonard Boudin, Michael Krinsky, Dorian Bowman, and Eric M. Lieberman, Rabinowitz, Boudin & Standard, New York City, on the brief), for appellant.
Henry Harfield, New York City (Herman E. Compter, James B. Keenan, Shearman & Sterling, New York City, on the brief), for appellee.
Before LUMBARD and HAYS, Circuit Judges, and BLUMENFELD, ■ Chief Judge.
Of the United States District Court for the District of Connecticut, sitting by designation.
HAYS, Circuit Judge:
The involved history of this case began in July, 1967 with the decision of Judge Bryan in the Southern District of New York, 270 F.Supp. 1004, finding that the confiscation of National City Bank’s property in Cuba was a violation of international law and that Banco Nacional and the Cuban Government were one and the same for the purposes of this litigation. On appeal, this court held that the act of state doctrine applied to bar adjudication of National City Bank’s counterclaim and reversed the decision of the District Court, not reaching, of course, .the merits of the District Court decision. The Supreme Court, 400 U.S. 1019, 91 S.Ct. 581, 27 L.Ed.2d 630 granted certiorari and remanded the case to this court for reconsideration in the light of a letter from the Legal Adviser of the Department of State to the Supreme Court indicating that the foreign policy interests of the United States would not be injured by litigation of the merits of the instant case. This court thereupon entered a second opinion, 442 F.2d 530, adhering to its original result. The Supreme Court again granted certiorari, and, reversing this court, held that the act of state doctrine did not bar consideration of the merits. The Supreme Court remanded the case to this court for the second time for “consideration of [Banco Nacional’s] alternative bases of attack on the judgment of the District Court.” First National City Bank v. Banco Nacional de Cuba, 406 U.S. 759, 770, 92 S.Ct. 1808, 1814, 32 L.Ed.2d 466 (1972).
The facts giving rise to this lengthy and involved litigation are fully stated in the earlier opinion of this court, 431 F.2d 394 (2d Cir. 1970), and it is unnecessary to recount them here. Suffice it to say that Banco Nacional originally brought suit in the District Court for the Southern District of New York for (1) the excess realized by National City Bank on the sale of collateral held as a security for a loan, and (2) for deposits by nationalized Cuban banks in National City Bank in New York. National City Bank counterclaimed, arguing that the Republic of Cuba was the real party in interest, that the Cuban government was indebted to it for the value of illegally expropriated property of National City Bank in Cuba, and that it was entitled to set off this obligation as a complete defense to the claims asserted by Banco Nacional. National City Bank then moved for summary judgment. The District Court granted the motion and Banco Nacional appealed.
Apart from the act of state defense Banco Nacional presented two major arguments in the District Court (1) that National City Bank’s counterclaim cannot properly be asserted against Banco Nacional but is directed at the government of Cuba, and (2) that in any event the nationalization of National City Bank’s property in Cuba did not violate international law. The District Court found against Banco Nacional on both points, holding (1) “There is no serious question that the Government of Cuba and Banco Nacional are one and the same for the purposes of this litigation” and (2) “The totality of circumstances presented by this case — a patent failure to provide adequate compensation, a retaliatory confiscation by a foreign government, and discrimination against United States nationals — compel a finding that the Cuban decree directing confiscation of First National City’s property was in direct contravention of the principles of international law. Thus First National City is entitled to set-off against the first claim for relief such amount as may be due and owing to it from the Cuban Government as compensation for the seized Cuban properties, and I so hold.” 270 F.Supp. 1004, 1006, 1010 (S.D.N.Y.1967).
We agree with the judgment of the District Court.
I.
In respect to the expropriation of National City Bank’s property in Cuba the Republic of Cuba and Banco Nacional acted as a single entity. We therefore have no difficulty in finding that for the purposes of this litigation Banco Na-cional is the alter ego of the Republic of Cuba, or as the District Court said, “the Government of Cuba and Banco Nacional are one and the same for the purposes of this litigation.”
The undisputed evidence in the record amply supports the conclusion that Banco Nacional and the government of Cuba acted as one in the nationalization of National City Bank’s property.
Law No. 891 of October 14, 1960 provided :
“The banking function is hereby declared of public interest and from this moment on, only the State shall be authorized to exercise it through the organizations created for that purpose it
Law No. 891 also provided that nationalization was to “be carried out through Banco Nacional de Cuba.”
On Friday, September 16, 1960, the take-over of National City Bank’s assets in Cuba began. Late in the day, the vice-president of National City Bank in charge of Cuban operations, Juan D. Sanchez, began to receive telephone calls from the officers in charge of the branches of National City Bank in Cuba indicating that the Cuban militia were demanding the keys to the National City Bank’s properties. At 11:00 P.M. on the 16th, Sanchez contacted one Bustabad, a member of the militia and a delegate of the bank employee’s union. Bustabad stated that the militia had received orders from Banco Nacional de Cuba to occupy all of National City Bank’s branches.
On the night of the 16th all of National City Bank’s branches were occupied by the Cuban militia acting on orders from officials of Banco Nacional.
On Monday, September 19th, Sanchez, at the instructions of Cuban officials, appeared at the main office of National City Bank in Havana. Here he found armed men patrolling the bank, men who were members of the bank employee’s branch of the militia. Sanchez was officially informed of the nationalization and told that Banco Nacional officials were taking over the operation of the bank. The official order nationalizing the bank was signed by Che Guevara, Minister of State, as President of Banco Nacional.
All of these facts, uncontested by Banco Nacional, point inescapably to the conclusion that Banco Nacional and the government of Cuba acted as one in implementing the nationalization policy.
Appellant urges that Banco Nacional was an independent juridical entity, an “autonomous organization” free from the control of the Cuban government. However, we are not concerned with any theoretical overall relationship between the bank and the Cuban government. The decisive facts here are those which show the function of Banco Nacional in the expropriation of National City Bank’s property in Cuba. Those facts clearly indicated Banco’s active role as a mere arm or division of the Cuban government.
II.
We see no reason to re-open the question whether the Cuban expropriation violated international law. This court’s decisions in Banco Nacional de Cuba v. Sabbatino, 307 F.2d 845 (2d Cir. 1962), reversed on other grounds, 376 U.S. 398, 84 S.Ct. 923, 11 L.Ed.2d 804 (1964) and Banco Nacional de Cuba v. Farr, 383 F.2d 166 (2d Cir.), cert. denied, 390 U.S. 956, 88 S.Ct. 1038, 20 L.Ed.2d 1151 (1967) establish that the actions of the government of Cuba and Banco Nacional in the instant case were violations of international law.
Affirmed.
. Banco Nacional also contends that the counterclaim of National City Bank was procedurally invalid since it was directed at the Republic of Cuba and not at Banco Nacional. Banco Nacional argues that the Republic of Cuba is not an “opposing party” in the present suit within the meaning of Rule 13 of the Federal Rules of Civil Procedure. Since we conclude that Banco Nacional and the Republic of Cuba are one and the same for the purposes of this litigation, it follows that the Republic of Cuba is an “opposing party” within the meaning of Rule 13 and that, therefore, the counterclaim was properly asserted.
|
f2d_478/html/0194-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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UNITED STATES of America v. John DOE (two cases). Appeal of Marilyn ALPEREN. Appeal of Robert ALPEREN.
Nos. 73-1062, 73-1063.
United States Court of Appeals, First Circuit.
April 4, 1973.
Barry H. Gerstein and Gerstein & Weiner, Boston, Mass., on brief, for appellants.
Edward F. Harrington, New Bedford, Mass., Attorney-in-Charge, and George F. Kelly, Sp. Atty., U. S. Dept, of Justice, on brief, for appellee.
Before COFFIN, Chief Judge, ALD-RICH and CAMPBELL, Circuit Judges.
PER CURIAM.
During the spring of 1971 a court-authorized tap was placed on the telephone line going to a house occupied by Robert and Marilyn Alperen, husband and wife, pursuant to 18 U.S.C. § 2510 et seq. Conversations of the wife indicating that gambling activities were being conducted from the house were overheard. In due course the husband and wife were summoned to appear before a federal grand jury. Upon their being asked essentially duplicative questions, both claimed self-incrimination and invoked the Fifth Amendment. Immunity was thereupon offered to them under 18 U.S.C. § 2514. When the questions were re-put, both again refused to testify, invoking, inter alia, the husband-wife privilege against testifying against the other, the only issue now raised. Upon their insistence in this court, they were adjudicated in contempt, and from that order they appeal. Pending our resolution of the appeals, they have been admitted to bail.
Although the seeming drift of the questions makes this case perhaps a clearer one for the invocation of the privilege than might be some others, cf. United States v. George, 6 Cir., 1971, 444 F.2d 310, it must be apparent that if appellants’ position is to be sustained, it would seem seriously to frustrate both the federal, and the state, Mass.G.L. c. 233 § 20C et seq., procedures whereby testimony thought worth the cost may be obtained by offering the witness immunity from criminal prosecution.
Section 2514 provides in part,
“No such witness shall be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter or thing concerning which he is compelled ... to testify or produce evidence, nor shall testimony so compelled be used as evidence in any criminal proceeding against him in any court.”
This statute does not, of course, grant immunity to anyone, including a spouse, other than the witness himself. The government seeks to remedy that objection, so far as the present case is concerned, by saying that it has no interest in either spouse, and supports its position by its conduct offering the statutory immunity to both. To this appellants counter,
“If one of the Alperens continues to refuse to testify before the Grand Jury, then he or she will have no immunity.”
The privilege not to testify against a spouse is a common law, and not a constitutional one. It is particularly an area where the court may introduce desirable changes. Funk v. United States, 1933, 290 U.S. 371, 54 S.Ct. 212, 78 L.Ed. 369; Wyatt v. United States, 1960, 362 U.S. 525, 80 S.Ct. 901, 4 L.Ed.2d 931. Just as the Fifth Amendment cannot be claimed when the testimony is merely personally unpalatable (nor can immunity be claimed on that basis, LaTona v. United States, 8 Cir., 1971, 449 F.2d 121) we hold that it would not merely be misapplication of the privilege, but an unwarranted extension, to allow either spouse to invoke it when both are immunized from prosecution and are asked questions about the same transaction.
The orders holding appellants in contempt are affirmed. |
f2d_478/html/0196-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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Brian J. MORTIBOYS, Plaintiff-Appellee, v. ST. MICHAEL’S COLLEGE, Defendant-Appellant.
No. 627, Docket 72-2341.
United States Court of Appeals, Second Circuit.
Argued March 27, 1973.
Decided May 11, 1973.
Frederick W. Allen, Burlington, Vt. (Karen McAndrew and Wick, Dinse & Allen, Burlington, Vt., on the brief), for defendant-appellant.
Philip H. Hoff, Burlington, Vt. (James L. Morse, Burlington, Vt., on the brief), for plaintiff-appellee.
Before FRIENDLY, Chief Judge, LUMBARD, Circuit Judge, and THOMSEN, District Judge.
Of the District of Maryland, sitting by designation.
THOMSEN, District Judge.
Defendant college appeals from a judgment for plaintiff in an action for damages based on injuries he received in a skating accident in February 1968. St. Michael’s College was then a small liberal arts college for men, in Colches-ter, Vermont. Plaintiff was there on a full athletic scholarship for the purpose of playing basketball.
The college had no organized hockey program, but provided two outdoor ice rinks on which students could skate at their pleasure. The one in question was in the form of a hockey rink, but smaller; it had sturdy side boards and nets, and was used by students for skating, pushing a puck around and “pickup” games.
The undisputed evidence shows that college employees scraped and flooded the rink whenever the weather would permit, usually a couple of times a week, when the temperature would drop to near zero; they removed snow when necessary and checked the rink daily or every other day.
On Friday, February 24, about 1:30 or 2:00 p. m., plaintiff and a friend walked over to the rink with their skates and hockey sticks, in the hope of picking up a game. They found six or seven others there, and skated around for about an hour and a half, passing the puck to each other. The temperature had risen to about 35°, but as the sun went down it became colder. The ice was rather rough, but skatable; it was “snowflakey” and cut up from having been skated on. As plaintiff was going after the puck, skating rapidly but not full speed toward the boards, intending to pass the puck to his friend, he noticed a small lump or ball of ice, between i/2 inch and 1 inch in height; he raised his foot to pass over it, but when he put his foot down, his skate hit the lump, causing him to fall and injure himself severely.
Plaintiff had not previously seen the lump, and there is no evidence that anyone else saw it before or after the accident. Outdoor ice is exposed to the vicissitudes of the weather and the accumulations caused by skaters using the surface. It necessarily becomes somewhat rough during such use. It is a matter of speculation what caused the lump to be formed and whether it had been there for any substantial length of time.
Plaintiff’s evidence shows that the maintenance of an indoor rink in suitable condition for intercollegiate hockey requires a staff, expensive equipment and repeated smoothing of the ice during games, as well as before games and practice sessions. Such maintenance cannot reasonably be required of a college providing an outdoor rink for the kind of use contemplated and to which this rink was actually being put at the time of the accident. The duty on the college was reasonable care under all the circumstances.
“In order to impose liability for injury to an invitee by reason of the dangerous condition of the premises, the condition must have been known to the owner or have existed for such a time that it was his duty to know it.” For-cier v. Grand Union Stores, Inc., 128 Vt. 389, 264 A.2d 796, 799 (1970), quoting from two earlier cases, Dooley v. Economy Store, Inc., 109 Vt. 138, 142, 194 A. 375, 377, and Wakefield v. Levin, 118 Vt. 392, 397, 110 A.2d 712.
As Judge Oakes pointed out in Hoar v. Sherburne Corp., 327 F.Supp. 570 (D.Vt.1971), aff’d 456 F.2d 1269 (2 Cir. 1972), the Vermont court has been increasingly liberal in holding the owner of premises liable to business visitors. The defense of assumption of risk, especially, has been sharply narrowed. But the duty owed to a business visitor or other invitee is still “to keep premises reasonably safe”. 327 F.Supp. at 578. The Vermont court has not repudiated the rule quoted above from Forcier v. Grand Union Stores, Inc.
A statement of the duty, applied to a skating rink, appears in Gaffney v. America on Wheels, 16 N.J.Super. 484, 85 A.2d 1, 2 (1951). The court said:
“There is no doubt that one who conducts a skating rink is not an insurer of the safety of the patrons. It is equally indubitable that one who engages in such a business is under the duty to exercise ordinary care to render and maintain the premises which are devoted to that use reasonably safe and suitable for such intended purpose.”
In Cumberland College v. Gaines, 432 S.W.2d 650 (Ky.1968), plaintiff fell during a physical education class because of a sticky substance on the floor of the gymnasium. The court treated plaintiff as an invitee but denied recovery, stating:
“Where the floor condition is one which is traceable to the possessor’s own act — that is, a condition created by him or under his authority — or is a condition in connection with which the possessor is shown to have taken action, no proof of notice of the con-, dition is necessary. However, where it is not shown that the condition was created by the possessor or under his authority, or is one about which he has taken action, then it is necessary to introduce sufficient proof by either direct evidence or circumstantial evidence that the condition existed a sufficient length of time prior to injury so that in the exercise of ordinary care, the possessor could have discovered it and either remedied it or given fair adequate warning of its existence to those who might be endangered by it.” 432 S.W.2d at 652.
There is no evidence in the instant case sufficient to support the conclusion that the small lump on the ice had existed for a sufficient period of time to render the defendant negligent in failing to discover and eliminate the potential hazard.
The judgment is reversed, with instructions to dismiss the complaint.
. E. g. a “Zamboni”, a machine described at trial as costing over $10,000 which “scrapes the surface with a blade and picks up the snow, and lays a new surface of hot water which freezes within minutes”.
. Decided by a three-judge panel of which the present Mr. Justice Brennan was a member,
|
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David KEND, Appellee, v. CHROMA-GLO, INC., Appellant.
No. 72-1389.
United States Court of Appeals, Eighth Circuit.
Submitted Feb. 12, 1973.
Decided April 20, 1973.
Raymond L. Erickson, Duluth, Minn., for appellant.
Robert E. Goldman, New York City, for appellee.
Before GIBSON and ROSS, Circuit Judges, and BENSON, District Judge.
Judge Benson, Chief District Judge of the District Court of North Dakota, sitting by designation.
BENSON, District Judge.
A judgment for the plaintiff (appel-lee) for the sum of $51,597.27 was entered on a jury verdict in a diversity action brought in the United States District Court for the District of Minnesota. This is an appeal from the judgment and from the order of the court denying defendant’s (appellant’s) motion for judgment notwithstanding the verdict, or in the alternative, for a new trial.
In June, 1966, Appellee David Kend (Kend), experienced in the name plate industry, contacted Appellant, Chroma-Glo, Inc. (Chroma-Glo), and expressed an interest in the company and its operations. Kend was particularly interested in Chroma-Glo’s production of a my-lar sign which closely resembled metal signs, but which fabricated very much like paper and didn’t require expensive tooling or heavy equipment.
At an August 31, 1966, meeting with the Board of Directors of Chroma-Glo, Kend learned that Cole National Corporation (Cole) was interested in a type of Mylar numeral or letter sign bonded to a rigid aluminum backing. The purpose of the aluminum backing was to prevent the sign from curling. Chroma-Glo could not produce such a product with its existing equipment. Its capital picture was such that it was not in a position to secure additional equipment without financial assistance. Kend suggested that perhaps Cole could be sold a sign with a paper or cardboard backing which would satisfy Cole’s requirements and could be produced with Chroma-Glo’s equipment. It was agreed that Kend would represent Chroma-Glo on a commission arrangement in efforts to sell to Cole.
On September 7, 1966, Kend wrote Chroma-Glo:
“. . . confirming our verbal arrangement, I am going to pursue the ‘Cole National’ project to a conclusion. I will cover all bases both in New York and Cleveland towards concluding a contract with them. As I progress I will be in touch with you to make sure our figures and proposals are sound. You have advised me that Chroma-Glo, Inc. will protect me with your standard commission arrangement in the event that I am successful in selling this account. This commission will be paid for any sales made to this company, whether or not we conclude a long term arrangement.”
The president of Chroma-Glo responded on September 23, 1966:
“. . . I’m anxious to hear from you on our potential business from Cole National Corp. and you have our assurance that you would receive for your efforts the commissions and per cent of over charge over price list as we had discussed it.”
On November 8, 1966, Kend made a presentation to Cole of Chroma-Glo gold and black cardboard mounted letters. Cole was impressed with the cardboard backing feature, and asked for an immediate quotation on black and white similarly mounted letters. Additional presentations with price quotations were made. It appeared an order would be forthcoming and on December 19, 1966, Kend brought a Cole representative to inspect Chroma-Glo’s production facilities and wrote Chroma-Glo:
“Confirming my arrangement with you, you will cover me with a commission on this program which represent the difference between your quoted price to me of .035 cents each and the selling price to Cole of .039 cents each. On the tooling I will be covered on the difference between the quoted price to me of $400 and the quoted price to Cole of $630. On all future items which we quote to Cole, I will be protected by you with a commission percentage in the same amount (10%) which we had established on this'initial program.”
Following the plant inspection, Cole began placing orders with Chroma-Glo for black and white cardboard backed numerals and some eighteen months after the initial black and white order, placed orders for black and gold cardboard backed numerals. Altogether, Cole placed orders totalling $728,364.80.
At about the time Cole began placing its orders, Kend, with Chroma-Glo’s knowledge, became associated with Dura Process Company, a competitor of Chroma-Glo. He continued to negotiate with Cole regarding the full marketing pro-gx-am of Chroma-Glo letters, numerals and signs of various color combinations. With reference to the Cole business, Chroma-Glo wrote Kend on February 8, 1967:
“If they wish, they can select any col- or combination such as olive drab, red, etc., for sale to certain customers such as Bell Telephone Company who uses approximately an olive drab. This would cause no difficulty whatever on our part, provided the quantities were fairly substantial. A color change creates no need whatever in the equipment required to make these parts.”
In March of 1967, during which time Kend testified he remained in contact with Cole on behalf of Chroma-Glo, samples of the mylar numerals were sent to Cole, accompanied by a letter dated March 27, from Mr. Erickson, which stated in part:
“David Kend will see you at your convenience to discuss the price quotations on all of these parts and he will cover with you at the same time the various points and possible changes you may require.”
Mr. Kend testified that he subsequently quoted prices to Cole, including prices on gold and black, in April of 1967. It appears thaf Mr. Kend corresponded with Cole in May of 1967, as to the progress of field testing of Chroma-Glo samples sent in February.
However, it was not until March of 1968, that Cole indicated to Chroma-Glo that it was interested in placing an order for the black and gold numerals. Chroma-Glo did not communicate this information to Kend, and in June, 1968, Cole made substantial purchases of the black and gold numerals. When Kend leaxmed of this purchase, a dispute arose as to whether Kend was entitled to a 10% commission on the black and gold sale.
Chroma-Glo has stated the issues presented for review to be:
“1. Did the trial court err in refusing to instruct the jury that whex-e words or other manifestations of intention bear more than one meaning an interpretation is preferred which operates more strongly against the party using them, as had been requested by the appellant, Chroma-Glo, Inc.?
2. Did the trial court err in refusing to instruct the jury as to the legal meaning of “procuring cause,” as had been requested by the appellant?
3. Did the facts sufficiently support the jury’s finding that the appel-lee, David Kend, was the procuring cause of the sales of the Black and Gold series to Cole National Company?”
Appellee stated a cause of action in his complaint on a theory of exclusive and continuing agency which would entitle him to a commission on all future Chroma-Glo sales to Cole, and demanded judgment accordingly.
In the trial of the case, and as argued to the jury, the parties, in effect, narrowed the issue to whether Kend was entitled to a 10% commission on the sale of black and gold numerals.
The evidence supports the trial judge’s view of the dispute as expressed in his post trial memorandum:
“Over the years defendant sold Cole National some three-quarters of a million dollars worth of its product. It was some two years after Cole National first ordered black and white that it placed an order for black and gold and it is the 10% commission on these sales in the amount of $339,065.86 or a total of $33,906.58 that is in dispute. Defendant admits that on sales of black and white in the amount of $389,334.76 it has only paid $21,242.78 and still owes $17,690.69.”
Although the evidence does establish that the parties did not disagree on the rate of the commission, it is insufficient to establish an exclusive and continuing agency which would entitle the appellee to commissions on all future sales by Chroma-Glo to Cole. On the state of the record at the time the case went to the jury, the determinative issue was whether the appellee was the procuring cause of the sale of the black and gold letters. On that issue, the appellant’s requested instruction on the rule for the interpretation of ambiguous contracts was obviously not appropriate, and it was not error for the trial court to deny the request.
Appellant requested the following instruction on procuring cause:
“To be the procuring cause of a sale, a broker must originate a cause of events, which without break in continuity make a cause of which the sale is the result. It is not enough that you find the plaintiff’s services merely contributed to the ultimate sale, his services must have been the procuring and effective cause., If you find that the agency of Mr. Kend was terminated or that he abandoned performance or ended his negotiations with Cole National Company before a sale was made, then he would not be the procuring cause thereof.”
The trial court’s instruction on procuring cause reads:
“Now under our system of law in this country, parties are generally free and competent to agree to whatever terms of a contract they may wish or desire, so long as it is lawful. Now if such an agreement is found, that controls. Absent such an agreement, however, and if there be no such agreement found, an agent whose compensation is conditioned upon his accomplishment of a specific result is entitled to the agreed compensation if, and only if, he is the effective cause of accomplishing the result.”
Minnesota follows the general rule that a broker or agent, where the agency created is non-exclusive,
“is not entitled to a commission unless he was the procuring cause of the sale; that is, it must have been the direct result of his efforts to bring it about, and a broker [or agent] seeking to recover a commission has the burden of proving this affirmatively.” Rees-Thompson-Scroggins, Inc. v. Nelson, 276 Minn. 453, 150 N.W.2d 568, 571 (1967), citing Neumeier v. Sper-zel, 223 Minn. 60, 64, 25 N.W.2d 651, 653 (1946).
Appellant contends that his requested instruction on procuring cause must be given to be in accordance with the pronouncements of the Supreme Court of Minnesota, in Neumeier and Rees-Thompson-Scroggins, Inc.
Generally, words which are of significance in their ordinary or popular meaning need no further legal explanation. “Effective”, used as an adjective, is capable of such meaning and needs no legal explanation. Webster’s Third International Dictionary, 724 (1967) states that the word comes from effectivus, latin, the past participle of efficere meaning to bring about, accomplish or effect. “Capable of bringing about an effect: productive of i’esults” is the primary meaning given. “Effectual [a synonym of effective] may apply to what has accomplished an intended result and may approach connotations of decisive." Webster’s, p. 724. “Effective cause”, in the context of this case, would connotate, in ordinary meaning, the primary or decisive cause of the desired result for which Kend was obtained — to sell Chroma-Glo’s products to Cole National. The given instruction to the jury would convey the concept that Kend could not receive a commission unless he brought about the sale of the black and gold series to Cole National through his efforts. Effective cause, as used in ordinary or popular language portrays a certain exclusiveness in that there cannot be two effective causes, no more than there can be two “procuring causes.”
The Supreme Court of South Dakota set forth the two “approaches” to justifiable commissions without distinguishing between them:
“A number of the cases digested in 34 Words and Phrases, phrase the definition of ‘procuring cause’ substantially in terms as one originating a series of events which without break in their continuity, result in the accomplishment of the prime object of the broker’s employment.”
“The Restatement employs the phrase ‘effective cause’ and states, ‘An agent is an ‘effective cause’ as that phrase is used in this Section, when his efforts have been sufficiently important in achieving a result for the accomplishment of which the principal has promised to pay him, so that it is just that the principal should pay the promised compensation to him.” Mehlberg v. Redlin, 77 S.D. 586, 96 N.W.2d 399, 401 (1959).
Actually there is no distinction between the two approaches as both focus upon compensation of one who accomplishes the object of his agency. A perusal of Minnesota cases not only emphasizes this, but also makes clear the Supreme Court of that State did not require the “without break in continuity” language to be included in all instructions on the subject. The primary concern of the Minnesota law is the protection of the principal against multiple claims for commissions on any one transaction. See Carney v. John Hancock Oil Co., 187 Minn. 293, 245 N.W. 367 (1932).
While Rees-Thompson-Scroggins, Inc. emphasized the “without break in continuity language,” that court also stated:
“. . . The test is whose efforts tipped the scale and induced the owner and purchaser to come to agreeable terms.” 150 N.W.2d at 571. (Emphasis added).
Here, the evidence clearly established that Cole was initially interested in letters bonded to rigid aluminum backing which Chroma-Glo couldn’t produce. The Chroma-Glo to Cole sales of black and white and black and gold numerals was brought about by Kend’s expertise and efforts in demonstrating to Cole that numerals on cardboard backing would satisfactorily meet Cole’s requirements. In this ease the time lapse on the black and gold sales was therefore of no significance on the issue of whose efforts tipped the scale or who was the procuring or effective cause.
We deem it unlikely that a modification of the instruction as suggested by Chroma-Glo would have changed the jury’s verdict. Lynch v. Traveler’s Indemnity Company, 452 F.2d 1065 (8th Cir. 1972).
There was no error in the instructions, and the evidence is sufficient to support the verdict.
Affirmed. |
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UNITED STATES of America ex rel. George HART, Appellant, v. Frank DAVENPORT, Sheriff of the State of New Jersey of Passaic County, and Howard D. Yeager, Warden, New Jersey Prison.
No. 72-1287.
United States Court of Appeals, Third Circuit.
Argued Oct. 19, 1972.
Submitted Jan. 31, 1973.
Decided April 27, 1973.
Stanley C. Van Ness, Public Defender, Herbert I. Waldman, Newark, N. J., for appellant.
Joseph D. J. Gourley, Passaic County Prosecutor, John P. Goceljak, Paterson, N. J., for appellee.
Argued Oct. 19, 1972.
Before STALEY, GIBBONS and RO-SEN, Circuit Judges.
Submitted on Briefs Jan. 31,1973.
Before STALEY, ALDISERT and GIBBONS, Circuit Judges.
Judge Rosen heard argument but died before opinion was filed.
OPINION OF THE COURT
GIBBONS, Circuit Judge.
This is an appeal from the denial of a petition for habeas corpus challenging a New Jersey sentence. Appellant Hart was convicted of unlawful possession of lottery slips, N.J.Stat.Ann. § 2A:121-3(b), working for a lottery operation, NJ.Stat.Ann. § 2A:121-3(a), and bookmaking, N.J.Stat.Ann. § 2A:112-3. The district court denied the petition on the basis of the State court record, without an evidentiary hearing, but, pursuant to 28 U.S.C. § 2253, granted a certificate of probable cause for appeal. Two issues, as to both of which State remedies have been exhausted, are raised by the petition. Hart contends, first, that he was deprived of the effective assistance of counsel in his criminal trial because in that trial a single defense attorney, retained by his code-fendant employers, represented him, the two employers, and three other code-fendants. His second contention is that in the criminal trial the State introduced evidence obtained in violation of the fourth amendment. Since no timely motion to suppress was made on his behalf, the second contention is closely related to the effective assistance of counsel argument.
Hart and five others were indicted for gambling offenses alleged to have been committed at Whitey’s Bar and Grill in Paterson. That business was owned by the codefendants John and Grace Bat-tersby. Hart was employed by them as a bartender. The Battersbys lived in an apartment above the business premise.Hart and the Battersbys were charged with maintaining a gambling resort, N. J.Stat.Ann. § 2A:112-3, bookmaking, N. J.Stat.Ann. § 2A: 112-3, possession of lottery slips, N.J.Stat.Ann. § 2A:121-3(b), and working for a lottery, N.J. Stat.Ann. § 2A: 121-3(a). Three patrons of the bar, Wolcott, Stewart, and Chambliss, were charged with possession of lottery slips. All six were represented by the same retained attorney and were tried together. No pretrial motions for severance or for suppression of evidence were made on behalf of any defendant. The record discloses no inquiry from the State trial court either to counsel or to the defendants as to any possible conflict of interest among the defendants. See Government of the Virgin Islands v. Hernandez, 476 F.2d 791 (3d Cir., 1973); Government of the Virgin Islands v. John, 447 F.2d 69, 74-75 (3d Cir. 1971).
At the end of the State’s case it consented to the dismissal of the charge that Hart had maintained a gambling resort. N.J.Stat.Ann. § 2A:112-3. All other charges went to the jury. In the defense case Wolcott, Stewart, Chambliss, and John Battersby took the stand. Hart and Mrs. Battersby did not. Wol-cott and Stewart were acquitted. Cham-bliss was convicted of possession of lottery slips, but did not appeal. The Bat-tersbys and Hart were convicted on all counts except the one charge against Hart which had been dismissed. Following the conviction Hart arranged for separate representation by the New Jersey Public Defender. An appeal on his behalf raising the same issues presented here resulted in an affirmance by the Appellate Division. State v. Hart, No. A-935-69 (N.J.Super., App.Div., Mar. 26, 1971). The New Jersey Supreme Court denied certification. State v. Hart, 58 N.J. 339, 277 A.2d 396 (1971). A separate appeal by the Battersbys resulted in an affirmance, and the denial of certification. State v. Battersby, 57 N.J. 140, 270 A.2d 42 (1970).
The indictments were the result of a raid conducted by the anti-gambling squad of the Paterson Police Department on March 18, 1969, in execution of a search warrant. Hart asserted on appeal that despite the failure of the common counsel to make a suppression motion admission of evidence seized in the raid should have been noticed as plain error. In rejecting this contention the Appellate Division, quoting from the disposition of the Battersbys’ appeal, State v. Battersby, No. A-891-69 (N.J. Super., App.Div., July 2, 1970), said:
“This point lacks substantial merit. This is not a situation where a defendant may have suffered a manifest denial of justice by reason of some palpably inept performance by an assigned attorney. The present case involves a hind-sight attack upon the professional handling of the defense by an attorney of one’s own choosing. There is nothing in the record to support the conclusion that a pretrial motion to suppress the incriminating evidence found upon defendants’ premises by the police in their execution of a search warrant, obtained upon the basis of a supporting affidavit, would have been granted.”
There was in the record, however, the affidavit upon which the search, warrant issued, which in relevant part reads:
“3. That the facts tending to establish the ground for this application and the probable cause of my belief as aforesaid, are as follows:
Tues. March 11, 1969 received from a confidtential informant, information regarding taveren in question that there was a bartender by the name of George taking horse and number action in the taveren and turning it over to owner who reside upstairs over the taveren with his wife.
Tues. 10:45 A.M. till 1:35 P.M. stood in area of taveren and went in there for lunch and then returned to office. All the time this date I observed from my private ear eleven men run in and run right out none of above stood in for any legth of time. Plus when I was in ther having lunch I observed two men come into establishment and talk to George and then he went upstairs at which time owners wife was downstairs with patrons. On this date I was in taveren from 12:p.m. till 12:50 p.m. the rest of time I spent riding around watching traffinto tav-eren and out.
3-13-69 Thurs.
I det. Tribio Verrone again took up a vantage point where I could not be detected from 11:30 till 3 P.M. and watched to see traffic into taveren At 12:p.m. I observed two railroad men after eating there lunch walk over two the taveren at which time I went in right behind them one man order a beer but the other went to George and had the Daily [N]ews in his hand I could see them in plain sight but at no time did this man give him a slip of paper he just talked to him and the went upstairs. Leading me to believe information recieved that owner is stationed upstairs taking action on horses I left after having lunch and several other men came into taveren and talk to [GJeorge but on this occasion thrre men came in but he didn’t go right upstairs until the third man was done with him but at no time did I see him write anything down just talk with the patrons and then go upstairs.
3-13-69 I again contacted my informant to see if he could make a bet with [GJeorge but he told me he won’t take any slips refering to George he runs upstairs when he has all he can remember, only off of his steady customers does he take slips.
3-17-69 Mon. I Det. Tribio Ver-rone again went into taveren on this date and had a few beers it was this time [I] heard phone ring it was approx. 11:35 a.m. [GJeorge went over to phone and spoke with someone for a minuet take care of things for me till I come back.
He returned shortly only when he came back down he was carring Daily [NJews. On this date while [IJ was in the taveren I again seen one of eleven men I had seen another day come into taveren he went directly to [GJeorge talke with him and then they both went upstairs and a old woman came down approx, five minuets went by and down came both [GJeorge and other gentleman and he left never havin a drink. It is in my belief that [GJeorge is taking the bets upstair to whoever is there which my informant says is the owner of the taveren, It is my belief that a search warrant should be issued so this investigation can be brought to a close.” [sicj.
This affidavit is palpably insufficient to support the issuance of the search warrant. The informant information is totally inadequate to establish his reliability. Aguilar v. Texas, 378 U.S. 108, 84 S.Ct. 1509, 12 L.Ed.2d 723 (1964). The affiant’s observations could have been made at noon outside and inside any bar and grill. They do not, independent of the informant’s conclusions, establish probable cause. Spinelli v. United States, 393 U.S. 410, 89 S.Ct. 584, 21 L.Ed.2d 637 (1969). The activities of “George” referred to are as consistent with innocent conduct as with bookmaking or maintaining a lottery. The district court opinion acknowledges as much, but sustains the seizure on other grounds:
“[IJf the legal sufficiency of the warrant were to be tested solely by the adequacy of the informant allegation, the Court feels the validity of the warrant could not be sustained. But a finding of probable cause must take into consideration the facts recited by Detective Verrone relating his personal observation of activities occurring at Whitey’s Bar and Grill on three separate occasions. The conclusion is reached that the seizure of evidence was not conducted in violation of petitioner’s Fourth Amendment rights. Thus the failure of counsel to move to suppress does not constitute ineffective representation of petitioner at trial.” United States ex rel. Hart v. Davenport, Civil No. 645-71 (D.N.J., Mar. 30, 1972).
The testimony of Detective Verrone referred to by the district court is testimony at trial, not testimony before the magistrate who issued the warrant. Compare this situation with that in United States ex rel. Gaugler v. Brier-ley, 477 F.2d 516 (3d Cir., 1973). Thus, the district court ruled that although the warrant was issued on the basis of a defective affidavit a suppression motion would not have been successful because a warrantless seizure would in the circumstances have been proper.
This ruling must be considered in light of the various charges and the different positions of the several defendants. There was no conspiracy charge. There are substantive differences between the offense of bookmaking, N.J. Stat.Ann. § 2A: 112-3, and the lottery offenses proscribed by N.J.Stat:Ann. § 2A: 121-3. The former is the making or taking and recording or registering of bets or wagers on races and other sporting contests. State v. Romeo, 43 N.J. 188, 207, 203 A.2d 23, 33 (1964), cert. denied, 379 U.S. 970, 85 S.Ct. 668, 13 L.Ed.2d 563 (1965). The latter statute defines as separate offenses possession of lottery slips, N.J.Stat.Ann. § 2A: 121-3(b), working for a lottery operator, N.J.Stat.Ann. § 2A:121-3(a), and being the owner of a building or place where any business of lottery or policy is carried on knowingly by the owner or an agency, N.J.Stat.Ann. § 2A:121-3(c). Hart was convicted of bookmaking, of possession of lottery slips, and of working for a lottery operator. As the State conceded at the end of its case, Hart, although so charged, not being the owner of the premises could not be convicted of an offense involving ownership of the premises. Some of the seized evidence tended to prove only lottery violations. Some of it tended to prove only bookmaking. The common attorney made no effort to differentiate when commenting on the evidence and requested no limiting instructions. Detective Verrone testified that on March 11, 13 and 17, he observed what he described as patrons writing out bets on paper and handing the paper either to Mrs. Battersby or to Hart. He made no arrest on these dates, and he did not include the details of his observation in an affidavit in support of an application for a search warrant or an arrest warrant. The arrests were made on March 18. If the seizures were to be sustained as incident to a lawful arrest a matter never considered by the State courts, they would have to be made because the officer had reasonable cause to believe an offense was being committed in his presence on that date. Beck v. Ohio, 379 U.S. 89, 85 S.Ct. 223, 13 L.Ed.2d 142 (1964). Indeed, the trial court ruled (Tr. 29) that Verrone’s testimony about activities prior to March 18 could not be considered by the jury because on cross examination he conceded that his reference to bets on these days was pure conjecture. On March 18, when the arrests were made, Mrs. Battersby and the three patrons, Wolcott, Stewart and Chambliss, were in the bar and grill. Hart was not present. He had left and gone upstairs to the Battersbys’ apartment. Since no conspiracy was alleged, the seized evidence of betting activity would have to be connected to individual defendants in some way. Some such evidence was seized in the bar. An obvious defense strategy for Hart was to attribute origin and possession of that evidence to Mrs. Battersby, who according to the testimony attempted to conceal some betting slips in the garbage can. (Tr. 41-43). This strategy was not effectively pursued. Indeed, no limiting instruction as to the use of the evidence seized in the bar and grill while Hart was not present was even requested. The absence of such a request, which would, of course, have tended to focus the attention of the jury on Mrs. Battersby’s role, points up the conflicting position of counsel. The same is true of certain evidence seized from the patron defendants while Hart was upstairs.
Almost immediately after the arrests were made in the bar and grill two detectives went upstairs and knocked on the apartment door. Hart, who had a phone in his hand, opened the door. A search of the apartment was conducted. In a room remote from that in which Hart was using the phone, described as an office, the officers seized a suitcase, Exhibit S-9, containing money and a horse sheet and slips containing horse bets. From a dresser drawer in the bedroom in which Hart was using the phone, the officers seized a notebook, Exhibit S-10, allegedly gambling paraphernalia. Battersby was sleeping in the apartment, which undisputably belonged to him and Mrs. Battersby. No objection was made to the admission of the evidence seized in the apartment and no limiting instruction was requested on Hart’s behalf. Officer Verrone was the only officer who made any significant observations on March 18 prior to the arrests. His observations, all in the bar and grill, were probably insufficient to justify a warrantless arrest of Hart upstairs in the apartment. Battersby, however, was known to be one of the proprietors of the bar and grill. Ver-rone’s observations might have been sufficient to justify Battersby’s arrest for a violation of N.J.Stat.Ann. § 2A:112-3, and the seizures in the apartment might possibly have been justified as incident to his arrest. But neither the apartment nor the bar and grill belong to Hart, and there is no evidence of Hart’s possession of Exhibits S-9 and S-10. See United States v. Bonham, 477 F.2d 1137 (3d Cir., 1973). Another exhibit, S-15, was seized from Hart’s person, but that seizure, had objection been made, should properly have been suppressed since there was no probable cause to arrest Hart. Here, again, the predicament of counsel becomes clear, for any effort to negate Hart’s connection with Exhibits S-9 and S-10 would have the inevitable tendency to focus attention on Battersby’s role as a proprietor of a gambling enterprise as well as a bar and grill.
In his opening statement to the jury the defense attorney made this short reference to Hart:
“[Mrs. Battersby] had gone behind the bar to relieve Mr. Hart, who was a bartender. Mr. Hart had at that time gone to the upstairs apartment to call his wife or to call his veterinarian about the dog that he owned that was confined at the veterinarian’s place of business and he was concerned about its well being. The State contends that he was phoning in numbers or phoning in bets of some sort. This I will have to wait and see how they are going to show that.” (Tr. of Openings, 11).
Hart contends the veterinarian to whom he was talking at the time of his arrest was available to verify that he was not phoning in bets, but that the common defense attorney did not call him. He complains, as well, that whereas the patron defendants and Battersby took the stand, he was not called to support the representation counsel had made to the jury in the opening statement. Finally he contends, and the record bears him out, that the common defense attorney made no attempt, in his closing argument, to differentiate Hart’s position from that of his codefendants.
The absence of a meaningful closing argument on Hart’s behalf again illustrates the dilemma .of counsel. There was testimony of an admission by Bat-tersby that they were in this gambling business because the tavern business was not so good and they needed the money. (Tr. 135, 148). An obvious defense strategy for Hart was to emphasize this testimony in an attempt to convince the jury that Mr. and Mrs. Bat-tersby were the sole proprietors not only of the bar and grill but also of the gambling enterprise. Instead, the strategy adopted was to deny the admission. (Tr. of Summations, 20).
The record of the State proceedings, then, establishes that there were among the defendants in the trial conflicting' interests. The record is silent as to any advice to Hart respecting those conflicting interests by counsel, by the prosecutor, or by the court. Moreover, in a case of this type, particularly, a conflict arises long before the trial. That conflict is referred to in Justice Wein-traub’s opinion in In re Abrams, 56 N.J. 271, 266 A.2d 275 (1970). Abrams is a disciplinary proceeding against an attorney for undertaking at the behest and expense of an employer in a gambling enterprise the representation of an underling employee. That is precisely what the attorney did in this case for it is not disputed that the Battersbys, the employers, retained and paid the common attorney. In Abrams Justice Wein-traub wrote:
“But, accepting the premise that respondent had no prior commitment to Pickett’s organization, we nonetheless think it was improper for respondent to have accepted the organization’s promise to pay his bill, for such an arrangement has the inherent risk of dividing an attorney’s loyalty between the defendant and the gambler-employer who will pay for the services. Obviously, it is to the interest of the defendant’s employer that the defendant shall not turn him in. That is why the employer is willing to pay. As the Pennsylvania Supreme Court said in Salus [In re Salus], supra [321 Pa. 106] 184 A. [70] at 71:
‘ * * * xt is the latter [the bankers of the syndicates] who are anxious to protect the numbers writers so that they will have no cause for dissatisfaction and no occasion to disclose the operations of the system or the identity of parties by whom they are engaged.’ It is of course to the advantage of the convicted defendant to seek leniency by aiding the State in its pursuit of his employer. State v. DeStasio, 49 N.J. 247, 256-258 [229 A.2d 636] (1967), cert. denied, 389 U.S. 830, 88 S.Ct. 96, 19 L.Ed.2d 89 (1967). It is the duty of the defendant’s attorney to advise him of that opportunity. An attorney is hardly well situated to discharge that duty when he has agreed to look to the syndicate for the payment of his fee.
A conflict of interest inheres in every such situation. It is no answer that Canon 6 of the Canons of Professional Ethics permits the representation of conflicting interest ‘by express consent of all concerned given after a full disclosure of the facts,’ or that Canon 38, restated in affirmative terms, would permit the acceptance of compensation from others with ‘the knowledge and consent of his client after full disclosure.’ Neither rule is relevant when the subject matter is crime and when the public interest in the disclosure of criminal activities might thereby be hindered. It is inherently wrong to represent both the employer and the employee if the employee’s interest may, and the public interest will, be advanced by the employee’s disclosure of his employer’s criminal conduct.” 56 N.J. at 275-276, 266 A.2d at 278.
The legal standard to be applied to a claim of prejudice from joint representation is clear enough. The right to counsel guaranteed by the sixth and fourteenth amendments contemplates the service of an attorney devoted solely to the interests of his client. The right to such untrammelled and unimpaired assistance applies both prior to trial in considering how to plead, Von Moltke v. Gillies, 332 U.S. 708, 68 S.Ct. 316, 92 L.Ed. 309 (1948), and during trial, Glasser v. United States, 315 U.S. 60, 70, 62 S.Ct. 457, 86 L.Ed. 680 (1942). Recognizing that the right to such assistance of counsel may be waived, e.g., Adams v. United States ex rel. McCann, 317 U.S. 269, 275, 63 S.Ct. 236, 87 L.Ed. 268 (1942), we have refused to find any such waiver from a silent record. Government of the Virgin Islands v. Hernandez, supra; Government of the Virgin Islands v. John, supra. We have not yet held that the coincidence of joint representation and a silent record is alone enough to require relief. But see Campbell v. United States, 122 U.S.App.D.C. 143, 352 F.2d 359 (1965). On the other hand, we have rejected the approach that before relief' will be considered the defendant must show some specific instance of prejudice. But see United States v. Lovano, 420 F.2d 769, 773 (2d Cir.), cert. denied, 397 U.S. 1071, 90 S.Ct. 1515, 25 L.Ed.2d 694 (1970); United States v. Alberti, 470 F.2d 878, 882 (2d Cir. 1972). Instead, we have held that upon a showing of a possible conflict of interest or prejudice, however remote, we will regard joint representation as constitutionally defective. Walker v. United States, 422 F.2d 374 (3d Cir.), cert. denied, 399 U.S. 915, 90 S.Ct. 2219, 26 L.Ed.2d 573 (1970). Cf. United States v. Rispo, 460 F.2d 965, 970 (3d Cir. 1972) ; United States ex rel. Small v. Rundle, 442 F.2d 235, 238 (3d Cir. 1971). The Walker test of possible conflict of interest or prejudice however remote, must be applied, moreover, in light of the normal competency standard for adequacy of representation by counsel adopted in this circuit. United States ex rel. Green v. Rundle, 434 F.2d 1112 (3d Cir. 1970) ; Moore v. United States, 432 F.2d 730 (3d Cir. 1970). Normal competency includes, we think, such adherence to ethical standards with respect to avoidance of conflicting interests as is generally expected from the bar.
This, being so, Justice Weintraub’s opinion in the Abrams case should alone suffice to establish Hart’s claim that he was tried without the effective assistance of counsel. But we need hardly rest our decision on the Abrams ease alone, since on the present record the Walker test — a showing of a possible conflict of interest or prejudice, however remote — clearly has been met. And this test is applicable to state proceedings, United States ex rel. Small v. Rundle, supra, just as the Moore standard on adequacy of representation is, United States ex rel. Green v. Rundle, supra.
There remains the final contention that because the attorney was privately retained his actions in rendering ineffective assistance should not be attributed, for fourteenth amendment purposes, to the State of New Jersey. See, e.g., United States ex rel. Wilkins v. Banmiller, 205 F.Supp. 123 (E.D.Pa. 1962) , aff’d, 325 F.2d 514 (3d Cir. 1963) , cert. denied, 379 U.S. 847, 85 S.Ct. 87, 13 L.Ed.2d 51 (1964). Cf. United States ex rel. O’Brien v. Maroney, 423 F.2d 865 (3d Cir. 1970). This contention argues too much. We have never indicated that the hand of the fourteenth amendment is stayed in every case where a defendant is represented by private counsel. What we have previously said is that actions of a privately retained attorney do not for fourteenth amendment purposes per se involve state action. Where the questioned conduct of such attorney takes place in the presence of the court or the state attorney, the state action basis for vindication of the alleged fourteenth amendment deprivation is the failure of the state prosecutor or state court to take necessary corrective action. Thus, in Wilkins and O’Brien, there was no proof that the state’s attorney or court had knowledge of the alleged deprivation. As early as United States ex rel. Darcy v. Handy, 203 F.2d 407, 426-427 (3d Cir.), cert. denied, 346 U.S. 865, 74 S.Ct. 103, 98 L.Ed. 375 (1953), this court recognized that when the attorney’s conduct is so lacking in competence or good faith that it shocked the conscience of the court or prosecutor as officers of the state, there was state action for fourteenth amendment purposes. Later the standard of competence was modified in Moore v. United States, supra, but the principle of state action was reaffirmed in United States ex rel. Green v. Rundle, supra. Indeed, it is difficult to imagine how a distinction between assigned and retained counsel in a conflict of interest context could be squared with the duty of the trial judge “ . . .of seeing that the trial is conducted with solicitude for the essential rights of the accused.” Glasser v. United States, supra, 315 U.S. at 71, 62 S.Ct. at 465. The action of the trial judge in permitting the case to go forward without so much as an inquiry as to potential harm arising from joint representation is the state action complained of. The very fact that courts control admission to their bar of licensed practitioners is a recognition that laymen simply are not equipped to appraise a lawyer’s professional skills. A rule which would apply one fourteenth amendment test to assigned counsel and another to retained counsel would produce the anomoly that the non-indigent, who must retain an attorney if he can afford one, would be entitled to less protection from the trial court. The effect upon the defendant — confinement as a result of an unfair state trial — is the same whether the inadequate attorney was assigned or retained. Cf., e.g., Shelley v. Kraemer, 334 U.S. 1, 68 S.Ct. 836, 92 L.Ed. 1161 (1948).
There is much to be said for the rule of the District of Columbia Circuit which assumes prejudice and nonwaiver if there has been no on-the-record inquiry by the court as to the hazards to defendants from joint representation. Campbell v. United States, supra. This case does not require the adoption of a per se rule since, as we have said above, the Walker test has been met. But we reiterate what Judge Rosenn wrote in Government of the Virgin Islands v. Hernandez, supra:
“[W]e believe the dangers inherent in joint representation are serious enough ... to make it highly desirable that [defendants] be apprised of them. If such dangers are communicated to [defendants], difficult questions of whether a conflict of interest arose because of joint representation can be avoided. [Defendants] will intelligently be given the choice of whether to reject joint representation or to waive their right to the unfettered representation made possible by separate counsel.”
To this admonition we add that the warning should come at the earliest stage of the criminal justice process, so that each defendant can be made aware of the advantages, such as grants of immunity for testimony or more lenient treatment, which sometimes come to those who leave a criminal enterprise and go their own way.
The order of the district court will be reversed and the case remanded with a direction that the writ of habeas corpus should issue, discharging the petitioner Hart from State custody unless within a reasonable time to be fixed by the district court he is afforded a new trial.
. See N.J.Stat.Ann. § 33 :l-35 governing inspection of premises licensed to dispense alcoholic beverages. Cf. State v. Zurawski, 89 N.J.Super. 488, 215 A.2d 564 (1965), aff’d, 47 N.J. 160, 219 A.2d 614 (1966). The State did not at the trial contend that the search in question was being made on behalf of the Division of Alcoholic Beverage Control or another license issuing authority.
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f2d_478/html/0211-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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Gilbert F. SIELING, Sr., Petitioner-Appellant, v. Frank A. EYMAN, Warden, Arizona State Prison, Respondent-Appellee.
No. 71-2784.
United States Court of Appeals, Ninth Circuit.
April 23, 1973.
Dennis J. Skarecky (argued), Post-Conviction Legal Assistance Clinic, Tucson, Ariz., for petitioner-appellant.
William P. Dizon, Asst. Atty. Gen. (argued), Gary K. Nelson, Atty. Gen., Phoenix, Ariz., for respondent-appellee.
Before MERRILL, KOELSCH, and DUNIWAY, Circuit Judges.
KOELSCH, Circuit Judge:
Gilbert F. Sieling was charged by information in the Arizona Superior Court with three counts of assault with a deadly weapon, and five counts of assault to commit murder. At his arraignment, the court entered a plea of not guilty for him and granted a defense motion for the appointment of two psychiatrists to examine Sieling to determine whether he was competent to stand trial. When the two psychiatrists disagreed on the issue, the court ordered a third expert to examine the defendant. At a hearing, held pursuant to Rule 250, Arizona Rules of Criminal Procedure, 17 A.R.S., the reports of the examining psychiatrists were considered, and each of the experts testified. All three of the psychiatrists expressed the opinion that, at the time of the alleged crimes, Sieling was insane under the applicable M’Naghten standard; however, two of them were of the opinion that he was then able to understand the proceedings and to assist counsel in his defense. The trial court concluded that Sieling was competent to stand trial.
Approximately a month later, shortly before the scheduled trial date, Sieling notified the court that he wished to change his plea. He was brought into court, and a brief inquiry was made by defense counsel, at the court’s direction, regarding Sieling’s understanding of the charge and the consequences of a guilty plea. A plea of guilty was entered on the counts of assault with a deadly weapon and, pursuant to a plea bargain, the court granted the prosecution’s motion to dismiss the five remaining counts in the information. The court then sentenced Sieling to consecutive terms of 8-10, and 4-6 years.
After exhausting all available state post-conviction remedies, Sieling petitioned the United States District Court for a writ of habeas corpus. The matter is here on the court’s judgment dismissing his petition.
Sieling bases his right to relief on the ground that his guilty pleas were invalid. He contends that he was mentally incompetent to enter them*. In substance, his argument is that neither the finding of competency to stand trial nor the guilty plea proceedings, held in the trial court, adequately resolved the question of his competency to waive his constitutional right to trial. He points out that his competency to make such a waiver was not at issue at the competency hearing, and accordingly, the trial court never made a finding on that issue; further, he argues that the colloquy immediately preceding his guilty plea cannot suffice to resolve the question, because it consisted of no more than the usual inquiry concerning volun-tariness, lack of coercion, and understanding of the consequences, and therefore did not extend into the area of his mental competency at all.
Support for Sieling’s argument is found in Westbrook v. Arizona, 384 U.S. 150, 86 S.Ct. 1320, 16 L.Ed.2d 429 (1966). In that decision, the Supreme Court gave recognition to a distinction between a defendant’s mental competency to stand trial, and his competency to waive his right to counsel at trial. The Court held that a trial court finding, under Arizona Criminal Rule 250, that the defendant was competent to assist counsel in his defense, did not suffice as a finding that he was also competent to waive such a fundamental constitutional right as the right to the assistance of counsel.
A plea of guilty “is itself a conviction. Like a verdict of a jury it is conclusive. More is not required; the court has nothing to do but give judgment and sentence.” Kercheval v. United States, 274 U.S. 220, 223, 47 S.Ct. 582, 583, 71 L.Ed. 1009 (1927); Machibroda v. United States, 368 U.S. 487, 493, 82 S.Ct. 510, 7 L.Ed.2d 473 (1962). “Several federal constitutional rights are involved in a waiver that takes place when a plea of guilty is entered in a state criminal trial. First, is the privilege against compulsory self-incrimination guaranteed by the Fifth Amendment and applicable to the States by reason of tlje Fourteenth. Malloy v. Hogan, 378 U.S. 1 [84 S.Ct. 1489, 12 L.Ed.2d 653]. Second, is the right to trial by jury. Duncan v. Louisiana, 391 U.S. 145 [88 S.Ct. 1444, 20 L.Ed.2d 491], Third, is the right to confront one’s accusers. Pointer v. Texas, 380 U.S. 400 [85 S.Ct. 1065, 13 L.Ed.2d 923].” Boykin v. Alabama, 395 U.S. 238, 243, 89 S.Ct. 1709, 1712, 23 L.Ed.2d 274 (1969). Consequently, the courts must exercise the “utmost solicitude of which [they] are capable in canvassing the matter with the accused to make sure he has a full understanding of what the plea connotes and of its consequence.” Boykin v. Alabama, supra, 395 U.S. at 243-244, 89 S.Ct. at 1712.
It is of course well settled that a defendant in a criminal trial cannot be deemed to abandon any fundamental constitutional protection unless there is both “an intelligent and competent waiver by the accused.” Johnson v. Zerbst, 304 U.S. 458, 465, 58 S.Ct. 1019, 1023, 82 L.Ed. 1461 (1938); Westbrook v. Arizona, supra. In the typical case — that is, when the defendant’s sanity or mental capacity has not been put in issue— the determination of the validity of the waiver by the defendant can be assessed with an assumption that he is mentally capable of making the weighty decisions involved in giving up his right to counsel, cross-examination, trial by jury, or his privilege against self-incrimination. However, where a substantial question of a defendant’s mental capacity has arisen in a criminal proceeding, it is logically inconsistent to suggest that his waiver can be examined by mere reference to those criteria we examine in cases where the' defendant is presumed competent, since in the latter cases no inquiry into the defendant’s mental capacity to make the waiver is made. Cf. Pate v. Robinson, 383 U.S. 375, 384, 86 S.Ct. 836, 15 L.Ed.2d 815 (1966). If a defendant who can be presumed competent pleads guilty, a court can assess the adequacy of his waiver by examination of the objective evidence in the record, such as the advice given him by the court as to the nature of the charge, the waivers resulting from the plea and the sentencing prospects, as well as the defendant’s statements or responses made in open court. Where the question of a defendant’s lack of mental capacity lurks in the background, however, the same inquiry, while still necessary, fails to completely resolve the question of whether the defendant can properly be said to have had a “rational, as well as a factual, understanding” [Dusky v. United States, 362 U.S. 402, 80 S.Ct. 788, 4 L.Ed.2d 824 (1960); Schoeller v. Dunbar, 423 F.2d 1183, 1184 (9th Cir. 1970)] that he was giving up a constitutional right. Cf. Rees v. Peyton, 384 U.S. 312, 86 S.Ct. 1505, 16 L.Ed.2d 583 (1966).
We think Westbrook makes it plain that, where a defendant’s competency has been put in issue, the trial court must look further than to the usual “objective” criteria in determining the adequacy of a constitutional waiver. In Westbrook, supra, although the state court had, after hearing, concluded that the defendant was mentally competent to stand trial, the Supreme Court deemed it essential that a further “inquiry into the issue of his competence to waive his constitutional right to the assistance of counsel . . .” was required. 384 U.S. at 150, 86 S.Ct. 1320. It was not suggested there, nor has it been in this case, that the state court’s determination that the accused was competent to stand trial was incorrect. The clear implication, then, is that such a determination is inadequate because it does not measure the defendant’s capacity by a high enough standard. While the Court did not suggest a standard, it is reasonable to conclude from the Court’s language that the degree of competency required to waive a constitutional right is that degree which enables him to make decisions of very serious import. Judge Hufstedler, in Schoeller v. Dunbar, 423 F.2d 1183, 1194 (9th Cir. 1970) has suggested the following standard: “A defendant is not competent to plead guilty if a mental illness has substantially impaired his ability to make a reasoned choice among the alternatives presented to him and to understand the nature of the consequences of his plea.” We think this formulation is the appropriate one, for it requires a court to assess a defendant’s competency with specific reference to the gravity of the decisions with which the defendant is faced.
The examination and inquiry into Sieling’s competency, made by the state court here, was not directed at such a level of competency. Under Rule 250, Arizona Rules of Criminal Procedure, the trial court’s inquiry is directed to whether a defendant is “. able to understand the proceedings and to assist in his defense.” In Westbrook, that same Arizona determination was held insufficient for waiver of counsel purposes. If such a determination is deficient on the facts of Westbrook, we think a fortiori it is a deficient basis for upholding a plea of guilty.
In our opinion, this court’s per curiam decision in Small v. Arizona, 455 F.2d 456 (9th Cir. 1972) does not compel a contrary result. In Small the court upheld a guilty plea against an attack based on the adequacy of the state court’s determination that the petitioner was competent to stand trial, a determination made after the entry, but before the trial court’s acceptance, of the plea. The decision did not, however, discuss the standard of competency involved in these determinations; that question was not briefed and was therefore not before the court. Accordingly, Small does not control our decision.
As to the proper form of relief, we think a remand to the state court may be adequate to resolve the question of Sieling’s competency to plead guilty. The Supreme Court in Pate v. Robinson, 383 U.S. 375, 86 S.Ct. 836, 15 L.Ed.2d 815 (1966) faced a problem of determining a defendant’s competency some six years after the defendant was tried. There the Court concluded that a retrospective determination of the defendant’s competency could not satisfactorily be made because inter alia, “expert witnesses would have to testify solely from information contained in the printed record.” 383 U.S. at 387, 86 S.Ct. at 843. That was so, because the trial court had never inquired into the competency question, and thus medical experts had never examined Robinson at the time of the trial. Therefore, the only proper course was a new trial. Here, however, Sieling was examined within a month before his plea by three medical experts, each of whom submitted reports and testified before the trial court. The scope of their examinations and the content of the opinions they expressed may be sufficient for the trial court to determine whether or not their opinions can support a finding that Seiling was competent to plead guilty as well as to stand trial. We note, however, that one of the experts disagreed even as to Siel-ing’s competence to stand trial, and the trial court may conclude that it is impossible from the present state of the record to make the determination we hold is required. However, we conclude that the trial court should have an opportunity to review the psychiatric evidence in light of our opinion, to decide in the first instance, whether there is sufficient evidence upon which to make that determination.
Accordingly, the judgment is reversed and the cause remanded to the District Court to grant the writ, unless within 60 days the State obtains trial court review of the psychiatric evidence in light of the views expressed herein. The District Court shall retain jurisdiction of the cause; if the state court vacates the pleas, then the cause shall be dismissed; should relief be denied the District Court shall then review the matter in conformity with this opinion.
Reversed and remanded.
. Judge Hufstedler dissented in Sehoeller. However, her quoted statement was not made with respect to any matter in issue in that case, nor was it the subject of attention by the majority, but constituted simply her passing observation on an unrelated question.
. In Rees v. Peyton, supra, the Supreme Court held that Rees could not be permitted to withdraw his pending certiorari petition, where Ms counsel had put before the Court a question of Rees’ competence, until it could be determined “whether he has a capacity to appreciate his position and make a rational choice with respect to continuing or abandoning further litigation or, on the other hand, whether he is suffering from a mental disease, disorder, or defect which may substantially affect his capacity in these premises.” 384 U.S. at 314, 86 S.Ct. at 1506.
. It should be noted that the transcript of the psychiatrists’ testimony before the state trial court is not in the record on this appeal, nor, apparently, was it before the District Court. The District Court’s conclusion that the state court inquiry was full and fair is therefore erroneous. Townsend v. Sain, 372 U.S. 293, 83 S.Ct. 745, 9 L.Ed.2d 770 (1963) ; Selz v. California, 423 F.2d 702 (9th Cir. 1970).
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f2d_478/html/0216-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "HILL, Circuit Judge.",
"license": "Public Domain",
"url": "https://static.case.law/"
} |
H. R. GIBSON, Sr., d/b/a Gibson Products Company, Plaintiff-Appellant, v. Clinton E. JEFFERS, Commissioner of Agriculture, State of Colorado, Defendant-Appellee.
No. 72-1405.
United States Court of Appeals, Tenth Circuit.
Argued Jan. 11, 1973.
Decided May 3, 1973.
Bardwell D. Odum and Robert E. Rad-ex', Jr., Dallas, Tex., for plaintiff-appellant.
Russell P. Kramer, Sp. Asst. Atty. Gen. and James K. Kreutz, Asst. Atty. Gen. (Duke W. Dunbar, Atty. Gen., and John P. Moore, Deputy Atty. Gen., Denver, Colo., on the brief), for defendant-appellee.
Before BREITENSTEIN,' HILL and McWILLIAMS, Circuit Judges.
HILL, Circuit Judge.
Plaintiff-milk distributor appeals dismissal of his declaratory judgment complaint by the federal district court of Colorado for lack of jurisdiction. The complaint was instituted to determine plaintiff’s rights under the Colorado Milk Marketing Order issued by ap-pellee Commissioner of Agriculture.
Since 1966 appellant, a Texas citizen, has been engaged in the business of buying milk and milk products in the State of Oklahoma for resale to retail outlets located in Colorado. In the latter part of January, 1971, the Commissioner of Agriculture advised appellant that his business of selling milk and milk products was subject to regulation by Docket A-20, State of Colorado, Department of Agriculture, Marketing Order to Promote and Regulate the Marketing of Milk and Milk Products in the State of Colorado, as amended January 15, 1971. This order required in part that distributors file a schedule of prices, discounts and rebates with the Commissioner of Agriculture at least thirty days before offering these commodities for sale in Colorado.
Appellant shortly thereafter filed with the Commissioner a schedule of prices, discounts and rebates; but nevertheless on March 9, 1971, appellant was served with a temporary restraining order prohibiting him from selling any milk or milk products in Colorado until thirty days after the filing of a “legal” schedule of prices, discounts and rebates. Three days later a second temporary restraining order was served on appellant restraining him from selling milk or milk products until he had followed the Colorado Milk Marketing Order or until further order of the court. On the same date as issuance of the second temporary restraining order, appellant received a letter from the manager of the Colorado Milk Marketing Board acknowledging receipt of the schedule of prices, discounts and rebates, but refusing to approve the schedule for the normal 30-day waiting period. On March 19, 1971, a Colorado district judge issued a temporary injunction at appellee’s request prohibiting and enjoining appellant from selling or offering for sale milk products in the State of Colorado until April 7, 1971, or until further order of the court. After finding that appellant was not selling below cost, appellee advised the court of such fact and the temporary injunction was terminated on April 5, 1971.
Appellant’s problems with the Commissioner of Agriculture were not over. Although his schedule had been approved, the approval was limited to marketing areas I, II, III, VII and IX. On July 14, 1971, appellee informed appellant that no schedule of prices was on file or approved for distribution of milk and milk products in marketing area VI. Appellant filed a second schedule of prices with applicability to area VI even though his first schedule filed was intended for use throughout the State of Colorado. Appellee thereafter changed his course of attack and obtained a preliminary injunction on August 26, 1971, prohibiting appellant from selling and distributing milk until appellant’s handler in the State of Oklahoma filed a schedule of prices, discounts and rebates which was approved by the Commissioner of Agriculture.
As a result of appellee’s exertion of authority under Docket A-20, appellant was prevented from selling milk to retail outlets in Colorado from March 9, 1971, to April 5, 1971, and was prohibited from selling milk in area VI from August 23, 1971, to October 11, 1971. Needless to say, appellant feels the Commissioner’s interpretation of his authority under Docket A-20 is strained and in violation of the law.
During the time appellant was enjoined by a state court from selling milk in Colorado, he filed suit in the United States district court seeking monetary damages against the Colorado Commissioner of Agriculture, and a temporary restraining order, a preliminary injunction and a permanent injunction prohibiting the Commissioner from enforcing Docket A-20. Appellant claimed he was damaged in the amount of $36,000. This figure was arrived at by taking his gross revenue lost for every week he was prohibited from doing business as a result of appellee’s unlawful interpretation of Docket A — 20. The weekly gross revenue was $9,000 and from this amount appellee earned gross profits of approximately $2,500. During the four weeks he was enjoined from selling milk in Colorado, appellant allegedly suffered a loss of over $10,000 in gross profits.
On the merits of the case appellant ai’gued that Docket A-20 as interpreted by appellee unconstitutionally burdened interstate commerce in violation of Article 1, Section 8, Clause 3, along with being an impost or duty on imports in violation of Article 1, Section 10, Clause 2. Appellant further charged that Docket A-20 as applied by appellee deprived him of his property without due process of law and therefore violated the Fourteenth Amendment to the United States Constitution. Finally, appellant alleged that as Congress has preempted the field of interstate commerce, appellee’s enforcement of Docket A-20 violated the Interstate Commerce Act, Title 49 U.S. C.
The United States district court held that jurisdiction might properly be invoked under 28 U.S.C. §§ 1331 and 1332. It was the court’s opinion, however, that because the state injunction had expired before appellant’s ease was heard, it was moot within the principles of Hall v. Beals, 396 U.S. 45, 90 S.Ct. 200, 24 L.Ed.2d 214 (1969), and Huse-man v. Finch, 424 F.2d 1237 (10th Cir. 1970).
Appellant amended his complaint and asked for a declaratory judgment as provided in 28 U.S.C. § 2201 His first amended complaint leveled several new charges on the constitutionality of Docket A-20, but nowhere were his jurisdictional arguments buttressed. The appel-lee vigorously challenged appellant’s right to sue in federal court. Appellee charged there could be no recovery against the Commissioner of Agriculture individually as he was acting under color of state authority when he prohibited appellant from selling milk commodities in Colorado, and therefore cloaked with sovereign immunity. Appellee further argued that appellant in his pleadings had offered no facts showing damage in the requisite $10,000 jurisdictional amount. Appellant’s original complaint alleged approximately $10,000 in lost gross profits but as gross profits are not a measure of damages, appellant had failed to surmount the jurisdictional hui’dle.
The court was in agreement with ap-pellee’s contentions but allowed appellant to file a second amended complaint showing the requisite jurisdictional amount. Appellant introduced a new issue into the case in his second amended complaint. He charged his civil rights were being violated by the Commissioner of Agriculture in that he was not being treated equally with distributors living within the State of Colorado. Supporting this allegation appellant pointed out that Docket A-20 prohibited distributors living outside Colorado from voting for members of the Colorado Milk Board. Such discrimination was in violation of 28 U.S.C. § 1343. Appellant also pleaded in general allegations that his inability to sell milk or milk products in marketing area VI from August 23, 1971, to October 11, 1971, caused him to suffer the loss of his right to do business. No facts were presented showing what his damages were as a result of the injunction in market area VI.
Once again the district court felt jurisdictional requisites had not been properly alleged, but nevertheless appellant was allowed to file another amended complaint. In his third and final amended complaint appellant asserted several other forms of damages resulting from appellee’s alleged illegal conduct. Besides lost profits and decrease in market value of his business, appellant charged he was out overhead expenses along with losing the use of his business property during the time he was enjoined from selling milk and milk products in Colorado. These general allegations were not supported by any facts showing the amount of damages. After reviewing the third amended complaint the lower court held appellant had failed to show facts sufficient to invoke jurisdiction. Utilizing as measure of damages the cost to appellant of complying with the order, the court found damages to be insufficient for jurisdictional purposes. City of Lawton, Oklahoma v. Chapman, 257 F.2d 601 (10th Cir. 1958). As appellant had been unable to show jurisdictional amount in three amended complaints, the court dismissed his complaint for want of jurisdiction.
Appellant on appeal presents two issues for consideration. He first charges that his complaint sufficiently alleges the jurisdictional amount as required by 28 U.S.C. §§ 1331-1332 and Rule 8, F.R. Civ.P. His second issue is that damages may be measured by loss of the right to do business, loss of profits from a preexisting business, loss of market value in a preexisting business and/or loss of use of property. Whichever way his damages are measured, appellant asserts that he has proved his damages to be in excess of $10,000.
Generally speaking, under federal question and diversity cases all that is required in the allegations is that the matter in controversy exceeds, exclusive of interest and costs, the sum of $10,000. 1 Moore’s Federal Practice, 0.-92 [1], p. 834 (2 ed. 1948). The test to determine amount in controversy is not the sum ultimately found to be due, but the sum demanded in good faith. Ordering dismissal of an action in federal district court must therefore be based on a legal certainty that the claim is for less than the jurisdictional amount. Farmers Elevator Mutual Insurance Co. v. Jewett, 394 F.2d 896 (10th Cir. 1968); Branding Iron Club v. Riggs, 207 F.2d 720 (10th Cir. 1953). When dismissal for lack of jurisdictional amount also constitutes a decision on the merits, the court should be even more reluctant to dismiss the case. Jaconski v. Avisun Corp., 359 F.2d 931 (3d Cir. 1966).
Although allegations in the complaint need not be specific or technical in nature, sufficient facts must be alleged to convince the district court that recoverable damages will bear a reasonable relation to the minimum jurisdictional floor. Nelson v. Keefer, 451 F.2d 289 (3d Cir. 1971). Merely asserting an amount in controversy equal to the minimum sum required does not entitle appellant to sue in federal court. He must allege sufficient damages to assure the district court that the jurisdictional requirement has not been “thwarted by the simple expedient of inflating the complainant’s ad damnum clause.” Nelson v. Keefer, supra at 294.
Once the jurisdictional amount is challenged the burden of proving jurisdiction is on the party asserting it. F & S Construction Co. v. Jensen, 337 F.2d 160 (10th Cir. 1964). And where the motion to dismiss states that it affirmatively appears from the allegations of the complaint that the requisite jurisdictional amount is not involved, the question of jurisdiction may be determined on the allegations of the complaint without the production of any evidence. Gibbs v. Buck, 307 U.S. 66, 59 S.Ct. 725, 83 L.Ed. 1111 (1939). Such was the procedure used in the present case. Appellant was given three chances to amend his complaint and after each amendment appellee attacked the complaint for lack of jurisdiction. The trial court felt three chances at showing the jurisdictional amount was enough. We agree.
Appellant’s third amended complaint merely alleges that the amount in controversy exceeds $10,000 exclusive of interest and costs. Nowhere does he attempt to show how he arrived at this amount. Instead he offers general statements such as lost profits resulting from the “illegal injunctions,” decrease in market value of his business, continuing overhead expenses, and loss of the right to use his business property. These general allegations are insufficient when the other party challenges the legal sufficiency of the complaint. Appellant was charged with showing his damages and he failed to carry his burden. If we combine all his complaints together, the closest he has come to averring facts sufficient to prove jurisdiction is his assertion in the original complaint that he suffered loss of gross profits of approximately $10,000 for the four weeks he was enjoined from selling milk and milk products in Colorado. Gross profits, however, do not furnish the proper basis for measuring damages in cases such as the one confronting us. Lee v. Durango Music, 144 Colo. 270, 355 P.2d 1083 (1960).
Appellant is asking the federal district court to interpret Colorado’s milk marketing regulations. • Our court on a previous occasion held that when enforcement of state law is sought to be restrained by resort to the federal court, “the amount in controversy is to be determined by the damages which would result to the party requesting the injunction if he were required to comply with the statute or ordinance to carry on his business.” City of Lawton, Oklahoma v. Chapman, supra 257 F.2d at 603-604. Nowhere do the allegations in appellant’s amended complaints set forth any facts showing what the losses were from appellee’s alleged wrongful conduct. Three times appellant was allowed to amend his complaint to be more specific, and three times the amended complaint alleged damages only in general terms.
Appellant failed to properly allege the requisite jurisdictional amount and therefore the lower court correctly dismissed his action for want of jurisdiction.
Affirmed.
. 28 U.S.C. § 2201.
. Appellee thereafter requested a permanent injunction against Gibson until its handler in Oklahoma filed the proper schedules. The Colorado district court ruled it was without jurisdiction over the handler and refused to grant the injunction. On appeal the Colorado Supreme Court affirmed tlie lower court decision on the ground that Gibson’s handler in Oklahoma did not have sufficient contact with Colorado to invoke in personam jurisdiction. Colorado v. Gibson, 508 P.2d 374 (Colo.1973).
. 28 U.S.C. § 1331(a). The district courts shall have original jurisdiction of all civil actions wherein the matter in controversy exceeds the sum or value of $10,000, exclusive of interest and costs, and arises under the Constitution, laws, or treaties of the United States.
28 U.S.C. § 1332(a). The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $10,-000, exclusive of interest and costs, and is between—
(1) citizens of different States;
(2) citizens of a State, and foreign states or citizens or subject thereof; and
(3) citizens of different States and in which foreign states or citizens or subjects thereof are additional parties.
. 28 U.S.C. § 2201. In a case of actual controversy within its jurisdiction, except with respect to Federal taxes, any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.
. 28 U.S.C. § 1343. The district courts shall have original jurisdiction of any civil action authorized by law to be commenced by any person:
(3) To redress the deprivation, under-color of any State law, statute, ordinance, regulation, custom or usage, of any right, privilege or immunity secured by the Constitution of the United States or by any Act of Congress providing for equal rights of citizens or of all persons within the jurisdiction of the United States.
. Rule 8, F.R.Civ.P. (a) Claims for relief. A pleading which sets forth a claim for relief, whether an original claim, counterclaim, cross-claim, or third-party claim, shall contain (1) a short and plain statement of the grounds upon which the court’s jurisdiction depends, unless the court already has jurisdiction and the claim needs no new grounds of jurisdiction to support it, (2) a short and plain statement of the claim showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief to which he deems himself entitled. Relief in the alternative or of several different types may be demanded.
(e) Pleading to be Concise and Direct; Consistency. (1) Each averment of pleading shall be simple, concise, and direct. No technical forms of pleading or motions are required.
(f) Construction of Pleadings. All pleadings shall be so construed as to do substantial justice.
. Bule 8, F.B.Civ.P. (e)(1).
|
f2d_478/html/0222-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "PER CURIAM.",
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Walter Mark FLANAGAN, Petitioner-Appellant, v. Jim ROSE, Warden, Respondent-Appellee.
No. 72-2079.
United States Court of Appeals, Sixth Circuit.
Argued April 10, 1973.
Decided May 22, 1973.
Blanchard E. Tual (Court Appointed), Tual, Douglas & Tual, Memphis, Tenn., for petitioner-appellant.
R. Jackson Rose, Asst. Atty. Gen., Nashville, Tenn., David M. Pack, Atty. Gen., of counsel, for respondent-appel-lee.
Before PHILLIPS, Chief Judge, and KENT and LIVELY, Circuit Judges.
PER CURIAM.
This is an appeal from the denial of a writ of habeas corpus. The appeal challenges the legality of a search warrant which was executed by state officers to obtain evidence to establish that the appellant and his co-defendants had been robbing the coin box of a pay telephone. Two search warrants are involved: one for the search of rooms at a motel, and the other for the search of an automobile located on the motel premises.
The affidavit in support of the search warrant was executed by the same af-fiant in each case. The affiant was not identified as a police officer, which in fact he was. In each affidavit this appellant, together with his co-defendants, is named. The affiant stated, in his affidavit in support of the search warrant, “that he has good ground and belief and does believe * * * ” that the appellant and his co-defendants are in possession of stolen property and burglary tools, and the affidavit continued, “and his reasons for such belief are that affiant has received information from David Hindman that burglary tools and/or stolen property was stored at the above premises, November 11, 1965.” The other affidavit is exactly the same, except the word “automobile” is substituted for the word “premises”.
The affidavit does not identify David Hindman. There is nothing to establish or even suggest that David Hindman was an individual upon whose information reliance could be placed. There is nothing in the affidavit to establish the circumstances under which David Hindman may have obtained the information to which reference is made.
In summary the affidavits are clearly inadequate within the meaning of Aguilar v. Texas, 378 U.S. 108, 84 S.Ct. 1509, 12 L.Ed.2d 723 (1964), and Spinelli v. United States, 393 U.S. 410, 89 S.Ct. 584, 21 L.Ed.2d 637 (1969).
It is claimed by the appellee, and the district court found, that the magistrate who issued the search warrants had other information in regard to the circumstances which led up to the affidavit for the search warrant, including the identity of Hindman and how Hindman obtained the information, referred to in the affidavit, which justified the issuance of the warrant. ■
The transcript of the evidentiary hearing in the district court, and the transcript of all proceedings in the state trial court are insufficient to establish that the magistrate who issued the warrant took any sworn testimony to supplement the allegations in the affidavits for the search warrants. In fact the officer who swore to the affidavits in support of the search warrants testified before the District Judge:
“A. Well, I remember making this out [the affidavit] and taking it out to his residence.
Q. That is really all you remember about it, isn’t it, Mr. Anderton?
A. Telling him what happened, I don’t know what I said exactly. * * * * * -x-
Q. Sir, the other question that I wanted to try to make clear is, you can’t say whether or not you walked in there and just started talking to the Judge in, normally, as officers do, and as lawyers do in the courtroom, and made some statement to him about what your problem was and so forth, and then later presented, handed him the affidavit and the search warrant, and then he swore you to the contents of the warrant, you can’t tell us the sequence of events, can you?
A. No, sir. I sure can’t.”
The same issue relating to a magistrate having information in addition to that contained in the affidavit was presented to this Court in Tabasko v. Barton, 472 F.2d 871, 874 (6th Cir. 1972). The statement made in that case is applicable to this case.
“We have read and reread the entire transcript of the hearing before the District Judge. We find therein no language from affiant which can be construed as a statement that he gave evidence under oath, except when he swore to the contents of the affidavit.”
In addition to the transcript of the hearing before the District Judge we have read and reread the transcript of the trial of the principal case and can find nothing “which can be construed as a statement that the [affiant] gave evidence [before the magistrate] under oath, except when he swore to the contents of the affidavit.”
Since the evidence secured in the search was essential to establish the appellant’s connection with the crime the admission of such evidence cannot be harmless error.
The judgment of the District Court is reversed and the case is remanded for the entry of an order granting the writ of habeas corpus on such terms as may appear to the District Judge to be appropriate. |
f2d_478/html/0224-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "PER CURIAM.",
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Charles HULL, Petitioner-Appellant, v. HOLIDAY INNS OF AMERICA, INC., a Tennessee corporation, Defendant-Third-Party Plaintiff-Appellee, Cross-Appellant. v. James H. COMINS et al., Third-Party Defendants-Appellees Cross-Appellees.
Nos. 72-1549, 72-1550.
United States Court of Appeals, Sixth Circuit.
April 26, 1973.
Ralph H. Adams, Detroit, Mich., on brief for appellants.
Plunkett, Cooney, Rutt & Peacock, Detroit, Mich., for Holiday Inns of America, Inc.
Floyd Westcott, Alexander, Buchanan & Conklin, Detroit, Mich., for Comins.
Manuel Zechman, Detroit, Mich., for Hazeii Hay.
David M. Tyler, Detroit, Mich., for Bryan Steam.
Thomas M. O’Leary, Detroit, Mich., for appellees; Plunkett, Cooney, Rutt & Peacock, by Jeannette A. Paskin, Detroit, Mich., on brief.
Before EDWARDS and McCREE, Circuit Judges, and CECIL, Senior Circuit Judge.
PER CURIAM.
This is an appeal by Charles Hull, plaintiff-appellant, from a judgment of no cause of action by the United States District Court for the Eastern District of Michigan, Southern Division. The plaintiff brought an action against Holiday Inns of America, as defendant, to recover damages for injuries alleged to have been sustained by excessively hot water in the bath tub of a Holiday Inn in Detroit, Michigan. Holiday brought in other parties as third party defendants but this opinion will involve only the plaintiff and defendant as briefed by the parties.
The plaintiff had been a guest of the Inn in question for thirty-five days and on the morning of September 11, 1967 he undertook to take a bath in the bath tub. He turned on the hot water, only, and in attempting to test the temperature of the water while sitting on the edge of the tub, he slipped in the tub and sustained the injuries of which he complains. The plaintiff received severe burns to his right hand and right buttocks.
It is claimed on behalf of the plaintiff that the water in the bathtub was excessively hot, of a temperature in excess of what is regarded as safe for such use and that the defendant violated its duty to maintain its premises in a reasonably safe condition for plaintiff, as an invitee. The severity of plaintiff’s injury is not in question. It was admitted for the purpose of the motion for a directed verdict that if the defendant supplied water in excess of 150° F. to plaintiff’s room for bath purposes it would have been in excess of that customarily permitted and regarded as safe.
The district judge in granting the motion for judgment of no cause of action held that the plaintiff had failed to offer evidence that the temperature of the water was in excess of 150° F. or that the defendant had violated its duty toward plaintiff to maintain its premises in a reasonably safe condition.
In considering a motion for a directed verdict the judge must consider all of the testimony in the light most favorable to the plaintiff. Lones v. Detroit, T. & I. R. Co., 398 F.2d 914 (C.A. 6) cert. den. 393 U.S. 1063, 89 S.Ct. 714, 21 L.Ed.2d 705; Serratoni v. Chesapeake and Ohio Ry. Co., 333 F.2d 621, 626 (C.A.6) cert. den. 379 U.S. 960, 85 S.Ct. 648, 13 L.Ed.2d 555; Kravat v. Indemnity Insurance Company of North America, 152 F.2d 336 (C.A. 6); Hinton v. Dixie Ohio Exp. Co., 188 F.2d 121, 124 (C.A. 6).
Obviously, there is no evidence available of the exact temperature of the water at the time the plaintiff fell into the tub and received his injuries. Mechanically, there was a separate boiler to furnish hot water to the rooms of the motel. The gauge on it was set at 180° F. There is a Holby Mixing Valve which mixes the hot water as it comes from the boiler with cold water to a proper temperature for the rooms. There is a gauge or thermometer on this Mixing Valve to regulate the temperature of the water that goes to the rooms. There is no evidence of the temperature at which that gauge or thermometer was set. There was also a limit switch which was supposed to cut off when the water got up to a certain temperature. There is no evidence of the temperature setting of it or whether it was functioning.
Dr. Joseph D. Carlysle, a plastic surgeon who treated the plaintiff, testified that the nature of plaintiff’s burns were such as might be received in water of 180° F. in thirty seconds. He did not testify whether such burns could be received in water of a temperature of 150° F. or less or how long it would take to get such burns as the plaintiff had in water of 150° F. or less.
The plaintiff testified that he turned on the hot water and sat on the side of the tub. When he reached over to test the water with his hand, he slipped and fell into the tub. He caught himself on his right hand and right hip and as he went down he bumped his head on something which caused a bump on his head as reported by the hospital. To extricate himself he reached for the basin, which was right by the tub, with his left hand and pushed himself out with his hand and hip. In the process he knocked a glass off of the basin which broke on the side of the tub and caused some cuts on the left hip and left buttocks.
He testified further that he was in a daze and didn’t know exactly how long he was in the water. He said he got up as fast as he could and estimated that he was in the water seven, eight or ten seconds.
Dr. Carlysle testified,
“The infliction of' a burn depends on the temperature of the agent, the duration that the patient is in contact with the agent, and also the area of the skin involved, and even the age of the patient.”
-x- -x- -x- * -x- *
“To have these burns inflicted, the water would, in my opinion, would have to be excessively hot- — as I said before, in excess of 150, and even approaching ranges of 180 and above.”
On cross examination he testified that at 135° F. one might receive burns corn-parable to the ones the plaintiff had in five minutes.
Thus, a crucial fact in the case is the length of time the plaintiff was in the'water. We consider that the jury is entitled to draw inferences from the physical facts as well as the oral evidence. We conclude from the fact that only the plaintiff’s right hand and right buttocks were burned the jury might well infer that no other part of his body was in the water and that he could not have remained in that position over a few seconds which would indicate that the water was excessively hot.
Counsel for the defendant argues that the plaintiff was guilty of contributory negligence as a matter of law. The district judge did not decide this question. We consider, however, that it is a question for the jury to decide under all of the facts of the case.
Judgment reversed and the case is remanded to the District Court for trial to a jury.
. It was undisputed that a safe temperature o water for rooms in a motel or hotel was 140° F., plus or minus five or ten degrees.
|
f2d_478/html/0226-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "\n PER CURIAM:",
"license": "Public Domain",
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Jacob W. BLASDEL and Ruth Alice Blasdel, Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.
No. 73-1284
Summary Calendar.
United States Court of Appeals, Fifth Circuit.
May 21, 1973.
John A. Bailey, Houston, Tex., for petitioners-appellants.
Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Atty., Tax Div., U. S. Dept, of Justice, Lee H. Henkel, Jr., Chief Counsel, I. R. S., Washington, D. C., for respondent-appellee.
Before GEWIN, COLEMAN and MORGAN, Circuit Judges.
Rule 18, 5 Cir., see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I.
PER CURIAM:
This is an appeal from the United States Tax Court, 58 T.C. 1014. It involves a determination of whether certain interests conveyed from the appellants to the donees are “future interests” and therefore not entitled to the $3,000 annual gift tax exclusion. We affirm the decision below.
In 1967, appellants transferred 290 acres of farm land to the Edgewood Farm Trust and named themselves as beneficiaries. They then executed gift agreements transferring fractional shares of their interests in the trust to eighteen family members (their children, the children’s spouses, and their grandchildren). The farm land had generated very little income, so the trust was created to allow the trustee to sell the land in small parcels and distribute the proceeds to the twenty beneficiaries. But under the Powers of the Trustee, § VII of the trust instrument provided:
“The trustee shall make periodic disbursements of the income and corpus of the trust, provided that all beneficiaries of the trust are in accord and unanimously agree that such distribution be made. Should it not be possible to obtain unanimous approval of all the beneficiaries, and should a majority of the beneficiaries be desirous that a distribution be made, the trustee will be authorized to make such distribution provided that it be authorized by a majority vote of the members of the Board of Directors of the Rosenberg State Bank.”
On the authority of Ryerson v. United States, 312 U.S. 405, 61 S.Ct. 656, 85 L.Ed. 917 (1941), and Howe v. United States, 7 Cir., 1944, 142 F.2d 310, the Tax Court held that the disbursement of income and corpus conditional on (1) unanimous agreement of the twenty beneficiaries, or (2) majority approval of the beneficiaries and majority approval of the directors of a local bank constituted “future interests in property” within the meaning of § 2503(b), I.R.C. 1954.
Since the receipt of income is contingent upon an event, the language in Chanin v. United States, 1968, 393 F.2d 972, 183 Ct.Cl. 840 is applicable:
“Unless the donee is entitled unconditionally to present use, possession, or enjoyment of property transferred, gift is one of future interest for which no gift tax exclusion is operable”. [Emphasis added]
The judgment of the Tax Court is
Affirmed. |
f2d_478/html/0227-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "ESTES, District Judge:",
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AMERICAN FIRE & CASUALTY COMPANY, Plaintiff-Appellant, v. STEWART-SNEED-HEWES, INC., Defendant-Appellee.
No. 72-2797.
United States Court of Appeals, Fifth Circuit.
May 17, 1973.
Rehearing Denied June 13, 1973.
David L. Cobb, Harry R. Allen, Gulf-port, Miss., for plaintiff-appellant.
Rae Bryant, Gulfport, Miss., for Thompson & Stewart, and others.
Hollis C. Thompson, Jr., Gulfport, Miss., for Thompson.
Before COLEMAN and SIMPSON, Circuit Judges, and ESTES, District Judge.
ESTES, District Judge:
American Fire and Casualty Company, claiming that its former agent, Stewart-Sneed-Hewes, Inc. (SSH), issued an insurance policy against the instructions of American Fire, brought this suit to obtain reimbursement from SSH for a $14,694.00 payment American Fire made for a claim on that policy. The jury found for the defendant, and American Fire appeals the trial judge’s denial of its motions for a directed verdict and judgment notwithstanding the verdict.
In 1969, SSH, an independent insurance agent, was authorized to write insurance on American Fire, as well as on many other insurance companies, in the area of Gulfport, Mississippi. The agency contract between American Fire and SSH provided that all policies would be written in accordance with the manuals and written instructions of American Fire issued to SSH, and that SSH would be liable for any loss sustained by American Fire due to any negligent delay in compliance with such instructions by SSH.
On June 3, 1969, Tom Rowe, the vice president of American Fire’s Property Division, sent the following letter to SSH concerning a policy issued for Gold-in & Schwartz, Inc.:
“We have just received this builders risk which is being processed, but would like to remind you that we prefer not to write any further builders risk for the balance of this summer. This, of course, is due to the present windstorm season, etc. We would appreciate your marking your files to this effect.” [emphasis added]
On June 5,1969, Mrs. Cecile Price, who was then a clerk in the property section of SSH, responded with the following note:
“With regard to your note about the above risk [the Goldin & Schwartz policy], the Builder’s Risk is to be can-celled as of this date — and we will abide by your request concerning B. Risks through the summer — ”
It appears from the record that SSH did not write any more builders risk insurance on American Fire until August 15, 1969, when a builders' risk policy was issued to Continental Construction Company for an apartment construction project, then sixty percent complete. The residents of Gulfport were then aware of the presence of Hurricane Camille in the Gulf of Mexico; however, the hurricane had not reached the longitude and latitude at which the writing of property insurance would be suspended. Three days later, Hurricane Camille struck Gulfport, causing extensive damage, including damage to the Continental apartment project. American Fire received the notice of loss from Continental at approximately the same time it received its notification that the policy had been issued by SSH.
In a letter dated September 4, 1969, Rowe asked J. C. Thompson, president and an agent of SSH, to advise him about this policy, since “[i]t was agreed by your office quite some time ago that we would not write any other builders’ risks during the storm season. . . . ” Thompson replied by letter on September 16, 1969, that “it is quite obvious that this office did not follow your instructions.” Thompson took the responsibility for the situation, but stated that neither he nor Sessions Hootsell, vice president and an agent of SSH, had seen the June 3 letter, and that many builders risk policies were placed by SSH without an agent instructing the clerk on which specific insurance company the policy should be written.
American Fire subsequently paid Con- ’ tinental $14,694.00 for damage to the insured project covered by the policy. It now seeks reimbursement from SSH for the loss, alleging SSH is liable to American Fire for failing to follow Ameidcan Fire’s instructions.
The jury having found the facts adversely to American Fire, American Fire appeals the trial court’s denial of its motions for a directed verdict and subsequently for a judgment notwithstanding the verdict. Appellant contends that its motions should have been granted because the evidence overwhelmingly proved that its June 3 letter contained written instructions to SSH not to write any builders risk insurance on American Fire throughout the summer, or even if SSH was not bound by the June 3 letter, it was bound by the June 5 response of Mrs. Price, who acted with actual or apparent authority to so bind SSH.
The standard for deciding motions for a directed verdict or a judgment notwithstanding the verdict was clearly stated in Boeing Company v. Shipman, 411 F.2d 365, 374 (5 Cir. 1969). If, upon considering all the evidence, the trial court determines that “the facts and inferences point so strongly and overwhelmingly in favor of one party . . . that reasonable men could not arrive at a contrary verdict,” it should grant the motions. If there is substantial evidence opposed to the motions, so that “reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions, the motions should be denied. . . . ”
With regard to its contention that its June 3 letter contained a written instruction for SSH not to write any more builders coverage during the summer months, American Fire points to the voluntary cancellation of the Goldin & Schwartz policy, by SSH and Thompson’s statement in the September 16 letter that SSH “did not follow your instructions.” [emphasis • supplied] However, both Thompson and Mrs. Price, the witnesses who testified concerning the instruction issues, asserted that the June 3 letter contained only a “preference,” not an “instruction.” They also testified that in the insurance practice, an independent agent would attempt to follow a company’s preference, but when the agent considered it necessary to serve a person seeking insurance, he would write insurance on a company contrary to its preference. Furthermore, SSH introduced into evidence, to show the strong language of an instruction, a 1966 American Fire bulletin to its agencies which read, “Effective immediately, we will not entertain any coverage on a restaurant account that does not have an approved type extinguishing system currently installed.” [emphasis added] In view of the conflicting evidence, we cannot say that reasonable men could not conclude that American Fire’s June 3 letter expressed merely a preference instead of an instruction.
The evidence concerning Mrs. Price’s actual or apparent authority to so bind SSH by her June 5 note is also conflicting. Mrs. Price was a clerk with SSH and as such had no authority herself to limit the type of insurance the agents could write; only an agent could do that. There was testimony that Mrs. Price obtained the approval of one of the SSH agents to reissue the Goldin & Schwartz policy and to write a note to American Fire to inform it of the reissuance; however, there was also evidence to the effect that in the SSH office clerks would prepare the paper work for a reissuance of insurance for a wide variety of reasons and present the proposed reissuance to an agent without necessarily informing the agent of the specific reason for reissuance. Because there could be a multitude of reasons for reissuing insurance, the agents. directed their concern toward the accuracy of the new policy in a reissuance instead of determining the reason for reissuance. Hence, reasonable men could conclude that Mrs. Price had obtained approval for the reissuance of the Goldin & Schwartz policy by an agent without specifically informing the approving agent that American Fire preferred not to write any more builders risk insurance during the summer and without obtaining authority from the agent to bind SSH not to issue any such insurance on American Fire.
As to Mrs. Price’s apparent authority, she did correspond with American Fire as part of her duties as clerk. If she had been authorized by an agent to do so, she could have bound SSH by her June 5 letter, and, furthermore, American Fire was not able to tell from the June 5 letter itself that she had not obtained such authority from an agent. However, it is uncontroverted that American- Fire, through its vice president Rowe, knew Mrs. Price was a clerk, not an agent, and had no personal authority to bind SSH. No evidence was presented to show that Mrs. Price’s previous correspondence with American Fire included instances in which she was authorized to limit the insurance which SSH agents could write. Appellant had the burden of proving Mrs. Price’s authority or apparent authority. United States Fidelity & Guaranty Co. v. Arrington, 255 So.2d 652 (Miss.1971). The evidence appellant produced was not so overwhelming that reasonable men must conclude that American Fire could rely upon Mrs. Price’s statement as being authoritative.
After reviewing all the evidence in the record, we find there was ample evidence to support the jury findings and that the district judge properly denied the motions for directed verdict and judgment notwithstanding the verdict. The judgment is
Affirmed.
At the time of the trial, Mrs. Price was no longer employed by SSH.
|
f2d_478/html/0231-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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KUNSTSAMMLUNGEN zu WEIMAR, Plaintiff-Appellant, v. Edward I. ELICOFON, Defendant-Appellee. FEDERAL REPUBLIC OF GERMANY, Plaintiff Appellee, v. Edward I. ELICOFON, Defendant-Appellee, Elisabeth Mathilde Isidore Erbgrossher-zogin von Sachsen-Weimar-Eisenach (Grand Duchess of Saxony-Weimar), Plaintiff-Intervenor-Appellee, Kunstsammlungen zu Weimar, Proposed Plaintiff-Intervenor-Appellant.
Nos. 748-749, Dockets 72-2305-2306.
United States Court of Appeals, Second Circuit.
Argued April 24, 1973.
Decided April 25, 1973.
Harry I. Rand, New York City (Lawrence M. Kaye, Botein, Hays, Sklar & Herzberg, New York City, on the brief), for proposed plaintiff-intervenor-appel-lant.
Richard W. Hulbert, New York City (Cleary, Gottlieb, Steen & Hamilton, New York City, on the brief), for defendant-appellee Elicofon.
Albert D. Jordan, New York City (Elliot Paskoff, Horst Kurnik and Valicen-ti, Leighton, Reid & Pine, New York City, on the brief), for defendant-appel-lee Federal Republic of Germany.
Herbert Strong, New York City, for plaintiff-intervenor-appellee Duchess of Saxony-Weimar.
Before BREITENSTEIN KAUFMAN and MANSFIELD, Circuit Judges.
Of tlie United States Court of Appeals for the Tenth Circuit, sitting by designation.
PER CURIAM:
On January 27, 1969, the Federal Republic of Germany brought suit in the district court for the Eastern District of New York against Edward Elicofon, a New York resident, to recover two valuable paintings by the renowned artist Albrecht Duerer, alleged to have been stolen in 1945 from Schwartzburg Castle in Germany during the American Occupation. The Federal Republic asserts that the paintings, executed in the year 1499, are the property of the German people, having been in the possession of a state museum at the time of theft, and that it is the only government that may properly represent the German people in an American court. On March 25, 1969 the Grand Duchess of Saxony-Weimar was granted leave to intervene, based on a claim that the Duerer masterpieces have been part of the collection of the Grand Duke of Saxony-Weimar since 1824 and that title to the paintings rests in her through an assignment from the Grand-Duke.
On April 14, 1969, the Kunstsamm-lungen zu Weimar (Weimar Art Collection), an entity existing under the laws of the German Democratic Republic, sought leave to intervene, and brought a separate action against Elicofon for return of the paintings. The Kunstsamm-lungen asserts that it has custody over the art collection from which the paintings allegedly were stolen and is, accordingly, the rightful owner of the Duerer works.
The motion to intervene was opposed by all parties, and Elicofon moved to dismiss the separate action brought against him by the Kunstsammlungen zu Weimar. In essence the Federal Republic of Germany, the Grand Duchess and Mr. Elicofon took the position that the Kunstsammlungen Zu Weimar is an arm and agency of the German Democratic Republic, a government not recognized by the United States, and as such is without standing to sue in American courts. In addition, the United States Department of Justice, acting in behalf of the Department of State, filed a “Suggestion of Interest of the United Stated” indicating the following.
1. The United States Government does not recognize the East German regime.
2. The United States Government recognizes the Federal Republic of Germany as the only German Government entitled to speak for Germany as the representative of the German people in international affairs.
3. The United States Government recognizes the Federal Republic of Germany as entitled in this litigation to represent the Weimar Museum as trustee of its interests.
In an opinion filed on June 25, 1970, Chief Judge Mishler ruled that the German Democratic Republic would not be entitled to sue in its own right to recover the two Duerer paintings. Following an evidentiary hearing, Chief Judge Mishler ruled, in an opinion filed September 26, 1972, that the Kunstsamm-lungen zu Weimar was an arm and agency of the German Democratic Republic and, as such, was barred from suit. Accordingly, leave to intervene was denied and the motion to dismiss made by Elicofon was granted. This appeal followed.
We affirm for the reasons given in Chief Judge Mishler's two opinions, reported at 358 F.Supp. 747 (E.D.N.Y.1973). Moreover, we find no merit in the argument advanced here that the Kunstsammlungen zu Weimar is an arm of the government of the Union of Soviet Socialist Republics and therefore an agency of a recognized government previously granted litigant status. |
f2d_478/html/0233-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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Daniel H. SHUMATE, Appellant, v. The BOARD OF EDUCATION OF the COUNTY OF JACKSON, a corporation, et al., Appellees.
No. 73-1139.
United States Court of Appeals, Fourth Circuit
Submitted April 16, 1973.
Decided May 4, 1973.
Charles R. McElwee and John C. Palmer, IV, Charleston, W. Va., on brief for appellant.
Joseph C. Hash, Jr., Pros. Atty., Ripley, W. Va., on brief for appellees.
Before HAYNSWORTH, Chief Judge, and SOBELOFF and BOREMAN, Senior Circuit Judges.
PER CURIAM:
Daniel H. Shumate brought this suit under 42 U.S.C. § 1983, seeking reinstatement as a public school teacher and damages against the Board of Education of Jackson County, West Virginia. The complaint alleged that the Board’s failure to re-employ him for the 1972-73 school year “was arbitrary, malicious and without legal cause and was based upon or resulted from the exercise by the plaintiff of rights guaranteed by the First Amendment to the Constitution of the United States * * In response to the defendants’ motion the district court, 350 F.Supp. 1315, dismissed the complaint for failure to state a claim upon which relief can be granted. We cannot agree. We reverse and remand this case for trial on the merits.
Shumate was an art teacher at a high school in Jackson County, West Virginia, employed in his third year of teaching under a probationary contract. ******Assuming he met the statutory requirements he was eligible for a “continuing contract,” providing teacher tenure, beginning with the fourth year. In his complaint Shumate alleged that although he was a competent teacher and satisfied the requirements for a fourth year contract, the school board refused to grant the contract because of his controversial activities as a member and president of the Jackson County Education Association. This refusal, he says, was intended to punish and deter him from exercising his first amendment rights, including the rights of freedom of association, speech, thought and inquiry.
In dismissing the complaint, the district court recognized that Shumate stated claims of violation of constitutional rights, but proceeded on the theory that the school board merely allowed his probationary contract to expire and was under no obligation to renew it. The court correctly noted that the board took no affirmative action revoking the contract nor did it condition renewal on some restrictive prerequisite. Thus, since Shumate did not have a tenured status, the district court reasoned he had no rights to vindicate and the school board could not be liable under section 1983.
We think such a conclusion is contrary to the recent Supreme Court decision of Perry v. Sindermann, 408 U. S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972). Just as Shumate’s contract was allowed to expire, so was Sindermann’s. While failure to renew a contract may not be an affirmative action, it was in each case a deliberate inaction. As it was with Sindermann, the critical question here is whether the board’s decision not to renew Shumate’s contract was made in retaliation for his exercise of his free speech rights. The absence of any contractual or tenure right does not affect Shumate’s constitutional claims. Id. at 596, 92 S.Ct. 2694. See also Chitwood v. Feaster, 468 F.2d 359 (4th Cir. 1972).
This is not to say that a school board may not decline to renew such a teacher’s contract for a good reason or for no reason. It may not do so for a bad reason if the bad reason is retribution for one’s lawful exercise of constitutionally protected rights.
Therefore, we hold that a claim grounded on 42 U.S.C. § 1983 and based on the allegation that the county school board has denied employment to a public school teacher solely because of his exercise of his constitutional free speech rights will, if proven, entitle Shumate to relief.
Accordingly, the board’s motion for summary affirmance is denied. The motion for summary reversal is granted and the judgment of the district court is reversed and the case is remanded for proceedings consistent with this opinion.
Reversed and remanded.
. W.Va.Code Ann. § 18A-2-2 (Replacement Vol. 1971) provides:
A teacher’s contract under this section, shall be for a term of not less than one nor more than three years; and if, after three years of such employment, the teacher who holds a professional certificate, based on at least a bachelor’s degree, has met the qualifications for the same, and the board of education enter into a new contract of employment, it shall be a continuing contract:
. The district court distinguished this action from similar cases in which school officials had “acted affirmatively pursuant to state law to make effective certain conditions prerequisite to continued teacher employment.” See Pickering v. Board of Education, 391 U.S. 563, 88 S.Ct. 1731, 20 L.Ed.2d 811 (1968) ; Keyishian v. Board of Regents, 385 U.S. 589, 87 S.Ct. 675, 17 L.Ed.2d 629 (1967) ; Shelton v. Tucker, 364 U.S. 471, 81 S.Ct. 247, 5 L.Ed.2d 231 (1960).
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f2d_478/html/0235-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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GREAT AMERICAN INSURANCE COMPANY et al., Appellants, v. BUREAU VERITAS, Appellee.
Nos. 541, 542, Dockets 72-1422, 72-1423.
United States Court of Appeals, Second Circuit.
Argued March 14, 1973.
Decided May 9, 1973.
Charles S. Haight, Jr., (Haight, Gardner, Poor & Havens, New York City, on the brief), for appellants Great American Ins. Co., American Manufacturers Mutual Ins. Co., Aetna Ins. Co., and Hartford Fire Ins. Co.
Walter L. Hopkins, New York City (William A. Wilson, Wilson & Hopkins, New York City, on the brief), for appellants World Tradeways Shipping, Ltd. and The Steamship Mutual Underwriting Ass’n Limited.
Edwin Longcope, New York City (John F. X. McKiernan, Hill, Betts & Nash, New York City, on the brief), for appellee.
Before HAYS, MULLIGAN and OAKES, Circuit Judges.
HAYS, Circuit Judge:
This is an appeal from a decision of the United States District Court for the Southern District of New York dismissing the complaint which sought to recover from appellee, a classification society, damages occasioned by the sinking of a ship, the TRADEWAYS II, in the North Atlantic in October, 1965, shortly after her departure from Antwerp, Belgium, bound for the United States.
The first group of appellants consists of the Great American Insurance Company, the American Manufacturers Mutual Insurance Company, the Aetna Insurance Company and the Hartford Fire Insurance Company, insurers of the charterer of the TRADEWAYS II. They will be referred to as the “Great American group.” The second group of appellants is made up of World Tradeways Shipping Ltd. and Steamship Mutual Underwriting Assoc. Ltd., respectively, the owner and the underwriter of the TRADEWAYS II.
The Great American group sued Bureau Veritas, the classification society which surveyed the TRADEWAYS II before it departed from Antwerp, for negligence and breach of warranty. They sought indemnification by way of subro-gation for the amounts which they, as insurers of the charterer, paid out in compromise of the claims asserted against the charterer as a result of the loss of the ship. A second suit was commenced by the owner and underwriter of the ship against Bureau Veritas for indemnification for sums paid out on their behalf. The two suits were consolidated for trial and for appeal.
The trial was limited by agreement of the parties to the issue of liability. The court had before it a stipulation of undisputed facts, numerous exhibits that were for the most part agreed upon by the parties prior to trial, and the testimony of witnesses as to the facts and of expert witnesses. The court dismissed the complaints of both groups of plaintiffs, 338 F.Supp. 999 (S.D.N.Y.1972), saying:
“Insofar as plaintiffs have failed to meet their burden of proving by a preponderance of the evidence that the alleged breach of warranty or duty was the proximate cause of the sinking, that there were in fact breaches of either warranty or duty, or that the principles of either tort or contract law would entitle them to recovery, judgment is entered in favor of the defendant.”
338 F.Supp. at 1002.
There was no direct evidence that the defects surveyed and reported by Bureau Veritas but left unrepaired caused the sinking of the TRADE-WAYS II. Weighing such evidence as there was the district court came to the conclusion that appellants had failed to establish a causal relationship between Bureau Veritas’ negligence and the loss of the TRADEWAYS II. No sufficient reason is advanced to justify our disregard of the court’s findings as to causation. Therefore, even assuming the classification society was negligent, appellants cannot recover. See In re Marine Sulphur Transport Co., 460 F.2d 89, 101 (2d Cir.), cert. denied, 409 U.S. 982, 93 S.Ct. 326, 34 L.Ed.2d 246 (1972).
On appeal, the appellants assert that even if they failed to establish that the negligence of Bureau Veritas caused the sinking of the ship, they should recover on the ground that Bureau Veritas’ negligence in not denying classification in the presence of the report reciting the unrepaired defects in the vessel created such a, risk of liability that appellants were justified in settling the cargo claim.
However, appellants did not have to assume the risk of liability. They could have vouched in Bureau Veritas to defend the cargo claims and thus secured a test of Bureau Veritas’ liability. Having chosen not to adopt that course they cannot now complain of the holding in their independent suit that Bureau Veritas’ negligence was not proved to be the cause of the loss. See Damanti v. A/S Inger, 314 F.2d 395 (2d Cir.), cert. denied, 375 U.S. 634, 84 S.Ct. 46, 11 L.Ed.2d 64 (1963).
. Nimpex International, Inc., the subvoyage charterer of Midland, sued both Midland and World Tradeways for cargo loss, seeking damages in excess of one million dollars. On the advice of counsel, the claim was settled for $220,000. Of this amount, the Great American group paid $130,000 on behalf of Midland and the owner and underwriter paid $90,000.
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f2d_478/html/0237-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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Percy C. and Beverly L. GREGSON, Appellees, v. INTERNAL REVENUE SERVICE et al., Appellants. Karl J. BRAY, pro se, and James H. L. Lawler, pro se, in Class Action, Appellees, v. T. W. ELISON et al., Appellants, v. UNITED STATES of America and Internal Revenue Service, J. M. Walters, Commissioner, et al., Appellants. Gerald L. HENDERSON and Yvonne S. Henderson, Appellees, v. INTERNAL REVENUE SERVICE, Thomas L. Harkness et al., Special Agent for Internal Revenue Service, et al., Appellants. Thomas W. HOOPES and Phyllis A. Hoopes, Appellees, v. INTERNAL REVENUE SERVICE, Tim W. Elison, Special Agent for Internal Revenue Service, et al., Appellants.
Nos. 72-1713, 72-1714, 72-1723 and 72-1764.
United States Court of Appeals, Tenth Circuit.
May 16, 1973.
Janet P. Spragens, Atty., Tax Division, Dept, of Justice, Washington, D. C. (Meyer Rothwacks and John P. Burke, Attys., Tax Division, Dept, of Justice, Washington, D. C., and Scott P. Cramp-ton, Asst. Atty. Gen., and C. Nelson Day, U. S. Atty., of counsel, with her on the brief), for appellants.
Leonard W. Burningham, Salt Lake City, Utah (Curtis K. Oberhansly, James S. Lowrie, and J. Wendell Bayles, Salt Lake City, Utah, with him on the brief), for appellees in Nos. 72-1713, 72-1714, and 72-1764.
Robert Rees Dansie, Murray, Utah, for appellees in No. 72-1723.
Herbert C. Livsey, Salt Lake City, Utah, for appellee, First Security Bank of Utah, Salt Lake City, Utah, in No. 72-1764.
Before SETH and HOLLOWAY, Circuit Judges, and KERR, District Judge.
SETH, Circuit Judge.
This is an appeal by the defendant, Internal Revenue Service, seeking to have dissolved the preliminary injunctions in each of the several cases consolidated for argument before this court.
Appellees are all taxpayers seeking to enjoin the Internal Revenue Service from obtaining by summons records of their accounts at banks where they have been doing business. Some allege that they are members of an organization known as the Tax Rebels of America, and have spoken out in favor of abolishing the income tax and the Internal Revenue Service, and that because of this they are being harassed and an attempt is being made by the IRS to intimidate them in violation of their First Amendment right of freedom of speech. The appellees Henderson do not apparently belong to such an organization and have independently asserted a right to the privacy of the records short of a court order.
The District Court granted appellees a preliminary injunction in each of the captioned cases, and set the matter down for hearing. However, before that hearing could take place, the IRS took this appeal. As a result, the trial court never had an opportunity to have the parties develop the facts as it planned to do.
The preliminary injunctions were issued after a limited hearing at which both appellants and appellees were represented, but no findings of fact or reasons for issuance were incorporated in the order granting the preliminary injunction, nor were any reasons separately set out. For this reason, the preliminary injunction in each of the cases fails to comply with the requirements of Rule 65(d), Fed.R.Civ.P., which states:
“Every order granting an injunction and every restraining order shall set forth the reasons for its issuance; shall be specific in terms; shall describe in reasonable detail, . . . . ”
See Farrell v. Danielson, 296 F.2d 39 (9th Cir.).
It is, therefore, necessary to dissolve the injunctions and reverse and remand the actions to give the trial court an opportunity to further consider the matter. The sole argument advanced by the IRS on this appeal is that under no circumstances would it be proper to enjoin it from issuing summons for the production of the records of a taxpayer’s bank transactions, even in the face of violation of the taxpayer’s constitutional rights. This is an open question which we do not reach, nor do we decide the nature of the taxpayers’ interest in the bank records.
The injunctions are each dissolved, and the cases are each reversed and remanded for such proceedings as the trial court deems proper. |
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UNITED STATES of America, Plaintiff-Appellee, v. Lewis Clyde MAY, Defendant-Appellant.
No. 73-1069
Summary Calendar.
United States Court of Appeals, Fifth Circuit.
May 14, 1973.
Frank W. Riggs, John W. Davis, III, Montgomery, Ala., for defendant-appellant.
Ira DeMent, U. S. Atty., D. Broward Segrest, Asst. U. S. Atty., Montgomery, Ala., for plaintiff-appellee.
Before JOHN R. BROWN, Chief Judge, and DYER and SIMPSON, Circuit Judges.
Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5 Cir., 1970, 431 F.2d 409.
PER CURIAM:
The only issue raised by appellant in this direct criminal appeal from his conviction of operating an illegal whiskey still in violation of 26 U.S.C.A. §§ 5601 (a)(1), 5601(a)(7), 5604(a)(1), is that the trial Judge’s cross-examination of one of the defense witnesses constituted a departure from his role of impartiality and deprived the defendant of a fair trial. Having made a careful study of the transcript of testimony and the Judge’s charge to the jury, we find no error.
Defendant’s co-conspirator Frank Howard was the government’s key witness. In an attempt to impeach his testimony, the defense called defendant’s former counsel Ted Hoffmann to the stand. Mr. Hoffmann testified that Howard had previously given him a written, sworn statement exonerating defendant from any involvement in the illegal whiskey operation. At the conclusion of the direct examination, and upon the government’s failure to cross-examine, the Court asked six questions to clarify the witness’s relationship to the defendant and the circumstances surrounding the sworn statement.
We cannot say that this minor interrogation deprived the defendant of a fair trial in any manner.
Affirmed.
. The entire colloquy between the Court and Witness Hoffmann was as follows:
THE COURT: Cross.
MR. SEGREST: I have no questions of Mr. Hoffmann.
THE COURT: Wait a minute. Who lined this appointment up for you? He didn’t just come to you; who — who lined it up?
WITNESS: I told Mr. Clyde May that we needed to get a statement, I thought, from—
THE COURT: Are you one of the lawyers for May?
WITNESS: —Frank Howard. I was at that time ; yes, sir; I am not at this time.
THE COURT: All right; and you were a lawyer for him then ?
WITNESS : At the time I took the statement, I was hjs attorney; yes, sir.
THE COURT: And you told Clyde May what?
WITNESS : I told Clyde May that I needed to get a statement from Frank Howard, and Clyde May said well, he could get him, and they could meet us at the courthouse.
THE COURT: Was Clyde May with him when—
WITNESS: Clyde May was with him at the time he was — he gave the statement; yes, sir.
THE COURT: And the time you talked to him, was Clyde May there?
AVITNESS : At all times at the time that I talked with—
THE COURT: I don’t have any more questions.
[Appendix at 91-92].
. Our conclusion in this regard is also supported by the careful instructions which the trial court gave to the jury concerning his own participation in asking questions, the ability to impeach a witness by prior inconsistent statements, and the testimony of an accomplice [appendix at 123-124]. The jury had not only Mr. Hoffmann’s testimony, but also a copy of the prior sworn statement of Howard when it considered the case. Obviously, the jury credited Howard’s testimony and discredited prior statement. And there it ends.
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Raymond ROSS, Appellant, v. Walter E. CRAVEN, Appellee.
No. 72-2814.
United States Court of Appeals, Ninth Circuit.
May 4, 1973.
Raymond Ross, in pro. per.
Evelle J. Younger, Atty. Gen., S. Clark Moore, Russel Iungerich, Cynthia Wald-man, Deputy Attys. Gen., Los Angeles, Cal., for appellee.
Before HUFSTEDLER, TRASK and CHOY, Circuit Judges.
PER CURIAM :
Ross’s federal habeas petition was dismissed on the ground that he failed to exhaust his state remedies. Ross pursued his direct attack through the California appellate system to a denial of hearing by the California Supreme Court. His habeas petition filed in the California Supreme Court was denied on the merits. He had no more state remedies.
The dismissal order appears to have been based on two erroneous assumptions : (1) Ross did not exhaust his state collateral remedies because he filed his habeas petition in the California Supreme Court instead of in a state trial court, and (2) the California Supreme Court in denying his habeas petition did not reach the merits of his contentions.
The California Supreme Court, as well as lower California courts, has original jurisdiction to entertain habeas petitions. (Cal.Const. art. 6, §§ 4, 4b, 5.) If it chooses to retain a habeas petition rather than to refer it to a lower court, its disposition of the petition on the merits ends state habeas attack. Federal court interference with this state procedure and with the exercise of the California Supreme Court’s discretion is an impermissible breach of comity.
In his habeas petition to the California Supreme Court, Ross - challenged his conviction on four grounds. In substance, the same issues were raised in his federal habeas petition. The California Supreme Court did not deny the petition without explanation, as it did in Castro v. Klinger (9 Cir. 1967) 373 F.2d 847. It cited In re Waltreus (1965) 62 Cal.2d 218, 225, 42 Cal.Rptr. 9, 397 P.2d 1001; In re Dixon (1953) 41 Cal.2d 756, 759, 264 P.2d 513; People v. Wilson (1963) 60 Cal.2d 139, 152, 32 Cal.Rptr. 44, 383 P.2d 452, and § 1074 of the California Penal Code. These authorities answer Ross’s contentions adversely to his claims, covering specifically denial of a speedy trial, insufficiency of the evidence to support the verdict, juror bias, and permitting collateral attack to serve as a second appeal. The citations were as effective in disposing of the merits as would have been a full dress opinion. The California Supreme Court’s disposition of the petition in this manner forecloses any speculation by the federal court that the denial was based on some state procedural irregularity or defect.
Federal courts should avoid the temptation to postpone confronting the merits of federal habeas applications by needlessly returning petitioners to the state courts. Overburden on both federal and state systems is thereby increased. We are mindful of the United States Supreme Court’s admonition that federal courts must not encourage repetitious applications to state courts in the guise of requiring petitioners to exhaust state remedies. (Wilwording v. Swen-son (1971) 404 U.S. 249, 92 S.Ct. 407, 30 L.Ed.2d 418).
The order is vacated and the cause is remanded to the district court for further proceedings consistent with the views herein expressed. |
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UNITED STATES of America, Appellee, v. Roger Morris THUNDERSHIELD, Appellant.
No. 72-1688.
United States Court of Appeals, Eighth Circuit.
Submitted March 16, 1973.
Decided April 25, 1973.
David L. Bergren, Ft. Pierre, S. D., for appellant.
David R. Gienapp, Asst. U. S. Atty., Sioux Falls, S. D., for appellee.
Before VAN OOSTERHOUT, Senior Circuit Judge, HEANEY, Circuit Judge, and VAN SICKLE, District Judge.
District of North Dakota, sitting by designation.
HEANEY, Circuit Judge.
Roger Morris Thundershield was convicted of transporting a stolen vehicle in interstate commerce, knowing the vehicle to have been stolen, in violation of 18 U.S.C. § 2312. His counsel contends that there was insufficient evidence to support the conviction, and that the prosecutor’s closing argument violated Thunder-shield’s constitutional rights. Thunder-shield filed a separate brief in which he contends that his counsel did not represent him properly at trial in that he failed to call witnesses who could have established his innocence. Counsel and Thundershield both request a reversal of the conviction. Thundershield asks, in the alternative, that he be given a new trial.
We affirm the conviction. The record shows that a maroon 1968 Dodge Dart, owned by Joseph Denton, was stolen from a parking lot in Billings, Montana, on October 22, 1971. The automobile had Montana license plates. In the car at the time of the theft were boxes of groceries and fishing equipment. Denton did not know the defendant, nor had he given him permission to drive his car. On October 24, 1971, the defendant was seen in the possession of a maroon 1968 Dodge Dart in Little Eagle, South Dakota, by two witnesses. Both observed fishing equipment in the car, and one observed groceries in the car. The defendant wrecked the car later the same day and, thereafter, offered to sell it to one of the two witnesses for $50.00. He could not produce a title to it. The defendant told both witnesses that he had recently been in Montana. The serial number on the wrecked ear established that it was the car owned by Denton.
At the close of the case, the court instructed the jury, without objection, that
“ * * * possession in one state of property recently stolen in another state, if not satisfactorily explained, is ordinarily a circumstance from which the Jury may reasonably draw an inference and find in the light of surrounding circumstances, shown by the evidence in the case, that the person in possession not only knew it to be stolen property, but also transported it or caused it to be transported in interstate commerce.”
Counsel argues that the evidence with respect to the defendant’s possession was so unclear that the instruction should not have been given and that in any event, the facts do not support an inference that the defendant transported the car or knew that it was stolen. We disagree. The defendant’s possession of the ear two days after it was stolen was clear and unequivocal. It justified the instruction. Moreover, the testimony as a whole clearly permitted the jury to infer that the defendant had transported the ear in interstate commerce knowing that it had been stolen. See, United States v. Rhodes, 433 F.2d 1307 (8th Cir. 1970); Kramer v. United States, 408 F.2d 837 (8th Cir. 1969); Pigman v. United States, 407 F.2d 237, 240 (8th Cir. 1969).
We find no merit to the contention that the prosecutor’s argument violated Thundershield’s constitutional rights. The prosecutor stated:
“You remember the instruction I anticipated in my opening statement, this instruction that states that you can find in the light of surrounding circumstances, unless there is satisfactory explained [sic]- — and I have not heard them satisfactory [sic] explain it under that instruction. He criticizes Mrs. Dogg. Mrs. Dogg testified — and Marvin Dogg did not testify that Roger didn’t tell his mother and he said he didn’t hear him tell his mother, and Mrs. Dogg told what she remembered and she said that he said, T came from Montana.’ And she remembers the boxes of groceries in the back seat, the fishing gear, Rod Singer’s ranch near Glencross, and the same thing was told. Now, it’s easy for Defense Counsel to criticize the FBI of something like this, and he claims the FBI put words in her mouth. Did you see any FBI agents here testifying? No. Mrs. Dogg was called because she was the one that heard it. Mr. Singer was called because he is the one that heard it. And all of these people saw them with the car. There is no satisfactory explanation present of that car. It can only lead to one conclusion, and that is that the Defendant is guilty of the crime charged.”
No objection was made to this argument by counsel for the defendant, nor did he make a motion for mistrial. Under such circumstances, we can only set aside the conviction if there was plain error. See, Patterson v. United States, 361 F.2d 632, 636 (8th Cir. 1966). We find no such error here. It is appropriate for a prosecutor to point out that possession has not been adequately explained in his closing argument so long as he refrains from commenting on the defendant’s failure to take the stand. See, United States v. Davis, 437 F.2d 928 (7th Cir. 1971).
We are left with the defendant’s argument that he was denied effective counsel because of his attorney’s knowing failure to present evidence that the defendant was never in Montana. This claim must be first considered in District Court, as the defendant relies on alleged facts outside of the present record. 2*An appropriate way to proceed is by way of 28 U.S.C. § 2255. See, Morgan v. United States, 396 F.2d 110 (2nd Cir. 1968). See generally, C. Wright, Federal Practice and Procedure: Criminal, §§ 594, 595. We express no opinion as to the merits of such a claim, but note that under § 2255:
“ * * * Inadequate representation by counsel is a ground for relief only if the deficiencies of counsel were so serious that defendant did not have ‘the effective assistance of counsel’ in the ' constitutional sense.” (Footnote omitted.)
C. Wright, supra at § 594, p. 602.
Affirmed.
. See Lustiger v. United States, 386 F.2d 132, 142 (9th Cir. 1967), cert. denied, 390 U.S. 951, 88 S.Ct. 1042, 19 L.Ed.2d 1142 (1968).
. A list of law review articles discussing the various proceedings in which the claim of ineffective counsel may be brought is found in Grano, The Right to Counsel: Collateral Issues Affecting Due Process, 54 Minn.L.Rev. 1175, 1241, n. 318 (1970).
|
f2d_478/html/0244-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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Donald HUDSON et al., as representative of a class of all students at Southwestern State College, seeking to form an organization entitled “Viet Nam Veterans Against the War” and/or “Students Against the War,” Plaintiffs-Appellants, v. Al HARRIS, Individually and as President of Southwestern State College, and Fred G. Janzen, Individually and as Dean of Students of Southwestern State College, Defendants-Appellees.
No. 72-1366.
United States Court of Appeals, Tenth Circuit.
Argued Jan. 12, 1973.
Decided May 9, 1973.
Stephen Jones, Enid, Okl. (Michael P. Atkinson, Enid, Okl., on the brief), for plaintiffs-appellants.
C. Larry Pain, Asst. Atty. Gen. (Larry Derryberry, Atty. Gen., Oklahoma City, Okl., on the brief), for defendants-appel-lees.
Before HILL and HOLLOWAY, Circuit Judges, and TEMPLAR, District Judge.
PER CURIAM.
This appeal is from the Western District of Oklahoma for summarily dismissing appellants’ civil rights action. Appellants bring this class action as representatives of a class of students at Southwestern State College in Oklahoma who undertook the formation of two organizations entitled “Viet Nam Veterans Against the War” and “Students Against the War.” Appellees are the college president and the dean of students who rejected appellants’ applications for the antiwar organizations.
Southwestern State College is a public, tax-supported institution of higher learning maintained by the State of Oklahoma at Weatherford, Oklahoma. The appellants were students at Southwestern State who opposed the United States’ policies in Southeast Asia. On two separate occasions appellants submitted applications to appellees requesting permission to establish an antiwar organization on campus. The applications were submitted pursuant to Southwestern State College regulations requiring any new organization on campus first to secure permission from the dean of students. On both occasions they received a letter from the dean denying their request. The reason behind the denials was “that we do not see a specific need for an organization of this type. We feel that the organization and functions of the Student Association permits all students to express their concerns in a constructive manner.”
Appellants thereafter brought suit in federal court claiming jurisdiction under the First, Ninth and Fourteenth Amendments to the United States Constitution and 28 U.S.C. §§ 1331, 1343 and 42 U.S.C. § 1983. They also requested a temporary and permanent injunction prohibiting appellees from refusing to approve their proposed organizations as formal student groups. They also demanded a declaration that Southwestern State College as operated by appellees is violative of the Fourteenth Amendment’s due process and equal protection clauses because guidelines for approval of campus organizations are vague and overbroad.
Appellants support their contentions by the following argument. Forty-seven honorary and professional organizations operate on the Southwestern State campus. Many of these organizations, such as the Oklahoma Young Republicans and Oklahoma Young Democrats, are at least in part political organizations. Many other organizations, such as Southwestern State Collegiate Farmers Union, take positions on political issues. Discrimination is also prevalent in the privileged status given certain off-campus organizations. For example, the Armed Forces are permitted to recruit on campus while antiwar organizations are denied use of the campus to solicit memberships and opposition to the Viet Nam war.
Appellees moved to dismiss the complaint on the ground no constitutional right of appellants had been denied, only the privilege of recognition. The motion was granted. It was the trial court’s position that college regulations are matters for the legislature rather than the judiciary and only when school administrators act fraudulently, capriciously or arbitrarily may the judiciary interfere with administration of school affairs; that no constitutional right had been denied because neither freedom of expression nor advocacy of individual beliefs had been impeded; and that appellants had not been deprived of any federally protected right under color of state law, therefore are not entitled to proceed in federal court.
We cannot agree with the trial court’s position in light of the recent Supreme Court decision in Healy v. James, 408 U.S. 169, 92 S.Ct. 2338, 33 L.Ed.2d 266 (1972). In Healy, a group of college students organized a “local chapter” of Students for a Democratic Society (SDS) and filed a request for official recognition as a campus organization. Although the SDS representatives stated they would not affiliate with the national SDS but would remain completely independent, the college president denied the application saying the organization’s philosophy was not in accord with school policies. The Supreme Court, in holding for the SDS group, stated that First Amendment rights are available to students while on school premises. “The vigilant protection of constitutional freedoms is nowhere more vital than in the community of American schools.” Healy v. James, supra at 180, 92 S.Ct. at 2346, quoting Shelton v. Tucker, 364 U.S. 479, 487, 81 S.Ct. 247, 5 L.Ed.2d 231 (1960). The Court there also determined that governmental action denying rights and privileges of a citizen’s association merely because it is an unpopular organization cannot be sanctioned. See also United States v. Robel, 389 U.S. 258, 88 S.Ct. 419, 19 L.Ed.2d 508 (1967).
We realize schools operate under unique circumstances and thus denial of approval should not be limited to acts of a criminal nature. “Associational activities need not be tolerated where they infringe reasonable campus rules, interrupt classes or substantially interfere with the opportunity of other students to obtain an education.” Healy v. James, supra at 189, 92 S.Ct. at 2350. The test to be applied is whether such an organization would substantially and materially interfere with the discipline necessary to operate the college. Burnside v. Byars, 363 F.2d 744 (5th Cir. 1966).
At this stage of the proceedings we cannot determine whether appellants’ organizations will substantially and materially interfere with the operation of Southwestern State College. There were no allegations of such fact in appellees’ motion to dismiss. We must therefore follow the rule that a claim for relief should not be dismissed unless it appears beyond a reasonable doubt that appellants can prove no set of facts supporting their claim for relief. Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Williams v. Eaton, 443 F.2d 422 (10th Cir. 1971). On the face of appellants’ complaint it appears their constitutional rights have been violated and thus it was error to grant a motion to dismiss.
The order granting the motion to dismiss is set aside, and the case is remanded to the trial court for further proceedings consistent herewith.
. The trial judge did not have the benefit of this case because the judgment appealed from was entered on March 29, 1972, and the Healy case was not decided until June 26, 1972.
|
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Julius SPOON and Annette Spoon, Plaintiffs-Appellants, v. WALSTON & CO., INC., Defendant-Appellee.
No. 72-1858.
United States Court of Appeals, Sixth Circuit.
Argued Feb. 6, 1973.
Decided May 10, 1973.
Elwood S. Simon, of Sehlussel, Lifton, Simon, Rands & Kaufman, Detroit, Mich., for plaintiffs-appellants.
George H. Zinn, Jr., of Butzel, Long, Gust, Klein & Van Zile, Detroit, Mich., for defendant-appellee.
Before PHILLIPS, Chief Judge, LIVELY, Circuit Judge, and YOUNG, District Judge.
Honorable Don J. Young, Judge, United States District Court for the Northern District of Ohio, sitting by designation.
PER CURIAM.
This is an action by appellants, stock purchasers, against a brokerage firm for damages resulting from a violation of a regulation promulgated by the Board of Governors of the Federal Reserve System pursuant to § 7 of the Securities & Exchange Act of 1934, 15 U.S.C. § 78a et seq. Reference is made to the comprehensive opinion of District Judge John Feikens reported at 345 F.Supp. 518 (E.D.MicK1972) for a recitation of the pertinent facts.
The District Court found that the broker violated the Securities & Exchange Act and Regulation T by making false statements to the New York Stock Exchange in obtaining extensions of time to bring the margin account of appellants up to the required level.
The amount of loss suffered by appellants was $9,136.55. The District Judge allowed recovery of one-half of this loss, $4,568.27, holding that appellant Julius Spoon actively participated in the false statements to the Stock Exchange and in the events which caused the loss. The District Court granted rescission of the contract, but allowed recovery of only one-half of the damages, saying:
“The court emphasizes that this award is made upon an equitable basis, the court being convinced that this is a just and fair result. The disposition is based, in part, on observation of the witnesses — most of them parties — and the conclusion that neither party’s statement of facts is true. Likewise, neither party is wholly culpable, and neither party is without fault in an equitable sense.” 345 F.Supp. at 522.
We agree with the Second Circuit that Congress intended for the loss in transactions of this type generally to fall upon the broker.V Pearlstein v. Scudder & German, 429 F.2d 1136 (2d Cir. 1970), cert. denied, 401 U.S. 1013, 91 S.Ct. 1250, 28 L.Ed.2d 550 (1971). Cf. Avery v. Merrill Lynch, Pierce, Fenner & Smith, 328 F.Supp. 677 (D.D.C.1971). See also,, 71 Columbia L.Rev. 1521 (1971). 1 Ordinarily the broker will be held liable'for all of the damages, rather than one-half of the damages as awarded in the present case.;1
We cannot say, however, under the facts of this case that the District Court committed reversible error in applying principles of equity and rendering judgment on an equitable basis. Rescission is an equitable remedy. We find nothing in the Act of Congress, the legislative history or Regulation T which precludes the District Court, in an appropriate case, from allowing less than a one hundred per cent recovery on equitable principles. In our opinion, the facts of the present case present an appropriate situation for an award based on equitable principles.
Affirmed. No costs are taxed. All parties will bear their own costs. |
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AEROJET-GENERAL CORPORATION, an Ohio corporation, Plaintiff-Appellee, v. The AMERICAN ARBITRATION ASSOCIATION, a New York corporation, Defendant-Appellee, Non-Ferrous Metal Refining, Ltd., an Israeli corporation, Defendant-Appellant.
No. 71-2565.
United States Court of Appeals, Ninth Circuit.
April 30, 1973.
Melvyn B. Fliegel (argued), Irving L. Halpern, Schwartz & Alschuler, Los Angeles, Cal., for defendant-appellant.
Orville O. Orr, Jr. (argued), John G. Wigmore, Lawler, Feliz & Hall, Bruce A. Bevan, Jr., Musick, Peeler & Garrett, Los Angeles, Cal., for appellees.
Before DUNIWAY and WRIGHT, Circuit Judges, and LINDBERG, District Judge.
Of the Western District of Washington.
EUGENE A. WRIGHT, Circuit Judge:
The plaintiff-appellee Aerojet contracted with defendant-appellant NonFerrous in 1969 and 1970 to engage in a commercial venture in Israel. Aerojet, an Ohio corporation, has its principal place of business in the Central District of California. Non-Ferrous, an Israeli corporation, has its principal place of business there. Each contract provided that any dispute arising thereunder was subject to arbitration in accordance with the rules of the American Arbitration Association (AAA).
A dispute involving a $30,000,000 contract arose in November 1970. NonFerrous requested arbitration in New York. Aerojet responded with a lawsuit in the state court of New York seeking to enjoin the proposed arbitration on the ground that it had been fraudulently induced to enter into the contract calling for arbitration. An ex parte stay of arbitration was vacated in March 1971 when the New York court ordered the parties to proceed with arbitration. This order was affirmed on appeal on June 10, 1971.
After the final decision in the New York action was rendered, Aerojet, by letter to the AAA, objected-to New York as the locale and gave reasons for holding the arbitration in Los Angeles. Non-Ferrous responded with a statement on behalf of its own choice of New York.
On July 12, 1971, the AAA concluded that the arbitration should be held in New York. Aerojet objected and requested review of the decision by the Association’s Executive Vice President. When the latter reaffirmed the designation Aerojet immediately sued in the district court in California. On July 21, 1971 Aerojet obtained an ex parte order temporarily restraining the AAA from conducting the arbitration in New York.
Aerojet’s amended complaint in the district court based jurisdiction on diversify of citizenship [28 U.S.C. § 1332]. It set forth the facts substantially as we have outlined them, but charged the AAA with arbitrary and unreasonable conduct in its selection of New York as the locale for arbitration.
“in that New York City bears no relationship to either the dispute between plaintiff and Non-Ferrous nor the parties and witnesses nor the making and performance of the aforesaid contracts; and, that the proper locale in which to proceed with the arbitration is an agreeable location within this District. . . .” [p. 4, Amended Complaint]
There followed a statement that Aero-jet and its witnesses would find it more convenient to arbitrate in Los Angeles than in New York. The AAA replied to the motion for preliminary injunction with affidavits of its officers, giving reasons for fixing New York as the locale for arbitration.
After the hearing in the district court the AAA and Non-Ferrous were enjoined from proceeding to arbitrate in New York “pending the trial of the cause on its merits.” This was on August 12, 1971. Non-Ferrous appealed this order [28 U.S.C. § 1292(a)(1).]
I.
Our first question is whether judicial scrutiny of arbitration proceedings is ever appropriate prior to the rendition of a final arbitration award. If not, then the order of the district court must be reversed irrespective of the merits of the AAA’s decision.
The use of arbitration as a means of settling disputes has been accorded specific Congressional endorsement in the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and should be encouraged by the federal courts. Kulukundis Shipping Co. v. Amtorg Trading Corp., 126 F.2d 978 (2d Cir. 1942). It is apparent, therefore, that judicial review prior to the rendition of a final arbitration award should be indulged, if at all, only in the most extreme cases. The basic purpose of arbitration is the speedy disposition of disputes without the expense and delay of extended court proceedings. Saxis Steamship Co. v. Multifacs International Traders, Inc., 375 F.2d 577 (2d Cir. 1967). To permit what is in effect an appeal of an interlocutory ruling of the arbitrator would frustrate this purpose.
For this reason it has been held that court review of evidentiary rulings should not be had before a final award has been rendered. See Compañía Panemena Maritima v. J. E. Hurley Lumber Co., 244 F.2d 286 (2d Cir. 1957). Cf. Application of Katz, 3 A.D.2d 238, 160 N.Y.S.2d 159 (1957).
On the other hand a ruling fixing the place for hearing may cause irreparable harm to one or more of the parties. As this court noted in Pacific Car & Foundry v. Pence, 403 F.2d 949 (9th Cir. 1968), error in denying a change of venue cannot effectively be remedied on appeal from the final judgment. Extreme cases can be imagined in which the choice of locale for arbitration is not made in good faith and severe irreparable injury is inflicted on one or more of the parties. In such case the courts should be free to prevent a manifest injustice. For this reason we decline to hold that immediate judicial review of a ruling setting the place for arbitration is never justified. Cf. Pacific Car & Foundry, Inc. v. Pence, supra. Only an extreme case could warrant such judicial review, and this is emphatically not such a case.
II.
Nor do we feel that the language in the AAA’s Commercial Arbitration Rules that its determination as to locale is “final and binding” precludes a limited inquiry into whether that determination was made in accordance with a minimum standard of fair dealing. While it has been held that parties to an arbitration can agree to eliminate all court review of the proceedings, Gramling v. Food Machinery & Chemical Corp., 151 F.Supp. 853 (D.S.C.1957), the intention to do so must clearly appear. Payne v. SS Tropic Breeze, 423 F.2d 236 (1st Cir. 1970).
Ordinary language to the effect that the decisions of the arbitrator shall be “final and binding” has D&en held not to preclude some judicial review. Goodall-Sanford, Inc. v. United Textile Workers, 233 F.2d 104 (1st Cir. 1956). As the Fifth Circuit has stated, “ ‘Finality’ is a mirage if relied upon to preclude any judicial review of an arbitration award. . ” Brotherhood of Railroad Trainmen v. Central of Georgia Railway Co., 415 F.2d 403, 412-413 (1969).
III.
Having concluded that some judicial scrutiny of the arbitrator’s choice of locale was appropriate we must consider whether the court was justified in granting an injunction against the arbitration proceedings prior to a trial of the facts. Aerojet argues that the preliminary injunction was proper because it was likely that the determination of the arbitrator would be set aside as “arbitrary and capricious.” We disagree.
In the first place we doubt that that the standard Aerojet would have us apply is the proper standard of review. Aerojet’s contentions amount to no more than a lengthy statement that the AAA acted erroneously in choosing New York over Los Angeles as the situs for the arbitration. The “correctness” of the abitrator’s rulings is not a proper concern of the reviewing court. Amicizia Societa Navegazione v. Chilean Nitrate & Iodine Sales Corp., 184 F.Supp. 116 (S.D.N.Y.1959), aff’d 274 F.2d 805 (2d Cir. 1960). See also Lundgren v. Freeman, 307 F.2d 104 (9th Cir. 1962).
An arbitration award must be upheld unless it be shown that there was partiality on the part of an arbitrator, Commonwealth Coatings Corp. v. Continental Casualty Co., 393 U.S. 145, 89 S.Ct. 337, 21 L.Ed.2d 301 (1968), or that the arbitrator exceeded his authority, Orion Shipping & Trading Co. v. Eastern States Petroleum Corp. of Panama, S.A., 312 F.2d 299 (2d Cir. 1963), or that the award was rendered in “manifest disregard of the law.” Trafalgar Shipping Co. v. International Milling Co., 401 F.2d 568, 572 (2d Cir. 1968).
There is no allegation that any such state of facts existed; nor is it at all likely that Aerojet could have proved such facts even if they had been properly alleged. Indeed, even if we applied something akin to the “clearly erroneous” test that Aerojet requests, we would still uphold the AAA’s decision. In view of the factors recited by representatives of the association in support of its choice of New York the selection was entirely reasonable. Cf. Reed & Martin, Inc. v. Westinghouse Electric Corp., 439 F.2d 1268 (2d Cir. 1971).
IV.
This is an equity case, and it is well established that in such a case, although a reviewing court will usually decide only those issues which are necessary to dispose of an appeal, an interlocutory appeal brings the entire case before the court. Thus, in equity cases “[i]f insuperable objection to maintaining the bill clearly appears, it may be dismissed and the litigation terminated.” Deckert v. Independence Shares Corp., 1940, 311 U.S. 282, 287, 61 S.Ct. 229, 232, 85 L.Ed. 189. Accord, Myers v. Bethlehem Shipbuilding Corp., 1938, 303 U.S. 41, 52-53, 58 S.Ct. 459, 82 L.Ed. 638; Denver v. New York Trust Co., 1913, 229 U.S. 123, 136, 33 S.Ct. 657, 57 L.Ed. 1101; Mast, Foos & Co. v. Stover Mfg. Co., 1900, 177 U.S. 485, 494-495, 20 S.Ct. 708, 44 L.Ed. 856; Johnson v. England, 356 F.2d 44, 46 n. 1 (9 Cir., 1966). At least one Court of Appeals has exercised this power to enter judgment for an appealing plaintiff. Hurwitz v. Directors Guild of America, Inc., 364 F.2d 67, (2 Cir., 1966). Moore believes that this is entirely proper in certain cases. 9 J. Moore, Federal Practice If 110.25[1] at 273 (2d ed. 1972). Normally this power is used to review other, nonappealable orders of the district court, such as the denial of a motion to dismiss.
Both the AAA and Non-Ferrous asked the district court to dismiss the complaint at the hearing on the motion for a preliminary injunction but neither of them made a motion to dismiss and the district court did not discuss the matter. However, the power to dispose of the whole case is not restricted to such situations.
In Mast, Foos, & Co. v. Stover Mfg. Co., supra, a patent case, the Supreme Court held:
“Does this doctrine apply to a case where a temporary injunction is granted pendente lite upon affidavits and immediately upon the filing of a bill ? We are of opinion that this must be determined upon the circumstances of the particular case. . . . [I]f there be nothing in the affidavits tending to throw a doubt upon the existence or date of the anticipating devices, and giving them their proper effect, they establish the invalidity of the patent; or if no question be made regarding the identity of the alleged infringing device, and it appear clear that such device is not an infringement, and no suggestion be made of further proofs upon the subject, we think the court should not only overrule the order for the in j unction, but dismiss the bill.” 177 U.S. at 495, 20 S.Ct. at 712.
See also Denver v. New York Trust Co., supra.
This reasoning supports an order dismissing Aerojet’s complaint. The affidavits filed in connection with the motion for a preliminary injunction do not conflict in any material respect. Rather, they establish that both parties will be inconvenienced in terms of transporting records and witnesses if the arbitration is held in New York, that Aerojet would not incur such expenses if the arbitration were held in Los Angeles while Non-Ferrous’ burden would be increased, and that the AAA took these and other factors into account in making its decision.
The only factual showing that could conceivably strengthen Aerojet’s case would be that its two non-employee witnesses definitely would not go to New York. However, “no suggestion [has been] made of further proofs upon the subject.” Moreover, Aerojet concedes that Israel would be a rational location, and if the witnesses would not go to New York, presumably they would not go to Israel either.
In sum, there is no material factual dispute in the ease, and under the standard of review that we have set out in Part I of this opinion, Non-Ferrous and the AAA would clearly be entitled to judgment as a matter of law should they so move. Under Mast, Foos & Co., it is appropriate for us to terminate the litigation now.
V.
Our mandate issued on April 2, 1973 following our order which read:
“The order of the district court is reversed and the preliminary injunction is dissolved. An opinion will follow.”
Upon issuance of the mandate, the Court of Appeals loses control of the judgment except for its power to recall the mandate. Meredith v. Fair, 5 Cir., 1962, 306 F.2d 374, 376. However, we can and do exercise that power here.
The authority of a Court of Appeals to recall its mandate is not conferred by statute, but its existence cannot be questioned. Greater Boston Television Corp. v. F. C. C., 149 U.S.App.D.C. 322, 463 F.2d 268, 277, 1971; Meredith v. Fair, supra,, 306 F.2d at 378 Broadly stated, this authority may be exercised for “good cause” and to “prevent injustice,” and one of the classic examples of such circumstances is where the mandate does not fully express the intentions of the court. Greater Boston Television Corp. v. F. C. C., supra, 463 F.2d at 277-278. Thus, in Meredith v. Fair, supra, the Court of Appeals directed the district court to “issue [the injunction] as prayed for in the complaint.” Subsequently, after dissolving an improperly granted stay, the court concluded that its instructions were too general, sua sponte recalled the mandate, and set out in detail the relief to be granted. 306 F.2d at 378-379.
Similarly, our March 8, 1973 order is incomplete, and does not fully express our intentions. We will therefore recall the mandate to make its disposition of the case complete.
CONCLUSION
It is ordered that:
1. The mandate is recalled.
2. This court’s judgment is modified to read:
The order of the district court is reversed and the preliminary injunction is dissolved. The action shall be dismissed with prejudice and the mandate shall issue forthwith.
. Section 10, Commercial Arbitration Rules provides:
“§ 10. Fixing of Locale — The parties may mutually agree on the locale where the arbitration is to be held. If the locale is not designated within seven days from the date of filing the Demand or Submission the AAA shall have power to determine the locale. Its decision shall be final and binding. If any party requests that the hearing be held in a specific locale and the other party files no objection thereto within seven days after notice of request, the locale shall be the one requested.”
. The affidavit of Donald T. Cahill, Assistant to the Executive Vice President of the AAA, stated:
“ (a) Claimant’s [Aerojet’s] initial demand for arbitration . . . was filed in the New York Regional Office of the Association and the respondent [Non-Ferrous], seeking an order staying the arbitration proceedings, filed motion papers in the New York courts, at first instance in the Supreme Court of New York County, Special Term Part 1, and later on appeal to the Supreme Court, Appellate Division, First Department . . . Thus, the New York jurisdiction was the location to which the parties addressed themselves from the very beginning of the case.
“(b) The fact that the parties agreed in their contract that the law of California would apply and govern their ease, is not conclusive on the locale of the hearing. If the arbitration is held in New York, the arbitrators can still apply California law.
“(c) While it is true respondent, its Divisions, Officers and employees are located in California, consideration was given to the fact that the claimant is based in Isreal, thereby making it necessary for it to transport all its witnesses and evidence from one country to another. If the hearings were to be held in California, an extra and unequal burden and expense would be placed on the claimant with respect to transporting these witnesses and evidence to that location. I determined New York to be a fair central point, equally accessible and convenient to both parties.
“(d) Regarding the fact that the contracts involved in this case were nego--tiated, drawn and executed in California, the performance of the agreements, involves activities taking place in Israel. Further, because such performance does take place in Israel, there is a closer connection between the subject matter of contracts and Israel than between the subject matter and California. Thus, the claimant could have, if so desired, requested Israel as the location for the arbitration hearings.”
. We heard oral argument on March 7, 1973, and entered an order on March 8, 1973 reversing the district court and dissolving a preliminary injunction. We indicated that a formal opinion would follow. For reasons that we shall hereafter explain, we contemplated that the parties would proceed at once with arbitration proceedings. Appellee moved on March 22, 1973 to stay the order of March 8 until 10 days after the filing of this opinion. That motion was denied.
. Emphasis should be placed on the word “proceedings.” There can always be prior judicial inquiry into the validity of an agreement to arbitrate. In the present case it is conceded that there was a valid agreement to arbitrate at a locale selected by the AAA. See In re Royal Globe Ins. Co. v. Spain, 36 A.D.2d 632, 319 N.Y.S.2d 115 (1971).
. Even if we assume there is some distinction between the ruling of the AAA here and a final arbitration award covered by 9 U.S.O. § 10 the test would be the same.
It was part of the arbitration agreement that the AAA could select a locale for the arbitration if the parties failed to agree on one. In re Royal Globe Ins. Co. v. Spain, supra note 3. When the parties to a contract agree that a factual determination is to be made by a neutral third party that determination is upheld in the absence of fraud or gross mistake as would necessarily imply bad faith. Baez v. Disabled American Veterans Service Foundation, 119 F.Supp. 490 (S.D.N.Y. 1954) ; Davidson v. Times Printing Co., 63 Wash. 577, 116 P. 18 (1911).
. It was once the law that a Court of Appeals’ power to recall its mandate expired at the end of the term at which it was issued. However, the better view is that this limitation was removed by the abolition of the “term” concept in 1948, the lapse of time being significant only with respect to the court’s duty to “prevent injustice.” Greater Boston Television Corp. v. F.C.C., supra, 463 F.2d at 275-276. At any rate, the March 8 order and subsequent mandate were clearly issued within the present “term.”
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Allen A. GREENBERG, d/b/a Allen Greenberg & Associates, PlaintiffAppellant, v. GENERAL MILLS FUN GROUP, INC., Defendant-Appellee.
No. 72-3793
Summary Calendar.
United States Court of Appeals, Fifth Circuit.
May 7, 1973.
Brenda M. Abrams, Miami, Fla., for plaintiff-appellant.
Richard B. Adams, James G. Ether-edge, Miami, Fla., for defendant-appel-lee.
Before THORNBERRY, GOLDBERG and RONEY, Circuit Judges.
Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York, 5 Cir. 1970, 431 F.2d 409, Part I.
PER CURIAM:
This is an appeal from the granting of judgment on the pleadings and final summary judgment in a contract case. Finding that the contract upon which judgment was granted is ambiguous and that therefore the case should have gone to the jury, we reverse.
Plaintiff-appellant, Allen A. Green-berg, is an inventor of toys. On July 25, 1969, he entered into a contract with Rainbow Crafts, Inc. (RCI), the predecessor in interest of defendant-appellee, General Mills Fun Group, Inc., whereby RCI agreed to pay plaintiff fifteen thousand dollars in exchange for his development of a line of toys to be purchased by RCI at a later date. Under this contract, plaintiff was obligated to provide plans for at least three but no more than five toys, which RCI could accept or reject at its option. The contract further provided that:
“RCI shall perform all engineering work required to complete development of the toys accepted by it. In the event that a toy appears not to be technically feasible as a result of such engineering work, Greenberg shall provide consulting services at reasonable times at no charge. . u
“In the event that the line of toys developed under this agreement does not produce at least two million dollars ($2,000,000.) in sales during the first twelve (12) months of sales, measured from the date of the first sale by RCI, Greenberg shall return the fifteen thousand dollars ($15,000.-00) to RCI.”
RCI eventually accepted five toys submitted by plaintiff. On October 7, 1969, agreements were entered into between the parties with respect to each of the five toys selected. Each of these agreements was completely separate from the July 25 contract.
Defendants ultimately manufactured only four of the five toys developed and accepted pursuant to the July 25 contract. When total sales of the four toys failed to reach two million dollars, defendant demanded that plaintiff return the fifteen thousand dollars consideration for developing the toys, claiming that plaintiff was required to do so by the July 25 contract. Plaintiff refused and contended that the July 25 contract required defendant to manufacture all five toys developed by plaintiff and accepted by defendant and that the failure of defendant to manufacture all five toys caused sales to fall below two million dollars. Defendant then withheld fifteen thousand dollars from royalties due under the October 7 agreements.
Plaintiff commenced this diversity action in the United States District Court alleging that defendant violated the July 25 contract by failing to develop all five toys that it accepted, and that defendant also violated the October 7 agreements by withholding royalties. Defendant counterclaimed, alleging that plaintiff breached the July 25 contract by refusing to return the fifteen thousand dollars when sales of the toys fell below two million dollars. Plaintiff moved for partial summary judgment on the October 7, agreements, and defendant moved for judgment on the pleadings. The District Court granted plaintiff’s motion for partial summary judgment, ruling that he was entitled to fifteen thousand dollars due under the October 7 agreements. The District Court also granted defendant’s motion for judgment on the pleadings and entered final summary judgment, ruling that:
“[T]he mutual obligations imposed upon the parties by the contracts herein are offsetting, [and] the Court finds that neither parties shall recover from the other, and each party shall bear its own expenses and costs, and that this case be and is, hereby dismissed with prejudice.”
Plaintiff argues that the District Court erred in granting defendant’s motion for judgment on the pleadings because the July 25 contract contains latent ambiguities concerning defendant’s obligation to produce the toys accepted by it that can only be resolved by a factual inquiry into the intent of the parties. We agree.
A motion for judgment on the pleadings, like a motion for summary judgment, should be granted only if there is no issue of material fact and if the pleadings show that the moving party is entitled to prevail as a matter of law. J. M. Blythe Motor Lines Corp. v. Blalock, 5 Cir. 1962, 310 F.2d 77; Stanton v. Larsh, 5 Cir. 1957, 239 F.2d 104; Austad v. United States, 9 Cir. 1967, 386 F.2d 147; Franklin Nat. Bk. v. Krakow, D.D.C.1969, 295 F.Supp. 910; see also 2A Moore’s Federal Practice § 12.15; Wright & Miller, Federal Practice and Procedure: Civil § 1368. We find that the provision of the July 25 contract, which was drafted by RCI, stating that “RCI shall perform all engineering work required to complete development of the toys accepted by it,” when read in juxtaposition with the provision that:
“In the event that the line of toys developed under this agreement does not produce at least two million dollars ($2,000,000.) in sales during the first twelve (12) months of sales, measured from the date of the first sale by RCI, Greenberg shall return the fifteen thousand dollars ($15,000.00) to RCI,”
evinces a facial ambiguity as to whether defendant was required to develop and market all of the toys accepted under the July 25 contract. This ambiguity could be clarified only by the introduction of evidence from which the finder of fact could determine the true intent of the parties. See Matthews v. Drew Chemical Corp., 5 Cir. 1973, 475 F.2d 146; International Erectors, Inc. v. Wil-hoit Erectors and Rental Service, 5 Cir. 1968, 400 F.2d 465.
Defendant contends that judgment on the pleadings and final summary judgment were proper because the October 7 agreement, which had been appended in outline form as an exhibit to the July 25 contract, demonstrates that the parties anticipated the possibility that one or more of the toys presented by plaintiff would be accepted but not manufactured by RCI. The clause relied on by defendant provides:
“In the event that it is technically feasible for RCI to complete the development of the toy for sale, but nevertheless, there are no sales of the toy by RCI by December 31, 1970, Green-berg shall be under no obligation to return any advances against royalties to RCI, which may have been paid by RCI to Greenberg.”
We do not find this clause dispositive of the facial ambiguity contained in the July 25 agreement, since it deals only with the potential that a toy would generate no sales, not that a toy would not be manufactured. Defendant was entitled to a judgment on the pleadings only if it was not required to manufacture all toys accepted pursuant to the July 25 contract. We find that the July 25 contract is facially ambiguous in that regard, and that therefore the District Court should have let the jury determine (1) whether the parties intended to require defendant to manufacture all the toys it accepted pursuant to the July 25 contract or (2) whether the parties intended that the manufacture of all toys accepted would be a condition precedent to plaintiff’s returning the fifteen thousand dollars if sales fell below two million dollars.
Reversed.
. Clause VI of the October 7 agreements provided:
“This instrument represents the entire agreement of the parties as to the sale of this toy, and it is a completely separate contract from the Agreement between the parties of July 25, 1969, even though this instrument accompanied it as Exhibit A. Any breacli of the July 25, 1969 agreement shall in no way effect rights and duties of the parties hereunder.”
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f2d_478/html/0257-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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RELIABLE COAL CORPORATION, Petitioner, v. Rogers C. B. MORTON, Secretary of the Interior and his delegate, and the Board of Mine Operations Appeals of the Department of the Interior, Respondents.
No. 72-1477.
United States Court of Appeals, Fourth Circuit.
Argued Dec. 8, 1972.
Decided May 3, 1973.
Brooks E. Smith, Kingwood, W. Va. (Dailey & Smith, Kingwood, W. Va., on brief), for petitioner.
Michael Kimmel, Atty., U. S. Dept, of Justice, Civil Div. (Harlington Wood, Jr., Asst. Atty. Gen., Alan S. Rosenthal, Atty., U. S. Dept, of Justice, Civil Div., J. Philip Smith, Asst. Sol., U. S. Dept, of Interior, on brief), for respondents.
Charles L. Widman, Atty., International Union, United Mine Workers of America (Edward L. Carey, and Willard P. Owens, Washington, D. C., on brief), for respondent, International Union, United Mine Workers of America.
Before BUTZNER, FIELD and WIDENER, Circuit Judges.
FIELD, Circuit Judge:
Reliable Coal Corporation seeks review of a decision of the Board of Mine Operations Appeals which affirmed the Hearing Examiner in denying Reliable’s petitions to modify certain mandatory safety standards contained in Sections 303(d)(1) and 303(Z) of the Federal Coal Mine Health and Safety Act of 1969, 30 U.S.C. §§ 863(d)(1) and 863(Z). Additionally, petitioner complains of the Board’s determination that review of the reasonableness of time for abating a violation of Section 303(d)(1) was rendered moot upon Reliable’s compliance with the standard. 2Jurisdiction for this review is based upon Section 106, 30 U.S.C. § 816.
Under Section 301(e) of the Act, 30 U.S.C. § 861(e), the Secretary may, upon petition by an operator or the representative of miners, modify the application of any mandatory safety standard to a mine if he determines that “an alternative method of achieving the result of such standard exists which will at all times guarantee no less than' the same measure of protection afforded * * * by such standard” or that “the application of such standard to such mine will result in a diminution of safety to the miners.”
Asserting that its Kanes Creek Mine was entitled to modification of the mandatory standards of Section 303(Z) under both criteria of Section 301(c), Reliable filed its initial petition for modification on January 5, 1971. On January 7, 1971, a preshift inspection resulted in the issuance of an abatement order for violating Section 303(d)(1) of the Act to take effect January 22, 1971 Subsequent to this order Reliable filed separate petitions challenging the reasonableness of time of the order as well as the application of Section 303(d)(1) on the basis that it was in compliance with the standard by an alternative method that attains the same result and assures no less than the same measure of protection to the miners. These petitions were consolidated for hearing by the Examiner.
In both instances, the modifications sought by Reliable pertain to testing devices used to detect methane in a mine. Section 303(d)(1) requires the use of a methane detector to check for accumulations of methane within three hours immediately preceding the beginning of the shift. In lieu of the detector, Reliable would test with a permissible flame safety lamp, a device commonly used for this purpose prior to the 1969 Act. Section 303(i) requires as an additional methane detecting device that a methane monitor be installed on any electric face cutting equipment, continuous miner, longwall face equipment, and loading machine, except that no monitor is required to be installed on the equipment prior to the date such equipment is required to be permissible under Section 305(a), 30 U.S.C. § 865(a). Reliable seeks to avoid the mandate of this provision of the Act by making what it terms “continuous routine periodic checks” with a methane detector or permissible flame safety lamp. The Examiner, whose decision was affirmed by the Board, concluded that neither of the modifications proposed by Reliable would meet the requirements of Section 301(c) that they guarantee the same measure of protection to the miners as the mandatory standards. In reaching this conclusion, the Examiner rejected Reliable’s argument that he should determine whether the Kanes Creek Mine is not gassy or potentially gassy. While permitting evidence on this question at the hearing, he concluded that the Act abolished the gassy/nongassy distinction and therefore it was unnecessary for him to make a factual finding relative to the potential for methane accumulations in Reliable’s Kanes Creek Mine.
Reliable’s position on this review rests on the premise that Sections 301(c) and 305(a) of the 1969 Act, when read together, indicate that it retained the distinction of the 1952 Federal Coal Mine Safety Act between gassy and nongassy mines. Under the prior Act, a nongassy mine, a classification based on the amount of methane detected in a mine, was subject to less stringent safety standards than those imposed on a gassy mine. See, e. g., Sections 209(d) (5), (6), (7), (9), (10), and (11) of the 1952 Act, 66 Stat. 703. Reliable concedes that all mines are initially regulated by the same standards under the 1969 Act, but argues that the debate in Congress on the question of retaining the distinction resulted in a compromise provision, namely Section 301(c), which they feel permits an operator to obtain a modification upon a factual showing that there is no potential for gas accumulation in the operator’s mine. Reliable reasons that once this is established, the mine satisfies the criteria for modification as enunciated in Section 301(c). They contend that Section 301(c) does not require a finding that the alternative method of measuring methane proposed by the operator must have the same degree of refined measurement as the statutory standard, but only that it achieve the same result. From this premise Reliable argues that since no methane exists in the Kanes Creek Mine, the alternative method will guarantee no less than the same protection since the result of using either device will be the same —a zero reading of methane. Reliable also refers to Section 305(a)(2) as an indication of Congressional intent to retain the gassy/nongassy distinction since this section extends to mines not previously classified as gassy and located above the watertable substantial grace periods within which to convert their present equipment to permissible status. Under the 1952 Act, it was primarily in regard to the requirement pertaining to the use of permissible electrical equipment that the distinction between gassy and nongassy mines was significant. In sum, based on a showing that the Kanes Creek Mine is not gassy or potentially gassy, Reliable asserts that Section 301(c) should countenance the use of a permissible flame safety lamp in lieu of a methane detector; and either of these devices in lieu of the methane monitor.
The argument is flawed in every aspect, the most conspicuous being the contention that the 1969 Act retained the distinction between gassy and non-gassy mines. A review of the legislative history of the Act as contained in House Comm, on Ed. and Labor, Legislative History Federal Coal Mine Health and Safety Act, Comm.Print, 91st Cong., 2d Sess. (1970) [hereinafter cited as Leg. Hist.], convinces us that, aside from the extension periods provided for in the Act, Congress intended to eliminate any distinction between gassy and nongassy mines. While the debate in Congress relative to Section 305(a) focused on the requirement of maintaining permissible equipment, it clearly indicates a rejection of the classification as related to all safety standards since obviously the means prescribed to detect methane provides greater protection for the miners than the mere elimination of one source of igniting the gas once its presence is discovered in a working area.
As in the case of prior coal mine legislation, the 1969 Act was precipitated by a tragic mining incident, an explosion which entombed seventy-eight coal miners in the Farmington No. 9 mine located in West Virginia. Leg.Hist. at 558. Immediately, Senate and House Subcommittees conducted extensive hearings to propose new legislation designed to raise the health and safety standards of the coal mining industry and one of the major areas of concern and controversy involved the elimination of the gassy/nongassy distinction. Aside from the dust standard, no issue received as much time or attention before the Senate Subcommittee. Leg.Hist. at 222. Significantly, of the bills introduced in the Senate Hearings on S. 355, S. 467, S. 1094, S. 1178, S. 1300, and S. 1907 Before a Subcommittee of the Comm, on Labor and Public Welfare, 91st Cong. 1st. Sess. 7-447 (1969), only Senator Cook’s proposal retained the distinction, id. at 283. The Committee, which during the deliberations had rejected an amendment submitted by Senator Cooper which would have retained the gassy/nongassy classification, Leg.Hist. at 35, explained in their report accompanying the composite bill S. 2917, that “[they] followed the recommendation of the Department of Interior that all mines be treated alike, in providing these new and additional safeguards to control methane and prevent ignitions.” Leg.Hist. at 27.
During the Senate debate on the Committee Bill, Senator Cooper again introduced an amendment to retain the distinction. Leg.Hist. at 397. To accommodate the Senator’s views with respect to the financial imposition on the small mines, the substitute amendment was offered which provided mines previously classified as nongassy additional time within which to comply with the requirements of procuring permissible electrical equipment. Leg.Hist. at 474-77. The amendment recognized the economic impact on the small operator if required to convert to permissible equipment on the operative date of the Act, as well as the industrial reality that manufacturers were incapable of producing the requisite equipment within a relatively short period of time. It is manifestly clear that Section 305(a) was a compromise measure incident to the elimination of the prior classification, Leg.Hist. at 690, 742. During the debate Senator Cooper himself recognized that except for the extension periods the adoption of the substitute amendment would remove the gassy/nongassy classification, LegHist. at 481. The substitute amendment was passed and contained in the final Senate Bill, Leg.Hist. at 482, 530.
The House likewise rejected the proposals of the small mine operators urging the retention of the distinction. The House Committee, after extensive hearings on the issue, Hearings on H.R. 4047, H.R. 4295, and H.R. 7976 Before the Comm, on Ed. and Labor, 91st Cong., 1st Sess. (1969), submitted a bill, H.R. 13950, which contained provisions similar to the Senate Bill regarding the elimination of the distinction, but did provide an extended grace period for compliance. While the Bill was on the House floor members of the House were advised that acceptance of the proposed Bill contemplated the elimination of the gassy/nongassy classification. Leg.Hist. at 690. The statement of the Managers of the House relative to the Bill accepted in conference explained that Section 305(a) which eliminated the distinction adopted the language of the Senate Bill, but accepted the time provisions of the House Bill. Leg.Hist. at 1045. In the Senate debate on the conference Bill, Senator Williams submitted a summary of the major provisions of the Bill in which he unequivocally stated that “[305(a)] eliminates the distinction be-tweén gassy mines and the so-called non-gassy mines.” Leg.Hist. at 1130.
The history of the Act demonstrates beyond any doubt that Congress carefully evaluated the issue and determined that the gassy/nongassy distinction should be eliminated. Yet, Reliable contends that Section 301(c), which was not contained in the Senate Bill, but was placed in the House Bill and conference Bill, was a compromise provision which in effect affords the small mine operator the statutory means to perpetuate the distinction. Again the legislative history as well as the plain language of the Act refutes this contention. Under the statutory pattern the Secretary is directed to “develop, promulgate and revise, as may be appropriate, improved mandatory safety standards for the protection of life and the prevention of injuries in a coal mine * * This authority and the procedure incident thereto is delineated in Section-101 of the Act, 30 U.S.C. § 811. However, recognizing the urgent need for improved safety measures, interim mandatory safety standards applicable to all underground coal mines are prescribed by Sections 302 through 318 of Title III of the Act, 30 U.S.C. §§ 862-878. These provisions were designed to prescribe immediate mandatory standards without undergoing the ’lengthy administrative process for the promulgation of such standards by the Secretary under Section 101, Leg.Hist. at 50. The expeditious application of these standards to the entire coal mining industry necessarily presented a variety of problems, technical in nature, and it was necessary to give the Secretary a degree of flexibility to adjust the many detailed requirements of Title III to the particular problems of individual coal mines. This is the plain purpose of Section 301(c), but it was never intended by the Congress that modifications thereunder would be employed to dilute the statutory standards or resurrect the “gassy/nongassy” distinction.
The safety standards embodied in Title III of the Act represent an attempt by the Congress to maximize the protection of the miners based on the current knowledge and technology of the industry. These standards, however, are not to be static, but constantly upgraded to provide increased safety and, when necessary, to meet changes in technology and mining conditions. Leg.Hist. at 1040. The methane testing devices challenged by Reliable were designed by the Act to provide reasonable interim protection for the miners and assuredly it would frustrate the legislative purpose to construe Section 301(c) in a manner which would permit these standards to be lowered.
In St. Marys Sewer P. Co. v. Director of U. S. Bureau of Mines, 262 F.2d 378, 381 (3 Cir. 1959), which involved an interpretation of the 1952 Act, the Court stated:
“The statute we are called upon to interpret is the out-growth of a long history of major disasters in coal mines. * * * It is so obvious as to be beyond dispute that in construing safety or remedial legislation narrow or limited construction is to be eschewed. Rather, in this field liberal construction in light of the prime purpose of the legislation is to be employed.”
We find this observation equally appropriate to the case at hand and conclude that the Board’s interpretation of the Act carries out the plain intent of the Congress and should not be disturbed.
The order of the Board will be affirmed.
Affirmed.
. We agree with the Board’s ruling on this point and do not feel the question necessitates further discussion.
. As a result of petitioner’s purchase order for methane detectors the period of abatement was extended several times until .Tune 14, 1971. On that date, the Bureau of Mines issued a notice of abatement since the detectors had then been procured b.v Reliable.
. The methane detector is a small portable instrument about the size of a transistor radio which measures the concentration of methane in the sampled air.
. Section 303(d) (1) requires testing for methane “[with] means approved by the Secretary.” This provision was implemented by regulation, 30 C.F.R. 75.304r-3, which permitted the use of the flame safety lamp until December 31, 1970, on and after which date a methane detector was required; however, the flame safety lamp may still be used as a supplementary testing device. The express language of the statute rejecting the use of the flame safety lamp, coupled with protests in subcommittee hearings against the rejection of the lamp as an adequate testing device, indicates a Congressional determination that the flame safety lamp, when used exclusively, is inadequate for the purpose of testing for methane. See Hearings on H.R. 4047, H.R. 4295 and H.R. 7976, before a Subcommittee of the House Committee on Education and Labor, 91st Cong. 1st Sess. 138-39 (1969).
. The methane monitor is similar to the methane detector, except that it tests on a continuous basis rather than at periodic intervals, and is designed to be attached fo electrically powered mine machinery. Section 303(i) requires that the monitor be set to automatically give a warning when the methane concentration reaches one percent, and to automaticaly de-ener-gize the machinery when the methane concentration reaches two percent.
. As applied to electric face equipment, “permissible” means “the electric parts of which * * * are designed, constructed, and installed, in accordance with the specifications of the Secretary, to assure that such equipment will not cause a mine explosion or mine fire, and the other features of which are designed and constructed, in accordance with the specifications of the Secretary, to prevent, to the greatest extent possible, other accidents in the use of such equipment * * *.” Section 318 (i) of the Act, 30 U.S.C. § 878 (i).
. Section 305(a) which will be discussed in detail infra, authorizes grace periods for certain mines to comply with the mandatory standards as related to permissible equipment. With respect to the Kanes Creek Mine, the required date for installation of the methane monitors will be March 30, 1974.
. The mine was sealed ten days after the explosion and its cause remains unknown.
. St Recognition of the interim standards as the minimal protective measures acceptable to Congress is evident in the language of Section 101(b), 30 U.S.C. § 811(b) :
“No improved mandatory health or safety standard promulgated under this sub-chapter shall reduce the protection afforded miners below that provided by any mandatory health or safety standard.”
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Harold H. LANGFORD et al., Appellants, v. CITY OF TEXARKANA, ARKANSAS, et al., Appellees.
No. 72-1187.
United States Court of Appeals, Eighth Circuit.
Submitted Jan. 10, 1973.
Decided April 25, 1973.
John T. Lavey, Little Rock, Ark., for appellants.
Willis B. Smith, Jr., Texarkana, Ark., for appellees.
Before LAY, HEANEY and STEPHENSON, Circuit Judges.
HEANEY, Circuit Judge.
We are asked on this appeal to reverse the trial court and to hold, as a matter of law, that two employees of the City of Texarkana, Arkansas, were discharged in violation of their constitutional rights — primarily the right to associate freely with persons of all races.
The underlying facts can be simply stated. Texarkana was selected to participate in the federal government’s Model Cities Program. The Community Development Department of the City was given the responsibility for administering the program, and Tom McRae was named director of that department. McRae hired Harold Langford, a black, to head the Community Organization Division of the department. Langford, in turn, employed Mrs. Jimmie Johnson, a white.
On November 28, 1970, McRae was told by the City Manager, Paul Schriever, to discharge Langford and Johnson. Schriever had acted on orders from the Board of Directors of the City, and the Mayor with respect to Langford. Mc-Rae objected to the discharges, but carried out his assignment on November 30. Thereafter, Langford and Johnson sought and were denied reinstatement. They then brought this action, alleging they were discharged without notice or hearing in violation of the due process clause of the Fourteenth Amendment to the United States Constitution, and for exercising their right to freely associate with persons of all races in violation of the First, Ninth and Fourteenth Amendments to the Constitution. Langford further alleged that he was discharged for his political beliefs and activities.
The matter was tried to the court. The City introduced testimony designed to prove that Langford was ineffective in his job, that he was unable to get along with elected presidents of neighborhood councils, that he failed to discipline his subordinates for conduct detrimental to the program, that he had failed to organize the Central Business District, and that he had an unacceptable record of prior employment.
Langford, on the other hand, presented testimony tending to prove that he was an effective employee who had been discharged over the objection of McRae, and that factors in the discharge were his interracial associations and his political activities and beliefs. Langford’s witnesses also testified that McRae was fully aware of Langford’s past record when he employed him, and that Lang-ford had been instructed by his superiors not to organize the Central Business District because they feared it would be taken over by VISTA workers who lived there.
Witnesses for the City testified that Mrs. Johnson was a probationary employee who could be fired without cause, but that there was, nonetheless, cause to fire her because she failed to organize a neighborhood council in the Central Business District and because she permitted blacks and whites to visit her home at all hours of the day and night.
Mrs. Johnson, on the other hand, presented testimony tending to show that she was a competent employee, that she had been instructed not to organize the Central Business District and that a factor in her discharge was her association with black men, including Lang-ford.
The trial court discussed the applicable law and the evidence in a memorandum opinion, 337 F.Supp. 723. It questioned whether City employees have a constitutional right to associate with persons of all races but assumed, for the purposes of the opinion, that they did. It then stated:
“ * * * While Texarkana is not entitled to be concerned with trying to keep Langford and Mrs. Johnson from associating together as citizens and/or as persons, if the exercise of their right to associate (if that right exists) creates such a state of community rejection in the Texarkana area that it destroys or materially and substantially impairs the ability of Lang-ford and Johnson to discharge the duties of their City employment, then Texarkana is required to step in and terminate their employment.” (Emphasis added.)
The trial court avoided answering the crucial question of whether Langford and Johnson’s interracial associations were a factor in their discharges. Instead, it found that neither was able to gain the confidence of the people with whom they were required to work, that their attitude was one of superior disregard and contempt rather than an attitude of cooperation, and that a true evaluation of the whole picture revealed that each was unable to perform the duties of his or her position.
The problem with these findings is that they left open the question of whether a factor underlying the dismissals was antipathy towards the plaintiffs’ interracial associations. This question must be answered because, in our view, the City had no right to dis-i charge Langford and Johnson if interracial associations were a factor in the! discharges. \
While we could answer the question from the record before us, we decline to do so. It is the trial court’s responsibility to do so in the first instance in accordance with the applicable law.
Racially discriminatory state action in employment is unlawful under the Equal Protection Clause of the Fourteenth Amendment. Penalizing a person for the race of his associates is just as racially discriminatory as penalizing a person because of his or her own race. See, Adickes v. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Dombrowski v. Dowling, 459 F.2d 190, 197, 198, 199 (7th Cir. 1972). See also, Loving v. Virginia, 388 U.S. 1, 87 S.Ct. 1817, 18 L.Ed.2d 1010 (1966); McLaughlin v. Florida, 379 U.S. 184, 85 S.Ct. 283, 13 L.Ed.2d 222 (1964). In Adickes, the complaint alleged that the plaintiff, a white, had been denied the “equal enjoyment of a place of public accommodation by reason of her association with Negroes” in violation of 42 U. S.C. § 1983. Adickes v. S. H. Kress & Company, 252 F.Supp. 140, 142 (E.D.N.Y.1966) (Emphasis added.). The Supreme Court agreed that this would, if true, constitute unlawful racial discrimination, stating:
“ * * * New principles of law are more firmly stitched into our constitutional fabric than the proposition that a State must not discriminate against a person because of his race or the race of his companions, or in any way act to compel or encourage racial segregation. * * * ” (Emphasis added and footnote omitted.)
Adickes v. Kress & Co., supra at 398 U.S. 151, at 90 S.Ct. 1605.
The fact that interracial associations are frowned on by some in a community cannot serve as a j ustification to discourage or prohibit sucETassociations by pumic employees. Hus'is true even if opposition to the interracial associations results in diminishing the effectiveness of the employees. See, Mayers v. Ridley, 151 U.S.App.D.C. 45, 465 F.2d 630, 641 (1972) ; Baker v. City of St. Petersburg, 400 F.2d 294 (5th Cir. 1968). To hold to the contrary would be to frustrate the exercise of ,^ constitutional rights. And this Court and the Supreme Court have rejected the proposition that interference with constitutional rights can be justified on the grounds that the community is hostile to their exercise and vigorously displays its feelings.
For example, in Aaron v. Cooper, 163 F.Supp. 13 (E.D.Ark.1958), the District Court ruled that the integration of the Little Rock School System might be delayed. In reaching its decision, the court took the position that it might properly consider “popular opposition to the plan, resulting in obstructions to its orderly operation.” Id. at 29. This Court reversed and rejected this view in an opinion by now Chief Judge Matthes. Aaron v. Cooper, 257 F.2d 33 (8th Cir. 1958). The Court recognized that implementation of the integration plan was resulting in community opposition which affected the functioning of the school system:
“Appalling as the evidence is — the fires, destruction of private and public property, physical abuse, bomb threats, intimidation of school officials, open defiance of the police department of the City of Little Rock by mobs — and the naturally resulting additional expense to the District, disruption of normal educational procedures, and tension, even nervous collapse of the school personnel, we cannot accept the legal conclusions drawn by the District Court from these circumstances. Over and over again, in the testimony, we find the conclusion that the foregoing turmoil, chaos and bedlam directly resulted from the presence of the nine Negro students in Central High School, and from this conclusion, it appears that the District Court found a legal justification for removing temporarily the disturbing influence, i. e., the. Negro students. It is more accurate to state that the fires, destruction of property, bomb threats, and other acts of violence, were the direct result of popular opposition to the presence of the nine Negro students. * * * ”
Id. at 39.
It held that despite these facts, the school board must promptly proceed with integration “ * * * ‘completely uninfluenced by private and public opinion' as to the desirability of desegregá'tfoil in the community,' * * T~rr. Td. 'St_3T (Emphasis omuted.) The Court was aware that the opposition would create practical difficulties but it, nonetheless, held:
“ ‘* * The vindication of rights guaranteed by the Constitution can not be conditioned upon the absence of practical difficulties.’ * * * ” (Emphasis included and citation omitted.)
Id. at 38.
Furthermore, it emphasized that while violence was occurring:
“* * * [T]he time has not yet come in these United States when an order of a Federal Court must be whittled away, watered down, or shamefully withdrawn in the face of violent and unlawful acts of individual citizens in opposition thereto.” (Emphasis included.)
Id. at 40.
On appeal, the decision of this Court was affirmed by the Supreme Court, stating that “law and order are not here to be preserved by depriving the Negro children of their constitutional rights.” Cooper v. Aaron, 358 U.S. 1, 16, 78 S.Ct. 1401,1409, 3 L.Ed.2d 5 (1958).
Time and again, the Supreme Court has reiterated the principle that “constitutional rights may not be denied simply because of hostility to their assertion or exercise.” Watson v. Memphis, 373 U.S. 526, 535, 83 S.Ct. 1314, 1319, 10 L.Ed.2d 529 (1963).
In the light of the trial court’s errors of law and its failure to make the necessary factual findings, we have no alternative but to reverse and to remand this matter to the District Court with instructions to it to determine from the record whether the appellants’ associations were a factor in the discharge of either or both. If it finds that the associations were a factor, it must reinstate the person discriminated against to the position formerly held by that person or to a position that is comparable in terms of duties, responsibilities and salaries. It must also determine the extent to which each person was damaged and the amount of such damages; the period for which damages may be shown is the period from the date of discharge, November 30, 1970, until the effective date of employment offered the discharged employee. The normal rules of mitigation shall apply in determination of the damages. See, Jackson v. Wheatley Sch. Dist. No. 28 of St. Francis County, Ark., 464 F.2d 411 (8th Cir. 1972).
Costs will be taxed to the appellees and attorneys fees in the sum of $500 are awarded to the appellants for services rendered on this appeal.
. A third discharged employee, Viola Kibble, was a party to this action below. She has not appealed the judgment of the District Court, sustaining her discharge.
. The plaintiffs, on this appeal, have not pursued their argument that their constitutional right to a due process hearing prior to termination was violated.
. We find no evidence in the record to support Langford’s allegation that he was discharged for exercising his First Amendment right of freedom of expression.
. The defendants argue that both Johnson and Langford could be discharged at will because Johnson was a probationary employee and neither was covered by “any union contract, tenure or by civil service sanctions.” These factors do not affect the right of either plaintiff to relief if they were discharged for reasons which are arbitrary, discriminatory, or otherwise in violation of their constitutional rights. See, Shelton v. Tucker, 364 U.S. 479, 81 S.Ct. 247, 5 L.Ed.2d 231 (1960) ; Freeman v. Gould Special Sch. Dist. of Lincoln County, Ark., 405 F.2d 1153, 1159 (8th Cir.), cert. denied, 396 U.S. 843, 90 S,Ct. 61, 24 L.Ed.2d 93 (1969) ; McLaughlin v. Tilendis, 398 F.2d 287 (7th Cir. 1968).
. No direct testimony was introduced to substantiate Schriever’s charge that persons visited Johnson at all hours of the day or night. See, n. 6.
. According to the plaintiffs, at a meeting following their dismissals between them, Ribble and Schriever, the latter indicated that interracial associations were a factor in the discharges:
“Ribble asked Schriever why he fired Johnson. Schriever replied that he had received complaints from Buster Mc-Carley pertaining to Johnson allowing blacks and whites to visit her apartment at High Point Court, which upset some of the neighbors. Johnson told Schriever that she had been aware of McCarley’s complaints prompting her to go see him to discuss them. Johnson told Schriever she confronted McCarley with those complaints, and he informed her that this constituted no problem to him. Schriever stated that he had additional complaints from two Frank Rowe construction workers, who said that Johnson allowed blacks and whites to visit her house. At this juncture, Schriever turned to Langford and pointed his finger at him and said ‘Harold, you also have been seen there.’ Johnson explained that she did allow blacks and whites to visit her house and that some blacks had assisted her to move from High Point Court to Preston Circle. She also told Schriever that when she went to buy her house at Preston Circle from Rowe, he questioned her about moving into that neighborhood. He inquired whether Johnson wanted to raise her children there, and Johnson informed him that she felt this was not a problem because she had grown up with blacks and it had no adverse effect on her. Rowe asked Johnson if someone had sent her to buy the house, and Johnson replied negatively. At this point, Rowe told Johnson, T shall let you have the house, but I do not want any nigger bucks coming in and out of it.’ ”
The plaintiffs’ allegations were also partially corroborated by McRae who described the reasons for Johnson’s discharge-: ¡
“A Being seen with Harold [Lang-ford] ; people coming in and out of her house at strange hours. This type of thing.
“Q Black and white coming into her house?
“A I believe so, although it wasn’t put that—
“Q How was it put to you?
“A Traffic in and out of the house at all hours. This type of thing.”
Schriever, at trial, denied that the reasons for the dismissal were the plaintiffs’ interracial associations. However, he stated that he was not personally familiar with the situation, and that he had relied on complaints by two neighborhood council presidents, Glorioso and Maddox, and Buster McCarley of the Housing Authority. Glorioso and Maddox testified but did not mention Johnson. McCarley did not testify and no evidence was introduced to show he was unavailable.
Langford also produced evidence to show that he had been fired for interracial associations. According to the plaintiffs’ account of the meeting with Schriever, the latter had complained that Langford had been seen at Johnson’s house. Langford testified that McRae had told him that at a meeting of the Model Cities Board, Glorioso had complained that Langford had been associating in public with Johnson, and Maddox had stated he disapproved of whites and blacks sitting together at public meetings. McRae testified that he had investigated complaints made by Glorioso about Lang-ford and that these complaints were insubstantial. As we have stated, a basis of these complaints, according to McRae, was that Glorioso was opposed to Lang-ford and Johnson associating with each other. Moreover, in determining whether or not Langford was fired for interracial associations, it is relevant to bear in mind the evidence produced by Johnson in regard to her daim.
In addition, evidence was introduced which showed that Langford had been doing a good job at supervision of the Community Organization Department. For example, McRae testified that he had opposed the dismissal of Langford, and felt that the latter was performing satisfactorily. He stated that an independent consulting firm had studied the Model Cities Program and found it to be functioning well. Langford was singled out for special praise.
The defendants also allege that Lang-ford was fired because he refused to dismiss a Community Organizer (Ribble). However, the record indicates that the ultimate power to hire and fire in the Model Cities Program was in McRae’s hands, and that he opposed terminating Ribble’s employment.
. There is nothing in the record to support the court’s conclusion that “their attitude was one of superior disregard and contempt,” except for the plaintiffs’ persistence in continued interracial association.
. See, Pughsley v. 3750 Lake Shore Drive Cooperative Bldg., 463 F.2d 3055, 1056 (7th Cir. 1972) ; Green v. McDonnell Douglas Corporation, 463 F.2d 337, 346 (8th Cir.) (Lay, J., concurring), cert. granted, 409 U.S. 3036, 93 S.Ct. 522, 34 L.Ed.2d 485 (1972) ; Smith v. Sol D. Adler Realty Company, 436 F.2d 344, 349-350 (7th Cir. 1970) ; Mead and Mount Construction Co. v. N.L.R.B., 411 F.2d 1154 (8th Cir. 3969). See also, London v. Florida Department of Health and Rehab. Serv., 448 F.2d 655 (5th Cir. 1973) (per curiam), cert. denied, 406 U.S. 929, 92 S.Ct. 1765, 32 L.Ed.2d 321 (1972).
. In Wieman v. Updegraff, 344 U.S. 183, 191-192, 73 S.Ct. 215, 219, 97 L.Ed. 216 (1952), the Court stated :
“* * * [T]he facile generalization that there is no constitutionally protected right to public employment * * « obscure [s] the issue. * * * We need not pause to consider whether an abstract right to public employment exists. It is sufficient to say that constitutional protection does extend to the public servant whose exclusion ® * * is patently arbitrary or discriminatory.”
. In Baker v. City of St. Petersburg, 400 F.2d 294, 295 (5th Cir. 1968), the facts showed that black police officers were “largely restricted in their duties to policing Negro citizens.” The defendant justified this as necessary for efficiency because of the “often delicate and sensitive nature of police work.” The Court rejected this argument, stating that “ * * * [p]olice efficiency must yield to constitutional rights.” Id. at 300.
. See, Palmer v. Thompson, 403 U.S. 217, 226, 91 S.Ct. 1940, 29 L.Ed.2d 438 (1971) ; Taylor v. Louisiana, 370 U.S. 154, n. 2, 82 S.Ct. 1188, 8 L.Ed.2d 395 (1962) ; Buchanan v. Warley, 245 U.S. 60, 81, 38 S.Ct. 16, 62 L.Ed. 149 (1971). Cf., Terminiello v. Chicago, 337 U.S. 1, 4-5, 69 S.Ct. 894, 93 L.Ed. 1131 (1949) ; Action v. Gannon, 450 F.2d 1227, 1232 (8th Cir. 1971).
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f2d_478/html/0268-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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UNITED STATES of America, Plaintiff-Appellee, v. Henry M. COLLIER, Jr., M. D., Defendant-Appellant.
No. 72-3242.
United States Court of Appeals, Fifth Circuit.
May 1, 1973.
B. Clarence Mayfield, Robert E. Barker, Savannah, Ga., for defendant-appellant.
R. Jackson B. Smith, Jr., U. S. Atty., Augusta, Ga., Lamar C. Walter, Asst. U. S. Atty., Savannah, Ga., for plaintiff-ap-pellee.
Before COLEMAN and SIMPSON, Circuit Judges, and ESTES, District Judge.
ESTES, District Judge:
Dr. Henry M. Collier, Jr., a physician authorized to dispense controlled substances, pleaded guilty to six counts of violating 21 U.S.C. § 841(a)(1) by distributing a controlled substance, methadone, a synthetic opiate, while not acting in the usual course of his professional practice and was fined $20,000. Dr. Collier’s appeal consists exclusively of a multi-faceted attack upon the constitutionality of 21 U.S.C. § 841(a)(1) as applied to physicians.
Dr. Collier’s primary contention is that § 841(a)(1), as applied to physicians, is unconstitutionally vague. This argument centers on the basis that Title II of the Comprehensive Drug Abuse Prevention and Control Act of 1970 and the regulations issued pursuant to the act make it illegal for a physician to dispense directly to the ultimate user a schedule II controlled substance other than “in the course of his professional practice.” Appellant contends that those words do not warn the physician of what conduct is proscribed, and that the statute is without objective standards and is subject to diverse interpretation. Although this issue has not been previously determined concerning the present act, the same standard has been judicially interpreted m prior federal drug statutes. Manifestly the language “in the course of professional practice” is intended to limit the immunity of a licensed practitioner. It is apparent that a licensed practitioner is not immune from the act solely due to his status, White v. United States, 399 F.2d 813 (8 Cir. 1968), but rather, because he is expected to prescribe or dispense drugs within the bounds of his professional practice of medicine. A physician is restricted to dispensing or prescribing drugs in the bona fide treatment of a patient's disease, including a dispensing of a moderate amount of drugs to a known addict in a good-faith attempt to treat the addiction or to relieve conditions or suffering incident to addiction. Linder v. United States, 268 U.S. 5, 45 S.Ct. 446, 69 L.Ed. 819 (1925); Boyd v. United States, 271 U.S. 104, 46 S.Ct. 442, 70 L.Ed. 857 (1926); United States v. Brandenburg, 155 F.2d 110 (3 Cir. 1946); Strader v. United States, 72 F.2d 589 (10 Cir. 1934). However, under the guise of treatment a physician cannot sell drugs to a dealer nor distribute drugs intended to cater to cravings of an addict. Jin Fuey Moy v. United States, 254 U.S. 189, 41 S.Ct. 98, 95 L.Ed. 214 (1920); United States v. Doremus, 249 U.S. 86, 39 S.Ct. 214, 63 L.Ed. 493 (1919); Webb v. United States, 249 U.S. 96, 39 S.Ct. 217, 63 L.Ed. 497 (1919); United States v. Behrman, 258 U.S. 280, 42 S.Ct. 303, 66 L.Ed. 619 (1922). Congress did not intend for doctors to become drug “pushers.” United States v. Warren, 453 F.2d 738 (2 Cir.), cert. denied, 406 U.S. 944, 92 S.Ct. 2040, 32 L.Ed.2d 331 (1972); White v. United States, 399 F.2d 813 (8 Cir. 1968).
In making a medical judgment concerning the right treatment for an individual patient, physicians require a certain latitude of available options. Doe v. Bolton, 410 U.S. 179, 93 S.Ct. 739, 747, 35 L.Ed.2d 201 (1973). Hence, “[w]hat constitutes bona fide medical practice must be determined upon consideration of evidence and attending circumstances.” Linder v. United States, supra, 268 U.S. at 18, 45 S.Ct. at 449.
That statutes affecting medical practice need not delineate the precise circumstances constituting the bounds of permissible practice is clearly illustrated by two recent cases in which the Supreme Court was called upon to consider whether certain abortion statutes were unconstitutionally vague in distinguishing between legal and illegal abortions. In United States v. Vuitch, 402 U.S. 62, 91 S.Ct. 1294, 28 L.Ed.2d 601 (1971), a District of Columbia statute made abortions illegal unless “necessary for the preservation of the mother’s life or health.” The Court held that the term “health” included psychological as well as physical well-being and, holding that the statute presented no problem of vagueness, concluded:
“Indeed, whether a particular operation is necessary for a patient’s physical or mental health is a judgment that physicians are obviously called upon to make routinely whenever surgery is considered.”
402 U.S. at 72, 9 S.Ct. at 1299.
In Doe v. Bolton, 410 U.S. 179, 93 S.Ct. 739, 35 L.Ed.2d 201 (1973), a Georgia statute which provided that it was illegal for a physician to perform an abortion except “based upon his best clinical judgment that an abortion is necessary” was attacked as vague because the word “necessary” was undefined. The Court held the language not vague because “whether . . . ‘an abortion is necessary,’ is a professional judgment that the Georgia physician will be called upon to make routinely.” 93 S.Ct. at 747. Similarly here the physician must make a professional judgment as to whether a patient’s condition is such that a certain drug should be prescribed.
Appellant next contends that the statute violates the Tenth Amendment by invading the state’s residual police powers, in particular the power to control medical practice. The Tenth Amendment does not operate upon a valid exercise of power delegated to Congress by the Commerce Clause. Similar attacks upon § 841(a)(1) as invading the police power reserved to the states because the statute does not require a showing that the individual acts prosecuted affected interstate commerce have already been rejected by both the Fifth and Sixth Circuits. United States v. Lopez, 459 F.2d 949 (5 Cir. 1972); United States v. Scales, 464 F.2d 371 (6 Cir. 1972). These cases held that § 841(a) clearly constituted a permissible exercise of Congress’s powers under the Commerce Clause. Since Congress itself has already determined that local distribution and possession of controlled substances have a substantial and direct effect upon interstate commerce, 21 U.S.C. § 801, the only function of the courts is to determine whether the particular class of activities regulated is within the federal power. Perez v. United States, 402 U.S. 146, 91 S.Ct. 1357, 28 L.Ed.2d 686 (1971); United States v. Lopez, supra. Appellant is a member of a class with legal access to drugs and a legal right to deliver or authorize delivery of drugs to other persons. An absolute exemption of this class from appropriate controls would enable drugs to be diverted from legitimate channels to an illegal market. For this very purpose Congress fashioned the Comprehensive Drug Control Act to provide “a ‘closed’ system of drug distribution for legitimate handlers of such drugs. Such a closed system should significantly reduce the widespread diversion of these drugs out of legitimate channels into the illicit market, while at the same time providing the legitimate drug industry with a unified approach to narcotic and dangerous drug control.” H.R.Rep.No.91-1444, 91st Cong. 2d Sess., U.S.Code Cong. & Admin.News, pp. 4566, 4571-4572 (1970). Congress could reasonably decide that in order to effectively regulate interstate commerce in drugs, it was necessary to insure that persons within legitimate distribution channels, including the dispensing physicians and pharmacists, did not divert drugs into the illicit market.
Another contention of Dr. Collier is that the Act unconstitutionally negates the presumption of innocence. Title 21 U.S.C. § 885(a)(1) provides that it shall not be necessary for the prosecution to negative any exemption in the indictment or trial and that “the burden of going forward with the evidence with respect to any such exemption or exception shall be upon the person claiming its benefit.” In considering the issue of burden of proof, one must distinguish between the burden of persuasion and the burden of going forward with the evidence. Of course, the burden of persuading the jury beyond a reasonable doubt that the defendant ' committed every essential element of the offense charged remains upon the prosecution throughout the trial. This precise constitutional attack on the predecessor to the present act was rejected by this Circuit in United States v. Ramzy, 446 F.2d 1184 (5 Cir. 1.971). See also, United States v. Rowlette, 397 F.2d 475 (7 Cir. 1968).
Appellant next contends that the maximum punishment established by 21 U.S.C. § 841(b)(1)(A) for violation of § 841(a), 15 years of imprisonment or a $25,000 fine or both for cases involving a schedule II controlled substance, is a cruelly excessive punishment when applied to physicians prescribing methadone for the treatment of heroin addicts. It is unnecessary for us to decide this contention, since appellant was not sentenced to any confinement. Nor can appellant rely upon a Robinson v. California, 370 U.S. 660, 82 S.Ct. 1417, 8 L.Ed.2d 758 (1962), argument that any punishment would be cruel and unusual for he was prosecuted not on the basis of his status as a physician but on the basis that he illegally distributed controlled substances other than in the course of his professional practice. Hence this ease does not come within the penumbra of the Robinson decision.
Dr. Collier’s last contention is that there is a constitutionally protected right to privacy in the physician-patient relationship which is violated by the Comprehensive Drug Control Act. We find this contention meritless. Appellant has ignored the fact that the statute does not invade the legitimate doctor-patient relationship when the doctor may dispense or prescribe drugs for medical reasons, but bars only activities outside the physician’s professional practice, where a physician acts, in essence, as a “pusher.” There is no constitutional protection of such activity.
Therefore, the conviction of Dr. Collier is
Affirmed.
. Methadone is listed in schedule II, which consists of drugs which have a high potential for abuse, have a currently accepted medical use with severe restrictions, and, if abused, may lead to severe psychological or physical dependence. 21 U.S.C. § 812.
. The following are the pertinent provisions of Title II of the act and the regulations promulgated pursuant to the act:
21 U.S.C. § 841 Prohibited acts A — Penalties
(a) Except as authorized by this [title,] it shall be unlawful for any person knowingly or intentionally—
(1) to . . . distribute, or dispense . a controlled substance .
21 U.S.C. § 829 Prescriptions (a) Except when dispensed directly by a practitioner, other than a pharmacist, to an ultimate user, no controlled substance in schedule II may be dispensed without the written prescription of a practitioner ....
21 U.S.C. § 821 Rules and regulations The Attorney General is authorized to promulgate rules and regulations and to charge reasonable fees relating to the registration and control of the manufacture, distribution, and dispensing of controlled substances.
21 O.F.R. § 306.11 Requirement of prescription
(b) An individual practitioner may administer or dispense directly a controlled substance listed in schedule II in the course of his professional practice without a prescription, subject to § 300.07.
21 C.F.R. § 306.07 Dispensing of narcotic drugs for maintenance purposes
The administering or dispensing directly (but not prescribing) of narcotic drugs listed in any schedule to a narcotic drug dependent person for the purpose of continuing his dependence upon such drugs in the course of conducting an authorized clinical investigation in the development of a narcotic addict rehabilitation program shall be deemed to be within the meaning of the term “in the course of his professional prac-tico or research” in section 308(e) of the Act (21 U.S.C. 828(e)): Provided, That approval is obtained prior to the initiation of such a program by submission of a Notice of Claimed Investiga-tional Exemption for a New Drug to the Food and Drug Administration which will be reviewed concurrently by the Food and Drug Administration for scientific merit and by the Bureau for drug control requirements, and that the clinical investigation thereafter accords with such approval, as required in § 130.44 of this title.
21 C.F.R. § .306.04 Purpose of issue of prescription
(a) A prescription for a controlled substance to be effective must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice. The responsibility for the proper prescribing and dispensing of controlled substances is upon the prescribing practitioner. .
21 U.S.C. § 802 Definitions As used in this title :
(1) The term “addict” means any individual who habitually uses any narcotic drug so as to endanger the public morals, health, safety, or welfare, or who is so far addicted to the use of narcotic drugs as to have lost the power of self-control with reference to his addiction.
(2) The term “administer” refers to the direct application of a controlled substance to the body of a patient or research subject by—
(A) a practitioner (or, in his presence, by his authorized agent), or
(B) the patient or research subject at the direction and in the presence of the practitioner,
whether such application be by injection, inhalation, ingestion, or any other means.
* * * *
(6) The term “controlled substance” means a drug or other substance, or immediate precursor, included in schedule I, II, III, IV, or V of part B of this title [21 USC § 8121.
# s¡; sfc sfc :ts
(8) The terms “deliver” or “delivery” mean the actual, constructive, or attempted transfer of a controlled substance, whether or not there exists an agency relationship.
* * * * *
(10) The term “disxiense” means to deliver a controlled substance to an ultimate user or research subject by, or pursuant to the lawful order of, a practitioner, including the prescribing and administering of a controlled substance and the packaging, labeling, or compounding necessary to prepare the substance for such delivery. The term “dispenser” means a practitioner who so delivers a controlled substance to an ultimate user or research subject.
(11) The term “distribute” means to deliver (other than by administering or dispensing) a controlled substance. The term “distributor” means a xterson who so delivers a controlled substance.
* * * * *
(20) The term “practitioner” means a physician, dentist, veterinarian, scientific investigator, pharmacy, hospital, or other person licensed, registered, or otherwise permitted, by the United States or the jurisdiction in which he practices or does research, to distribute, dispense, conduct research with respect to, administer, or use in teaching or chemical analysis, a controlled substance in the course of professional practice or research.
. The Harrison Narcotic Act, Dec. 17, 1914, Oh. 1, 38 Stat. 785 (repealed by the Comprehensive Drug Control Act of 1970), and the Drug Abuse Control Amendments of 1965 of the Federal Food, Drug and Cosmetic Act, July 15, 1965, Pub.L. 89-74, § 4, 79 Stat. 232 (repealed by the Comprehensive Drug Control Act of 1970).
. Several past cases demonstrate that certain unscrupulous persons, who are found in the medical as well as other professions, would welcome a cloak of immunity as an invitation to become large-scale “pushers.” Webb v. United States, 249 U.S. 96, 39 S.Ct. 217, 63 L.Ed. 497 (1919) ; Jin Fuey Moy v. United States, 254 U.S. 189, 41 S.Ct. 98, 95 L.Ed. 214 (1920) ; United States v. Behrman, 258 U.S. 280, 42 S.Ct. 303, 66 L.Ed. 619 (1922) ; Direct Sales Co. v. United States, 319 U.S. 703, 63 S.Ct. 1265, 87 L.Ed. 1674 (1943) ; United States v. Brandenburg, 155 F.2d 110 (3 Cir. 1946) ; White v. United States, 399 F.2d 813 (8 Cir. 1968).
. A five-year sentence for a physician for violating the Harrison Narcotic Act, by prescribing drugs other than in the course of his professional practice, has been held not to be cruel and unusual punishment. Boehm v. United States, 21 F.2d 283 (8 Cir. 1927).
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f2d_478/html/0274-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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UNITED STATES of America, Appellee, v. Leonard W. WISNIEWSKI et al., Appellants.
No. 628, Docket 72-1671.
United States Court of Appeals, Second Circuit.
Argued March 1, 1973.
Decided April 3, 1973.
Warren A. Luedecker, Bridgeport, Conn., for appellants Wisniewski, Novak, Camillo, Jr., Benoit and DiFederico.
Raymond B. Rubens, Bridgeport, Conn. (Rubens & Saffo, Bridgeport, Conn., of counsel), for appellant Staires.
W. Paul Flynn, New Haven, Conn. (Kopkind, Flynn & Raccio, P.C., New Haven, Conn., of counsel), for appellant Cavallaro.
Lucy V. Katz, Attorney, Bridgeport, Conn. (Koskoff, Koskoff, Rutkin & Bieder, Theodore I. Koskoff, Bridgeport, Conn., of counsel), for appellant Pulver.
Barry J. Cutler, Asst. U. S. Atty. (Stewart H. Jones, U. S. Atty., D. Conn., New Haven, Conn., of counsel), for appellee.
Before KAUFMAN and MANSFIELD, Circuit Judges, and BRYAN, District Judge.
Of the United States District Court for the Southern District of New York, sitting by designation.
MANSFIELD, Circuit Judge:
In this prosecution for the knowing receipt and concealment of stolen motor vehicles in violation of 18 U.S.C. §§ 2313 and 2, eight co-defendants appeal from a judgment of conviction entered May 23, 1972, in the United States District Court for the District of Connecticut following jury verdicts of guilty in a trial before Judge Thomas F. Croake of the Southern District of New York, sitting by designation. Appellants Leonard Wisniewski, Robert Staires, Jeffrey Pulver, Salvatoro Cavallaro and Ernest Novak, were named in three counts of the indictment: the first for the receipt and concealment of a stolen 1971 red Ford station wagon; the second for the receipt and concealment of a stolen 1969 gold Pontiac; and the third for the receipt and concealment of a stolen 1968 blue Cadillac. Appellants Dennis Di-Federico and David Benoit were named in the first two counts and defendant Joseph Camillo, Jr. was named in the first and third counts.
On appeal all defendants raise the impropriety of admitting certain testimony at trial allegedly stemming from an unlawful arrest. Some also claim that the evidence was insufficient as to them, that the trial judge committed reversible error in his charge and that they were denied effective assistance of counsel for the reason that all defendants were represented by the same trial counsel. As we find these assertions to be without merit, we affirm the convictions.
On December 13, 1971, a team of FBI agents commenced surveillance of Leonard’s House of Buys and of the Milford Salvage Company, enterprises located on adjacent properties in Milford, Connecticut, and owned by the defendant Leonard Wisniewski. The bulk of the government’s ease was based on the testimony of the FBI agents and photographs taken by them in the course of their surveillance. The agents observed stolen cars being delivered to these premises, which resembled a combination used car lot and junk yard, and there dismantled with the apparent purpose of selling the resulting automobile parts.
In the late afternoon of December 15, 1971, a stolen 1971 red Ford station wagon with New York license plates, the subject of the first count, was driven up to Leonard’s House of Buys. Following closely behind was a white 1965 Pontiac Bonneville, also with New York plates, which was to accompany each of the other stolen cars specified in the indictment. Agent Chastain testified that on December 15 he saw the defendants Be-noit, Pulver, Novak and Wisniewski engaging in various activities apparently pertaining to the stolen car. Pulver was observed driving the stolen red station wagon from the House of Buys to the rear side of the Milford Salvage building, from which bright reflections then appeared, indicating that a blow torch was being used.
On the following day, December 16, 1971, defendants Cavallaro, Camillo, DiFederico, Benoit, Novak, Staires and Wisniewski were seen in the surveillance area. Agent Chastain “observe[d] the doors [of the stolen 1971 Ford] had been removed, the seats removed, the hood and fender removed from the car: in fact, it was still steaming or smoking from that area.” Shortly thereafter other incriminating conduct was observed: Staires exited from the Milford Salvage building carrying “a car type radio”; Wisniewski, sometimes with Staires and Pulver by his side, was seen using hand motions apparently to direct his colleagues, including DiFederico and Novak, as to the disposition of car parts; Benoit was seen driving a yellow truck carrying the body of a red station wagon; parts of a car frame were observed in a green truck driven by defendant Camillo; another truck (with Staires in the rear) transported what appeared to be the nose of a red Ford to a nearby Ford dealer. Salvador Vargas, an insurance adjuster, testified that he had informed Wisniewski in early December, that he was in need of a nose of aTl971 Ford station wagon.
The drama continued on December 17, 1971. The government established that another ear of recent vintage, a 1969 gold Pontiac, had been stolen on that date. Subsequently, on that day the stolen gold 1969 Pontiac, followed by the same white 1965 Pontiac that had accompanied the stolen 1971 Ford upon its arrival at the premises, was delivered to the surveillance area. Once again Wis-niewski, Staires, Benoit, DiFederico, No-vak and Pulver were seen on the premises. This stolen car, like its predecessor, was driven “through the parking lot in front of Leonard’s House of Buys, down over the. little incline, into the junk yard; drove it through the junk yard and turned to go through the gate. The car (the gold Pontiac) then went behind the Milford Salvage building and out of my sight.” Thus the second stolen car was secreted.
Finally we come to December 27, the day of the arrests, and the day of the receipt of the stolen blue 1969 Cadillac, the subject of the third count. The owner of the car testified that it had been stolen that day and that the trunk contained a yellow box filled with a half case of Cutty Sark scotch. With Wis-niewski, Staires, Pulver and Camillo on the porch of the House of Buys, two automobiles with New York licenses, the stolen blue Cadillac and the familiar white Bonneville, were driven into the parking lot. The Cadillac was then driven “through the parking lot, down over the embankment, through the junk yard . . . and out of sight behind the Milford Salvage building.” Shortly thereafter Staires was seen walking from the Salvage building to the “House of Buys” carrying a “yellow box with the Cutty Sark on it.” After communicating with an FBI supervisor and with the local police, Agent Chastain, with the purpose of making an arrest, entered the Salvage building where he saw No-vak, Camillo and Cavallaro next to the stolen 1969 Cadillac, already partially dismantled, at which time they were arrested. Arrests of the other defendants followed.
Thus the two-week surveillance uncovered evidence (including the receipt and disposition of three stolen late model cars) which, when viewed most favorably to the government, established that the defendants were acting in criminal concert to carry out a highly organized scheme to receive, conceal and dismantle stolen cars. The jury found all defendants guilty of the counts submitted for verdict.
All defendants assert that the trial judge erred in admitting into evidence that portion of Agent Chastain’s testimony which referred to his observations and certain photographs taken at the time of making the arrest on December 27, 1971. It is contended that no probable cause existed for the entry and arrest, that in any event an arrest warrant should have been obtained, and that since the arrests were therefore unlawful any resulting evidence was tainted and should have been suppressed.
“The lawfulness of the arrest without warrant . . . must be based upon probable cause, which exists where the facts and circumstances within their [the officers’] knowledge and of which they had reasonably trustworthy information [are] sufficient in themselves to warrant a man of reasonable caution in the belief that an offense ... is being committed.” Ker v. California, 374 U.S. 23, 34-35, 83 S.Ct. 1623, 1630, 10 L.Ed.2d 726 (1963) (citations omitted). “Agents of the FBI have statutory authority to make felony arrests without a warrant for offenses ‘committed in their presence,’ or where they have ‘reasonable grounds to believe that the person to be arrested has committed or is committing’ felony, 18 U.S.C. § 3052. The ‘reasonable grounds’ requirement of the statute is equivalent to the Fourth Amendment’s requirement that arrests may be made only upon ‘probable cause’. What constitutes ‘reasonableness’ or ‘probable cause’ must depend upon the specific facts of each case. . . . ” United States v. Elgisser, 334 F.2d 103, 109 (2d Cir.), cert. denied, Gladstein v. United States, 379 U.S. 879, 85 S.Ct. 148, 13 L.Ed.2d 86 (1964) (citations omitted). See United States v. Drummond, 354 F.2d 132, 153 (2d Cir. 1965), cert. denied, 384 U.S. 1013, 86 S.Ct. 1968, 16 L.Ed.2d 1031 (1966) ; Henry v. United States, 361 U.S. 98, 102, 80 S.Ct. 168, 4 L.Ed.2d 134 (1959).
Here it is clear that the arresting officials had ample probable cause to believe that the crime of receiving stolen automobiles was being committed. A late model stolen Cadillac, accompanied by the tell-tale white Bonneville, appeared on the premises and was promptly secreted behind the Salvage building. Present were the same persons who had played varying parts in the earlier receipt and concealment of two other stolen cars. Moreover, the agents knew that less than two weeks earlier the stolen red Ford had promptly been dismembered upon delivery. They feared — with justification as it turned out — that the Cadillac was destined for a similar fate. Under the circumstances the arresting officers were amply justified in taking prompt action. Cf. United States v. Coplon, 185 F.2d 629, 635 (2d Cir. 1950), cert. denied, 342 U.S. 920, 72 S.Ct. 362, 96 L.Ed. 688 (1952). Furthermore the government offered at trial to prove that the agents, before closing in to make the arrests, had been informed that the Cadillac had in fact been stolen.
The contention that the court was foreclosed from considering the government’s offer of proof as to the agents’ being informed regarding the theft of the Cadillac is meritless. Despite ample notice of the government’s intended proof, the motion was, with Judge Croake’s permission, made during trial. No abuse of discretion is shown on his part in denying the motion. See United States v. Romero, 249 F.2d 371, 374 (2d Cir. 1957); United States v. DiDonato, 301 F.2d 383, 384 (2d Cir.), cert. denied, 370 U.S. 917, 82 S.Ct. 1557, 8 L.Ed.2d 497 (1962) ; United States v. Watts, 319 F.2d 659, 660 (2d Cir. 1963); United States v. Roth, 430 F.2d 1137, 1139 (2d Cir. 1970). Cf. F.R.Cr.P. Rule 41(e).
Appellants Staires, Cavallaro and Pul-ver contend that the evidence did not establish knowledge on their part that the cars were stolen or that they actually participated in the offenses, elements necessary to convict them either as principals or as aiders and abettors. See 18 U.S.C. §§ 2313 and 2. We find these contentions without merit.
While mere coincidental presence at the scene of a crime is insufficient to establish participation, see United States v. Vilhotti, 452 F.2d 1186, 1188 (2d Cir. 1971), cert. denied, 406 U.S. 947, 92 S.Ct. 2051, 32 L.Ed.2d 335 (1972); United States v. Kearse, 444 F.2d 62, 63-64 (2d Cir. 1971), “evidence of an act of relatively slight moment may warrant a jury finding participation in a crime [and] that participation may be proved by circumstantial evidence. . ” United States v. Garguilo, 310 F.2d 249, 253 (2d Cir. 1962). In addition “[t]he trier is entitled, in fact bound to consider the evidence as a whole, and, in law as in life, the effect of this generally is much greater than the sum of the parts.” United States v. Bottone, 365 F.2d 389, 392 (2d Cir.), cert. denied, 385 U.S. 974, 87 S.Ct. 514, 17 L.Ed.2d 437 (1966) (where the aggregate circumstances were deemed sufficient to prove knowledge). Moreover, “[e]ach of the three episodes gained col- or from each of the others.” United States v. Monica, 295 F.2d 400, 401 (2d Cir. 1961), cert. denied, 368 U.S. 953, 82 S.Ct. 395, 7 L.Ed.2d 386 (1962).
Applying the foregoing principles here, the evidence was more than ample to support the conclusion that Staires, Cavallaro and Pulver were each active participants in the scheme to conceal and dismantle late model stolen automobiles. Staires was observed in the salvage area when all three of the stolen cars were secreted there. He was seen talking to Pulver on the evening of December 15 after Pulver had driven the red Ford behind the Salvage building. On December 16 he was seen carrying a “car-type radio” and was in the rear of the truck which contained the dismantled red Ford “nose.” The jury was entitled to infer that the radio and “nose” came from the just-dismantled stolen Ford station wagon. On December 17 Staires, with Pulver, “drove through the lot in the manner that a gold Pontiac had gone, through the gate and behind the Salvage building.” On December 27 Staires was observed carrying a yellow “Cutty Sark” box matching the description of the box that, according to the testimony of the owner of the stolen Cadillac, had been in the trunk of his ear at the time when it was stolen.
Cavallaro was observed next to the partially dismantled stolen Cadillac at the moment of the arrests on December 27. In addition, on December 16, he was observed walking back and forth from the House of Buys to the Salvage building during the period when the dismantled red Ford was still lodged on the premises.
As to Pulver, he was observed on the premises on all of the pertinent dates, December 15, 16, 17 and 27. He was there with Wisniewski when both the Ford and the Cadillac were received. At the close of business on December 15 he walked out of the House of Buys with Wisniewski, Novak and Benoit and after talking with Wisniewski he drove the stolen Ford through a tortuous route to a spot near a set of junk cars, returning to the House of Buys. Then at 6:11 P. M., when it was dark, he exited the House of Buys, entered the Ford and drove it through the junk yard into the back of the Salvage area where it was parked out of sight. At that time there were “reflections” from the back of the Salvage building from which the jury might infer that a torch was being used. On December 16, after the Ford had been cut up, he was seen with Wisniew-ski and Staires as Wisniewski was directing operations in the yard. On December 17 he and Staires were seen driving to the rear of the Salvage building shortly after the gold Pontiac had been secreted there and on December 27 Pul-ver was seen with Wisniewski, Staires and Camillo as the stolen Cadillac was delivered to the premises.
From all of the foregoing, the jury could infer beyond a reasonable doubt that these three defendants (Staires, Cavallaro and Pulver) were guilty as charged.
Likewise without merit is the assertion by Staires, Pulver and Cavallaro that Judge Croake’s charge on “aiding and abetting” did not adequately instruct the jury as to the necessity for proving actual participation on their part, see United States v. Peoni, 100 F.2d 401, 402 (2d Cir.1938); Nye & Nissen v. United States, 336 U.S. 613, 618-619, 69 S.Ct. 766, 93 L.Ed. 919 (1949). After instructing that for aiding and abetting “the guilt of a particular accused may be established without proof that he personally did every act constituting the offense charged,” and quoting from the text of 18 U.S.C. §§ 2(a) and (b), Judge Croake continued: “Every person who thus wilfully participates in the commission of a crime may be found guilty of the offense” (emphasis added). Thereupon he emphasized the need for knowledge and intent. However in view of his earlier reference to the necessity for proving willful participation, the emphasis on knowledge and intent was not error, especially since it was given in response to a specific request of defense counsel, whose defense strategy was based principally upon his contention that the government had failed to prove guilty knowledge.
A more serious issue is the contention of Staires, Cavallaro and Pulver that they were denied their Sixth Amendment right to effective assistance of counsel because their trial counsel, Warren Luedecker, represented all defendants below. From this common representation they argue that his ability to devote his full and undivided professional skill to the defense of each of them was hampered because of possible conflicting interests of his clients. The gravamen of the argument is that Luedeeker' had represented Wisniewski in the past and that while all of the defendants had retained Luedecker, the entire fee had been paid by Wisniewski; Luedecker would not, therefore, develop evidence disassociating the other defendants from Wisniewski. The result, it is asserted, was that at trial a defense was selected in which appellants were required to close ranks and present a united front, contending that they had been running a large legitimate junk yard and were the unwitting victims of two men who dealt in stolen cars.
“The rule in this circuit is that some specific instance of prejudice, some real conflict of interest, resulting from a joint representation must be shown to exist before it can be said that an appellant has been denied the effective assistance of counsel.” United States v. Lovano, 420 F.2d 769, 773 (2d Cir.), cert. denied, 397 U.S. 1071, 90 S.Ct. 1515, 25 L.Ed.2d 694 (1970). See also Morgan v. United States, 396 F.2d 110, 114 (2d Cir.1968). Since neither Staires nor Cavallaro points to facts indicating that they suffered any prejudice, their claim can be rejected without further discussion.
Pulver contends on appeal that Lue-decker failed adequately to bring out the weakness of the government’s case against him and to develop an individual defense that might have exonerated him individually. He asserts that since he had no prior record, he should have been called to testify in his own defense that he was present on the premises merely looking for used car parts, that he never was employed or had any business connections with Wisniewski other than as a customer, that he drove the red Ford merely as a favor to Wisniewski and that he had no knowledge of any illegal activity. In addition, Pulver contends that the proceedings below did not adequately screen potential conflicts and that Pulver was not adequately apprised of the dangers of a possible conflict.
We are not here dealing with negligence on the part of the trial judge or defense counsel in failing to inquire into the possibility of a conflict of interest. On the contrary, from the very outset both the court and the government evidenced a keen sensitivity to the subject and repeatedly sought to ferret out from the defendants and their retained common counsel whether there were facts or separate defenses indicating the necessity for separate representation. On December 27, 1971, at a preliminary hearing, Magistrate Latimer drew the attention of the defendants to the question of whether there was a conflict of interest that might render separate representation necessary. In response all defendants indicated satisfaction with Mr. Luedecker’s joint representation of them. On February 24, 1972, Luedecker appeared on behalf of the defendants to enter pleas of not guilty. At the government’s suggestion, Judge Newman expressed concern about a conflict, leaving to defense counsel, at least initially, the burden “to satisfy himself and his clients that, in undertaking to represent all nine defendants, no question of inconsistent defenses or any other related matter comes up.” Luedecker replied that he had advised the defendants of the problem stating “I envision no conflict. And in good conscience, if there is a conflict I will so advise the accused. . . .” Luedecker later added that “I have nine accused. I have to evaluate each case independently of the other.”
On April 3, 1972, Judge Timbers, before whom the case was originally scheduled to be tried, inquired on his own initiative about any possible conflict of interest. Luedecker informed the court in the defendants’ presence that on several occasions he had informed the defendants of a possible conflict of interest and that they had a right to counsel of their choosing, whether privately retained or court appointed. Judge Timbers then individually asked the defendants whether they understood what Lue-decker had said and whether they still wanted him as their attorney. Each defendant individually answered in the affirmative.
Had there not been such repeated searching inquiries by the court into the question of potential conflict of interest, followed by statements both by the defendants’ counsel and by the defendants themselves that no such conflict existed, we might, in view of the defendant Pulver’s post-trial contentions, have remanded the case for a hearing on the issue, as was done in Morgan v. United States, 396 F.2d 110, 114 (2d Cir.1968), where no such earlier inquiry had been made by the court. But the very fact of such repeated inquiries militates against such a course. Pulver was no moron. He had attended college for two years and had served in the Army. Both the existence and the significance of any possible conflict of interest between himself and the other defendants, had one existed, should have been apparent to him, especially after his attention was repeatedly drawn to the possibility of conflict.
From the outset each defendant was virtually forced to consider whether he might have a position sufficiently different from that of the others to enable him to contend and prove that, regardless what the others might have known, he was unaware that the three ears had been stolen. Any such uniqueness in one defendant’s position would undoubtedly have been exploited to the hilt. But if the position of each on the key question of guilty knowledge was substantially the same as that of the others, as apparently was the case, each might stand a better chance of acquittal by joining in one monolithic claim of ignorance than by riding off in different directions.
In the face of repeated judicial inquiries into the subject of any possible conflict of interest, we cannot assume that the defendants’ legal counsel, a reputable lawyer experienced in the trial of criminal cases, falsely advised the court that no conflict of interest existed. Nor can we assume that he would have sacrificed one of the defendant’s chances of acquittal to those of another. In stating that he was required “to evaluate each case independently of the other,” he recognized the necessity of weighing carefully, among other things, the advisability of having one or more of the defendants present affirmative evidence of his lack of guilty knowledge. In resolving that issue he could not, consistently with his duties as a member of the court, consciously permit his client to commit perjury. Furthermore he could not overlook the fact that presentation of such proof might be fraught with serious risks, including the danger that the defendant, if he took the stand, might be confronted with incriminatory evidence of his own knowing involvement. Thus, although Pulver might have taken the stand and denied guilty knowledge, he might also have faced a blistering cross-examination.
When a trial culminates in a verdict of guilty the temptation is great for a defendant, armed with hindsight, to claim that his lawyer’s strategy in not permitting him to run the cross-examination gauntlet was motivated by a conflict of interest. We do not say that such belated assertions are to be ignored. Each case must, of course, be viewed on its own facts. However, in the absence of objective evidence of corroboratory circumstances, such post-trial claims must be viewed with some suspicion, especially when there has not been submitted a supporting affidavit of the attorney in accordance with the practice recommended in cases where clients belatedly raise a claim of ineffective assistance of counsel. Cf. United States v. Welton, 439 F.2d 824, 826 (2d Cir.), cert. denied, 404 U.S. 859, 92 S.Ct. 157, 30 L.Ed.2d 102 (1971); Korenfeld v. United States, 451 F.2d 770, 775 (2d Cir.1971), cert, denied, 406 U.S. 975, 92 S.Ct. 2425, 32 L.Ed.2d 675 (1972).
To permit a post hoc judicial inquiry into earlier privileged attorney-client communications whenever a defendant seeks to set aside his conviction on grounds of conflict of interest on the part of his lawyer would be virtually to outlaw joint representation, since the temptation to attack his counsel’s unsuccessful strategy would be too great for the disappointed client to resist, particularly when he stood to lose nothing by launching the attack. Such a per se rule conflicts with our statement in United States v. Armone, 363 F.2d 385, 406 (2d Cir.), cert. denied Viscardi v. United States, 385 U.S. 957, 87 S.Ct. 391, 17 L.Ed.2d 303,(1966), that the trial court’s “inquiry of counsel as to possible conflict of interests in this ease sufficed to protect any rights Viscardi (the appellant) may have had in the matter. The court must be allowed to accept an attorney’s representations in matters of this kind, at least absent unusual circumstances.” Absent objective proof we cannot assume that a lawyer representing more than one client would act in violation of the Code of Professional Responsibility, much less ignore the opportunity to introduce proof which might acquit one defendant but not the other. Indeed in Morgan v. United States, supra, relied upon by Pulver and Staires, we recognized (396 F.2d at p. 114) that “the trial judge should not be precluded from permitting [a] defendant to be represented by counsel for a co-defendant if counsel, with the consent of both defendants, agrees to do so and if the judge, after careful inquiry, is satisfied that no prejudice will result. Obviously, the trial judge, who is in a position to talk to the parties and to make such inquiry, both public and private, as may be necessary, should be given as free a hand as possible to deal with such situations.” We remanded for a hearing in that case because it was “unclear from the record why the court appointed Stein’s attorney to represent Morgan” and it appeared that the court may have been under an erroneous impression as to counsel’s prior representation of both defendants, no inquiry as to a possible conflict apparently having been made. No such uncertainty exists here, where thorough and repeated inquiries were made and the absence of conflict was assured.
In rejecting appellants’ conflict of interest claim, we, of course, do not disparage the importance of a defendant’s right to be represented by counsel possessing zealous and undivided regard for his client’s interests. See, e. g., Glasser v. United States, 315 U.S. 60, 67-76, 62 S.Ct. 457, 86 L.Ed. 680 (1942). However, “defendants who retain counsel also have a right of constitutional dimension to representation by counsel of their own choice. . . . ” United States v. Sheiner, 410 F.2d 337, 342 (2d Cir.1969).
Finding all of appellants’ contentions to be without merit, we affirm.
. 18 U.S.C. § 2813 provides:
“Whoever receives, conceals, stores, barters, sells, or disposes of any motor vehicle or aircraft, moving as, or which is a part of, or which constitutes interstate or foreign commerce, knowing the same to be stolen, shall be fined not more than $5,000 or imprisoned not more than five years, or both.”
18 U.S.C. § 2 provides:
“(a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission is punishable as a principal.
(b) Whoever wilfully causes an act to be done, which if directly performed by him or another, would be an offense against the United States is punishable as a principal.”
. The indictment contained six counts. None of the appellants was named in Counts 4-6, which involved the transportation of stolen vehicles in violation of 18 U.S.C. §§ 2312 and 2.
A ninth co-defendant, Clifford Johnson, was tried with the eight appellants, but a judgment of acquittal was entered at the close of the evidence with the government’s consent.
A directed judgment of acquittal on Count 2 was entered as to defendant Cavallaro.
. Judge Croake imposed prison sentences ranging from 6 to 30 months. Defendants Pulver and Novak, who were charged and convicted on all three counts, were each sentenced on Count 1 to a split sentence of six months, followed by a two-year probationary period. Sentence was suspended on Counts 2 and 3 and probation imposed concurrently with probation on Count 1. Defendants Camillo, Di-Federico, and Benoit each received the same sentence except that, since they had been charged and convicted on only two counts (DiFederico and Benoit on Counts 1 and 2, Camillo, Counts 1 and 3), their probation term was made concurrent with one count.
Defendant Staires, who was charged and convicted on all three counts, was sentenced to imprisonment for a term of one year and six months, followed by concurrent terms of one year of probation on each of the other counts.
Defendant Cavallaro, who was convicted on Counts 1 and 3 (he received a directed acquittal on Count 2, see note 2 supra), was sentenced to imprisonment for a period of two years and six months on Count 1, with a suspended sentence on Count 3.
Defendant Wisniewski was sentenced to concurrent terms of two- years and six months on each count, to run consecutively to a prior five year sentence in another case which he was then serving. In addition, he was fined $15,000 ($5,000 on each count).
. 18 U.8.C. § 3052 provides in pertinent part:
“[T]he Director, Associate Director and agents of the Federal Bureau of Investigation of the Department of Justice may . . . make arrests without warrant for any offense against the United States committed in their presence, or for any felony cognizable under the laws of the United States, if they have reasonable grounds to believe that the person arrested has committed or is committing such felony.”
. The arrests were a joint effort of the F.B.I. and the local police who were acting pursuant to Connecticut General Statute § 6-49.
. The relevant portion of the charge relating to “aiding and abetting” provided :
“In a case where two or more persons are charged with the commission of a crime, the guilt of a particular accused may be established without proof that he personally did every act constituting the offense charged.
“Whoever commits an offense against the United States, or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.
“Whoever wilfully causes an act to be done, which if directly performed by him or another would be an offense against the United States, is punishable as a principal.
“Every person who thus wilfully participates in the commission of a crime may be found guilty of the offense.
“Obviously one cannot aid and abet in commission of a crime unless there is another who has committed the offense. One is guilty as an aider and abettor when he consciously shares in any criminal intent. One need not agree to or even know all details, minor or otherwise of a criminal transaction in order to aid and abet commission thereof. However, one must have knowledge. One must have knowledge of the essential elements of the offense, that is, that the vehicle named in a particular count of the indictment was stolen, and know that it was wilfully transported by a defendant or defendants from one state to another.”
. “Mr. Luedecker: Of course, your Honor.
“If I may, just for the record, your Honor: When the nine accused were arrested, I undertook to have all the accused bonded out or on their own recognizance. And at that time, unequivocally I told all the defendants that I would represent them at this stage of the proceeding, but I did not envision any conflict, and that I would continue to represent them; if a conflict developed at a later date, of course I would have to ask other accused to seek other counsel.
“We had a preliminary hearing before Magistrate Latimer. And Magistrate Latimer raised the same issue; again asked me whether or not there was any conflict. I told him that at that stage of the proceeding I saw none.
“He advised all the accused in the matter, of a possible conflict or whether or not there was any conflict; and I think that all the accused at that time indicated that they saw no conflict, that they wanted me to represent them, and that I would represent them; if a conflict developed at a later date, then of course I would have to advise them to seek other counsel.
“As I stand here at this very moment, I envision no conflict. And in good conscience, if there is a conflict I will so advise the accused, and I may have to get out of numerous cases or some of the cases, and those accused would have to seek other counsel.”
. “The Court: . . .
“The one remaining matter that I wish to take up — and this is in the same case, United States against Wisniewski and others — again is a matter that I have raised of my own initiative, even though I understand it is a matter that has been inquiredrinto by Judge Newman on January 24 of this year, and prior thereto by United States Magistrate Latimer. And it is simply this: In view of the fact that — I believe it is nine named defendants are represented by one lawyer, Mr. Luedecker, I simply inquired, being new to the case, whether there was any question of a possible conflict of interest arising from the fact that more than one defendant is represented by the same lawyer.
“And I have been informed that there is believed to be no basis for a conflict; and on the contrary, I am informed that both Mr. Luedecker and his clients are satisfied that he should represent them, that they want him to represent them, that they do not want other counsel either by their own selection or by court appointment to represent them; and therefore the case should go foward that way.
“And I might say that, if that is the fact, that is entirely acceptable to me.
“But out of an excess of caution, and in order to save time in connection with the actual trial of the case that will begin two weeks from today before Judge Croake, I of my own initiative do wish to raise this question in the presence of — I think all nine defendants are here seated in the front row, immediately behind their lawyer, Mr. Luedecker.
“And I will suggest this procedure: I am simply going to ask Mr. Luedecker, who is the attorney of record for each of the defendants in this case, to state here in open court on the record, in the presence of the nine defendants, the facts as he understands them.
“I will ask each of the nine gentlemen in the front row to listen carefully to what Mr. Luedecker says; because, when Mr. Luedecker finishes, I am going to ask each of you individually to stand up and, in effect, say whether you agree with Mr. Luedecker or not.
“The purpose of this is not just a mechanical thing. It is an honest, genuine effort on the part of the Court to ascertain at this stage of the proceeding whether each defendant, knowing that he is being represented by the same lawyer who represents his eight co-defendants, is willing to have it that way and expresses that — whether he expresses that willingness, knowing that he has the right, if he wishes to insist upon having separate counsel retained by him or court-appointed by the Court to represent him.”
. “Mr. Luedecker: If your Honor please, I would like the record to reflect that I have represented these nine accused, the nine named accused in the indictment, since on or about January 3 of 1972.
“At that time, when I first undertook to represent the defendants, I advised them at that time as to what they could or couldn’t do. I asked them whether or not they wanted me to represent them.
“And at that time, all unequivocally said that they wanted me to represent them in this matter.
“I advised them specifically at that time that, representing multiple defendants, there was possibly a conflict of interest; I did not envision a conflict of interest at that time; and since there was no conflict, I did appear on behalf of the accused.
“We subsequently, shortly thereafter, had a hearing before Magistrate Lati-mer. And at that time I think there were only seven of the nine accused, at that time. But it is my recollection at that time that Judge Latimer again asked whether or not there was a conflict of interest or whether or not there was a possible conflict of interest.
“And in the presence of all the then accused, I told him I did not envision a conflict; if, however, conflict did arise at a later date, I would bring it to the attention of the Court, to the attention of the defendants, and perhaps some of the accused or all of the accused would have to seek other counsel.
“The defendants were put to plea on or about January 24, 1972 before Judge Newman in New Haven. And at that time all the accused were present.
“Judge Newman, or Mr. Byelas on behalf of the Government, again raised the question of a possible conflict of interest.
“I expressed myself on the record at that time, that I had reviewed the matter with the accused, that I did not envision a conflict, and that, if a conflict did arise on a later date, I would proceed accordingly.
“I also told the accused at that time that they had a right to counsel of their own choice, and that counsel of their own choice could either be other private counsel or court-appointed counsel, in the event that they qualified for court-appointed counsel.
“Subsequent to appearing in New Haven, I conferred with the accused on other occasions. I have made it clear, on the subsequent occasions, they have at all times a right to counsel of their own choice.
“I met with all the accused except Mr. Wisniewski last Friday. I again spent hours with the accused. And, among other things, at that time I again told them among other rights they had a right to counsel of their own choosing, whether it be private or court-appointed ; if, however, they elected to proceed with me, I would be pleased to proceed on their behalf.
“I talked to the accused again this morning, except as to the accused Mr. Wisniewski, and they again expressed— withdrawn. They again indicated they understood they had a right to private or public counsel of their own choice, but they elected to proceed, my representing all the accused in this ease.”
. “The Court. Perhaps you can just step forward.
“And I will ask each of the other defendants please to listen, because it will save a little time if I simply ask hereafter if you have heard the question put to Mr. Wisniewski, and what is your answer.
“My question is as simple as possible, Mr. Wisniewski: First, have you fully heard and understood what your lawyer, Mr. Luedecker, has just said to the Court?
“Defendant Wisniewski: Yes, I did, sir.
“The Court: And on the basis of Mr. Luedecker’s statement to the Court, are you willing to have this case proceed, with Mr. Luedecker representing your eight co-defendants as well as yourself?
“Defendant Wisniewski: That I am, sir.
* * * * *
“The Court: Mr. Pulver, is your full name Jeffrey L. Pulver?
“Defendant Pulver: Yes, your Hon- or.
“The Court: Have you heard and fully understood what your lawyer, Mr. Luedecker, has just stated here in open court on the record with respect to the matter of his representing you and the other eight co-defendants?
“Defendant Pulver: Yes, your Hon- or.
“The Court: On the basis of Mr. Luedecker’s statement to the Court, are you willing that the case should proceed to trial with Mr. Luedecker repre-seating your eight co-defendants as well as yourself?
“Defendant Pulver: Yes, your Hon- or.”
|
f2d_478/html/0285-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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Peter J. BRENNAN, Secretary of Labor, United States Department of Labor, Plaintiff-Appellant, v. YELLOWSTONE PARK LINES, INC., a corporation, and Yellowstone Park Company, a corporation, Defendants-Appellees.
No. 72-1591.
United States Court of Appeals, Tenth Circuit.
Argued and Submitted March 29, 1973.
Decided May 10, 1973.
Donald S. Shire, Atty., U. S. Dept, of Labor (Alfred G. Albert, Acting Sol. of Labor, Carin Ann Clauss, Associate Sol., John K. Light, Atty., U. S. Dept, of Labor, and Harper Barnes, Regional Sol., on the brief), for plaintiff-appellant.
Douglas Foster, New York City (Love-joy, Wasson, Lundgren & Ashton, New York City, Redle, Yonkee & Arney, Sheridan, Wyo., of counsel; Lawrence A. Yonkee, Sheridan, Wyo., on the brief), for defendants-appellees.
Before BREITENSTEIN, Circuit Judge, DURFEE, Judge, Court of Claims, and DOYLE, Circuit Judge.
Sitting by designation.
WILLIAM E. DOYLE, Circuit Judge.
This is an appeal from a judgment rendered by the United States District Court for the District of Wyoming denying the petition of the Secretary of Labor for an injunction against Yellowstone Park Lines, Inc. and Yellowstone Park Company from violating the minimum wage and record keeping requirements of the Fair Labor Standards Act. Plaintiff sought a judicial determination that the Act applied to the numerous employees of the Company who were working in Yellowstone National Park. Jurisdiction was founded upon 29 U.S.C. § 217 and 28 U.S.C. §§ 1337 and 1345. The trial court ruled that these employee relationships were exempt on the basis that all of the operations of Yellowstone Park Lines, Inc. and Yellowstone Park Company constituted a single establishment and as such were exempt under 29 U.S.C. § 213(a)(3), the employees being “employed by an establishment which is an amusement or recreational establishment.”
Based on the geographic separation of the various enterprises, the Secretary maintained that there was not a single establishment but, rather, a number of separate and distinct establishments.
The parties agreed that if each physically separate facility or location operated by defendants constituted a single establishment, the Secretary would be entitled to an injunction for violation of the Act. On the other hand, the parties agreed that if all Company operations in Yellowstone National Park constituted a single establishment, the decision should be that the defendants are exempt.
Summary judgment motions were filed by both sides, and following arguments and factual presentations in the form of affidavits, the judgment was in favor of the defendants.
Yellowstone Park Company is a Delaware corporation which owns and operates tourist facilities in Yellowstone National Park. It has a contract with the Secretary of the Interior which was first entered into in 1936 and was renewed again in 1966 for an additional term of 30 years.
The Company’s concessions include hotels, inns, lodges, cabins and restaurants. These are located at widely separated places including Mammoth, Hot Springs, Old Faithful, Yellowstone Lake and Canyon Village. The Company facilities at Hot Springs are located some 51 miles from the facilities at Old Faithful, whereas the facilities at West Thumb near Yellowstone Lake are 68 miles from Mammoth, and the facilities at Roosevelt Lodge are 60 miles from Old Faithful, and were shown to be 56 miles from West Thumb.
Wide variations in the various areas are shown — different types of scenery and different formations including canyons and mountain streams, lakes and geysers. There are marked differences in the various areas in terms of size and individuality. The recreational facilities also vary from one area to another as do the hotel facilities.
Ordinarily employees are primarily attached to one facility, that at which they are working. They are supervised by the manager of that particular facility who has his own day to day standards. The accounting methods are set up so as to reveal whether each individual unit makes a profit.
Two classes of employees serve more than one facility. One group includes maids, maintenance personnel and boiler room operators, who work at more than one establishment. The other group is made up of those who work mainly at one facility, but performing work which benefits another. These are employees who work in the central accounting office, manager’s office, reservations, advertising and promotion, laundries, print shop, personnel office, warehouse, garage, central fire watch office and ice manufacturing plant.
The manager’s office, central reservations, advertising and promotion are located in the summer at Mammoth and the rest of the year at Gardiner. These offices serve each of the Company’s facilities. The laundries are operated at Mammoth Lake Lodge and Old Faithful Inn and each serves several different facilities from those locations. The print shop is located at Mammoth, but serves each of the Company facilities in the Park. The personnel office, the warehouse and garage are all located in Gar-diner and serve all of the Company locations and facilities.
The facilities operated by the Company are located at the major scenic places and tourist attractions in the Park, including Old Faithful Geyser, Mammoth Hot Springs, Yellowstone Lake and the Grand Canyon of Yellowstone. At Old Faithful there are several lodges including Old Faithful Inn, Old Faithful Lodge and Old Faithful Campers Cabins. At Yellowstone Lake are the Lake Hotel, Lake Lodge and Lake Hotel Cabins. All of these facilities are advertised in one brochure. The Company also maintains buses for transporting tourists from one area to another. The various facilities have a central management which includes a number of department directors. Policy decisions are made by the management and are applicable to all of the facilities.
The statutory provision which the Company claims furnishes it an exemption is § 213(a)(3) which provides an exemption for any employee employed by an amusement or recreational establishment which meets certain seasonal tests. Undoubtedly the enterprise is carried on by the Company and its wholly-owned subsidiary, Yellowstone Park Lines, Inc., and is recreational in character.
The trial court made special findings in support of the motion for summary judgment and in these findings it described in detailed fashion the operation of the Yellowstone Park Company within the Yellowstone National Park pointing out that there is central management of the numerous facilities within the Park headed up by officers of the Company and a member of the so-called department directors such as director of marketing and sales, director of food and beverage and the director of lodging. According to the findings, some 2,289 people, mostly college students, were at the time in question employed by the Yellowstone Park Company.
The court pointed out that the controlling provision of the Fair Labor Standards Act is 29 U.S.C. § 213(a)(3) and said:
If Yellowstone Park Company qualifies as an amusement or recreational establishment within the meaning and for the purpose of that section, the Company is exempt from Sections 6 and 7 of the Act, 29 U.S.C. §§ 206 and 207, pertaining to minimum wages and maximum hours.
The court went on to hold that as a result of the integrated management of the Company it was a recreational establishment and concluded in its judgment:
After considering the pleadings, the interrogatories and answers thereto, the affidavits filed herein and exhibits attached thereto, the request for admissions and the stipulation filed by the parties herein wherein each of the parties agreed there is no dispute as to any genuine issue of fact, and now being fully advised in the premises, the Court finds that 29 U.S.C. Section 213(a)(3) exempts the defendants from the minimum wage and overtime provisions of said Act * * *
The exemption which we are now considering was provided in the Fair Labor Standards Act so as to allow recreational facilities to employ young people on a seasonal basis and not have to pay the relatively high minimum wages required by the Fair Labor Standards Act. Based on this legislative purpose the Company maintains that the provision should be given a liberal construction so as to carry out this basic purpose. This is, however, contrary to accepted rules of construction which call for broadly construing coverage provisions and narrowly construing the exemption provisions. Also, it runs contrary to the decisions of the Supreme Court and at least one decision of this court.
An early Supreme Court case, Phillips, Inc. v. Walling, 324 U.S. 490, 65 S.Ct. 807, 89 L.Ed. 1095 (1945), considered the term “retail establishment” in connection with an exemption provided for in § 13(a)(2). Involved in the Phillips case was a chain enterprise consisting of 49 grocery stores together with a central warehouse and office building. It was argued in that case, much in the same manner as it is argued here, that the numerous stores, the warehouse and the office building were a single establishment so as to bring the entire enterprise within the exemption. This integration argument was, however, rejected by the Supreme Court which held that Congress used the word “establishment” to mean a distinct physical place of business rather than an integrated business or enterprise. Each unit was, therefore, held to be a separate establishment.
Much the same result was reached in Mitchell v. Bekins Van & Storage Co., 352 U.S. 1027, 77 S.Ct. 593, 1 L.Ed.2d 589 (1957), wherein it was held that the exemption did not apply to physically separate warehouses even though they were operated as a single economic unit. Once again the emphasis was placed on the term “establishment” and its meaning of a single physically separate place of business.
Finally, this court in Shultz v. Adair’s Cafeterias, Inc., 420 F.2d 390 (10th Cir. 1969), had before it a case involving six cafeterias having a central bakery. The employer argued that the establishment as a whole was entitled to an exemption and the district court agreed. This decision was, however, reversed, our court ruling that the district court’s determination had failed to follow the interpretation which had been given to the term “retail establishment” by the Supreme Court in the Phillips, Inc. and Mitchell cases. In reversing the district court it was said:
The lower court refused to test the Adair enterprise, for exemption, on an individual establishment basis. Instead, all businesses, including the bakery, were viewed together as being proprietarily united and functionally integrated, and physical separation was considered immaterial. This proposition runs directly contrary to the letter and spirit of the Fair Labor Standards Act and does not comport with the cases interpreting that law.
420 F.2d at 394.
After discussing the applicability of the Phillips, Inc. and Mitchell rulings this court continued:
The exemption in § 213(a)(2) has a limited reach, touching only those retail or service establishments as are comparable to the local corner grocery store, local drug store or local department store, which sells directly to the ultimate consumer. Prosperous retail businesses eventually lose their identity as establishments exempt from the Act. It may occur through an increased volume of interstate sales or, as here, by physically serving a nonexempt establishment. A company operating numerous food stores cannot include as a part of its retail business its candy kitchens. Fred Wolferman, Inc. v. Gustafson, 169 F.2d 759 (8th Cir. 1948). The operator of sandwich counters cannot include as retail its commissary where sandwiches are prepared. Armstrong Co. v. Walling, 161 F.2d 515 (1st Cir. 1947). Similarly, a restaurant-cafeteria chain may not include its bakery as part of its retail establishments.
420 F.2d at 394-395.
We view Adair’s as being not only definitive of the term “establishment”, but also as illustrating the broad coverage —narrow exemption approach to this Act.
We recognize that there are differences between the so-called recreational exemption which we are now considering and the retail establishment exemption considered in Adair’s Cafeterias and in Phillips, Inc. as well as Mitchell. Much of the law which deals with the retail establishment exemption is concerned with the difference between retail and wholesale activities and with the question whether the particular retail unit is engaged in local business or interstate commerce. None of this, however, affects the basic issue presented to us which is whether the term “establishment” as used in § 13(a)(3) is to be judged in the same light as that term is judged under § 13(a)(2) and as in Phillips, Inc., Mitchell and Adair’s. We are of the opinion that the distances and the heterogeneous nature of the areas of interest do not lend to the Yellowstone Park enterprises being considered as one integrated unit subject to exemption under § 13(a)(3). Thus, we must reverse the trial court’s judgment holding that all of Yellowstone Park is to be considered as a single integrated recreational area.
The parties have stipulated that the plaintiff is entitled to an injunction restraining future violation of the Act if it prevails on the question of what constitutes an establishment for purposes of § 13(a)(3) of the Act. Therefore, having resolved this issue in favor of the plaintiff-appellant, it follows that the cause must be reversed and an injunction is to be granted and entered in favor of the plaintiff and against the defendants.
Inasmuch as a question existed at the time that this matter was orally argued as to the scope of the employees exempted and the employees covered, clarification was requested. Since the cause was argued there has been an exchange of letters and in essence the employees exempted are those who are employed by an exempt establishment. Those who are covered are, generally speaking, those central employees who serve several or all of the Company’s establishments at various locations throughout the Park. In its clarification letter plaintiff-appellant adds:
We concede the applicability of the exemption to all of defendants’ employees in the Park, including maids and boiler room workers, except central employees who perform functions which serve several, or all, of the company’s establishments at the various locations throughout the Park. Among those not within the exemption are the following: (1) central accounting office employees (R. 39, 46-48); (2) manager’s office employees (R. 48-50); (3) reservations office employees (R. 48-50); (4) advertising and promotion office employees (R. 48-50); (5) laundry employees (R. 40, 51-52); (6) print shop employees (40, 52-53); (7) personnel office employees (R. 40, 54-55); (8) warehouse employees (R. 40, 54-55); (9) garage employees (R. 40, 54-55); (10) ice manufacturing plant employees (R. 29, 40); (11) central fire watch employees (R. 56-57); and (12) central maintenance and repair workers who perform functions which serve several or all of the company’s establishments in the Park (R. 51, 60-61). Since these central employees are not employed by any specific establishment, but rather by the entire enterprise, they would be exempt only if all of the defendants’ facilities throughout the Park constitute a single “establishment.”
In our view the concession contained in the plaintiff-appellant’s letter is entirely consistent with the view which we have taken as to the meaning of the term “establishment.”
Accordingly, the judgment of the district court is reversed, and the cause is remanded with directions to the district court to enter an injunction in accordance with the views expressed above.
. 29 U.S.C. § 213 provides in part:
(a) The provisions of sections 206 and 207 of this title shall not apply with respect to—
* * * $ *
(3) any employee employed by an establishment which is an amusement or recreational establishment, if (A) it does not operate for more than seven months in any calendar year, or (B) during the preceding calendar year, its average receipts for any six months of such year were not more than 33% per centum of its average receipts for the other six months of such year; or * * * * *
It is undisputed that defendants meet the seasonal requirements of § 213(a)(3).
|
f2d_478/html/0291-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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Anthony Earl WRONE, Appellant-Petitioner, v. Park J. ANDERSON, Warden, Oklahoma State Penitentiary, McAlester, Oklahoma, Appellee-Respondent.
No. 72-1386.
United States Court of Appeals, Tenth Circuit.
April 30, 1973.
George J. Duckworth, Denver, Colo., for appellant-petitioner.
Paul Crowe, Asst. Atty. Gen. (Larry Derryberry, Atty. Gen., of Okl., on the brief), for appellee-respondent.
Before SETH, McWILLIAMS and BARRETT, Circuit Judges.
McWILLIAMS, Circuit Judge.
Wrone, presently an inmate in the Oklahoma State Penitentiary, brought an action under 28 U.S.C. § 2254 in the United States District Court for the Northern District of Oklahoma against Park J. Anderson, the Warden of the state penitentiary. Based on the allegations in Wrone’s petition, the trial court directed that an order to show cause be served on the respondent, and in due time the Attorney General of Oklahoma filed a response on behalf of the Warden. Based on such response and the exhibits attached thereto, the trial court denied the relief prayed for on the ground that there existed no federal constitutional question and dismissed the action. Wrone now appeals. We affirm.
Though the trial court held no evidentiary hearing, the essential facts are in nowise in dispute. On January 10, 1961, Wrone pleaded guilty1 to an Oklahoma state charge of larceny of narcotic drugs and was sentenced to a term of five years in the state penitentiary. The sentence thus imposed was suspended during good behavior under the provisions of 22 O.S. § 991.
On April 19, 1964, Wrone was indicted by a federal grand jury in the Western District of Oklahoma for a drug violation. Thereupon, and prior to his subsequent conviction in the federal court, application was made by the county attorney, in the state court where Wrone had previously received the suspended sentence, to revoke the suspended sentence, the application to revoke reciting that Wrone had been thus indicted and additionally that during the month of April 1964 had been observed by federal agents in the company of known criminals and persons using narcotics. This application to revoke was granted on June 25, 1964, without hearing, as such, with Wrone not being present and not having been previously served with any notice of proposed hearing.
As indicated, as of the time when Wrone’s suspended sentence was revoked, Wrone was in the custody of the federal authorities. Thereafter, he was convicted in the federal court and served a term in a federal penitentiary. A state detainer was placed on Wrone at the federal institution wherein he was then confined, and when he was thereafter released from the federal penitentiary on August 17, 1970, he was turned over to the Oklahoma authorities who placed him in the Oklahoma state penitentiary to begin serving the five year sentence above referred to.
On June 15, 1968, Wrone, while in federal custody, appealed the revocation of his suspended sentence, which appeal was denied by the Oklahoma Court of Criminal Appeals on January 29, 1969. Thereafter, Wrone sought state habeas corpus relief which, after hearing, was denied again by the Oklahoma Court of Criminal Appeals. Wrone v. Page, 481 P.2d 479 (Okl.Cr.App.1971). It was in this setting that Wrone turned to the federal courts for relief. As indicated, his action was dismissed by the trial court and Wrone now appeals that order of dismissal.
By way of additional background, 22 O.S. § 992, which was in effect at the time Wrone’s suspended sentence was revoked, permitted a more or less summary revocation of a suspended sentence with no requirement that the defendant be personally present in court. ' That statute has since been repealed and was replaced by that which now appears as 22 O.S. § 991b, the latter statute providing for a hearing when application is made to revoke a suspended sentence. However, in Wrone v. Page, supra, it was held by the Oklahoma Court of Criminal Appeals that the procedural statute in effect in 1964, when Wrone’s suspended sentence was revoked, was controlling, rather than the subsequently enacted statute, which was held not to be given retroactive effect.
In this court Wrone argues that the revocation of his suspended sentence, without hearing and without notice to him so as to permit him to appear with counsel and contest the application by the county attorney to revoke, was unconstitutional under the provisions of the Sixth Amendment as applied to the states through the Fourteenth Amendment. In thus arguing, counsel relies primarily upon Mempa v. Rhay, 389 U.S. 128, 88 S.Ct. 254, 19 L.Ed.2d 336 (1967), and McConnell v. Rhay, 393 U.S. 2, 89 S.Ct. 32, 21 L.Ed.2d 2 (1968). In Mempa, it was held that the Constitution did require that counsel be afforded a defendant previously convicted of a felony in a state post-trial proceeding for revocation of his probation and the imposition of a sentence which had been previously deferred. In McConnell, it was held that the rule of Mempa should be given retroactive application.
We deem Mempa and McConnell to be inapplicable to the present controversy. Those cases were concerned with defendants who had not been sentenced, as such, but placed on probation. The rationale of those eases was that the imposition of a sentence was a critical stage in any criminal proceeding and as such was subject to the Sixth Amendment as applied to the several states through the due process clause of the Fourteenth Amendment.
Though the revocation of Wrone’s suspended sentence may bear some resemblance to the revocation of Mempa’s probation, there is one very important difference between the facts in the instant case and those in Mempa. In the instant case, sentence was in fact imposed on Wrone and the sentence thus imposed was thereafter suspended, conditioned on good behavior. In Mempa, pursuant to statute sentence was deferred at the time the defendant was placed on probation, and the hearing at which it was held that Mempa had a right to counsel was one where probation was revoked and sentence imposed. In our view, the revocation of the suspended sentence imposed on Wrone is not governed by Mempa and McConnell. Rather, the suspended sentence here involved is more akin to parole, than probation, for the reason that in the ease of a parolee a sentence has already been previously imposed, and similarly a sentence, though suspended, was imposed against Wrone some three years prior to its revocation. Accordingly, we deem the instant case to be governed by the case law relating to parole, rather than the case law relating to probation. In this particular regard we have heretofore held in Earnest v. Willingham, 406 F.2d 681 (10th Cir. 1969), that Mempa dealt with probation, and did not apply to a parole revocation.
We have previously held that a parolee, i. e., one who has been sentenced and later released on parole, whose parole is about to be revoked, is entitled under the Constitution to be afforded a hearing when his parole is in Jeopardy, to be personally present at such hearing, to be informed in advance of the charges, and the like. Alverez v. Turner, 422 F.2d 214 (10th Cir. 1970), cert. denied sub nom. McDorman v. Turner, 399 U.S. 916, 90 S.Ct. 2221, 26 L.Ed.2d 574 (1970). Subsequent to Alverez, the Supreme Court in Morrissey v. Brewer, 408 U.S. 471, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972), also held that under the Constitution a parolee is entitled to at least an informal hearing to give assurance that the finding of a parole violation is based on facts, though a parolee is not entitled to the full panoply of rights due a defendant in a criminal proceeding.
So, then, even though Wrone’s status be akin to that of a parolee, under Alverez, as well as Morrissey, of course, Wrone would still be entitled to at least an informal hearing before his suspended sentence could be revoked, if the rule of Alverez and Morrissey is given retroactive application. In this regard we find nothing in Morrissey to indicate that the rule of Morrissey is to be given retroactive effect. However, we have specifically held that our pronouncement in Alverez is not to be retroactively applied. Murray v. Page, 429 F.2d 1359 (10th Cir. 1970), cert. denied, 402 U.S. 934, 91 S.Ct. 1530, 28 L.Ed.2d 869 (1971).
In Murray, we recognized that the Oklahoma courts had declined to give retroactive effect to the statutory change whereby a parolee was thereafter to be afforded a hearing before the parole was revoked and held that such afforded the petitioner no right to federal relief. Similarly, in that case we declined, in effect, to give retroactive effect to our holding in Alverez. Accordingly, then, the summary revocation of Wrone’s suspended sentence in 1964 in the Oklahoma state courts was in accord with the Oklahoma statutes then in effect, and under Murray, our pronouncement in Alverez would not in anywise affect the validity of the revocation of Wrone’s suspended sentence.
We recognize that in a sense the instant case is somewhat academic in nature. Wrone’s sentence was suspended on good behavior, and the statute then in effect permitted a revocation thereof if the “person so released has been guilty of a violation of any law after his release * * It is true that in the instant case Wrone’s suspended sentence in the state court was revoked before he was subsequently convicted in federal court. It is equally true that Wrone was in fact convicted in federal court subsequent to the imposition of a suspended sentence in the state court. This is not in dispute. So, if Wrone had prevailed in this court he would not be entitled to release. Rather, the matter would merely be remanded to the trial court with direction that it afford the state court opportunity to hold a hearing on the application to revoke Wrone’s suspended sentence. And at such hearing the only issue would be whether Wrone in fact suffered a federal conviction subsequent to the imposition of his suspended sentence, for such subsequent conviction, if true, is without doubt sufficient grounds to revoke a suspended sentence. That Wrone suffered such subsequent conviction is admitted. It is for this reason that we say the controversy in the present case is more imaginary than real.
Judgment affirmed. |
f2d_478/html/0294-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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In the Matter of GENERAL STEEL TANK COMPANY, INC., Bankrupt. MERRITT-HOLLAND WELDING SUPLIES, INC., et al., Appellants, v. GENERAL STEEL TANK COMPANY, INC., Appellee.
No. 72-2279.
United States Court of Appeals, Fourth Circuit.
Argued Feb. 7, 1973.
Decided May 4, 1973.
L. Patten Mason, Beaufort, N. C., Ellis L. Aycock, Wilmington, N. C., and John A. Mraz, Charlotte, N. C. (Wheatly & Mason, Beaufort, N. C., Stevens, Me-Ghee, Aycock, Morgan & Lennon, Wilmington, N. C., and Mraz, Aycock & Casstevens, Charlotte, N. C., on brief), for appellants.
Hubert Humphrey, Greensboro, N. C. (McLendon, Brim, Brooks, Pierce & Daniels, Greensboro, N. C., on brief), for General Steel Tank Co., Inc.
Larry B. Sitton, Greensboro, N. C. (Smith, Moore, Smith, Schell & Hunter, Greensboro, N. C., on brief), for Fidelity and Deposit Co. of Md.
Before HAYNSWORTH, Chief Judge, BUTZNER, Circuit Judge, and BRYAN, District Judge.
BUTZNER, Circuit Judge:
This appeal concerns the right of attaching creditors to seek recovery against an unindemnified surety on bonds given to release an insolvent debt- or’s property that had been attached within four months before the filing of an arrangement under Chapter XI of the Bankruptcy Act. The district court, affirming the referee, held that § 67 (a) of the Act rendered the bonds null and void, and it restrained the attaching creditors from continuing state court suits to recover from the surety the accounts owed by the debtor. Because we hold that the Act does not discharge the liability of an unindemnified surety, we vacate the judgment of the district court and remand the case for modification of the referee’s order.
Creditors of General Steel Tank Co., Inc., alleging that the company was removing its property from North Carolina, attached the property through proceedings filed in state courts. The attachments were discharged when General Steel posted bonds conditioned on its paying any judgments that might be obtained by attaching creditors but limiting liability on the bonds to the value of the property attached. Fidelity & Deposit Company of Maryland was the surety on the bonds. Within four months, General Steel filed a petition for an arrangement.
The referee found that General Steel was insolvent when the creditors secured the attachments. He declared the attachment liens and the bonds null and void, and he enjoined the attaching creditors from continuing their state court suits to subject the surety to liability.
The attaching creditors, reserving their rights against the surety, participated in the arrangement, but they also sought permission to continue their state court actions so they could establish General Steel’s liability as principal and pursue their remedies against the surety. They acknowledge that any judgments awarded by the state courts can be executed only against the surety, not against General Steel, and they are willing to have this restriction expressed in the referee’s order.
General Steel and its surety challenge the attaching creditors’ right to obtain judgments in the state courts against General Steel even for the limited purpose of subjecting the surety to liability on the bond. The Bankruptcy Act, however, does not support their contention. Continuation of state court actions to impose liability on the debt- or’s surety is a recognized procedure, and the attaching creditors’ participation in the arrangement and receipt of a fraction of the indebtedness does not bar this relief.
Section 16 of the Act provides that the discharge of a debtor shall not alter the liability of his surety. This provision rests on the premises that a discharge is personal and that it results from operation of the law, not the consent of the creditor. These principles form the background for interpreting the specific provisions of § 67(a), which pertain to a surety’s liability on a bond given to release an attachment lien. The purpose of § 67(a) is to foster the equitable distribution of the debtor’s property by preventing the creation of preferences by judicial liens, either directly, or indirectly through the interposition of a surety. Under § 67(a)(1), a lien obtained by attachment within four months before the filing of a petition for arrangement is deemed null and void if the debtor was insolvent at the time the lien was obtained. If a lien deemed null and void under § 67(a)(1) has been dissolved by a releasing bond, the transfer of property, or the creation of a lien, for the indemnification of the surety is deemed null and void under § 67(a)(2)., As a corollary to the preceding provisions, § 67(a)(3) renders property and liens affected by §§ 67(a)(1) and (2) available for the benefit of the debtor’s estate. Finally, when § 67(a)(2) nullifies the protection a surety has obtained through indemnification, § 67(a) (5) discharges the surety of his liability to the extent the indemnifying property or lien enhances the debtor’s estate.
In this case no party claims that General Steel transferred any property, or created any lien, for the indemnification of the surety. Nevertheless, the referee held, and the district court affirmed, that the policy of the Bankruptcy Act would be subverted by allowing the attaching creditors to recover a greater portion of their debts than other creditors even though the surety, not the debtor, would pay the difference. This conclusion, however, conflicts with § 16, which recognizes the legitimacy of a creditor’s recovery against a surety despite the principal’s discharge in bankruptcy. When § 67(a) is read in the light of § 16, it is apparent that allowing attaching creditors to recover a portion of their claims against a surety on a releasing bond does not contravene the policy of the Bankruptcy Act. The loss suffered by the attaching creditors is simply transferred to the surety without affecting the debtor’s estate or his other creditors.
The referee and the district court also ruled that under North Carolina law the bonds given to release the attachment were statutory forthcoming bonds that stood as a substitute for the attached property, and not payment bonds for the satisfaction of any judgments that might be obtained by the attaching creditors. They held that the Act’s nullification of the attachment liens also dissolved the bonds and discharged the liability of the surety.
The bankruptcy court’s ruling does not, we believe, give appropriate consideration to the legislative history of § 67(a). Prior to 1934, the predecessor to § 67 (a) contained no provision governing the surety’s liability when an attachment lien was discharged by a bond. Most cases held that bankruptcy did not relieve the surety of his liability, although a minority ruled that the surety was released. In 1934, Congress amended the Act to incorporate the minority view by expressly providing that the bond given to dissolve an attachment lien was null and void. Congress again amended the section in 1938, this time to substantially its present form. The 1938 amendment abolished the 1934 clause that voided all bonds when the liens underlying them were invalidated, and it replaced the clause with § 67(a)(5), which discharged only those sureties whose indemnifying transfers had been voided under § 67(a)(2). The amendment makes no reference to the distinction between forthcoming bonds and payment bonds. It classifies both types as “releasing bonds.” The intention to expand surety liability seems obvious, for otherwise there would have been no need to alter the 1934 statutory framework.
The congressional intent is made even clearer by the legislative history of the 1938 amendment. The House committee report recognized that under the amendment the surety could remain liable even when § 67(a)(1) voided the underlying lien. However, the committee noted that the credit for the value of the indemnifying property allowed by § 67(a)(5) prevents injustice to the surety. The emphasis in the House committee report on the limited nature of release granted to sureties by § 67(a)(5) provides additional support for our interpretation of § 67(a). According to the report, the provision discharging the liability of a surety applies only to “the case where a lien has been released by the furnishing of a bond, the surety of which has been indemnified.” The narrow scope of § 67(a)(5) indicates that Congress intended only a limited exception to the general rule of continued surety liability.
In sum, we conclude that the Bankruptcy Act does not discharge the liability of an unindemnified surety on a bond given to release the property of an insolvent debtor that was attached within four months before a petition for arrangement. But this holding is not to be read as conclusively imposing liability on the surety. The bankruptcy court’s adjudication of the surety’s liability ends after it determines when the attachments were given, whether the debtor was insolvent at that time, what transfers of property and liens are deemed null and void, and to what extent the liability of the surety must be discharged under the Act because of the indemnifying property and liens he must surrender for the benefit of the debtor’s estate. The surety’s liability ultimately must be decided in a forum other than the bankruptcy court, where the validity of the attachment and the effect of state law on the surety’s undertaking can be litigated. Nothing that we have written reflects on these issues. We hold only that the Bankruptcy Act did not discharge the unindemnified surety.
Accordingly, the judgment of the district court is vacated, and the ease is remanded so the referee’s order may be modified to delete the declaration that the bonds are null and void and that no recourse may be had against the surety. The injunction should be modified to permit the attaching creditors to pursue their state court actions and to bar them from executing any judgments against General Steel. The attaching creditors shall recover their costs against the Fidelity & Deposit Company of Maryland.
. Section 302 of the Act [11 U.S.C. § 702 (1970)] makes §§ 16 and 67(a) [11 U.S.C. §§ 34 and 107(a) (1970)], with which this opinion is primarily concerned, applicable to proceedings for arrangements under Chapter XI.
. See Manufacturers’ Finance Corp. v. Vye-Neill Co., 62 F.2d 625, 628 (1st Cir.), cert. denied, 289 U.S. 738, 53 S.Ct. 657, 77 L.Ed. 1486 (1933) ; Brown v. Four-In-One Coal Co., 286 F. 512 (6th Cir.), cert. denied, 262 U.S. 749, 43 S.Ct. 524, 67 L.Ed. 1213 (1923). Cf. Gordon v. Calhoun Motors, Inc., 222 N.C. 398, 23 S.E.2d 325 (1942). See also 1A Collier, Bankruptcy 1535 (1972) ; 4 Remington, Bankruptcy 87 (1957) ; Glenn, The Surety’s Bight to Indemnity — Effect of Principal’s Bankruptcy, 31 Yale L.J. 582, 586 (1922). Contra Morgan v. Cummings, 117 So.2d 606 (La.App.1960).
. Goodwin & Sigel v. Boston Clothing Co., 47 R.I. 25, 129 A. 611 (1925). See 1A Collier, Bankruptcy 1527 (1972) and 4 Collier, Bankruptcy 161 (1971). Of course, the attaching creditors may recover only that portion of the indebtedness that has not been paid.
. Section 16 of the Bankruptcy Act [11 U.S.C. § 34 (1970)1 provides:
“The liability of a person who is a co-debtor with, or guarantor or in any manner a surety for, a bankrupt shall not be altered by the discharge of such bankrupt.”
. 1A Collier, Bankruptcy 1523 (1972).
. Section 67 (a) (1) of the Bankruptcy Act [11 U.S.C. § 107(a) (1) (1970) ] provides:
“Every lien against the property of a person obtained by attachment, judgment, levy, or other legal or equitable process or proceedings within four months before the filing of a petition initiating a proceeding under this title by or against such person shall be deemed null and void (a) if at the time when such lien was obtained such person was insolvent or (b) if such lien was sought and permitted in fraud of the provisions of this title: Provided, however, That if such person is not finally adjudged a bankrupt in any proceeding under this title and if no arrangement or plan is proposed and confirmed, such lien shall be deemed reinstated with the same effect as if it had not been nullified and voided.”
. Section 67(a) (2) of the Bankruptcy Act [11 U.S.C. § 107(a)(2) (1970)] provides :
“If any lien deemed null and void under the provisions of paragraph (1) of this subdivision, has been dissolved by the furnishing of a bond or other obligation, the surety on which has been indemnified directly or indirectly by the transfer of or the creation of a lien upon any of the nonexempt property of a person before the filing of a petition initiating a proceeding under this title by or against him, such indemnifying transfer or lien shall also be deemed null and void: Provided, however, That if such person is not finally adjudged a bankrupt in any proceeding under this title, and if no arrangement or plan is proposed and confirmed, such transfer or lien shall be deemed reinstated with the same effect as if it had not been nullified and voided.”
. Section 67(a)(3) of the Bankruptcy Act [11 U.S.C. § 107(a)(3) (1970)] provides:
“The property affected by any lien deemed null and void under the provisions of paragraphs (1) and (2) of this subdivision a shall be discharged from such lien, and such property and any of the indemnifying property transferred to or for the benefit of a surety shall pass to the trustee or debtor, as the case may be, except that the court may on due notice order any such lien to be preserved for the benefit of the estate, and the court may direct such conveyance as may be proper or adequate to evidence the title thereto of the trustee or debtor, as the case may be : Provided, however, That the title of a bona-fide purchaser of such property shall be valid, but if such title is acquired otherwise than at a judicial sale held to enforce such lien, it shall be valid only to the extent of the present consideration paid for such property.”
. Section 67 (a) (5) of the Bankruptcy Act [11 U.S.O. § 107(a) (5) (1970)] provides:
“The liability of a surety under a releasing bond or other like obligation shall be discharged to the extent of the value of the indemnifying property recovered or the indemnifying lien nullified and voided by the trustee or debtor, or, where the property is retained pursuant to the provisions of paragraph (4) of this subdivision, to the extent of the amount paid to the trustee or debtor.”
. See e. g. Hill v. Harding, 130 U.S. 699, 9 S.Ct. 725, 32 L.Ed. 1083 (1889) (attachment bond). Section 16 has been applied in a wide variety of other situations to permit a creditor to recover against a co-debtor, guarantor, or surety of a discharged debtor: Barrick v. Barnes, 46 Ill.App.2d 172, 196 N.E.2d 526, 527 (1964) (co-maker of a promissory note) ; Miller v. Collins, 328 Mo. 313, 40 S.W.2d 1062, 1065 (1931) (liability insurer) ; In Re Marshall Paper Co., 102 F. 872, 874 (1st Cir. 1900) (corporate officers) ; Dominion Culvert & Metal Corp. v. United States Fid. & Guar. Co., 238 S.C. 452, 120 S.E.2d 518, 521 (1961) (construction performance bond) ; Brown & Brown Coal Co. v. Antezak, 164 Mich. 110, 128 N.W. 774, 130 N.W. 305 (1910) (appeal bond). See generally 1A Collier, Bankruptcy § 16.01 et seq. (1972).
. Williams v. United States Fid. & Guar. Co., 236 U.S. 549, 35 S.Ct. 289, 59 L.Ed. 713 (1915) ; Manufacturers’ Finance Corp. v. Vye-Neill Co., 62 F.2d 625, 628 (1st Cir.), cert. denied, 289 U.S. 738, 53 S.Ct. 657, 77 L.Ed. 1486 (1933).
. Section 67(f) of the Bankruptcy Act of 1898, ch. 541, § 67, 30 Stat. 564.
. See e. g. Brown v. Four-In-One Coal Co., 286 F. 512 (6th Cir.), cert. denied, 262 U.S. 749, 43 S.Ct. 524, 67 L.Ed. 1213 (1923). See also 4 Collier, Bankruptcy 157 n. 4 (1971).
. See e. g. Republic Rubber Co. v. Foster, 95 Conn. 551, 111 A. 839 (1920). See also 4 Collier, Bankruptcy 157 n. 4 (1971).
. From 1934 until 1938, § 67(f) of the Act read as follows:
“That all levies, judgments, attachments, or other liens, obtained through legal proceedings against a person who is insolvent, at any time within four months prior to the filing of a petition in bankruptcy against him, and any bond which may be given to dissolve any such lien so created, shall be deemed null and void in case he is adjudged a bankrupt, and the property affected by the levy, judgment, attachment, or other lien, and any nonexempt property of his which he shall have deposited or pledged as security for such bond or to indemnify any surety thereon, shall be deemed wholly discharged and released from the same, and shall pass to the trustee. . . . ” Act of June 7, 1934, ch. 424, § 5, 48 Stat. 924 (emphasis added).
. Act of June 22, 1938, ch. 575, § 67, 52 Stat. 875. The current wording of the section may be found in 11 U.S.C. § 107 (a) (1970) ; see notes 6-9, supra.
. With reference to § 67(a)(2), the committee reported:
“Section 67 (a) (2) is intended to avoid an indix'ect preference, such as may be created by the obtaining of an attachment lien against the debtor, who px-o-cures its release by furnishing a sui'ety bond and indemnifying the surety by transferring or pledging property which other-wise would pass to the trustee. Sometimes this process is carried one step further by having the surety indemnified by a relative or friend of the debtor, who in turn is indemnified by a transfer or pledge of the debtor’s property. Even though the ox-iginal lien may be dissolved by the debtor’s bankruptcy, the lienholder may nevertheless proceed on the bond and recover from the surety. In re Federal Biscuit Co., (2 Cir., 214 F. 221). The creditor thus is effectually preferred, while the surety, who has given an adequate present consideration for the transfer of the bankrupt’s property, would be entitled to retain his security. The net result to the bankrupt estate is a transfer for the purpose of effecting a preference, which cannot be set aside under any specific provision of the act. The purpose is to enable such a transfer to be set aside, and since the surety is given credit for the value of the propex-ty recovered no injustice is done to him.” H.R.Rep.No.1409, 75th Cong., 1st Sess. at 33 (1937).
A National Bankruptcy Conference analysis of a similar bill from the preceding year provides further evidence that the 1938 amendment was intended to discharge an unindemnified surety. Speaking critically of the 1934 amendment to § 67 (f) of the Bankruptcy Act, the analysis states:
“The section, thus amended [in 1934], is expanded to x-ender null and void ‘any bond which may be given to dissolve any such lien so created’, and ‘any nonexempt property of his (debtor) which he shall have deposited or pledged as security for such bond or to indemnify any surety thereon’ is discharged and released. This provision is unsound in that it extends beyond the purpose of protecting property of the estate. Where the obligation of the surety is covered by indemnity, consisting in part of property of a third person, it would seem px-oper to release the bond only to the extent covered by the bankrupt’s property. Thus the attaching or lien creditor would be entitled to recover from the sux-ety, and the surety would continue liable on his obligation, to the extent of the amount remaining undischarged after cx-edit is given for the value of the px-operty recovered by the tx-ustee for the estate.” National Bankruptcy Conference Analysis of H.R. 12889, Hearings on Amendments to the Bankruptcy Act of 1898 Before the House Judiciary Comm., 74th Cong., 2d Sess. at 208 (1936).
. The section of the committee report discussing § 67 (a) (5) states :
“Clause (5) relates only to the case where a lien has been released by the furnishing of a bond, the surety of which has been indemnified. If the transfer or indemnifying lien is set aside, the surety is obviously entitled to a proportionate credit. The court which sets aside the transfer or lien determines its value; and it is specifically provided that the obligee' on the bond, who has been given notice of the proceeding, shall be bound by this determination of value. The credit given the surety is limited to the value of the property actually recovered by the trustee or debtor or the value of the lien, if the lien is set aside, or the amount actually paid to the trustee or debtor where the proceeding is to recover money rather than to recover the property itself or to set aside the lien.”
This comment was taken almost verbatim from the National Bankruptcy Conference analysis, which was prepared by the drafters of the 1938 amendments. See National Bankruptcy Conference Analysis of H.R. 12889, Hearings on Amendments to the Bankruptcy Act. of 1898 Before the House Judiciary Comm., 74th Cong., 2d Sess. at 210 (1936).
. This interpretation of § 67(a) follows that suggested by the leading bankruptcy commentators:
“[T]he lien creditor is now entitled to enforce the bond of the surety to the extent of the amount of the obligation remaining undischarged after credit is given for the value of any of the bankrupt’s nonexempt property recovered from the surety by the trustee in bankruptcy.” 4 Collier, Bankruptcy 160 (1971).
“The state court proceedings can go forward notwithstanding avoidance of the attachment or other lien by the statute upon initiation of bankruptcy proceedings, for the purpose of determining whether there is liability on' the release bond and to enforce such liability if it is enforceable under state law.” 4 Remington, Bankruptcy 87 (1957).
Cf. Morris Plan Bank v. Simmons, 201 Ga. 157, 39 S.E.2d 166 (1946) ; Bates Street Cigar & Confectionery Co. v. Howard Cigar Co., 137 Me. 151, 15 A.2d 190 (1940). But cf. Morgan v. Cummings, 117 So.2d 606 (La.App.1960).
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Annie J. BEATY, Individually and as next friend of Franklin T. Beaty and Tracy A. Beaty, minors, Plaintiffs-Appellees-Cross-Appellants, v. Caspar W. WEINBERGER, Secretary of Health, Education and Welfare, Defendant-Appellant-Cross-Appellee.
No. 72-1356.
United States Court of Appeals, Fifth Circuit.
April 23, 1973.
John W. Stokes, Jr., U. S. Atty., Julian M. Longley, Jr., Asst. U. S. Atty., Atlanta, Ga., Stanton Koppel, Civil Div., Morton Hollander, Chief, Appellate Sec., Kathryn H. Baldwin, Civil Div., Dept, of Justice, Washington, D. C., for appellant.
Kenneth G. Levin, Atlanta, Ga., for appellees.
Before TUTTLE, WISDOM and SIMPSON, Circuit Judges.
TUTTLE, Circuit Judge:
This action was brought under Section 205(g) of the Social Security Act, 42 U. S.C.A. § 405(g), for review of a final decision of the Secretary of Health, Education and Welfare, denying the claim of Annie J. Beaty, on behalf of her two illegitimate children, Franklin and Tracy, for children’s insurance benefits. The claim was based on the social security earnings record of J. B. Bryant, a disabled worker conceded by the Secretary to be the children’s natural father. Benefits were denied the children on the basis of the Secretary’s finding that neither had been dependent upon Bryant at the time his period of disability began, a prerequisite to recovery by illegitimate children under the relevant provisions of the Act. Upon review the district court held that the record would not support the Secretary’s finding of non-dependen-ey as to one of the children, Franklin, but upheld the Secretary’s determination with regard to the other child, Tracy, who had been born after the onset of Bryant’s disability. We affirm in part and reverse in part.
This claim for insurance benefits is governed by Section 202(d) of the Act, 42 U.S.C.A. § 402(d), which in pertinent part provides that “Every child (as defined in section 416(e) of this title) of an individual entitled to old-age or disability insurance benefits” who “has filed application for child’s insurance benefits,” and “was dependent upon such individual — if such individual is living, at the time such application was filed . shall be entitled to a child’s insurance benefit. . . . ”
Section 216(e) of the Act, 42 U.S.C.A. § 416(e), provides that the term “child” means the child or legally adopted child of an individual. However, in order to be eligible for social security benefits the child must qualify under one of the criteria set forth in sections 216(h)(2) or 216(h)(3) of the Act, 42 U.S.C.A. § 416(h)(2) and § 416(h)(3). Though we treat of these statutes in greater detail below, it is sufficient for our purposes here to note that in order to.'be deemed eligible for the insurance benefits which they seek, the two illegitimate children in this case were obliged to meet the requirements of 42 U.S.C.A. § 416(h) (3)(B) (ii) which provides for the recovery of benefits where “such insured individual is shown by evidence satisfactory to the Secretary to be the father of the applicant and was living with or contributing to the support of that applicant at the time such period of disability began.”
Turning to the salient facts of this case, we note the following: On September 2, 1969, Annie J. Beaty, the mother of the two illegitimate children of J. B. Bryant, applied for insurance benefits in behalf of the children based on Bryant’s earnings record. On the same day Bryant applied for disability insurance benefits and in a separate proceeding the Social Security Administration determined that Bryant had been under a disability, paranoid schizophrenia, since March 10, 1961 and awarded him benefits retroactive to September, 1968 pursuant to Section 223(b) of the Act, 42 U.S.C.A. § 423(b). Insurance benefits were denied to the children, however, on the grounds that, although Franklin and Tracy were Bryant’s natural children, Bryant had not been contributing to their support at the time his disability began in March of 1961. The hearing examiner concluded that Tracy, who had been born in 1966, could not possibly have been receiving support from Bryant, as required by statute, at the time Bryant’s period of disability began in 1961. As to Franklin, who was born in 1960, and thus was not, because of date of birth, barred by the statutory exclusion which deprived Tracy of insurance benefits, the examiner concluded that the “reliable, probative, and substantial evidence of record” did not establish the existence of support payments from Bryant before the onset of his disability. This determination became the final decision of the Secretary on December 31, 1970, and claimant brought this action in the district court for review.
As noted, the district court reversed the determination of the Secretary with regard to Franklin’s claim, but affirmed as to the denial of benefits to Tracy. In its present posture the case involves two distinct issues. Raised on direct appeal by the Secretary is the issue with regard to Franklin’s claim as to whether there was substantial evidence in the record to support the Secretary’s findings that Bryant had not been contributing to the child’s support at the time of the onset of his disability. As to the denial of benefits to Tracy, which is the subject of Ms. Beaty’s cross-appeal, the constitutional issue is raised: whether Section 416(h) (3) (B) (ii), which excludes the possibility that Tracy, born after his father’s period of disability commenced, could ever receive child’s insurance benefits on account of such disability constitutes a denial of equal protection to Tracy.
We deal initially with Franklin’s claim. Before the Social Security hearing examiner, whose findings of fact were accepted in toto by the Secretary, appellant Beaty testified that from about the time of Franklin’s birth in August, 1960, Bryant contributed approximately $10 twice each month for the child’s support. However, Bryant’s social security earnings record for 1960 disclosed income of only $331 and for 1961 of $426. In view of this fact the examiner found it unlikely that with such minimal income Bryant would have been contributing $20 per month to the support of his illegitimate child. This conclusion was based on the presupposition that the income of $331 in 1960 and of $426 in 1961 had been evenly spread over the four quarters of each of those calendar years. In point of fact Bryant’s income of $331 during 1960 had been received in the last three quarters of that year and his reported income of $426 during 1961 was all received in the first quarter. It is to be noted that Franklin was born during the third quarter of 1960. Bryant, of course, was subsequently determined to have been disabled as of March 10, 1961, and thus, for Franklin to be eligible for insurance benefits it was necessary for him to prove only that his father had been contributing to his support prior to that time. In the perspective from which we view Bryant’s earnings record for 1960 and 1961 it does not seem so unlikely as the examiner concluded that Bryant could not have contributed $20 monthly to Franklin’s support during the last four months of 1960 and certainly not unlikely that out of $426 earned during the first quarter of 1961 Bryant could not have contributed $20 per month to the child’s support — a total of $60 — until the onset of his disability in March of that year. Plainly Bryant’s .income for the months of January, February, and March, 1961 was much more than adequate for Bryant to have been making the $20 per month payments which Ms. Beaty claimed he had made.
A second basis which the government posits for denying Franklin’s claim is the putative conflict between Ms. Beaty’s testimony at the hearing and a prior written statement signed by her and considered along with the case. In filing her claim Ms. Beaty signed a statement to the effect that “Franklin Tony Beaty and Tracy A. Beaty are my children by J. B. Bryant. We have never lived together and he has not supported the children since 1957. The VA advised us to go to the court and file an acknowledgment of paternity and support agreement before we filed with the VA.” This statement had been written out by a caseworker, later identified as Helen Wilson, who also prepared a statement for J. B. Bryant (which he signed) which said in part “Franklin Tony Beaty and Tracy A1 Beaty are my children by Ms. Annie Jewel Beaty. I have never lived with her or the children and have not contributed to their support since 1957.”
Since the first of these two children was born in August, 1960, and the second in 1966, it is plain that these statements could not mean what they purport to say. One may speculate as to whether the statements were meant to refer to 1967 or some other date, but m any event it is clear that the reference to 1957 was a scrivener’s error. We note that the statements were not sworn to and, of course, neither was in the handwriting of the affiant, but rather had been written out by the same case worker.
In view of these circumstances we think that Ms. Beaty’s sworn testimony at the hearing, to the effect that Bryant had paid her approximately $10 every 2 weeks after the first child was born, together with Bryant’s affidavit to substantially the same effect, would have to prevail on the grounds that there was no substantial evidence on the record to support the hearing examiner’s findings that Bryant had not contributed to Franklin’s support prior to March 10, 1961. We, therefore, conclude that the district court’s determination in this respect was correct.
We turn then to the equal protection issue raised by Ms. Beaty on cross-appeal concerning the denial of benefits to her son Tracy. The issue arises within the framework of the following statutory scheme for awarding children’s insurance benefits. As noted, the entitling provision is 42 U.S.C.A. § 402(d)(1). In pertinent part it provides for insurance benefits to every child, as hereinafter defined, of a fully-insured individual himself entitled to disability benefits where such child has filed application for benefits and was dependent on the insured individual, if living, at the time such application was filed. In order to be eligible for benefits, however, the applicant must be a “child” or deemed a “child” within the meaning of 42 U.S.C. A. § 416(h)(2)(A) or (B) or § 416(h) (3)(B), quoted in full in the margin.
Briefly, § 416(h)(2)(A) provides that in determining whether an applicant is the “child” of an insured individual the Secretary shall apply “such law as would be applied in determining the devolution of intestate personal property by the courts of the State in which such insured individual is domiciled” at the time application is made. Under § 416(h)(2)(B) an applicant who does not meet the above requirement, but was the product of a purported marriage which “but for a legal impediment would have been a valid marriage” is deemed to be a “child” of the insured individual for purposes of eligibility for insurance benefits. Finally, § 416(h)(3)(B), which was added to the Act by amendment in 1965, provides that an otherwise illegitimate child shall be deemed to be the “child” of an insured individual for purposes of § 402 benefits where, with additional provisos not here relevant, “such insured individual is shown by evidence satisfactory to the Secretary to be the father of the applicant and was living with or contributing to the support of that applicant at the time such [the father’s] period of disability began.” 42 U.S.C.A. § 416(h) (3) (B) (ii) (Emphasis added).
Cross-appellant concedes that Tracy does not fall within any of the categories of eligibility listed above. Under Georgia law, applicable here, a child in Tracy’s position does not under the intestacy laws inherit from his natural father, as provided in § 416(h)(2)(A), nor was there a purported marriage here which might qualify Tracy under § 416(h) (2) (B). Additionally since Tracy was born nearly five years after the commencement of his father’s disability he cannot qualify under § 416(h)(3)(B) even though, as Beaty contends, Bryant, the admitted father, made and continued to make contributions to Tracy’s support following the child’s birth in 1966, long prior to the filing of any social security claim either for the father or the children.
For children such as Tracy, then, the reality of support payments from the father in no way affects their ineligibility for insurance benefits, since, under § 416(h)(3)(B), illegitimate children, in order to be eligible for benefits, must have been receiving support from the putative father at the time his disability commenced. This treatment of illegitimate, post-disability children contrasts with the treatment afforded h(2) children born after the onset of their father’s disability. Under § 402(d)(1) these children may establish their dependency on their fathers, thus making them eligible for benefits, at the time their applications for benefits are filed. Moreover, as more fully explicated hereinafter, there is a statutory presumption in § 402(d)(3) that h(2) children are dependent, thus obviating the need for any proof in that respect. The net effect of this statutory scheme is that while post-disability illegitimate children are ipso facto ineligible for benefits, their post-disability peers, who qualify under § 416(h)(2), will almost automatically be eligible. It is this disparity in treatment which Ms. Beaty contends constitutes an invidious discrimination in violation of the Due Process Clause of the Fifth Amendment.
In assessing this contention we start with the proposition that the constitutional test to be applied in these circumstances is whether the classification set up by Congress has a rational basis, Richardson v. Belcher, 404 U.S. 78, 92 S.Ct. 254, 30 L.Ed.2d 231 (1971). The Secretary argues that this rather unexacting standard has in fact been met. He notes that the purpose of the children’s insurance provisions in the Social Security Act is to replace the support lost by a child when his father dies, retires, or becomes disabled, and that Congress was of the view that children with inheritance rights under state law, or whose parents had undergone a formal marriage ceremony were more likely to have received support from their parents than other classes of children. Thus it was that, in broadening the coverage of the Act in 1965 by including children described by § 416(h)(3), Congress required that children falling within this class prove that they were likely to be or were in fact being supported by the insured parent. However, with respect to children born after the onset of their parent’s disability Congress was faced with the problem of devising tests by which fabricated claims could be excluded since, the Secretary avers, the “risk that a claimant is fabricating the evidence of parentage or support is greater when the child is not born until after the wage-earner has become entitled to benefits.” Thus, since any test which might be devised for weeding out fraudulent claims would involve additional administrative burdens, Congress might reasonably deny benefits to this class of children who are deemed less likely in any event to have lost support by a wage-earner’s disability.
It is doubtless true, as the Secretary suggests, that children’s benefits under the Act are theoretically conditioned on the loss of support from a disabled parent. In point of fact, however, so-called legitimate children have ordinarily been eligible for benefits regardless of whether the insured parent lives with them or contributes to their support. Section 402(d)(3) of the Act provides in effect that a legitimate child is presumed to be dependent on the wage-earner unless the child has been adopted by some other individual and the wage-earner no longer contributes to that child’s support. Of course, the class of children deemed to be legitimate for eligibility purposes (though technically they are illegitimate) has been broadened by amendment to include children described by § 416(h)(2)(B) and (h)(3)(B), but of all eligible children only those covered under § 416(h) (3) (B) (ii) are required to prove actual support and this only at the time the insured parent’s period of disability began and not thereafter.
The net effect of this statutory framework is that the bulk of those children who meet the eligibility criteria of § 416(h)(2) or (3)(B) would be entitled to insurance benefits on the account of a disabled parent regardless of whether they are being supported by that parent, whereas illegitimate children in Tracy’s class cannot receive benefits even though able to prove both parentage and support at any really relevant time. The Secretary seeks to rationalize this anomalous circumstance on the grounds that the classification is an administrative device for obviating the risk that claimants like Tracy will fabricate evidence of parentage and support. We think, however, that such a rationale will not withstand constitutional scrutiny.
We do not here dispute the Secretary’s underlying premise that because illegitimate children are less likely to be supported by their fathers than h(2) children — a proposition which we are inclined to accept as true — -the former might be required to establish to the satisfaction of the Secretary the entitling facts of parentage and support. Thus, it would doubtless be appropriate for Congress to require that post-disability illegitimate children prove those facts. It does not follow, however, that the entire class may be excluded from coverage simply because of a postulated difficulty of proof. This is what happens now as to all post-disability children who do not meet the h(2) requirements.
The starting point for our analysis is with the companion cases of Levy v. Louisiana, 391 U.S. 68, 88 S.Ct. 1509, 20 L.Ed.2d 436 (1967) and Glona v. American Guarantee Co., 391 U.S. 73, 88 S.Ct. 1515, 20 L.Ed.2d 441 (1967). What is significant about these cases is the Court’s implicit, if not explicit, disavowal of the notion that difficulties of proof are a sufficient, or indeed rational, basis for discriminating against illegitimates. In Glona, which involved the question whether a mother should be entitled to recover for the alleged wrongful death of her illegitimate child, the Court said, “Opening the courts to suits of this kind may conceivably be a temptation to some to assert motherhood fraudulently. That problem, however, concerns burden of proof. Where the claimant is plainly the mother, the State denies equal protection of the laws to withhold relief merely because the child, wrongfully killed, was born to her out of wedlock.” 391 U.S. at 76, 88 S.Ct. at 1517 (emphasis added). Plainly, the problem of proving parentage was viewed as a procedural matter which of itself was not sufficient justification for the State to formulate classifications between legitimates and illegitimates based upon it.
Of course, Levy and Glona both in-' volved the mother-child relationship and not, as here, the relation between father and child. That the same rule should obtain in both instances, however, was subsequently decided by the Court in Weber v. Aetna Casualty & Surety Co., 406 U.S. 164, 92 S.Ct. 1400, 31 L.Ed.2d 768 (1972). In that case the issue involved was “the right of dependent unacknowledged, illegitimate children to recover under Louisiana workmen’s compensation laws benefits for the death of their natural father on an equal footing with his dependent legitimate children,” 406 U.S. at 165, 92 S.Ct. at 1401. The Court held that the denial of equal recovery rights to the former constituted a violation of equal protection. In discussing the problems of proof, which the State apparently asserted as a basis for discriminating between the two classes of children, the Court had this to say:
“[W]e are mindful that States have frequently drawn arbitrary lines in workmen’s compensation and wrongful death statutes to facilitate potentially difficult problems of proof. Nothing in our decision would impose on state court systems a greater burden in this regard. By limiting recovery to dependents of the deceased, Louisiana substantially lessens the possible problems of locating illegitimate children and of determining uncertain claims of parenthood. Our decision fully respects Louisiana’s choice on this matter. It will not expand claimants for workmen’s compensation beyond those in a direct blood and dependency relationship with the deceased and avoids altogether diffuse questions of affection and affinity which pose difficult probative problems. Our ruling requires equality of treatment between two classes of persons the genuineness of whose claims the State might in any event be required to determine.” 406 U.S. at 175, 92 S.Ct. at 1406 (emphasis added).
Clearly the Court did not believe that proving dependency and parentage, when proof of both was necessarily a prerequisite to recovery, presented difficulties sufficient for the State to justify excluding a class of illegitimates from coverage under the workmen’s compensation laws at issue. And, the Court indicated that notwithstanding difficulties in proof, the State might in any event be obliged to determine the genuineness of the claims of illegitimate children.
This principle was reaffirmed in Gomez v. Perez, 409 U.S. 535, 93 S.Ct. 872, 35 L.Ed.2d 56 (1973) in which the Court was confronted with the question whether a State could grant legitimate children a judicially enforceable right to support from their fathers and deny that right to illegitimate children. While recognizing “the lurking problems with respect to proof of paternity” the Court noted, “those problems are not to be lightly brushed aside, but neither can they be made into an impenetrable barrier that works to shield otherwise invidious discrimination.”
Moreover, in Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969), the Court rejected the suggestion that prevention of fraud might constitute a rational basis for a state to impose a one year residency requirement on individuals seeking welfare assistance. The Court said, “[I]t is unreasonable to accomplish this objective by the blunderbuss method of denying assistance to all indigent newcomers for an entire year.” 394 U.S. at 637, 89 S.Ct. at 1333.I ********* Though the case was decided in terms of compelling state interest, it was noted that “even under traditional equal protection tests a classification of welfare applicants according to whether they have lived in the State for one year would seem irrational and unconstitutional.” 394 U.S. at 638, 89 S.Ct. at 1333.
We conclude, therefore, that the classification at issue, which works a total exclusion of claims by a class of illegitimate children, some of whose claims would be demonstrably valid, does not pass constitutional muster. It is plain that all of the children affected by this classification are illegitimate — as contrasted to the treatment afforded legitimate children who, as noted, are almost always eligible for benefits. The sole justification offered for this difference in treatment is that there may reasonably be supposed to be a greater likelihood of spurious claims from this group than from others. Yet, as we have indicated, this justification will not insulate an otherwise invidious discrimination. We thus hold that § 416(h) (3) (B) (ii) is constitutionally infirm insofar as it requires a showing of paternity and dependency at the time the insured parent’s period of disability began. While proof of parentage and support may be required of post-disability, illegitimate children they may not as a class be excluded from coverage of the Act simply because they were born after the onset of the insured parent’s disability.
We are not unmindful that a three-judge court in Illinois recently held to the contrary. Jimenez v. Richardson, D.C.N.D.Ill., 353 F.Supp. 1356, decided January 30, 1973. That court did not consider, however, that, even though there might exist the possibility of spurious claims by post-disability, illegitimate children, that justification alone, as a constitutional matter, will not support the classification. We agree with Judge Fairchild’s dissenting opinion in which he noted that the Supreme Court [406 U.S. 164, 92 S.Ct. 1400, 31 L.Ed.2d 768] has made it clear “that once dependency was established, the Constitution required that all dependents— whether legitimate or illegitimate — must be treated equally,” and that while “the need to guard against fraudulent claims is surely a valid legislative goal,” the total exclusion of a class for claims would not be a “reasonable means of achieving that goal.”
Turning to the facts of the case before us we note that because Tracy was deemed ineligible for insurance benefits owing to the lateness of his birth, the Secretary made no finding as to whether Bryant was actually contributing to the child’s support at the time application for benefits was made. It is therefore necessary to remand the case for a factual determination with regard to this question.
We have considered Ms. Beaty’s claim that the one year retroactivity provision in the Act should not apply to Bryant and find the contention to be without merit.
The district court’s determination with respect to the issue raised on direct appeal is affirmed. With respect to the issues raised on cross-appeal, the judgment is affirmed in part and reversed in part and the case is remanded to the district court with directions to remand to the Secretary for a factual hearing in accordance with this opinion.
SIMPSON, Circuit Judge
(concurring in part and dissenting in part):
I concur fully in the majority’s af-firmance of the district court’s treatment of the claim asserted for the older child of Mrs. Beaty, Franklin: reversal of the Secretary’s determination that “reliable, probative and substantial evidence of record” did not establish the existence of support payments for Franklin’s benefit by Bryant prior to the onset of Bryant’s disability in 1961.
But I respectfully dissent from the remaining portion of the opinion which sustains Mrs. Beaty’s cross-appeal and reverses the district court’s approval of the Secretary’s denial of benefits to the younger son, Tracy, born in 1966, five years subsequent to the onset of Bryant’s disability in 1961.
I would hold that the discrepancy in treatment between h(2) and h(3) post-disability illegitimate children is rationally related to achieving legitimate Congressional goals, and that by passing this rational basis test the statutory scheme meets constitutional standards of equal protection under the Fifth Amendment Due Process Clause. Richardson v. Belcher, 1971, 404 U.S. 78, 81, 92 S.Ct. 254, 257, 30 L.Ed.2d 231, 235; Dan-dridge v. Williams, 1970, 397 U.S. 471, 90 S.Ct. 1153, 25 L.Ed.2d 491. We deal here with a federal statute which does not directly involve the Fourteenth Amendment’s Equal Protection Clause but it is clear that a classification which meets the Dmdridge equal protection test is necessarily consistent with the due process requirement of the Fifth Amendment. Richardson v. Belcher, supra; Shapiro v. Thompson, 1969, 394 U.S. 618, 641-642, 89 S.Ct. 1322, 1335, 22 L.Ed.2d 600, 619; Bolling v. Sharpe, 1954, 347 U.S. 497, 499, 74 S.Ct. 693, 694, 98 L.Ed. 884.
In upholding the constitutionality of Title 42, U.S.C. § 416(h)(3)(B), I would follow the majority opinion of the three-judge statutory court in Jimenez et al. v. Richardson, 1973, N.D.Ill., 353 F.Supp. 1356 rather than follow Judge Fairchild’s dissent as the-majority does. See also Watts v. Veneman, D.C.Cir. 1973, 476 F.2d 529 and its holding in a similar context:
“The entire thrust of the Social Security laws relevant to dependents is to provide benefits to those who were most likely to have relied upon the deceased for their support. In light of this overriding purpose, it is well-established that Social Security benefits are not accrued property rights. One’s ability to receive benefits is not dependent solely upon the biological relationship between the decedent and his children, but also upon the probability that the children were dependent for support upon the deceased.
Congress in enacting the Social Security laws made various judgments about the probability that children are dependent. For example, it seems more logical that illegitimates would be dependent upon their father if he has recognized them, or if in fact he is contributing to their support. The incorporation of a state’s intestacy laws for purposes of determining eligibility is in furtherance of this scheme. If an illegitimate child may not inherit, then the child’s support following the father’s death is less likely to be dependent upon what was received upon the deceased’s death than if the child could receive property following the wage earner’s demise.
It must be remembered that the Social Security laws do not exclude all il-legitimates from eligibility for payments. In this case, for example, the children of decedent Jones were and are fully eligible for support. Rather, the laws are reasonably designed to disqualify a class of illegitimates who are less likely, as a class, to possess the requisite biological or legal relationship to or economic dependency on the wage earner.” (Footnotes omitted)
. The record is clear that Bryant did not live with the children. Thus, in order for the children to be eligible for benefits under § 416(h) (3) (B) (ii) it was necessary to prove that Bryant was contributing to the support of the children at the time his period of disability began.
. Ms. Beaty’s sworn testimony was supported by an affidavit submitted by Bryant which stated that he had made periodic payments to Ms. Beaty for the support of each of the children. However, the amount and frequency of such payments were not indicated.
. The other evidence of record which might have led the examiner to reject Ms. Beaty’s sworn testimony at the hearing, such as a statement made to the Fulton County Legal Aid Society to the effect that she had not received a payment from Bryant, is at best ambiguous. Since Ms. Beaty did not seek such legal assistance until 1963 and since she stated at the hearing that her reason for doing so was because Bryant’s payments were “kind of slow” and further since the reference to payments from Bryant made to the Legal Aid Society could as easily be interpreted as referring to a stoppage of payments as to the fact that Bryant had never made any payments, we do not consider this evidence as being of any particular significance.
. Ҥ 416(h) (2) (A) In determining whether an applicant is the child or parent of a fully or currently insured individual for purposes of this subehapter, the Secretary shall apply such law as would be applied in determining the devolution of intestate personal property by the courts of the State in which such insured individual is domiciled at the time such applicant files application, or, if such insured individual is dead, by the courts of the State in which he was domiciled at the time of his death, or, if such insured individual is or was not so domiciled in any State, by the courts of the District of Columbia. Applicants who according to such law would have the same status relative to taking intestate personal property as a child or parent shall be deemed such.
(B) If an applicant is a son or daughter of a fully or currently insured individual but is not (and is not deemed to be) the child of such insured individual under sub-paragraph (A), such applicant shall nevertheless be deemed to be the child of such insured individual if such insured individual and the mother or father, as the case 'may be, of such applicant went through a marriage ceremony resulting in a purported marriage between them which, but for a legal impediment described in the last sentence of paragraph (1)(B), would have been a valid marriage.
(3) An applicant who is the son or daughter of a fully or currently insured individual but who is not (and is not deemed to be) the child of such insured individual under paragraph (2) of this subsection, shall nevertheless be deemed to be the child of such insured individual if: (B) in the case of an insured individual entitled to disability insurance benefits, or who was entitled to such benefits in the month preceding the first month for which he was entitled to old-age insurance benefits—
(i) such insured individual—
(I) has acknowledged in writing that the applicant is his son or daughter,
(II) has been decreed by a court to be the father of the applicant, or
(III) has been ordered by a court to contribute to the support of the applicant because the applicant is his son or daughter,
and such acknowledgment, court decree, or court order was made before such insured individual’s most recent period of disability began; or
(ii) such insured individual is shown by evidence satisfactory to the Secretary to be the father of the applicant and was living with or contributing to the support of that applicant at the time such period of disability began
. Children who meet the requirements of either § 416(h) (2) (A) or § 416(h) (2) (B) will hereinafter be referred to as “h(2) children.” Though such children are sometimes loosely referred to as “legitimate” children, the appellation is not entirely accurate and thus, for purposes of clarity we will use the statutory designation.
. See 42 U.S.C.A. § 416(h) (3) (B) (i), supra n. 4.
. We use the term “almost automatically” because a close reading of the statute indicates that there are special circumstances set out which would exclude coverage for even an h(2) child. It is apparent that statistically this class would he negligible.
. § 402(d) (3) provides “A child shall be deemed dependent upon his father or adopting father or his mother or adopting mother at the time specified in paragraph (1) (C) of this subsection unless, at such time, such individual was not living with or contributing to the support of such child and—
(A) such child is neither the legitimate nor adopted child of such individual, or
(B) such child has been adopted by some other individual.
For purposes of this paragraph, a child deemed to be a child of a fully or currently insured individual pursuant to section 416(h) (2) (B) or section 416(h) (3) of this title shall be deemed to be the legitimate child of such individual.”
. In support of his argument the Secretary has introduced statistics from a study of absent father families by the Department of Health, Education and Welfare which demonstrate that where the father was or had been married to the mother 18.3% of the families received contributions from the father whereas in families where the father had never been married to the mother only 10.2% received such contributions. It can, with equal accuracy, be said that of the former group fully 82% of such families did not receive support contributions from the father, yet the children would nonetheless be eligible for insurance benefits under § 402(d). It also appears, by reversing the figures in this manner, that only a slightly greater percentage of families in the latter group did not receive contributions from the father, there being a difference of just slightly more than 8%.
. It has been suggested that in the wake of Levy v. Louisiana, 391 U.S. 68, 88 S.Ct. 1509, 20 L.Ed.2d 436 (1968) even this requirement might not hold. See Semmel, Social Security Benefits for Illegitimate Children after Levy v. Louisiana, 19 Buf.L.Rev. 289 (1970), in which the author noted, “If after Levy, such illegitimates fall within the definition of ‘child,’ may they still be denied benefits because of non-dependency when others receive them without regard to dependency? It is difficult to find a rational basis for such a distinction other than administrative difficulties of ascertaining paternity, a reason which apparently lacks constitutional weight.” at 297.
. The opinion indicates that under the circumstances welfare fraud could have been obviated by the simple expedient of sending a letter or telegram to pertinent officials. While we do not suggest that fatherhood can so easily be established, nonetheless the problems of proof, where the alleged father is living, are not nearly so difficult as the Secretary envisions, and, of course, the burden of proof lies with the claimant. For a discussion of methods of establishing parentage, see Note, Illegitimacy : Equal Protection and How to Enjoy It, 4 Ga.L.Rev. 383 (1970).
. We confine our decision in this case to § 416(h) (3) (B) (ii), which is the provision under which Tracy would have come, but for the lateness of his birth. We express no opinion as to the eligibility criteria set forth in § 416(h) (3) (B) (i) or elsewhere in the Act.
. For simplicity I adopt the majority opinion's shorthand nomenclature.
|
f2d_478/html/0310-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
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COMMUNICATIONS WORKERS OF AMERICA, Plaintiff-Appellee, v. UNITED TELEPHONE COMPANY OF OHIO, Defendant-Appellant.
No. 72-2097.
United States Court of Appeals, Sixth Circuit.
Argued April 6, 1973.
Decided May 15, 1973.
James Allen Smith, Smith, Currie & Hancock, Atlanta, Ga., for defendant-appellant.
Melvin S. Schwarzwald, Cleveland, Ohio, for plaintiff-appellee; Metzen-baum, Gaines, Finley & Stern Co., L.P.A. by Norton N. Newborn, Cleveland, Ohio, on brief.
Before WEICK and EDWARDS, Circuit Judges and PRATT, District Judge.
Honorable Philip Pratt, United States District Judge for the Eastern District of Michigan, Southern Division, sitting by designation.
PER CURIAM.
The United Telephone Company appeals from a temporary injunction granted to appellee union against appellant telephone company prohibiting it from pursuing a unit clarification proceeding before the National Labor Relations Board, which proceeding the company had previously filed.
The underlying dispute concerns whether 20 clerical employees scattered through the various operations of the telephone company were or were not covered by the collective bargaining agreement. The agreement calls for arbitration of disputes over interpretations of the contract, and after the processing of a grievance in this regard and the refusal of the company to arbitrate, the union had filed suit in the District Court seeking an order from it addressed to the company requiring arbitration of the dispute and an injunction to restrain the NLRB proceeding.
The District Judge issued a temporary injunction, holding:
Although there are two forums, an accommodation between them must be achieved so that the matter can proceed in an orderly fashion. An accommodation must be reached so that valuable judicial and administrative time is not wasted. At this time, then, order must be brought to bear on the situation.
While we note that the injunctive order was addressed to the United Telephone Company and not to the National Labor Relations Board or its members, we believe that the District Judge failed to observe the import of Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958), and Boire v. Greyhound Corp., 376 U.S. 473, 84 S.Ct. 894, 11 L.Ed.2d 849 (1964), as well as the implications of Carey v. Westinghouse Electric Corp., 375 U.S. 261, 84 S.Ct. 401, 11 L.Ed.2d 320 (1964).
In this latter case the Supreme Court said:
By allowing the dispute to go to arbitration its fragmentation is avoided to a substantial extent; and those conciliatory measures which Congress deemed vital to “industrial peace” (Textile Workers v. Lincoln Mills, supra [353 U.S. 448] at 455 [77 S.Ct. 912, 917, 1 L.Ed.2d 972]) and which may be dispositive of the entire dispute, are encouraged. The superior authority of the Board may be invoked at any time. Meanwhile the therapy of arbitration is brought to bear in a complicated and troubled area. Carey v. Westinghouse Electric Corp., supra 375 U.S. at 272, 84 S.Ct. at 409. (Emphasis added.)
Absent the narrow exception in Leedom v. Kyne, supra, the authority of the National Labor Relations Board in determining appropriate bargaining units should not be interfered with by the in-junctive process, even for the laudable purposes described by the District Judge.
The judgment of the District Court is reversed and the case is remanded to that court for further proceedings not inconsistent with this opinion. |
f2d_478/html/0311-01.html | Caselaw Access Project | 2024-08-24T03:29:51.129235 | 2024-08-24T03:29:51.129683 | {
"author": "PER CURIAM.",
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Samuel C. and Clare H. LOVENTHAL, Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee.
No. 72-1993.
United States Court of Appeals, Sixth Circuit.
Argued April 9, 1973.
Decided May 8, 1973.
H. Stennis Little, Jr., Nashville, Tenn., for plaintiffs-appéllants.
Gordon S. Gilman, Atty., Tax Div., Dept, of Justice, for defendant-appellee; Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Leonard J. Henzke, Jr., Attys., Tax Div., Dept, of Justice, Washington, D. C., on brief; Charles H. Anderson, U. S. Atty., of counsel.
Before PHILLIPS, Chief Judge, LIVELY, Circuit Judge, and O’SULLIVAN, Senior Circuit Judge.
PER CURIAM.
The taxpayers appeal from the judgment of the district court which denied their claim for refund of income taxes which they asserted were erroneously assessed and collected. The controversy arose out of the guarantee by Samuel C. Loventhal, who was an employee of Lo-venthal Brothers, Inc., of a debt of another corporation in which he was a shareholder, but from which he received no compensation. The debtor corporation became insolvent and the taxpayer was required to pay a portion of its debts and he claimed the amount thus paid as a business bad debt under Section 166(a) of the Internal Revenue Code of 1954. The Internal Revenue Service maintained that the payment was a non-business bad debt under Section 166(d) of the Code and assessed deficiencies for the year 1967.
An examination of the entire record, including the transcript of the hearing in the district court, depositions and stipulations, together with the briefs and oral arguments has convinced this Court that the dominant motivation of Samuel C. Loventhal in guaranteeing the debts of Old Hickory Construction Company, Inc. was to enhance his position as an investor in Loventhal Brothers, Inc. and Old Hickory Construction Company, Inc. rather than to protect or enhance his position as an employee of either corporation. The findings and conclusions contained in the Memorandum of District Judge L. Clure Morton dated June 29, 1972 and reported in 346 F.Supp. 1318 (1972), are fully supported by the record. See also Estate of Martha M. Byers et al. v. Commissioper of Internal Revenue, 472 F.2d 590 (6th Cir. 1973).
The judgment of the district court is affirmed. |
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"author": "ROSENN, Circuit Judge. ADAMS, Circuit Judge",
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Fred GREEN, Administrator of the Estate of James Henry Bruno, a/k/a Jaime Perez Bruno, Deceased, Appel-ant, v. Frank PARISI, Individually and as trustee for Dorothea Parisi et al. Fred GREEN, Administrator of the Estate of James Henry Bruno, a/k/a Jaime Perez Bruno, Deceased, Appellant, v. PHILADELPHIA GAS WORKS DIVISION OF the UNITED GAS IMPROVEMENT COMPANY.
Nos. 71-2173, 71-2174.
United States Court of Appeals, Third Circuit.
Argued Jan. 15, 1973.
Decided May 1, 1973.
Gordon W. Gerber, Deehert, Price & Rhoads, Philadelphia, Pa., for appellant.
James M. Marsh, John M. Fitzpatrick, Richard M. Rosenbleeth, Blank, Rome, Klaus & Comisky, Walter J. Timby, Jr., LaBrun & Doak, Philadephia, Pa., for appellees.
Before ADAMS, ROSENN and HUNTER, Circuit Judges.
OPINION OF THE COURT
ROSENN, Circuit Judge.
These two consolidated appeals brought by Fred Green, administrator of the estate of James Henry Bruno, seek reversal of the judgments of the United States District Court for the Eastern District of Pennsylvania entered in favor of the three appellees — the Philadelphia Gas Works, Frank Parisi and John DeMarco. Bruno died from serious burns suffered in an unfortunate explosion and fire occurring when he struck a match to light a gas burner in the kitchen of his rented home in Philadelphia.
Green brought suit under the Pennsylvania wrongful death and survivor statutes against the Philadelphia Gas Works, as supplier of natural gas to the Bruno home, Parisi, Bruno’s landlord, and DeMarco, Parisi’s real estate agent. Federal jurisdiction was based on diversity, and Pennsylvania substantive law applies. After a bifurcated trial, the jury returned verdicts in favor of all defendants. We have considered all trial errors alleged by appellant, and, finding them without merit, affirm the judgments of the district court.
At trial, two different theories of the cause of the explosion and fire were presented. Plaintiff’s theory was that a natural gas leak in the connector pipe of the Brunos’ gas range caused the conflagration. Plaintiff attempted to demonstrate that the negligence of the three appellees caused the gas leak. Defendants’ theory, on the other hand, was that the explosion was caused by the existence in the kitchen of gasoline, which Bruno had been using to clean automobile parts. Alternatively, defendants contended, if the explosion had been caused by a natural gas leak, the decedent had assumed the risk of such an occurrence.
Appellant’s primary contention of trial error is that, in the absence of any evidence indicating that decedent Bruno was aware of the dangers of a gas leak, the jury should not have been instructed that it could find he had assumed the risk of an explosion. Appellant emphasizes that there is no evidence in the record indicating that decedent was aware of the dangerousness of gas leaks or the existence of a foul smelling gas odor in his home, or, even if he was aware of the odor, that he knew it was natural gas which had explosive combustion potentialities. Appellant points out that Bruno was Puerto Rican, spoke only Spanish, and was not shown to have any special scientific expertise.
Appellees argue that the danger of gas leaks is an ordinary risk appreciated by the community in general, and that the jury was properly allowed to infer that Bruno was aware of the gas smell and of the accompanying risk. They point to the evidence at trial that other members of the Bruno family had smelled gas while living in the house for three months prior to the explosion. They emphasize that Bruno, a 37 year old man, had lived in the United States for fifteen years, was employed as a machinist, and was an amateur automobile mechanic.
The court’s instruction to the jury on assumption of risk was:
If you find that Mr. Bruno subjectively knew, that is actually knew that there was the risk of an explosion or of a fire being caused by leaking gas, if he attempted to light the stove, but that nevertheless being aware of an obvious danger, took or assumed the risk of the explosion, and by so doing brought about the injury to himself, even though the precise extent of the injuries might not have been anticipated or known to him, he may not recover.
Assumption of risk, however, relates to a subjective awareness by the plaintiff of a perceptible risk of harm. I advise you, however, that both the possible defenses of contributory negligence and assumption of risk are what are known as affirmative defenses and as such the defendant has the burden of proof on those issues. That is the defendant or defendants asserting such a defense must prove by a preponderance of the evidence that Mr. Bruno himself was eontribu-torily negligent, as I have defined this term to you, or being aware of the risk of harm voluntarily assumed the risk of harm, and that such contributory negligence or assumption of the risk contributed to the happening of the accident in a proximate way.
I further advise you that there is a presumption in law that a decedent was using due care at the time of his death and that he did not negligently or voluntarily bring about his own death, and that he took all normal and reasonable precautions to protect and preserve his life. Thus in the absence of substantive evidence to the contrary which overcomes by a preponderance of the evidence the presumption that the decedent was not con-tributorily negligent, this presumption would prevail and you would be justified in finding that the decedent was not contributorily negligent and that he did not voluntarily assume the risk of harm.
The charge is based on the principles stated in Restatement of Torts 2d § 496 (1965). There is no dispute among the parties that the charge correctly stated the principles that assumption of risk depends on the subjective state of mind of decedent, that the burden of proving assumption of risk is on defendant, and that because of the presumption of due care given deceased persons, assumption of risk cannot be found unless there was substantive evidence rebutting due care. The dispute, therefore, is whether such substantive evidence existed to properly warrant the instruction given to the jury.
”§inee assumption of risk relates to the subjective awareness by a party of a perceptible risk of harm, direct proof of it is exceedingly difficult. Evidence that a party assumed a risk may, however, be inferred from surrounding circumstances; there need not be actual proof that he knew, understood or appreciated the risk. Restatement of Torts 2d § 496D, Comment (d) (1965); Schentzel v. Philadelphia National League Club, 173 Pa.Super. 179, 96 A.2d 181, 186-187 (1953). In Schentzel, there was no direct evidence that plaintiff, a 47 year old woman, knew that baseball players hit foul balls which go astray and may injure spectators. The court, nonetheless, reversed a judgment in her favor, finding she must have assumed such a risk, because “she must be presumed to have been cognizant of the ‘neighborhood knowledge’ with which individuals living in organized society are normally equipped.” 96 A.2d at 186.
Although most cases in which courts have allowed juries to infer knowledge of a dangerous risk have involved plaintiff spectators at, or participants in, sporting events, see Restatement of Torts 2d App. § 496D, Comment (d); 149 A.L.R. 1174, 1177-1179; 142 A.L.R. 868, 874-877; 138 A.L.R. 540, 554-556; Watson v. Zanotti Motor Co., 219 Pa.Super. 96, 280 A.2d 670 (1971); the doctrine need not be limited to such cases. Juries have been allowed to draw inferences about the subjective knowledge of plaintiffs in products liability suits. In Green v. Sanitary Scale Co., 431 F.2d 371 (3d Cir. 1970), plaintiff was injured when his hand was drawn into a meat grinding machine. The district court refused to instruct on assumption of risk because plaintiff had testified that although he recognized the danger of putting his hand into the machine’s gears, he was not aware of the danger involved in using his hand, instead of an aluminum stomper, to push the meat into hopper. We reversed, stating:
[I]n view of Green’s testimony that he clearly understood the risk of putting his hand into the gear, it was for the jury to decide whether or not he must also have understood the obvious danger of placing his fingers too close to the gear, and also how far, in fact, he voluntarily put his fingers into the grinder before attempting to withdraw them. We would usurp the traditionally broad discretion of juries to apply their common sense were we to declare that a jury which has heard a party testify that he knew the danger of putting his hand in a moving gear was barred from drawing the inference that he also knew there was a risk in putting his hand too close to the gear, simply because he had not acknowledged that he was expressly aware of that extent of the risk.
431 F.2d at 374. See also Bartekewich v. Billinger, 432 Pa. 351, 247 A.2d 603, 606 (1968); Dorsey v. Yoder Co., 331 F.Supp. 753, 765-767 (E.D.Pa.1971) (although no assumption of risk was found, the issue was decided by the jury).
In the present case, there was evidence from which the jury could have concluded that Bruno was aware of the danger of leaking gas. Other members of his family had smelled the leaking gas and had been disturbed by it during their three month residence. It is a reasonable inference that the head of the family was also aware of the gas in his home and its dangerous propensities. *****8 It was not necessary for the jurors to recognize a general community knowledge that leaking gas is dangerous in order to infer Bruno’s knowledge; the inference could have been based on the knowledge and reactions of Bruno’s own family. If the jury did rely on community knowledge, however, that would not have been error. The cases emphasize that the jury is to apply its own common sense when knowledge of a risk is widely known and appreciated. The dangers of leaking natural gas in a home would seem such a widely known risk.
Appellant argues that this court refused to allow juries to make inferences as to a plaintiff’s knowledge of a risk when it affirmed the decision in Hennigan v. Atlantic Refining Co., 282 F.Supp. 667 (E.D.Pa.1967), aff’d per curiam, 400 F.2d 857 (3d Cir. 1968). In Hennigan, three workmen were killed by an explosion in a tunnel in which they were constructing a sewer. The cause of the explosion was established at trial to have been ignition of fumes, coming from crude oil which had leaked from a tank farm into the area of the tunnel, by sparks from various equipment in the tunnel. Special interrogatories were submitted to the jury asking it to determine whether the decedents had assumed the risk of the explosion. Upon various motions for judgment notwithstanding the verdict, the trial judge sustained the jury finding of no assumption of risk. In so doing, he said:
While the workmen may have smelled gas fumes and known that they became lightheaded or nauseous from working in the tunnel, there was no evidence that they knew or should have known (a) that the vapors were at or near the explosive limit; (b) that a random spark from any source could cause a flash fire and explosion, and (c) that the equipment being used was likely to create such a spark.
282 F.Supp. at 682.
The trial judge in Hennigan stated that if any error was made, it was in even allowing the jury to consider the assumption of risk issue. His statement that there was not sufficient evidence of the subjective states of mind of decedents to submit the issue to the jury was, however, dicta, as the issue had been submitted. Even this dicta does not conflict with the general principle that a jury will be allowed to infer knowledge of a risk. The only evidence presented in Hennigan bearing on decedents’ mental state was that there was an odor of petroleum in the tunnel. There was no evidence that any man in the tunnel was aware, nor any general community knowledge for the court to take judicial notice of, that petroleum fumes in such circumstances were dangerous. In the present case, other residents of the Bruno household expressed an awareness of the danger of the leaking gas, and. it is general community knowledge that gas leaking in a home is dangerous.
The district court was therefore correct in instructing the jury that it should not find appellees liable if it found Bruno had assumed the risk of lighting a match near leaking gas.
Appellant’s second contention is that the jury should have been told explicitly that the Philadelphia Gas Works was negligent when it turned on the gas at the Bruno home if its employees had not followed company procedures. He contends the company manual, “Specifications for the Installation of Gas Piping and Domestic Appliances,” which was in evidence, imposed a duty on the employees to follow certain procedures to check for gas leaks. This contention is without merit.
The evidence at trial disclosed that the manual referred to by appellant was for use of plumbers and appliance installers, not company servicemen. Because they lacked the familiarity with gas lines which company servicemen had, plumbers and appliance installers were instructed to complete slightly different and more extensive tests for gas leaks. It does not necessarily follow, therefore, that the failure of the Gas Works employee who turned on the Bru-nos’ gas to follow the procedures in the “Specifications for the Installation of Gas Piping and Domestic Appliances” manual constituted negligence. The absence of an explicit reference in the instructions to the jury to this manual was therefore not error. The judge did instruct:
If the Gas Company . . . is in possession of facts which should reasonably inform it that it is unsafe, it then becomes the Gas Company’s duty to investigate the safety of the pipe before it continues to use it for the transportation of gas.
And, further:
But the Company knows that it is dealing with a dangerous agency, and if it knows or should have known that the customer’s lines are not safe, it is then its duty to require the lines to be repaired or else shut off the gas. [Emphasis added.]
By telling the jury that the gas company is liable for repairing the gas line if it “should have known” of an unsafe gas line, the court properly instructed on the company’s duty to police its lines. It was for plaintiffs to convince the jury that this duty was neglected when Bruno’s gas was turned on.
Appellant’s other contentions — (a) that he should have been allowed to read into evidence Interrogatory No. 10 and the answer of the Philadelphia Gas Works; (b) that the opinion testimony of Lt. William Shirar of the fire department, that the fire and explosion were “probably” caused by ignition of gasoline fumes, rather than of leaking gas, should have been ruled inadmissible; and (e) that errors were committed in the court’s determination of what exhibits could be taken to the jury room — are all properly disposed of in the district court opinion. 333 F.Supp. at 1404-1407. We find the contentions without merit.
The judgments of the district court will be affirmed.
ADAMS, Circuit Judge
(dissenting):
In this case, in which a 37 year old Puerto Rican American was killed by an explosion while lighting his gas stove, the defendants interposed the defense of assumption of risk. Since this is a diversity action, the law of Pennsylvania controls. Under Pennsylvania law the defense of assumption of risk is an affirmative one, and the burden of proof is on the party asserting it. The applicability of the assumption of risk defense depends upon the subjective knowledge of the injured party.
Under these precepts, the defendants, to establish assumption of risk by the decedent, were required to demonstrate that Mr. Bruno placed himself in a position of danger, knowing full well that he was doing so. To prove this factual predicate, the defendants had to show (1) that Mr. Bruno knew there was a gas leak in the area where he sought to light the gas, and (2) that striking a match under such circumstances was dangerous.
Although there was testimony that members of the Bruno household knew of the gas leak for some time, there was not one shred of evidence that Mr. Bruno was subjectively a ware of the presence of any such leak. No testimony was adduced at trial that Mr. Bruno had been told about the gas leak by his family, or that he had talked to others about it, or that he had attempted to have the leak fixed. The absence of any evidence indicating that Mr. Bruno personally was aware of the gas leak is a fatal flaw in the defendants’ assertion that Mr. Bruno assumed the risk of the explosion that killed him.
It would appear that the general rule requiring the defendants to prove by-substantive evidence the injured party’s subjective knowledge of the facts creating the risk of harm precludes permitting the jury to infer that Mr. Bruno was aware of the gas leak merely because others in the household smelled the gas.
To fill this evidentiary gap, the majority cites cases in which various courts were faced with determining whether the injured party appreciated the risk of harm involved, the second element in the defense of assumption of risk. That issue would correspond in the present case to whether Mr. Bruno knew that lighting a match in the presence of a natural gas leak is dangerous. It would not correspond to the first element in the assumption of risk defense, whether Mr. Bruno was aware of the gas leak. None of these cases, then, except perhaps Schentzel v. Philadelphia National League Club, which we shall discuss separately, presented a problem concerning the injured party’s subjective awareness of the facts creating the danger.
The majority also relies upon Comment (d), Restatement (Second) of Torts § 496(D) (1965). That Comment, however, deals with whether the plaintiff’s testimony concerning what he knew and understood is conclusive, not whether the jury may be permitted to infer what the plaintiff knew. In addition, the commentator is referring to the plaintiff’s appreciation of' the risk of harm, not his knowledge of the facts creating the danger.
As to the Schentzel case, although it is not clear whether the court was discussing the plaintiff’s awareness of the facts creating the danger or her appreciation of the risk of harm, ample evidence may have existed for the jury to infer that Mrs. Schentzel was aware of the facts creating the hazards. The Pennsylvania Superior Court stated:
“It strains our collective imagination to visualize the situation of the wife of a man obviously interested in [baseball], whose children view the games on the home television set, and who lives in a metropolitan community, so far removed from [the knowledge that baseball spectators might be hit by foul balls] as not to be chargeable with it.” 96 A.2d at 186.
Even assuming, however, that the Schentzel court would permit the jury to infer that Mrs. Schentzel was aware that baseballs were sometimes hit into the stands merely because the community generally possesses such knowledge, such ruling should be limited either to the facts of that particular case or to cases involving plaintiffs who are spectators at, or participants in, sporting events. Although the majority opinion states that “the doctrine need not be limited to such eases,” the citations to support this contention would appear to be inapposite, as indicated in the margin. See note 5, supra. In addition, the Schentzel court itself relied exclusively upon “sports” eases, and Dean Prosser, for example, when discussing the doctrine followed in Schentzel adheres to this same pattern of examining the principle in the context of athletic contests.
Moreover, assuming that Schentzel stands for the proposition for which it is cited by the majority — that the jury should be allowed to infer that the injured party knew the facts creating the danger merely because others do — limiting such a rule to the facts of that case or generally to cases involving sporting events is supported by logical and practical considerations.
The basic effect of the Schentzel court’s opinion was to place upon the plaintiff, at a minimum, the burden of going forward with evidence that she either had poor eyesight or was unaware that baseballs are hit into the stands. Such a result is not unreasonable in view of the facts of that case. Whether Mrs. Schentzel was aware of the facts creating the risk of harm is a question touching upon her visual ability. She had attended a baseball game, which would seem fairly to suggest that she possessed at least adequate eyesight, and the court and jury could easily determine from in-court observation whether she had inadequate eyesight.
Also, to the extent that Schentzel may be thought to alter the rule that the assumption of risk depends upon the injured party’s subjective knowledge, it should perhaps be viewed in light of the court’s obvious unwillingness to believe that Mrs. Schentzel did not know that baseballs are hit into the stands and its willingness, under these circumstances, to place upon her, a living, injured plaintiff who knew best what she can and did see, the burden of showing that she was unaware of the facts creating the danger. And, the alternative of placing such a burden upon the defendant may be considered unwise when the result would, in practical terms, mean that proprietors of sports establishments in order to limit their liability would then have to ask each entering patron whether he had ever witnessed such an event, and if not, whether he was aware of the facts creating the risk of harm.
In the present case, unlike the situation in Schentzel, whether Mr. Bruno was aware of the gas leak depends upon his olfactory, not visual, ability. Nothing in the present case remotely suggests that he must have had an adequate sense of smell, and, because he was killed by the explosion, neither the court nor the jury was able to observe Mr. Bruno. Placing upon the plaintiff the burden of showing that Mr. Bruno did not have an adequate sense of smell or did not smell the gas would seem to be unjustified when, as here, the plaintiff is not the injured party, but an administrator who may not possess any more information than the defendants concerning the decedent’s knowledge of the facts creating the danger.
It would not appear inappropriate, under these circumstances, to require the defendants, in order to have the assumption of risk issue submitted to the jury, to adduce some evidence concerning Mr. Bruno’s subjective knowledge of the gas leak in his kitchen. The alternative which the majority apparently adopts here is to impose upon the plaintiff the burden of showing that the decedent had a deficient olfactory capacity. This result might well undermine the principle, followed by the Pennsylvania courts, that the defendants have the burden of proving this affirmative defense.
For the above reasons, I would reverse the judgments of the district court and remand for a new trial.
. The district court opinion denying a motion for a new trial is reported at 333 F.Supp. 1398 (E.D.Pa.1971).
. Unlike the dissent, we have no problem with the submission to the jury under appropriate instructions of the question of whether Bruno was aware of the leaking gas. Trial testimony indicated that Mrs. Bruno, her mother, her brother, and a close friend had smelled gas in the house for about three months, from August 13 to November 5, with the smell being strongest in the kitchen. The record shows that Bruno’s family was disturbed by it and was apparently aware of its dangers. Although there was no direct evidence that Bruno was aware of the gas smell, the jury could have inferred from the circumstantial evidence that Bruno, as head of the house, was also aware of it either because (1) he too smelled it, or (2) members of his family, since they were aware of its presence and were disturbed by it, told him about it.
Under Pennsylvania law, the burden to present an issue of fact to the jury may be fulfilled entirely by circumstantial evidence from which reasonable inferences are deducible. Hines v. Fanti, 374 Pa. 254, 97 A.2d 808 (1953) ; Smith v. Bell Telephone Co. of Pennsylvania, 397 Pa. 134, 153 A.2d 477 (1959) ; Weidemoyer v. Swartz, 407 Pa. 282, 180 A.2d 19 (1962). Circumstantial evidence of Bruno’s knowledge was presented at trial here; we are unable to say that it would not have been a reasonable inference for jurors to determine that Bruno was aware of the gas smell. The dissent seems to suggest that defendants failed to meet the production burden because they did not elicit testimony from the witnesses that Bruno had been told of, or had acknowledged smelling, the gas. Such direct evidence of his awareness was not necessary to constitute a jury question, although its absence could certainly have been argued to the jury.
. The defendants asserted the assumption of risk defense in the face of the plaintiff’s theory that a natural gas leak caused the explosion. Defendants also offered the theory that the explosion was caused not by a natural gas leak but by gasoline which Mr. Bruno was using to clean automobile parts.
. Cummings v. Borough of Nazareth, 427 Pa. 14, 233 A.2d 874 (1967) ; Whitley v. Philadelphia Transp. Co., 211 Pa. Super. 288, 234 A.2d 922 (1967) ; Restatement (Second) of Torts § 469D, comment c (1965).
. Restatement (Second) of Torts § 469D, comment b (1965).
. Id. See Colosimo v. May Dept. Store Co., 325 F.Supp. 609, 611 (W.D.Pa.1971), rev’d on other grounds, 466 F.2d 1234 (3d Cir. 1972) ; Stark v. Lehigh Foundries, Inc., 388 Pa. 1, 130 A.2d 123, 127-128 (1957) ; cf. Whitley v. Philadelphia Transp. Co., 211 Pa.Super. 288, 234 A.2d 922 (1967).
. In Green v. Sanitary Scale Co., 431 F.2d 371 (3d Cir. 1970), the plaintiff was aware of the facts creating the risk of harm to him ; the principal question faced by this Court was whether he appreciated one danger (“placing his fingers too close to the gear”) as opposed to a different danger (“putting his hand into the gear”). Bartekewich v. Billinger, 432 Pa. 351, 247 A.2d 603 (1968), was a products liability case under § 402A of Restatement (Second) of Torts, in which it was necessary to determine whether the defendant’s glass-breaking machine was defectively designed. The court inquired into whether the defendant should have foreseen the possibility that workers might place themselves in “an obviously dangerous position.” Id. at 606. It did so, however, only for the purpose of deciding whether the defendant violated § 402A (whether this was the kind of risk he should have guarded against), and not for determining whether he could properly defend on an assumption of risk theory.
The court in Dorsey v. Yoder Co., 331 F.Supp. 753 (E.D.Pa.1971) (products liability) focused upon whether the plaintiff “appreciated the risk of his actions.” Id. at 765. There was no question that the plaintiff “knew about the existence of a danger. ...” Id.
Similarly, in Hennigan v. Atlantic Refining Co., 282 F.Supp. 667 (E.D.Pa. 1967), aff’d per curiam, 400 F.2d 857 (3d Cir. 1968), the trial judge discussed only the absence of evidence that the plaintiffs “appreciate [d] the danger itself and the nature, character and extent which made it unreasonable. . . . ’ ” Id., quoting Restatement (Second) of Torts, § 496(d), Comment (b) (1965).
In Watson v. Zanotti Motor Co., 219 Pa.Super. 96, 280 A.2d 670 (1971), the lower court dismissed the complaint on the ground that the plaintiff must have known of the obvious dangers of snowmobiles and therefore, had assumed the risk as a matter of law. The Superior Court reversed because “in the procedural posture of this case the allegations in the complaint that appellant knew nothing about snowmobiles or the presence of the ice patches must be taken as true.” Id. at 672. Under these circumstances, the case would not appear to lend support to the proposition for which it is cited by the majority.
. 173 Pa.Super. 179, 96 A.2d 181, 186-187 (1953).
. Restatement (Second) of Torts § 496 (D) Comment (d) (1965).
. See W. Prosser, Law of Torts 460, 463 & n. 9 (3d ed. 1964). It is also interesting to note that Professor Prosser appears to discuss the doctrine in the context of whether the injured party appreciates the danger, not whether he knew the facts creating the danger.
“Implied assumption of risk has been found in a variety of cases. By entering freely and voluntarily into any relation or situation which presents obvious danger, the plaintiff may be taken to accept it. . . . Thus those who participate or sit as spectators at sports or amusements may be taken to assume all the known risks of being hurt. .
“On the same basis, plaintiffs who enter business premises as invitees and discover dangerous conditions may be found to assume the risk when they nevertheless proceed to encounter them. The guest who accepts a ride with an automobile driver may assume the risk of his known incompetence . . . or of known defects in the car. Likewise the user of a product supplied to him may assume the risks of its known dangerous defects.” Id., at 459-461 (emphasis supplied, footnotes omitted).
It is significant that the above discussion by Dean Prosser occurs under the heading “Implied Acceptance of Risk” and not under the next heading of his treatise which is entitled “Knowledge of Risk.”
. It may be pertinent, though not squarely on point, that in a wrongful death action Pennsylvania law creates a presumption that the decedent exercised due care. See Laubach v. Haigh, 433 Pa. 487, 252 A.2d 682 (1969) ; Bragdon, Admr. v. Pittsburgh Railways Co., 375 Pa. 307, 100 A.2d 378 (1953). Although this rule would seem to apply more logically to the defense of contributory negligence, than to the typical assumption of risk defense, it may be thought to reflect a general principle of not placing the burden of proof On similar issues upon the party representing the decedent’s interest.
. See Ingersoll v. Onondaga Ilockey Club, 245 App.Div. 137, 281 N.Y.S. 505.
. Of. note S supra and accompanying text.
. Sarne v. Baltimore & O. R. Co., 370 Pa. 82, 87 A.2d 264, 270 (1952).
. A new trial would be necessary since the jury in finding for the defendants may have done so because of the theory that the explosion was caused by gasoline Mr. Bruno had been using to clean automobile parts, see note 1, supra, and not because they accepted the defendants’ assumption of risk theory.
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