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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America v. Thomas Peter VALLEJO et al. Appeal of David MILLER. No. 72-1439. United States Court of Appeals, Third Circuit. Argued Dec. 8, 1972. Decided April 3, 1973. John J. Flynn, Flynn, Kimerer, Thinnes & Galbraith, Phoenix, Ariz., for appellant. Robert E. J. Curran, U. S. Atty., Jeffrey M. Miller, Asst. U. S. Atty., Philadelphia, Pa., for appellee. Before VAN DUSEN, GIBBONS and HUNTER, Circuit Judges. OPINION OF THE COURT VAN DUSEN, Circuit Judge. David Miller appeals that May 22, 1972, district court order denying his motion to withdraw before sentencing his guilty plea to Count I of a five-count indictment. Miller also contends that the court failed to comply with F.R.Crim.P. 11 when he was not advised of his privilege against self-incrimination and that this failure should render his plea invalid. We have carefully examined the record and conclude that each of these contentions is without merit. We therefore affirm. The district court opinion fully sets forth the facts. See United States v. Miller, Crim. No. 71-229 (E.D.Pa. May 22, 1972). For our purposes, it is only necessary to briefly summarize the events that transpired prior to Miller’s sentencing. Miller had been indicted along with six others on charges relating to the illegal transportation of a ton of marijuana. After his arrest, Miller offered to act as an informer for the Government. On November 5, 1971, he filed a motion to dismiss the indictment against him, or, in the alternative, to permit him to enter a plea of guilty to a non-mandatory count of the indictment. His motion was premised on the claim that the Government breached its agreement to dismiss the charges against him. He alleged that the Government’s promise had been made in return for his promise to act as an informer and to provide sufficient information that would lead to the successful prosecution of other persons involved in the sale and distribution of narcotics. The Government opposed this motion, claiming Miller failed to perform his side of the bargain. A series of evidentiary hearings were conducted beginning on November 11, 1971, and continuing until November 23, 1971, where Miller produced evidence in support of his motion. Meanwhile, the trial, with Miller and four other defendants, commenced on November 15 and continued on a daily basis until December 3. However, on November 23, 1971, Miller, in the presence of the court and his counsel, agreed to withdraw his motion, with prejudice, and requested leave of the court to change his not guilty plea to Counts I and V of the indictment to guilty. The court accepted his plea. Sentencing was postponed from February 24, 1972, until May 4, 1972. On the day of sentencing, Miller presented the court with a motion to withdraw his guilty plea pursuant to F.R.Crim.P. 32(d). Although Rule 32(d) does not establish a standard governing the withdrawal of a plea prior to sentencing, the district court may, in its discretion, permit a defendant to substitute a plea of not guilty “if for any reason the granting of the privilege seems fair and just. . . .” Kercheval v. United States, 274 U.S. 220, 224, 47 S.Ct. 582, 583, 71 L.Ed. 1009 (1927) (emphasis supplied); United States v. Young, 424 F.2d 1276, 1279 (3d Cir. 1970). However, this is not an absolute right to be made in a vacuum without reference to surrounding circumstances. See United States v. Stayton, 408 F.2d 559, 561 (3d Cir. 1969); cf. United States ex rel. Culbreath v. Rundle, 466 F.2d 730 (3d Cir. 1972). Acceptance of a motion to withdraw a plea of guilty lies within the sound discretion of the trial court and its determination will only be disturbed where it has abused its discretion, United States v. Stayton, supra, 408 F.2d at 561. There has been no abuse of discretion in denying Miller’s motion to withdraw his guilty plea. The trial court properly considered the substantial prejudice that would have resulted to the Government if Miller’s motion had been granted. It noted: “Witnesses for the government who were presented in opposition to the defendant’s motion to dismiss the indictment and who were trial witnesses had been assembled to appear in Philadelphia from several far western and southwestern states. Testimony most damaging to the defendant and which resulted in guilty verdicts against co-defendants had been received in evidence prior to the defendant’s change of plea. “Finally it appears appropriate to again point out that Miller changed his plea on November 23rd, 1971. He waited until the day of sentencing, a time factor of almost six months, before filing the motion under consideration.” United States v. Miller, supra, at 7. Furthermore, Miller’s request to withdraw his plea appears to be merely a reassertion of the same allegations raised in his earlier motion. Miller withdrew that motion with prejudice on the advice of his counsel on the basis of a carefully worked out stipulation between him and the Government. Nevertheless, he claims that at the time he entered his plea of guilty to the mandatory count of the indictment, he relied upon United States v. Stephens, 449 F.2d 103 (9th Cir. 1971), which provided that one who was convicted before the effective date (May 1, 1971) of 21 U.S.C. § 844(a) and (b) (The Comprehensive Drug Abuse Prevention and Control Act of 1970), but sentenced after such effective date, could receive less than the sentence provided under 21 U.S.C. § 176a and 26 U.S.C. § 7237(d). 21 U.S.C. § 176a specified mandatory sentences of not less than five, nor more than twenty, years. The new Act does not prescribe any mandatory minimum sentence and permits the grant of probation. After Miller entered his plea and prior to March 11, 1972, the Second Circuit, in United States v. Fiotto, 454 F.2d 252 (2d Cir. 1972), and the First Circuit, in United States v. Bradley, 455 F.2d 1181 (1st Cir. 1972), aff’d, 410 U.S. 605, 93 S.Ct. 1151, 35 L.Ed.2d 528 (1973), rejected the rationale of Stephens. The Supreme Court in Bradley stated (410 U.S. 609, 93 S.Ct. 1155): “The District Judge had no power to consider suspending petitioners’ sentences or placing them on probation. . . . The mandatory minimum sentence of five years must therefore be imposed on offenders who violated the law before May 1,1971. And Congress specifically provided that § 4208(a) does not apply to any offense ‘for which there is provided a mandatory penalty.’ ” We note that Judge Adams’ opinion in United States v. Caldwell, 463 F.2d 590 (3d Cir. 1972), relied, in part, on the reasoning of the Supreme Court of the United States in Bradley, supra. A change in the law subsequent to the entry of a guilty plea is not, in and of itself, a ground for its withdrawal, where the plea is knowingly entered on the advice of counsel. See McMann v. Richardson, 397 U.S. 759, 773-774, 90 S.Ct. 1441, 25 L.Ed.2d 763 (1970); Brady v. United States, 397 U. S. 742, 757, 90 S.Ct. 1463, 25 L.Ed.2d 747 (1970). While Miller may have harbored a wistful hope that he would be sentenced to less than five years, the court made abundantly clear prior to accepting the guilty pleas, as the following colloquy indicates, that he knowingly ran the risk of a substantial jail sentence and fine: “Q. Are you pleading guilty because you are in fact guilty to the two counts ? “A. Yes. “Q. What is the maximum? “A. Thirty years. “Q. What is the fine? “A. Thirty-five thousand dollars. “Q. Knowing that you wish to enter the plea? “A. Yes. “Q. Has anybody brought any pressure to bear on you from the government? “A. No. “Q. Anyone made any promises of ■leniency from the government or anywhere else ? “A. No, sir. “Q. Anybody told you what I am going to do with you? “A. No, sir. “Q. Are you making this of your own volition? “A. Yes.” (N.T. 56, Nov. 23, 1971) Therefore, we are unable to say the district court abused its discretion when it denied Miller’s request. The defendant’s other contention that Rule 11 of the Federal Rules of Criminal Procedure and McCarthy v. United States, 394 U.S. 459, 89 S.Ct. 1166, 22 L.Ed.2d 418 (1969), required the trial court to advise him. of his privilege against self-incrimination is equally without merit. McCarthy did not require the courts to develop a litany, or fixed formula, when addressing a defendant; but, rather, requires the courts “to inquire into the defendant’s understanding of the nature of the charge against him, and whether the defendant possesses an understanding of the law in relation to the facts.” United States v. Cantor, 469 F.2d 435, 438 (3d Cir. 1972). This court, in Davis v. United States, 470 F.2d 1128 (3d Cir. 1972), rejected a similar contention that a failure to specifically advise a defendant of his privilege against self-incrimination invalidated his plea. In Davis we held that “. . . once the court has satisfied itself . . . that the guilty plea was made knowingly and voluntarily, an independent warning against self-inerimination becomes unnecessary.” Id. at 1132. The record makes clear that the defendant acted knowingly and voluntarily with full realization of the effect of his plea. The district court judgment of conviction will be affirmed. However, the illegal three-year sentence on Count 1 will be vacated and the case will be remanded to the district court for sentencing on both Counts I and V in accordance with Bradley v. United States, supra. . Miller entered a plea of guilty to Counts I and V of the indictment. Count I charged him with conspiring to import marijuana in violation of 21 U.S.C. § 176a. Section 176a specified a mandatory sentence. See infra. Count V charged a conspiracy to transport marijuana in violation of 26 U.S.C. § 4755(b), which does not contain a mandatory sentencing requirement. Miller only sought to withdraw his plea to Count I. . Rule 32(d) provides, inter alia: “A motion to withdraw a plea of guilty . . . may be made only before sentence is imposed or imposition of sentence is suspended. . . . ” . Compare a Rule 32(d) motion to withdraw a plea of guilty prior to sentence with the standard after sentence is imposed. “. . . [T]o correct manifest injustice the court after sentence may set aside the judgment of conviction and permit the defendant to withdraw his plea.” . The Supreme Court in Bradley v. United States, supra, granted the petition for writ of certiorari in order to resolve the conflict between the First and Ninth Circuits. Our decision in United States v. Caldwell, 463 F.2d 590 (3d Cir. 1972), relying on the reasoning of the First Circuit opinion in Bradley, is in accordance with the Supreme Court’s decision and held that the penalties prescribed by 26 U.S.C. §§ 4705(a) and 7237(b) and (d) are preserved for prosecutions commencing prior to May 1, 1971, even though the sentence was imposed after that date. The issues discussed by the Court in Bradley were whether the trial court may impose a sentence of less than the mandatory minimum sentence prescribed by 26 U.S.C. §§ 4705(a) (1964 ed.) and 7237(b) (1964 ed. and Supp. V), suspend the sentence, place the offender on probation, or specify that he be eligible for early parole, where that offender had been convicted of a federal narcotics offense committed before May 1, 1971, but sentenced after that date. See id. at 606 of 410 U.S. 93 S.Ct. 1151. The reasoning of Bradley establishes that the District Judge in this case had no choice but to impose sentence on Count I in accordance with the five-year mandatory minimum sentencing requirements of § 176a (see also 26 U.S.C. § 7237(b) and (d)), which were in effect prior to May 1, 1971. . Miller was sentenced on May 4, 1972, on Count I to three years’ imprisonment. The sentence of three years under Count I does not conform with our decision in Caldwell, supra, or the recent Supreme Court decision in Bradley, supra. See note 4.

f2d_476/html/0671-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Gene A. WARD, M. D., Plaintiff-Appellant, v. ST. ANTHONY HOSPITAL et al., Defendants-Appellees. No. 72-1611. United States Court of Appeals, Tenth Circuit. Argued and Submitted Jan. 12 ,1973. Decided April 4, 1973. Robert Temmer, Denver, Colo. (Charles F. Brega and Samuel J. Smith, Denver, Colo., on the brief), for plaintiff-appellant. Richard T. Spriggs, Denver, Colo., for def endants-appellees. Before HILL and HOLLOWAY, Circuit Judges, and TEMPLAR, District Judge. HILL, Circuit Judge. This is an appeal by plaintiff-appellant Ward from a decision in the District of Colorado dismissing his action against St. Anthony Hospital, a nonprofit hospital, and others for lack of jurisdiction. Dr. Ward is a licensed physician who practiced medicine in Wheat Ridge, Colorado, until shortly after the institution of this action. In connection with his Wheat Ridge practice, Dr. Ward was a member of the medical staff of St. Anthony Hospital until May 10, 1971. On that date appellee Hospital, acting by and through its medical executive board and board of trustees, suspended Dr. Ward from its hospital staff. Dr. Ward avers that his dismissal is unwarranted, arbitrary and in violation of the Hospital’s “Constitution, ByLaws, Rules and Regulations.” In particular, Dr. Ward declares that the Hospital failed to follow proper administrative procedures before ordering his suspension, in that the Hospital failed to advise him of the proposed suspension of staff privileges; failed to advise him of the reasons for the proposed action; failed to allow him to appear before either the Credentials or Executive Board; and failed to give him the opportunity to appeal his case to the Board of Trustees prior to suspension. These actions were all in violation of Article II, Section G, paragraph 3 of the Hospital’s “Constitution, By-Laws, Rules and Regulations”: 3. Change of status of a staff member from a classification of greater privilege and responsibility to one of lesser, or vice versa, may be initiated by any service or by the Executive Board itself. In all such cases the member himself shall be informed by the Secretary of the proposed action, and shall be acquainted with the rea- • sons therefor. Each such member shall have ample opportunity to present his views on the proposed Change of Status to the Credentials Committee and/or the Executive Committee. In event of a disagreement between the member and the Executive Board, the member shall have the right to appeal to the Board of Trustees. Realizing his first obstacle was to surmount the jurisdictional hurdle, Dr. Ward advanced several arguments supporting his right to sue in federal district court. He first asserted that receipt of Hill-Burton, Medicare and Medicaid funds by St. Anthony Hospital constituted sufficient state action to vest the federal district court with jurisdiction under the Civil Rights Act of 1871, 42 U.S.C. § 1983, and 28 U.S.C. § 1343(3). His second major allegation was that a conspiracy had been committed for the purpose of denying Dr. Ward his hospital staff privileges in violation of 42 U.S.C. § 1985 and 28 U.S.C. § 1343(1). The district court rejected these arguments and found that any federal funds given St. Anthony Hospital were insufficient to color the Hospital with state action under the United States Constitution or federal statutes. The lower court further held that § 1985 does not apply since there was no conspiracy to obstruct the due course of justice as prohibited by that section. vidual is not the subject matter of the Fourteenth Amendment. Nor does the Equal Protection Clause prohibit violations of individual rights unless to some significant extent the state is found to have become involved in the violations. The Civil Rights Cases, 109 U.S. 3, 3 S. Ct. 18, 27 L.Ed. 835 (1883). Dr. Ward therefore must show state involvement in the Hospital’s suspension of his staff privileges before federal law will apply. To overcome this hurdle, he alleges that federal funds received under Hill-Burton, Medicare, Medicaid, and Colorado-Wyoming Regional Medical programs color the hospital with enough state authority to constitute his dismissal as “state action.” It is Dr. Ward’s position that all state and federal aid given the Hospital carried with it stringent regulations; that by accepting these governmental funds with the attendant regulations the hospital was transformed into an arm of the state; and that the Hospital members and directors were agents of the- state, therefore their dismissal of Dr. Ward was the state’s dismissal of him. Appellant’s most persuasive argument is that acceptance of Hill-Burton funds causes the Hospital to act under color of state law. In 1964, the Hospital received two Hill-Burton grants totaling approximately $588,000. Acceptance of the funds, Dr. Ward argues, places the Hospital within the jurisdiction of 42 U.S.C. § 1983. Any other construction would allow states to deprive individuals of their civil rights by funneling funds through private institutions. Holmes v. Silver Cross Hospital, 340 F.Supp. 125 (N.D.1972). In support of this position, Dr. Ward relies on Simkins v. Moses H. Cone Memorial Hospital, 323 F.2d 959 (4th Cir. 1963), cert. denied, 376 U. S. 938, 84 S.Ct. 793, 11 L.Ed.2d 659 (1964). In that case the court found defendant hospital’s participation in the Hill-Burton program sufficient to invoke federal jurisdiction. The court demanded the hospital to end racial discrimination in determining who might use the facilities. Plaintiff’s argument boils down to the fact that states must maintain a fair and just governance of hospitals accepting Hill-Burton funds. Sams v. Ohio Valley General Hospital Ass’n, 413 F.2d 826 (4th Cir. 1969); Citta v. Delaware Valley Hospital, 313 F.Supp. 301 (E.D. Pa.1970). It necessarily follows, appellant argues, that once a private hospital accepts these state funds its representatives are clothed with a mantle of state law. Bricker v. Sceva Speare Memorial Hospital, 339 F.Supp. 234 (D.N.H.1972). As our court emphasized in Don v. Okmulgee Memorial Hospital, 443 F.2d 234, 235 (10th Cir. 1971), “While receipt of funds under the [Hill-Burton] Act may be significant in determining the existence of state action in acts alleged to have violated a person’s constitutional rights, the Act itself creates no personal rights or causes of action as such, nor does it confer jurisdiction on federal courts of controversies involving civil or other personal rights.” Stated another way, Dr. Ward cannot obtain jurisdiction merely by invoking the Hill-Burton Act; he must show that funds granted under the Act clothe the Hospital with sufficient state authority to constitute state action. From the cases Dr. Ward cites above, it is clear that determining what is state action is no easy matter. “Only by sifting and weighing circumstances can the non obvious involvement of the State in private conduct be attributed its true significance.” Burton v. Wilmington Parking Authority, 365 U.S. 715, 722, 81 S.Ct. 856, 860, 6 L.Ed.2d 45 (1961). Dr. Ward urges us to hold that private institutions receiving state or federal aid are acting under color of state law. Citta v. Delaware Valley Hospital, supra. There may be a point in the amount of governmental aid given private hospitals which renders the acts of its board members the acts of the state. We do not attempt to decide that question here. But in any event, we do not feel in the present case the Hospital has received governmental funding sufficient to invoke § 1983 jurisdiction. The Hospital was given approximately $588,000 in Hill-Burton funds between the years 1958 and 1971. During the same period total construction costs were approximately $11,500,000. The percentage of Hill-Burton funds to total construction cost was approximately five percent. Such a small percentage of the total costs is not sufficient to invoke federal jurisdiction. Otherwise, in our time of increasing federal aid to private institutions and businesses, the private sector would find itself constantly charged with state action in the performance of functions normally considered as private. Grossner v. Trustees of Columbia University, 287 F.Supp. 535 (S.D.N.Y.1968). There is little doubt that under the Hill-Burton Act and state law, hospitals in Colorado are subject to intricate state regulation. This alone, however, is not sufficient to invoke federal jurisdiction. State action does not arise merely because private hospitals receive governmental aid; more is required than that. Our court previously held that the state must be involved in the activity causing the alleged injury before federal jurisdiction can be invoked. That is, the claimed involvement must be associated with the challenged activity. Browns v. Mitchell, 409 F.2d 593 (10th Cir. 1969). The fact that Colorado regulates “facilities and standards of care of private hospitals or offers them financial support does not make the acts of these hospitals in discharging physicians the acts of the state.” Mulvihill v. Julia L. Butterfield Memorial Hospital, 329 F.Supp. 1020, 1023 (S.D.N.Y.1971). Such a rule would overlook the “essential point— that the state must be involved not simply with some activity of the institution alleged to have inflicted injury upon a plaintiff but with the activity that caused the injury. Putting the point another way, the state action, not the private action, must be the subject of complaint.” Powe v. Miles, 407 F.2d 73, 81 (2d Cir. 1968). Dr. Ward has failed to show that Colorado is involved in his dismissal from the St. Anthony Hospital. This crucial point distinguishes many of the cases Dr. Ward relies upon to show state involvement. For example, in Simkins v. Moses H. Cone Memorial Hospital, supra, the state of North Carolina actively engaged in a plan to distribute Hill-Burton funds to a private, racially segregated hospital pursuant to a state policy of racial segregation. The federal court properly exercised jurisdiction because plaintiff was challenging the state’s illegal policy of encouraging segregation. No such state involvement has been shown by Dr. Ward in the present case. State regulation of Colorado hospitals is to assure quality medical service throughout the state. Nowhere has Dr. Ward shown that Colorado has an interest in supervising or influencing the purely internal affairs of private hospitals. Without this proof we do not believe receiving Hill-Burton or state funds is sufficient to invoke federal jurisdiction under § 1983. Dr. Ward further argues that even if the Hospital’s receipt of Hill-Burton funds is not sufficient to invoke federal jurisdiction, the cumulative effect of the Hospital’s exemption from state and federal taxes, its receipt of substantial funds from Medicaid and Medicare and its subjection to exhaustive state and federal regulations transforms it into an arm of the state. Our court has expressly held in Browns v. Mitchell, supra, that tax exemptions alone do not vest a private institution with state authority. Dr. Ward also argues, however, that all the benefits received and regulations imposed on the Hospital by the state distinguish this case from Browns and brings it within the realm of Holmes v. Silver Cross Hospital, supra. In Holmes, the plaintiffadministratrix sued defendant private hospital under 42 U.S.C. § 1983 for giving decedent a blood transfusion after the decedent had advised the doctors of his religious convictions which precluded transfusion. The court allowed jurisdiction because defendant hospital is licensed by the state and is subjected to pervasive regulations concerning its operations. Its actions are state actions for Fourteenth Amendment purposes and under color of state law. We do not find Holmes persuasive authority because our court, as emphasized above, requires the complaining party to show a causal connection between state conduct and plaintiff’s injury. As Dr. Ward has not shown this causal connection we are precluded from hearing this ease. Browns v. Mitchell, supra. Dr. Ward’s final argument is that staff members, employees and agents of defendant Hospital met at various times and places for the purpose of denying him his staff privileges. This unlawful conspiracy was in violation of 42 U.S.C. § 1985 and 28 U.S.C. § 1343(1). Admittedly private conspiracies as well as those perpetrated by state authorities may be the subject of a suit in certain types of cases. Griffin v. Breekenridge, 403 U.S. 88, 91 S.Ct. 1790, 29 L.Ed.2d 338 (1971). This authority to sue for a private conspiracy, however, has been expressly limited: That the statute was meant to reach private action does not, however, mean that it was intended to apply to all tortious, conspiratorial interferences with the rights of others. The constitutional shoals that would lie in the path of interpreting § 1985(3) as a general federal tort law can be avoided by giving full effect to the congressional purpose — by requiring, as an element of the cause of action, the kind of invidiously discriminatory motivation stressed by the sponsors of the limiting amendment. . . . The language requiring intent to deprive of equal protection, or equal privileges and immunities, means that there must be some racial, or perhaps otherwise class-based, invidiously discriminatory animus behind the conspirators’ action. The conspiracy, in other words, must aim at a deprivation of the equal enjoyment of rights secured by the law to all. Griffin v. Breekenridge, at 101-102, 91 S.Ct. at 1798. Nowhere has Dr. Ward alleged that he was a member of any particular class, racial or otherwise. The alleged removal of him from defendant’s medical staff has in no way been equated with racial or otherwise class based invidiously discriminatory animus. His failure to show class based discrimination precludes our court from invoking § 1985 jurisdiction. The court’s order denying the filing of a second amended complaint and dismissing this action was entirely proper. Affirmed. . Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress. . The district courts shall have original jurisdiction of any civil action authorized by law tó 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; . . . . Apparently Dr. Ward is relying on § 3 of 42 U.S.C. § 1985, as this section is the only one applicable: (3) If two or more persons in any State or Territory conspire or go in disguise on the highways or on the premises of another, for the purpose of depriving, either directly or indirectly, any person or class of persons of the equal protection of the laws, or of equal privileges and immunities under the laws; . . . or to injure any citizen in person or property on account of such support or advocacy; in any case of conspiracy set forth in this section, if one or more persons engaged therein do, or cause to be done, any act in furtherance of the object of conspiracy, whereby another is injured in his person or property, or deprived of having and exercising any right or privilege of a citizen of the United States, the party so injured or deprived may have an action for the recovery of damages, occasioned by such injury or deprivation, against any one or more of the conspirators. . As the Supreme Court long ago held, invasion of civil rights by an indi4. The district courts will have original jurisdiction of any civil action authorized by law to be commenced by any person: (1) To recover damages for injury to his person or property, or because of the deprivation of any right or privilege of a citizen of the United States, by any act done in furtherance of any conspiracy mentioned in section 1985 of Title 42. . The Hill-Burton Act provides federal funds for governmentally owned and voluntary non-profit hospitals. State agencies inventory existing facilities to de termine hospital construction needs and develop construction priorities under federal. standards. These agencies then adopt state-wide plans which are submitted to the Surgeon General of the United States for his approval. Once approved, federal funds are allocated among the states according to a mathematical formula based on population and per capita income (42 U.S.C. § 291)

f2d_476/html/0676-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Bennie G. THOMPSON et al., Individually, etc., Plaintiffs, Evelyn K. Thomas and Wade E. Sutton, Plaintiffs-Appellants, v. MADISON COUNTY BOARD OF EDUCATION and Robert E. Cox, Superintendent of the Madison County School District, Defendants-Appellees. No. 72-1760. United States Court of Appeals, Fifth Circuit. March 13, 1973. Frank R. Parker, Lawyers’ Committee for Civil Rights Under Law, James M. Abram, Jackson, Miss., for plaintiffs-appellants. G. Milton Case, R. L. Goza, Case & Montgomery, Canton, Miss., for defendants-appellees. Before GODBOLD, DYER and CLARK, Circuit Judges. DYER, Circuit Judge: Sutton and Thomas had been employed as teachers in the Madison County, Mississippi, school district but were not offered new contracts of employment for the 1970-71 school term. In their complaint, they sought injunctive relief from the school board’s allegedly racially discriminatory refusal to rehire them as public school teachers. The district court found that the refusal of the Madison County Board of Education to rehire the two plaintiffs was based on “just and proper cause.” We reverse. After the complaint was filed the district court ordered the Board to provide the plaintiffs with written notices of the reasons for their discharges, a summary of the evidence, and the names of witnesses. The order further required the Board to hold a hearing, with the opportunity to the plaintiffs to cross examine witnesses, to present evidence, to be represented by counsel, and to be informed in writing of the final determination by the Board, with a statement of the reasons and evidence relied upon to support its decision. The record of the hearing was to be transcribed and the findings were to be filed with the district court. All of the preliminaries were accomplished and, after a full evidentiary hearing before the Board, both of the plaintiffs’ claims were denied. We agree with the district court that it was the Board’s responsibility, in the first instance, to provide a hearing, on notice, to the plaintiffs. And we emphasize that “[t]he findings and decision of academic administrative bodies are to be upheld by the courts when reached by correct procedures and supported by substantial evidence.” Green v. Regents of Texas Tech Univ., 5 Cir. 1973, 474 F.2d 594. When this case was set for trial, however, the parties were informed that there would be no trial in the sense of hearing witnesses or taking evidence. Instead, the court decided that it would rely on the facts as developed at the evidentiary hearing before the Board and that it would limit the formal trial to the presentation of legal argument. Due process mandates that a judicial proceeding give the affected parties an opportunity to be heard on the allegations asserted in the complaint and to present evidence and argument on the contested facts and legal issues framed by the answer to the complaint. Before a district court adjudges, it must determine the facts for itself on the basis of the proffered evidence. It may not simply decline to hear evidence and base its conclusions solely on the transcript of a school board’s hearing. In short, a court can only render a judgment after the parties have been afforded a full and fair trial on the claims properly before the court. As a result of the district court’s refusal to grant the plaintiffs a full evidentiary hearing, we are unable to determine whether the Madison County School District is still in the process of implementing the desegregation or.ders of this Court or whether desegregation has already been completely achieved. Consequently, we find ourselves with no record on which to predicate a decision concerning the applicability of Singleton v. Jackson Municipal Separate School District, 5 Cir. 1969, 419 F.2d 1211. Moreover, although the district court’s opinion implies that Singleton is applicable, the court failed to make any determination whether the defendants had complied with the Singleton requirement that “objective and reasonable non-discriminatory standards” be established for selection of the teachers to be dismissed, demoted, or not rehired. Additionally, assuming that Singleton does apply, the district court’s conclusion that there was “just cause” for Sutton and Thomas not being rehired appears to be erroneously based on a subjective comparison of the plaintiffs’ proficiency in the classroom with the performance of other teachers in the school district. We recognize that under certain circumstances, Singleton notwithstanding, discharges on .the basis of “just cause” may be warranted without reference to the school board’s pre-established objective and reasonable standards. However, “just cause” in a Singleton situation does not refer to a teacher’s lack of professional credentials, his poor performance in the classroom, his failure to abide by school regulations, his lack of cooperation, or other similar explanations. These types of reasons for discharge fall directly within the scope of Singleton, and accordingly such discharges must be justified on the basis of objective and reasonable standards for dismissal previously set by the school board. If this kind of a discharge can be justified in terms of the established objective standards, it is not for “just cause”; it is simply a discharge in compliance with Singleton criteria. “Just cause” in a Singleton situation means types of conduct that are repulsive to the minimum standards of decency — such as honesty and integrity— required by virtually all employers of their employees, and especially required of public servants such as school teachers. No pre-established objective criteria are necessary to justify the discharge of a teacher whose conduct does not measure up to these minimum standards of behavior. For example, if a teacher came to school drunk, or was found stealing from the school treasury, or sexually assaulted a student, the school board could substantiate on “just cause” grounds its firing of that teacher, even though the school system was still in the process of desegregation and whether or not the school board had established any Singleton criteria for discharge or demotion. If, on the other hand, desegregation of the Madison County school district has been completed so that Singleton is inapplicable, “just cause” would embrace a much wider range of teacher conduct, as well as other reasons. If the school district has a tenure system “just cause” might, for example, encompass reduction of the school system’s budget, a teacher’s gross neglect of his duties, or his continued poor performance in the classroom — i. e., reasons for discharge or for not rehiring similar to those for which Singleton requires that the school board establish objective criteria during periods of desegregation.. Furthermore, if the school district has no tenure system or if the plaintiffs were not tenured and had no expectation of reemployment, the school board’s refusal to rehire them for whatever reason it chose would be justified, because such teachers would have no prospect of continuous employment from one school year to the next. In this situation, and in this situation alone, there is a difference between the “just cause” reasons for a school board’s refusal to rehire a teacher for the next school year and its discharging or demoting a teacher during the school year. During the school year, the reason for discharge or demotion must conform with the “just cause” standard for dismissing a tenured teacher or, if the school district does not have a tenure system, it must comply with due process requirements; whereas at the end of the school year, the school board can refuse to rehire a non-tenured teacher with no expectation of reemployment without any reason at all. See Moore v. Knowles, 5 Cir. 1972, 466 F.2d 531; Skidmore v. Shamrock Independent School District, 5 Cir. 1972, 464 F.2d 605. However, if the school board bases the nonrenewal of the teacher’s contract on a charge that implicates the teacher’s interest in liberty or property, he must be afforded an opportunity to refute the charge before the school officials. Board of Regents v. Roth, 1972, 408 U.S. 564, 573, 92 S.Ct. 2701, 33 L.Ed.2d 548; Perry v. Sindermann, 1972, 408 U.S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570. In sum, it is essential to any appraisal of the propriety of a school board’s dismissal of a teacher to determine first if desegregation is still in process, for what constitutes “just cause” will vary greatly depending on whether or not Singleton is applicable. Moreover, if desegregation has been fully completed, it is necessary to determine if the school district has a tenure system; if so, then it is important to ascertain whether the plaintiffs are tenured or have a reasonable expectation of reemployment. Finally, the timing of the discharge is significant — i. e., whether it comes at the end of a school year or during the school year. The judgment of the district court is reversed and the cause remanded for further proceedings consistent with this opinion. Reversed and remanded. CLARK, Circuit Judge (concurring specially): In my opinion the dicta in the panel majority regarding the due process consequences of the academic procedure we have required to be established (particularly the notion that every court proceeding eventuating from the process must be conducted de novo) severely undercuts the principle on which the procedure rests. Hence this concurrence. This circuit is firmly committed to the proposition that every teacher discharge controversy must be filtered through an academic hearing procedure before embedded federal claims become ripe for court adjudication. Ferguson v. Thomas, 430 F.2d 852 (5th Cir. 1970); Stevenson v. Board of Education of Wheeler County, 426 F.2d 1154 (5th Cir. 1970). If this required hearing process is to serve' its proper function, it must not be reduced to an empty gesture. Accordingly, court proceedings should not be conducted on a de novo basis. A school hearing procedure which is conducted in accordance with the dictates of procedural due process is entitled to great weight and if substantial evidence appears to support the school board’s action, that ordinarily ends the matter. Green v. Regents of Texas Tech University, supra; Woodbury v. McKinnon, 447 F.2d 839 (5th Cir. 1971); Ferguson v. Thomas, supra; see also Fluker v. Alabama State Board of Education, 441 F.2d 201 (5th Cir. 1971); London v. Florida Department of Health and Rehabilitative Services, 448 F.2d 655 (5th Cir. 1971). I agree that in the present case neither the district court nor this court is able to determine whether the Madison County School District is still in the process of implementing the desegregation orders of this Court or whether desegregation has already been completely achieved. Consequently, the academic hearing record furnished no basis on which to predicate a decision concerning the applicability of Singleton v. Jackson Municipal Separate School District, 419 F.2d 1211 (5th Cir. 1969).

f2d_476/html/0680-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Juan A. GONZALEZ, Administrator on behalf of the Estate of Efrain Gonzales, Deceased, Plaintiff-Appellant, v. John DOE, Officer of the Hartford Police Force, et al., Defendants-Appellees. No. 318, Docket 72-1508. United States Court of Appeals, Second Circuit. Argued Dec. 8, 1972. Decided March 15, 1973. Mitchell Pearlman, Hartford, Conn. (Bruce C. Mayor, David Pels, Hartford, Conn., on the brief), for plaintiff-appellant. Jerome T. Malliet, Hartford, Conn. (Richard M. Cosgrove, Deputy Corp. Counsel, Hartford, Conn., of counsel), for defendants-appellees. Before LUMBARD, SMITH and MANSFIELD, Circuit Judges. MANSFIELD, Circuit Judge: Juan A. Gonzalez, administrator of the estate of his deceased brother Efrain, brought an action in the United States District Court for the District of Connecticut seeking damages against a then unknown Hartford police officer, other named supervisory police officials of the City of Hartford, the former City Manager, and the City itself, for the alleged homicide of Efrain and the deprivation of his civil rights in violation of 42 U.S.C. § 1983. The police officer, originally designated John Doe, is now claimed to be Thomas Ganley. The district court, acting upon a motion filed by the City alone, dismissed the claims against the City, holding in reliance upon Monroe v. Pape, 365 U.S. 167, 187-192, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961), that the City is not a “person” within the meaning of 42 U.S.C. § 1983 and that it therefore may not be sued thereunder. Plaintiff urged retention of pendent jurisdiction over the City, even if it were held not liable to suit under § 1983, because Conn.Gen. Stats. § 7-465 (1972) might obligate it to pay on behalf of the defendant City officials any sums for which they might be held liable as a result of this proceeding. Applying the standards set forth in United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966), however, the court also declined to exercise pendent jurisdiction over state law claims against the City. On motion of the plaintiff under Rule 54(b), F.R.Civ.P., Judge Clarie determined that there was no just reason for delay and directed entry of a final judgment dismissing the claims against the City. Accordingly, the appeal is properly before us. See Farrell v. Piedmont Aviation, Inc., 411 F.2d 812, 814-815 (2d Cir.), cert. denied, 396 U.S. 840, 90 S.Ct. 103, 24 L.Ed.2d 91 (1969); 6 Moore, Federal Practice ¶ 54.45 [2-2] (2d ed. 1971). We affirm the dismissal of both the § 1983 and pendent claims against the City. The case arises out of the shotgun slaying of Efrain Gonzalez in Hartford during a period of civil strife in that City in July, 1970. Defendant police officers were on duty at the time in an attempt to quell the disturbances. Plaintiff claims that his brother was shot without provocation by Officer Ganley who then left the scene with other police officers, none of whom attempted to render any assistance to the fatally wounded victim. The complaint designates eight separate claims or causes of action. The first three seek compensatory and punitive damages under § 1983 against Officer Ganley for the slaying of Efrain Gonzalez, either wilfully and wantonly or through the negligent use of excessive force. The Fourth and Fifth Claims are jointly and severally directed against the other defendant municipal employees, seeking the same relief under § 1983 for negligent failure to supervise and prevent in various respects the use of deadly force by the police in the control of civil disturbances, which allegedly resulted in the shotgun death of Efrain Gonzalez. The Eighth Claim seeks the same relief from Ganley and the other individual defendants for an alleged conspiracy to conceal Ganley’s identity and thereby prevent the enforcement of plaintiff’s right to damages under § 1983. Upon this appeal we are concerned only with the dismissal of the Sixth and Seventh Claims as against the defendant City of Hartford. The Sixth Claim was brought under Connecticut’s wrongful death statute and seeks “pecuniary damages” jointly and severally against the individual defendants. The Seventh Claim, which incorporates the § 1983 and wrongful death allegations contained in the first six claims, and further alleges that at all material times the defendant City officials were acting within the scope of their employment, is directed against the City of Hartford and asks compensatory damages and costs only. I. In Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961), the Supreme Court canvassed the legislative history of Section 1 of the Ku Klux Act of April 20, 1871, now codified as 42 U. 5. C. § 1983, and noted that a proposal (suggested by Senator Sherman) to add a separate section to the Act providing for municipal liability in damages was rejected amidst vigorous debate over the question of Congress’ constitutional power to impose civil liability on the municipal corporations of the states. The Court concluded that “[t]he response of the Congress to the proposal to make municipalities liable for certain actions being brought within federal purview by the Act of April 20, 1871, was so antagonistic that we cannot believe that the word ‘person’ was used in this particular Act to include them.” Id. at 191, 81 S.Ct. at 486. Absent any judicial or legislative modification, the effect of this landmark decision is to preclude suit against a municipality based on § 1983. Appellant seeks to avoid the breadth of Monroe by urging that where a state has, through a law such as Conn.Gen.Stats. § 7-465, voluntarily imposed on its municipalities an obligation to pay certain damages for which one or more of its employees has been held liable and has removed from them the defense of governmental immunity, no question of federal deference to local immunity is involved and a claim for damages under § 1983 should therefore be permitted against the municipality. The correctness of this view is said to be buttressed by the existence of 42 U.S.C. § 1988 which has been read to mean that “both federal and state rules on damages may be utilized, whichever better serves the policies expressed in the federal [civil rights] statutes [described in § 1983],” Sullivan v. Little Hunting Park, Inc., 396 U.S. 229, 240, 90 S.Ct. 400, 406, 24 L.Ed.2d 386 (1969) (action under 42 U.S.C. § 1982). Appellant further argues that Monroe v. Pape has been eroded by decisions granting equitable relief against municipal corporations under § 1983 and by the absence of any indication in that statute’s legislative history of Congressional hostility toward the imposition of municipal liability where such liability is imposed by state law. In short, we are asked to draw the “inference that Congress intended municipalities to be liable under the Civil Rights Act to the extent that they are liable under state law.” This we decline to do. In construing the word “person” as used in § 1983, the Supreme Court did not base its decision upon policy considerations but upon the clearly defined intent of Congress as evidenced by the legislative history of that statute. 365 U. S. at 191, 81 S.Ct. 473. The 42nd Congress, voicing sharp hostility to subjecting municipalities to liability for damages based upon violation of civil rights, made it clear that the term “person” was not to include a municipality. Whatever may be our views as to the wisdom of subjecting municipalities to liability when the parent state has adopted a legislative amendment, we cannot now expand that meaning by attributing to Congress policy considerations which it never entertained. To say that the 42nd Congress, if it had pondered further upon the matter, might have concluded that § 1983 should reach a situation where a state itself imposes liability upon its municipalities for acts of their employees is to rewrite history. There is no evidence that it ever contemplated such a possibility. But there is strong evidence to the contrary, which led the Supreme Court in Monroe to conclude that since a municipality is not a' “person” it may not be held liable in damages for deprivation of rights protected by § 1983. The word “person” as used in the statute has the same meaning now as it had then. As the Seventh Circuit recognized in dealing with the same issue in Ries v. Lynskey, 452 F.2d 172, 175 (7th Cir. 1971), the question is “[N]ot whether the Congress in 1871 would have included a municipality within the definition of ‘person’ if at the time municipalities generally had not had immunity under the common law of states but rather the test is what Congress meant to do at that time irrespective of the reasons leading to that action. What Congress meant to do, it. seems clear from the exposition in Monroe, was to legislate that ‘person’ did not include a municipality.” We are aware that in Carter v. Carlson, 144 U.S.App.D.C. 388, 447 F.2d 358, 368-369 (1971), reversed on other grounds sub nom. District of Columbia v. Carter, 409 U.S. 418, 93 S.Ct. 602, 34 L.Ed.2d 613 (Jan. 10, 1973), the District of Columbia Court of Appeals adopted the view, here advocated by appellant, that municipalities may be held liable in damages under § 1983 to the extent that they are liable under state law. But we find ourselves in accord with the contrary views expressed in Yumich v. Cotter, 452 F.2d 59 (7th Cir. 1971), cert. denied, 410 U.S. 908, 93 S.Ct. 955, 35 L. Ed.2d 269 (1973), which rejected the reasoning of Carter v. Carlson, supra, stating : “With all respect, however, we read Monroe as a binding statutory construction, not dependent upon state law immunity, and not related to a deficiency in federal remedies, but establishing that § 1983 does not impose liability for damages upon a city.” Id. 452 F.2d at 61. The same position has been adopted by other courts which have considered the issue in this light, see Moor v. Madigan, 458 F.2d 1217, 1218-1220 (9th Cir. 1972); Wilcher v. Gain, 311 F.Supp. 754 (N.D.Cal.1970); see also Patrum v. City of Greensburg, 419 F.2d 1300 (6th Cir. 1969), cert. denied, 397 U.S. 990, 90 S. Ct. 1125, 25 L.Ed.2d 398 (1970). We find no warrant for a departure from the Monroe rule of municipal immunity from damages under § 1983 in the reasons pressed upon us by appellant. While § 1988 may allow use of state remedies in redressing deprivations under § 1983, at least where federal remedies are deficient, see Sullivan v. Little Hunting Park, Inc., supra,, we are here confronted with the preliminary issue of whether liability exists at all under § 1983, not what remedy would be appropriate if liability should exist. Manifestly the nature of an appropriate remedy, which assumes the existence of liability, is irrelevant to the question of whether liability can attach in the first place. Furthermore, since state remedies available by virtue of § 1988 may not be “inconsistent with the . laws of the United States,” and municipal liability for damages does not exist under § 1983, Monroe v. Pape, supra, such liability cannot be created by state legislation, whether or not it be labelled a legislative waiver of immunity. See Moor v. Madigan, supra 458 F. 2d at 1220. Federal liability can be created only by an affirmative act of Congress. In short, Congress intended municipalities not to be encompassed within the term “person” as used in § 1983, at least for the purpose of damage suits. The decision to change what it enacted should remain exclusively with Congress itself. In such a posture consideration of the wisdom of making municipalities liable to suit under § 1983 when the parent state has removed governmental immunity and imposed liability on them for damages assessed against their employees acting in the scope of municipal employment would not be an appropriate course for us to pursue. II. We turn to the issue of pendent jurisdiction over the state law claim of indemnification against the City under Conn.Gen.Stats. § 7-465, which is contingent upon a judgment ultimately being entered in favor of appellant against the City officials. Judge Clarie declined to exercise such jurisdiction, and we think it was within his discretionary power to do so. In United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966), the Supreme Court considered the question whether a federal court, assuming it had the power to hear a state claim as pendent, should, after taking into account “considerations of judicial economy, convenience, and fairness to litigants,” exercise that power, id. at 726, 86 S.Ct. at 1139, and observed: “That power need not be exercised in every case in which it is found to exist. It has consistently been recognized that pendent jurisdiction is a doctrine of discretion, not of plaintiff’s right.” Id. Applying these principles here, we find no abuse of discretion in the dismissal of the pendent claims against the City. See Patrum v. City of Greensburg, 419 F.2d 1300 (6th Cir. 1969), cert. denied, 397 U.S. 990, 90 S.Ct. 1125, 25 L.Ed.2d 398 (1970). Appellant phrases the issue as “whether a state law claim against a public entity can be pendent to a § 1983 action against one or more of the entity’s employees” and, answering in the affirmative, refers us to Eidschun v. Pierce, 335 F.Supp. 603 (S.D.Iowa 1971), where the court, after finding it had the power, chose to retain pendent claims against a city as § 1983 claims remained to be tried against municipal employees and the proof required to establish both sets of claims was essentially the same. In the present ease, however, the district court struck a different balance in weighing the factors of economy, convenience, and fairness, and we do not find its conclusion to be unsound. We may assume for the purpose of review that there was power in the district court to hear pendent state claims against the City even though federal claims survived only against the other defendants, cf. Leather’s Best, Inc. v. Mormaclynx, 451 F.2d 800, 809-811 (2d Cir. 1971); Astor-Honor, Inc. v. Grosset & Dunlap, Inc., 441 F.2d 627 (2d Cir. 1971), because we are convinced in any event that there were sound reasons for not retaining pendent jurisdiction over the City in this case as a matter of discretion. First, the City of Hartford notes in its brief that it “filed a statement with the Clerk of the District Court on June 8, 1971, that the municipality will pay any judgment entered in the action against named employees.” Secondly, there is no reason to assume that, if necessary, the state courts would not grant full faith and credit to any judgment obtained against the municipal officials in the federal court. Thirdly, if the City should contest its obligation to pay any judgment rendered against its employees, the issues of whether they were “acting in the performance of [their] duties and within the scope of [their] employment” and whether the damage was “the result of any wilful or wanton act” would likely be raised. Those issues concern the interpretation of a state statute and the Supreme Court reminded us in Gibbs that “[n]eedless decisions of state law should be avoided both as a matter of comity and to promote justice between the parties, by procuring for them a surer-footed reading of applicable law.” 383 U.S. at 726, 86 S.Ct. at 1139. Moreover, to the extent that the standards to be applied and the proof required to meet them in order to render the City liable under the state statute differ from the standards and proof required to render the individual defendants liable under § 1983, any jury which might be empanelled would be subject to confusion which it would be best to avoid. Finally, there is the possibility that a jury might be prejudiced against the other defendants on the primary claims if it knew from the claim against the City as a defendant that it might be obligated as an indemnitor to pay for any judgment assessed. Under these circumstances the district court was well within the bounds of allowable discretion in refusing to hear the state law claims against the City once the federal claim against it was dismissed before trial. Affirmed. . 42 U.S.C. § 1983 provides: “Civil action for deprivation of rights “Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.” . Though the district court record before us does not so indicate, plaintiff, after the notice of this appeal was filed, was apparently granted leave to amend his complaint to substitute the name of Thomas Ganley for that of John Doe, as well as to name one Jesse Campbell as one of those not then known to plaintiff who was alleged, in plaintiff’s Eighth Cause of Action, to have conspired to conceal Ganley’s identity to deprive plaintiff of his right to damages under § 1983. The City of Hartford states that, following the filing of the substituted complaint, it has now filed an appearance on behalf of defendants Ganley and Campbell in addition to its representation of the other named defendants from the outset of this action. Appellees’ Brief 11. We, therefore, refer to Ganley by name hereafter. . The district court’s ruling is not officially reported. Gonzalez v. Doe, Civil No. 14,-383 (D.Conn.Dec. 1, 1971). . Section 7-465 provides in relevant part: “Assumption of liability for damage caused by employees “Any town, city or borough, notwithstanding any inconsistent provision of law, general, special or local, shall pay on behalf of any employee of such municipality, ... all sums which such employee becomes obligated to pay by reason of the liability imposed upon such employee by law for physical damages to person or property, except as hereinafter set forth, if the employee, at the time of the occurrence, accident, physical injury or damages complained of, was acting in the performance of his duties and within the scope of his employment, and if such occurrence, accident, physical injury or damage was not the result of any wilful or wanton act of such employee in the discharge of such duty. . . . Any employee of such municipality, although excused from official duty at the time, for the purposes of this action shall be deemed to be acting in the discharge of duty when engaged in the immediate and actual performance of a public duty imposed by law. . . . Governmental immunity shall not be a defense in any action brought under this section. In any such action the municipality and the employee may be represented by the same attorney if the municipality, at the time such attorney enters his appearance, files a statement with the court, which shall not become part of the pleadings or judgment file, that it will pay any verdict rendered in such action against such employee. No mention of any kind shall be made of such statement by any counsel during the trial of such action.” . The judgment entered February 29, 1972, ordered that “the plaintiff’s sixth and seventh causes of action [be dismissed] for failure to state a claim for which there is federal jurisdiction, and that the Court declines to exercise pendent jurisdiction, against the City of Hartford.” Though entered pursuant to a motion by the plaintiff, it was expressly based upon the court’s ruling, supra note 3, granting the “Motion To Dismiss Complaint As Against The Defendant, City of Hartford,” for failure to state a claim upon which relief can be granted. That ruling stated in pertinent part: “The plaintiffs may- proceed in this Court against the municipal employees under § 1983. State law damages for wrongful death and the claimed statutory indemnification of the defendant municipal employees, both as to state and federal judgments should be pursued in the state courts.” Despite the fact that the Sixth Cause of Action (the state wrongful death claim) is itself directed only against the municipal employees, under the complaint and the circumstances of the proceedings in this action thus far, we assume that the district court declined to exercise pendent jurisdiction only as to the City of Hartford. Accordingly, we restrict our review to the questions thus raised and express no view as to whether it would have been proper for the district court to have declined to exercise pendent jurisdiction as to the defendant City officials on the state wrongful death claims. . Conn.Gen.Stats. § 52-555 (1973 Supp.) provides: “Actions for injuries resulting in death “In any action surviving to or brought by an executor or administrator for injuries resulting in death, whether instaneous or otherwise, such executor or administrator may recover from the party legally at fault for such injuries just damages together with the cost of reasonably necessary medical, hospital and nursing services, and including funeral expenses, provided no action shall be brought to recover such damages and disbursements but within two years from the date when the injury is first sustained or discovered or in the exercise of reasonable care should have been discovered, and except that no such action may be brought more than three years from the date of the act or omission complained of.” . See note 4 supra. . Section 1988 states, in pertinent part: “The jurisdiction in civil matters conferred on the district courts by the provisions of this chapter and Title 18, for the protection of all persons in the United States in their civil rights, and for their vindication, shall be exercised and enforced in conformity with the laws of the United States, so far as such laws are suitable to carry the same into effect; but in all cases where they are not adapted to the object, or are deficient in the provisions necessary to furnish suitable remedies and punish offenses against law, the common law, as modified and changed by the constitution and statutes of the State wherein the court having jurisdiction of such civil or criminal cause is held, so far as the same is not inconsistent with the Constitution and laws of the United States, shall be extended to and govern the said courts in the trial and disposition of the cause. ...” . It is true that equitable relief has been granted under § 1983 against municipal corporations by some courts, see, e. g., Adams v. City of Park Ridge, 293 F.2d 585, 587 (7th Cir. 1961); Harkless v. Sweeny Independent School District, 427 F.2d 319 (5th Cir.), cert. denied, 400 U.S. 991, 91 S.Ct. 451, 27 L.Ed.2d 439 (1971); but see Zuckerman v. Appellate Division, 421 F.2d 625, 626 (2d Cir. 1970); Seergy v. Kings County Republican County Committee, 459 F.2d 308, 312-313 n. 6 (2d Cir. 1972). However, the legislative history relied upon by the Supreme Court in Monroe “focused primarily on damage actions against municipalities, and . . . should be read accordingly,” Comment, Injunctive Relief Against Municipalities Under Section 1983, 119 U.Pa.L.Rev. 389, 397 (1970). We are persuaded that prohibitory, as opposed to mandatory, injunctions might consistently with that history be granted against municipalities under § 1983, id. at 400, and that whatever the ultimate resolution of the question of injunctive relief under § 1983, cf. Monroe v. Pape, supra 365 U.S. at 191 n. 50, 81 S.Ct. 473, Comment, supra at 392, 393 n. 25; Law Students Civil Rights Research Council, Inc. v. Wadmond, 401 U.S. 154, 158 n. 9, 91 S.Ct. 720, 27 L.Ed.2d 749 (1971), the immunity of municipalities from a § 1983 suit for damages, established in Monroe, remains viable and is not affected thereby. . Cf. Foote, Tort Remedies for Police Violations of Individual Rights, 39 Minn.L. Rev. 493, 514 (1955); Fuller & Casner, Municipal Tort Liability in Operation, 54 Harv.L.Rev. 437 (1941); Smith, Municipal Tort Liability, 48 Mich.L.Rev. 41, 50-51 (1949); Note, Grievance Response Mechanisms for Police Misconduct, 55 Va. L.Rev. 909, 925-27 (1969). . See Note, Carter v. Carlson: The Monroe Doctrine at Bay, 58 Va.L.Rev. 143, 159 (1972), implicitly suggesting the possibility that such a rule might lead to a statutory reimposition of municipal immunity in some states. . See notes 4 and 5 supra. . And see Fortune, Pendent Jurisdiction—The Problem of “Pendenting Parties,” 33 U.Pitt.L.Rev. 1 (1972); Note, 73 Colum.L.Rev. 153; Note, 81 Harv.L.Rev. 657, 662-64 (1968). . See note 4 supra.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

GULF & WESTERN INDUSTRIES, INC., Plaintiff-Appellant, v. The GREAT ATLANTIC & PACIFIC TEA COMPANY, INC., Defendant and Third-Party Plaintiff-Appellee, v. Charles G. BLUHDORN, Third-Party Defendant-Appellant and Kidder, Peabody & Co., Inc., Third-Party Defendant Docket No. 73-1223. United States Court of Appeals, Second Circuit. Argued March 8, 1973. Decided March 12, 1973. Whitney North Seymour, New York City (William J. Manning, John A. Guzzetta, Melvyn L. Cantor, George H. Hempstead, III, Cynthia M. Cohen, Patrick H. Barth, and Simpson, Thacher & Bartlett, New York City, on the brief), for plaintiff-appellant Gulf & Western Industries, Inc., and third party defendant-appellant Charles G. Bluhdorn. Denis McInerney, New York City (Raymond L. Falls, Jr., William T. Lifland, Henry G. Bisgaier, Allen S. Joslyn, Charles Platto, David A. Mead, and Cahill, Gordon, Sonnett, Reindel & Ohl, New York City, on the brief), for defendant and third party plaintiff-appellee The Great Atlantic & Pacific Tea Co., Inc. Robert F. Ambrose, Morton E. Grosz, Gerald A. Novack and Barrett, Smith, Schapiro & Simon, New York City, for The Josephine H. McIntosh Foundation, Incorporated, amicus curiae. George D. Reycraft, Eugene J. Leff, Boaz M. Shattan, Jr., and Cadwalader, Wickersham & Taft, New York City, for Neuberger & Berman, amicus curiae. Fred Lowenschuss Associates, Philadelphia, Pa., for Fred Lowenschuss Associates Pension Plan and Tendering Shareholders of A&P, amicus curiae. Before LUMBARD and TIMBERS, Circuit Judges, and WYZANSKI, District Judge. Senior District Judge of the District of Massachusetts, sitting by designation. . G&W’s motion claimed that A&P had violated the securities laws by false and misleading statements in both the February 2 press release and the February 3 letter to shareholders. The district court rejected G&W’s claims, based on the view “that the alleged omissions were not material omissions and that the plaintiff has failed to show a reasonable expectation of success on the trial of the issues so as to cause this Court to issue the preliminary injnction sought by G&W. Nor does this Court find these . issues so difficult and doubtful as to tip the balance of hardship toward G&W and thus warrant the issuance of injunction . . . . ” G&W has not appealed from the denial of its motion for a preliminary injunction. TIMBERS, Circuit Judge: The issues before us on this appeal by appellants Gulf & Western Industries, Inc. (G&W) and Charles G. Bluhdorn, the chairman of the board, chief executive officer and largest stockholder of G&W, arise from a motion brought on by order to show cause in the District Court for the Southern District of New York before Kevin T. Duffy, District Judge, by The Great Atlantic & Pacific Tea Company. Inc. (A&P) for a preliminary injunction. A&P’s motion sought to enjoin consummation of a tender offer by G&W to purchase 3,750,000 shares of the common stock of A&P. The motion alleged that G&W’s proposed acquisition of A&P stock would violate Section 1 of the Sherman Act, 15 U.S.C. § 1 (1970), and Section 7 of the Clayton Act, 15 U.S.C. § 18 (1970); and that G&W’s tender offer was in violation of Sections 14(d) and 14(e) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78n(d) and (e) (1970), and of Rule 14d-1 promulgated under the 1934 Act, 17 C.F.R. § 240.14d-1 (1972). G&W’s tender offer was announced February 1, 1973. Judge Duffy on February 6 signed an order to show cause bringing on A&P’s preliminary injunction motion for hearing on February 9. He heard the motion that day. On February 13, he filed a 21 page opinion granting the motion and on the same day entered a preliminary injunction enjoining consummation of the tender offer. On February 20, we granted appellants’ motion to expedite their appeal from Judge Duffy’s order. We heard the appeal on March 8. For the reasons stated below, we affirm the preliminary injunction enjoining consummation of the tender offer. I. FACTS AND PRIOR PROCEEDINGS G&W is a Delaware corporation. Its principal place of business is in New York City. It is the seventy-fourth largest industrial corporation in the United States. Its sales in 1972 totalled $1,669,671,000. It is one of the largest conglomerates, having acquired since 1957 approximately 100 previously independent companies. Bluhdorn has been at the helm of G&W since 1957. A&P is a Maryland corporation. Its executive offices are in New York City. It operates one of the largest chains of retail supermarkets in the United States and is the largest such operator in the New York metropolitan area. Its sales in 1972 were approximately $6 billion. At the time of the announcement of the tender offer which gave rise to the instant action, G&W was the owner of more than one million shares of A&P stock. A&P had 24,875,224 shares of common stock issued and outstanding. G&W thus had acquired more than 4 per cent of A&P’s stock. Those shares had been purchased on the open market in the year preceding the announcement of the tender offer. They were held in street name by Kidder, Peabody & Co., a brokerage firm. A&P was unaware of this substantial G&W interest in its stock. On February 1, 1973, G&W announced its intention to make a cash tender offer for the acquisition at $20 per share of an additional 3,750,000 shares of A&P stock (approximately 15 per cent). As required by Rule 14d promulgated under the 1934 Act, G&W filed with the Securities and Exchange Commission a Schedule 13D on February 1. On the following day, the tender offer was communicated to the public. A&P’s management reacted swiftly in opposition. On February 2, it issued a press release indicating A&P’s intent to “vigorously oppose” the tender offer. The release stated that not only was the $20 per share offer “inadequate and not in the best interest of [A&P’s] shareholders”, but that “it would seem that the acquisition of a large block of A&P shares by Gulf & Western raises most serious questions under the antitrust laws.” The press release was followed up the next day by a letter to A&P’s shareholders. Included in the letter were summary statements and statistics indicating that A&P was in a “turnaround” situation and that the G&W offer, by its “inadequate” terms, was an attempt “to purchase at a cheap price the value [in terms of upward potential] that rightfully belongs to [the A&P shareholders].” The implication of possible antitrust liability stated in the initial press release was repeated in the letter to shareholders. On February 5, G&W commenced the instant action against A&P in the district court, alleging that A&P had made false and misleading statements in its opposition to the tender offer, in violation of Sections 10(b), 14(d) and 14(e) of the 1934 Act. G&W, simultaneously with the commencement of its action, presented an order to show cause bringing on its motion for a preliminary injunction against A&P. Also on February 5, A&P filed its answer, counterclaim and a third-party action against Bluhdorn and against Kidder, Peabody & Co., the dealer-manager for G&W’s tender offer. A&P’s counterclaim and its motion for a preliminary injunction alleged violations of the antitrust laws and the securities laws. Judge Duffy signed A&P's order to show cause on February 6 and made it returnable on February 9, together with G&W’s order to show cause referred to above. He denied applications by both sides for temporary restraining orders. With respect to the antitrust violations, A&P alleged probable foreclosure and anticompetitive effects, both horizontal and vertical. It also alleged likelihood of unlawful reciprocal dealing. The horizontal allegations were based on Bluhdorn’s interest in the Bohack Corporation, one of A&P’s major competitors in the New York area. Bohack is the second largest operator of retail supermarkets in the New York area, A&P being the largest. In the period immediately preceding the tender offer, Bluhdorn was the largest shareholder in Bohaek, he was a member of its board of directors, and, with three other G&W officers on Bohack’s board, Bluhdorn clearly had effective control of Bohaek. On February 1, the four G&W directors of Bohaek submitted their resignations from that board, and Bluhdorn placed all of his Bohaek shares in a voting trust. Under the final terms of that trust, in the event the tender offer is consummated, Bluhdorn’s shares in Bohaek must be sold by the trustees within one year after the expiration date of the tender offer. In addition to the claim of horizontal market foreclosure, A&P alleged that success of the tender offer would create a probability of price-fixing between A&P and Bohaek. This was based on the September 1972 denouncement by Bohaek’s president, Joseph Binder, of A&P’s “WEO” (profit and price cutting) program as predatory and injurious to competition. That statement followed shortly after a private conversation between Bluhdorn and Binder. Binder, in addition, was named one of the two trustees of the voting trust. ■ The basis of A&P’s vertical claim is that G&W, among its myriad conglomerate holdings, has a number of companies that deal in products of which A&P is a purchaser. A&P alleges the “potential exclusion of other suppliers of A&P if G&W affiliates are able to provide the same products or services on equal terms.” The scope of such vertical foreclosure was alleged to be upwards of $100 million. A&P also alleged the likelihood of unlawful reciprocity, in that A&P suppliers might be expected to direct their purchasers toward G&W affiliates in the hope of increasing sales to A&P. G&W’s main response to the vertical and reciprocal charges was evidence of established corporate policy against such practices. The alleged securities law violations generally charged G&W with omissions from the tender offer of material facts in contravention of Sections 14(e) and 14(d) of the 1934 Act. As summarized by the district court, the Section 14(e) claim was as follows: “[T]hat the published tender offer and Schedule 13D filed with the Securities and Exchange Commission by G&W, omitted certain material facts in that they failed to disclose G&W’s intention to acquire dominance of the A&P; that it failed to disclose that Bohaek was the largest competitor of A&P in the New York City metropolitan area; and that Bluhdorn had effective control of Bohaek; it failed to disclose the existence of a consent decree between Bohaek and the Federal Trade Commission; and it failed to adequately describe G&W’s business, including, in particular, the areas in which G&W controls companies producing products which are actual or potential suppliers of A&P.” The Section 14(d) charge alleged a failure by G&W to file a Schedule 13D in advance of its pre-tender offer purchases. A&P asserted that during the course of those purchases G&W had “formed the intention and embarked on a program to acquire more than 5% of the outstanding common stock of A&P.” After approximately two days of depositions, the district court heard on the same day the motions for preliminary injunctions brought on by G&W and A&P, respectively. The record before the court consisted of the testimony of three witnesses, depositions, affidavits and documentary exhibits. Four days after the hearing, the court denied G&W’s motion for a preliminary injunction, but granted A&P’s motion for a preliminary injunction against G&W and Bluhdorn. The only appeal before us is from the order granting A&P’s motion. The essential question before us on this appeal is whether the record supports the district court’s order which granted a preliminary injunction enjoining consummation of the tender offer. We hold that it does. II. PRELIMINARY INJUNCTION STANDARD We repeatedly have held that the two-fold requirement for a preliminary injunction is a demonstration of probability of success on the merits and a showing that irreparable harm will result if such relief is denied. Recently we have emphasized the importance of demonstrating on a preliminary injunction motion the presence of serious questions going to the merits which warrant further investigation and trial. For example, in Stark v. New York Stock Exchange, 466 F.2d 743 (2 Cir. 1972), we recently stated: “Appellants assumed the burden of demonstrating either a combination of probable success and the possibility of irreparable injury or that they had raised serious questions going to the merits and that the balance of hardships tipped sharply in their favor.” 466 F.2d at 744. And in Checker Motors Corp. v. Chrysler Corp., 405 F.2d 319 (2 Cir.), cert. denied, 394 U.S. 999 (1969), the standard which we find particularly applicable here was set forth as follows: “The purpose of a preliminary injunction is to maintain the status quo pending a final determination of the merits . . . . It is an extraordinary remedy, and will not be granted except upon a clear showing of probable success and possible irreparable injury (emphasis that of the Court) . However, ‘the burden [of showing probable success] is less where the balance of hardships tips decidedly toward the party requesting the temporary relief.’ Dino De Laurentiis Cinematografica, S. p. A. v. D-150, Inc., 366 F.2d 373, 375 (2 Cir. 1966). In such a case, the moving party may obtain a preliminary injunction if he has raised questions going to the merits so serious, sub stantial, and difficult as to make them a fair ground for litigation and thus for more deliberate investigation. Unicon Management Corp. v. Koppers Co., 366 F.2d 199, 205 (2 Cir. 1966); Dino De Laurentiis Cinematografica, S. p. A. v. D-150, Inc., supra; Hamilton Watch Co. v. Benrus Watch Co., 206 F.2d 738, 740 (2 Cir. 1953).” (emphasis added) (some citations omitted). 405 F.2d at 323. Moreover, in government antitrust actions involving alleged Clayton Act violations, a “balancing of the equities — in terms of injury to the public interest if an injunction were denied, as against injury to the defendants if it were granted — is a relevant factor, once the probability of success standard has been met, in deciding whether to deny or grant injunctive relief.” United States v. International Telephone & Telegraph Corp., 306 F.Supp. 766, 797 n. 95 (D. Conn.1969), appeal dismissed, 404 U.S. 801 (1972), and cases there cited. In the instant case, the magnitude and far reaching consequences of the alleged violations of the antitrust and securities laws are such that, in our view, the public interest requires the application of a like standard. With this standard in mind, we turn directly to a consideration of the substantiality of the alleged violations of the antitrust and securities laws, and the probability of A&P’s success on the merits on such claims after trial; and then, depending upon our conclusions on that issue, we shall consider the balance of equities as between the parties, keeping foremost in mind the paramount public interest. III. PROBABILITY OF SUCCESS ON THE MERITS (A) Claims of Antitrust Law Violations The antitrust claims of A&P are based on Section 7 of the Clayton Act which provides in relevant part: “No corporation engaged in commerce shall acquire, directly or indirectly, the whole or any part of the stock ... of another corporation engaged also in commerce, where in any line of commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.” At this stage of the litigation, we of course need not decide whether A&P has proven a violation of that provision. We are required, however, to decide whether the evidence at the hearing below demonstrated that A&P’s allegations were of sufficient substance to warrant an examination of the other requirements necessary to the grant of preliminary injunctive relief. G&W’s primary defense to the Section 7 claims is that the evidence demonstrated that its tender offer comes within the proviso to that section — to wit, that its offer to purchase A&P stock is “solely for investment and not ... to bring about . . . the substantial lessening of competition.” Section 7, jf 3. In arguing for a broad definition of “investment”, G&W relies on Pennsylvania R.R. Co. v. ICC, 66 F.2d 37 (3 Cir. 1933), aff’d per curiam by equally divided Court, 291 U.S. 651 (1934). In our view, however, that case says no more than that the court’s attention should be focused less on whether the purchase constitutes an “investment” than on whether the effect (indeed at this juncture the reasonably likely effect) is substantially to lessen competition. G&W next contends that each of the potential anticompetitive effects claimed by A&P depend on the attainment of control by G&W. Put another way, the argument is that, without control over the policies and practices of A&P, the feared horizontal, vertical and reciprocal practices are no more likely to occur than they were with G&W entirely out of the A&P corporate picture. We reject that contention both on the facts and on the law. Factually, it must be remembered that the reciprocal allegations relate to the actions of third-parties — in this case, suppliers of A&P who might determine that it would be in their best interest to purchase whenever possible from G&W companies. It is the third-parties’ perception of what course would be to their best advantage that may give rise to reciprocal dealing by creating a market structure conducive to reciprocity or reciprocity effect. Particularly with companies of the size and power of those here involved, “the actual or potential implementation of coercive reciprocity, which presupposes the existence of leverage, is inimical to a competitive economic society.” United States v. General Dynamics Corp., 258 F.Supp. 36, 59 (S.D.N.Y.1966). Furthermore, with respect to all the antitrust claims, we are satisfied that the record demonstrates a substantial likelihood that G&W will seek to obtain control of A&P and that it has the potential to attain that goal. Our views in this regard are more fully set forth in our discussion of the securities law claims below. As a matter of law, we are not aware of any decision that requires numerical control in order to establish an antitrust violation. Several cases have held to the contrary. E.g. American Crystal Sugar Co. v. Cuban-American Sugar Co., 152 F.Supp. 387, 393 (S.D.N.Y.1957), aff’d, 259 F.2d 524 (2 Cir. 1958); Hamilton Watch Co. v. Benrus Watch Co., 114 F.Supp. 307, 317 (D. Conn.), aff’d, 206 F.2d 738 (2 Cir. 1953). Rather, the critical question is whether the probable future effect of the transaction will be substantially to lessen competition. Brown Shoe Co. v. United States, 370 U.S. 294, 332 (1962); United States v. Von’s Grocery Co., 384 U.S. 270, 278 (1966). In assessing that issue, we turn now to the allegations of vertical integration. In discussing the vertical claim by way of illustration, we do not indicate any view as to the relative strength of that claim vis-a-vis the other antitrust claims asserted by A&P. The leading case in the vertical area of course is Brown Shoe Co. v. United States, supra, in which the Supreme Court held unlawful under Section 7 a merger between a leading shoe manufacturer and a leading shoe retailer. We find the present case sufficiently similar to that one to permit a conclusion that A&P has shown a reasonable likelihood Of success on the vertical claim at the trial on the merits. Passing over the essential, but here uneontested, definition of the relevant product and geographical markets, the issue centers on the probable effect of the acquisition by G&W of over 19% of the A&P shares. As in Brown Shoe, “[a] most important . . . factor to examine is the very nature and purpose of the arrangement.” 370 U.S. at 329. Here, the record before us supports the conclusion that the purpose of the acquisition is very likely to provide a basis for eventual control of A&P by G&W. The record further supports the conclusion that the nature of the post-acquisition arrangement will be such as to give G&W a substantial advantage over its competitors in the sale to A&P of products which the latter either uses or retails and which G&W can supply. In support of those conclusions, the record here discloses many of the same troublesome ingredients that led to the Brown Shoe decision: the tender offer here “involve[s] neither small companies nor failing companies”, 370 U.S. at 331; because of the absolute size of the firms involved “in this industry, no merger between a manufacturer and an independent retailer could involve a larger potential market foreclosure”, 370 U.S. at 331-32; and the trend toward concentration of the industry has been well-documented, 370 U.S. at 332. Furthermore, in light of the present production capacity of A&P and the great possibilities for expansion, the potential foreclosure is well above the “de minimis” level. The import of these views, once again, is not that A&P is necessarily correct in its allegations of a vertical integration in violation of the antitrust laws. Rather, we hold only that a sufficient likelihood of success- on that claim has been demonstrated to satisfy A&P’s burden on the motion for preliminary injunction. (B) Claims of Securities Law Violations A&P claims that G&W has violated Section 14(e) of the Securities Exchange Act of 1934 by omitting certain material facts from its tender offer announcement: (1) G&W’s intention to acquire a controlling position in A&P or at least to exercise influence over A&P’s management and policies; and (2) G&W’s holdings in other companies which indicate that G&W’s acquisition of A&P stock is likely to result in violations of the antitrust laws by both companies. The question here is whether, on the basis of the evidence presented below, it appears that A&P stands a strong chance of proving at trial that G&W’s failure to disclose these facts in its announcement of the tender offer violated § 14(e). We hold that A&P has demonstrated a probability of success on the merits with regard to its § 14(e) claim. While § 14(e) is a relatively new statute, in general it tracks the language of Rule 10b-5, 17 C.F.R. § 240.10b-5 (1972), except that § 14(e) applies to tender offers rather than the purchase or sale of securities. The elements of an action for injunctive relief are essentially the same under § 14(e) as under Rule 10b-5. See Chris-Craft Industries, Inc. v. Piper Aircraft Corp., 480 F.2d 341, 362 (2 Cir. 1973), slip op. 4897, 4929-30 (March 16, 1973). With respect to A&P’s § 14(e) claim, in order to succeed at the trial on the merits, A&P need only establish that the omissions were material and that “ ‘any of the stockholders who tendered their shares would probably not have tendered their shares’ if the alleged violations had not occurred.” Electronic Specialty Co. v. International Controls Corp., 409 F.2d 937, 948 (2 Cir. 1969), quoting Symington Wayne Corp. v. Dresser Industries, Inc., 383 F.2d 840, 843 (2 Cir. 1967). There can be no doubt that if G&W intended, when it announced its tender offer, to take control of A&P or to participate extensively in its management, its failure to disclose that intention constituted a violation of § 14(e). Cf. Susquehanna Corp. v. Pan American Sulphur Co., 423 F.2d 1075, 1082-86 (5 Cir. 1970). Any of the tendering shareholders who did not tender all of their A&P holdings to G&W would be influenced in their decision whether or not to tender by the fact that G&W would eventually control or substantially influence the operations of A&P. For example, such shareholders might be disinclined to facilitate G&W’s takeover attempt, if it were to create a substantial risk that their remaining holdings in A&P would suffer a decline in value, because present management would be replaced by less efficient G&W management. On the other hand, they might want to retain all their shares because of their belief that the incoming management team would be superior. In short, G&W’s intentions with regard to directing A&P’s policies and operations, are of such significance that the tendering shareholders would have weighed them in their decision whether or not to sell. Moore v. Greatamerica Corp., 274 F.Supp. 490, 492-93 (N.D.Ohio 1967). Considerable evidence was adduced at, the hearing which indicates that G&W purchased A&P stock not for the purpose of investment but with a view to exercising influence or control. Proof of such intent obviously is difficult, particularly where only limited discovery is possible, as in the case below due to the time limitations. Nevertheless, the Bluhdorn deposition, as well as other evidence adduced, strongly indicates that such intent was present. G&W has a well-established practice of eventually acquiring firms in which it initially purchased only a small percentage of the outstanding shares. It is likely that this acquisition practice will be applied to A&P, especially since G&W’s present commitment to purchase A&P shares represents the largest single commitment in G&W’s history. In addition, A&P is such an “overpriced” and “rundown” corporation, in the opinion of Bluhdorn, that it could not possibly succeed as an “investment”. But since in Bluhdorn’s view much of A&P’s difficulty is attributable to its present management, it is the type of company that probably would make a sound acquisition with a replacement of management. Bluhdorn indeed remarked that his “Bohack management team” possessed the skills and experience necessary to cause a turnaround of A&P. These facts and circumstances indicate that A&P has a probability of success in proving at trial that G&W had an intention to obtain control of A&P or to influence substantially its management, which intentions it failed to disclose in violation of § 14(e). It also appears that G&W omitted to state certain material facts indicating that there are substantial antitrust obstacles to G&W’s purchasing a large portion of A&P’s shares. As stated above, Bluhdorn’s ownership of a controlling interest in Bohaek, combined with G&W’s large purchases of A&P stock, creates a strong likelihood of antitrust litigation to prevent unlawful foreclosure of competition in the supermarket business. G&W also owns or controls several companies which are actual or potential suppliers of A&P, and apparently has plans to expand such operations so as to take advantage of its shareholder position in A&P. We have discussed above the exposure of G&W to potential antitrust liability for engaging in unlawful vertical integration. The facts that, at the time it announced its tender offer, an antitrust action had not been commenced against G&W, and that its liability was uncertain, does not excuse G&W’s failure to disclose all these relevant circumstances so that A&P shareholders could weigh them in reaching their decision whether or not to tender their shares. As we said in SEC v. Texas Gulf Sulphur Co., 401 F.2d 833, 849 (2 Cir. 1968) (en banc), cert. denied sub nom. Kline v. SEC, 394 U.S. 976 (1969), the disclosure requirements of the securities laws require “nothing more than the disclosure of basic facts so that outsiders may draw upon their own evaluative experience in reaching their own investment decisions with knowledge equal to that of the insiders.” Those “basic facts” bearing upon G&W’s possible liability for antitrust violations were of obvious concern to those A&P shareholders who retained part of their holdings. We hold that the record before the district court demonstrated a probability of A&P’s success on the merits on its claims of securities law violations. IV. BALANCING THE EQUITIES Having determined that A&P has established a probability of success on the merits at trial on at least some of its claims, we turn now to a consideration of the balancing of the equities. (A) Interest of A&P The district court’s opinion indicates that above all else its conclusion was based on its perception of the harm that would accrue to A&P in the absence of preliminary relief: “[T]o permit the tender offer to go forward could have serious detrimental effects on A&P. It is possible that A&P would be involved in a violation of the antitrust laws. There is testimony in the record that the executives of A&P have already suffered a tremendous downgrading of morale with just the suggestion that the company was about to be taken over by G&W. Moreover, if this Court permitted the tender offer to be consummated and at some later date were to find the violations charged by A&P, it would be almost impossible to unravel the situation.” We agree. Moreover, considering the entire record, that is a finding that certainly cannot be said to be clearly erroneous. (B) Interest of G&W The only interest of G&W urged upon us that bears on the propriety of the preliminary injunction is that G&W has the right to invest on behalf of its shareholders at such time as it deems ripe and profitable. Certainly this is one factor to be considered and we have done so. But we think that it is important, in weighing this interest, to bear in mind that (1) the interest urged can only be so where a lawful acquisition or investment is involved; and (2) the preliminary relief granted is not nearly as final as G&W urges. Here, the probability that the “investment” is unlawful, as shown above, is sufficiently strong to call into serious question G&W’s right to proceed with the tender offer. Further, if after trial on the merits G&W is vindicated, it will not be foreclosed from renewing its tender offer. While that may be said to be something less than a full blessing for G&W, its right to act at will is not absolute. In a case of strong likelihood of unlawfulness, that right must be at least temporarily subordinated. (C) Interest of A&P Shareholders In Butler Aviation International, Inc. v. Comprehensive Designers, Inc., 425 F.2d 842, 845 (2 Cir. 1970), we said: “While courts should vigorously enforce the policy of honesty and fair dealing prescribed by federal securities legislation, they must guard against the risk that, at the instance of incumbent management, they may be frustrating informed stockholders from doing what the latter want.” We have given careful attention to that consideration here. What we said in Butler Aviation, however, clearly presupposes that the shareholders are indeed informed — a premise which we have indicated above has been drawn into serious doubt in this case. A&P shareholders, moreover, like G&W, have no inherent right to proceed with an unlawful tender; a requirement of lawfulness is included by implication in every tender offer. (D) Interest of the Public Finally, in balancing the equities, the public interest must be considered. If G&W is in fact proceeding in violation of the antitrust and securities laws, a preliminary injunction would serve the public interest as much as A&P’s private interests. In this regard, by asserting these claims, A&P is assuming a dual role, including that of a private attorney general. Since it is impossible as a practical matter for the government to seek out and prosecute every important violation of laws designed to protect the public in the aggregate, private actions brought by members of the public in their capacities as investors or competitors, which incidentally benefit the general public interest, perform a vital public service. As the Supreme Court said in J. I. Case Co. v. Borak, 377 U.S. 426, 432 (1964), private actions provide “a necessary supplement” to actions by the government and “the possibility of civil damages or injunctive relief serves as a most effective weapon in the enforcement” of laws designed to protect the public interest. Therefore, as in actions brought by the government, doubts as to whether an injunction sought is necessary to safeguard the public interest — when the public interest involved is as clear, pervasive and vital as the record here demonstrates — should be resolved in favor of granting the injunction. See United States v. First National City Bank, 379 U.S. 378, 383 (1965); Mitchell v. Pidcock, 299 F.2d 281, 287 (5 Cir. 1962). In our view, the present case involves precisely that strong showing of public interest which we hold is paramount. ■ Upon balancing the equities in accordance with the standard stated above, we hold that the record clearly supports the district court’s order which granted a preliminary injunction enjoining consummation of the tender offer. Under all the circumstances, we suggest to the district court that it expedite further proceedings in this case, as it so commendably has done to date, with a view to the earliest possible date for trial on the merits consistent with the rights of the parties. We are confident that counsel will fully cooperate to that end. Finally, we express our appreciation to able counsel for all parties for their excellent briefs and oral arguments which have facilitated our task on this expedited appeal. Affirmed. . We set forth below a more complete statement of the litigation sequence that preceded this motion, including the plenary action out of which the motion arose. . The tender offer reserved to G&W the right to purchase any shares tendered in excess of that amount. At the hearing in the district court, however, G&W informed the court that it would accept no more than 3,750,000. G&W accordingly has returned all shares tendered in excess of that amount. . The voting trust as originally drafted required disposal of the shares “[i]f G&W becomes the controlling shareholder of A&P”, defined as either being the “largest single holder of common stock of A&P” or having “a majority of the members of the Board of Directors of A&P . . . designees of G&W.” (emphasis added). . The specific items involved include paper goods, produce and meat, refrigeration equipment, and cigars, each of which is a category of goods which A&P purchases and G&W can supply. It is further alleged that various financial services offered by G&W, not currently utilized by A&P, present further vertical foreclosure potential. . The following depositions were taken, each of which was received in evidence without objection at the preliminary injunction hearing: Charles G. Bluhdorn (Chairman of the Board and Chief Executive Officer of G&W) (by A&P); Joel Dolkart (General Counsel and Director of G&W) (by A&P); Ralph D. DeNunzio (Chairman of the Executive Committee of Kidder, Peabody & Co.) (by A&P); William J. Kane (Chairman of the Board and Chief Executive Officer of A&P); (by G&W); and Byron Jay (former Chief Executive Officer of A&P, and Trustee of the Hartford Foundation) (by G&W). . G&W called no witnesses, except that it cross-examined M. Dean Potts (Comptroller of A&P) on his affidavit. A&P called as witnesses William J. Kane, see note 6, supra; and John Guest, a member of the brokerage firm of Kuhn, Loeb & Co., who testified to a conversation with Bluhdorn concerning a proposed purchase of the Hartford Foundation’s A&P shares. . The court denied that portion of A&P’s motion which sought a preliminary injunction against Kidder Peabody on the ground that “[t]here is no showing that Kidder Peabody was acting as anything but a stockbroker for G&W. Apparently it had no knowledge of any possible wrongdoing by G&W and Bluhdorn.” No issue is before us on this appeal regarding Kidder Peabody, since no appeal has been taken from the denial of A&P’s motion for a preliminary injunction against it. . G&W’s argument that, aside from its asserted lack of intent, there is no possibility of gaining control is not supported by the record. That contention rests on the premise that the Hartford Foundation, and the various shareholding members of the Hartford family, together form a monolithic block with considerably more than 50% of the outstanding shares. The district court concluded that the evidence showed no block voting among the various Hartford interests. We agree. At the argument of this appeal, moreover, we were informed that the Foundation was not unwilling to reduce its interest. Upon the announcement of the tender offer, the Foundation voted to tender some 1.5 million shares to G&W. On February 14, it actually did tender 500,000 shares, although these shares were returned by G&W due to the oversubscription of the tender offer at that time. We note further that under the provisions of Section 4943 of the Tax Reform Act of 1969, 26 U.S.C. § 4943 (1970), the Hartford Foundation is in a position where divestment of a sizeable portion of its A&P holdings soon will be highly probable. In short, we find no basis in fact for the argument that the current dominance of the various Hartford interests precludes G&W control of A&P at some future date. . In Denver & Rio Grande Western R. R. Co. v. United States, 387 U.S. 485, 501 (1967), the Court held that, while the ICC’s duty to consider anticompetitive effects of the acquisition of stock of a common carrier under Section 5 of the Interstate Commerce Act, 49 U.S.C. § 5 (1970), “arises only after the threshold fact of control is established, [n]o such preliminary finding need be made to trigger the ICC’s duty under the Clayton Act. A company need not acquire control of another company in order to violate the Clayton Act.” See also United States v. B. I. duPont deNemours & Co., 353 U.S. 586 (1957). . While A&P’s recent performance may be said to have been lackluster, the data provided in its own response to the tender offer negates any possible claim that it is “failing”. . The FTC has found distinct trends toward concentration in both the food distribution and grocery products manufacturing industries. 1 CCH Trade Reg. Rep. ¶ 4525, at 6904; ¶ 4530 at 6908 (1971). . Section 14(e) reads in pertinent part: “It shall be unlawful for any person to make any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or to engage in any fraudulent, deceptive, or manipulative acts or practices, in connection with any tender offer or request or invitation for tenders-, or any solicitation of security holders in opposition to or in favor of any such offer, request, or invitation.” . Our Court has had occasion to construe § 14(e) on at least four previous occasions. Butler Aviation International, Inc. v. Comprehensive Designers, Inc., 425 F.2d 842 (2 Cir. 1970); Crane Co. v. Westinghouse Air Brake Co., 419 F.2d 787 (2 Cir. 1969), cert. denied, 400 U.S. 822 (1970); Iroquois Industries, Inc. v. Syracuse China Corp., 417 F.2d 963 (2 Cir. 1969), cert. denied, 399 U.S. 909 (1970); Electronic Specialty Co. v. International Controls Corp., 409 F.2d 937 (2 Cir. 1969). See Chris-Craft Industries, Inc. v. Piper Aircraft Corp., 480 F.2d 341, 357 (2 Cir. 1973), slip op. 4897, 4920-59 (March 16, 1973). A&P’s standing, as the target corporation of a tender offer, to bring suit under § 14(e) for a preliminary injunction against G&W, the offeror, is clear. Butler Aviation International, Inc. v. Comprehensive Designers, Inc., supra, 425 F. 2d at 843 n. 1; Susquehanna Corp. v. Pan American Sulphur Co., 423 F.2d 1075 (5 Cir. 1970). See also Electronic Specialty Co. v. International Controls Corp., supra, 409 F.2d at 940-41, 944-46. . That there are shareholders in this situation is clear from the record. The Josephine H. McIntosh Foundation, for example, tendered only 200,000 of its total 1,100,000 shares of A&P common stock. . Former SEG Chairman Cohen has made some especially relevant comments on the importance of disclosing an intended change of control: “Information about a potential change in control can be particularly essential to an informed decision. A change in control brings with it the possibility of different operating results and different investment results, or perhaps the possibility of realizing on a company’s liquidation value. This may be either good, or bad, depending on the facts and circumstances involved. But no investor can reach a conclusion on the possible effects of a change in control until the facts are available to him.” See Cohen, A Note On Takeover Bids and Corporate Purchases of Stock, 22 Business Lawyer 149, 151 (1966), quoted in, Moore v. Greatamerica Corp., supra, 274 F.Supp. at 493. . As additional basis for this inference (at least as of an earlier date), see note 4, supra. . It appears that G&W also has failed to comply with the requirements of Section 14(d) of the 1934 Act and Regulations 14d-1 through 14d-4, 17 C.F.R. §§ 240.14d-1 to 14d-4 (1972). Section 14(d) requires that a tender offer which will result in more than 5% ownership of the target company cannot be made until the offeror files a Schedule 13D with the Commission providing specified information. Item 4 on Schedule 13D in part requires that the following information be provided: “Item 4. Purpose of Transaction. State the purpose or purposes of the purchase or proposed purchase of securities of the issuer. If the purpose or one of the purposes of the purchase or proposed purchase is to acquire control of the business of the issuer, describe any plans of proposals which the purchasers may have to liquidate the issuer, to sell its assets or to merge it with any other persons, or to make any other major change in its business or corporate structure.....” G&W did not supply such information— in violation of § 14(d). . G&W argues that after April 3 the tendering shareholders have the right to withdraw their tendered shares, thereby effectively destroying the tender offer. Suffice it to note that the provision of the Williams Act referred to, 15 U.S.C. § 78n(d) (5) (1970), merely gives shareholders the option of withdrawing; it says nothing about re-solicitation of those shares; and indeed it authorizes adding to the attractiveness of the tender offer. 15 U.S.C. § 78n(d) (7).

f2d_476/html/0699-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

McNeill STOKES and Lewis C. Barbe, Plaintiff-Appellee, v. Peter J. BRENNAN, Secretary of Labor, U.S. Department of Labor, Defendant-Appellant. No. 72-2946. United States Court of Appeals, Fifth Circuit. April 3, 1973. John W. Stokes, Jr., U. S. Atty., Charney K. Berger, Asst. U. S. Atty., Beverley R. Worrell, Regional Sol., U. S. Dept, of Labor, Atlanta, Ga., for defendant-appellant. J. Ben Shapiro, Jr., Atlanta, Ga., for plaintiff-appellee. Before ALDRICH, SIMPSON and CLARK, Circuit Judges. Hon. Bailey Aldrich, Senior Circuit Judge of the First Circuit, sitting by designation. CLARK, Circuit Judge: Stokes and Barbe brought this action based on the Freedom of Information Act [the Act] in the District Court for the Northern District of Georgia, seeking temporary and permanent injunctions prohibiting the Secretary of Labor from withholding certain documents and materials. The materials sought include the “ ‘Training Course for Compliance Safety and Health Officers’ including all instructor and student manuals, training slides, training films and other visual aids and materials used in training inspectors of the Occupational Safety and Health Administration.” Stokes and Barbe contend that the material sought is an administrative staff manual and contains a substantive discussion of the provisions of the Occupational Safety and Health Act of 1970, 84 Stat. 1590. After examining the manual in camera, the District Court ordered the Secretary to produce the manual and teaching aids for inspection and copying. This appeal ensued. We affirm. Though the government’s position in this and other cases involving similar issues might lead one to a contrary conclusion, disclosure of material in government files has now become the rule, not the exception. The Act was intended to increase public access to such records through the imposition of liberal disclosure requirements limited only by specific, narrowly constructed exemptions. The Act is divided into three subsections: the first sets out the types of material which must be disclosed, the second carves out certain restrictions and limitations on the nature of those materials which are required to be revealed, and the third emphatically reiterates the proposition that the Act does not authorize withholding of any information except as specifically stated. Thus, to prevail, the government had to show that the material which Stokes and Barbe sought was not within the purview of the first subsection of the Act, or if it was, that such material was exempted by one of the exclusions set out in the second subsection. The Administrative — Law Enforcement Dichotomy Though all parties assumed in the court below that the material sought was an administrative staff manual which affected the public and thus was subject to disclosure unless it was specifically exempted by one of the enumerated exclusions, the government now seeks to contend on this appeal that the material sought is without the purview of that provision. It does not challenge the fact that the material sought is a staff manual and that the material affects a member of the public. It argues, however, that the manual sought is not administrative in nature but rather is a law enforcement manual. It points to the language of the Senate Committee on the Judiciary as support for its proposition : The limitation of the staff manuals and instructions affecting the public which must be made available to the public to those which pertain to administrative matters rather than to law enforcement matters protects the traditional confidential nature of instruetions to government personnel prosecuting violations of law in court, while permitting a public examination of the basis for administrative actions. Sen.Rep.No.813, 89th Cong., 1st Sess. 2 (1965). While the distinction which the government would draw is valid in the abstract, there is no basis in fact for applying it to this case. The Sixth Circuit, after an examination of the legislative history of the Act, concluded that the purpose of the law enforcement exception “was to bar disclosure of the information which, if known to the public, would significantly impede the enforcement process.” Because their reasoning is so apt the following quote is included for the convenience of the reader and in preference to any attempt at paraphrase: Law enforcement is the process by which a society secures compliance with its duly adopted rules. Enforcement is adversely affected only when information is made available which allows persons simultaneously to violate the law and to avoid detection. Information which merely enables an individual to conform his actions to an agency’s understanding of the law applied by that agency does not impede law enforcement and is not excluded from compulsory disclosure under (a)(2)(C). Far from impeding the goals of law enforcement, in fact, the disclosure of information clarifying an agency’s substantive or procedural law serves the very goals of enforcement by encouraging knowledgeable and voluntary compliance with the law. Such clarifying information is found in agency rulings made public; it is also found in many cases in manuals and instructions like those sought here which are addressed specifically to agency personnel. It may be found in the criteria for investigative action; in standards for evaluation and so forth. Materials providing such information are administrative in character and clearly discloseable under (a)(2)(C). Hawkes v. Internal Revenue Service, 467 F.2d 787, 795 (6th Cir. 1972) (footnote omitted). Secrecy can be justified in such a case as the one at bar only to the extent that it protects policies governing enforcement methods which, if disclosed, would tend to defeat the purpose of inducing maximum voluntary compliance by revealing classes or types of violations which must be left undetected or unremedied because of limited resources. Our comprehensive in camera, examination of the documents in question fully affirms the district court’s conclusion that there is no support in fact for the government’s contention that disclosure of this entire manual and associated documents would allow an employer to anticipate the matters which compliance officers would or would not cover in their investigations. The general areas of instruction detailed in the manual have already been made public by disclosure of the course outline. An examination of the course material dealing with each of these broad areas reveals that, while certain of the obviously more important guidelines are emphasized, the course focuses on educating new officers as to the scheme of the standards as a whole. No matter how thorough an examination and analysis an employer may make of the manual and course material, he could not use the knowledge gained to insulate himself from the statutory penalties by complying with selected rules while ignoring even the least substantial part of the thrust of the standards as a whole. Rather, disclosure of these more concise explanations of inspection procedures and detailed discussions of the standards to be enforced is likely to lead to more compliance, not less. The material sought in this case is simply not within the ambit of the exception for law enforcement materials. Since we hold that the manual sought is administrative in nature, we must proceed to examine the government’s alternative argument that the material is excluded from the scope of the Act by two specific provisions. The government contends, first, that the manual is related solely to the “internal personnel rules and practices of an agency”, and second, that the material is “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”. The Internal Personnel Rules and Practices Exclusion An examination of the legislative history of the internal personnel rules and practices exception reveals a definite conflict between the language of the Senate Report and that of the House Report. The Senate Committee stated: Exemption No. (2) relates only to the internal personnel rules and practices of an agency. Examples of these may be rules as to personnel’s use of parking facilities or regulations of lunch hours, statements of policy as to sick leave, and the like. Sen.Rep., supra, at 8. The House, on the other hand, explains: Matters related solely to the internal personnel rules and practices of any agency: Operating rules, guidelines, and manuals of procedure for Gov-eminent investigators or examiners would all be exempt from disclosure. H.R.Rep.No.1497, 89th Cong., 2d Sess. 10, U.S.Code Cong. & Admin.News 1966, p. 2427 (1966). Professor Davis, in an article tracing the legislative history of the Act and examining the conflict between the two reports, concluded that the language of the Senate Report most accurately reflects the wording of the statute. Moreover, he observed that the greater weight should be given to the report of the house which acted first, since otherwise that house would be deprived of any voice in the final meaning of the enactment. We find his analysis persuasive. Though the courts addressing the question have not reached uniform results, the better reasoned decisions hold that the Senate Report more accurately interprets the language of the statute. See Hawkes v. Internal Revenue Service, supra; Benson v. General Services Administration, 289 F.Supp. 590 (W.D.Wash.1968), aff’d on other grounds, 415 F.2d 878 (9th Cir. 1969) (where the government apparently did not argue this issue on appeal); Consumers Union of United States v. Veterans Administration, 301 F.Supp. 796 (S.D.N.Y.1969), appeal dismissed as moot, 436 F.2d 1363 (2d Cir. 1971); Long v. Internal Revenue Service, 349 F.Supp. 871 (W.D.Wash.1972). But see Polymers, Inc. v. NLRB, 414 F.2d 999 (2d Cir. 1969), cert. denied, 396 U.S. 1010, 90. S.Ct. 570, 24 L.Ed.2d 502 (1970); cf. City of Concord v. Ambrose, 333 F.Supp. 958 (N.D.Cal.1971); Cuneo v. Laird, 338 F.Supp. 504 (D.D.C.1972), appeal docketed, No. 72-1328, D.C.Cir., April 11, 1972. We conclude that this statutory exclusion must not be read so broadly as to exempt the manual sought here. Although this manual does include some amount of material which falls within the description of personnel rules and practices, the manual is not solely or even primarily composed of that type of material. It would be a strained, indeed ridiculous application of the statute which would insulate from disclosure the majority of the manual which contains the substance of what the statute commands be revealed because minor, relatively immaterial parts of the manual, such as the introduction and welcome to the course, could be classified as internal personnel rules and practices. The “Memorandum” Exception We also find without merit the government's contention that the material involved falls within the exception for inter-agency or intra-agency memorandums. Whatever may be the scope of this exception, with its cryptic limiting phrase “which would not be available by law to a party other than an agency in litigation” (see Environmental Protection Agency v. Mink, 410 U.S. 73, 93 S.Ct. 827, 35 L.Ed.2d 119 (1973)) we think it would be a perversion of the Act to classify the materials sought in this case as within this provision which is designed to encourage the free exchange of ideas among government policy-makers. It was not defined as an exception to compelled disclosure in order to authorize an agency to throw a protective blanket over any type of information it might choose by the expedient of casting it in the form of an internal memorandum. Bristol Myers Co. v. F. T. C., 424 F.2d 935 (D.C.Cir.), cert. denied, 400 U.S. 284, 91 S.Ct. 46, 27 L.Ed.2d 52 (1970). Substance not form determines its availability by the public. That exemption [(b)(5)] was intended to encourage the free exchange of ideas during the process of deliberation and policy-making; accordingly, it has been held to protect internal communications consisting of. advice, recommendations, opinions, and other material reflecting deliberative or policy-making processes, but not purely factual or investigatory reports. Factual information may be protected only if it is inextricably intertwined with policy-making processes. . . . But courts must beware of “the inevitable temptations of a governmental litigant to give [this exemption] an expansive interpretation in relation to the particular records in issue.” Soucie v. David, 145 U.S.App.D.C. 144, 154-155, 448 F.2d 1067, 1077-1078 (1971) (footnotes omitted). See also General Services Administration v. Benson, 415 F.2d 878, 880-881 (9th Cir. 1969). The subject manual is an impersonal, mass-produced statement of established policy designed to be utilized as an educational and reference tool, not for policy-making or deliberative purposes. If this material be a “memorandum” then the term would cover virtually all government documents of any description or nature. Such an interpretation would be at war not only with the plain meaning of the word but also with the spirit and purpose of the Act. Whatever the ultimate scope of this “memorandum” exception may be, we are confident that these materials would remain without its reach. The district court correctly determined that the government failed to carry its burden to justify its action of withholding this material. The order appealed from is in all respects. Affirmed. . 5 U.S.C.A. § 552 (1967). . 5 U.S.C.A. § 552(a)(2) provides: (2) Each agency, in accordance with published rules, shall make available for public inspection and copying— (O) administrative staff manuals and instructions to staff that affect a member of the public; . . . . In adopting the rationale of Hawhes, we embrace the principle stated by Professor Kenneth Davis — “secret law is an abomination. . . .” K. Davis, Administrative Law Treatise 114, 137 (Supp.1970), updating and republishing the author’s article, The Information Act: A Preliminary Analysis, 34 Univ. of Chi.L.Rev. 761 (1967). . 5 U.S.C.A. § 552(b) provides: (b) This section does not apply to matters that are— (2) related solely to the internal personnel rules and practices of an agency; (5) 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; . Administrative Law Treatise, supra note 3, at 145, 174-75.

f2d_476/html/0704-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Walter R. CARRINGTON and Ada Raye Carrington, Petitioners-Appellees, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellant. No. 72-1644. United States Court of Appeals, Fifth Circuit. April 23, 1973. Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Richard Farber, Attys., Tax Div., Dept, of Justice, Lee H. Henkel, Jr., Acting Chief Counsel, Chris J. Ray, Atty., Internal Revenue Service, Washington, D. C., for respondent-appellant. E. Richard Criss, Jr., Austin, Tex., for petitioners-appellees. Before BROWN, Chief Judge, and MOORE and RONEY, Circuit Judges. Hon. Leonard P. Moore, Senior Circuit Judge of the Second Circuit, sitting by designation. MOORE, Circuit Judge: This is an appeal by the Commissioner of Internal Revenue (the Commissioner) from a decision of the Tax Court (C. Moxley Featherston, Judge) that there was no deficiency in the Federal income tax for the taxable year 1966 paid by appellees, Walter R. Carrington and Ada Raye Carrington (collectively referred to as Carrington). The tax deficiency assessed was $5,573.71 and was based upon the Commissioner’s increase in Carrington income of $10,959.80, which the Commissioner claimed was an unreported dividend. In his deficiency notice, the Commissioner asserted that “redemption by Cardinal Construction Company of 51 shares of its stock which you had contributed to St. Matthews Episcopal Church was equivalent to a dividend to you of $10,959.80 in 1966.” The background facts are not complicated. Carrington was a member of the vestry, the governing body, of the Church and a member of a committee created for- the purpose of acquiring a new rectory. Carrington was the sole stockholder of two corporations, Cardinal Construction Company (Cardinal) and Day Realty Company (Day). Cardinal and Day as a partnership (Cardinal-Day Enterprises)- owned a residence suitable for a rectory. The stipulation of facts states: The purpose of the various integrated transactions involving the real property described in paragraph 9, above, was to place the property in the hands of St. Matthews Episcopal Church at the maximum tax benefit to petitioners, Walter R. Carrington and Ada Raye Carrington. (Par. 16, Appendix at 26.) As the Tax Court recognized, there were several ways in which the transaction could have been handled, each with its own tax consequences. Carrington “was entitled to choose the method most favorable to him tax-wise. Gregory v. Helvering, 293 U.S. 465, 469 [55 S.Ct. 266, 79 L.Ed. 596] (1935); Granite Trust Co. v. United States, 238 F.2d 670, 675 (1st Cir. 1956).” The method selected was as follows: On December 19, 1966, Carrington transferred fifty-one of the one hundred outstanding shares of Cardinal stock, of which he was the owner, to the Church. On December 23, 1966, Cardinal-Day conveyed the residence to Cardinal subject to an outstanding mortgage of $30,600. On December 27, 1966, Cardinal redeemed the fifty-one shares of its stock held by the Church and, as consideration therefor, conveyed the residence subject to the mortgage to the Church. The value (undisputed) of the residence was $41,559.80. The equity ($41,559.80 less the mortgage of $30,600) accounts for the $10,959.80 which the Commissioner claims was dividend income chargeable to Carrington. Cardinal did not reissue the fifty-one shares and on June 30, 1967, Cardinal was liquidated. The Commissioner argues that Carrington’s gift of stock “although complete in form, must be disregarded for tax purposes because it was merely an intermediate step in the taxpayer’s overall plan” to transfer the residence to the Church “without the imposition of a dividend tax on the distribution” (Gov’t Br. at 9). In other words, because several steps were required to accomplish the transfer, the Commissioner would regard the redemption as if made while Carrington was the owner of all the Cardinal stock. There is no doubt that in any “step transaction” situation careful analysis of the transaction as a whole must be made to distinguish between proper tax avoidance and illegal tax evasion. The Commissioner argues that to arrive at the “substance” of this transac- ' tion we should refuse to recognize the transfer of the Cardinal stock to the Church and the subsequent redemption of that stock eight days later. Having done this, says the Commissioner, the exchange of the fifty-one shares for the rectory may then be regarded as a redemption by Carrington, the sole Cardinal shareholder, which distribution, under United States v. Davis, 397 U.S. 301, 307, 90 S.Ct. 1041, 25 L.Ed.2d 323 (1970) would be included in Carrington’s gross income for 1966. Kanawha Gas & Util. Co. v. Commissioner, 214 F.2d 685 (5th Cir. 1954) contains a frequently cited exposition of the problems posed by a transaction which has involved a “step transaction”. In determining the incidence of taxation, we must look through form and search out the substance of a transaction. [citations omitted] .This basic concept of tax law is particularly pertinent to cases involving a series of transactions designed and executed as parts of a unitary plan to achieve an intended result. Such plans will be viewed as a whole regardless of whether the effect of so doing is imposition of or relief from taxation. 214 F.2d at 691 See also Commissioner v. Court Holding Co., 324 U.S. 331, 334, 65 S.Ct. 707, 89 L.Ed. 981 (1945). It is, of course, elementary that Carrington had “[t]he legal right * * * to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits * * Gregory v. Helvering, supra, 293 U.S. at 469, 55 S. Ct. 266 at 267; Knetsch v. United States, 364 U.S. 361, 365, 81 S.Ct. 132, 5 L.Ed.2d 128 (1960); Rupe Investment Corp v. Commissioner, 266 F.2d 624, 629 (5th Cir. 1959). Thus the mere fact that the transactions here questioned were concededly designed to limit Carrington’s tax liability establishes nothing with, regard to the question of the proper taxation of these transactions. There have been several cases which have presented situations analogous to that which we face here. In Stuart A. Rogers, 38 T.C. 785 (1962), the taxpayer made a gift to a church of a $10,000 equity in a stand of timber. As an accommodation to the church, the taxpayer arranged the sale of the church’s timber in conjunction with his sale of other timber. In deciding that the taxpayer had received no income from this sale of the church’s timber, the Tax Court said: The test seems to be simple: Did the donor part with title to the property producing the income ? If he did, then the sale by the donee does not result in taxation to the donor. * * # * * * This gift, when delivered and accepted, gave the donee the indefeasible right to the first $10,000 to be realized from the timber stand. * * * The subsequent sale thereof does not cause realization of income by him. 38 T.C. at 789 In Rogers, supra, the Tax Court relied in part on our holding in Campbell v. Prothro, 209 F.2d 331 (5th Cir. 1954). In that case one hundred calves were donated to a charitable organization without actually being separated from the taxpayer’s remaining cattle. Upon the sale of all of these cattle, the proceeds from the sale of the donated cattle were paid to the donee. The Commissioner contended that these proceeds should be treated as income to the taxpayer-donor. Even though there was some doubt in that case as to whether there had been a bona fide gift, this Court held that the taxpayer had not received income. 209 F.2d at 336. Two cases involving complete liquidations of coi’porations are also instructive of the law in this area. Jacobs v. United States and Winton v. Kelm each involved the donation of corporate stock to charity immediately prior to payment of a liquidating dividend. In both cases the gifts were held to be effective and thus the taxpayers were found to have received no income from the liquidating dividend paid on the donated shares. Apt v. Birmingham concerned a gift of shares to a taxpayer’s wife just seven days prior to the distribution of a liquidating dividend. In that case, too, the Commissioner urged that “under the realities of the situation” there was no gift of stock, but only of the distribution in liquidation. 89 F.Supp. at 368 (emphasis added). In each of these cases the Commissioner’s argument that the gift step of the transaction should be ignored failed to persuade the courts. Other courts have also rejected this argument of the Commissioner in similar cases. Sheppard v. United States, 361 F.2d 972, 176 Ct.Cl. 244 (1966) (donation of interests in racing horse); Humacid Co., 42 T.C. 894 (1964) (contribution of promissory notes); White v. Brodrick, 104 F.Supp. 213 (D.Kan.), appeal dismissed 198 F.2d 751 (10th Cir. 1952) (donation of grain); Elsie SoRelle, 22 T.C. 459, 475-479 (1954) (gifts of land on which crops had been planted); Mamie F. Farrier, 15 T.C. 277, 283-284 (1950) (gift of cattle). The Commissioner suggests that United States v. General Geophysical Co. and Crenshaw v. United States in this Circuit should control our decision in this case. General Geophysical concerned the propriety of a stepped-up basis for certain depreciable assets. Two of Geophysical’s major stockholders redeemed their shares for depreciable assets with a tax basis of $169,290. Later the same day these assets were sold back to the corporation for their fair market value of $746,525. Judge Wisdom’s opinion in that case pointed out that: The facts of these transactions will not support a holding that the corporation had terminated its ownership * * *. It parted with bare legal title to the property for a few short hours. It made no physical delivery of any of the assets. Its control and use of the property were never interrupted. 296 F.2d at 89 The Court denied the corporation a stepped-up basis for its assets. This case is distinguishable from the instant case not only because the facts establish that there was no bona fide loss of dominion and control by the corporation, but also because the case concerned the question of the proper basis for depreciable assets held by a corporation. Crenshaw v. United States involved a complex financial transaction designed to make the sale of an interest in a partnership under Section 741 of the Internal Revenue Code appear to be a “liquidating dividend” of a partnership interest, which, under Section 736 of the Code- would not be taxed as income. The Court denied the taxpayer the benefits of Section 736 treatment since the final result of that transaction was that the taxpayer received $200,000 in cash and the remaining partners controlled the former partner’s interest in the partnership. We cannot agree with the Commissioner that these cases, either separately or taken together, should control the result of the case before us. Neither General Geophysical nor Crenshaw concerns a gift of property or a redemption of donated stock. The law which does control the result in this case is clear beyond peradventure. As was said in a case involving the redemption of corporate promissory notes which had been donated only a few days earlier by the corporation’s sole shareholder: The law with respect to gifts of appreciated property is well established. A gift of appreciated property does not result in income to the donor so long as he gives the property away absolutely and parts with title thereto before the property gives rise to income by way of sale. Humacid Co., supra, 42 T.C. at 913 See also, Stuart A. Rogers, supra; Campbell v. Prothro, supra; Sheppard v. United States, supra; Mamie F. Farrier, supra. The reasoning of these cases is that the transfer of income producing property (not of income) is not an event in which an appreciation of value is realized. As is well established, “ * * * Congress has not seen fit to tax unrealized appreciation in property value.” Tatum v. Commissioner, 400 F. 2d 242, 247 (5th Cir. 1968) (footnote omitted); Lyon & Eustice, Assignment of Income: Fruit and Tree as Irrigated by the P.G. Lake Case, 17 Tax L.Rev. 295, 380-82 (1962). From the cases we have examined' we believe that the central inquiry in a case such as this one, which concerns donated property and which the Commissioner has attacked through the “step transaction” doctrine, is: Did the donor part with all dominion and control over the donated property? Thus we must determine whether Carrington retained any control over his gift of fifty-one shares of Cardinal stock to St. Matthew’s Church. If he did not retain any vestige of control, the gift was compíete, and this ease must follow the many analogous eases already discussed. From the stipulated facts we learn that Carrington transferred and “delivered fifty-one (51) of his one hundred (100) shares of stock in Cardinal Construction Company to St. Matthews Episcopal Church, a charitable organization, and he retained ownership of the remaining forty-nine (49) shares.” (Par. 8, Appendix at 24). This alone should suffice to establish that by retaining “ownership” of only forty-nine shares Carrington had completely divested himself of the fifty-one donated shares. Consideration of the facts of the transaction compels a similar conclusion. A gift of stock between competent parties requires donative intent, actual delivery, and relinquishment of dominion and control by the donor. Ellsworth v. Ellsworth, 151 S.W.2d 628, 632 (Tex.Civ.App.1941); Apt v. Birmingham, 89 F. Supp. 361, 370 (N.D.Iowa 1950); 38 C.J.S. Gifts § 46 (1943). Here Carrington, with full intention to do so, gave absolute title to and actually delivered fifty-one shares of Cardinal stock to St. Matthew’s Church. Not only was the title to the donated stock free and clear, but the Church’s shares represented a controlling interest in Cardinal. There is, therefore, no doubt that the Church had full title to the shares and full dominion and control over them. There is neither evidence of, nor suggestion that, there was a prior obligation on the part of the Church to redeem this stock so that Carrington would regain control of Cardinal. We thus conclude that the gift to St. Matthews was complete and effective. Since this was a completed gift, we believe that the Commissioner’s characterization of the transactions involved in this case must be rejected. The Tax Court noted that the Commissioner had suggested no reason why recasting the distribution of the residence as a dividend to Carrington would reflect the substance of the transaction any more accurately than would giving effect to the form adopted; that Carrington had parted with ownership of his stock; that no gain on a redemption had been realized by him at that point; and that the Church had acquired the rectory directly from Cardinal. Upon the facts and the law we agree with the Tax Court that Carrington realized neither an actual nor a constructive dividend upon the redemption of the Cardinal stock. The decision of the Tax Court is affirmed. . Judge Featherston’s opinion is unofficially reported at T.C. Memo 1971-222 at 950. . Id. at 953. . The property was actually held for the use of St. Matthews Episcopal Church by the Prostestant Episcopal Church Council of the Diocese of Texas, which holds all real property owned by the Episcopal Church in Texas. . See the dissenting opinion of the Hon. Richard T. Rives, U.S.C.J., 209 F.2d 336-337. . Jacobs v. United States, 280 F.Supp. 437 (S.D.Ohio 1966), aff’d, 390 F.2d 877 (6th Cir. 1968). . Winton v. Kelm, 122 F.Supp. 649 (D.Minn.1954). . Apt v. Birmingham, 89 F.Supp. 361 (N.D.Iowa 1950). . United States v. General Geophysical Co., 296 F.2d 86 (5th Cir. 1961), cert. denied, 369 U.S. 849, 82 S.Ct. 932, 8 L.Ed.2d 8 (1962). . Crenshaw v. United States, 450 F.2d 472 (5th Cir.), cert. denied, 408 U.S. 923, 92 S.Ct. 2490, 33 L.Ed.2d 333 (1972). . The question of whether an item is property or income has been often litigated. Helvering v. Horst, 311 U.S. 112, 118, 61 S.Ct. 144, 85 L.Ed. 75 (1940) contains the Supreme Court’s statement of the law in this area. Contests between the Commissioner and taxpayers in this area are common. See, e. g., Tatum v. Commissioner, 400 F.2d 242, 247 (5th Cir. 1968). That question does not concern us here, for the Commissioner has not suggested that the stock was not property, but only that the redemption of stock by the Chureli was, in reality, a dividend to Carrington. . See the portions of the following opinions quoted supra. Stuart A. Rogers, 38 T.C. 785, 789 (1962); United States v. General Geophysical Co., supra, 296 F.2d at 89; Humacid Co., 42 T.C. 894, 913 (1964). See also, Winton v. Kelm, 122 F.Supp. 649, 653 (D.Minn.1954); Behrend v. United States, 73-1 U.S.T.C. ¶ 9123.

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UNITED STATES of America, Appellee, v. Allan A. HANDLER, Appellant. In the Matter of the Contempt Citation against Grand Jury Witness, Allan A. Handler, Appellant. No. 584, Docket 72-2447. United States Court of Appeals, Second Circuit. Argued Feb. 23, 1973. Decided April 3, 1973. Lawrence Stern, New York City, for appellant. Michael C. Eberhardt, Sp. Atty., U. S. Dept, of Justice, Joint Strike Force, S. D. N. Y. (Whitney North Seymour, Jr., U. S. Atty., and John W. Nields, Jr., Asst. U. S. Atty., New York City, on the brief), for appellee. Before FEINBERG, MULLIGAN and TIMBERS, Circuit Judges. TIMBERS, Circuit Judge: Allan A. Handler appeals from a summary order of civil contempt entered against him as a grand jury witness on December 1, 1972 in the Southern District of New York by Murray I. Gurfein, District Judge, ordering that he be confined pursuant to 28 U.S.C. § 1826(a) (1970) for refusal to answer questions before a grand jury after having been granted immunity under 18 U.S.C. §§ 6002 and 6003 (1970). The issues on appeal are directed exclusively to the procedure which led to Handler’s current confinement for contempt. He claims a denial of due process at various points in that procedure. We find such claims to have been afterthoughts which even as forethoughts would have been unproductive. We affirm. I. On August 22, 1972, a special grand jury was empanelled in the Southern District of New York to investigate gambling activities in violation of 18 U.S.C. § 1955 (1970). On October 30, Handler, then serving a prison term on a state gambling charge, was subpoenaed to testify before the federal grand jury. He refused to answer any questions, invoking his privilege against self-incrimination. On October 31, upon application by the government, Judge Weinfeld entered an order granting immunity to Handler under 18 U.S.C. §§ 6002 and 6003, thereby precluding the use against him in any criminal proceeding of his testimony before the grand jury. On November 1, despite the order granting him immunity, Handler again refused to answer any questions before the grand jury. He continued his refusal on November 2 when, accompanied by counsel, he was brought before Judge Weinfeld. Handler next appeared before the grand jury on November 22. He again asserted his Fifth Amendment privilege and refused to answer each question asked of him before the grand jury. The government then applied to Judge Gurfein, before whom the grand jury had appeared, to adjudge Handler in contempt and to order him confined in accordance with 28 U.S.C. § 1826(a) (1970). On November 29, following submission by the government of a brief in response to the court’s inquiry as to the proper procedure, Judge Gurfein entertained the government’s contempt application. Handler, in the presence of his counsel, was given an opportunity to state why he should not be held in contempt. In addition to a statement by his counsel, Handler himself responded in pertinent part: “[B]efore I went up to the Grand Jury, two Federal Agents told me that if I testified in the Grand Jury pertaining to this case, the people, whatever it might be, that they felt that I was in some danger and they would move me to a different part of the country, if I wanted to, relocate me. * * . •» -x- * -X- All my family ties, and so on, are in that community. Excuse my expression, but I would have to — based on what the Federal Agents told me — I would have to almost be a little paranoid for the rest of my life Because of this, I don’t want to get myself involved in something like this and look back over my shoulder for the rest of my life based on what the agents told me, that is the reason I didn’t testify.” Judge Gurfein informed Handler that he had not stated a legal excuse, and that his refusal to testify constituted a wilful contempt. Handler was then given one further opportunity to answer questions. He persisted in his unwillingness to testify. Judge Gurfein adjudged him in contempt. He was ordered confined until such time as he is willing to testify; but his confinement is not to exceed the expiration of the grand jury term plus extensions, and in no event is it to exceed sixteen months. An order so providing was entered on December 1, 1972. II. Handler’s first challenge to his civil contempt confinement is that he was not given prior notice of the nature of the proceedings against him. The essence of his contention is that at no time was he formally apprised that he was being charged with civil contempt, nor was he ever notified of the specific charge against him. We reject this claim as factually incorrect. Handler’s reliance on Parker v. United States, 153 F.2d 66 (1 Cir. 1946), is misplaced. There the court said that “[t]he respondent is entitled to due notice of the nature of the proceeding against him — whether of criminal or civil contempt.” 153 F.2d at 70. Nowhere in that opinion or in any other case that has come to our attention, however, has it been said that “due notice” means formal notice. See, e. g., In re Guzzardi, 74 F.2d 671, 673 (2 Cir. 1935) (“[I]t is of at least some practical consequence to the respondent in such a proceeding to know whether he is charged with crime .... We do not say that this mast be known at the outset; it is enough if it becomes manifest in season . . . .”) (L. Hand, J.). (emphasis added). Here, there can be little doubt that Handler had actual notice of the nature of the proceedings against him. As early as November 2 (the date of his third refusal to testify), Handler’s counsel informed Judge Weinfeld as follows: “Your honor, I represent the defendant and have gone over the situation with him. He persists in his position and refuses to testify in spite of the grant of immunity. I have informed him that if he does not, your Honor has the power to punish him for contempt and to give him a sentence up to possibly eighteen months or maybe more, and the defendant is still adamant in his refusal to testify.” Following Judge Weinfeld’s inquiry directed to Handler himself, he confirmed that he was aware that a wilful contempt was being committed. Two important conclusions may be drawn from that exchange. First, it is clear that Handler had actual knowledge of the specific acts for which he was exposing himself to contempt. Second, counsel’s reference to “eighteen months” indicates an awareness of the applicability of Section 1826(a) — the federal civil contempt statute. The record also establishes beyond question that Handler knew that any punishment would be remedial only, in that it would cease immediately upon his agreeing to testify. It should also be borne in mind that, since Section 1826(a) • specifically provides for summary contempt procedure, certain concessions to ideal process necessarily must be made. “The same considerations which justify the holding of civil contempt proceedings, absent the safeguards of indictment and jury ., warrant reasonable expedition of such proceedings. . . . ” United States v. Weinberg, 439 F.2d 743, 746 (9 Cir. 1971). See also Shillitani v. United States, 384 U.S. 364, 370-71 (1966). In the light of Handler’s actual knowledge of the nature of the contempt proceedings against him, we hold that he was not denied due process by the failure to provide formal notice. III. Handler’s next claim goes to the conduct of the contempt hearing itself. In particular, he argues that, not only did the court fail to require any proof of the legitimacy of the grand jury investigation or of the materiality to that investigation of the questions asked of Handler, but that the court in fact refused to entertain the government’s offer of such proof. His contention that such conduct of the contempt hearing constituted a denial of due process is based largely on his reading of United States v. Dinsio, 468 F.2d 1392 (9 Cir. 1972), and In re Verieker, 446 F.2d 244 (2 Cir. 1971). We find both eases readily distinguishable. We hold that Handler was not denied a fair hearing. Section 1826(a) provides for confinement of a recalcitrant witness where the refusal to testify is “without just cause shown.” (emphasis added). That language seems rather clearly to place on the witness the burden of coming forward with “just cause”. In Gelbard v. United States, 408 U.S. 41 (1972), for example, the Court held that the government is required to respond to an allegation by a recalcitrant grand jury witness that the questions asked were based on information obtained by an illegal wiretap. Cf. Bacon v. United States, 466 F. 2d 1196 (9 Cir. 1972). Similarly in Dinsio, the witness' refusal to submit finger and palm print exemplars to a grand jury was based on specific constitutional objections to the request. In the present case, on the other hand, Handler completely failed to make a prima facie showing of “just cause”. Vericker more directly addresses itself to the specific issue raised by Handler. There immunity had been granted under 18 U.S.C. § 2514 (1970) which provides for transactional immunity for witnesses in cases involving certain offenses. We reversed the civil contempt judgment on the ground that there was nothing in the questions asked to indicate that the grand jury was investigating any crime within the permissible grant of immunity. Here no such claim has been made; and, under the less restrictive provisions of Sections 6002 and 6003, none apparently could be made. In Vericker, moreover, we made the point which we regard as dispositive here: “[T]he decisions are virtually unanimous in holding or assuming that the witness may challenge whether the subject matter of a grand jury investigation is consonant with the statutory authorization for the grant of immunity and that, upon such a challenge, the Government must make at least a modest showing that it is.” 446 F.2d at 247 (emphasis added). Handler having failed to assert a challenge of that sort, we hold that he was not denied a fair hearing by the court’s failure to require the government to prove legitimacy or materiality. IV. Handler claims that in two other respects the procedure which led to his confinement denied him due process of law: the denial of a jury trial on the contempt charge, and the absence of counsel at the hearing at which immunity was granted. We find no merit in either claim. The question whether there is a right to trial by jury on a civil contempt charge was settled in Shillitani v. United States, supra, 384 U.S. at 370-71, where the Court said, “[t]he conditional nature of the imprisonment — based entirely upon the contemnor’s continued defiance — justifies holding civil contempt proceedings absent the safeguards of indictment and jury, . . . provided that the usual due process requirements are met.” We find unpersuasive the distinction between Shillitani and the instant case suggested by Handler. While it is true that Shillitani did not involve an order of confinement with a specified maximum term, it is also true that in the instant case the “keys to the jailhouse” are as much in the contemnor’s pocket as in Shillitani — the confinement, in other words, is equally conditional. We hold that Handler was not entitled to a jury trial on the civil contempt charge. Bacon v. United States, 446 F.2d 667, 668 (9 Cir. 1971), vacated on other grounds, 408 U.S. 915 (1972). Similarly, Handler’s contention that he was denied assistance of counsel at the October 31 hearing at which he was granted immunity rests on a misplaced reliance on United States v. Sun Kung Kang, 468 F.2d 1368 (9 Cir. 1972). There the court reversed a civil contempt order which was entered after' the district court had refused to grant an indigent defendant’s request for representation by appointed counsel at the contempt proceeding. In the instant case, the only point at which Handler was without counsel was at the benign stage where immunity was granted. We have found no authority, and we perceive no reason, to support Handler’s claim that the absence of counsel at the time immunity was granted constituted a deprivation of any constitutional right. While the better practice would be to have a witness represented in such a hearing, the record shows that Handler was informed on October 30 of his right to be represented by counsel at the grand jury proceedings and that he was accompanied by counsel at all times following the grant of immunity. We have carefully considered all of Handler’s claims and we find them— separately and in the aggregate — to be without merit. . Those sections provide : “§ 6002. Immunity generally Whenever a witness refuses, on the basis of his privilege against self-inerimination, to testify or provide other information in a proceeding before or ancillary to— (1) a court or grand jury of the United States, (2) an agency of the United States, or (3) either House of Congress, a joint committee of the two Houses, or a committee or a subcommittee of either House, and the person presiding over the proceeding communicates to the witness an order issued under this part, the witness may not refuse to comply with the order on the basis of his privilege against self-incrimination ; but no testimony or other information compelled under the order (or any information directly or indirectly derived from such testimony or other information) may be used against the witness in any criminal case, except a prosecution for perjury, giving a false statement, or otherwise failing to comply with the order. “§ 6003. Court and grand jury proceedings (a) In the case of any individual who has been or may be called to testify or provide other information at any proceeding before or ancillary to a court of the United States or a grand jury of the United States, the United States district court for the judicial district in which the proceeding is or may be held shall issue, in accordance with subsection (b) of this section, upon the request of the United States attorney for such district, an order requiring such individual to give testimony or provide other information which he refuses to give or provide on the basis of his privilege against self-incrimination, such order to become effective as provided in section 6002 of this part. (b) A United States attorney may, with the approval of the Attorney General, the Deputy Attorney General, or any designated Assistant Attorney General, request an order under subsection (a) of this section when in his judgment— (1) the testimony or other information from such individual may be necessary to the public interest; and (2) such individual has refused or is likely to refuse to testify or provide other information on the basis of his privilege against self-incrimination.” . “§1826. Recalcitrant witnesses (a) Whenever a witness in any proceeding before or ancillary to any court or grand jury of the United States refuses without just cause shown to comply with an order of the court to testify or provide other information, including any book, paper, document, record, recording or other material, the court, upon such refusal, or when such refusal is duly brought to its attention, may summarily order his confinement at a suitable place until such time as the witness is willing to give such testimony or provide such information. No period of such confinement shall exceed the life of— (1) the court proceeding, or (2) the term of the grand jury, including extensions, before which such refusal to comply with the court order occurred, but in no event shall such confinement exceed eighteen months.” . On November 22, upon the government’s request that Handler be placed in custody for civil contempt, Judge Gurfein expressed concern whether confinement could be ordered “without papers and without a notice and specifications.” He adjourned the proceeding to allow the government to submit a brief addressed to the requirements of due process in a summary civil contempt proceeding. . The sixteen months limitation, rather than the statutory maximum of eighteen months, 28 U.S.C. § 1826(a), was arrived at by Judge Gurfein as a “rough approximation” of the estimated two months “good time” credit against his state sentence which Handler had lost as the result of his involvement in the instant case. . At the hearing on November 29, the following exchange took place: “[Special Atty] Shaw: Your Hon- or, I think I should put on the record that I myself have had occasion to review the Grand Jury proceedings involving the Grand Jury operation and I can represent to the Court that each of the questions asked of Allan Handler as read by Mr. Lorber here directly related to subjects of that Grand Jury investigation and that the questions do certainly fall within the scope of the immunity that was granted. The Court: I don’t think you need any statement of materiality. If you did, you would have to have the foreman testify as to what the matters were that were pending before the Grand Jury.” . At the argument of this appeal, we raised the question as to precisely how Handler claims to have been prejudiced by the absence of counsel at the immunity hearing. We granted leave to file a supplemental brief with respect to this issue. Handler argues in his post-argument brief that he was prejudiced by the in camera sealing of the government’s application for immunity, the supporting affidavit and letter, and the grant of immunity — all at a time when he was without counsel. We are not persuaded that any prejudice resulted. Nothing in the immunity statute suggests that Handler would have been entitled to view the sealed papers even if counsel had been present, or that counsel could have challenged the sealing itself. The only point at which substantive objections might have been interposed was at the contempt hearing itself, Bursey v. United States, 466 F.2d 1059, 1073 (9 Cir. 1972), at which time Handler’s counsel was present and had access to the rather conclusory information contained in the sealed documents. Further, a motion to unseal the documents was not made until two weeks after entry of the contempt order. The documents since have been included in the record on appeal. In short, in addition to the other deficiencies in Handler’s denial of counsel claim, we hold that he has failed to show prejudice. . In ruling as we do, we emphasize at the same time the remedial nature of Handler’s confinement. The importance of that fact is the recognition of Handler’s continuing right to petition the district court for release if it appears that he is no longer able to comply with the order to testify, or if the public necessity that led to the grant of immunity and the order to testify should cease to exist. Cf. Shillitani v. United States, supra, 384 U.S. at 371-72 (ordering the release of the witness because the grand jury term had expired). That is a matter within the province of the district court, not ours.

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Hal SIMMONS, Administrator of the Estate of Melvin D. Anderson, Deceased, Appellant, v. UNITED STATES of America, Appellee. No. 72-1020. United States Court of Appeals, Tenth Circuit. Argued and Submitted May 18, 1972. Decided April 2, 1973. Kendall O. Schlenker, Albuquerque, N. M. (James M. Parker, Jay R. Payne, and Charles I. Wellborn, Albuquerque, N. M., on the brief), for appellant. Wesley J. Filer, Atty., Dept, of Justice, Washington, D. C. (Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks., and John P. Burke, Attys., Dept, of Justice, Washington, D. C., and Victor R. Ortega, U. S. Atty., Albuquerque, N. M., of counsel, on the brief), for appellee. Before SETH and HOLLOWAY, Circuit Judges, and LANGLEY, District Judge. Honorable Edwin Langley, Chief Judge of the Eastern District of Oklahoma. HOLLOWAY, Circuit Judge. This appeal involves the validity of a claim by the government for excise taxes imposed on a transfer of marihuana alleged to be due under the Marihuana Tax Act provisions in 26 U.S.C.A. § 4741 (1954). Appellant Simmons raises only one issue here — the constitutionality of the excise tax provisions. He argues that in view of the self-incrimination principles pronounced in Leary v. United States, 395 U.S. 6, 89 S.Ct. 1532, 23 L.Ed.2d 57, the marihuana excise tax provisions are no longer valid and are not now sustained by the United States v. Sanchez, 340 U.S. 42, 71 S.Ct. 108, 95 L.Ed. 47. We do not agree and affirm the trial court’s judgment which rejected these contentions. The principal facts are as follows. Carmen Paz sued for injunctive relief and to quiet title on property she claimed as her own against a federal tax lien based on a claim for marihuana excise tax against her husband, Melvin D. Anderson. The government answered and counterclaimed against her and also cross-claimed against Anderson. The government sought to foreclose its tax lien against funds and properties of Anderson and his wife and requested a deficiency judgment against him for any amount unsatisfied. The principal claim asserted by the government was based on an assessment of marihuana excise tax in the amount of $483,200 and interest thereon, claimed to be due from Anderson. Anderson moved to dismiss the claims against him, asserting the unconstitutionality of the marihuana excise tax. The trial court granted summary judgment for the government on the marihuana excise tax liability. From the papers and from some evidence taken the court found that Carmen Paz and Melvin D. Anderson were married at all material times; that certain properties were their community property and that one business property had been validly assigned to Carmen Paz and that no cause was shown to set aside that assignment. The trial court found that there was no genuine issue of material fact as to the claim for marihuana excise tax against Anderson assessed in the sum of $483,200, plus interest. And the court concluded that the tax was a valid civil tax that could be collected from the interests of Carmen Paz and of Anderson in their community property. Judgment was entered for the marihuana tax and other liabilities totaling $567,393.58 against the estate of Anderson, who had died prior to entry of judgment. The judgment also provided for foreclosure of the tax liens and for entry of a deficiency judgment of any amount of the indebtedness of Anderson remaining unsatisfied after disposition of proceeds. Anderson’s Administrator Simmons appeals, raising only the constitutionality of the marihuana excise tax. We turn to his contentions on appeal. Appellant Simmons argues primarily that since the Leary decision on self-incrimination principles, the excise tax liability of $100 per ounce imposed by 26 U.S.C.A. § 4741(a)(2) may no longer be sustained as a valid civil tax as was held in United States v. Sanchez. The Leary case involved a conviction on a third count charging that the defendant knowingly transported, concealed and facilitated concealment of marihuana without ■ having paid the transfer tax imposed by 26 U.S.C.A. § 4741, 68A Stat. 560 (1954) (repealed 1970), thereby violating 26 U.S.C.A. § 4744(a)(2), 70 Stat. 567 (1956) (repealed 1970). The Court concluded that obtaining the required order form and payment of the $100 per ounce tax for a valid acquisition of the marihuana would have involved a substantial risk of self-incrimination. It was held, therefore, that Leary properly invoked the privilege against self-incrimination, which was a complete defense to this charge, and the conviction was reversed. While the Leary opinion discussed United States v. Sanchez in other contexts, it in no way vitiates the Sanchez holding or the reasoning which sustained the $100 per ounce tax as a valid tax. The Sanchez ease was a suit for recovery of the $100 tax under the antecedent statute, § 7(a) (2) of the earlier Marihuana Tax Act, 50 Stat. 551. Collection was resisted on the ground that the statute levied an unconstitutional penalty and not a tax. The Court held that imposition of the heavy liability was a legitimate exercise of the taxing power, despite its collateral regulatory purpose and effect and its severity as opposed to the $1. tax rate on transfers to registered persons. The Court stated, 340 U.S. at 45, 71 S.Ct. at 110: “Second. The tax levied by § 2590(a)(2) is not conditioned upon the commission of a crime. The tax is on the transfer of marihuana to a person who has not paid the special tax and registered. Such a transfer is not made an unlawful act under the statute. Liability for the payment of the tax rests primarily with the transferee; but if he fails to pay, then the transferor, as here, becomes liable. It is thus the failure of the transferee to pay the tax that gives rise to the liability of the transferor. Since his tax liability does not in effect rest on criminal conduct, the tax can be properly called a civil rather than a criminal sanction. The fact Congress provided civil procedure for collection indicates its intention that the tax be treated as such. Helvering v. Mitchell, 1938, 303 U.S. 391, 58 S.Ct. 630, 82 L.Ed. 917. Moreover, the Government is seeking to collect the levy by a judicial proceeding with its attendant safeguards. Compare Lipke v. Lederer, 1928, 259 U.S. 557, 42 S.Ct. 549, 66 L.Ed. 1061; Tovar v. Jarecki, 7 Cir., 1949,173 F.2d 449.” We recognize that Sanchez did not involve self-incrimination principles and that Leary and the three self-incrimination cases foreshadowing it significantly extended the application of those principles. However we cannot agree with appellant that the collection of the tax amounts to a punishment or penalty for exercise of the privilege against self-incrimination and feel that the privilege is not involved in this suit. Therefore we conclude that the rationale of Sanchez is unimpaired and still sustains the tax as a valid civil liability. In Anderson’s situation the $100 tax was the only rate involved if he acquired the marihuana, regardless of his actions. We must assume that he was not a lawful dealer or possessor of marihuana under federal and state law, for otherwise the self-incrimination claim would have no substance as a good faith defense. As an unlawful possessor of marihuana, Anderson was not entitled under the statute and the Treasury Regulations to register and thereby qualify to pay the tax at the $1. rate. He could either pay the $100 per ounce transfer tax and give incriminating information, see Leary v. United States, supra 395 U.S. at 26, 89 S.Ct. 1532, or he could refuse to do so and remain liable for the tax at the $100 rate. The liability was the same whether Anderson voluntarily paid the tax or whether he failed to do so and was subjected to the liability by a collection suit as occurred here. Thus the liability at the $100 rate is not a penalty or punishment for assertion of the privilege against self-incrimination. Rather it is a severe tax burden that Congress may validly impose under the taxing power for the collateral purpose of discouraging unlawful acquisition of marihuana. See United States v. Sanchez, supra 340 U.S. 45-46, 71 S. Ct. 108. Of course since Leary, Anderson need not pay the tax voluntarily and furnish incriminating information and he has a valid defense to prosecution for not voluntarily paying the tax and furnishing incriminating information, by a timely and proper assertion of the privilege. He is not, however, relieved of liability for the civil tax by pleading the Fifth Amendment. We agree with the reasoning of the Court of Claims in Cancino v. United States, 451 F.2d 1028, 1032, 196 Ct.Cl. 568, cert. denied, 408 U.S. 925, 92 S.Ct. 2504, 33 L.Ed.2d 337: “ . . . While the transferee may not have a duty to voluntarily pay the transfer tax in circumstances where doing so would be self-incriminating, neither can he complain that his Fifth Amendment privilege is infringed if the Internal Revenue Service later collects the tax pursuant to a valid lien. Since the transferee remains civilly liable for the transfer tax, the transferor is also liable and likewise cannot complain about an involuntary collection.” See also United States v. Alvero, 470 F.2d 981 (5th Cir., filed Jan. 19, 1973). We feel that this conclusion is also supported by similar decisions reached under the wagering tax statutes. While Marchetti and Grosso sustained the self-incrimination defense against prosecutions under those statutes for failure to furnish incriminating information, the attendant civil tax liability has been upheld. Cole v. Cardoza, 441 F.2d 1337, 1340-1341 (6th Cir.); Washington v. United States, 402 F.2d 3, 5-6 (4th Cir.), cert. denied, 402 U.S. 978, 91 S.Ct. 1641, 29 L.Ed.2d 145, and see United States v. United States Coin & Currency, 401 U.S. 715, 717-718, 91 S.Ct. 1041, 28 L.Ed.2d 434. We have examined the carefully reasoned opinion in Jensen v. United States, No. C-2938 (D.Colo., unpublished, filed Mar. 27, 1972). The court there concluded that under present law protecting assertion of the privilege against self-incrimination, the $100 tax rate constituted an impermissible burden on assertion of the privilege. However, for the reasons stated we respectfully disagree. Accordingly we conclude that the trial court properly decided this case and affirm. . These excise tax provisions have since been repealed by Public Law 91-513, Title III, § 1101(b)(3)(A), October 27, 1970, 84 Stat. 1292. However the repealing statute had a savings clause providing that civil seizures or forfeitures or injunctive proceedings commenced prior to the effective date of § 1101 shall not be affected by the repeals or amendments or abated by reason thereof. The answer, counterclaim and cross-claim of the government, including its claim for the foreclosure of its tax lien against the interests of Melvin D. Anderson in certain properties, and for a deficiency judgment for any amount unsatisfied, was filed October 31, 1969. Anderson moved to dismiss the government’s cross-claim on December 9, 1969, and asserted the constitutional challenge to the marihuana excise tax by that motion. Anderson died prior to entry of judgment and appellant Simmons, his administrator asserts that same contention. . Appellant relies also on Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889, and Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709,19 L.Ed. 2d 906, and similar decisions under the Fifth Amendment privilege against self-incrimination. . Marchetti v. United States, supra; Grosso v. United States, supra, and Haynes v. United States, 390 U.S. 85, 88 S.Ct. 722, 19 L.Ed.2d 923. . In view of the statute and regulations we feel it is clear that there is no practical possibility that Anderson was in a group entitled to register and pay the occupational tax imposed by 26 U.S.C.A. § 4751, 68A Stat. 563 (1954) (repealed 1970) on importers, manufacturers and the like, and on persons dealing in marihuana. See § 4751(5), 68A Stat. 563 (1954) (repealed 1970). Under the pertinent regulations such persons dealing in marihuana and other persons registering must show that under the laws of the jurisdiction in which they are operating or propose to operate, they are legally qualified or entitled to engage in the activities for which registration is sought. Treas.Reg. §§ 152.22 and 152.23; 26 C.F.R. §§ 152.22 and 152.23 (1964). We believe these regulations are valid. See Leary v. United States, supra, 395 U.S. at 24 n. 38, 89 S.Ct. 1532; Minor v. United States, 396 U.S. 87, 93, 90 S.Ct. 284, 24 L.Ed.2d 283; Bingler v. Johnson, 394 U.S. 741, 749-750, 89 S.Ct. 1439, 22 L.Ed.2d 695; United States v. Correll, 389 U.S. 299, 305-306, 88 S.Ct. 445, 19 L.Ed.2d 537 (1967). On the other hand, if Anderson had been a dealer within § 4751(5), entitled to register as legally qualified, there would have been no self-incrimination problem. . We likewise agree with the Court of Claims that United States v. United States Coin & Currency, 401 U.S. 715, 91 S.Ct. 1041, 28 L.Ed.2d 434, is inapposite since this suit for collection of a civil tax lacks the criminal penalty ingredient present in the forfeiture suit in Coin & Currency,

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Ruben HARRIS, Jr., Petitioner-Appellant, v. STATE OF TEXAS, COUNTY OF WALKER and Dr. George J. Beto, Director, Texas Department of Corrections, Respondents-Appellees. No. 72-2818. United States Court of Appeals, Fifth Circuit. March 30, 1973. Gerard P. Nugent, Austin, Tex., court appointed, for petitioner-appellant. Crawford Martin, Atty. Gen., Guy C. Fisher, Gilbert J. Pena, Asst. Attys. Gen., Austin, Tex., for respondents-appellees. Before COLEMAN and SIMPSON, Circuit Judges, and ESTES, District Judge. PER CURIAM: On March 2, 1972, the United States District Court for the Western District of Texas in a habeas corpus proceedings found that the Appellant Harris had been denied due process in a 1969 Texas conviction for robbery by assault because the State failed to disclose evidence favorable to him and ordered Harris discharged from custody subject to the State’s right to try him within a reasonable period of time not to exceed 120 days. On July 12, 1972, Harris filed another application for a writ of habeas corpus on the grounds that he had not been retried within 120 days; in response, the State moved for an extension of time on August 2, 1972, and moved that Appellant’s Application be dismissed on August 4, 1972. After considering the motion along with a transcript of the proceedings in the State Court, the District Court, under 28 U.S.C. 2243, granted the State’s motion for an extension of time on August 10, 1972, and on August 16, 1972 granted the State’s motion to dismiss the Application. This is not a case of a defendant being denied a speedy trial by delaying tactics by the state. Appellant has made no effort to obtain a speedy re-trial through the available state remedies. On the contrary, Appellant is dissatisfied with the original March 2 order of the District Court entitling him to only a new trial instead of outright release. In its August 10 order the District Court found “that said Petitioner, REUBEN [sic] HARRIS, JR., is attempting to frustrate and prevent the right of State to re-try the case of State v. Reuben [sic] Harris, Jr., (cause No. 68-458), by employing tactics .of recalcitrance and delay. It is apparent that the State has attempted to comply with this Court’s order dated March 2, 1972, and has been standing ready to re-try Defendant HARRIS since the call of the trial docket on May 1, 1972.” Appellant will not be permitted to obstruct the State’s efforts to re-try him and then obtain a dismissal for failure of the State to provide him with a speedy trial. Therefore, the orders appealed from are Affirmed. . “The court shall . . . dispose of the matter as law and justice require.’

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Johnnie A. REED, Appellant, v. ARLINGTON HOTEL COMPANY, INC., Appellee. No. 71-1726. United States Court of Appeals, Eighth Circuit. Submitted Oct. 16, 1972. Decided March 21, 1973. Rehearing and Rehearing Eh Banc Denied April 26, 1973. Richard L. Mays, Little Rock, Ark., for appellant. Philip K. Lyon, Little Rock, Ark., for appellee. Before HEANEY and STEPHENSON, Circuit Judges, and BOGUE, District Judge. District of South Dakota, sitting by designation. HEANEY, Circuit Judge. Johnnie A. Reed, a black, brought this suit on behalf of himself and blacks as a class, contending that the defendant, Arlington Hotel, Inc., of Hot Springs, Arkansas, has violated Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a) (1), through racially discriminatory employment practices. Reed worked as a bellman at the Arlington Hotel. On February 17, 1969, the chief bellman ordered him and two other black bellmen to help unload a truck. All three refused on the grounds that - such a task was not included as part of a bellman’s duties. Reed and the others were immediately discharged. On March 7, 1969, Reed filed a charge with the Equal Employment Opportunity Commission alleging a violation of Title VII. On November 19, 1970, Reed received from the E.E.O.C. notice of his right to sue. On December 18, 1970, he filed this action. During the course of the trial, the hotel entered into a settlement agreement with the E.E.O.C. Two of those employees discharged in the February, 1969, incident accepted the settlement. Reed rejected it because it included no provision for back pay. While the defendant’s discharge of Reed provided the impetus for the present action, the additional allegations that the hotel has discriminated against all blacks in employment rested upon the hotel’s record of maintaining segregated job categories and discriminatory recruitment policies. After a trial, the court dismissed both Reed’s individual action for back pay and injunctive relief and the class action. I. REED’S ACTION The trial court held that Reed was fired for insubordination. There is substantial evidence to support that conclusion. When Reed protested the order on the grounds that the unloading was not the work of a bellman, he was told he would be fired if he persisted in his refusal. Moreover, it is clear that the assignment was not a racially discriminatory one. The record shows that the unloading was carried out by whomever was available, whether black or white. There is no evidence to support Reed’s contention that he was singled out to do the job because he was black. Employees in all departments did the job from time-to-time, and Reed was in no position to claim special privilege. II. CLASS ACTION Before trial, the defendant took the position that the plaintiff, as an employee discharged before the action was commenced, had no standing to raise the issue of discrimination against blacks generally. The defendant relied on two District Court decisions—Burney v. North American Rockwell Corporation, 302 F.Supp. 86 (C.D.Cal.1969), and Hyatt v. United Aircraft Corp., Sikorsky Aircraft Div., 50 F.R.D. 242 (D.Conn. June 11, 1970). The trial court reserved its ruling on the question until after trial, at which time it held that it was proper for the plaintiff to represent blacks as a class. The court stated: “* * * [R]eeently the courts [have held] * * * that even an employee who has been discharged, * * * and recognizing that he would not ever go back to work, still has a standing to bring a class action for all those in the same situation * * And I think the courts have appropriately pointed out that if this kind of an individual would be prevented from bringing class actions as the rules permit, there would be a windfall for the employer, and when any such matter was coming up, all they would have to do is discharge the employee * * *. That reasoning is logical. So this Court follows the rule that has been more recently established, that a discharged employee does have standing to bring class action where all of the other criteria of the rules have been met. * * * ” The trial court’s holding on standing is correct. We have stated that: “ * * * a single charge of employment discrimination under Title VII found by the EEOC to rest upon reasonable grounds may serve to launch a full scale inquiry into the alleged unlawful motivation in employment practices. * * *” Parham v. Southwestern Bell Telephone Co., 433 F.2d 421, 425 (8th Cir. 1970). In Parham, we allowed an individual who claimed that he had not been hired because of racial discrimination to bring a class action, attacking employment discrimination generally. It requires no extension of Parham to give a discharged employee the same privilege. As a black and a former employee, the plaintiff was subject to the same racially discriminatory policies as other members of the class. “The very nature of a Title VII violation rests upon discrimination against a class characteristic, * * Parham v. Southwestern Bell Telephone Co., supra at 428. The trial court’s holding is also in accord with decisions of those Courts of Appeals which have ruled on the matter. Tipler v. E. I. duPont deNemours and Co., 443 F.2d 125, 130 (6th Cir. 1971); Johnson v. Georgia Highway Express, Inc., 417 F.2d 1122, 1124 (5th Cir. 1969). See, Brown v. Gaston County Dyeing Machine Company, 457 F.2d 1377, 1387, n.8 (4th Cir. 1971) (J. Dupree, concurring), cert. denied, 409 U.S. 982, 93 S.Ct. 319, 34 L.Ed.2d 246 (1972); Cf., Graniteville Co. (Sibley Div.) v. Equal Employ. Op. Com’n, 438 F.2d 32, 35 (4th Cir. 1971). We next consider, on the merits, the trial court’s dismissal of the class action. The court held, in substance, that while the statistics showed that discrimination had taken place, dismissal was appropriate because the defendant’s current hiring practices sufficiently complied with Title VII. We disagree. The statistics which show segregated departments ' and job classifications establish a violation of Title VII. Under these circumstances, outright dismissal is inappropriate. See, Parham v. Southwestern Bell Telephone Co., supra 433 F.2d at 426. Thirteen percent of Hot Springs’ population was black in 1970. Yet, at the time that suit was filed, five of the hotel’s eleven departments, providing approximately fifty-eight jobs, were all white and had traditionally been so. Only two department heads were black. The all-white departments included the higher paying job categories found in the front office, accounting and maintenance departments. One department was all black. Another department had seventeen blacks and three whites. While porters and bellmen performed substantially the same duties, they were divided into two separate departments —each one racially segregated. While turnover in some of these segregated departments was relatively low; in others, it was higher. That some departments were integrated does not change the facts that blacks have been substantially deprived of their Title VII rights. There was testimony which indicated that even in those departments which were not completely segregated, specific positions were limited to persons of one race. For instance, while the maids in the housekeeping department have usually been black, those persons who work in the linen room have always been white. In the food department, the waiters were all black while the food checkers and cashiers were all white. In addition, the defendant’s recruitment practices at the time suit was brought were racially discriminatory in view of its history of racial segregation. See, Brown v. Gaston County Dyeing Machine Company, swpra; Parham v. Southwestern Bell Telephone Co., supra. The evidence shows that the hotel had not established uniform recruiting procedures. Sometimes the state employment service was used, but more often recruiting was done by word of mouth. The hotel had also failed to establish objective criteria for evaluating applicants. Recruitment was left to the individual department heads who decided how to publicize a specific job opening and who subjectively determined an applicant’s qualifications for employment. Such unstandardized and subjective procedures lend themselves to arbitrary and discriminatory hiring. See, Brown v. Gaston County Dyeing Machine Company, supra 457 F.2d at 1382, 1383. The evidence also shows that the defendant did not post notices of job openings in the hotel, and news of them was instead passed along by word of mouth. Under the circumstances, this constituted a discriminatory employment practice. A department head may easily discriminate against black employees by failing to notify them of the opportunities for transfer and promotion in the segregated departments. Furthermore, delays in notification may occur which will effectively preclude the black employees from being considered for a job vacancy. See, Brown v. Gaston County Dyeing Machine Company, supra at 1382, 1383. It has been suggested that dismissal was appropriate because the defendant hired a few blacks in previously all-white positions during the course of the trial or shortly before it. We reject this contention. The number of blacks hired was insubstantial. Recruiting procedures continued to violate Title VII. Further, even if substantial changes had occurred in the hotel’s hiring policies, outright dismissal would have been inappropriate because such change “ ‘in the face of litigation [is] equivocal in purpose, motive and • performance.’ [Jenkins v. United Gas Corporation, 400 F.2d 28, 33 (5th Cir. 1968)].” Parham v. Southwestern Bell Telephone Co., supra 433 F.2d at 426. On appeal, it was also suggested that the settlement agreement between the E.E.O.C. and the defendant has mooted this action even though the plaintiff has rejected it. We also reject this contention. Cox v. United States Gypsum Company, 409 F.2d 289, 291 (7th Cir. 1969); Williams v. New Orleans Steamship Association, 341 F.Supp. 613, 617 (E.D.La.1972); Austin v. Reynolds Metals Company, 327 F.Supp. 1145, 1151 (E.D.Va.1970). “ * * * t0 hold otherwise would be to make the EEOC the final arbiter of an individual’s Title VII grievance whereas Congress has given the federal judiciary the ultimate power to determine Title VII rights. The Commission has not been given the power of adjudication. Hutchings v. United States Industries, Inc., 428 F.2d 303 (5th Cir. 1970); McGriff v. A. O. Smith Corporation, 51 F.R.D. 479 (D.S.C.1971); see also, Employment Discrimination and Title VII of the Civil Rights Act of 1964, 84 Harv.L.Rev. 1109,1249, fn. 301.” Williams v. New Orleans Steamship Association, supra 341 F.Supp. at 617-618. Dismissal of the class action on the basis of the settlement agreement would be particularly inappropriate in view of Rule 23 of the Federal Rules of Civil Procedure which provides: “ ‘A class action shall not be dismissed or compromized without the approval of the court, and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.’ See, Banks v. Lockheed-Georgia Company, 46 F.R.D. 442 (N.D.Ga. 1968). * * *” Id. at 618. We can, however, consider the settlement agreement in determining the relief that will be granted. Cf., Parham v. Southwestern Bell Telephone Co., supra. III. REMEDY In fashioning a remedy, it is our duty to “so far as possible eliminate the discriminatory effects of the past as well as bar like discrimination in the future.” Louisiana v. United States, 380 U.S. 145, 154, 85 S.Ct. 817, 822, 13 L.Ed.2d 709 (1964), quoted in Carter v. Gallagher, 452 F.2d 315, 328 (8th Cir. 1971), cert. denied, 406 U.S. 950, 92 S.Ct. 2045, 32 L.Ed.2d 338 (1972). ‘“The crux of the problem is how far the employer must go to undo the effects of past discrimination.’ ” In the Matter of Bethlehem Steel Corporation, Respondent, Decision of the Secretary of Labor, C.C.H. Employment Practices Guide § 5128 at 3253 (January 15, 1973). As we have indicated, the hotel has entered into a settlement agreement with the E.E.O.C. In part, this agreement will govern the hotel’s recruitment procedures. The relevant provisions state: “4. All hiring, assignment, promotions, transfers, dismissals and other conditions of employment, shall be maintained and conducted in a manner which does not discriminate on the basis of race, color, sex, religion, or national origin in violation of Title VII of the Civil Rights Act of 1964. -X- * * -X- -X- -X- “9. The Company agrees to take affirmative action to insure that traditional patterns of recruitment, hiring and job assignment which may have been discriminatory are not perpetuated. Such affirmative action shall include, but not be limited to: “a) notification in writing of this restatement of policy to all supervisory personnel and all others having hiring or job placement authority. “b) recruitment efforts shall be conducted so as to insure applicants from minority sources are encouraged to apply. To implement this, Respondent agrees to notify, in writing, all routine sources of recruitment, such as public and private employment agencies. All newspaper advertisements for help wanted are to bear the legend ‘AN EQUAL OPPORTUNITY EMPLOYER.’ “10. When using word of mouth recruitment, Respondent agrees that vacancies will be made known to minority employees with a request to publicize such vacancies in their community. “11. Respondent agrees to recruit for applicants from minority group sources to apply for any vacancies occurring in any currently all-white job categories, such as desk clerk, cashier, telephone operator, porter, parking attendant and office clerical. The selection of the applicant shall be made without discrimination based on race, color, sex, religion or national origin.” This agreement will go a long way to eliminate discrimination in the hiring of new personnel by formally committing the hotel to a policy of equal opportunity, and by providing the means for informing the black community of that policy and of particular job openings. In addition, if the hotel is to fully comply with Title VII, it must adopt written objective criteria for the evaluation of job applicants. The agreement, however, does not adequately protect the rights of those blacks presently working for the hotel. It is these blacks who have suffered the most from the indignities of segregation and the denial of opportunities for transfer and promotion. The company has stated that those employed in the porters’ department (all white) and the bellman department (all black) perform substantially the same job, and the separation into two departments is largely based on tradition. Under these circumstances, the hotel must immediately eliminate the distinction between the two departments and permit employees, without regard to race, to perform all the work within either department. Such action will not result in the displacement of any white workers, nor will it significantly interfere with the functioning of the hotel. The record indicates that the hotel’s other departments are organized according to the distinct services they provide. To immediately merge any of the all-white and all-black departments is not appropriate because it would result in totally disrupting the normal functioning of the hotel. We also do not believe that the immediate transfer of some black employees into previously all-white departments is appropriate because this would result in present white employees losing their jobs. Instead, present employees of both races must be given a preference in the filling of job openings as they arise. Notices of such openings must be posted for a reasonable time, and the opening filled by the employee with the longest service with the hotel who is qualified for the position and who desires it. Finally, the trial court should retain jurisdiction to see that the settlement agreement and this Court’s decision are carried out. The plaintiff is entitled to reasonable attorney’s fees, including services for this appeal, to be allowed by the District Court as authorized by 42 U.S. C.A. § 2000e-5(k). Affirmed in part; reversed in part; and remanded for action consistent with this opinion. . Accord, Tolbert v. Daniel Construction Company, 332 F.Supp. 772, 775 (D.S.C. 1971); White v. Gates Rubber Company, 53 F.R.D. 412 (D.Colo.1971). See, Joslin Dry Goods Co. v. Equal Employ. Opportunity Com’n, 336 F.Supp. 941, 948 (D.Colo.1971). But see, Mack v. General Electric Company, 329 F.Supp. 72, 75 (E.D.Pa.1971).

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UNITED STATES of America, Plaintiff-Appellee, v. Ray BURNETT, Defendant-Appellant. No. 72-2591. United States Court of Appeals, Fifth Circuit. March 23, 1973. John N. Barnhart, Houston, Tex., for defendant-appellant. Anthony J. P. Farris, U. S. Atty., James R. Gough, Asst. U. S. Atty., Houston, Tex., for plaintiff-appellee. Before ALDRICH, SIMPSON and CLARK, Circuit Judges. Hon. Bailey Aldrich, Senior Circuit Judge of the First Circuit, sitting by designation. CLARK, Circuit Judge: Ray Burnett appeals from his conviction for willful failure to report for and submit to induction into the Armed Forces of the United States, a violation of 50 App. U.S.C. § 462(a). We reverse and remand for a new trial. Burnett asserts that the local Selective Service Board deviated from the regulations establishing the Order of Call for inductees, that he would not have been called had the Board complied with the regulations, and that as a result the order to report for induction was invalid. It is well established and the Government concedes that a registrant is entitled to be inducted in proper order; and that Burnett’s contention, if proven, would constitute a good defense to the offense charged. See, e, g., United States v. King, 455 F.2d 345 (1st Cir. 1972); United States v. Dudley, 451 F.2d 1300 (6th Cir. 1971); United States v. Baker, 416 F.2d 202 (9th Cir. 1969). Burnett attempted to establish his defense by producing the names of those whom it appeared, on the facts known to him, should have taken precedence in the Order of Call. Burnett’s name appeared ninth from the bottom of his local board’s monthly Delivery List. Thus, had Burnett been able to point out nine registrants who should have been ordered for induction before him but were not, he would have established that he was improperly placed on the Delivery List. At the time that Burnett was ordered to report, the prescribed Order of Call was (1) delinquents, (2) volunteers under 26 years of age, and (3) draftees over 19 and under 26 years of age. Burnett was in the third category. Within this category the regulation provided that those eligible would be called in the order of their birth dates with the oldest being selected first. By examining the monthly Delivery Lists prepared subsequent to his own, Burnett ascertained they contained the names of 15 registrants who were under 26 years of age, older than Burnett, classified I-A, and who had been ordered for induction after Burnett. Burnett then offered the delinquency list containing the names of six registrants who by virtue of their delinquent status should have been ordered for induction prior to Burnett, if they could have been located. All of this evidence was excluded by the trial court. In addition, Burnett was precluded from examining the executive secretary of his Draft Board with reference to the Board’s SSS 102 Book which lists in order of birth all the registrants born in the same year. The trial judge only permitted him to elicit the names of six registrants who were older than defendant and who were not called ahead of him, though Burnett contends that the SSS 102 Book contained the names of 13 additional such registrants. Burnett asserts that but for the restrictions placed on the reception of probative evidence by the trial court, he could have adduced proof that 40 men who apparently should have been called prior to him were not. The Government correctly observes that the actions of draft boards, like those of other officials, are imbued by the law with a presumption of regularity. However, in this case, the court’s stringent rulings effectively blocked the only chance Burnett may have had of neutralizing this presumption by establishing that at least nine of these 40 registrants were required to be called before he was. Not only was Burnett thus thwarted in his proffer of proof, but his adversary, who was the ' custodian of all the information he sought to adduce, claimed the benefit of the court-created presumption that its governmental actions were correct. The presumption of official regularity is a proper shield against reckless harassment of public servants. But shield not shroud it is. Justice will not permit it to become a cloak to hide all official action from court scrutiny. Once the defendant has brought forward the most probative evidence he can reasonably adduce that an apparent irregularity exists, the government then can no longer withhold crucial evidence it possesses and insist on retaining the presumption that its unrevealed cache of truth would demonstrate its actions were proper. See United States v. King, supra; United States v. Dudley, supra; United States v. Baker, supra; Rusk v. United States, 419 F.2d 133 (9th Cir. 1969); Yates v. United States, 404 F.2d 462 (1st Cir. 1968), reh’g denied, 407 F.2d 50 (1st Cir.), cert. denied 395 U.S. 925, 89 S.Ct. 1781, 23 L.Ed.2d 242 (1969). We do not hold the Government can be required to violate the confidentiality of draft records conferred by law. Our ruling only means that it must meet a prima facie case of irregularity such as Burnett made here with something more probative than the legal fiction of presumed regularity or forego its prosecution. Another error in this record would equally mandate reversal and since the case must be remanded for another trial it should be reached now. The charge to the jury in this case on the presumption of regularity sails so perilously close to the shoals of a directed verdict of guilt it must not be repeated. The text is set out in the margin. It may be possible for a sophisticated student of the law to draw the fine distinction which the Government asks us to discern — that the charge meant only to advise that the defendant was not entitled to a directed verdict of acquittal —but the probability is that a jury could not. . Even learned counsel with the benefit of calm hindsight and textbook study is unable to suggest why this advice was necessary when its potential for prejudice was so great. We have no hesitancy in holding its impact on the jury’s deliberation requires that the retrial be conducted without its taint. Burnett contends that the thirty month interval between his indictment and trial in and of itself establishes as a matter of law that he was denied his constitutional right to speedy trial. We disagree. The record shows that at no time during the thirty month period did the defendant seek or request that a trial date be set. The recent decision of United States v. Dyson, 469 F.2d 735 (5th Cir. 1972), relied upon at oral argument, does not mandate a different result. There the court specifically noted in its discussion of the principles set out in Barker v. Wingo, 407 U.S. 514, 92 S. Ct. 2182, 33 L.Ed.2d 101 (1972), that there was no indication that Dyson was even aware of his right to a speedy trial since counsel was not appointed to represent him until four days before trial. Burnett, on the other hand, was represented from the beginning by competent counsel. The only logical conclusion which can be drawn from this state of facts is that Burnett, who was not then confined, had no desire to have his case brought on for trial. In the alternative, Burnett argues that, even if his right to a speedy trial has not been abridged by the thirty month delay standing alone, the right has been denied nevertheless because of the prejudice which he has suffered from the Government’s delay. Specifically, he contends that the Government, in accordance with its standard policy to retain records for no more than one year, destroyed certain records which could have been relevant to his defense. It is conceded that it was improper to routinely apply this procedure to materials directly related to an issue in pending, untried litigation. The court views this destruction with even more concern because of the fact that some of the very records destroyed apparently were the object of discovery motions by Burnett. Though the Government ultimately gave Burnett some documentation which he sought, it refused to produce all of the written materials demanded, claiming that they were irrelevant, immaterial or privileged. We are unable to determine from the record on this appeal what degree of prejudice, if any, Burnett may have suffered from the destruction and intimate no ruling on the merits of this point. However, if Burnett chooses to pursue this issue on remand, the district court is directed to examine this contention, and determine just what records were destroyed and whether their destruction prejudiced Burnett in his defense. If prejudice is found the teachings of Barker and Dyson would mandate dismissal. Reversed. . Though the language of the indictment asserts that Burnett failed to report for and failed to submit to induction, the record makes it clear that Burnett did indeed report but refused to step forward for induction. Compare Schutz v. United States, 422 F.2d 991 (5th Cir. 1970). . It is the general duty of the local board, selective board to induct registrants in a proper order of call. Failure to do so may invalidate the induction order. You are instructed that a presumption of regularity supports an order of induction by the local selective board. You are further instructed, as a matter of law, that the registrant in this case has raised no issue that would, in itself, alter this rebuttable presumption of regularity. The order of call in this case has not been shown to be either an improper punishment or, on the face of the record, a clear violation of the selective Service regulations. The registrant must bring forth sufficient evidence to overcome the presumption of regularity that pertains to his order of call, and if you, the members of the jury, find the registrant has brought forth sufficient evidence to overcome this general presumption of regularity, then, by his evidence the registrant demonstrates under all the facts and circumstances of this case that his order of call by the local selective service board was basically and fundamentally unjust, unfair and wrongful and then, in that event, but only in that event, members of the jury, you may acquit the defendant on the grounds of an improper order of call.

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UNITED STATES of America, Plaintiff-Appellee, v. Bienvenido Mercado VASQUEZ, Defendant-Appellant. No. 72-3308 Summary Calendar. United States Court of Appeals, Fifth Circuit. March 22, 1973. Raymond E. LaPorte, Tampa, Fla. (Court-appointed), for defendant-appellant. John L. Briggs, U. S. Atty., Jacksonville, Fla., Ronald H. Watson, Asst. U. S. Atty., Tampa, Fla., for plaintiff-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: Vasquez appeals from his conviction under 26 U.S.C. § 5861 for possession of an unregistered firearm. We affirm. Initially,’ it is contended that the trial court erred in instructing the jury that it was unnecessary for the Government to prove that Vasquez knew that the rifle was designed to shoot automatically or could be readily converted to shoot automatically. The Government, on the other hand, argues that it need prove only that the defendant knew he possessed an item which was a firearm within the general sense of meaning of the term, and not that the defendant knew that the firearm which he possessed was a firearm within the meaning of 26 U.S.C. § 5845. Both the Government and the defendant rely on United States v. Freed, 401 U.S. 601, 91 S. Ct. 1112, 28 L.Ed.2d 356 (1971). In the majority opinion in Freed, Justice Douglas stated the following rule: By the lower court decisions at the time [the Act was amended] the only knowledge required to be proved was knowledge that the instrument possessed was a firearm. See Sipes v. United States, 8 Cir., 321 F.2d 174, 179, and cases cited. 401 U.S. at 607, 91 S.Ct. at 1117. Mr. Justice Brennan’s concurrence amplified this thought thus: The cases [decided prior to the enactment of the amended law] held that a conviction of an individual of illegal possession of unregistered firearms had to be supported by proof that his possession was “willing and conscious” and that he knew the items possessed were firearms. E. g., Sipes v. United States, 321 F.2d 174, 179 (C.A.8 1963); United States v. Decker, 292 F.2d 89 (C.A.6 1961). Congress did not disapprove these cases, and we may therefore properly infer that Congress meant that the Government must prove knowledge with regard to the first two elements of the offense under the amended statute. 401 U.S. at 614, 91 S.Ct. at 1121. These two explicit references to Sipes and its cited eases, including Decker, make it abundantly clear that Justices Douglas and Brennan used the term “firearm” in its general meaning, not in its technical statutory meaning. For in Sipes, then Circuit Judge Blackmun stated: He said he found it and possessed it for several days. It was in his hands when the arresting officers took it from him. He knew it was a gun. His possession therefore was a knowing possession. This is all the scienter which the statute requires. It is not necessary that, in addition to knowing possession, there also be knowledge on the defendant’s part that it was made in violation of § 5821. 321 F.2d at 179. Decker supports the same conclusion, as follows: Appellants urge that they did not know that the weapon was a firearm within the meaning of the statute and that it could not be ascertained from visual examination without test firing the gun. They insist that the element of criminal intent is lacking. * * # * * * The statute makes the mere possession of an unregistered firearm transferred in violation of law an offense. If an accused possesses such firearm, the offense is complete. It is not necessary for the Government to prove that the defendant knew that the weapon in his possession was a firearm within the meaning of the statute. Scienter is not involved. Based upon this authority, we hold that the Government was not required to prove that the defendant had knowledge that the physical characteristics of the weapon rendered it subject to registration. Scienter is established if the defendant be proved to have had knowing possession of an item which he knew to be a firearm, within the general meaning of that term. See United States v. Gardner, 448 F.2d 617 (7th Cir. 1971). Vasquez’s next contention is that the court erred in denying his motion to suppress statements he made to Government agents. Vasquez was interviewed by an agent of the F.B.I. while in custody in a Florida county jail. After administering the advice and warnings required by Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966), Vasquez executed a written waiver of those rights. The agent thereupon requested that Vasquez talk to him about an M-14 rifle that had been seized in connection with a recent shooting. Vasquez then told the agent he did not wish to discuss the shooting. The agent assured him that he was not interested in the shooting itself but only in the rifle. Vasquez consented to talk about the rifle and gave the agent a statement. The well-established general rule is that all interrogation must cease if a suspect indicates that he wishes to remain silent. Miranda v. Arizona, supra. However, that rule is much broader than this case. Vasquez indicated no more than that he did not wish to discuss the shooting. While the shooting was tangentially related to Vasquez’s possession of the rifle, it was not so closely and inexorably related that Vasquez’s partial exercise of his Miranda privilege tainted his decision to inform the agent of the details of his purchase of the rifle. When a person in custody has responded to proper police interrogation by voicing a general willingness to talk, subject only to a limited desire for silence, and his wishes not to discuss a particular subject-matter area are respected, nothing rooted in law or constitutional policy makes it improper to question him as to any unlimited subjects. Nor do we find that the agent violated Vasquez’s right to effective counsel by interviewing him when he was alone in the jail, at a time after an attorney had been appointed for him on the state charge of attempted murder. This court has previously rejected the position urged by Vasquez that all statements obtained in the absence of counsel from a person represented by counsel are inadmissible. See United States v. Brown, 459 F.2d 319 (5th Cir. 1971); United States v. De Loy, 421 F.2d 900 (5th Cir. 1970); United States v. Venere, 416 F.2d 144 (5th Cir. 1969); Wilson v. United States, 398 F.2d 331 (5th Cir. 1968), cert. denied 393 U.S. 1069, 89 S.Ct. 727, 21 L.Ed.2d 712 (1969). In this case where the defendant was carefully apprised of his right to have the advice of his counsel, there is no merit in the contention that the defendant was unable to waive that right. Vasquez also contends that the prosecution should have been required to establish the “chain” or “continuity of possession” in order to prove that the weapon had not been changed or altered. It is well settled, however, that such an objection goes merely to the weight of the evidence, and not to its admissibility. United States v. Mendoza, 473 F.2d 692 (5th Cir. 1972); United States v. Wilson, 451 F.2d 209, 213 (5th Cir. 1971). Finally, we find without merit his allegation of error in the trial court’s refusal to charge the jury that it was not unlawful to possess an unregistered rifle with a barrel 16 inches or more in length. Such an instruction could not have provided appellant with a valid defense to the charge. The mere fact that the subject M-14 would fit the broader § 5845(c) definition of a rifle constitutes no defense, since the gun was within the statutory definition of machine gun. The conviction appealed from is Affirmed. . § 5845. Definitions For the purpose of this chapter— (a) Firearm. — The term “firearm” means (1) a shotgun having a barrel or barrels of less than 18 inches in length; (2) a weapon made from a shotgun if such weapon as modified has an overall length of less than 26 inches or a barrel or barrels of less than 18 inches in length; (3) a rifle having a barrel or barrels of less than 16 inches in length; (4) a weapon made from a rifle if such weapon as modified has an overall length of less than 26 inches or a barrel or barrels of less than 16 inches in length; (5) any other weapon, as defined in subsection (e) ; (6) a machine-gun ; (7) a muffler or a silencer for any firearm whether or not such firearm is included within this definition; and (8) a destructive device. The term “firearm” shall not include an antique firearm or any device (other than a machinegun or destructive device) which, although designed as a weapon, the Secretary or his delegate finds by reason of the date of its manufacture, value, design, and other characteristics is primarily a collector’s item and is not likely to be used as a weapon. . We certainly do not intimate approval of any practice by which a suspect’s express desire to remain silent as to some specific activity is aborted by the subterfuge of questioning which is designed or intended to indirectly gain information about those matters which he has indicated he wishes not to discuss.

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UNITED STATES of America v. Michael NEWMAN and Frank X. Gaca. Appeal of Michael NEWMAN. No. 72-1664. United States Court of Appeals, Third Circuit. Argued Dec. 4, 1972. Decided March 29, 1973. Richard L. Thornburgh, U. S. Atty., James M. Seif, Kathleen Kelly Curtin, Asst. U. S. Attys., Pittsburgh, Pa., for appellee. Thomas A. Livingston, Livingston & Miller, and John L. Doherty, Pittsburgh, Pa., for appellants. Before VAN DUSEN, GIBBONS and HUNTER, Circuit Judges. OPINION OF THE COURT VAN DUSEN, Circuit Judge. This appeal by Michael Newman challenges his June 22, 1972, sentence and judgment. Newman, who was at the time a City Councilman in McKeesport, Pennsylvania, had been convicted by a jury on Count I of a two-count indictment, which charged him with willfully procuring another person to intercept telephone conversations in violation of 18 U.S.C. §§ 2511(1) (a) and 2. We affirm. The evidence adduced at Newman’s trial revealed that on March 3, 1970, Thomas Nee, a former Bell Telephone employee and a political associate of Newman, installed a tape recorder and activator on the telephone line of Mr. and Mrs. Eugene O’Neill. Nee, the chief Government witness, testified that Newman directed him to undertake the interceptions in order to collect politically useful information of the plans of Newman’s opponents (N.T. 93-94). The interceptions continued for approximately one week. Each day Nee would service the recording device by removing the tape recorder from the telephone line and later playing the contents of the tape for Newman (N.T. 108-121). The tape recorder was discovered when Nee apparently inadvertently set it on broadcast, rather than record (N.T. 124). Nee was indicted for his participation and subsequently entered a plea of guilty. The defendant urges each of three contentions as a basis for reversal: I. The trial court erred when it denied him the opportunity to call the United States Attorney as a witness to impeach Nee’s credibility. II. The trial court erred when it refused his request, made in the midst of the trial, to hear the contents of the tape found on the tape recorder. Neither the tape nor its contents were received in evidence. III. The trial court committed plain error in its charge to the jury. We shall consider these contentions in the above order. I. Newman contends that he has been denied his Sixth Amendment right to compulsory process. Specifically, he argues that the refusal by the trial court to allow him the opportunity to call the United States Attorney thwarted his efforts to impeach the credibility of Nee by showing a bargain had been reached between the Government and Nee concerning the sentence for Nee’s admitted participation in illegal electronic surveillance and his possible prosecution for perjury before the grand jury. Newman claims Nee’s explicit denial of a bargain on cross-examination was inconsistent with the following statement made by the United States Attorney during a conference outside of the presence of the jury (“he” refers to Nee): “He indicated if we indicate our good faith as best we can that he will disclose these facts at that time and we will then proceed to prosecute those persons who are responsible, but he has a Fifth Amendment right to I think avoid getting into those other offenses.” (N.T. 146) Newman reads that statement to suggest that Nee had agreed to testify about previous wiretaps he had undertaken involving persons not connected with the trial in return for preferential treatment. However, the record, as a whole, makes clear that the United States Attorney’s statement does not support that contention. Nee, instead of agreeing to testify in future trials, “steadfastly refused to tell about them because he [was] in genuine fear of physical harm” (N.T. 145). The reason behind the out-of-court discussion, as the prosecutor made clear, was a concern that the court, by one of its questions, had opened the door to cross-examination concerning the details of the previous wiretaps. The United States Attorney felt that if Nee refused to answer the questions and relied on his Fifth Amendment right to remain silent, his credibility would be damaged. In the alternative, Newman suggests the United States Attorney’s statement may be read as a suggestion that Nee had agreed to disclose other facts in prosecutions against other persons in return for an indication of good faith by the prosecutor not to prosecute him for his possible previous perjury before the Grand Jury. This suggestion is equally misplaced. The court conducted a lengthy discussion out of the hearing of the jury, where the prosecutor denied the existence of any bargains, and he emphasized that his office had not reached a decision on whether to prosecute Nee for perjury. Although this court has consistently held that defense counsel has available the right to show that the testimony of a Government witness was given in reliance on a promise of a lighter sentence, or other preferential treatment, United States v. Murray, 445 F.2d 1171, 1174 (3d Cir. 1971); e. g., United States v. Migliorino, 238 F.2d 7 (3d Cir. 1956), the district court has wide discretion with respect to the examination of witnesses. Hayes v. United States, 329 F.2d 209, 218 (8th Cir. 1964). It may properly refuse to allow the defense to call the prosecutor if it does not believe that “he possesses information vital to the defense.” Gajewski v. United States, 321 F.2d 261, 268-269 (8th Cir. 1963); cf. Fisher v. United States, 231 F.2d 99 (9th Cir. 1956); see also United States v. Maloney, 241 F. Supp. 49 (W.D.Pa.1965). The decision in Giglio v. United States, 405 U.S. 150, 92 S.Ct. 765, 31 L.Ed.2d 104 (1972), does not aid Newman’s claim that the district court’s refusal to allow him to call the United States Attorney mandates a new trial. The rationale underlying the Court’s determination in Giglio is inapplicable to the facts presented in this record. Giglio dealt with evidence of a promise of freedom from prosecution for a key government witness, discovered after the trial, which was inconsistent with explicit denials of leniency made both by that witness and the prosecutor during the trial. In that situation, the Court felt, the suppression by the prosecutor’s office of what was material evidence deprived the defendant of his due process rights as guaranteed in Napue v. Illinois, 360 U.S. 264, 79 S.Ct. 1173, 3 L. Ed.2d 1217 (1959), and Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963). See Giglio, supra, 405 U.S. at 154-155, 92 S.Ct. 765. Here, however, there is no evidence that the prosecutor suppressed evidence. The prosecutor explicitly denied to the court, on the record, both as a member of the bar and as an officer of the court, making any bargains or agreements with Nee. In United States v. Hykel, 461 F.2d 721 (3d Cir. 1972), the defendant contended that he had been prevented from showing that the testimony of a witness was prompted by her desire to avoid prosecution. Judge Hunter explained : “The present case is not like Giglio v. United States, 405 U.S. 150, 92 S. Ct. 765, 31 L.Ed.2d 104 (1972). The opinion in that case makes clear that where a key Government witness has been promised that he will not be prosecuted if he testifies, a failure to disclose the promise may deny a defendant due process of law. In the present case, however, there is no evidence that the Government made any such promise to Mrs. Lawson.” 461 F.2d at 727; cf. United States ex rel. Dale v. Williams, 459 F.2d 763, 765 (3d Cir. 1972). We believe that on these facts the court properly concluded that Newman’s request was “irrelevant to this case. ...” (N.T. 647). II. Newman next contends that the failure by the trial court to grant his request for the examination and use, if relevant, of a tape of the private phone conversations of the O’Neill family that had been made available to Nee prior to the trial, precluded him from developing his defense. This motion for discovery was made on the morning of the fourth day of the trial. Defense counsel did not seek to examine this tape even though Nee had concluded his testimony, including his cross-examination, and the prosecution had rested at the end of the third day of trial. The tape could have been requested and examined the previous evening without causing a trial delay. An application for discovery under Rule 16 of the Federal Rules of Criminal Procedure is addressed to the sound discretion of the trial court, “and its ruling will be disturbed only for an abuse of discretion.” United States v. Fioravanti, 412 F.2d 407, 410 (3d Cir.), cert. denied, Panaccione v. United States, 396 U.S. 837, 90 S.Ct. 97, 24 L.Ed.2d 88 (1969); United States v. Randolph, 456 F.2d 132 (3d Cir. 1972). As Judge Aldisert has noted: “Appellate courts have been increasingly reluctant to find that the denial of a particular discovery motion was an abuse of discretion in the absence of a showing that the defendant was prejudiced by such denial.” Fioravanti, supra, 412 F.2d at 410. In addition, Rule 16(f) of the Federal Rules of Criminal Procedure provides that the trial .court may deny an untimely motion for discovery where the defendant has failed to show cause “why such motion would be in the interest of justice.” Cf. United States v. Conder, 423 F.2d 904 (6th Cir. 1970). The 1966 Advisory Committee Note to Rule 16 makes clear that one of the purposes behind Rule 16(f) is “to give the court sufficient control to prevent unnecessary delay and court time consequent upon a multiplication of discovery motions.” 8 Moore’s, Federal Practice, ¶ 16.01 [3], at 16-8 (2d ed. 1953). After a careful examination of the record, we are unable to say that Newman was prejudiced by the court’s denial of his request. As stated above, Nee had completed his testimony, including his cross-examination, on the previous day. The tape was not introduced into evidence and the prosecutor never listened to it (N.T. 398). Moreover, the notes taken by Nee after he listened to the tape were provided to the defense for cross-examination. Since the defendant has failed to demonstrate why the grant of his motion, which was made in the middle of the trial, would be in the interest of justice, the court properly denied it. III. The defendant’s final contention that the trial court’s facetious comments made during its charge constituted plain error is also without merit. See United States v. Newman, supra at note 1. Although the alleged “witty diversities” may have been unwise, we cannot say that they affected the substantial rights of Newman. F.R.Crim.P. 52(a). For the foregoing reasons, the June 22, 1972, sentence and judgment will be affirmed. GIBBONS, Circuit Judge (dissenting). In Giglio v. United States, 405 U.S. 150, 92 S.Ct. 765, 31 L.Ed.2d 104 (1972), the Supreme Court held that discovery, after trial, of the nondisclosure by the United States Attorney’s office of an understanding between that office and a key government witness that the witness had been promised some degree of immunity, or in the Government’s version “would definitely be prosecuted if he did not testify and that if he did testify he would be obliged to rely on the ‘good judgment and conscience of the government’ as to whether he would be prosecuted”, Id. at 153, 92 S.Ct. at 765, was ground for the grant of a new trial. Chief Justice Burger reasoned: “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 therefore 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.” Id. at 154-155, 92 S.Ct. at 766. Substituting in the foregoing quotation the name of the witness Thomas Nee for the name Taliento, the quotation would serve as an accurate description of Nee’s role in the instant case. Nee is an accomplice. Without his testimony there would have been no case against appellant Newman. On direct examination Nee was asked, and answered: “Q. Was there any kind of a deal that was made between you and thé United States Attorney’s office or the Federal Bureau of Investigation ? A. There was no so-called deals made. The only thing was said was if I would testify in this ease that they would mention to the judge that I did testify for the government, which was no promise or no threat or anything. *- * * * * -X- Q. Do you know what your sentence is going to be ? A. I have no idea. Q. Has anybody made any promises or representations to you ? A. No, and this is one reason I have never been able to get a job, because I can’t tell people that I will be here next week, you know, or next month after the sentencing.” (Tr. 140-42). On cross-examination Nee was asked: “Q. Did you discuss fully your illegal snooping activities with Mr. Thornburgh?” (Tr. 194). To put the question in context, the evidence in the Government’s case was that Nee, a telephone company employee, engaged in the moonlighting business of illegal wiretapping, and that the activities which resulted in the Newman indictment were a part of that broader business which included other illegal interceptions. Mr. Thornburgh is the United States Attorney. His objection to this question was sustained. Later in cross-examination Nee was asked and answered: “Q. Did you testify on two occasions before a federal grand jury? A. Yes/ Q. On one of those occasions, you admit here today that you did lie under oath? A. Yes, sir.” (Tr. 205). On several occasions when Nee was cross-examined about other incidents of illegal wiretapping he refused to answer on the ground of possible self-incrimination. Throughout the cross-examination, when other illegal activities were touched upon, both the United States Attorney and the district judge took steps sua sponte to apprise the witness of his Fifth Amendment rights. Following the cross-examination the United States Attorney on redirect, in rehabilitating Nee, asked and was answered : “Q. Mr. Nee, you have pleaded guilty to the charges of violation of the federal wiretapping law ? A. Yes, sir. Q. And you understand that plea of guilty is just as much a guilty finding as a verdict by a jury ? A. Yes, sir. Q. And you did that with the advice of counsel, didn’t you ? A. Yes, sir.” (Tr. 306-07). On re-cross Nee was asked and answered: • “Q. Sir, you have been made no promises or no threats have been made against you concerning your testimony in this case ? A. No, sir, no threats have been made or no promises have been made. Q. Have you had any discussion with any member of the U. S. Attorney’s office concerning what information you will provide to the United States Attorney after sentence is imposed upon you ? A. I have promised them nothing. Q. Have you made any indication to the United States Attorney’s office concerning what you might do in the event that they show their good faith ? A. No, sir. I told them I would testify fully and truthfully in this ease, and that is all I said I would testify. In fact, I specifically said I would never testify under the other situations. Q. Was it then your indication to the United States Attorney’s office that you would never testify against anybody except the defendant, Michael Newman? A. No, I didn’t say anybody. I said under certain situations that they were talking about. I didn’t say anybody. Q. Did you indicate a willingness after the United States Attorney’s office shows their good faith to cooperate further with them ? A. No, sir. I said I would never testify in other incidents, that they would never get me on the stand.” (Tr. 318-19). The overall impression created by Nee’s testimony was that the only discussion with the Government concerned his testimony in the instant case, that the Government gave him no expectation of any consideration beyond calling to the sentencing judge’s attention that he had testified in this case, and that he was in all other respects uncooperative. With that overall impression before the jury, we turn to a colloquy which took place ex parte between the United States Attorney and the court during Nee’s direct examination. The United States Attorney asked to see the judge outside the presence of the deeense attorney, who consented so long as a transcript of the conference was made. That transcript discloses: “MR. THORNBURGH: Your Hon- or, I am afraid through inadvertence we might have stumbled into something here that is troublesome for Mr. Nee. He has indicated to me that he did perform jobs for other persons of this type. He has never and has steadfastly refused to tell me about them because he is in genuine fear of physical harm. As I size him up, he is not pulling my leg, and it involves some racket connections in McKeesport, and I have tried to studiously avoid getting into that, and I am sure your Honor asked a perfectly logical question and maybe it would have been relevant in cross examination anyway, but I am a little concerned about him being forced to answer these things because he seems to express a genuine fear of bodily harm with expression of distress of any disclosure of for whom these jobs were done. THE COURT: Well, I presume as long as you don’t prosecute him for having inadvertently admitting something— MR. THORNBURGH: Well, his problem is this: This area of Mc-Keesport is something else again. He thinks this whole proceeding is fixed, that Newman is going to ‘take a walk’ automatically. That is what he tells me. He indicated if we indicate our good faith as best we can that he will disclose these facts at that time and we will then proceed to prosecute those persons who are responsible, but he has a Fifth Amendment right to I think avoid getting into those other offenses.” (Tr. 145-46) (Emphasis Supplied). When the transcript of the conference came to the attention of the defense counsel, he asked for a side bar conference at which he informed the court of his desire to call the United States Attorney to the stand to develop what the defense hoped would be testimony casting doubt upon Nee’s testimony that his cooperation was limited to this case and his expectation of reward limited to a representation that his testimony in this case would be called to the attention of the sentencing judge. If Nee’s expectation of reward was greater than he had indicated, the possible impeaching effect would be greater. The United States Attorney responded at side bar: “We told him we would bring his cooperation to the attention of the court at the proper time.” (Tr. 642). He objected to taking the stand. The jury was excused. A further colloquy took place in which the defense attorney expanded his argument that he desired to know the extent of Nee’s anticipated cooperation and what offenses were included within any understanding with the Government. This colloquy took place: “MR. THORNBURGH: Tom, you know full well the practice of a prosecution office when a man purges himself of perjury. You know that. We don’t go around prosecuting people without giving them a chance. We can’t. MR. LIVINGSTON: Now, wait a second. I don’t mean this in the sense of unethical impropriety. I mean in the sense that I think it is improper for you to make the determination that he purged himself of perjury the second time. MR. THORNBURGH: I make every determination in our office as to who is prosecuted, and you know full well we decline a basketfull of prosecutions every week. MR. LIVINGSTON: But what you are doing here is saying, in effect, that he has purged himself of perjury the second time. MR. THORNBURGH: I don't know at this point, but I am not going to prosecute him at this point. MR. LIVINGSTON: For example, if it was brought to your attention that he perjured himself the second time— MR. THORNBURGH: We could consider it. These are matters within the discretion of the prosecutor’s office, and I think this is just a grandstand play, your Honor, and I resent it very much. There is no basis in that scrap of paper for thinking a deal has been made with Mr. Nee. MR. LIVINGSTON: I think that becomes a jury question. MR. THORNBURGH: You’re right, I said I hope we could make some more cases if this person gets rid of the idea everything is fixed in McKeesport, but the idea of— MR. LIVINGSTON: That he will disclose those facts at that time. MR. THORNBURGH: He indicated if we indicated — and I’m talking in terms of circles within circles here— we made no deal. I didn’t say to Tom Nee, and there is absolutely no basis in that piece of paper for you making that kind of statement — ” (Tr. 645-46). The court ruled: “I consider it to be irrelevant to this case, the hope for the future if the witness should prove more talkative in the future than he has in the past and if nobody shoots him on the way home.” (Tr. 647). This is not a case, such as United States ex rel. Dale v. Williams, 459 F.2d 763 (3d Cir. 1972), where the possible impeaching effect of any understanding with the prosecutor went to the credibility of a witness whose testimony was merely cumulative or corroborative of other unimpeached witnesses. Nor is it a case where because of latitude permitted with respect to other impeaching evidence exclusion of the evidence can be regarded as harmless error. See, e. g., United States v. Hykel, 461 F.2d 721, 727 (3d Cir. 1972); United States v. Murray, 445 F.2d 1171 (3d Cir. 1971). The effect of the district court’s ruling was to require that the defendant accept the United States Attorney’s interpretation of the impeaching effect of whatever discussion did take place. Nee was the Government’s case, and he was effectively safeguarded from impeachment. What is perfectly clear is that the discussions between Nee and the Government went beyond the instant case, and that the Government’s undertaking was to inform the court of Nee’s “cooperation”. The United States Attorney never said unequivocally that the “cooperation” referred to testimony in this case only. The jury never knew these facts. The appellant Newman, and another defendant, Gaea, who was tried separately in March of 1972, were sentenced on June 22, 1972. The witness, Nee, who had pleaded guilty on September 29, 1970, was sentenced at the same time. At the sentencing the United States Attorney appeared and addressed the court as follows: “There is one matter which I am bound to bring to the Court’s attention and which the Court is certainly aware of. That is the fact that the defendant Nee, who pleaded guilty to the charges contained in the first indictment, was, from the time that he appeared before the grand jury as a Government witness, wholly cooperative. He appeared at every appointment made with FBI agents or with persons in my office on time. He cooperated to the maximum extent, and I think it’s fair to say that without his cooperation, the convictions of the two ■ other defendants, which resulted from the indictment returned on November 17, 1970, would have been impossible. We would never have been able to determine the full extent of the activity undertaken in this case and the true complexion of the invasion of privacy carried out through electronic means without the cooperation of Mr. Nee. His cooperation extended from the time that he entered a plea of guilty in September of 1970 to this date and appeared at two trials, was subject to rigorous cross examination by skilled defense counsel and in both instances, I think it’s manifest from the findings of guilty the jury accepted his testimony as true in forming a basis for the conviction of defendants Newman and Gaea. I think it would be a gross defalcation on the part of the Government not to bring this cooperation to the Court’s attention because frankly, the Government is always trying to encourage criminal defendants to cooperate with the Government in bringing others involved in criminal enterprise to the bar of justice and were we not to then stand in open court and make known to the Court the nature and extent of that cooperation, we would be defaulting, not only on the individual defendant, but on the processes of criminal justice within this Western District of Pennsylvania. THE COURT: Elaborating a little on that, can you make any statement as to whether the defendant Nee furnished any additional information concerning other cases than the ones which he testified concerning in open court ? MR. THORNBURGH: He has not, your Honor. As he stated on the witness stand in both trials in this case, he has stated only to us that he asserts his right under the Fifth Amendment of the United States not to testify with respect to other offenses. He expresses to us a fear for his physical well-being and safety, not from these defendants but with respect to other offenses, and I have no manner or means to compel him to testify other than the grant of immunity which we are not at the present time considering due to the pending sentencing and final resolution of this case, but I recognize and I think the Court recognizes his right to refuse to testify on matters that would incriminate himself and while his cooperation has been complete and thorough in this case, we have at this point received no further information from him. That is a matter of continuing concern to us.” (Tr. of Sentencing 6-8). The Giglio issue apparently arose in Gaea’s case as well, for at the sentencing Gaea’s attorney contrasted what he referred to as a plea for leniency on behalf of Nee to the position taken at the Gaea trial that there was no understanding with Nee, The United States Attorney responded: “I- repeat again no promises were made to Mr. Nee with respect to any deal. I have made no plea on his behalf today. I merely think it’s appropriate to bring to the Court’s attention, have done so in the past and will do so in the fúture, that a witness has cooperated with the United States Government in securing a conviction.” (Tr. of Sentencing 17). With deference, I suggest that the majority has read ungenerously both Chief Justice Burger’s opinion in Giglio v. United States, supra, and the compulsory process clause of the Sixth Amendment. Giglio, it seems to me, is based upon the assumption that the jury is entitled to hear all the facts from which a crucial witness’ expectations of benefit from testimony might be inferred, and to judge for itself whether or not in the light of those facts the witness is entirely credible. The fine lines drawn by the United States Attorney here, between a representation as to the witness’ cooperation and a plea on his behalf, or between a promise and an understanding, are not to be drawn by the attorney for the Government. They are to be drawn by the jury in the light of all the circumstances. And if that relevant information is in the possession of the United States Attorney the compulsory process clause requires that he testify. Thus, Part I of the majority opinion errs in two respects. First, it approaches the Giglio problem as if only a “deal” or “bargain” in a Willistonian sense would be impeaching. The critical inquiry is not whether the prosecutor made a contract, but what was the witness’ expectation. Second, it assumes that the defense must accept the prosecutor’s characterization of what took place, rather than leaving the defense free to call a witness to lay the facts before the jury. Unlike the Hykel and Murray cases, the circumstances from which the jury could decide whether Nee might have been inclined to testify falsely in favor of the Government were not adequately presented to it in this ease. Nee’s credibility is also directly involved in the district court ruling discussed in Part II of the majority opinion. The telephone conversations interception which resulted in the indictment was made by means of a magnetic tape recorder connected to a telephone line by Nee. The tape recorder was introduced in evidence, but the tape remained in the possession of the police department of McKeesport, Pennsylvania, which had discovered it. Prior to his testimony Nee listened to the tape recording for the purpose of refreshing his recollection. He made notes to which he referred during his testimony. (Tr. 208-10). He also mentioned some of the contents of the tape in his testimony. (Tr. 317). The indictment is in two counts. Count I charges unlawful interception in violation of 18 U.S.C. § 2511(1)(a). Count II charges unlawful disclosure of an intercepted communication in violation of 18 U.S.C. § 2511(1) (c). The Government attempted to establish Newman’s violation of § 2511(1) (c) by testimony that his wife had discussed with third persons information which could only have come from one of the intercepted conversations. Harry Walsh, the son of a state legislator, testified that Mrs. Newman repeated to him remarks he had made over the telephone to Mr. O’Neil. (Tr. 348-59, 382). Nee testified that two conversations between O’Neil and Mr. Walsh were on the tape. At the end of the Government’s case the district court granted a motion for judgment of acquittal on the second count. Thus, to some extent the credibility of Nee’s testimony as to the contents of the intercepted communications became less critical than it would have been had the second count remained in the case. Nevertheless, the jury had heard Nee’s testimony about the contents of the tape, and on Count I his testimony was the Government’s case. His credibility was the central issue of the case. If the defense could have established that he colored his discussion of the intercepted communications so as to reenforce Walsh’s testimony and thus the Government’s theory of proof on Count II, the impeaching effect would remain whether or not that count remained in the case. At the end of the Government’s case the defense attorney made a motion for an opportunity to listen to the tape recording so as to determine if it would have such an impeaching effect. In denying the motion the court said: “I really think it is theoretically irrelevant and probably no harm will result, so the motion is denied.” (Tr. 402). The Government advances two theories in defense of this ruling. First, it suggests that permitting the defense attorney to listen to the tape recording would itself be a violation of 18 U.S.C. § 2511. Second, it urges that the motion was untimely. The first contention is discussed in United States v. Liddy, In re Allen, No. 73-1020 (D.C.Cir. Jan. 19, 1973), which revises a district court order permitting disclosure of the contents of the communication in a prosecution for violation of 18 U.S.C. § 2511. We need not reach the same issues here, because in this case, correctly or incorrectly, the contents of some of the intercepted communications were in fact disclosed to the jury during the Government’s case. Moreover, the Government, prior to the trial, arranged to have such of the communications as were still preserved on the tape recording disclosed to its key witness, Nee. Elementary due process requires that if disclosure has been permitted in a prosecution under 18 U.S.C. § 2511 the defense be afforded an opportunity to verify that the disclosure being made is a truthful account of the communication. In any event, the United States Attorney did not rely upon 18 U. S.C. § 2511 in objecting to the defendant’s motion, and the district court’s ruling was made not on that ground but on the ground of relevancy. The second theory, that of untimeliness, is accepted by the majority. No objection was made by the Government to the timeliness of the motion. There is no indication whatsoever in the record that the trial would in any way have been delayed by the grant of the motion. The district judge did not deny the motion on the ground of untimeliness. The suggestion that the motion for discovery of the tape recording should have been made prior to the trial was not advanced below or considered by the district court for the obvious reason that until Nee testified to the contents of the tape and to having prepared for trial by listening to the tape recording there was no way in which the tape recording would have been relevant to the defense. Undoubtedly, had a motion for leave to listen to the tape been made prior to the trial the court would have ruled that further disclosure of the private conversations preserved thereon was premature and might prove to be unnecessary. The motion was made at the time when it became appropriate; that is, at the end of the Government’s case and before the beginning of the defendant’s case. If the tape were to prove to be impeaching its introduction in evidence would occur not during the Government’s case but during the defense case, which is the only time when in a properly tried case the defense introduces exhibits in evidence. The majority opinion holds that we can affirm because, after a careful examination of the record, we cannot say that Newman was prejudiced by the ruling. The fallacy in that ruling is that we simply do not know whether or not Newman was prejudiced since we do not know whether the tape recording would have been impeaching. The district judge didn’t hear it. The United States Attorney didn’t hear it. The defense attorney didn’t hear it. The judges in the majority didn’t hear it. Only the witness Nee heard it, and almost the sole issue in the case was Nee’s credibility. The effect of Part I of the majority opinion is that the defendant must be satisfied with the United States Attorney’s appraisal of the witness’ credibility. The effect of Part II is that the defendant must rely on Nee’s appraisal of his own credibility. The defendant was entitled to have the jury make the appraisal. I would reverse and remand for a new trial. . After the jury returned its verdict of guilty, Newman promptly filed a motion for new trial alleging 14 reasons in support. The trial court found the points urged by the defendant to be without merit, but 4% months later sua sponte granted a new trial based on its “injudicious indulgence in witty diversities.” The Government filed a petition for a writ of mandamus to compel the district court to vacate its order granting the new trial on the basis that the court’s order was entered not for reasons in the defendant’s timely new trial motion, but on grounds raised by the district court months after such motion and answer to such petition. The district court’s order was vacated and the defendant directed to appear for sentencing. United States v. Newman, 456 F.2d 668 (3d Cir. 1972). . A motion for acquittal as to Count II of the indictment, which charged a violation of 18 U.S.C. §§ 2511(1) (c) and 2, was granted at the. completion of the Government’s case. . 18 U.S.C. § 2511(1) (a) provides: “(1) Except as otherwise specifically provided in this chapter any person who— (a) willfully intercepts, endeavors to intercept, or procures any other person to intercept or endeavor to intercept, any wire or oral communication; . shall be fined not more than $10,000 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 willfully 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 following conversation took place between Nee and Newman’s counsel during cross-examination: “Q. Sir, you have been made no promises or no threats have been made against you concerning your testimony in this case? “A. No, sir, no threats have been made or no promises have been made. “Q. Have you had any discussion with any member of the U.S. Attorney’s office concerning what information you will provide to the United States Attorney after sentence is imposed upon you? “A. I have promised them nothing. “Q. Have you made any indication to the United States Attorney’s office concerning what you might do in the event that they show their good faith? “A. No, sir, I told them I would testify fully and truthfully in this case, and that is all I said I would testify under the other situations. “Q. Was it then your indication to the United States Attorney's office that you would never testify against anybody except the defendant, Michael Newman. “A. No, I didn’t say anybody. I said under certain situations that they were talking about. I didn’t say anybody. “Q. Did you indicate a willingness after the United States Attorney’s office shows their good faith to cooperate further with them? “A. No, sir. I said I would never testify in other incidents, that they would never get me on the stand.” (N. T. 318-19). . In chambers the prosecutor stated: “As I size him up, he is not pulling my leg, and it involves some racket connections in McKeesport, and I have tried to studiously avoid getting into that, and I am sure your Honor asked a perfectly logical question and maybe it would have been relevant in cross-examination anyway, but I am a little concerned about him being forced to answer these things because he seems to express a genuine fear of bodily harm with expression of distress of any disclosure of for whom these jobs were done. “So far as we are concerned — and I hate like the dickens to have him take the Fifth Amendment out there in the courtroom, and I am in a quandary as to what to do. Now that your Honor has raised the question in doing other jobs— “I don’t want to have [counsel] ask a question when he knows he is going to get a Fifth Amendment response because I think it goes improperly to the credibility of the witness. He has a constitutional right, but in this day and age, the Fifth Amendment, I think juries react to it . . . ” (N.T. 145, 146, 149). We note, nevertheless, that except on grounds of relevancy, there was no limitation on defense counsel’s cross-examination of Nee. The trial judge said: “ . . . conceivably [defense counsel] might ask some questions that were entirely outside of the ballpark and to which objection might be made and sustained without the necessity of the witness pondering whether he could safely answer them or not, but I suppose the proper procedure would be to wait until the questions are asked and then hear what objections are made . . . ” (N.T. 169-170) . After Newman’s attorney repeated the statement made by the United States Attorney, the following conversation. took place at sidebar: “ME. THOENBUEGH [United States Attorney] : What kind of a deal is that? “THE OOUET: What does this have to do with this case? It is the gleam in the eye of Mr. Thornburgh to have some more. “ME. LIVINGSTON [defense counsel] : I think it requires Mr. Thorn-burgh to answer the question whether or not he has made any promises not to prosecute Nee for perjury, whether he has made any promises. I think he must answer these questions, whether he has made any promises not to prosecute Nee for intimidating witnesses when the matter has been brought to his attention, and I think if he answers those questions in the negative, I think I fall flat on my face, and I am willing to rest. That is the thing in a nutshell, I think the record is clear, and, very frankly, in the present state of the record, although for the record I insist that he testify with the record clear, it doesn’t upset me a great deal if the court rules that he will not and I walk away and that is the end of the ballgame. “THE COUET: It seems to me that it is unrelated to this case, that it is more about what he hopes to accomplish by a brilliant conviction in this case. Maybe he will get a couple more customers. “ME. LIVINGSTON: Well, I am inclined, your Honor, to think that really there is no way — this witness was asked if he made any deals. He said no. I am talking about Nee. Now, I don’t know whether [the United States Attorney] hasn’t prosecuted him for perjury— “ME. THOENBUEGH: . . . you know full well the practice of a prosecution office when a man purges himself of perjury. You know that. We don’t go around prosecuting people without giving them a chance. We can’t. “ME. LIVINGSTON: Now, wait a second. I don’t mean this in the sense of unethical impropriety. I mean in the sense that I think it is improper for you to make the determination that he purged himself of perjury the second time. “ME. THOENBUEGH: I make every determination in our office as to who is prosecuted, and you know full well we decline a basketful of prosecutions every week. “ME. LIVINGSTON: But what you are doing here is saying, in effect, that he has purged himself of perjury the second time. “ME. THOENBUEGH: I don’t know at this point, but I am not going to prosecute him at this point. “ME. LIVINGSTON: For example, if it was brought to your attention that he perjured himself the second time— “ME. THOENBUEGH: We could consider it. These are matters within the discretion of the prosecutor’s office, and I think this is just a grandstand play, your Honor, and I resent it very much. There is no basis in that scrap of paper for thinking a deal has been made with Mr. Nee. “ME. LIVINGSTON: I think that becomes a jury question. “ME. THOENBUEGH: You’re right, I said I hope we could make some more cases if this person gets rid of the idea everything is fixed in McKeesport, but the idea of— “ME. LIVINGSTON: That he will disclose those facts at that time. “ME. THOENBUEGH: . . .— we made no''deal. I didn’t say to Tom Nee, and there is absolutely no basis in that piece of paper for you making that kind of statement — ” (N.T. 644-646). . The following conversation took place when Newman’s attorney requested the United States Attorney to provide him with any exculpatory evidence that had come to his attention: “Mr. Livingston: I would request the opportunity to listen to this particular tape to determine what if any exculpatory matters may appear on it which can be used to the defendant’s benefit. “The Court: Do you have any known exculpatory material? “Mr. Thornburgh: I have none . I have never heard so much as one fragment of that tape.” (195a-196a, N.T. 397). . Proof of the contents of the intercepted telephone conversations was not required to prove the charges against the defendant. Cf. United States v. Liddy, In Re Allen, 12 Crim.Law Reporter 2343 (D.C. Cir., Jan. 19, 1973). . He said in making this motion: “If your Honor please, I think this is one of the prime examples of why counsel rather than the court should be in a position of making the determination as to what would be helpful. Now, I talked in terms of exculpatory evidence, but not exculpatory alone. For example — and not limiting my request to this particular matter — here is a witness that testified concerning the conversation which we don’t know was intercepted or not, the witness Walsh, who by his testimony suggests as the conversation came back to him, it therefore must have been on that tape and that tape must have come into the possession of somebody who got it to his secretary directly or indirectly. Now, I think it critical if that conversation does not appear on the tape at all. I think Mr. Newman has a right to know that. }\t * :¡: s¡: sjc Obviously Mr. Thornburgh places a great deal more credence on the testimony of Mr. Nee than I do. * $ $ $ * Now, it is my position that this witness [Nee] may be telling the truth and may not be telling the truth, but I as a lawyer am not going to rely on his representation of what is on that tape . . .” (Tr. 399-400).

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

James H. THOMPSON, Jr., Individually and d/b/a Rusty Thompson Mid Town Auto Service, Plaintiff-Appellant, v. ALLSTATE INSURANCE COMPANY, Defendant-Appellee. No. 72-2062. United States Court of Appeals, Fifth Circuit. March 27, 1973. Barry Hess, Roderick P. Stout, Mobile, Ala., for plaintiff-appellant. Lewis G. Odom, Jr., J. Knox Argo, Montgomery, Ala., Robert E. Gibney, Mobile, Ala., for defendant-appellee. Before WISDOM, BELL and COLEMAN, Circuit Judges. WISDOM, Circuit Judge: In appeals to this Court, judgments dismissing a complaint for failure to state a claim on which relief could be granted have a high mortality rate. They should — under federal rules of pleading. In this case the plaintiff, James H. Thompson, Jr., appeals from the district court’s decision dismissing his complaint for failure to state a claim on which relief could be granted under Alabama law. In his complaint, the plaintiff alleged facts showing that the defendant, Allstate Insurance Company, had intentionally interfered with his business for the purpose of causing injury, that the defendant acted with malice and for no legitimate economic reason, and that Thompson’s business had been injured as a result. We reverse. I. James H. Thompson, Jr., owns and operates an automobile repair business in Mobile, Alabama, known as “Rusty Thompson Mid Town Auto Service”. On April 19, 1971, Thompson filed the complaint in this case in the Circuit Court of Mobile County, Alabama, against Allstate Insurance Company, an automobile casualty and liability insurer. On Allstate’s motion, the case was removed on the basis of diversity jurisdiction to the federal district court. The district court granted Allstate’s motion to dismiss the plaintiff’s original complaint and later granted three successive motions to dismiss amended complaints for failure to state a claim on which relief could be granted under Alabama law. In his third amended complaint, the plaintiff alleged that Allstate, through its agents, had intentionally interfered with the plaintiff’s business by informing the plaintiff’s customers that Allstate would not make any estimates of repair on damaged automobiles taken to Thompson’s garage and that Allstate would not honor any claims against it if Thompson performed the repair work. The plaintiff further averred that Allstate acted with malice for the purpose of injuring the plaintiff’s business and for no legitimate economic reason, and that the plaintiff’s business was damaged as a result. On Allstate’s motion, the district court again dismissed the complaint, this time with prejudice, for failure to state a claim on which relief could be granted. The plaintiff appealed. H. Alabama has long recognized a cause of action in tort for intentional interference with another’s business. See Sparks v. McCrary, 1908, 156 Ala. 382, 47 So. 332; Carter v. Knapp Motor Co., 1943, 243 Ala. 600, 11 So.2d 383; Lash v. State, 1943, 31 Ala.App. 121, 14 So.2d 235, cert. den. 244 Ala. 568, 14 So. 2d 242, cert. den. 320 U.S. 784, 64 S.Ct. 192, 88 L.Ed. 471. Allstate contends, however, that the plaintiff’s complaint is deficient because it states only that Allstate did not act for “any legitimate economic reason or purpose” and thus fails to negative the possibility of a non-economic justification for its actions. In effect, Allstate argues that in order to state a claim for which relief can be granted under Alabama law, the plaintiff must affirmatively allege that the defendant's actions were unqualifiedly “without justification.” Our reading of Alabama law discloses no such requirement. Instead, as we read the cases, they have consistently held that, prima facie, a cause of action for intentional interference with another’s business is established by showing: (1) an intentional act of interference and (2) some consequential harm to the plaintiff’s business. See Sparks v. McCrary, supra; Carter v. Knapp Motor Co., supra; Kelite Products v. Binzel, 5 Cir. 1955, 224 F.2d 131. Justification for interference in another’s business is an affirmative defense and is no part of the plaintiff’s ease. It “is enough to allege and prove the conduct and effect, leaving the defendant to justify if he can.” American Well Works Co. v. Layne & Bowler Co., 1916, 241 U.S. 257, 259, 36 S.Ct. 585, 586, 60 L.Ed. 987 (Holmes, J.) Cases in other jurisdictions providing a similar cause of action for intentional interference with another’s business hold that the plaintiff does not have to negative justification. Mitchell v. Aldrich, 1960, 122 Vt. 19, 163 A.2d 833; Ross v. Wright, 1934, 286 Mass. 269, 190 N.E. 514, 515; Hartnett v. Plumbers’ Supply Association of New England, 169 Mass. 229, 235, 47 N.E. 1002; Godin v. Niebuhr, 236 Mass. 350, 128 N.E. 406. The Restatement, which is in general harmony with Alabama law, also adopts this approach. Restatement, Torts § 766, 767. See also Hare and Hare, Principal Alabama Action in Tort; Part II, 22 Ala.L.Rev. 361, 410-411 (1970); W. Prosser, The Law of Torts § 130 (4th ed. 1971); F. Harper and F. James, The Law of Torts § 6.12 (1966); Forkosch, An Analysis of the “Prima Facie Tort” Cause of Action, 42 Cornell L.Q. 465 (1957); Note, 41 Cornell L.Q. 507 (1956); Comment, The Prima Facie Tort Doctrine, 52 Colum.L.Rev. 503 (1952); Note, The Prima Facie Tort Doctrine, 16 A.L.R.3d 1191; Note, 9 A.L.R.2d 228. Allstate has been unable to call to our attention any case in Alabama or in any other jurisdiction holding that to state a cause of action the plaintiff must allege affirmatively that the defendant acted without justification, and an examination of Alabama cases reveals that the complaints sustained by the court against demurrers did not contain any such allegation. See, e. g., Sparks v. McCrary, swpra; Carter v. Knapp Motor Co., supra. We conclude, therefore, that to state a cause of action it is sufficient to allege an intentional act of interference resulting in harm to the plaintiff’s business. Once the interference and resulting harm are established, the burden of going forward then shifts to the defendant who, as the alleged wrongdoer, must prove his privilege to intervene. Since the complaint in the instant case contained allegations of fact sufficient to constitute a cause of action, it was error for the district court to grant Allstate’s motion to dismiss. The district court’s decision must also be reversed on another ground. Although in a diversity case state substantive law controls, federal law governs procedure. We have consistently held that under the Federal Rules of Civil Procedure, a motion to dismiss for failure to state a claim should not be granted “unless it appears to a certainty that the plaintiff would be entitled to no relief under any set of facts which could be proven in support of his claim.” Des Isles v. Evans, 5 Cir. 1952, 200 F.2d 614, 615. A complaint is sufficient if it satisfies the Federal Rules, even though it would be subject to demurrer in a state court for failure to set forth facts sufficient to constitute a cause of action. Brunswick Corporation v. Vineberg, 5 Cir. 1967, 370 F.2d 605; Arthur H. Richland Co. v. Harper, 5 Cir. 1962, 302 F.2d 324; Banco Continental v. Curtiss Nat-Bank of Miami Springs, 5 Cir. 1969, 406 F.2d 510. Ancestor worship in the form of ritualistic pleadings has no more disciples. The time when the slip of a sergeant’s quill pen could spell death for a plaintiff’s cause of action is past. Under Federal Rules of Civil Procedure, a complaint is not an anagramatie exercise in which the pleader must find just exactly the prescribed combination of words and phrases. All that the Rules require is “ ‘a short and plain statement of the claim’ that will give the defendant fair notice of what the plaintiff’s claim is and the grounds on which it rests . . . .” Conley v. Gibson, 1957, 355 U.S. 41, 47, 78 S.Ct. 99, 103, 2 L.Ed.2d 80. Allstate argues that state law makes actionable only those acts of interference that are “without justification”. But whatever the state substantive law, to require the plaintiff to plead an ultimate fact, such as “without justification”, adds nothing to plaintiff’s claim where, as here, the complaint gave fair notice of what the plaintiff’s claim was. The Federal Rules were intended to abolish such exaltations of form over substance. The plaintiff’s inclusion in the complaint of the allegation that Allstate’s actions were not “done for any legitimate economic reason or purpose” also provides no basis for dismissal. The plaintiff merely suggested one legal theory on which he could prevail. A complaint is sufficient if the plaintiff is entitled to relief under any legal theory. Nord v. McIlroy, 9 Cir. 1961, 296 F.2d 12; Wright and Miller, Federal Practice and Procedure § 1219 (1969); 2A Moore, Federal Practice ¶ 8.14 (2nd ed. 1972). Allstate further contends that the plaintiff’s complaint should be dismissed because its actions were privileged. Allstate asserts that it has an economic interest in insuring that claims against its policyholders are disposed of expeditiously and at the minimum reasonable cost and that its actions were in furtherance of that interest. See Zoby v. American Fidelity Co., 4 Cir. 1957, 242 F.2d 76. Without deciding the sufficiency of Allstate’s alleged privilege, we note that whether Allstate had an economic interest in the subject matter and, assuming such interest, whether its conduct was actually motivated by that economic interest, are questions of fact. In his complaint, the plaintiff alleged that Allstate’s actions were not motivated by any economic interest but by a desire to injure the plaintiff’s business. Thus, dismissal of the complaint was improper since there was a contested issue of a material fact. See Zoby v. American Fidelity Co., supra, 242 F.2d at 80. Finally, Allstate argues that its actions amount to no more than a unilateral refusal to deal and that the plaintiff has failed to allege an affirmative act of interference required by Alabama law. Allstate relies on Alabama Power Co. v. Thompson, 1965, 278 Ala. 367, 178 So.2d 525. This case held that liability for intentional interference with another’s business cannot be predicated on a refusal or failure to carry out a promise. Despite Allstate’s attempts to clpak itself in the robes of those filing claims against its policyholders, this case clearly does not involve a unilateral refusal to deal. The plaintiff alleged that Allstate induced third parties, the plaintiff’s customers, not to deal with the plaintiff. This is not a case in which Allstate refused to have its own automobiles repaired at the plaintiff’s garage. The requirement of an affirmative act is amply satisfied by the allegation of Allstate’s threatened refusal to make estimates or honor claims against its policyholders if the automobiles remained at the plaintiff’s garage or if the plaintiff performed the repair work. We conclude, therefore, that the decision of the district court must be reversed and the case remanded for further proceedings. Reversed and remanded. . The plaintiff also alleges that Allstate acted with malice. Several Alabama cases indicate that malice, in the sense of “ill will”, is not an essential element of the cause of action. See Sparks v. McCrary, supra; Birmingham Broadcasting Co. v. Bell, 259 Ala. 656, 68 So. 2d 314; Kelite Products v. Binzel, supra, 224 F.2d 139 fn. 8. Malice may also mean “nothing more than the intentional doing of an injurious act without justification or excuse.” Birmingham Broadcasting Co. v. Bell, supra, 68 So.2d at 322. “The allegation of malice is merely to aggravate the damages claimed. It is not an element of the right of action, and adds nothing essential to such a claim.” 68 So.2d at 323.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Plaintiff-Appellee, v. Frank Paul CASTRO and Nena Castro, Defendants-Appellants. No. 72-2638. United States Court of Appeals, Ninth Circuit. April 3, 1973. James M. Gattey (argued), Gregorcich, Gattey & Hunt, San Diego, Cal., for defendants-appellants. Robert P. Risso, Asst. U. S. Atty. (argued), Harry D. Steward, U. S. Atty., San Diego, Cal., for plaintiff-appellee. Before KOELSCH and CARTER, Circuit Judges, and HARRIS, Senior District Judge. Honorable George B. Harris, Senior District by designation. Judge, Northern District of California, sitting JAMES M. CARTER, Circuit Judge: Appellant Frank Paul Castro appeals from convictions below on ten counts of an indictment. Appellant Nena Castro appeals from convictions on five counts. Both appellants were convicted in Count 1 of a conspiracy to accept bribes to issue fraudulent immigration documents and to defraud the United States of the faithful services of Frank Paul Castro. Appellant Frank Paul Castro was convicted additionally on Counts 2, 3, 4, and 5, charging the seeking and accepting of bribes for the issuance of immigration documents to Mexican citizens, and on Counts 10, 11 and 12, charging aiding and abetting the procurement by fraud of immigration documents by Mexican citizens, and finally, on Counts 13 and 15, alleging perjury before the Grand Jury. Appellant Nena Castro, in addition to being convicted in Count 1, the conspiracy count, was convicted under Counts 4 and 5, charging aiding and abetting bribery, and on Counts 11 and 12 of aiding and abetting the fraudulent procurement of immigration documents for Mexican citizens. The sentence imposed on appellant Frank Paul Castro, pursuant to 18 U.S. C. § 4208(a)(2), was a total of 12 years and a fine of $10,000.00. Appellant Nena Castro was sentenced, pursuant to the same statute, to a three-year term on Counts 1, 4, 5, 11 and 12, to run concurrently. ISSUES (1) Appellant Frank Paul Castro contends that permitting Count 9 to go to the jury and afterwards granting a judgment of acquittal was error. (2) Appellant Nena Castro contends that the evidence was insufficient to convict her as an aider and abetter in Counts 4, 5,11 and 12. (3) Both appellants contend that the trial court erred in admitting evidence of a prior similar conspiracy on the issue of plan, scheme and intent. We affirm as to each appellant. I. Count 9 Count 9 charged appellant Frank Paul Castro with aiding and abetting the sale and delivery to Ramon Medina, a citizen of Mexico, of immigration documents, knowing them to have been falsely processed, in violation of 18 U.S. C. §§ 2 and 1546. A motion for judgment of acquittal was denied as to Count 9 and the jury returned a verdict of guilty on the count on April 3, 1972. On May 4, 1972, the court granted the motion for judgment of acquittal, as it had a right to do under Rule 29, Fed.R.Crim.P. Frank Paul Castro was not sentenced on Count 9. Appellant cannot now complain of the earlier denial of the motion when, in fact, the court later granted the motion. Appellant Frank Paul Castro contends that allowing the jury to consider Count 9 emphasized the extent of his involvement in criminal activity. We find no error, but if there was, it was harmless error in view of the overwhelming evidence of Castro’s guilt on the other counts. II. Nena Castro Nena Castro expressly concedes the sufficiency of the evidence as to Count 1, the conspiracy count. She contends the evidence was insufficient to convict her as an aider and abetter under Counts 4, 5,11 and 12. Since the sentences on all five counts ran concurrently, we need not examine the validity of the convictions on Counts 4, 5, 11 and 12. Hirabayashi v. United States, 320 U.S. 81, 105, 63 S. Ct. 1375, 87 L.Ed. 1774 (1943); Benton v. Maryland, 395 U.S. 784, 791, 89 S.Ct. 2056, 23 L.Ed.2d 707 (1969); Gonzales v. United States (9 Cir. 1972), 461 F.2d 1000, 1001 (per curiam); cert. den., 409 U.S. 914, 93 S.Ct. 230, 34 L.Ed.2d 175. However, we have reviewed the evidence as to Counts 4, 5, 11 and 12 and find it sufficient. She engaged in activity seeking to make the proposed illegal sale of the immigration documents successful. Nye & Nissen v. United States, 336 U.S. 613, 619, 69 S.Ct. 766, 769, 93 L.Ed. 919 (1949); United States v. Manna (2 Cir. 1965), 353 F.2d 191, cert. den., 384 U.S. 975, 86 S.Ct. 1868, 16 L.Ed.2d 685 (1966). The testimony of an accomplice, here Concha Castrellon, if believed by the jury, is sufficient to support a conviction. Bible v. United States (9 Cir. 1963), 314 F.2d 106, cert. den., 375 U.S. 862, 84 S.Ct. 131, 11 L.Ed.2d 89 (1963). Finally, appellant Nena Castro took the witness stand and denied her participation and involvement in the offenses charged in Counts 4, 5, 11 and 12. The jury could draw affirmative inferences of knowledge and intent from her denials. United States v. Peyton (9 Cir. 1971), 454 F.2d 213 (per curiam). Her testimony and her claim of lack of guilt may be, and was, disbelieved by the jury and the contrary, her guilt, may be and was inferred. United States v. Cisneros (9 Cir. 1971). 448 F.2d 298, 305-306. Counsel for Nena Castro was faced with problems of trial strategy as to (1) whether he should call her as a witness in her defense, and (2) whether he should question her about her involvement in the conspiracy, Count 1, or only about her involvement in the matters charged in Counts 4, 5, 11 and 12. Counsel’s argument at our bench, but not in his brief, that in some way appellant Nena Castro was prejudiced, has no merit. The judgment as to Nena Castro is affirmed. III. The admission of evidence of a similar prior conspiracy Both appellants contend that the trial court erred in admitting evidence concerning a prior similar conspiracy. Evidence of a prior similar act is admissible on the issues of a defendant’s intent, knowledge, modus operandi, preparations and plan, and absence of any mistake in his acts. Stewart v. United States (9 Cir. 1962), 311 F.2d 109, 112 (common scheme, purpose, guilty knowledge, intent, motive); Fernandez v. United States (9 Cir. 1964), 329 F.2d 899, 908, cert. den., 379 U.S. 832, 85 S.Ct. 62, 13 L.Ed.2d 40 (modus operandi); United States v. Jones (9 Cir. 1970), 425 F.2d 1048, 1051, cert. den., 400 U.S. 823, 91 S.Ct. 44, 27 L.Ed. 2d 51 (absence of mistake, opportunity, intent, plan, knowledge); United States v. Rodriguez (9 Cir. 1972), 459 F.2d 983, 984, cert. den., 409 U.S. 865, 93 S. Ct. 158, 34 L.Ed.2d 113 (intent, motive, method of dealing). Appellants rely on United States v. Fierson (7 Cir. 1969), 419 F.2d 1020, and Hamilton v. United States (5 Cir. 1969), 409 F.2d 928. These cases have not been followed in the Ninth Circuit. In Fierson the defendant, found guilty of falsely representing himself as an FBI agent, admitted he repossessed a car but denied he represented himself to be an FBI agent. A similar prior act of repossession and representation that he was such an agent, was proved. In our circuit it would probably have been admissible as proof of a plan or scheme. In Hamilton the charge was selling moonshine whiskey in violation of 26 U. S.C. § 5205(a)(2). Intent was not an ingredient of the charge. Id., 409 F.2d at 930. Proof of a prior offense on the issue of intent was clearly error. Appellants urge that there was no issue of intent, plan or scheme but solely the question — were documents exchanged and money received by appellants? However, from the beginning of the trial, counsel for appellants injected into the case the thrust of one part of the defense — that the immigration operation at San Ysidro was so loosely run and slipshod that allegations of misconduct could be made against anyone. On cross-examination of the Government’s first witness, counsel for appellants began laying out this defense. Questions brought out testimony that there were no written instructions regarding issuance of documents; the issuance of documents was largely discretionary; there were no mandatory questions regarding the issuance of documents ; it was not unusual to ask for an individual inspector; more persons asked for Mr. Castro than other inspectors because he was Mexican-American and had many friends in Mexico; the greater portion of the inspector’s work is discretionary; that documents for aliens were issued at a place other than the immigration office; and the issuance of the SW-434 is completely discretionary. When appellant Frank Paul Castro testified in his defense he stated that documents could be issued at the discretion of the interviewing officer; and there were no specific instructions for the issuance of temporary border crossing cards nor instructions as to who was required to complete certain forms. Thus one part of the defense presented, opened up the issues of intent, knowledge, mistake and plan or scheme. The plan as charged in the indictment was generally identical to the prior similar act. In both instances, it was the same group of people from the south or interior of Mexico, possessing Mexican Form 13 and the U.S. Public Health X-ray Card, who were issued an 1-190 for a fee. In both cases, the SW-434s were issued only to those persons possessing an 1-186. They were issued at appellant Frank Paul Castro’s house and the charge in both cases was $30. Carrasco was the runner in the earlier conspiracy and Castrellon took over, in the conspiracy charged, when Carrasco terminated his activities. The questioned proof obviously bore on the issues of intent, guilty knowledge, plan, scheme, and modus operandi. It could have been contended that there was only one conspiracy with two successive runners. The indictment stated the conspiracy began at a date unknown to the Grand Jury. Since the evidence of the prior conspiracy went to the jury with instructions limiting the use of the evidence, the appellants were benefitted, since otherwise that evidence could have been considered as proof of one conspiracy without the limiting instructions. Appellants assert that proof of prior similar acts were also offered in rebuttal. Actually, when Frank Paul Castro tendered himself as a witness and testified, he opened the door for impeachment testimony. This testimony, which, if offered in chief by the Government, might have been testimony as to prior similar acts, became instead impeaching testimony, properly admitted. White v. United States (9 Cir. 1963), 317 F.2d 231, 233. The judgments of conviction are affirmed as to each appellant. Bail of each appellant is revoked now. The motion to reopen argument, filed March 26,1973, is denied. . An SW-434 is an immigration permit which, when accompanied by a border crossing card (1-186) or temporary border crossing card (1-190) allows the bearer to travel within the United States more than twenty-five miles from the border. . (1) The Operation of the Prior Similar Conspiracy. Isabel Carrasco met Frank Paul Castro in 1966. They became good friends. In 1967, he first talked to Castro about the sale of immigration documents and then began to locate Mexican citizens as customers and take them to Castro. Isabel Carrasco testified to the operation of the prior similar conspiracy. He was to gather persons from the south or interior of Mexico. After these people had obtained the Mexican Form 13 and the U.S. Public Health X-ray Card, they were brought to appellant Frank Paul Castro at the Immigration office by Isabel Carrasco. Appellant Frank Paul Castro would then issue the 1-190 (temporary border crossing card). Eventually, because so many persons were brought to the office, appellant Frank Paul Castro told Isabel Carrasco not to accompany the customers. Payment and all discussions regarding the sale of permits took place at appellant Frank Paul Castro’s house. In 1969, Isabel Carrasco began selling SW-434s issued by appellant Frank Paul Castro. The procedure was to obtain the 1-186 (border crossing card) and bring it into the United States to appellant Frank Paul Castro’s house. Isabel Carrasco and appellant Frank Paul Castro would enter the bedroom where Isabel Carrasco would observe Frank Paul Castro make out the SW-434. The charge for this permit was $30. (2) The Operation of the Conspiracy Presented to the Jury. Ezequiel Castrellon was a brother-in-law of Isabel- Carrasco, and in June or July 1969 he began to refer customers to Carrasco, and then take the customers into Castro’s office while Carrasco waited outside. About September 1969, Castro told Carrasco, “not to call any more, . the thing was getting hot, ... to go away from Tijuana.” Castrellon then took over, although beginning in April 1969, Carrasco was again working through one Chino, who operated both in the first conspiracy and the second. Castrellon testified to a series of conversations with Nena Castro in December 1969. The Government treated this as the beginning of the conspiracy charged. The evidence showed that Ezequiel Castrellon would find persons from the interior of Mexico, ascertain that they had obtained the Mexican Form 13 and the U.S. Public Health X-ray Card. He would take these persons to appellant Frank Paul Castro, who would issue the 1-190. The customers thereafter paid Ezequiel Castrellon. Castrellon would then take the money to appellant Frank Paul Castro’s house and pay him. Later, when Ezequiel Castrellon began bringing too many people to the office, appellant Frank Paul Castro told Ezequiel Castrellon not to come to the office. In regard to the sale of SW-434s, Ezequiel Castrellon began also by taking customers to the office. When this became obvious, appellant Frank Paul Castro had Ezequiel Castrellon assemble the 1-186 (border crossing card), which Ezequiel Castrellon would then bring to appellant Prank Paul Castro’s house. At the house, appellant Prank Paul Castro and Ezequiel Castrellon would enter Castro’s bedroom. Here Ezequiel Castrellon would give appellant Prank Paul Castro the 1-186 and Castro would go into the bathroom, emerging with the SW-434 to accompany the 1-186. The charge for this permit was $30 and was paid the same day or the day after.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

SECURITIES AND EXCHANGE COMMISSION, Petitioner, v. Charles E. STEWART, Jr., United States District Judge, Respondent. Nos. 759, 760, Docket 73-1250, 73-1251. United States Court of Appeals, Second Circuit. Argued March 5, 1973. Decided March 16, 1973. David Ferber, Solicitor, SEC, Washington, D. C. (Richard E. Nathan, Asst. Gen. Counsel, Richard L. Jaeger, Spec. Counsel, and William H. Kuehnle, Atty., SEC, Washington, D. C., on the brief), for petitioner. Arthur L. Liman, New York City (Paul, Weiss, Rif kind, Wharton & Garrison, Jack C. Auspitz, New York City, Leonard H. Becker, Washington, D. C., Warren M. Green, New York City, on the brief), for respondent Yesco. John S. Martin, Jr., New York City (Martin & Obermaier, New York City, on the brief) for respondent Straub. Martin Menseh, New York City (Dornbush Menseh, Mandelstam & Schwartz, New York City, Frederic J. Gruder, Yonkers, N. Y., on the brief), for respondents Clay and Beatty. Neal M. Goldman, New York City (Squadron, Gartenberg, Ellenoff & Pie-sent, Theodore Ellenoff, New York City on the brief), for respondent Graze. James P. O’Neill, New York City, (Palmer & Serles, New York City, Raichle, Banning, Weiss & Halpern, Frank G. Raichle, Buffalo, N. Y., on the brief), for defendant Meissner. Before FEINBERG, MULLIGAN and TIMBERS, Circuit Judges. FEINBERG, Circuit Judge: The Securities and Exchange Commission petitions this court for a writ of mandamus directing Charles E. Stewart, Jr., judge of the United States District Court for the Southern District of New York, to vacate an order preventing the Commission from obtaining pre-trial discovery of Robert L. Vesco, Gilbert R. J. Straub, Frank G. Beatty, Richard E. Clay, Stanley Graze and Laurence B. Richardson, Jr., unless the Government grants them immunity pursuant to 18 U.S.C. §§ 6002, 6003. The order was entered in the course of a proceeding that commenced on November 27, 1972 when the Commission brought a civil complaint against 42 defendants, including the persons named above, charging them with having engaged, and continuing to engage, in acts and practices which constitute a “scheme to defraud” in violation of section 10(b) of the Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint alleges a scheme to transfer investments held by International Controls Corp. in IOS Ltd. and its related companies to shell companies controlled by defendant Vesco and his group. The complaint seeks broad equitable relief, including the appointment of a receiver, return of securities, an injunction and an accounting. The order complained of was entered at the request of the six defendants, over the objection of the Commission, on the ground that since criminal charges were in the offing their fifth amendment rights might otherwise be violated. At the outset, it must be remembered that the first question before us is not whether Judge Stewart’s pre-trial discovery order was a correct exercise of his discretion but whether this situation is an appropriate instance for use of the extraordinary writ of mandamus. While such an issue may seem technical, it is not, for it raises grave questions of the continued strength of the salutary final judgment rule in the federal courts and the propriety of appellate interference with the trial process at an early stage of the proceedings in an obviously massive litigation. From the papers before us, from the representations at oral argument, and from subsequent events of public record of which we are now cognizant, certain facts are now clear. Not surprisingly, the Commission stated in open court that it has no intention of granting use immunity under 18 U.S.C. §§ 6002, 6003 to any of the five defendants now resisting the mandamus petition. See note 1 supra. The Commission expressed its belief in the trial court, and reiterated it to us, that it has sufficient evidence of fraudulent activities to present a prima facie case on a motion for a preliminary injunction. While that motion, for reasons which were sufficient for the respective parties, was originally bypassed, it appears that the Commission has now determined to seek preliminary relief, and that proceedings on the preliminary injunction are scheduled to commence before Judge Stewart on March 19, 1973. In addition, counsel for the principal defendant (Vesco) stated to us in open court that his client will not testify unless he is granted immunity and that as to him, the Commission may get the benefit of any inferences to which it therefore might be entitled, should Judge Stewart decide to draw them. Vesco is now apparently out of the country. Thus, in considering the propriety of mandamus here, the following factors must be noted. While we fully appreciate the grave danger of ongoing violations, to which the Commission and our dissenting brother refer, the Commission is now seeking preliminary relief to correct these and anticipates success without deposition testimony. Should it be unsuccessful, then from any denial of preliminary injunctive relief, the Commission will have an appeal of right under 28 U.S.C. § 1292(a)(1), at which time it could and would undoubtedly challenge the propriety of the order now before us on petition for mandamus. Moreover, that order does not threaten to compel the Commission to grant immunity and jeopardize any future criminal proceedings involving these defendants, since the Commission refuses to do so. Thus, whatever damage might result if the condition imposed by Judge Stewart were applied in other cases, its only effect in this case is to prevent the depositions of these defendants. Even as to that, it is important to define the precise harm allegedly resulting from Judge Stewart’s order. The Commission argues that failure to depose these defendants prior to trial will deprive it of the benefit of negative inferences from defendants’ failure to testify on fifth amendment grounds; if Judge Stewart’s order were withdrawn, at least Vesco and possibly others would be required to invoke their fifth amendment privilege at any deposition, from which unfavorable inferences might be drawn. But if these defendants fail to testify in their own behalf either at the evidentiary hearing on preliminary relief or at trial, nothing in Judge Stewart’s order prevents the judge from drawing any proper inference from that. . Under these circumstances, the possible immediate harm to the Government and the precise underlying legal dispute are both narrow indeed. The question is whether Judge Stewart, at the preliminary hearing or at trial, might be barred from drawing the additional adverse inference flowing from invocation by these defendants of a fifth amendment privilege. On this record, we do not think that a compelling case has been made for the issuance of the extraordinary writ of mandamus to decide such a narrow issue. At the hearing on preliminary relief or at trial, the Commission may suffer no immediate harm at all because its case would be sufficiently strong to justify granting the relief requested. If the Commission fails, it has an immediate right to appeal, as already indicated, which in a proper case can be expedited. Of course, that an error committed in the trial court will ultimately be reviewable does not absolutely foreclose a petition for mandamus, but access to immediate appellate correction of error, if any, surely counsels against mandamus. See Roche v. Evaporated Milk Association, 319 U.S. 21, 26, 63 S.Ct. 938, 87 L.Ed. 1185 (1943). It is argued that should the Commission prevail in the civil proceedings, the correctness of the order would not be litigated on appeal and would survive as an unfortunate precedent. Neither proposition necessarily follows. If the Commission prevails, one or all of the losing parties would likely prosecute an appeal; we do not believe that this court would ignore the issue of the propriety of Judge Stewart’s order in an • appeal already properly before it, if the Commission as appellee stressed its significance. Moreover, two judges of this panel have today gone on record as disapproving, on the merits, the action taken by Judge Stewart. But the fact that the order may have been improper does not change our position as to the propriety of granting the writ. Extraordinary writs do not serve the function of merely correcting error, Will v. United States, 389 U.S. 90, 103-104, 88 S.Ct. 269, 19 L.Ed.2d 305 (1967), however tempting that course may be when the order appealed from appears, as it does to our dissenting brother, to be gross error. See United States v. DiStefano, 464 F.2d 845, 850 (2d Cir. 1972). The arguments raised in dissent do not justify ignoring the clear policy of denying mandamus except in the rarest situations. In United States v. Kordel, 397 U.S. 1, 9, 90 S.Ct. 763, 25 L.Ed.2d 1 (1970), the Supreme Court alluded to the possibility of a protective order postponing civil discovery until termination of a criminal action, when failure to do so appreciably threatened the fifth amendment rights of a civil litigant. In view of that, it is hard to see how Judge Stewart lacked the power to do something less. See also Gordon v. Federal Deposit Insurance Corp., 1238 U.S.App. D.C. 308, 427 F.2d 578, 580 (1970). Nor do we believe that the order raises issues suitable for resolution through “supervisory” mandamus. See generally Note, Supervisory and Advisory Mandamus Under the All Writs Act, 86 Harv. L.Rev. 595 (1973). The competing rights of the Government and of individuals, who are faced with parallel civil and criminal proceedings or the threat of them, hardly raise questions of first impression. See United States v. Kordel, supra; Gordon v. Federal Deposit Insurance Corp., supra; United States v. Simon, 373 F.2d 649 (2d Cir.), cert. granted sub nom. Simon v. Wharton, 386 U.S. 1030, 87 S.Ct. 1485, 18 L.Ed.2d 591, vacated as moot, 389 U.S. 425, 88 S.Ct. 577, 19 L.Ed.2d 653 (1967). Nor is the problem one which is subject to resolution by general guidelines applicable to an entire class of cases; individualized facts in each case of this sort will generally be dispositive. See Note, supra, at 619. Finally, most of the cases cited by the dissent to support mandamus hepe prove the general rule that use of the writ to review discovery orders should rarely be allowed. In sum, we believe that the observations of Mr. Justice Holmes in Northern Securities Co. v. United States, 193 U.S. 197, 400-401, 24 S.Ct. 436, 468, 48 L.Ed. 679 (1904) (dissenting opinion), should be kept in mind: Great cases like hard cases make bad law. For great cases are called great, not by reason of their real importance in shaping the law of the future, but because of some accident of immediate overwhelming interest which appeals to the feelings and distorts the judgment. These immediate interests exercise a kind of hydraulic pressure which makes what previously was clear seem doubtful, and before which even well settled principles of law will bend. There is no doubt that this is a “big” ease, with attendant publicity. But the extraordinary writ of mandamus is reserved for extraordinary situations in which the early intervention of an appellate court is necessary. We conclude that this attempt to obtain review of a pre-trial discovery order is not one of them. Petition for writ of mandamus denied. MULLIGAN, Circuit Judge (concurring) : I concur in the opinion of Judge Feinberg holding that the extraordinary remedy of mandamus is not appropriate to review these interlocutory discovery orders. In view of the circumstances set forth in his opinion, I find no compelling reason to make any exception to the sound policy of refusing to review intermediate orders by appeal or by mandamus. There is no reason to review the authority for this which is fully set forth in his opinion. At the same time I believe that the court below committed error. Rule 26(c), Fed.R.Civ.P. gives a trial court broad authority to protect parties or other witnesses during the pre-trial discovery process. In light of 18 U.S.C. §§ 6001-05, it is clear, however, that such authority does not extend to conditioning all discovery upon a blanket grant of use immunity by the Government pursuant to § 6002. The House Report accompanying the immunity provisions of the Organized Crime Control Act of 1970, expresses the Congressional intent that a witness must specifically claim his privilege to receive immunity. The statute does not contemplate an “immunity bath” H.R.Rep. No. 91-1549, 91st Cong., 2d Sess., in 1970 U.S.Code, Cong. & Ad.News, pp. 4007, 4017. Moreover § 6003 which sets forth the procedure to be followed in court, explicitly provides that the United States Attorney, with the approval of the Attorney General’s office, must request the court to grant immunity. I agree therefore with Judge Timbers that the initiator of the immunity provided by the statute is the Government and not the Court. In my view therefore the orders below are violative of both the spirit and the letter of the Congressional enactment. TIMBERS, Circuit Judge (dissenting) : If ever there were a case that cries out for mandamus, this is it. The district court — acting conscientiously and undoubtedly with the best of intentions — nevertheless has committed serious error. Two members of this panel (Judges Mulligan and Timbers) expressly agree that Judge Stewart’s orders were egregiously wrong; and the third member of the panel (Judge Feinberg) does “not suggest in the slightest degree that [he] necessarily disagree [s]” with the other two that the orders below were erroneous. The error committed strikes at the jugular vein of the entire enforcement program, civil and criminal, of the Securities and Exchange Commission. By conditioning the SEC’s right to take depositions of defendants in a civil injunction enforcement action upon the grant of use immunity to those defendants in a prospective criminal action, the district court has emasculated a key provision of the Securities Exchange Act of 1934. It has done so by an upside-down application of the use immunity provisions in Title II of the Organized Crime Control Act of 1970 — an application that could hardly be further from the remotest intent of Congress. In the teeth of the erroneous decision below, the SEC is being required — in this ease involving charges of a continuing fraudulent scheme of monumental proportions—to carry out its statutory duties with at least one hand, and perhaps both, tied behind its back. Aside from the impact of such a decision upon the instant ease, its terribly damaging precedential effect is bound to cause untold mischief with the Commission’s entire enforcement program, not only in other court actions, but in its investigations as well. And the radiations of this decision will have their impact upon the enforcement programs of every federal agency to which Congress has entrusted similar two-fold civil and criminal enforcement responsibilities. In short, this is precisely that truly extraordinary case for which the extraordinary remedy of mandamus is reserved. For the reasons more fully stated below, I therefore respectfully but most emphatically dissent from the majority’s denial of the petitions for mandamus. I. The crux of what the SEC seeks in this civil injunction enforcement proceeding is to take the depositions of the defendants, subject of course .to their privilege to refuse to answer specific questions which they reasonably believe will incriminate them or will lead to incriminating evidence. The SEC in essence believes that it is entitled to preserve the two specific, non-exclusive courses of action granted to it by Congress in Section 21(e) of the 1934 Act: (1) to institute a civil injunction enforcement proceeding; and (2) if the evidence warrants, to transmit a criminal reference report to the Attorney General leading to possible criminal proceedings. It seeks to require the defendants either to answer deposition questions or to invoke their Fifth Amendment privilege not to do so. If they invoke the Fifth Amendment, the trier of the facts would be permitted to draw an adverse inference from such silence. If they choose to testify, the evidence obtained would be available for use in the civil proceeding and, additionally, would constitute part of “such evidence as may be available concerning such acts and practices” which would form the basis for a possible criminal reference report. Section 21(e) of the 1934 Act, last sentence. There is not the slightest question — • even in the mind of the district court below — -that before enactment of the use immunity statute, 18 U.S.C. §§ 6001-05 (1970), the SEC would have been entitled to precisely what it seeks in the district court, as stated above. In United States v. Kordel, 397 U.S. 1 (1970), the FDA brought a civil in rent, action against two products and shortly thereafter announced that a criminal proceeding would be initiated against the corporation and certain corporate employees. When the FDA submitted interrogatories to the corporation, it moved to stay further proceedings in the civil action until after disposition of any criminal proceeding. The district court denied the motion and the interrogatories were answered. No one associated with the corporation asserted his privilege against self-incrimination. Individual defendants who had answered the interrogatories were convicted on the criminal charges. The Supreme Court upheld the convictions essentially on the ground that those individuals who answered the interrogatories could have asserted their Fifth Amendment privilege but failed to do so. We upheld essentially the same principle in United States v. Simon, 373 F.2d 649 (2 Cir.), cert. granted, 386 U.S. 1030, vacated as moot sub nom. Simon v. Wharton, 389 U.S. 425 (1967). There a trustee in bankruptcy sought to take the depositions of certain persons as witnesses in preparation for a hearing in a bankruptcy proceeding. When an indictment was returned against those witnesses, on the basis of conduct with regard to which the trustee sought to question them, the witnesses moved to enjoin the taking of their depositions until after the criminal trial. They urged that, as accountants, they would lose their professional standing if forced to invoke their Fifth Amendment privilege. We held that the public interest in the speedy progress of the bankruptcy action clearly outweighed the witnesses’ interest in withholding their testimony until after the criminal trial without invoking their privilege against self-incrimination. See also United States v. Parrott, 425 F.2d 972, 976 (2 Cir. 1970), cert. denied, 400 U.S. 824 (1970). In Gellis v. Casey, 338 F.Supp. 651 (S.D.N.Y.1972), the plaintiff moved for a preliminary injunction to enjoin the SEC from proceeding against him in an administrative hearing where he was a defendant, he having been warned that the transactions involved in the administrative proceeding had been called to the attention of the United States Attorney for possible presentation to a grand jury. The court denied the motion principally on the grounds that the plaintiff could invoke his Fifth Amendment privilege and there was no certainty of a criminal prosecution. While none of these decisions is dis-positive of the basic, undecided question raised by the decision of the district court below, they do point strongly toward the correctness of the SEC’s position. They establish that a civil proceeding will not be deferred until after a criminal proceeding in order to relieve a person from the decision whether to testify in the civil proceeding or to invoke his Fifth Amendment privilege. Such a person must make a decision; and, as Kordel holds, if he chooses to testify, his testimony may be used against him in a subsequent criminal prosecution. It is not disputed that the orders of the district court below are inconsistent with the above decisions and effectively emasculate the SEC’s two-prong enforcement duties under a statutory pattern that has been on the books for nearly four decades. By conditioning the SEC’s discovery upon the grant of use immunity, the court has presented the SEC with a Hobson’s choice. If the SEC decides to forego discovery, it risks losing its case for permanent equitable relief. If it grants use immunity, it most assuredly will be scuttling any prospective criminal proceeding. Use immunity does not preclude the government from bringing a criminal action against the defendants for conduct related to the deposition testimony given in the civil action. But the government would have the burden of proving that the evidence introduced at the criminal trial was not derived from the immunized testimony. Kastigar v. United States, 406 U.S. 441, 456-62 (1972). This burden would be impossible to meet in a complex case such as the instant one, where evidence is being obtained from many different sources. Of chief significance, however, the court’s utilization of the immunity statute to undercut the SEC’s statutory powers as they had stood for nearly four decades before the immunity statute was enacted clearly is not supported by the text or purpose of that statute. The use immunity statute was enacted to enable the government at its option to secure information which it previously would have been unable to obtain because of a witness’ Fifth Amendment privilege. It was designed to increase the effectiveness of the government’s enforcement powers. The utilization of the statute by the district court below, however, effectively impairs the enforcement powers of the SEC by forcing it to select between two previously nonexclusive enforcement courses. The district court clearly was not empowered to use the statute in this manner. Additionally, there is no justification for distinguishing between a stay of the SEC proceeding and what the district court has done here. The harmful effect of either type of order on the public interest is equal in magnitude although different in nature. Limiting the SEC to a civil or criminal proceeding, when in its judgment it is necessary to bring both proceedings, adversely affects the public interest not a whit less than delaying a civil action until the completion of a criminal trial. As the Supreme Court said in United States v. Kordel, supra, 397 U.S. at 11, in a different but analogous situation: “It would stultify enforcement of federal law to require a governmental agency . . . invariably to choose either to forego recommendation of a criminal prosecution once it seeks civil relief, or to defer civil proceedings pending the ultimate outcome of a criminal trial.” While the issue presented by the decision of the district court below is one of first impression, it is clear that the court committed egregious error. II. My disagreement with the majority centers upon the issue whether this is an appropriate case for issuance of a writ of mandamus. The majority characterizes the district court’s action as an “exercise of discretion”. It concludes that, even if such discretion were abused, a “compelling case” has not been made for “early intervention” by an appellate court. In my opinion, sufficiently extraordinary circumstances have been shown to justify granting the writ. The district court clearly acted in excess of its authority in applying the immunity statute for the sole and exclusive benefit of the defendants to enable them to avoid invoking their Fifth Amendment privilege. The immunity statute was designed to be invoked by the government to obtain information privileged under the Fifth Amendment. It was not contemplated that defendants would be able to use it as a sword against the government. Here the “usurpation of power” by the district court was sufficiently extraordinary and compelling of itself to call for issuance of the writ. See De Beers Consolidated Mines, Ltd. v. United States, 325 U.S. 212 (1945). There are additional substantial reasons why review of the district court’s orders should not be postponed. First, whether the government’s civil discovery can be conditioned upon a grant of use immunity where parallel, civil and criminal proceedings are anticipated is an issue of first impression and of such exceptional importance that we should undertake review immediately under our supervisory mandamus power. See La-Buy v. Howes Leather Co., 352 U.S. 249 (1957); Schlagenhauf v. Holder, 379 U.S. 104 (1964). See generally Note, Supervisory and Advisory Mandamus Under the All Writs Act, 86 Harv.L.Rev. 595 (1973). The district court’s application of the immunity statute in the instant case cuts to the core of many government enforcement schemes since it may seriously impair the ability of agencies to bring both civil and criminal proceedings. The SEC is not the only agency concerned. The Antitrust Division of the Department of Justice, for example, is empowered to bring both civil and criminal proceedings under the antitrust laws on the basis of the same conduct. For its authority to institute civil proceedings, see, e. g., 18 U.S.C. §§ 4, 9 (1970), authorizing United States attorneys to institute proceedings in equity to prevent violations of the antitrust laws. This issue certainly is as important as the issues that have prompted other courts to issue the writ pursuant to the supervisory mandamus doctrine. See United States v. United States District Court, 444 F.2d 651 (6 Cir. 1971), aff’d, 407 U.S. 297 (1972) (question whether Department of Justice’s “national security” wiretapping at issue was constitutional); In re Ellsberg, 446 F.2d 954 (1 Cir. 1971) (question whether defendant had standing in a removal proceeding to force the government to reveal whether grand jury indictment had been based on illegal wiretap evidence); United States v. Hughes, 413 F.2d 1244 (5 Cir. 1969), vacated as moot sub nom. United States v. Gifford-Hill-American, Inc., 397 U.S. 93 (1970) (question whether new Rule 16 of the Federal Rules of Criminal Procedure authorized defendant’s discovery of statements made to a grand jury). As far as I know, this is the first case in which the important issue raised by the district court’s decision has arisen. In my view, a matter of first impression which is as important as this is should receive the immediate attention of this Court. See Investment Properties International, Ltd. v. IOS, Ltd., 459 F.2d 705, 707-08 (2 Cir. 1972). If we do not rule on the issue now, we may lose the opportunity to do so until after the district courts have had to rule on the issue numerous times without our guidance. If the SEC wins in the present civil proceeding, there will be no occasion for it to appeal. Since the district court’s ruling was incorrect, and since the issue is of extraordinary significance, it strikes me as especially inadvisable for us to pass up this opportunity to rule on the issue. Second, review on appeal probably would be an inadequate remedy under the circumstances. The SEC has alleged a continuing fraud of immense proportions. The district court granted a temporary restraining order which provided some relief but not all that the SEC had requested as necessary to prevent continuing injury pending trial. Hearings on the SEC’s motion for a preliminary injunction and other relief are scheduled to begin on March 19, 1973. As the majority here states, the SEC may be successful on its preliminary injunction motion despite the district court’s shackling discovery order. On the other hand, the SEC may lose because of the absence of inferences adverse to defendants. Such a loss also might well be attributable to the fact that the SEC was not given the opportunity to adduce unprivileged testimony from defendants. No one has claimed that all the defendants would invoke their Fifth Amendment privilege with regard to all the SEC’s questions. And while it cannot be said to a certainty that the SEC will lose its preliminary injunction motion because of the district court’s order, the magnitude of the potential harm from such a loss emphasizes its importance. Under these circumstances, we should not expose the SEC to the risk of having to go through more than one proceeding to obtain effective relief. The situation clearly calls for early intervention by our Court. Cf. Harper & Row Publishers, Inc. v. Decker, 423 F.2d 487, 492 (7 Cir. 1970), aff’d mem. by an equally divided court, 400 U.S. 348 (1971); United States v. Hemphill, 369 F.2d 539, 543 (4 Cir. 1966). I agree with the majority’s view regarding the wisdom of the final judgment rule. Nevertheless, if inexorably applied, the final judgment rule at times may work an injustice. We have recognized that certain unusual and compelling cases call for immediate review by mandamus despite the lack of a final judgment. See, e. g., United States v. Lasker, _ F.2d _ (2 Cir. 1973); Hilbert v. Dooling, 476 F.2d 355, 362 (2 Cir. 1973), (March 12, 1973); Grace Lines, Inc. v. Motley, 439 F.2d 1028, 1031 n. 2 (2 Cir. 1971); United States v. Dooling, 406 F.2d 192, 198-99 (2 Cir. 1969), cert. denied sub nom. Persico v. United States, 395 U.S. 911 (1969); Miller v. United States, 403 F.2d 77, 80-81 (2 Cir. 1968); United States v. Nebbia, 357 F. 2d 303, 305 (2 Cir. 1966); Robine v. Ryan, 310 F.2d 797 (2 Cir. 1962). Our practice has been to balance the policy underlying the final judgment rule against the claim in an individual case that justice and the effective administration of our courts demands immediate review. Grace Lines, Inc. v. Motley, supra, 439 F.2d at 1031 n. 2. Having in mind the effect that postponed review may have here on those investors the SEC seeks to protect, and considering the adverse impact the district court’s order will have on the effectiveness of all government enforcement agencies — including the SEC — sound administration of justice seems to me to require that the final judgment rule yield in this extraordinary case to the extraordinary remedy of mandamus. Distinguished commentators recently have observed that “[rjeview by mandamus should indeed be restricted to the exceptional, unusual case, but such cases do arise, and the courts should be alert to respond to them.” 9 Moore’s Federal Practice ¶ 110.26, at 286 (2d ed. 1972). The instant case certainly is an “exceptional, unusual case” and the majority has failed to be “alert to respond”. Finally, we cannot ignore developments in the district court in this case since the argument before us on the mandamus petitions on March 5, of which we take judicial notice. Nor can we blind ourselves to reports in the public press, see, e. g., New York Times, March 11, 1973, § 4, at 3, col. 6, relating to the SEC’s investigation of this very case. The overtones of such reports, if the charges are proven, strike at the very foundations of government. And specifically they reflect the commendable swiftness with which the SEC reported to the Department of Justice an obvious attempt to interfere with the Commission’s investigation of this case. This serves further to confirm the extraordinary character of this case. I would issue the extraordinary writ of mandamus in this truly extraordinary case forthwith. By so doing we would demonstrate that this- Court is not powerless to cut the shackles which have been clamped upon the SEC and permit it to proceed without further impairment to discharge the awesome responsibilities entrusted to it by Congress. There are actually two petitions for mandamus before us apparently involving two orders of Judge Stewart. For convenience, we refer to one petition and one order. . We are told that one of these defendants, Laurence B. Richardson, is now cooperating with the Commission and has himself brought a motion to compel appointment of a receiver for one or more of the corporate defendants. . We say “might” because Vesco’s counsel, as indicated above, appears to have conceded that Vesco should be regarded as though he had specifically invoked the fifth amendment at a deposition. . While the Commission argues that the order prevents it from properly preparing for trial, its statement as to the strength of its case at a preliminary hearing undercuts this argument. If the Commission’s real concern is that it may be taken by surprise if some or all of these defendants suddenly decide to testify, Judge Stewart can deal with that situation if it arises. Obviously, defendants cannot have relief both ways. . I do not suggest in the slightest degree that I necessarily disagree, but on my view of the case, we need not reach, and I therefore express no view with regard to, the merits. . E. g., in American Express Warehousing, Ltd. v. Transamerica Insurance Co., 380 F.2d 277, 284 (2d Cir. 1967), we stated the general rule and denied the writ; in Investment Properties International Ltd. v. IOS, Ltd., 459 F.2d 705 (2d Cir. 1972), the discovery order went to the jurisdiction of the district court to hear the case, hardly the situation here. The dissent also refers to Financial Services, Inc. v. Ferrandina, 933 F.2d 73 (2d Cir. 1973), where we suggested that, but for the peculiar facts there present, mandamus might have been appropriate. The underlying issue involved, however, was the constitutionality of New York’s attachment statute in light of very recent Supreme Court decisions; the problem was subject to complete resolution and was not otherwise reviewable in the usual ways. . As must be obvious to all, references in this opinion to abuse of discretion and usurpation of power on the part of the district judge are not to be taken as any reflection by the author of this opinion upon the district judge personally. Such terms simply express the judicial standards to be invoked in determining whether the writ of mandamus should issue. My colleagues and I hold Judge Stewart in the highest esteem. The benchmark of a truly competent district judge — as with Judge Stewart in the instant case — is his capacity to insure that the record demonstrates with crystal clarity the basis of his exercise of discretion or assertion of power, so that a reviewing court can determine abuse of discretion or usurpation of power, or the absence thereof. . It is charged that the fraudulent scheme involved, among other things, the looting of mutual funds to the extent of some $224 million of United States blue chip securities. . Section 21(e) of the Securities Exchange Act of 1934, 15 U.S.C. § 78u(e) (1970), provides: “Whenever it shall appear to the Commission that any person is engaged or about to engage in any acts or practices which constitute or will constitute a violation of the provisions of this chapter, or of any rule or regulation thereunder, it may in its discretion bring an action in the proper district court of the United States or the United States Courts of any Territory or other place subject to the jurisdiction of the United States, to enjoin such acts or practices, and upon a proper showing a permanent or temporary injunction or restraining order shall be granted without bond. The Commission may transmit such evidence as may be available concerning such acts or practices to the Attorney General, who may, in his discretion, institute the necessary criminal proceedings under this chapter.” Section 20(b) of the Securities Act of 1933, 15 U.S.C. § 77t(b) (1970), is substantially identical. . The above decisions must be considered in the light of cases such as Malloy v. Hogan, 378 U.S. 1 (1963), and Spevack v. Klein, 385 U.S. 511 (1966). In Malloy and Spevack, the Court held that a person cannot be subjected to severe deprivations (imprisonment for contempt and disbarment, respectively), as a consequence of invoking his Fifth Amendment privilege. These cases indicate that, where a civil proceeding might result in a severe deprivation, it would be improper for the court to draw an adverse inference from the defendant’s silence. Indeed, under extreme circumstances the court in a criminal case might rule that the defendant’s testimony in a civil proceeding was so essential to his defense that it was “coerced” and thus inadmissible at his criminal trial. See Melson v. Sard, 402 F.2d 653 (D.C.Cir. 1968) (parole revocation proceeding). Clearly none of these unusual circumstances is present here. The relief sought by the SBC is prophylactic rather than punitive. It does not affect the basic interests of these defendants. No unfair consequences would be visited upon them as a result of their refusal to testify on Fifth Amendment grounds. . The relevant sections of the use immunity statute, 18 U.S.C. §§ 6002 and 6003 (1970), provide as follows : “§ 6002. Immunity generally Whenever a witness refuses, on the basis of his privilege against self-incrimination, to testify or provide other information in a proceeding before or ancillary to— (1) a court or grand jury of the United States, (2) an agency of the United States, or (3) either House of Congress, a joint committee of the two Houses, or a committee or a subcommittee of either House, and the person presiding over the proceeding communicates to the witness an order issued under this part, the witness may not refuse to comply with the order on the basis of his privilege against self-incrimination; but no testimony or other information compelled under the order (or any information directly or indirectly derived from such testimony or other information) may be used against the witness in any criminal case, except a prosecution for perjury, giving a false statement, or otherwise failing to comply with the order.” “§ 6003. Court and grand jury proceedings (a) In the case of any individual who has been or may be called to testify or provide other information at any proceeding before or ancillary to a court of the United States or a grand jury of the United States, the United States district court for the judicial district in which the proceeding is or may be . held shall issue, in accordance with subsection (b) of this section, upon the request of the United States attorney for such district, an order requiring such individual to give testimony or provide other information which he refuses to give or provide on the basis of his privilege against self-incrimination, such order to become effective as provided in section 6002 of this part. (b) A United States attorney may, with the approval of the Attorney General, the Deputy Attorney General, or any designated Assistant Attorney General, request an order under subsection (a) of this section when in his judgment— (lj the testimony or other information from such individual may be necessary to the public interest; and (2) such individual has refused or is likely to refuse to testify or provide other information on the basis of his privilege against self-incrimination.” . See S.Rep.No. 91-617, 91st Cong., 1st Sess. 55 (1969); H.R.Rep.No. 91-1549, 91st Cong., 2d Sess. 32 (1970), the latter quoted in 2 U.S.Code, Cong. & Ad.News 4007, 4008 (1970). See also Kastigar v. United States, 406 U.S. 441, 443-48 (1972) (“[I]mmunity statutes [are] essential to the effective enforcement of various criminal statutes”. Id. at 447). . The supervisory mandamus doctrine apparently originated with the following language in LaBuy: “We believe that supervisory control of the District Courts is necessary to proper judicial administration in the federal system.” 352 U.S. at 259-60. The doctrine was reinforced by the decision in Schlagenhauf where the Court upheld the power of courts of appeal to review by mandamus a “basic, undecided question,” and “to settle new and important problems.” 379 U.S. at 110-11. Professors Moore and Ward have interpreted these decisions to mean that courts of appeal “may review immediately questions of unusual importance the determination of which are necessary to orderly, even and efficient administration.” 9 Moore’s Federal Practice ¶ 110.28, at 312-13, and authorities cited at n. 58 (2d ed. 1972). . We have recognized that, in precisely such areas as discovery, supervisory mandamus would be expected to have its greatest value: “When a discovery question is of extraordinary significance or there is extreme need for reversal of the district court’s mandate before the case goes to judgment, there are escape hatches from the finality rule: ... an extraordinary writ.” American Express Warehousing, Ltd. v. Transamerica Ins. Co., 380 F.2d 277, 282 (2 Cir. 1967). For decisions in this Court granting the writ with respect to discovery orders, see Investment Properties International, Ltd. v. IOS, Ltd., supra, 459 F.2d at 707-08; Madison-Lewis, Inc. v. MacMahon, 299 F.2d 256 (2 Cir. 1962). Immediate review of discovery orders by means of mandamus has been granted in other circuits. Pfizer Inc. v. Lord, 456 F.2d 545, 547-48 (8 Cir. 1972); Harper & Row Publishers, Inc. v. Decker, 423 F.2d 487, 492 (7 Cir. 1970), aff’d mem. by an equally divided court, 400 U.S. 348 (1971); Texaco, Inc. v. Borda, 383 F.2d 607, 608 (3 Cir. 1967); United States v. Hemphill, 369 F.2d 539, 543 (4 Cir. 1966); Continental Oil Co. v. United States, 330 F.2d 347, 349 (9 Cir. 1964); Hartley Pen Co. v. United States District Court, 287 F.2d 324, 328-30 (9 Cir. 1961). . The SEC sought preliminary relief against further violations of the anti-fraud, reporting, and proxy provisions of the 1933 and 1934 Acts, an order that certain false and misleading reports be corrected, and the appointment of receivers. It also sought a temporary restraining order restricting the transfer of cash or other assets from certain funds. On November 28, the court refused to grant the temporary restraining order. On November 30, the court granted a limited temporary restraining order prohibiting the mutual funds from making any new investment commitments except in prescribed circumstances. This order was extended on December 10 for an additional 10 days. On December 20, the court combined this limited relief, which it continued in effect, with an order for an expedited consolidated trial on preliminary and permanent relief. Subsequently, the court amended its order because of “changed circumstances” and directed that the motion for a preliminary injunction be heard separately, in advance of trial, beginning March 19. . Professors Moore and Ward also have observed that “[wjitli respect to the demands of justice made by individual cases, it seems clear that discretionary review by mandamus is to be preferred to enlarging by judicial interpretation the categories of interlocutory orders that are appealable of right.” 9 Moore’s Federal Practice ¶ 110.26, at 286 (2d ed. 1972), quoted in Financial Services, Inc. v. Ferrandina, 474 F.2d 743, 746 n. 7 (2 Cir. 1973).

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Petitioner-Appellee, v. Walter SECOR, Respondent-Appellant. No. 476, Docket 72-2161. United States Court of Appeals, Second Circuit. Argued Feb. 26, 1973. Decided April 4, 1973. Joseph I. Stone, New York City, for respondent-appellant. Dennis J. Helms, Asst. U. S. Atty. (Whitney North Seymour, Jr., U. S. Atty., S. D. N. Y., of counsel), for petioner-appellee. Before KAUFMAN, ANDERSON and MANSFIELD, Circuit Judges. MANSFIELD, Circuit Judge: Upon this appeal from a judgment of contempt for failure to comply with two orders of the United States District Court for the Southern District of New York directing appellant, Walter Secor, to comply with a summons issued by the Internal Revenue Service (“IRS”) pursuant to 26 U.S.C. § 7602, the sole error claimed by Secor is that the summons directing him to appear at the IRS offices and to turn over certain records violated his Fifth Amendment privilege against self-incrimination. That issue, however, had been raised earlier in a proceeding instituted in the district court pursuant to 26 U.S.C. §§ 7402(b) and 7604(a) to enforce compliance with the IRS summons and had been adjudicated against Secor by a decision and order of the district court from which no appeal had been taken within the time prescribed by law. Accordingly, since Secor is barred by the doctrine of res judicata from raising the issue, we affirm the judgment of the district court. The history of the government’s efforts to interrogate Secor and of the legal proceedings which followed is undisputed. Pursuant to § 7602 the IRS on June 9, 1971, served upon Secor a summons directing him to appear at its offices on June 30, 1971, to testify regarding his tax liability for the year ended December 31, 1968, and to bring with him specified books and records. The Revenue Agent in charge of the matter, Charles Paletty, was informed by Secor’s attorney that he had advised Secor, who failed to appear, to invoke his constitutional privilege against self-incrimination and not to answer any questions. On December 13, 1971, the district court, acting upon a petition of the IRS, issued to Secor an Order to Show Cause why he should not be compelled to comply with the IRS summons served upon him in June. On December 30, 1971, Secor appeared in court and furnished an affidavit of the same date prepared by his counsel, which reiterated his refusal to testify in response to the summons, stating that he was contesting IRS assessments against him for the years 1964-1967, that a tax deficiency had been assessed against him for the year 1968 after he had refused to answer questions with respect to earlier orders, and that he had been convicted in 1966 for failure to register and pay the federal wagering tax. The conviction was set aside pursuant to the subsequent decision in Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L. Ed.2d 889 (1968), which held unconstitutional the wagering tax as violative of the Fifth Amendment. Seeor’s affidavit requested that he be permitted the right to invoke his constitutional privilege against self-incrimination, that the order to show cause be dismissed, and that the summons issued by the IRS be cancelled. With the issue thus joined, Judge Pierce in a memorandum opinion entered on February 10, 1972, denied Secor’s application, stating “The Court is not aware that anyone has suggested criminal prosecution of respondent based on any alleged gambling activities. . . . If such a situation eventuates, respondent may then urge that his constitutional claims be measured against the Marchetti case.” Secor was ordered by the court “to obey the mandate contained in the Internal Revenue Service summons which had been served upon him.” Secor neither obeyed the court’s order nor took an appeal therefrom. On June 27, 1972, the court, upon the written application of the United States Attorney, a copy of which was served on Secor’s attorney, issued a second order directing Secor to comply with the IRS summons by appearing at the IRS offices, this time on July 10, 1972, and by producing the documents and records referred to in the summons. Again Secor neither- obeyed the court’s order nor took an appeal. On August 22, 1972, the government moved pursuant to 26 U.S.C. § 7604(b) for an order holding Secor in contempt because of his failure to obey the court’s two earlier orders. An evidentiary hearing was held in which the only witness called by Secor was Revenue Agent Faletty; Secor also offered a limited amount of documentary evidence. Secor’s position was that he was not guilty of contempt because he had been justified in refusing to obey the summons on the ground that interrogation pursuant to it would violate his Fifth Amendment rights. By decision dated September 13, 1972, Judge Pierce adjudged Secor to be in contempt for his refusal to obey the orders of the court. Imposition of sentence was suspended and Secor was fined $25 per day thenceforth for each day upon which he should fail to comply with the IRS summons. Pending appeal the sentence was stayed. On September 18, 1972, Secor filed a notice of appeal from the district court’s judgment holding him in contempt. Upon this appeal Secor asks us to reverse the judgment of contempt on the ground that interrogation of him pursuant to the IRS summons would violate his Fifth Amendment rights. However, we must first determine whether we are precluded from determination of that issue, interesting though it may be, by Secor’s failure to take a timely appeal from the district court’s earlier orders directing him to comply with the IRS summons. The government urges that when his time to appeal from the February 10, 1972 order expired the district court’s decision in this proceeding became res judicata as to the sole issue which he now seeks to raise and that that order cannot now be collaterally attacked. We agree. The final and appealable nature of a district court’s order enforcing an IRS summons in a proceeding instituted pursuant to 26 U.S.C. §§ 7402(b) and 7604 (a) was firmly established by the Supreme Court in Reisman v. Caplin, 375 U.S. 440, 84 S.Ct. 508, 11 L.Ed.2d 459 (1964). There the Court, affirming the denial of declaratory and injunctive relief sought by attorneys for the taxpayers against an IRS summons issued under § 7602, held that the taxpayers’ constitutional rights were fully protected for the reason that in order to enforce the IRS summons the government would be required to institute an adversary proceeding in the district court (as it did here) for an order enforcing the summons, in which the taxpayer could assert and litigate his constitutional rights and appeal as a matter of right from an adverse decision and enforcement order. “If the Secretary or his delegate wishes to enforce the summons, he must proceed under § 7402(b), which grants the District Courts of the United States jurisdiction ‘by appropriate process to compel such attendance, testimony, or production of books, papers, or other data.’ “Any enforcement action under this section would be an adversary proceeding affording a judicial determination of the challenges to the summons and giving complete protection to the witness. * * * *- * * “Furthermore, we hold that in any of these procedures either before the district judge or United States Commissioner, the witness may challenge the summons on any appropriate ground. This would include, as the circuits have held, the defenses that the material is sought for the improper purpose of obtaining evidence for use in a criminal prosecution, Boren v. Tucker, 239 F.2d 767, 772-773, as well as that it is protected by the attorney-client privilege, Sale v. United States [8 Cir.] 228 F.2d 682. Finally, we hold that such orders are appealable. See O’Connor v. O’Connell, 253 F.2d 365 (C.A. 1st Cir.); In re Albert Lindley Lee Memorial Hospital, [209 F.2d 122 (C.A. 2d Cir.)]; Falsone v. United States, [205 F.2d 734 (C.A. 5th Cir.)]; Bouschor v. United States, 316 F.2d 451 (C.A. 8th Cir.); Martin v. Chandis Securities Co., 128 F.2d 731 (C.A. 9th Cir.); D. I. Operating Co. v. United States, 321 F.2d 586 (C.A. 9th Cir.). Contra, Application of Davis, 303 F.2d 601 (C.A. 7th Cir.). It follows that with a stay order a witness would suffer no injury while testing the summons.” Reisman v. Caplin, 375 U.S. at 445-446, 449, 84 S.Ct. at 512-513. Accord, Daly v. United States, 393 F.2d 873, 876 (8th Cir. 1968) (“The order of the trial court in enforcing the summons of the revenue agent became an appeal-able order upon its proper entry. . . . [t]he order entered was similar to a final judgment in any other case”); see McGarry’s Inc. v. Rose, 344 F.2d 416 (1st Cir. 1965); Tillotson v. Boughner, 327 F.2d 982 (7th Cir. 1963). Since the district court’s February 10, 1972, decision and enforcement order represented a final adjudication of Se-cor’s Fifth Amendment defense, he cannot now turn back the hands of the clock and retry an issue that was litigated on the merits in an adversary proceeding where due process requirements were fully observed. To permit such a collateral attack would be to make a mockery of the well settled doctrine of res judicata. See Oriel v. Russell, 278 U.S. 358, 49 S.Ct. 173, 73 L.Ed. 419 (1929); Baldwin v. Iowa State Traveling Men’s Association, 283 U.S. 522, 51 S.Ct. 517, 75 L.Ed. 1244 (1931); Durfee v. Duke, 375 U.S. 106, 83 S.Ct. 509, 9 L.Ed.2d 496 (1963); Daly v. United States, 393 F.2d 873 (8th Cir. 1968). The situation here is in all legally significant respects the same as that before the Supreme Court in Oriel, supra, where it held, in a contempt proceeding for violation of a bankruptcy court turnover order, that the bankrupt was precluded from relitigating defenses raised and tried in the earlier turn-over proceeding itself, resulting in a final order from which no appeal had been taken. “It would be a disservice to the law if we were to depart from the longstanding rule that a contempt proceeding does not open to reconsideration the legal or factual basis of the order alleged to have been disobeyed and thus become a retrial of the original controversy. The procedure to enforce a court’s order commanding or forbidding an act should not be so inconclusive as to foster experimentation with disobedience. Every precaution should be taken that orders issue, in turnover as in other proceedings, only after legal grounds are shown and only when it appears that obedience is within the power of the party being coerced by the order. But when it has become final, disobedience cannot be justified by re-trying the issues as to whether the order should have issued in the first place.” Maggio v. Zeitz, 333 U.S. 56, 69, 68 S.Ct. 401, 408, 92 L.Ed. 476 (1948). See also 9 J. Moore, Federal Practice ¶ 110.-13 [4] at 168-69 (2d ed. 1972). These principles apply with equal force here, where we are not confronted with any contention that Secor was denied due process in the enforcement proceeding or that he was barred from raising his Fifth Amendment claims on a question-by-question basis before the IRS. The latter procedure might have represented at least an effort to furnish non-incriminatory information to the IRS and have permitted the court to rule on specific questions claimed to be incriminatory. But Secor simply refused on Fifth Amendment grounds to submit to any interrogation. Since Secor is thus barred by res judicata from raising again the issue of whether he properly invoked his privilege against self-incrimination, we need not consider on the merits his claim that enforcement of the IRS summons would violate the Fifth Amendment. Although Secor does not raise the issue, we note that there was ample evidence in the record to support the district court’s finding of contempt. His conduct in refusing to comply with the district court’s February 10, 1972 enforcement order was not free of contumacy. Upon the entry of that order he faced the choice of complying or taking an appeal. Instead of following either course, he deliberately defied the order. Four months later, when the court entered its second enforcement order in the hope that Secor might comply, he adhered to his course of disobedience. The order holding him in contempt was fully justified and is affirmed. . 26 U.S.C. § 7602 provides: “For the purpose of ascertaining the correctness of any return, making a return where none has been made, determining the liability of any person for any internal revenue tax or the liability at law or in equity of any transferee or fiduciary of any person in respect of any internal revenue tax, or collecting any such liability, the Secretary or his delegate is authorized— “(1) To examine any books, papers, records, or other data which may be relevant or material to such inquiry; “(2) To summon the person liable for tax or required to perform the act, or any officer or employee of such person, or any person having possession, custody, or care of books of aceourt containing entries relating to the business of the person liable for tax or required to perform the act, or any other person the Secretary or his delegate may deem proper, to appear before the Secretary or his delegate at a time and place named in the summons and to produce such books, papers, records, or other data, and to give such testimony, under oath, as may be relevant or material to such inquiry; and “(3) To take such testimony of the person concerned, under oath, as may be relevant or material to such inquiry.” . 26 U.S.C. § 7402(b) provides: “(b) To enforce summons. — -If any person is summoned under the internal revenue laws to appear, to testify, or to produce books, papers, or other data, the district court of the United States for the district in which such person resides or may be found shall have jurisdiction by appropriate process to compel such attendance, testimony, or production of books, papers, or other data.” 26 U.S.C. § 7604(a) provides: “(a) Jurisdiction of district court.— If any person is summoned under the internal revenue laws to appear, to testify, or to produce books, papers, records, or other data, the United States district court for the district in which such person resides or is found shall have jurisdiction by appropriate process to compel such attendance, testimony, or production of books, papers, records, or other data.” . 26 U.S.C. § 7604(b) provides: “(b) Enforcement — Whenever any person summoned under section 6420 (e)(2), 6421(f)(2), 6424(d)(2), or 7602 neglects or refuses to obey such summons, or to produce books, papers, records, or other data, or to give testimony, as required, the Secretary or his delegate may apply to the judge of the district court or to a United States commissioner for the district within which the person so summoned resides or is found for an attachment against him as for a contempt. It shall be the duty of the judge or commissioner to hear the application, and, if satisfactory proof is made, to issue an attachment, directed to some proper officer, for the arrest of such person, and upon his being brought before him to proceed to a hearing of the case; and upon such hearing the judge or the United States commissioner shall have power to make such order as he shall deem proper, not inconsistent with the law for the punishment of contempts, to enforce obedience to the requirements of the summons and to punish such person for . his default or disobedience.” . On this issue we do note that claims of self-incrimination in IRS civil investigatory proceedings have been approached differently by different courts. Compare United States v. Roundtree, 420 F.2d 845, 852 (5th Cir. 1969), with United States v. White, 301 F.Supp. 1129, 1131 (D.R.I.1969). See also United States v. Hatch, 31 AFTR2d ¶ 73-465 (D.C. Idaho, Civ. No. 472-16, June 28, 1972); United States v. Runte, 1973 CCH U.S. Tax Cases ¶ 9265 (W.D.La., Civ. No. 18514, Jan. 18, 1973). United States v. Kordel, 397 U.S. 1, 90 S.Ct. 763, 25 L.Ed. 2d 1 (1970), relied on by Secor, did not rule upon the issue which he seeks to raise on this appeal. There the Supreme Court held that where a defendant did not invoke his privilege against self-incrimination in a civil condemnation proceeding instituted by the government, testimony given by him in that proceeding could be used against him in a subsequent criminal prosecution. To the extent that the Court implied that the defendant could have invoked his privilege in the civil proceeding it should be noted that, unlike the present case, the criminal prosecution was not only contemplated at the time of the civil proceeding but was “nearly contemporaneous” with it. We, of course, intimate no views at this time on the question whether the pendency of a criminal prosecution is an essential prerequisite for invocation of the Fifth Amendment privilege in a civil proceeding.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

GOVERNMENT OF the VIRGIN ISLANDS v. Micha WILLIAMS, Appellant. GOVERNMENT OF the VIRGIN ISLANDS v. Angel De JESUS, Appellant. Nos. 72-1374, 72-1389. United States Court of Appeals, Third Circuit. Argued Feb. 1, 1973. Decided March 28, 1973. Edgar D. Ross, Christiansted, St. Croix, V. I., for appellants. Joel D. Sacks, U. S. Atty., Julio A. Brady, Asst. U. S. Atty., Charlotte Amalie, St. Thomas, V. I., for appellees. Before MARIS, ROSENN and HUNTER, Circuit Judges. OPINION OF THE COURT MARIS, Circuit Judge. These are appeals by the defendants, Micha Williams, at our docket No. 72-1374, and Angel De Jesus, at our docket No. 72-1389, from judgments entered in the District Court of the Virgin Islands on jury verdicts of guilty in narcotics cases. The defendant Williams was charged with and found guilty of the crime of distributing marihuana in violation of 19 V.I.C. § 604(a); the defendant De Jesus was charged with and found guilty of distributing heroin in violation of 19 V.I.C. § 604(a). In each case, prior to the empanelling of the trial jury, the defendant had moved to quash the array of jurors on the ground that the selection of jurors from that array would deprive him of a fair trial because some of them had served as jurors in prior narcotics cases tried within the previous month in which they had heard the testimony of certain prosecution witnesses, including a government informer, whom the government planned to call to testify at the defendant’s trial. In each case the court denied the motion to quash the array. The denial of the motion in each case is asserted as error on these appeals. We are satisfied that the court did not commit error in this regard. For it has been settled from early times that a challenge to the array of jurors goes only to the form and manner of making up the jury panel and must, therefore, be based on some ground affecting the validity of the whole panel or array of jurors. The disqualification of an individual juror for any cause is not a ground for challenge to the array, since it may later be raised on a challenge to the polls for cause. United States v. Callender, C.C.Va.1800, F.Cas. No. 14,709; Frazier v. United States, 1949, 335 U.S. 497, 510, 511, 69 S.Ct. 201, 93 L.Ed. 187; United States v. Gordon, 7 Cir. 1958, 253 F.2d 177; State v. Lundgren, 1913, 124 Minn. 162, 144 N. W. 752; Smith v. State, 1954, 219 Miss. 741, 69 So.2d 837; State v. Taylor, 1959, Mo., 324 S.W.2d 643, 76 A.L.R.2d 671, and annotation thereto, 76 A.L.R.2d 678, 679; 47 Am.Jur.2d Jury § 229; 50 C.J.S. Juries § 262. Here, admittedly, the grounds alleged — prior service in narcotics cases involving the same government witnesses — applied to less than all of the jurors in the array and were, if valid, grounds for later individual challenges. They were, therefore, insufficient to support the defendants’ challenges to the array. Those challenges were accordingly rightly denied by the court. In the ease of the defendant De Jesus, however, later challenges for cause were made to the polls in the cases of certain individual jurors. These individual challenges were based on the same grounds, namely, that the challenged jurors must be presumed to be partial as a matter of law and were, therefore, disqualified because they had served as jurors in the trial of other narcotics cases within the preceding month, which had resulted in convictions and at which prosecution witnesses, including a government informer, who were scheduled to testify in De Jesus’ case, had testified. De Jesus actually challenged for this cause five of the jurors selected for his case. Three of them had served in three prior narcotics eases and the court, in the exercise of its discretion, sustained his challenges as to them. The other two challenged jurors had served in only two prior eases and as to them De Jesus’ challenges were overruled. The jury, which included these two jurors, found De Jesus guilty, as we have seen. On his appeal from his conviction, De Jesus asserts that the court should have held the two jurors to be disqualified for partiality and should have sustained his challenges of them for that cause. The failure of the court to do so he asserts as the second ground of error which, as he contends, entitles him to a new trial. We do not agree. The federal courts have uniformly held that, absent some evidence of actual partiality, a juror is not disqualified merely because he previously sat in a similar case arising out of a separate and distinct set of circumstances even though . the offenses charged in the cases are similar and some of the same prosecution witnesses testify in each case. United States v. Haynes, 2 Cir. 1968, 398 F.2d 980, 984, 985, cert. den. 393 U.S. 1120, 89 S.Ct. 996, 22 L.Ed.2d 124; United States v. Ragland, 2 Cir. 1967, 375 F.2d 471, 476, fn. 2; United States v. Cooper, 3 Cir. 1964, 332 F.2d 790; Casias v. United States, 10 Cir. 1963, 315 F.2d 614, 615, 618, cert. den. 374 U.S. 845, 83 S.Ct. 1901, 10 L.Ed.2d 1065; Cwach v. United States, 8 Cir. 1954, 212 F.2d 520, 529; Belvin v. United States, 4 Cir. 1926, 12 F.2d 548, 550; Haussener v. United States, 8 Cir. 1925, 4 F.2d 884, 886, 887; Wilkes v. United States, 6 Cir. 1923, 291 F. 988, 990, cert. den. 263 U.S. 719, 44 S.Ct. 181, 68 L.Ed. 523. See, also, United States v. Stevens, 6 Cir. 1971, 444 F.2d 630, 631, 632. In Ward v. Union Barge Line Corporation, 1971, 443 F.2d 565, 570, this court stated “It is clear that jurors are not disqualified merely because they have sat in cases involving similar issues.” Casias v. United States, 10 Cir. 1963, 315 F.2d 614, cert. den. 374 U.S. 845, 83 S.Ct. 1901, 10 L.Ed.2d 1065, was a case in which an evenly divided court of appeals in banc affirmed the conviction of the defendant by a jury of which most of the members had sat in prior similar cases and in which the same prosecution witnesses, who were called upon to testify in Casias’ ease, had testified. In that case, Judge Breitenstein, speaking for the three members of the court who favored affirmance, observed that the “general rule is that a juror is not disqualified to sit in a criminal case because he previously sat on a similar case arising out of a separate, distinct, and independent transaction.” 315 F.2d at 615. De Jesus relies upon the views of Chief Judge Murrah speaking for the three judges who favored reversal in the Casias case. Those views, however, have never found favor with any federal court, so far as we are aware, nor do we accept them here. Moreover, even Chief Judge Murrah’s opinion states that “Not every prospective juror who has sat on another similar case with the same government witnesses is ipso facto debarred from the jury box. His qualifications may very well rest on voir dire. Prejudice should be implied in law only when the accumulative effect of the extrinsic evidence of guilt is clear and convincing.” 315 F.2d at 621. We think that this rule is particularly appropriate for the Virgin Islands in which the number of persons available for jury duty is limited by the comparatively small population of the territory. For there is an ever-increasing likelihood that the district court will in the future be called upon to try even larger numbers of criminal cases .rising out of similar circumstances, such as narcotics violations, in which some of the same government witnesses are necessarily involved. It might well, therefore, seriously impede the prompt administration of criminal justice in the territory as well as deny to accused persons the speedy trial to which they are entitled under section 3 of the Revised Organic Act, 48 U.S.O.A. § 1561, if jurors should be conclusively presumed to be partial and, therefore, disqualified from sitting in the trial of a criminal case merely because they had sat in a prior similar case involving some of the same government witnesses and without any regard for their actual states of mind and ability to try the case fairly. Since a juror who is regularly drawn and selected is presumed, in the absence of some showing to the contrary, to be unbiased and otherwise qualified and competent to serve and since, as we have seen, the mere fact of service in previous similar cases involving some of the same witnesses does not of itself amount to such a showing, it necessarily follows that a defendant challenging a juror on that ground must show by some evidence, normally obtained on voir dire, the probability of the actual existence of bias. Haussener v. United States, 8 Cir. 1925, 4 F.2d 884. In the Haussener case the court said, pp. 886-887: “Five jurors who sat in this case had theretofore sat in other cases, against other persons, charged with some violation of the Volstead Act, wherein one or both of the government prohibition agents testifying in this case had also been witnesses. Touching the qualifications of these jurors it developed upon their voir dire examination that some of them had formed and still had a certain opinion as to the credibility of these prohibition agents; but these jurors said, in substance, that they could try the case in the same fair state of mind as they could have done if these witnesses had been strangers, and if they had never heard them testifying in other cases. “. . . it is too plain for argument that no such procedure ought to be held reversible error, unless in the presence of an examination which shows that the attitude of the jurors is such as to preclude a fair and impartial trial, beyond cavil or question. This is so, because in the very nature of the situation practically all prosecutions for violations of the Volstead Act . . . must be bottomed upon the testimony of prohibition agents. “We are not saying that, if the jurors had by their answers disclosed a state of opinion that would have prevented a fair and impartial trial, or an unprejudiced consideration of all of the evidence offered, that they would have been competent jurors; but it will be observed that no such state of mind is shown by the voir dire examination. The ingrafting into the criminal procedure of a novel practice like that here disclosed ought not be permitted, except in the face of a situation clearly showing the bias, prejudice, and lack of impartiality of the juror. In this the record fails. }} The following statements of the Supreme Court in Irvin v. Dowd, 1961, 366 U.S. 717, pp. 722-724, 81 S.Ct. 1639, pp. 1642-1643, 6 L.Ed.2d 751, are significant in this connection: “It is not required, however, that the jurors be totally ignorant of the facts and issues involved To hold that the mere existence of any preconceived notion as to the guilt or innocence of an accused, without more, is sufficient to rebut the presumption of a prospective juror’s impartiality would be to establish an impossible standard. It is sufficient if the juror can lay aside his impression or opinion and render a verdict based on the evidence presented in court. “The adoption of such a rule, however, ‘cannot foreclose inquiry as to whether, in a given case, the application of that rule works a deprivation of the prisoner’s life or liberty without due process of law’ ... As stated in Reynolds [98 U.S. 145, 25 L. Ed. 244,], the test is ‘whether the nature and strength of the opinion formed are such as in law necessarily raise the presumption of partiality. The question thus presented is one of mixed law and fact .’ At page 156. ‘The affirmative of the issue is upon the challenger. Unless he shows the actual existence of such an opinion in the mind of the juror as will raise the presumption of partiality, the juror need not necessarily be set aside . . . If a positive and decided opinion had been formed, he would have been incompetent even though it had not been expressed.’ At page 157. As was stated in Brown v. Allen, 344 U.S. 443, 507 [73 S.Ct. 397, 446, 97 L.Ed. 469], the ‘so-called mixed questions or the application of constitutional principles to the facts as found leave the duty of adjudication with the federal judge’. “The rule was established in Reynolds that ‘[t]he finding of the trial court upon that issue [the force of a prospective juror’s opinion] ought not be set aside by a reviewing court, unless the error is manifest.’ 98 U.S., at 156. In later cases this Court revisited Reynolds, citing it in each instance for the proposition that findings of impartiality should be set aside only where prejudice is ‘manifest’.” It is clear from the decisions that broad discretion and duty reside in the court to determine from the evidence and demeanor of the jurors on voir dire and from any other evidence available to it that the jury as finally selected is subject to no solid basis of objection on the ground of partiality. Frazier v. United States, 1948, 335 U.S. 497, 69 S. Ct. 201, 98 L.Ed. 187. It is equally clear that the decision of the court on a challenge for cause on that ground will be reversed only if an abuse of that discretion is manifest. Implicitly recognizing the authority of the cited cases, De Jesus argues that the totality of facts in his case established the partiality of the two jurors in question and that the court should, therefore, have excluded them. We see no merit in this contention. The unsatisfactory nature of the retrospective application of such a case by case approach, which Judge Breitenstein pointed out in his opinion for the three judges who favored affirmance in the Casias case, 315 F.2d at p. 617, is manifest. In any event the “totality of facts” upon which De Jesus relies is stated in his brief on appeal merely as “(a) the use by the government of the same two key witnesses in all three (3) trials; (b) the frequency of the service of the challenged jurors; and (e) the fact that the informant’s credibility must have of necessity been at issue in all the trials.” He does not rely on any facts brought out on voir dire or on any other evidence on the question of the actual partiality of the two jurors in question. Thus De Jesus’ “totality of facts” turns out to be nothing more than the one fact on which he has relied throughout, namely, the service of these two jurors on prior cases in which the accused were convicted of similar offenses on the testimony of the same two government witnesses, inter alia. As we have already seen this fact, standing alone, was not sufficient to raise even a presumption of partiality. Under these circumstances, the rejection of the challenges was wholly within the discretion of the court. The judgments of the district court will be affirmed.

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GOVERNMENT OF the VIRGIN ISLANDS v. Valdemar HENDRICKS, Appellant. No. 72-1911. United States Court of Appeals, Third Circuit. Argued Jan. 31, 1973. Decided April 3, 1973. John B. Nichols, Nichols & Silver-light, Christiansted, St. Croix, V. I., for appellant. Julio A. Brady, Asst. U. S. Atty., Christiansted, St. Croix, V. I., for appellee. Before VAN DUSEN, ROSENN and HUNTER, Circuit Judges. OPINION OF THE COURT VAN DUSEN, Circuit Judge. Defendant Hendricks was convicted of both of two counts of selling heroin in violation of 19 V.I.C. § 604(a) and was sentenced to ten-to-fifteen years on each count, to be served consecutively. He asserts here that the district court erred in regard to jury selection, jury instructions, and sentencing. We affirm. The circumstances of the two sales are essentially the same. The police employed one Carlos Encarnación to purchase the drugs. According to the testimony of the police and Encarnación, on October 14, 1971, and again on October 19, 1971, the police searched Encarnación, gave him money, and told him to buy drugs from defendant. Encarnación sought out defendant and, as he stated, purchased heroin from him. Then Encarnación returned to the police, who searched him and found in his possession heroin but no money. On both occasions the police officers had trailed Encarnación. On October 14 they witnessed an exchange between Encarnación and defendant. On October 19, however, they saw only that Encarnación and defendant entered an apartment house together; the police officers did not observe the alleged sale itself. Encarnación was similarly employed to obtain evidence against a number of other suspected drug pushers. Four of these individuals were brought to trial before defendant Hendricks was, and, as a result, the jury array from which defendant’s jury was selected contained jurors who had sat on some of such earlier cases and had heard Encarnación testify during such cases. Defendant challenged the entire array, and, after that challenge was rejected, requested that the district court ask certain questions designed to elicit whether jurors who had sat on such earlier cases had formed an impression about the credibility of Encarnación or of the police officers involved in defendant’s case. The district court declined to ask the requested questions, but did determine which jurors had sat on such earlier cases and did inquire of these persons whether they were able to confine themselves solely to the evidence which would be presented. The district court denied defendant’s motion to strike such jurors for cause. While we acknowledge that the credibility of Encarnacion’s testimony was crucial to this case, we adhere to the view that the mere fact that a juror has sat on a prior case involving similar issues and some of the same witnesses does not, absent some showing of resulting prejudice, disqualify the juror. See Government of Virgin Islands v. Williams, 476 F.2d 771 (3d Cir.1973). We note that of the nine jurors who had sat on such earlier cases, eight had sat on one such case and one had sat on two such cases. Consequently, we reject defendant’s claim that the district court erred in the above-mentioned rulings. Defendant requested two instructions involving the credibility of Encarnación, one relating to his being a drug addict and the other to his being paid by the Government. The district court refused to give the former on the ground that there was no evidence in the record to show that Encarnación was an addict as of the time of the trial, February 15, 1972. The district court did give the latter, but with significant modification. Defendant took exception to the refusal to give the proffered instruction on addicts, but he did not make any objection to the instructions eventually given by the court. It is undisputed that, inter alia, Encarnación was an addict at the time he allegedly bought drugs from defendant, that he was to be paid $2,000 by the Government for obtaining evidence and then testifying against from 10 to 20 persons, that he had been convicted of forgery and was still subject to sentencing for this conviction, and that he had pending against him a number of felony charges. The questions before this court are whether, under these circumstances, the district court should have given defendant’s instruction that “a drug addict is inherently a perjurer” and, if not, whether the district court’s instructions were plain error, see F.R. Crim.P. 30. Defendant took this “inherently a perjurer” language from Fletcher v. United States, 81 U.S.App.D.C. 306, 158 F.2d 321, 322 (1946). While the court-in Fletcher was concerned with the reliability of an addict-informer, the court’s decision was to allow such testimony but to require that a cautionary instruction be given. To suggest that the cautionary instruction should contain the words “inherently a perjurer” is to misread Fletcher, for such an instruction would in effect make the testimony incompetent altogether. The district court was correct in not giving the proposed instruction. One recent case has held outright that it is plain error for a district court not to instruct the jury sua sponte about the unreliability of an addict-informer’s testimony when that testimony is corroborated only in minor details. United States v. Griffin, 382 F.2d 823 (6th Cir. 1967). Griffin, however, is easily distinguishable on its facts. In Griffin there were two co-defendants, Griffin and a woman. The woman made two sales to an addict-informer; Griffin was not present at the first sale and was only seen in the vicinity of the second. While there was corroboration by police officers as to the woman’s guilt, only the word of the addict-informer connected Griffin with the crimes. In the present case, on the other hand, police witnessed one transaction and provided significant corroboration for Encarnacion’s testimony about the other transaction, even though they did not witness the sale itself. Moreover, the district court did instruct the jury that because Encarnación was an informer his testimony had to “be scrutinized with care and received with caution.” In these circumstances, we decline to hold that there was plain error. We do not, however, mean to suggest that, if it is requested, a special cautionary instruction is not proper when a witness is in the Government’s pay and either is an addict at the time of trial or was an addict at the time of the events concerning which testimony has been given. Similar scrutiny must be used in weighing the testimony of a present or former addict who recognizes, or may recognize, the possibility of being rewarded by the Government. Examples of possible rewards are the dropping of charges presently pending against the witness and the recommending of a lighter sentence for a crime of which the witness has already been convicted. An instruction would be appropriate whether or not it is shown that the Government intends to reward the witness. It would be especially useful when the testimony of such a witness is uncorroborated as to a material fact. While the precise formulation of the instruction is up to the trial court, it should set out the rationale for examining the testimony of such a witness with special caution. As United States v. Kinnard, 150 U.S.App.D.C. 386, 465 F.2d 566, 570-571 (1972), points out, an addict-informer faces the immediate threat of being jailed and thereby kept from access to the drugs to which he is addicted, as well as the prospect of a long term prison sentence and possible retaliation from various persons in the drug trade. These factors substantially increase the danger that the addict-informer may color his testimony so as to place guilt on the defendant. Defendant Hendricks’ final contention is that the sentence he received —two consecutive terms of ten-to-fifteen years — was excessive. Although this is a very long sentence, it is within the statutory limits, and, therefore, not subject to review here. Government of Virgin Islands v. Venzen, 424 F.2d 521 (3d Cir. 1970). See Gore v. United States, 357 U.S. 386, 393, 78 S.Ct. 1280, 2 L.Ed.2d 1405 (1958); United States v. Frank, 245 F.2d 284, 288 (3d Cir. 1957). Cf. generally ABA Project on Minimum Standards for Criminal Justice (Approved 1968), Standards Relating to Appellate Review of Sentences, including Appendix 3, pp. 86-90. We note, however, that defendant may apply under F.R.Crim.P. 35 for a reduction of sentence after the issuance of this court’s mandate. The March 10, 1972, judgment and commitment will be affirmed. . Motion of February 9, 1972. . Supplemental Proposed Questions to the Jury on Voir Dire, questions Nos. 28-33, filed February 9, 1972. . The judge addressed the jury as a group. At various times during the court’s questioning of the group, jurors responded. When the district court asked the jurors if they would be prejudiced because the defendant was charged with a narcotics violation, one juror raised his hand and, when questioned, said he would be prejudiced in such a case. AVhen the jurors were asked if they knew Encarnación, one raised her hand and stated that she was his cousin. The district court began its discussion of the earlier cases in which Encarnación had testified by asking the jurors who sat on Government of the Virgin Islands v. Ventura to identify themselves. The court then asked, as a group, the five who raised their hands whether they would be able to “judge the credibility of the witnesses entirely upon the evidence adduced at this trial? ” Transcript of Voir Dire at 17. No juror indicated any inability to do so. The district court repeated this procedure for each of the other three such cases. Transcript of voir dire at 17-22. The district court then addressed all such jurors together, as follows: “You heard the testimony of the witnesses in those cases and you obviously formed some impression as to their credibility in those cases; would you be able to form an opinion as to the credibility of those same witnesses in this case based entirely upon their testimony in this case even to the point where you would change your opinion as to their credibility which you had in the prior case? “(No response.) “Is there anyone who would not be able to do so? “(No response.)” Id. at 24. In light of these extended inquiries, we believe that the voir dire was adequate. AVe note that, under appropriate circumstances, it may be desirable for the district court, in conducting a voir dire examination of jurors, to require an audible response to important questions. . Id. at 26-27. Defendant apparently exhausted all peremptory challenges. . “I instruct you that a drug addict is inherently a perjurer where his own interests are concerned and therefore the testimony of a drug addict should be carefully scrutinized and received with caution.” Defendant’s Proposed Jury Instructions, filed January 7, 1972. . “I instruct you that the testimony of a paid informer must be scrutinized with care and received with caution. This is because there is a serious question of credibility inherent in the use of such a witness by the government and his usefulness is dependent wholly upon his ability to make out a case in favor of the government.” Id. . “AVe have a rule that the testimony of an informer must be scrutinized with care and received with caution. And it is within your exclusive province to determine the weight to be given the testimony of an informer.” N.T. 2.124. The court deleted the second sentence of defendant’s proposed instruction quoted in the preceding footnote because the court found that Encarnación was to be paid whether or not convictions were obtained. . N.T. 2.91. . N.T. 2.130. . Encarnación himself so testified. N.T. 2.35-.38. At N.T. 2.91, the district court stated, “The Court recognizes that the informant was a drug addict prior to November, 1971. . . . ” . Another case, United States v. Kinnard, 150 U.S.App.D.C. 386, 465 F.2d 560 (1972), disregarded defendants’ failure to object to the instructions given, see id. at 583 (Adams, J., dissenting). However, the holding of Kinnard is that a trial court must give a cautionary instruction in these circumstances, tut only upon request.. Hence, the failure to give such an instruction could not be plain error. . See United States v. Bailey, 451 F.2d 181,183-184 (3d Cir. 1971).

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GOVERNMENT OF the VIRGIN ISLANDS v. Angel Luis VENTURA, Appellant. No. 72-1397. United States Court of Appeals, Third Circuit. Argued Feb. 2, 1973. Decided April 4, 1973. Edward J. Ocean, Christiansted, St. Croix, V. I., for appellant. Julio A. Brady, Asst. U. S. Atty., Christiansted, St. Croix, V. I., for appellee. Before VAN DUSEN, ROSENN and HUNTER, Circuit Judges. OPINION OF THE COURT PER CURIAM: Defendant was convicted by a jury of two counts of having sold heroin in violation of 19 V.I.C. § 604(a), and was sen-fenced to a term of ten to fifteen years on each count, to be served consecutively. He appeals this sentence. The principal witness against defendant was Carlos Encarnación, a former addict turned informer, who testified that he made the purchases from defendant on October 9 and 10, 1971. Police officers testified that on two occasions they had searched Encarnación, given him money, followed him to building 38 in the DeChabert Project, had seen him enter and later leave, searched him again, and found heroin. The police did not, however, witness the sales themselves, which Encarnación testified took place in apartment 242. After close examination of the record and consideration of the briefs and oral arguments of counsel, we reject the defendant’s contentions (1) that the Government should have endorsed the names of three persons on the information and produced at trial such three persons whom Encarnación said were present at one or the other sale, and, at the least, should have informed defendant of the witnesses it intended to call and not to call, (2) that the Government’s cross-examination of the defendant as to prior drug usage was improper, (3) that the district court erred in admitting into evidence prior consistent statements of Encarnación, (4) that the district court erred in not allowing Encarnación to be recalled by defendant solely for impeachment purposes, (5) that the Government did not challenge statements of Encarnación as to whether he had had a drug overdose, which the Government allegedly knew to be false, (6) that Encarnacion’s testimony was incompetent, (7) that the trial court should have given sua sponte a stronger cautionary instruction regarding Encarnacion’s testimony than the instruction given, (8) that the evidence was insufficient to establish guilt beyond a reasonable doubt, and (9) that the defendant's sentence constituted cruel and unusual punishment.5 The judgment and commitment of January 28, 1972, will be affirmed. . The Federal Rules of Criminal Procedure apply to the District Court of the Virgin Islands, see Rule 54(a), and these rules do not adopt the practice of some states to require the prosecution to endorse on the information and produce witnesses. It does not appear in the record that defendant requested a bill of particulars pursuant to Rule 7; and, even if he had, he would not have been entitled to a list of the Government’s witnesses. See United States v. Addonizio, 451 F.2d 49, 63-64 (3d Cir. 1972). We also note that Encarnación was the first witness to testify on the second day of trial. It does not appear that defendant made any attempt to effect compulsory process under F.R.Crim.P. 17 to secure the persons Encarnación testified were present during the purchases or requested a continuance to permit him to do so. It is further noted that two of such persons named by Encarnación were cousins of the defendant, see N.T. 2.23. . The Government offered these statements to rebut a suggestion of defense counsel during the trial that they had been altered, see N.T. 2.69. When the Government offered them, defense counsel said, “No objection.” N.T. 2.70. . In his opening statement, the Government prosecutor stated that Encarnación had been convicted of forgery and had been a drug addict. Transcript of Opening Statements at 6. On direct examination of Encarnación, the Government brought out that he had been an addict for four years and had stolen in order to pay for his $60.00-$70.00 a day habit. N.T. 2.4-8. Moreover, defense counsel repeatedly referred to testimony at the earlier trial of Angel DeJesus, when it had been developed that Encarnación had been hospitalized for an overdose sometime in November 1971. See, e. g., N.T. 1.39, 1.54, 2.32-.33, 2.82. Although Encarnacion’s testimony in this case about the overdose was at best evasive, see N.T. 2.32-.33, under these circumstances we cannot say that the Government intended to conceal information about the overdose or had any reason to believe that defense counsel was unaware of such information. . For a discussion of the treatment by the fact-finder of the testimony of an addict-informer, see this court’s recent opinion in Government of the Virgin Islands v. Hendricks, 476 F.2d 776, (3d Cir. 1973).

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CONTINENTAL CASUALTY COMPANY, a corporation, Appellee, v. EMPLOYERS COMMERCIAL UNION INSURANCE COMPANY, a corporation, Appellant, and Crane and Ordway Co., a corporation, Appellee. No. 72-1528. United States Court of Appeals, Eighth Circuit. Submitted Feb. 13, 1973. Decided March 20, 1973. Rehearing Denied May 11, 1973. Michael F. Pieplow, Sioux Falls, S. D., for appellant. Donald J. Porter, Pierre, S. D., for appellee. Before GIBSON and ROSS, Circuit Judges, and BENSON, District Judge. Judge Benson, Chief Judge of the District Court of North Dakota, sitting by designation. GIBSON, Circuit Judge. The defendant Employers Commercial Union Insurance Company (Employers), appeals from an adverse declaratory judgment requiring it to defend, as an omnibus insured, the defendant in another law suit, Bruce Lyson v. Crane and Ordway Company, pending in the United States District Court for South Dakota. Plaintiff Continental Casualty Company (Continental), the liability carrier for Crane and Ordway (Crane), brought this declaratory action pursuant to 28 U.S.C. §§ 2201 and 2202. Jurisdiction is based on diversity of citizenship and the laws of South Dakota apply. We reverse and hold that Continental is the primary insurer of Crane and must defend the action brought by Lyson against Crane. On August 4, 1967, Lyson, an employee of Grimshaw Drilling Company, drove a Grimshaw truck to Crane’s business premises in order to pick up pipe that Crane had sold to Grimshaw. While on Crane’s premises, Lyson, in loading a 21-foot long and four-inch diameter pipe onto the Grimshaw truck, was injured. He was assisted in the loading of the truck by a fellow employee and one of Crane’s employees. Lyson claimed and received workmen’s compensation in the sum of $10,405.75 from Employers Group of Insurance Companies, a wholly owned subsidiary of Employers and the workmen’s compensation carrier of Grimshaw. Defendant Employers had also issued a liability policy to Grimshaw. Lyson then began an action in the United States District Court for South Dakota against Crane, claiming that his injuries were caused by the negligence of its employee. Crane notified its liability insurance carrier, Continental, of Lyson’s suit, and Continental tendered the defense to Employers on the ground that Employers was the primary insurer under its liability policy issued to Grimshaw and should defend the Lyson suit. Employers refused the tender, and Continental brought this declaratory action to determine who is the primary insurer of Crane, and who, therefore, must defend the Lyson suit. Before discussing the legal interpretation of the conflicting contentions of the insurance companies, we first express our strong disapproval of the litigation procedure employed by Continental and Employers. While these insurance companies are bickering over the legal obligations of liability and duty to defend (issues that too often come before this Court), Lyson remains uncompensated for any possible negligence by Crane’s employee. Lyson was injured on August 4, 1967, and sued Crane during May 1971. The declaratory action was heard on April 11, 1972, and judgment was rendered on June 22, 1972. The Lyson suit has been pending now for nearly two years. We see no reason why Lyson must wait for the determination of this law suit. Instead, Continental and Employers should have decided on one of them to defend the suit and then, after Lyson’s claim was litigated, take legal steps to determine which company was liable. There has been no contention that some other party, beside Continental or Employers, is ultimately liable in the Lyson suit. Such unreasonable delay oppressively prejudices the suit of the injured party and unfairly prolongs the payment of possible damages to him. We now turn to the legal interpretation of the insurance contracts in this diversity case governed by South Dakota law. Attached to Employers’ liability policy with Grimshaw was an endorsement that contained the following exclusion: “LIMITATION OF ADDITIONAL INTERESTS — LOADING AND UNLOADING “It is agreed that the insurance for Bodily Injury Liability-Automobile . . . does not apply to injury . . . which arises out of the loading or unloading of an automobile, if the accident occurs on premises . . . owned, rented or controlled either by the person or by the employee of the person against whom claim is made or suit is brought for such injury. . . .” The District Court stated that, if the endorsement was effective, coverage by Employers’ policy of Crane would be precluded. The parties do not contest this conclusion. The District Court, however, held that the endorsement was defective and invalid, since it violated S.D.C.L. § 58-11-2 (1967) in failing to name the parties, the subject of the insurance, and the time that the endorsement was to take effect. The questioned endorsement contained blank spaces, which were not completed, for the effective date of the endorsement, the policy number, and the parties to the contract. This endorsement was physically attached to the main policy along with 12 other endorsements that were properly completed and was the third in order of attachments to the policy. S.D.C.L. §§ 58-10-2 and 58-11-2 were enacted for the benefit of the insured and in the interest of making insurance agreements more readily understood by the parties purchasing insurance. The main thrust of § 58-11-2 is to the policy itself, as obviously none of the riders or endorsements could contain all six items specified without being an entire insurance policy itself. Thus, for example, the risk insured against, the premiums, and the conditions pertaining to the insurance are not set forth in the riders. The crucial elements of the requirements, as to the riders, are the subject of the insurance or the rider (usually an exclusion of limitation to the main policy) and the number of the insurance policy. The inclusion of the number of the insurance policy on the rider makes certain that the parties intended that the rider be part of the entire policy. In this case, the insurance policy number was omitted on the rider, however we think under these particular facts that there is no question at all, as between the insurance company and the insured Grimshaw, that all of the 13 riders were attached to the policy at the time of issuance of the entire policy and that the policy with its 13 attached riders embodies the agreement of the parties. All riders were signed by the authorized agent at the time the policy was issued and were delivered as a unit. Thus, absent any detriment to the insured, the clerical error in failing to fill out the third rider in a list of 13 riders attached to the policy is not the type of violation sought to be reached by § 58-11-2. Although we are faced with the plain wording of § 58-11-2, the view above on the incomplete but valid endorsement is buttressed by both the general common law and another South Dakota statute. The general common law rule has been stated as follows: “But at least as regards separate papers physically attached, the modern trend of authority is to the effect that complete absence or insufficiency of reference in the policy proper to the attached paper, or vice versa, whereby there can be no certainty that the parties intended the attached paper to become a part of the whole contract of insurance, precludes its inclusion or construction in connection therewith.” Annot., 128 A.L.R. 1034, 1042 (1940). Also, 43 Am.Jur.2d, Insurance § 283 (1969); 13 J. Appleman, Insurance Law & Practice § 7540 at 302 (1946). At common law whether or not an incomplete endorsement is part of the policy presents a factual question that turns on the intention of the parties. The existence of certain facts leads to inferences that can be reasonably made to determine whether a rider was intended by the parties to be a part of the entire policy. For example, the extreme ease for non-inelusion of a rider would be complete absence of reference to the policy in an unsigned rider and the issuance of this lone rider after issuance of the entire policy. However, in this ease, the rider was signed, attached to the policy at the time of issuance of the entire policy, and was only one of 13 riders that was not properly completed. Such facts lead to the reasonable inference that the rider was intended by the parties to be part of the entire policy. Petrowski v. Hawkeye Security Ins. Co., 237 F.2d 609, 610 (7th Cir. 1956), cert. denied, 352 U.S. 972, 77 S.Ct. 364, 1 L.Ed.2d 325 (1957). In addition, another South Dakota statute leads to the same conclusion. S.D.C.L. § 58-11-38 (1967) reads: “58-11-38 . . . Any insurance policy, rider, or endorsement issued after June 30, 1966 and otherwise valid which contains any condition, omission or provision not in compliance with the requirements of this title, shall not be thereby rendered invalid but shall be construed and applied in accordance with such conditions and provisions as would have applied had such policy, rider, or endorsement been in full compliance with this title.” The failure in this case to fill in the blank spaces on the questioned endorsement was a clerical error, which is an omission under § 58-11-38 that does not make the endorsement invalid. An added factor in this analysis is that the requirements of § 58-11-2 are for the purpose of protecting the insured from any improper inclusion of policy provisions contained in endorsements of which he has no knowledge. Here, the insured (Grimshaw) is not contesting the validity of the endorsement, but rather another insurance company (Continental) who was not a party to the insurance contract. Further, Continental is attempting to shift its primary liability, for which it received premiums, to Grimshaw, who has no connection with the alleged tort feasor, and to make Grimshaw through Employers liable for the damage inflicted. Apropos are the words of Chief Judge Brown in American Fidelity & Cas. Co., Inc. v. Pennsylvania Threshermen & Farmers’ Mut. Cas. Ins. Co., 280 F.2d 453, 455 (5th Cir. 1960): “This is another and undoubtedly not the last, of those cases of which we have many, in which one insurer having the good fortune to find some other insurer who has written a policy for someone else attempts to engraft itself upon the contract to which it was not a party in the hopes that what it bound itself to do, it need not perform. The result, if successful, is that its contractee, .the assured, must look elsewhere for the promised protection.” In considering questions of primary coverage and potential overlapping coverage clauses, we think an incongruous result can be avoided by giving heed to the intention of the parties to the insurance contract and the coverage they intended to purchase. Judge Tate’s concurring opinion in State Farm Mutual Automobile Ins. Co. v. Travelers Ins. Co., 184 So.2d 750, 754 (La.App.1966), appropriately reads: “. . . the respective policy coverages can be sensibly allocated in the light of the total policy insuring intent, as determined by the primary policy risks upon which each policy’s premiums were based and as determined by the primary function of each policy.” These principles can be applied for each insurance policy involved in this case. The workmen’s compensation policy issued by Employers Group to Grimshaw was obviously issued to compensate employees of Grimshaw. Employers Group has properly fulfilled its insuring obligation by paying Lyson over $10,000 for the injuries suffered. Employers’ liability policy covered losses to nonemployees of Grimshaw occurring due to the negligence of Grimshaw or its employees. In addition, that policy generally did not insure against the risk of injuries occurring during the loading or unloading of the insured’s vehicle on the premises of another employer. Continental’s liability policy issued to Crane was intended to compensate for losses occurring to non-employees due to the negligence of Crane or its employees. With these policies in force, we think that the sensible allocation of policy coverage and the intentions of all parties demand that Continental’s liability policy should cover Lyson’s alleged claim. To interpret these policies so as to require Grimshaw’s carrier to be liable for the negligence of a Crane employee defies common sense knowledge that one company would not pay for insurance to protect against the negligence of another company’s employee on the other company’s premises. Such an absurd result conflicts with the intention of businesses to insure against the risk of their own negligence and further increases the accelerating cost of insurance. Therefore, the exclusion in Employers’ liability policy is valid and precludes coverage for liability due to the loading of the truck on Crane’s premises. Continental, as the primary insurer and liability carrier of Crane, must defend Lyson’s suit and be liable for any judgment within policy limits. Judgment reversed. . The District Court decision is published. Continental Cas. Co. v. Employers Com’l Union Ins. Co., 344 F.Supp. 4 (D.S.D. 1972). . South Dakota Compiled Laws § 58-10-2 defines “Policy” as “the written contract of or written agreement for or effecting insurance, by whatever name called, and includes all clauses, riders, endorsements and papers which are a part thereof.” S.D.C.L. § 58-11-2 reads: “Contents of policy. — Every policy as defined by § 58-10-2 shall specify: “(1) The names of the parties to the contract; “(2) The subject of the insurance; “(3) The risks insured against; “(4) The time when the insurance takes effect and the duration thereof; “(5) The premium; and “(6) The conditions pertaining to the insurance.” . It is our duty to apply South Dakota law in interpreting these insurance contracts. McMichael v. American Insurance Co., 351 F.2d 665, 669 (8th Cir. 1965). Neither South Dakota courts nor federal courts interpreting South Dakota law have had the occasion to interpret this statute. . Cited with approval in Federal Insurance Company v. Prestemon, 278 Minn. 218, 153 N.W.2d 429 (1967) and State Farm Mutual Automobile Insurance Company v. American Casualty Company, 433 F.2d 1007, 1012 (8th Cir. 1970) (Gibson, J., dissenting). . Due to our decision on the validity of the “loading and unloading” exclusion, it is unnecessary for us to discuss the District Court’s holding and parties’ contentions concerning another exclusion and a “severability of interests” clause. We express no opinion on those issues.

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UNITED STATES of America, Appellee, v. Amadeo Augusto Luciano SANTELISES, Appellant. No. 686, Docket 72-2381. United States Court of Appeals, Second Circuit. Argued April 4, 1973. Decided April 12, 1973. Martin L. Rothstein, New York City (Austin T. Fragomen, New York City, of counsel), for appellant. Bart M. Schwartz, Asst. U. S. Atty. (Whitney North Seymour, U. S. Atty., S. D. N. Y., of counsel), for appellee. Before KAUFMAN, ANDERSON and OAKES, Circuit Judges. IRVING R. KAUFMAN, Circuit Judge: On July 16, 1965, Amadeo Santelises, a citizen of the Dominican Republic residing in the United States, was charged in a twenty-seven count indictment with various offenses connected with the preparation and use of false immigration documents. On December 7 Santelises, appearing with counsel, pleaded guilty to counts 1-8 (charging violations of 18 U.S.C. § 1001, § 2 and § 3238), counts 18-19 (charging violations of 18 U.S.C. § 1546, § 2 and § 3238), and counts 21-24 (charging violations of 18 U.S.C. § 1015, § 2 and § 3238) of the indictment. The appellant was sentenced on January 28, 1966 to concurrent one-year terms of probation, and completed his sentence satisfactorily. No appeal was taken from the judgment of conviction. On June 9, 1966, the Immigration and Naturalization Service of the Department of Justice instituted deportation proceedings against Santelises. On October 9, 1967, after a hearing at which appellant was represented by counsel, he was ordered deported pursuant to 8 U. S.C. § 1251(a)(5), which authorizes the deportation of any alien previously convicted of violating 18 U.S.C. § 1546, the statutory prohibition which made up counts 18-19 of the indictment to which Santelises had pleaded guilty. On April 10, 1972, appellant brought the instant petition to set aside his plea of guilty to counts 18 and 19 of the 1965 indictment. He urges that both counts fail to allege violations of law under 18 U.S.C. §§ 1546 and 2. In addition, Santelises argues that his plea was not knowingly and voluntarily tendered because he was not informed that deportation was a collateral consequence of his conviction. Judge Tenney, ruling on Santelises’s petition in the district court, rejected both claims without holding a hearing. We affirm. Appellant concedes that where, as here, the sufficiency of the indictment went unchallenged at the time of pleading, the indictment will be upheld “unless it is so defective that it does not, by any reasonable construction, charge an offense for which the defendant is convicted.” United States v. Trollinger, 415 F.2d 527, 528 (5 Cir. 1969). Although Santelises pressed this issue in his brief on appeal, he chose not to argue the matter before the court, indieating that he believed it to be a “technicality.” Section 1546 provides, inter alia, that whoever utters, uses, attempts to use, possesses, obtains, accepts or receives any [immigrant or nonimmigrant] visa, permit or document [required for entry] , knowing it to be forged, counterfeited, altered or falsely made, or to have been procured by means of any false claim or statement, or to have been otherwise procured by fraud or unlawfully obtained . . . , shall be guilty of an offense against the United States. 18 U.S.C. § 2 provides that whoever aids or abets in the commission of a crime is punishable as a principal. Count 18 of the indictment to which Santelises pleaded guilty charged that the appellant “knowingly did obtain, accept, receive and cause to be obtained, accepted and received, an immigrant visa for Fabia Gomez deFelix, knowing the same to have been procured by fraud. . . . ” More specifically, Count 18 accused Santelises of submitting and causing to be submitted both a letter falsely indicating that the applicant for entry had waiting employment in the United States, and a false affidavit of support stating that the signer had a bank account in a New York City bank. Count 19 essentially tracked count 18, charging similar violations in connection with the contemplated entry into the United States of one Fredesvinda Feliz. We are unable to detect even a “technical” error in the indictment. Accordingly, we reject this claim as frivolous. Somewhat more substantial is the argument that appellant’s plea was involuntary because he was not aware that a conviction pursuant to section 1546 would subject him to deportation proceedings. Although that portion of Rule 11, F.R.Crim.P., which requires the court to inform a defendant of the consequences of a plea of guilty had not been enacted at the time of Santelises’s conviction, appellant argues that his lack of awareness as to so significant a sanction as deportation requires us to vacate his plea under due process standards. We disagree. We need not intimate how we might decide this case were the mandate of Rule 11 applicable to these proceedings. It is sufficient to state at this time that the mere failure of a district judge to warn a defendant of the possibility of deportation as a consequence of his plea does not, without more, amount to a violation of constitutional due process, thereby rendering the plea invalid. In United States v. Parrino, 212 F.2d 919 (2 Cir.) cert. denied, 348 U.S. 840, 75 S.Ct. 46, 99 L.Ed. 663 (1954), this Court was unable to find “manifest injustice”, see Rule 32(d) F.R.Crim.P., in a case involving a defendant who, having pleaded guilty to a kidnapping offense, proceeded to serve a two-year jail sentence and, upon release, found himself the subject of deportation proceedings based on his prior conviction. Unlike the instant case, Parrino was affirmatively misled by his counsel, a former Commissioner of the Immigration Service, who advised his client that a plea of guilty would not subject him to deportation: Judge Frank, concluding that counsel’s performance was grossly inadequate, dissented for that reason. Although Professor Moore indicates his approval of Judge Frank’s opinion, 8A Moore, Federal Practice, ¶ 32.07 [3] [b], p. 106, it is clear that Santelises does not allege that he was affirmatively misled by counsel, and he has not made out any claim of ineffective assistance of counsel. In addition, nothing in Judge Frank’s opinion in Parrino supports the view that the court is constitutionally required to inform a defendant that he may be subject to deportation as a consequence of his plea. Moreover, we should emphasize that deportation under section 1546 is not “automatic”. Although 8 U.S.C. § 1251(a)(5) does allow deportation of any alien who has violated sec. 1546, without proof that the crime is one of moral turpitude, deportation results, however, only upon “order of the Attorney General” who retains discretion whether or not to institute such proceedings. Deportation, then, serious sanction though it may be, is not such an absolute consequence of conviction that we are mandated to read into traditional notions of due process a requirement that a district judge must warn each defendant of the possibility of deportation before accepting his plea. We have been referred to no eases, nor have we found any, indicating that this or any other court has seen fit to take such a giant step and we believe that this trend should be noted and followed by us. We emphasize, finally, that cases arising after the enactment of the 1966 amendments to Rule 11, F.R.Crim.P., may bring different considerations to bear upon this problem but we neither address nor decide those questions. Affirmed. . The district judge concluded that jurisdiction existed under 28 U.S.C. 1651(a), the “all writs” statute, and treated the petition as a request for a writ of error coram ñoñis. . Rule 11 provides, in part, that a judge may 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." The italicized words were added to the Rule and became effective on July 1, 1966. The amendments have not been given retroactive effect, McCarthy v. United States, 394 U.S. 459, 89 S.Ct. 1166, 22 L.Ed.2d 418 (1969). . Santelises’s failure to submit an affidavit of counsel, corroborating his allegation that he was unaware that deportation was a possible consequence of the guilty plea, independently justifies the decision to dismiss below, see Grant v. United States, 451 F.2d 931 (2 Cir. 1971); cf. United States v. Wisniewski, 2 Cir. 1973, 478 F.2d 274, 284 (1973). Santelises contends, however, that certain conduct on the part of the district judge affirmatively misled him as to the consequences of his plea and that inasmuch as evidence of the court’s error appears in the record an affidavit of counsel was unnecessary in this case. We find the argument fanciful. The court questioned Santelises concerning his understanding of the charges against him, whether he was indeed guilty of the crime to which he was pleading, whether threats or promises were made in connection with the plea, and whether any representation as to sentence had been made to him. The following colloquy then took place: Court: You recognize that all that remains to be done is for the Court to accept your plea of guilty on each count and to pass sentence on you? Defendant: Yes sir. Court: Which could include a jail sentence? Defendant: Yes. Santelises argues that when Judge Tenney, in accepting the plea, stated that “all that remains to be done” is for the court to pass sentence, he implied that Santelises could not be deported. Although the argument is imaginative, to say the least, we remain unpersuaded. . Indeed, Bye v. United States, 435 F.2d 177 (2 Cir. 1970), although concluding that a defendant must be informed, pursuant to Rule 11, if he will be ineligible for parole, reaffirmed the view that' a defendant need not be advised of “every conceivable collateral effect” of his plea, citing Parrino. See Bye v. United States, 435 F.2d at 179-180. United States v. Sambro, 454 F.2d 918 (D.C.Cir. 1971) rehearing en banc denied, id. at 924, followed our own Parrino case in refusing to allow a defendant who was unaware that a plea of guilty would subject him to deportation, to withdraw his plea even prior to sentencing. But see opinion of Bazelon, Chief Judge, dissenting from the denial of a rehearing en bane, id. at 924. . Since the evidence justified the court in concluding that the defendant testified falsely, and the 2O-to-30-year sentence is less than the 30-year permissible maximum, review of'the record and the presentence report supports the conclusion that such sentence does not constitute cruel and unusual punishment. See Government of the Virgin Islands v. Venzen, 424 F.2d 521, 523 (3d Cir. 1970). Defendant may apply for reduction of sentence upon remand of the case to the district court. See F.R.Crim.P. 35.

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GOVERNMENT OF the VIRGIN ISLANDS v. Felix Carrion HERNANDEZ, and Iris Lopez Hernandez, Appellants. Nos. 72-1453, 72-1454. United States Court of Appeals, Third Circuit. Argued Feb. 1, 1973. Decided April 3, 1973. Arnold M. Selke, Charlotte Amalie, St. Thomas, V. I., Stanley M. Poplow, Philadelphia, for appellants. Frederick G. Watts, Fred M. Acuff, Appellate Section, Crim. Div., Washington, D. C., for appellee. Before MARIS, ROSENN, and HUNTER, Circuit Judges. OPINION OF THE COURT ROSENN, Circuit Judge. Husband and wife, Felix and Iris Hernandez, were tried to a jury in a joint trial in the District Court for the District of the Virgin Islands and convicted for possession of heroin with intent to manufacture or distribute it, in violation of 19 V.I.C. § 604(a)(1). They appeal from their judgments of conviction, in which Felix Hernandez was sentenced to fifteen years incarceration and his wife to ten to fifteen years. The entire case against appellants consisted of testimony about, and display to the jury of, a number of items seized by the Narcotics Strike Force in a search of the Hernandez home on November 11, 1971. Heroin seized included 2.08 grams of white powder (35.1% pure) found in one of the wife’s housedresses, seven or eight small decks of heroin (8% pure) found scattered around the bathroom, and 32.75 grams (37.1% pure) found floating in the cistern connected with the house. The officers also seized from a dresser drawer in the master bedroom 29.67 grams of a white powder proven to be 6.6% pure methadone. Also found in or on top of the dresser were two spoons —one coated with heroin — some air mail envelopes, a book from which paper had been cut, and numerous small slips of paper. The Government contended that the quantity of heroin combined with the paraphernalia, such as spoons and paper slips, demonstrated an intent of the appellants to distribute the heroin. Although it did not offer scientific evidence that the seized paper slips were made of the same paper as that in which the decks of seized heroin were wrapped, the Government urged that the papers were of the type used to package heroin. Its expert testified that the heroin found in the cistern could be divisible into 2,000 decks, saleable at $5 each. The only other incriminating evidence was one officer’s testimony that he saw Iris Hernandez through a window pouring some white powder into the sink and toilet after officers knocked at her front door. Appellants raise numerous grounds for reversal of their convictions, the more substantial of which are the assertions that (1) the jury instructions were in plain error because they included an Allen Charge; (2) they were deprived of their right to effective assistance of counsel by being represented by the same attorney; and (3) Iris Hernandez’s admission of ownership of a housedress should have been excluded from the evidence because it was made during custodial interrogation absent any Miranda warning. We reverse the convictions. The fairness of appellants’ trial was jeopardized by the inclusion in the jury instructions of a form of the Allen Charge, urging a minority of the jury to give special consideration to the views of the majority in order to avoid a hung jury. The judge instructed in his charge in chief: If there is disagreement as to the innocence or guilt of both defendants, or either one of them, those in the minority should be willing to reexamine and reevaluate their ideas and exchange their views with the thoughts of those Jurors who constitute the majority. The same can be said for a disagreement as to whether either one or both of them are guilty of the lesser included offense or guilty of the offense charged in the information. If there is disagreement as to which one it is, again, those in the minority ought to be willing to reexamine and reevaluate their concepts and their ideas with those in the majority to the end that unanimity might be obtained and a verdict returned. The Allen Charge, originally approved in Allen v. United States, 164 U.S. 492, 17 S.Ct. 154, 41 L.Ed. 528 (1896), has created considerable judicial tribulation over the years. In light of the constitutional principle that the judge may not “coerce” the jury in its determination of guilt or innocence, courts have had to determine from time to time whether variations of the Allen Charge, given in many different circumstances, have injected coercion into the fact-finding process. Recognizing the inherent potential of the charge to coerce and the inscrutable problem of determining in each case whether such coercion actually existed, we prospectively banned the use of the Allen Charge in this circuit in United States v. Fioravanti, 412 F.2d 407 (3d Cir.), cert. denied sub nom. Panaccione v. United States, 396 U.S. 837, 90 S.Ct. 97, 24 L.Ed.2d 88 (1969), as part of our supervisory authority over the district courts. The District of Columbia and Seventh Circuits have done likewise. United States v. Thomas, 144 U.S.App.D.C. 44, 449 F.2d 1177 (1971); United States v. Brown, 411 F.2d 930 (7th Cir. 1969), cert. denied, 396 U.S. 1017, 90 S.Ct. 578, 24 L.Ed.2d 508 (1970). One of the coercive elements of the Allen Charge in the form often given is its admonition to the minority jurors to give deference to the views of the majority. United States v. Johnson, 139 U.S.App.D.C. 193, 432 F.2d 626, 633 (1970). The instruction given in the present case includes that element. The minority was told to “reexamine and reevaluate their concepts and their ideas with those in the majority to the end that unanimity might be obtained and a verdict returned.” Our prospective ruling in Fioravanti was aimed, among other things, at eliminating such a coercive influence from charges used in the Circuit. 412 F.2d at 416-417. In order to prevent any confusion among the district courts, we explicitly warned in Fioravanti: Hereafter, in this circuit, trial judges are not to give instructions either in the main body of the charge or in the form of a supplement that direct a juror to distrust his own judgment if he finds a large majority of the jurors taking a view different from his. Such an instruction will be deemed error, normally reversible error. Conceivably, in very extraordinary circumstances the error may be found so inconsequential as to avoid the necessity of reversal on appeal. But hereafter this court will not let a verdict stand which may have been influenced by an Allen Charge. 412 F.2d at 420. Finding no such “extraordinary circumstances” in the present case, although no objection was made to the charge at trial, we find plain error and reverse the convictions on this ground. We reiterate our suggestion in Fioravanti, 412 F.2d at 420 n. 32, that trial judges restrict their jury instructions on the deliberative process to the charge suggested by Mathes and Devitt, “Federal Jury Practice and Instructions,” 1965, § 79.01. Since we must reverse the convictions, we need not consider all of the alleged errors asserted. Some comment, however, should be addressed to the issue raised concerning the right to the effective assistance of counsel because the appellants must be awarded a new trial. They were represented by the same retained counsel throughout the trial. Although they never requested separate counsel; they now allege they were prejudiced by the joint representation at trial. Prior to trial, a motion for severance had been made and denied. At the time, the prosecutor had requested the court to consider the possibility that joint representation would be prejudicial to the appellants if severance were not granted. Appellants, however, were never apprised by the court of the dangers of joint representation, nor was their counsel asked about possible conflicts of interest in such representation. The Supreme Court has held that the sixth amendment right to fair and effective assistance of counsel can be abridged when several defendants are represented by one counsel. Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680 (1942). Although recognizing that this constitutional right could be waived, the Court said any waiver must be made knowingly and intelligently. 315 U.S. at 70-71, 62 S.Ct. 457. Drawing on Glasser’s imposition on the trial judge of a duty to preserve a defendant’s right to effective assistance of counsel, the District of Columbia Circuit has required trial judges to ascertain from defendants whether their choice of joint counsel is an informed decision. Campbell v. United States, 122 U.S.App.D.C. 143, 352 F.2d 359 (1965). We have never gone so far as to impose this affirmative obligation on the trial judge. United States v. Rispo, 470 F.2d 1099, 1102 (3d Cir. 1973). We have, however, refused to find a waiver of this right in the face of a silent record on the issue, noting that Glasser required “the trial judge ... to ‘indulge every reasonable presumption against the waiver.’ ” Government of the Virgin Islands v. John, 447 F.2d 69, 74-75 (3d Cir. 1971). In the present case, we are again faced with a silent record. Despite the prosecutor’s expression of concern, the trial judge did not apprise appellants of the perils of joint representation. Nor does the record indicate that defense counsel explained the dangers to the clients. We recommend, that on the retrial of this case, the trial judge warn each defendant of the possible dangers of joint representation. In order to have convicted both husband and wife, the jury had to infer intent to distribute on the part of each. None of the seized evidence pointed specifically at the husband; the only evidence pointing specifically at his wife was the discovery of a small quantity of heroin in her house-dress and the testimony that she had been seen pouring white powder into the sink and toilet when officers arrived to search. The evidence which may have been crucial to indicate more than mere possession, i. e., an intent to distribute, was the large quantity of heroin found in the cistern. Neither appellant was shown to have been aware of this contraband. We recently reversed a conviction for heroin acquisition where “the evidence provided no more than an occasion to speculate whether he [appellant], or his brother, or both of them knew of the hidden heroin and exercised control over it.” United States v. Bonham, 477 F.2d 1137 (3d Cir. 1973). The evidence in Bonham showed only that heroin was seized from a hidden recess behind a door frame in a bedroom shared by appellant and his brother. Although we did not reverse on the grounds that joint representation of appellant and his brother at trial denied appellant effective assistance of counsel, we noted that counsel was inhibited in exculpating appellant because to do so would have inculpated his brother. Bonham, and earlier cases such as Delgado v. United States, 327 F.2d 641 (9th Cir. 1964), and United States v. Holland, 144 U.S.App.D.C. 225, 445 F.2d 701 (1971), recognize that there is always a close question of sufficiency of evidence when two persons are jointly charged with possession of narcotics when the only proof is that the narcotics were found in the zone of control of both persons. The problem is exacerbated in the present case where an intent to distribute is charged on the basis of narcotics found within the zone of control of both appellants. When both defendants are represented by the same counsel, counsel may understandably be inhibited in his efforts to demonstrate that one or the other defendant was the guilty party. Although we need not decide on this appeal whether counsel for the Hernandezes faced such a conflict of interest as to deprive either appellant of his or her right to effective assistance of counsel, see United States v. Rispo, 460 F.2d 965 (3d Cir. 1973), Walker v. United States, 422 F.2d 374 (3d Cir. 1970), we believe the dangers inherent in joint representation are serious enough here to make it highly desirable that they be apprised of them. If such dangers are communicated to the appellants, difficult questions of whether a conflict of interest arose because of joint representation can be avoided. Appellants 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. The judgments of the district court will be reversed. MARIS, Circuit Judge (dissenting). I do not think that the charge of the court in this case, to which significantly no objection was made at trial, was given under circumstances similar to those in United States v. Fioravanti, 3 Cir. 1969, 412 F.2d 407, nor do I believe that the rule of that case should be extended to cover the situation disclosed by this record. In my view the court did not commit reversible error in failing to apprise the defendants, who were represented by retained counsel, of their right to separate representation. Nor do I think that the court erred in receiving in evidence the wife-defendant's admission of ownership of the housedress found in the search of their home since the officers’ request to her to remain seated on the living room couch during the search, where she was seated when she made the admission, did not in my view, constitute an arrest which would bring into play the rule of the Miranda case. . Although not per se banning use of the Alien Charge, the First Circuit has banned any use of the charge which speaks to the minority, but not the majority. United States v. Flannery, 451 F. 2d 880, 883 (1st Cir. 1971). . As we note, at page 793 infra, the evidence pointing to an intent to distribute heroin by each defendant here was not overwhelming. Although each defendant was charged with only one count, the jury deliberations lasted two hours and twenty-three minutes. . This charge is now incorporated in the second edition of Mathes and Devitt. See Devitt and Blackmar, “Federal Jury Practice and Instructions,” 1970, § 17.05.

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Herman L. ZELLER, Plaintiff-Appellant, v. BOGUE ELECTRIC MANUFACTURING CORPORATION et al., Defendants-Appellees. No. 445, Docket 72-2004. United States Court of Appeals, Second Circuit. Argued Feb. 13, 1973. Decided March 22, 1973. Lawrence M. Powers, New York City (Powers & Gross and Steven E. Gross, New York City, of counsel), for plaintiff-appellant. Alexander Stone, New York City (Becker, Ross & Stone, James J. Ross, and William C. Kratenstein, New York City, of counsel), for defendants-appellees Bogue Electric Mfg. Corp., Edw. P. Schinman, Robert S. Herwig, Wm. S. Guttenberg and Murray Reiffin. Richard G. McGahren, New York City, for defendant-appellee Irwin Small Co. Barry Kessler, New York City, for defendant-appellee Belco Pollution Control Corp. Before FRIENDLY, Chief Judge, OAKES, Circuit Judge, and DAVIS, Judge. Of the United States Court of Claims, sitting by designation. FRIENDLY, Chief Judge: Appellant Zeller, a stockholder of Belco Pollution Control Corporation (Belco), a Delaware corporation having its principal offices in New Jersey, brought this derivative action in the District Court for the Southern District of New York against Bogue Electric Manufacturing Corporation (Bogue), a New Jersey corporation, four individuals who were directors of both Belco and.Bogue, and Belco’s accountants. Federal jurisdiction was predicated on § 27 of the Securities Exchange Act of 1934, § 22 of the Securities Act of 1933, and pendent jurisdiction. The principal allegations of the complaint were as follows: In 1968 Bogue caused Belco to be incorporated and later that year to make a public offering of 200,000 of its 810,000 common shares, with 600,000 unregistered shares being retained by Bogue, which exercised effective control over Belco. During 1969 Bogue suffered from accelerating operating losses and a deteriorating working capital position. In contrast, Belco, as a result of receiving approximately $1,000,000 from the public offering and operating earnings, was accumulating cash which was necessary for its growing business. During 1970 the four individual defendants caused Belco to make a series of open-account loans to Bogue for which “no interest was required to be paid.” At the year end the loans totaled $202,130, and by June 30, 1971 they had increased to $315,310. On July Y, 1971, the open account indebtedness was replaced by a demand interest bearing promissory note, collateralized by 150,000 shares of Belco stock owned by Bogue and to be held by a trustee. Subsequent disclosure of the loan by Belco to Bogue was claimed to have aborted a further public offering of Belco shares which would have yielded Belco at least $800,000. The conduct of Bogue and the individual defendants was alleged to have violated § 10(b) and Rule 10b-5 of the Securities Exchange Act, § 17(a) of the Securities Act, and the securities laws of New York and New Jersey, where the improper acts were claimed to have been done. The complaint sought judgment for the amount of all loans by Belco to Bogue with interest at the legal rate of 7}4% and the proceeds of the aborted underwriting, various forms of injunctive relief, and orders awarding attorneys’ fees, costs and such other relief as would be just and proper. After answer, plaintiff moved for summary judgment. Defendants countered with a motion and supporting papers which asked that the complaint be dismissed for want of subject matter jurisdiction, that they be granted summary judgment, or that, in any event, plaintiff’s motion for summary judgment be denied. Plaintiff’s moving affidavit added several new matters of importance: Belco’s own corporate resolutions recited that the advances had been made “for the corporate purposes of Bogue.” Belco itself had suffered losses in 1969 and 1970, with a net decrease of working capital of $629,828 in the latter year, and thus was in no position to loan substantial sums to its parent. Plaintiff alleged that during 1970 “some of the most successful corporations in America were paying 10% to 12% per annum to borrow money from banks and other sources of financing because of ‘tight money’ conditions,” were often required to give sweeteners in the form of options, warrants, or other securities, and were required to keep compensating balances of as much as 20% of the sums borrowed, thus making the effective rate for low risk borrowers as high as 15% per annum. For the first nine months of 1971 Belco had earned 40% on its invested capital. Also, after the action had been brought, Bogue had sold its interest in Belco to Foster-Wheeler Corporation. Defendants’ affidavits supplied more details: Bogue had sold its 600,000 Belco shares to Foster-Wheeler for $1,650,000. Upon the closing on May 1, 1972, the amount owing from Bogue to Belco with 8% interest from the date of each advance was paid, and the 150,000 Belco shares that had collateralized Bogue’s promissory notes were included in the transfer to Foster-Wheeler. It was alleged that the loans to Bogue were in Belco’s best interest and that Belco had derived other benefits from its association with Bogue which must be taken into account in any determination whether Belco had been wronged and, if so, how much. The district judge, 346 F.Supp. 651, granted defendants’ motion for summary judgment and dismissed the complaint. He did this on the basis of the provision in § 28(a) of the Securities Exchange Act which entitles a plaintiff to recover only “actual damages on account of the act complained of” and his conclusion that, under the “federal” rule whereby a defrauded buyer is entitled only to the difference between the amount parted with and the amount received, see Smith v. Bolles, 132 U.S. 125, 10 S.Ct. 39, 33 L.Ed. 279 (1889); Levine v. Seilon, Inc., 439 F.2d 328, 334 (2 Cir. 1971), rather than the “benefit of the bargain” rule applied in such actions by many states, see Prosser, Torts § 110, at 734 (4th ed. 1971), repayment of the loan with interest had eliminated any compensable loss. From this ruling plaintiff appeals. I. Defendants urge that, whether or not we agree with the court’s holding that Belco could not establish any damages, the complaint should have been dismissed because it did not allege fraud in connection with the purchase .or sale of a “security.” In analyzing this argument it will be convenient to treat the ease in the first instance as if Bogue had issued demand notes collateralized with Belco stock from the outset and then consider whether a different result is required because until July 1, 1971, Bogue’s indebtedness was evidenced only on open account. The Securities Act of 1933 and the Securities Exchange Act of 1934 differ in their method of handling short-term commercial paper. Under the 1933 Act, while § 2(1) provides that any note is a “security,” § 3(a)(3) exempts from the registration and prospectus requirements “[a]ny note, draft, bill of exchange, or banker’s acceptance which arises out of a current transaction or the proceeds of which have been or are to be used for current transactions, and which has a maturity ^at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited.” However, § 17, the general anti-fraud provision, provides in subsection (e) that the exemptions of § 3 shall be inapplicable. Instead of following this model in the Securities Exchange Act, Congress defined “security,” § 3(a) (10), to include “any note” but inserted in the same clause that this would not include “any note, draft, bill of exchange, or banker’s acceptance which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited.” If the letter of the 1934 Act is followed, paper falling within this proviso is thus excluded from all provisions of the 1934 Act, including those dealing with fraud. A short answer to the question whether Bogue’s demand note came within the exclusion of § 3(a) (10) could be that it makes no difference, since the only consequence of an affirmative answer would be predication of liability on § 17(a) of the 1933 Act, if that section created a private right of action. See SEC v. Texas Gulf Sulphur Co., 401 F. 2d 833, 867-868 (2 Cir. 1968) (Friendly, J., concurring), cert. denied, 394 U.S. 976, 89 S.Ct. 1454, 22 L.Ed.2d 756 (1969); 3 Loss, Securities Regulation 1785-86 (2d ed. 1961) and 6 Loss, Securities Regulation 3912-15 (Supp.1969). Be that as it may, we believe Bogue’s note is not within the exclusion of § 3(a) (10) of the Securities Exchange Act. Here again there is a short way to answer the question should we wish to take it. The SEC has made clear its view that the nine-month standard of § 3(a)(3) of the 1933 Act is not met by obligations payable on demand. Securities Act Rel. No. 4412 (1961), 26 Fed. Reg. 9158, 9159 (1961). Presumably it would take the same view with respect to the exclusion in § 3(a) (10) of the 1934 Act. Whatever the proper answer to this question in general, we would have little doubt of the validity of such a position in a case like this where the maker of the note could prevent any demand by the holder and the note was outstanding for ten months. We think it preferable, however, to rest our decision on the basis that even if demand paper could ever qualify for the § 3(a) (10) exclusion — which we do not decide, see ALI, Federal Securities Code, Tent. Draft No. 1 § 216A and comment on pp. 71-72 (April 1972)— Bogue’s note would not. The SEC has taken the position with respect to the exemptive provision of § 3(a)(3) of the Securities Act, Securities Act Rel. No. 4412, supra, 26 Fed.Reg. at 9159, that: The legislative history of the Act makes clear that section 3(a)(3) applies only to prime quality negotiable commercial paper of a type not ordinarily purchased by the general public, that is, paper used to facilitate well recognized types' of current operational business requirements and of a type eligible for discounting by Federal Reserve banks. We have no doubt that the Commission would take the same view with respect to the exclusion in § 3(a) (10) of the Securities Exchange Act. See 2 Loss, Securities Regulation 796 (2d ed. 1961). Such a ruling, by an agency charged with the administration of a statute, while not conclusive, is entitled to substantial weight. Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944). We thus agree with the decision of the Seventh Circuit in Sanders v. John Nuveen & Co., Inc., 463 F.2d 1075, cert. denied, 409 U.S. 1009, 93 S.Ct. 443, 34 L.Ed.2d 302 (1972), that the mere fact that a note has a maturity of less than nine months does not take the case out of Rule 10b-5, unless the note fits the general notion of “commercial paper” reflected in the SEC Release. See also Anderson v. Francis I. duPont & Co., 291 F.Supp. 705 (D.Minn.1968) (short-term notes); cf. United States v. Hill, 298 F.Supp. 1221, 1226-1227 (D.Conn.1969) (high risk 6-month notes held not exempt from the registration requirements of the Securities Act of 1933); Bromberg, Securities Law: Fraud SEC Rule 10b-5 § 4.6(317) (1969). We see nothing in SEC v. Fifth Avenue Coach Lines, Inc., 435 F.2d 510, 517 (2 Cir. 1970), which would lead to a contrary conclusion, though the district court opinion contains dicta with which we would not agree, see 289 F. Supp. 3, 38 (S.D.N.Y.1968). It does not follow, however, that every transaction within the introductory clause of § 10, which involves promissory notes, whether of less or more than nine months maturity, is within Rule 10b-5. The Act is for the protection of investors, and its provisions must be read accordingly. See Movielab, Inc. v. Berkey Photo, Inc., 452 F.2d 662 (2 Cir. 1971). But we see no reason to doubt that Belco stood in the position of an investor, although perhaps an involuntary one, with respect to Bogue. We thus hold that, if at the outset the transaction had taken the form of Belco’s buying Bogue’s demand note, Rule 10b-5 would apply. However, we are unable to find anything in the definition of security in the Securities Exchange Act that would cover an advance on open account. In this respect the omission, in the 1934 definition, of the words “evidence of indebtedness” contained in the definition in § 2(1) of the 1933 Act would seem to have a significance which, for good reason, the Supreme Court found lacking on the facts before it in Tcherepnin v. Knight, 389 U.S. 332, 344, 88 S.Ct. 548, 19 L.Ed.2d 564 (1967). Arguably this would mean that damages must be limited to those accruing after July 1, 1971. However, such a conclusion would fail to take suitable account of plaintiff’s claim that Bogue’s use of its control over Belco to compel a loan which was in Bogue’s interest but not in Beleo’s violated applicable state law. If the issuanee of the note created a claim under Rule 10b-5, any damages suffered earlier can be awarded in the exercise of pendent jurisdiction. II. Analysis of plaintiff’s claims reveals five different bases for his contention that payment of the note with 8% interest may not have adequately compensated Belco: 1) Belco could have obtained more than 8% interest, at least from a borrower in what is alleged to have been the precarious financial condition of Bogue, during the period of tight money conditions that prevailed during part or all of the time when Bogue’s debt was outstanding ; 2) Bogue would have had to pay more than 8% to obtain funds during part or all of the period; 3) The loan enabled Bogue to profit by selling the 150,000 Belco shares pledged as collateral for $412,500 (a quarter of the total price paid by Foster-Wheeler), since otherwise Bogue would have been obliged to sell these shares 10 months earlier under distress circumstances and before Belco had experienced a highly profitable period; 4) The intercompany loan deprived Belco of the benefits of a new underwriting in late 1971 from which it would have realized at least $800,000, see fn.2, supra; and 5) Belco could have earned more than 8% by using the loaned funds in its own business. The parties have argued the case as presenting the question whether the principle of Janigan v. Taylor, 344 F.2d 781, 786-787 (1 Cir.), cert. denied, 382 U.S. 879, 86 S.Ct. 163, 15 L.Ed.2d 120 (1965); Myzel v. Fields, 386 F.2d 718, 748-749 (8 Cir. 1967), cert. denied, 390 U.S. 951, 88 S.Ct. 1043, 19 L.Ed.2d 1143 (1968); and now Affiliated Ute Citizens v. United States, 406 U.S. 128, 154-155, 92 S.Ct. 1456, 31 L.Ed.2d 741 (1972), whereby, in addition to the usual measure of damages, defrauders will be forced to disgorge windfall profits, applies when the defrauded party is a buyer as well as when he is a seller. Although most of plaintiff’s theories do not involve that issue and the ones that do may fail on different grounds, we think it desirable to state our views since the question is fairly raised. We do not consider the cited cases, or our own decision in Levine v. Seilon, Inc., supra, 439 F.2d at 334, as having established any such bright line between defrauded sellers and defrauded buyers as defendants urge. The actual holdings in Janigan and Ute were that defrauded sellers were entitled not only to the difference between the value of what they sold and what they got but also any additional profits realized by the defrauding buyer. The Supreme Court in Ute did not discuss the problem with respect to the defrauded buyer. As indicated above, the thrust of Chief Judge Aldrich’s dictum with respect to defrauded buyers in Janigan and of what we said on the same subject in Levine was to repudiate the “benefit of the bargain” rule in cases arising under the Securities Exchange Act. See also Estate Counseling Service, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 303 F.2d 527, 533 (10 Cir. 1962). Such repudiation does not necessarily call for a rule that, if a fraudulent seller can be shown to have made a windfall profit, principles of the law of restitution do not require that he be made to disgorge it. See 6 Loss, Securities Regulation 3923 (Supp.1969). The reason why the remedy has been applied for the benefit of defrauded sellers but not of buyers is not any decisive legal difference but the difficulty generally confronting the defrauded buyer in showing that the fraudulent seller has in fact reaped such a profit. Plaintiff’s first theory of damages does not present the problem just discussed. This claim is, in essence, that the 8% note and the preceding open account debt were not worth what Beleo paid for them. We cannot agree with the district court that damage to a subsidiary from forcing it to loan money to a parent necessarily is fully compensated by the parent’s paying off the note, even with a fairly liberal rate of interest, if the subsidiary was in a position to lend money at a higher rate. If Bogue had had outstanding 8% debentures which were selling say at 80, it would be hard to deny that Beleo was damaged if Bogue forced it to purchase at 100 such bonds, whether held in Bogue’s treasury or an additional issue, even though they were paid at maturity. Yet this hypothetical does not differ essentially from what plaintiff asserts .to have been the situation here. To be sure, the fact that Bogue would have had to pay more than 8% interest to others, if it be a fact, does not alone demonstrate that Beleo suffered a loss by loaning at that rate; plaintiff will also have to show that Beleo could have made loans at a higher rate. This would require proof that it, a new company engaged in the business of pollution control, could have found borrowers and that it had funds to loan —an assertion rather contrary to plaintiff’s fifth theory, namely, that Bogue forced Beleo to loan moneys needed to develop its own business. Plaintiff’s second theory of damages, that Bogue owes Beleo the difference between the 8% interest it paid Beleo and what Bogue would have had to pay in an arm’s length transaction, while not precisely a “disgorging” theory, bears some resemblance to it in that it looks to the seller’s gain rather than the buyer’s loss. While we see no objection to this in principle, Beleo would not have been harmed unless it had funds to lend and could have found a borrower willing to pay more than 8%. In practical effect the second theory is thus the mirror image of the first. The third theory does sound in terms of disgorging a profit. For the reasons indicated we see no sound basis for precluding plaintiff from endeavoring to establish this. But the obstacles in his way are formidable. He will have to demonstrate not only that Belco was harmed, as he must under the first or second theory, but also that Bogue required the loan to keep alive; that it had no other means of doing so except by selling — -not pledging- — some of its Belco shares; and that an earlier sale would have resulted in a lower price for the stock. Plaintiff’s fourth and fifth theories do not involve application of Janigan and Ute to a defrauded buyer but another question of equal importance. This is whether § 28 of the Securities Exchange Act (or, for the period prior to July 1, 1971, applicable state law) permits the recovery of consequential damages for fraud. General principles of tort law allow such damages in such actions, see Restatement of Torts 2d, Tent. Draft No. 11, § 549(1)(b) and comment d. (1965); McCormick, Damages § 122, at 459-60 (1935); Prosser, Torts, supra, § 110, at 735 and eases there cited. We perceive no sound reason for refusing to apply this principle under the Securities Exchange Act. However, we do not wish to arouse unfounded expectations in Zeller or in other potential 10b-5 plaintiffs. A plaintiff seeking consequential damages for fraud, at common law or under federal securities legislation, must establish the causal nexus with a good deal of certainty. Since consequential damages are an addition to or in lieu of what would ordinarily constitute a fair recovery, there is no room here for applying the liberal principles of Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359, 379, 47 S.Ct. 400, 71 L.Ed. 684 (1927); Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 563, 51 S.Ct. 248, 75 L.Ed. 544 (1931); and Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, 264, 66 S. Ct. 574, 90 L.Ed. 652 (1946), where some liberality is required to enable an injured plaintiff to recover anything. Thus, taking the claim about the aborted underwriting, plaintiff will not carry his burden merely by showing that the loan to Bogue was a factor of concern to the proposed underwriter. He must also show that Bogue was unwilling to meet the underwriter’s conditions concerning intercompany borrowings; that but for this the underwriter would have gone forward; that the underwriting would have been accomplished; and that Belco could have used the proceeds in a manner that would have increased per share earnings. And once all this has been demonstrated, Belco should only be permitted to recover as consequential damages what it lost by not being able to make the -public offering as originally scheduled; once the loan was repaid, the shares which were to have been offered could presumably have been sold to the public. Similarly, with respect to plaintiff’s fifth theory of damages, it would not suffice to show that Belco lost the use of the funds loaned to Bogue; plaintiff must demonstrate that but for defendants’ fraud, Belco would have chosen to invest the monies in its own operations; and that Belco could have used the funds more profitably in its own business. While we thus do not take a very bright view of plaintiff’s prospects on his fourth and fifth theories, the judge should have allowed him to" try. III. Plaintiff’s request that we enter summary judgment on the issue of liability is completely without merit; defendants have asserted numerous defenses to the claim that Bogue misused Beleo, which raise triable issues of fact. Equally baseless is plaintiff’s request for an immediate award of attorneys’ fees on the ground that it was the institution of this action that caused the note to be paid. So far as we can see, what caused the payment was Bogue’s sale of its Beleo stock to Foster-Wheeler, which provided both the need and the means. The order granting summary judgment to the defendants and dismissing the complaint is reversed and the cause remanded for further proceedings consistent with this opinion. . A copy of the promissory note, annexed as an exhibit to ' plaintiff’s affidavit in support of his summary judgment motion, reveals that the rate of interest was 8%. . In August 1971, the underwriter proposed an offering of 150,000 units of Belco securities, each unit being composed of two shares of Belco common stock and one warrant exercisable into Belco common stock. Belco" and Bogue were each to sell 75,000 units, and the unit price was not to exceed $11. The body of the complaint contains-a claim that the proceeds of the offering would have been $1,650,-000, yielding Belco at least $800,000, but the ad damnum speaks in terms of $1,500,-000 “which would have been the proceeds of the proposed offering.” Additional correspondence annexed as exhibits to appellant’s affidavit in support of his motion for summary judgment indicate that modifications in the number of units to be sold in the proposed offering were considered. . Plaintiff is not, of course, limited to the ad damnum stated in the complaint. See, e. g., United States ex rel. Bergen Point Iron Works v. Maryland Casualty Co., 384 F.2d 303 (2 Cir. 1967); Kahan v. Rosenstiel, 424 F.2d 161, 174 (3 Cir.), cert. denied, 398 U.S. 950, 90 S.Ct. 1870, 26 L.Ed.2d 290 (1970). See generally 6 Moore, Federal Practice ¶ 54.62 (2d ed. 1972). . Both the complaint and the moving affidavit contain many allegations of alleged falsities and nondisclosures in Belco’s reports to the SEC and to stockholders. The pertinence of all this in a derivative stockholder’s action on behalf of Belco escapes us, unless the plaintiff is attempting to provide thereby proof of an intent to defraud. . Defendants also disputed plaintiff’s claim that interest had not been accrued on the open-account advance; - they claimed this had been charged on Bogue’s books at the rate of 8%. . In explaining the House bill’s § 3(3) exemption, which was ultimately enacted into law without amendment, the House Committee report states that “ [paragraph (3) exempts short-term paper of the type available for discount at a Federal Reserve bank and of a type which rarely is bought by private investors.” H.R.Rep. No. 85, 73d Cong., 1st Sess. 15 (1933). Since this statement was quoted and relied upon by the SEC in its release, Professor Loss’ criticism of the Commission’s reliance on S.Rep. No. 47, 73d Cong., 1st Sess. 3-4 (1933), for failing to mention that the Senate bill, the focus of the report, had provided in § 2(a) that the paper must not be “offered or intended to be offered for sale to the public,” see 4 Loss, Securities Regulation 2590 (Supp. 1969), though technically correct, does not seem to undermine the validity of the SEC’s position. . The Senate Report on the Securities Exchange Act stated that the definition of security was intended to be substantially the same as that contained in the Securities Act, S.Rep. No. 792, 73d Cong., 2d Sess. 14 (1934), quoted in Tcherepnin v. Knight, 389 U.S. 332, 342, 88 S.Ct. 548, 19 L.Ed.2d 564 (1967). . Appellee has not argued and, in the light of Superintendent of Insurance v. Bankers Life & Casualty Co., 404 U.S. 6, 92 S.Ct. 165, 30 L.Ed.2d 128 (1971), could not successfully argue that, if the note was a security, Rule 10b-5 was inapplicable because the ease simply raised an issue of a controlling corporation’s taking advantage of a controlled subsidiary. See also Schoenbaum v. Firstbrook, 405 F.2d 215, 219-220 (2 Cir. 1968) (en banc), cert. denied, 395 U.S. 906, 89 S.Ct. 1747, 23 L.Ed.2d 219 (1969), and Drachman v. Harvey, 453 F.2d 722, 736 (2 Cir. 1972) (en banc), where, however, the transactions were in securities of the controlled corporation. . Myzel went beyond this and permitted, under the special circumstances of that case, an award for “ ‘the subsequent increases in the value of the stock over . . . a reasonable period,’ ” 386 F.2d at 745, apparently whether the buyer resold or not. We take no position on that question here. . There may be an additional reason for the distinction. Restitution seems to be based not only on a feeling that the party who has acted wrongfully should not be permitted to benefit from his conduct but also that the injured party should be given the benefits of a transaction he would otherwise have been in a position to enter into. The latter consideration is snore likely to be present in a securities fraud case where the defrauded party is a seller and the defrauding buyer has subsequently sold the fraudulently acquired securities at a profit, since the higher market price would have been as much of an inducement to the defrauded party to sell the securities as it was to the defrauder. When the defrauded party is a buyer, and the defrauding seller uses the proceeds of a sale to enter into a second profitable transaction, it is far more difficult to say as a general proposition that, if the fraud had not occurred, the defrauded party would also have done this. Nevertheless, absent unusual circumstances, when a buyer has been induced to surrender consideration because of the fraudulent conduct of a seller, it seems appropriate to require the seller to disgorge any profits he would not otherwise have been in a position to realize if these can be traced with sufficient certainty. Compare Restatement of Restitution § 150 (1937), with id, §202. . We would see nothing wrong in a principle varying the required degree of certainty somewhat inversely with the depth of the fraud. . This is not so self-evident as plaintiff assumes on the basis of Belco’s profitable 1971 operations. An affidavit of William S. Guttenberg, president of Bogue and former treasurer of Belco, asserted that, in a new scientific equipment'manufacturing business like Belco’s, “[m]erely putting more capital into such a business will not cause it to grow faster, any more than stuffing more food into a baby will accelerate its growth. The very opposite may happen in both cases.” ,

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2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Plaintiff-Appellee, v. Milton James TAULBEE and Laura Arleen Taulbee, Witnesses, Defendants-Appellants. Nos. 73-1277, 73-1278. United States Court of Appeals, Ninth Circuit. March 13, 1973. David S. Maguire, of Eustice, Feeley & Maguire, Los Altos, Cal., for defendants-appellants. A. William Olson, Asst. Atty. Gen., Robert L. Keueh, William M. Piatt, Attys., Internal Security' Div., Dept, of Justice, Washington, D. C., James L. Browning, Jr., U.S. Atty., David P. Bancroft, Asst. U.S. Atty., San Francisco, Cal., for plaintiff-appellee. MEMORANDUM ORDER Before CHAMBERS, WRIGHT and TRASK, Circuit Judges. PER CURIAM: These witnesses were held in contempt for refusal to testify before a federal grand jury in the Northern District of California. They had previously been granted immunity under 18 U.S.C. §§ 6002 et seq. The Taulbees complain that they were denied adequate notice of both the contempt and immunity hearings. The Taulbees first refused to testify on January 23, 1973. They were informed at that time by the government’s attorney that_ immunity would be sought. On January 30, they refused to answer the same questions. Later on January 30 the government applied to the district court for a grant of immunity under 18 U.S.C. §§ 6002 et seq. The court granted immunity on the same day. The witnesses persisted in their refusal to testify. On January 30, 1973, the court ordered the Taulbees to show cause why they should not be held in contempt. The show cause hearing was set for and held on January 31. Under Rule 6(d) F.R.Civ.P. the district court had discretion to shorten time. Here there is no abuse of that discretion. See United States v. Fitch, 472 F.2d 548 (9th Cir. 1973). The Taulbees claim the marital privilege against testifying, relying on United States v. Weinberg, 439 F.2d 743 (9th Cir. 1971). The questions asked of the Taulbees did not intrude on privileged territory. The government attorney specifically instructed each witness to exclude information from their answers that might in any way relate to the other spouse. Relying on Bursey v. United States, 466 F.2d 1059 (9th Cir. 1972), the Taulbees claim that some of the questions were an infringement on their First Amendment rights. The claim is not amplified, and we can see no such infringement. The Taulbees claim a right to see their prior statements to F.B.I. agents made during the course of an investigation. They have no right to such statements not transcribed and given under oath. See Fitch, supra, at note 4. The government denied wiretapping both the witnesses and their attorney. This was sufficient here. The government attorney also swore that he knew the sources on which all his questions were based, and he denied that any of the questions were based on state or other wiretaps. This solved all wiretap problems in the absence of a further showing by the Taulbees. Other questions hinted at by the Taulbees are of no merit. The grant of immunity was a full and adequate substitute for the Fifth Amendment privilege. Kastigar v. United States, 406 U. S. 441, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972). There is no apparent defect in the justice department’s authorization of the immunity request. The contempt orders are affirmed.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Bruce BORAAS et al., Plaintiffs-Appellants, v. The VILLAGE OF BELLE TERRE, an incorporated municipality, et al., Defendants-Appellees. No. 372, Docket 72-2040. United States Court of Appeals, Second Circuit. Argued Oct. 19, 1972. Decided Feb. 27, 1973. Rehearing En Banc Denied March 16, 1973. Opinion Dissenting From, Denial of Rehearing En Banc April 5, 1973. Lawrence G. Sager, New York City (Arthur N. Eisenberg, Bruce J. Ennis, New York Civil Liberties Union, New York City, of counsel), for plaintiffs-appellants. Bernard E. Gegan, Port Washington, N. Y. (James J. von Oiste, Village Atty., Port Jefferson, N. Y., of counsel), for defendants-appellees. Before MANSFIELD, OAKES and TIMBERS, Circuit Judges. MANSFIELD, Circuit Judge: At issue upon this appeal is the constitutionality of a zoning ordinance of the incorporated Village of Belle Terre, New York, which prohibits groups of more than two (2) unrelated persons, as distinguished from traditional families consisting of any number of persons related by blood, adoption, or marriage, from occupying a residence in an area zoned for “one-family” occupancy. We hold that since the discriminatory classification is unsupported by any rational basis consistent with permissible zoning law objectives, it transgresses the Equal Protection Clause. The district court’s decision denying preliminary injunctive relief against, enforcement of the ordinance is reversed. Plaintiffs Edwin and Judith Dickman, owners of a house in Belle Terre, a suburban municipality with approximately 700 residents occupying some 220 homes in Suffolk County, New York, have rented their six-bedroom, single-family residence for occupancy to plaintiffs Bruce Boraas, Anne Parish and Michael Truman, all students at the State University of New York at Stony Brook, located seven or eight miles away, and to three other students attending the same university who are not parties to the instant action. The premises were originally leased on or about December 31, 1971, by plaintiff Truman as lessee for a term ending May 31, 1973, at a monthly rental of $500. Plaintiff Boraas later became a co-signer of the lease on the same terms. None of the six student occupants is related. Each occupies one of the six bedrooms and pays a portion of the rent. The six are organized and function as a single housekeeping unit insofar as they use the common cooking facility, dine together and share housekeeping, “yard” chores, and a “house” checking account from which disbursements for necessary household expenses are made. It is conceded that all of the occupants have behaved in a responsible manner, and no immoral conduct on their part is suggested. Four of them are pursuing graduate studies in sociology at Stony Brook. Plaintiffs assert that before leasing the Belle Terre residence from the Dick-mans they looked extensively for alternatives to traditional dormitory living, which admittedly are available. Conventional apartment rentals, when available, however, were found to be beyond their means, and a cooperative housing arrangement was considered by them to be pleasant, convenient, promotive of scholarly exchange, and within their pocketbooks. The Village of Belle Terre, which consists of approximately 220 homes, is zoned exclusively for residence in one-family dwellings. A “family” is defined as: “One or more persons related by blood, adoption or marriage, living and cooking together as a single housekeeping unit ... a number of persons but not exceeding two (2) living and cooking together as a single housekeeping unit though not related by blood, adoption, or marriage shall be deemed to constitute a family.” The Building Zone Ordinance of the Village of Belle Terre, Art. I, § D-1.35a (June 8,1970). To enforce the zoning code the ordinance further provides: “Each violation of this ordinance shall constitute disorderly conduct. . . . [Persons] shall be liable for and pay a penalty not exceeding One Hundred Dollars ($100.00) or by imprisonment for a period not exceeding 60 days or by both such fine and imprisonment. A separate and distinct offense shall be deemed committed on each day during or on which a violation occurs or continues.” Building Zone Ordinance of the Village of Belle Terre, Art. VIII, Part 4, § M-1.4a(2) (Oct. 17, 1971). On June 8, 1972, Boraas and Truman were denied residents’ beach passes because the ordinance allegedly considered them “illegal residents.” On July 19, 1972, the Dickmans, the owners-lessors, were served with a summons returnable before the Village Justice on July 28, 1972. However, because the Village Code required a 48-hour notice of violation, which had not been complied with, the summons was withdrawn. On July 31, 1972, the Dickmans were served with the required “Order to Remedy Violations” which notified plaintiffs that failure to remedy the condition might subject them to liability commencing on August 3, 1972. On August 2, 1972, plaintiffs commenced an action in the district court under the federal Civil Rights Act of 1871, 42 U.S.C. § 1983, against appellees, who are the Mayor and Trustees of Belle Terre, seeking preliminary and permanent injunctive relief against enforcement of the ordinance and a declaratory judgment invalidating as unconstitutional the prohibition against residential occupancy by more than two persons “not related by blood, adoption, or marriage.” Jurisdiction was grounded on 28 U.S.C. §§ 1331(a), 1343, and 2201. Pending a hearing on the constitutional issues, Judge Dooling issued a temporary restraining order. Following a hearing on plaintiffs’ motion for a preliminary injunction, Judge Dooling on September 20 issued a 40-page decision and order denying the motion for a preliminary injunction and upholding the validity of the ordinance. A temporary restraining order was continued for five days to enable plaintiffs to seek a stay pending appeal, which was granted by this Court on September 27, and thereafter extended to the date of our decision and mandate. In his carefully considered opinion Judge Dooling decided that he was not precluded from reaching the merits by Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), its brethren, or by the anti-injunction statute, 28 U. S.C. § 2283 (1965), and that abstention was not appropriate for the reason that the New York decisional law clearly indicated that the zoning ordinance would be deemed an exercise of power granted by New York’s enabling legislation, N.Y. Village Law §§ 175, 177. See, e. g., City of Schenectady v. Alumni Association of Union Chapter, 5 A.D.2d 14, 168 N.Y.S. 2d 754 (3d Dept. 1957). Recognizing that plaintiffs had the “unquestionable right to live together in student groupings,” free from unwarranted public intrusions, just as traditional families had the right to live in areas restricted to one-family dwellings, he summarized the issue before the court as follows: “The question ultimately posed is whether it is lawful to have a one-family dwelling zone district which excludes equally small household groups who impose no greater burdens of use on the land, the building or the surrounding than a blood-and-marriage family group on the simple and bare ground that such student groups are not families made up of husband, wife and children.” (A. 73a). Judge Dooling concluded that the exclusionary classification could not be upheld on traditional grounds supporting zoning regulations as a valid exercise of state police power, see Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303 (1926), because it did not promote “such familiar zoning objectives as safety, adequate light and air, preservation of the land from overintensive use, avoiding crowding of the population, reduction of traffic congestion and facilitation of adequate transportation, water, sewerage, school, park and other public services.” (A. 77a). However, he decided that the ordinance represented a lawful exercise of a “legally protectable affirmative interest” in the family made up of married parents and children, i. e., the traditional “marriage-and-blood-related” families of the type presently occupying Belle Terre. Holding that the interest of such traditional families in maintaining uses of the same character in the community is a “proper zoning consideration,” he described “[s]uch zoning [as] simply another of countless statutes of bounty and protection with which the states, and all of them, and the Federal government alike aggressively surround the traditional family of parents and their children, reaching from family court laws, through laws of inheritance to tax laws.” (A. 77a). In reaching its decision the district court gave weight to the smallness of the Belle Terre community, the absence of similar restrictive or exclusionary classifications in some nearby communities, and the existence of dormitory facilities at Stony Brook itself. Appellants here seek reversal on the ground that the Belle Terre zoning ordinance impinges upon their constitutional rights of privacy and association. Procedural Questions Although we are faced at the outset with a number of procedural questions, we agree with the district court that none of them precludes consideration of the merits. Since the Belle Terre ordinance was not of state-wide applicability, the statutory requirement for consideration by a three-judge court, 28 U.S.C. § 2281, has no application. “The court has consistently construed the section [2281] as authorizing a three-judge court not merely because a state statute is involved but only when a state statute of general and statewide application is sought to be enjoined.” Moody v. Flowers, 387 U.S. 97, 101, 87 S.Ct. 1544, 1548, 18 L.Ed.2d 643 (1967); see Ex parte Collins, 277 U.S. 565, 48 S.Ct. 585, 72 L. Ed. 990 (1928). (Emphasis supplied.) We further conclude that Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), and its brethren, which held that in the absence of extraordinary circumstances threatening irreparable injury federal injunctive or declaratory relief should not issue when a prosecution is pending in a state court against the federal plaintiff, do not preclude federal equitable intervention, at least under the facts of this case. See Thoms v. Heffernan, No. 72-1013, 473 F.2d 478 (2d Cir. 1973); Note, Implications of the Younger Cases for the Availability of Federal Equitable Relief When No State Prosecution is Pending, 72 Colum.L.Rev. 874; Hull v. Petrillo, 439 F.2d 1184, 1186 n.1 (2d Cir. 1971). Cf. Abele v. Markle, 452 F.2d 1121 (2d Cir. 1971). As of August 2, 1972, the date of the initiation of the federal suit, no state case was pending; in fact no liability attached until August 3, 1972. We are also persuaded that a justiciable controversy is presented. Neither Younger, nor Boyle v. Landry, 401 U.S. 77, 91 S.Ct. 758, 27 L.Ed.2d 696 (1971) , precludes a showing of such a controversy. See Thoms v. Heffernan, No. 72-1013, 473 F.2d 478 (2d Cir. 1973); Abele v. Markle, 452 F.2d 1121 (2d Cir. 1971). Here the denial of the beach passes and the service of the notice of July 28 overcome any justiciability barrier. It is further settled that the anti-injunction statute, 28 U.S.C. § 2283 does not bar enjoining future state court proceedings, Dombrowski v. Pfister, 380 U.S. 479, 484 n.2, 85 S.Ct. 1116, 14 L.Ed.2d 22, (1965); see Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), and that 42 U.S.C. § 1983 constitutes a congressionally carved out exception to the anti-injunction statute. Mitchum v. Foster, 407 U. S. 225, 92 S.Ct. 2151, 32 L.Ed.2d 705 (1972). Finally, we agree with Judge Dooling that absention is not warranted. We are not here confronted with a situation where state court resolution of an unclear state statute might obviate the necessity to decide federal constitutional questions. See Railroad Commission v. Pullman Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941). It is unlikely that New York courts would find Belle Terre’s zoning ordinance ultra vires the state enabling legislation, N.Y. Village Law, §§ 175, 177 (McKinney 1966), since similar zoning classifications grounded on the concept of “natural families” have been sustained. See, e.g., City of Schenectady v. Alumni Association of Union Chapter, 5 A.D.2d 14, 168 N.Y.S.2d 754 (3d Dept. 1957). Moreover, as Judge Dooling noted: “In the present case a state court decision holding that the ordinance, construed as the village has construed it, was beyond the authority granted to the village by the New York Village Law, could apparently be based only on the argument that to hold otherwise would impose on the Village Law an unconstitutional interpretation. Any unresolved question of the state law detectable here is, therefore, the federal question differently stated.” Cf. Wisconsin v. Constantineau, 400 U.S. 433, 438-439, 91 S.Ct. 507, 27 L.Ed.2d 515 (1971). The Merits Turning to the merits, it is undisputed that the Belle Terre zoning ordinance restricts appellants in the exercise of their rights with respect to the use of land in the Village and that it is discriminatory and unequal to the extent that, while traditional families of more than two members may occupy a one-family dwelling, groups of more than two unrelated individuals (sometimes described as “voluntary” families)' are prohibited from doing so. The basic issue before us is whether this unequal legislative classification violates the Equal Protection Clause. In approaching that issue we start on the premise that almost every local zoning ordinance represents a restriction upon citizens’ freedom of action in the exercise of otherwise lawful and constitutional rights with respect to the use of their land, whether it be in the operation of a business or the construction of a home. Where such regulations represent a valid exercise of delegated state police power and are designed to promote or protect the public health, safety or welfare, the individual’s right must give way to the particular concern of the community, Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303 (1926); Zahn v. Board of Public Works, 274 U.S. 325, 47 S.Ct. 594, 71 L.Ed. 1074 (1927); Nectow v. City of Cambridge, 277 U.S. 183, 48 S.Ct. 447, 72 L.Ed. 842 (1928); cf. Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 57 S.Ct. 868, 81 L.Ed. 1245 (1937). The right of an individual or of a group, related or otherwise, to live together does not necessarily guarantee complete freedom as to the location, construction, or living conditions, without regard to reasonably based zoning laws. In enacting zoning legislation the local authorities are vested with broad discretion. Ordinarily a court will intervene to declare a zoning ordinance to be a denial of due process only where it cannot be supported by a substantial public interest. Traditionally it may be justified by showing that it is related to such matters as safety, population density, adequacy of light and air, noise and necessity for traffic control, transportation, sewerage, school, park and other public services. More recently, promotion of the aesthetic aspects of a town has been upheld as a legitimate zoning objective, e.g., United Advertising Corp. v. Borough of Metuchen, 42 N.J. 1, 198 A.2d 447 (1964). From the very outset of its consideration of the constitutionality of local zoning laws, which were then attacked under the Due Process Clause, the Supreme Court laid down a basic principle: “The governmental power to interfere by zoning regulations with the general rights of the land owner by restricting the character of his use, is not unlimited, and, other questions aside, such restriction cannot be imposed if it does not bear a substantial relation to the public health, safety, morals, or general welfare.” Nectow v. City of Cambridge, 277 U.S. 183, 188, 48 S.Ct. 447, 448, 72 L.Ed. 842 (1928). To the requirement that zoning laws satisfy due process, as thus enunciated by Euclid and its brethren, there must be added the important condition that they not discriminate in violation of the Equal Protection Clause. While some inequalities may be tolerated, Williamson v. Lee Optical Co., 348 U.S. 483, 75 S.Ct. 461, 90 L.Ed. 563 (1955), a law which might otherwise be upheld as a valid exercise of police power will be struck down where it classifies on the basis of impermissible criteria, such as race. Reitman v. Mulkey, 387 U.S. 369, 87 S.Ct. 1627, 18 L.Ed.2d 830 (1967); Kennedy Park Homes Association v. City of Lackawanna, 436 F.2d 108 (2d Cir. 1970), cert. denied, 401 U.S. 1010, 91 S.Ct. 1256, 28 L.Ed.2d 546 (1971). Turning to the present case, appellants urge that since the Belle Terre ordinance impinges upon constitutionally protected rights and interests characterized by them as “fundamental,” i.e., their rights of privacy, of association and of travel, as well as their freedom to live with whom they please, cf. Eisenstadt v. Baird, 405 U.S. 438, 92 S.Ct. 1029, 31 L.Ed.2d 349 (1972); Griswold v. Connecticut, 381 U.S. 479, 85 S.Ct. 1678, 14 L.Ed.2d 510 (1965), the challenged legislation must be struck down for the reason that it is not shown to be supportable by a “compelling state interest.” See Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969). Appellees, on the other hand, argue that if, upon judicial hypothesis, any state of facts might be conceived of which would indicate a rational zoning basis for the ordinance, it must be sustained. Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 78 (1911), 31 S.Ct. 337, 55 L.Ed. 369; McGowan v. Maryland, 366 U.S. 420, 426, 81 S.Ct. 1101, 6 L.Ed.2d 393 (1961). They suggest that since the ordinance might conceivably be justified as a measure designed to curb population density and excessive rental costs, or to preserve the traditional family character of the neighborhood, it must be upheld. With respect to appellants’ contention that the rights invoked by them should be classified as “fundamental,” we note that the interests thus identified by the Supreme Court have been few in number. They include the right to travel, Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969), the right to vote, Dunn v. Blumstein, 405 U.S. 330, 92 S.Ct. 995, 31 L.Ed.2d 274 (1972); Harper v. Virginia Board of Elections, 383 U.S. 663, 86 S.Ct. 1079, 16 L.Ed.2d 169 (1966), and the right to the essential facilities for prosecution of a criminal appeal, Griffin v. Illinois, 351 U.S. 12, 76 S.Ct. 585, 100 L.Ed. 891 (1956). Despite vigorous efforts to extend the characterization into other fields, including exclusionary zoning, the list of so-called “fundamental” rights has not been expanded. At its last term the Supreme-Court declined to classify as “fundamental” the right to housing, Lindsey v. Normet, 405 U.S. 56, 92 S.Ct. 862, 31 L.Ed.2d 36 (1972), and reaffirmed its similar views with respect to welfare payments, Jefferson v. Hackney, 406 U.S. 535, 546, 92 S.Ct. 1724, 32 L.Ed.2d 285 (1972); Richardson v. Belcher, 404 U.S. 78, 81, 92 S.Ct. 254, 30 L.Ed.2d 231 (1971); Dandridge v. Williams, 397 U.S. 471, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970). Unquestionably the rights claimed by appellants are important. Certainly they are more personal and basic in nature than those of commercial interests of the type under consideration in Lindsley, supra, and McGowan, supra. On the other hand, this case does not present us with discrimination against racial minorities or the poor. Note, The Equal Protection Clause and Exclusionary Zoning After Valtierra and Dandridge, 81 Yale L.J. 61 (1971); Norwalk CORE v. Norwalk Redevelopment Agency, 395 F.2d 920 (2d Cir. 1968). Nor does the present case fit snugly into any of the other categories recognized as requiring application of the compelling state interest test. Despite the incidental effects of the Belle Terre ordinance, we are not here dealing with a “suspect” classification such as race, Loving v. Virginia, 388 U.S. 1, 87 S.Ct. 1817, 18 L.Ed.2d 1010 (1967), or alienage, Graham v. Richardson, 403 U.S. 365, 91 S.Ct. 1848, 29 L.Ed.2d 534 (1971), or with a law directed against a right of association sought as a means of political expression or action, e. g., NAACP v. Alabama, 357 U.S. 449, 78 S.Ct. 1163, 2 L. Ed.2d 1488 (1958); Shelton v. Tucker, 364 U.S. 479, 81 S.Ct. 247, 5 L.Ed.2d 231 (1969); Bates v. Little Rock, 361 U.S. 516, 80 S.Ct. 412, 4 L.Ed.2d 480 (1960), or as a means of obtaining access to the courts, NAACP v. Button, 371 U.S. 415, 83 S.Ct. 328, 9 L.Ed.2d 405 (1963). It may be that the underlying purpose of the Belle Terre statute is to regulate the intimate moral behavior of its residents within their “zone of privacy,” Stanley v. Illinois, 405 U.S. 645, 92 S.Ct. 1208, 31 L.Ed.2d 551 (1972); Eisenstadt v. Baird, 405 U.S. 438, 92 S.Ct. 1029, 31 L.Ed.2d 349 (1972); Griswold v. Connecticut, 381 U.S. 479, 85 S.Ct. 1678, 14 L.Ed.2d 510 (1965), and that its effect has been to curb the right to travel of those who wish to live in Belle Terre. Shapiro v. Thompson, 394 U.S. 617, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969). Belle Terre, however, claims that these are not purposes of its zoning law. Fortunately we do not have to decide whether there has been an infringement of the right of privacy or travel because we believe that we are no longer limited to the either-or choice between the compelling state interest test and the minimal scrutiny permitted by the Lindsley-McGowan formula. Faced recently with the issue under similar circumstances the Supreme Court appears to have moved from this rigid dichotomy, sometimes described as a “two-tiered” formula, toward a more flexible and equitable approach, which permits consideration to be given to evidence of the nature of the unequal classification under attack, the nature of the rights adversely affected, and the governmental interest urged in support of it. Under this approach the test for application of the Equal Protection Clause is whether the legislative classification is in fact substantially related to the object of the statute. Eisenstadt v. Baird, 405 U.S. 438, 446-455, 92 S.Ct. 1029, 31 L.Ed.2d 349 (1972); Reed v. Reed, 404 U.S. 71, 76, 92 S.Ct. 251, 30 L.Ed.2d 225 (1971), see James v. Strange, 407 U.S. 128, 140-141, 92 S.Ct. 2027, 32 L.Ed.2d 600 (1972); Jackson v. Indiana, 406 U.S. 715, 723-730, 92 S.Ct. 1845, 32 L.Ed.2d 285 (1972); Weber v. Aetna Cas. & Sur. Co., 406 U.S. 164, 172-176, 92 S.Ct. 1396, 31 L.Ed.2d 768 (1972). This approach is suggested by language of Royster Guano Co. v. Virginia, 253 U.S. 412, 415, 40 S.Ct. 560, 64 L.Ed. 989 (1920), and of a distinguished commentary, e. g., Tussman & tenBroek, The Equal Protection of the Laws, 37 Cal.L.Rev. 341, 344-353, 365-368 (1949). If the classification, upon review of facts bearing upon the foregoing relevant factors, is shown to have a substantial relationship to a lawful objective and is not void for other reasons, such as overbreadth, it will be upheld. If not, it denies equal protection. “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 similarly circumstanced shall be treated alike.’ Royster Guano Co. v. Virginia, 253 U.S. 412, 415, 40 S.Ct. 560, 64 L.Ed. 989 (1920). The question presented by this case, then, is whether a difference in the sex of competing applicants for letters of administration bears a rational relationship to a state objective that is sought to be advanced by the operation of §§ 15-312 and 15-314. * * * * * * “The crucial question, however, is whether § 15-314 advances that objective in a manner consistent with the command of the Equal Protection Clause. We hold that it does not.” Reed v. Reed, 404 U.S. 71, 76, 92 S.Ct. 251, 254, 30 L.Ed.2d 225 (1971). In thus being required to focus on the actual rationality of the legislative means under attack, we are asked to do what courts are historically suited to do —apply the law to factual contexts rather than accept one hypothetical legislative justification to the exclusion of others that represent the true rationale of the classification. This more realistic judicial scrutiny in cases in which the compelling state interest test is not invoked serves to render the Equal Protection Clause effective rather to permit all but egregious inequalities to go unchecked, as was sometimes the case under the minimal scrutiny test. This approach is particularly appropriate in eases of the present type, where individual human rights of groups as opposed to business regulations are involved. See United States v. Carolene Products Co., 304 U.S. 144, 152-153 n. 4, 58 S.Ct. 778, 82 L.Ed. 1234 (1938); Tussman & tenBroek, supra at 373. Turning to the question of whether the Belle Terre ordinance may be sustained upon application of the foregoing principles, we start by examination of the sole ground upon which it was upheld by the district court, namely the interest of the local community in the protection and maintenance of the prevailing traditional family pattern, which consists of occupancy of one-family houses by families based on consanguinity or legal affinity. In our view such a goal fails to fall within the proper exercise of state police power. It can hardly be disputed — and the district court so found — that the ordinance has the purpose and effect of permitting existing inhabitants to compel all others who would take up residence in the community to conform to its prevailing ideas of lifestyle, thus insuring that the community will be structured socially on a fairly homogeneous basis. Such social preferences, however, while permissible in a private club, have no relevance to public health, safety or welfare. See Kirsch Holding Co. v. Borough of Manasquan, 59 N.J. 241, 281 A.2d 513 (1971); City of Des Plaines v. Trottner, 34 Ill.2d 432, 216 N.E.2d 116 (1966); cf. Moreno v. U. S. Dept. of Agriculture, 345 F.Supp. 310 (D.D.C.) (three-judge court) (per McGowan, Cir. J.), prob. jur. noted, 409 U.S. 1036, 93 S.Ct. 526, 34 L.Ed.2d 485 (1972). The effect of the Belle Terre ordinance would be to exclude from the community, without any rational basis, unmarried groups seeking to live together, whether they be three college students, three single nurses, three priests, or three single judges. Although local communities are given wide latitude in achieving legitimate zoning needs, they cannot under the mask of zoning ordinances impose social preferences of this character upon their fellow citizens. To permit such action would be to invite, upon similar guise, zoning laws that would restrict occupants to those having no more than two children per family, those employed within a given radius, those earning a minimum income, or those passing muster after interview by a community “Admissions Committee.” While such selective exclusion may be practiced by private institutions, it cannot be tolerated on the part of a governmental body such as Belle Terre, which is bound to serve the public. Even assuming arguendo that a social predilection in the form of entrenched traditional family units constituted a valid zoning objective, we fail to find a shred of rational support for the means used here to achieve that end. It is not suggested that appellants or unrelated groups functioning as a single housekeeping unit, endanger the health, safety, morals or welfare of existing residents of the community. The most that can be said is that they differ from existing residents solely because of lack of blood or marriáge ties. Appellees urge that regardless whether social preferences may or may not form a valid basis for upholding the ordinance, it should nevertheless be sustained on the ground that it has a rational basis in traditionally recognized zoning objectives. It is suggested, for instance, that the ordinance is justified as a means of controlling population density. This contention is based on the assumption that the number of related persons in the conventional family unit (husband, wife, brothers, sisters, children, nephews, uncles, grandparents) tends to be “self-limiting,” whereas in the absence of a regulation limiting the number of unrelated occupants, the “voluntary” family can be limitless in size. Another argument advanced by appellees is that the ordinance might avoid escalation of rental rates, which would price traditional families out of the market, since it is possible that unrelated groups would be willing to pay higher rentals than would consanguineal families. We are further asked to speculate that “voluntary” families would pose greater parking, traffic and noise problems than would traditional families and that there would be a greater degree of transiency on the part of the former than the latter, thus weakening the stability of the community. If some or all of these hypothesized objectives were supportable, some form of such ordinance might conceivably be upheld as a valid exercise of state police power. Upon the record before us, however, we fail to find a vestige of any such support. To theorize that groups of unrelated members would have more occupants per house than would traditional family groups, or that they would price the latter out of the market or produce greater parking, noise or traffic problems, would be rank speculation, unsupported either by evidence or by facts that could be judicially noticed. We are here constrained to adhere to Judge Dooling’s observation that “Such a restricted zoning district might well be all but impossible to justify if it had to be strictly justified by its service of such familiar zoning objectives as safety, adequate light and air, preservation of the lands from overintensive use, avoiding crowding of the population, reduction of traffic congestion and facilitation of adequate transportation, water, sewerage, school, park and other public services.” “In terms of permissible zoning objectives, a group of persons bound together only by their common desire to operate a single housekeeping unit, might be thought to have a transient quality that would affect adversely the stability of the neighborhood, and so depreciate the value of other property. An ordinance requiring relationship by blood, marriage or adoption could be regarded as tending to limit the intensity of land use. And it might be considered that a group of unrelated persons would be more likely to generate traffic and parking problems than would an equal number of related persons. “But none of these observations reflects a universal truth. Family groups are mobile today, and not all family units are internally stable and well-disciplined. Family groups with two or more cars are not unfamiliar. And so far as intensity of use is concerned, the definition in the present ordinance, with its reference to the ‘respective spouses' of persons related by blood, marriage or adoption, can hardly be regarded as an effective control upon the size of family units.” City of Des Plaines v. Trottner, 34 Ill.2d 432, 434, 216 N.E.2d 116, 119 (1966) (per Justice Schaefer). Even if the Belle Terre ordinance could conceivably have a legitimate zoning objective, the classification established may well be vulnerable as too sweeping, excessive and over-inclusive. See Kirsch Holding Co. v. Borough of Manasquan, 59 N.J. 241, 281 A.2d 513 (1971); cf. Developments in the Law—Equal Protection, 82 Harv.L.Rev. 1065, 1082-1087 (1969). For instance, if it were aimed at maintaining population density at the level of traditional family units, it would not limit the number of unrelated occupants to two (2) persons per one-family dwelling, which admittedly is smaller than the size of the average family. Assuming such a purpose, a more permissive ordinance would suffice. Furthermore, such an objective could be achieved more rationally and without discrimination against unrelated groups by regulation of the number of bedrooms in a dwelling structure, by restriction of the ratio of persons to bedrooms, or simply by limitation of occupancy to a single housekeeping unit. Public and private nuisance laws should provide an adequate remedy to curb noise or other forms of pollution on the part of occupants of a dwelling, regardless of their relationship to each other. If the objective of the ordinance were to avoid rent inflation, the simple remedy would be adoption of rent controls rather than the exclusion of a class of people from the community. Lastly, disregarding the absence of evidence to support the suggestion that the ordinance might constitute a means of controlling traffic, parking or noise, there exist a wide variety of local legislative enactments by which these objectives could be accomplished without impinging upon the rights of privacy and association of unrelated persons. If a problem of excessive automobiles existed, it could be met simply by restricting the number of cars per dwelling unit, regardless of the relationship of its occupants. Nor are we persuaded to sustain the Belle Terre ordinance by the fact that dormitory housing is available to appellants at Stony Brook or one-family housing available in other nearby communities which have not enacted exclusionary zoning of the type here under attack. The fact that an unconstitutional ordinance is limited in geographical scope does not make it any less an abridgement of guaranteed constitutional rights. See Buchanan v. Warley, 245 U.S. 60, 38 S.Ct. 16, 62 L.Ed. 149 (1917); Murdock v. Pennsylvania, 319 U.S. 105, 63 S.Ct. 870, 87 L.Ed. 1292 (1943). Appellants are entitled, subject to lawful and reasonable local laws, to travel and settle down where they please. See King v. New Rochelle Municipal Housing Authority, 442 F.2d 646, 648 (2d Cir. 1971); Cole v. Housing Authority, 435 F.2d 807 (1st Cir. 1970), affirming 312 F.Supp. 692 (D.R.I.1970). If Belle. Terre is permitted to exclude appellants from its borders, other nearby communities, in the absence of a coordinated, enforceable regional plan, may be expected to do likewise. Indeed, many already have. The availability of housing in another community, therefore, does not constitute a defense. Carried to its logical conclusion such an argument might, after all local communities in an entire area had adopted unjustifiable exclusionary zoning laws, relegate those discriminated against, in this age of the jet plane and superhighway, to distant regions or even to other states. Lastly we note that in most cases similar zoning classifications have been found invalid. See City of Des Plaines v. Trottner, 34 Ill.2d 432, 216 N.E.2d 116 (1966); Kirsch Holding Co. v. Borough of Manasquan, 59 N.J. 241, 281 A.2d 513 (1971). In an analogous context a three-judge court has struck down a legislative classification which limited eligibility for food stamps to “related” individuals living as one economic unit sharing common cooking facilities and excluded groups of unrelated individuals similar to appellants here. Moreno v. United States Dept. of Agriculture, 345 F.Supp. 310 (D.D.C.), prob. jur. noted, 409 U.S. 1036, 93 S.Ct. 526, 34 L.Ed.2d 485 (1972). We find Palo Alto Tenants Union v. Morgan, 321 F.Supp. 908 (N.D.Cal.1970), relied on by appellees, to be unpersuasive. Although the court there upheld a similarly defined “single family” zoning ordinance under restrained equal protection scrutiny, it also found, unlike the district court here, that the ordinance was rationally related to population density control, traffic control and maintenance of lower rental rates. Conclusion The discriminatory classification created by the Belle Terre ordinance does not appear to be supported by any rational basis that is consistent with permissible zoning objectives. Since appellants have shown a strong likelihood of success on the merits and the balance of hardships tips decidedly in their favor, the prerequisities for preliminary injunctive relief have been established. Checker Motors Corp. v. Chrysler Motors Corp., 405 F.2d 319 (2d Cir.), cert. denied, 394 U.S. 999, 89 S.Ct. 1595, 22 L.Ed.2d 777 (1969). Accordingly the order of the district court is reversed and the case remanded for further proceedings consistent with this opinion. TIMBERS, Circuit Judge (dissenting) : The Village of Belle Terre, a community of 700 people, has enacted a “one-family” zoning ordinance similar to those in effect in thousands of communities throughout the Nation. Six unmarried students — three males and three females — at the State University of New York at Stony Brook, claiming that they constitute “one-family”, have leased a house in Belle Terre for the purpose of living there together. The Village says its one-family ordinance prohibits such a group living there. The students, in their civil rights action brought in the district court below, challenge the constitutionality of the ordinance. After a hearing in the district court, Judge Dooling, in a most thoughtful and perceptive opinion (E.D.N.Y. 1972), upheld the validity of the ordinance and denied a preliminary injunction against its enforcement. The majority in our Court today reverses the district court and strikes down the Village’s zoning ordinance on the ground that it violates the equal protection clause, of the United States Constitution. I disagree. First, while I recognize that the Supreme Court appears to be casting aside the rigid old equal protection-new equal protection dichotomy, I believe that the majority in our Court incorrectly perceives the essence of the new standard being developed. Since our decision will have radiations far beyond the immediate controversy, I feel compelled to state my understanding of the Supreme Court’s latest equal protection decisions and the new standard of judicial review that they require. Secondly, I disagree with the majority on the merits of the instant controversy. In my view since the Belle Terre zoning ordinance bears a significant relationship to the traditionally recognized zoning objectives asserted by appellees, it satisfies the new equal protection standard. I. In the century that has passed since the equal protection clause became part of our Constitution, two well-defined equal protection standards have been established: the “minimal scrutiny” standard and the “strict scrutiny” standard. A good definition of the “minimal scrutiny” standard or test was articulated by Chief Justice Warren in McGowan v. Maryland, 366 U.S. 420, 425-26 (1961): “[The equal protection clause] permits the States a wide scope of discretion in enacting laws which affect' some groups of citizens differently than others. The constitutional safeguard is offended only if the classification rests on grounds wholly irrelevant to the achievement of the State’s objective .... A statutory discrimination will not be set aside if any state of facts reasonably may be conceived to justify it.” This deferential test, also known as the “old equal protection”, was utilized most often where economic or social legislation was being challenged. See, e. g., Williamson v. Lee Optical Co., 348 U.S. 483 (1955); Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 78 (1911). The “strict scrutiny” test involved a more intense and interest-balancing review of legislative means and ends. It required that the governmental purpose for legislation be “compelling” and that the intrusion upon individual rights caused by a legislative classification be “necessary” to the effectuation of this “compelling” purpose. See Shapiro v. Thompson, 394 U.S. 618 (1969). This interventionist test, also known as the “new equal protection”, was applied where a classification provided for differential treatment on the basis of race, Loving v. Virginia, 388 U.S. 1 (1967), or where a neutral classification in fact adversely affected the fundamental rights of a disadvantaged group. See Harper v. Virginia Bd. of Elections, 383 U.S. 663 (1966) (voting rights); Griffin v. Illinois, 351 U.S. 12 (1956) (right to an effective criminal appeal); Shapiro v. Thompson, supra (right of interstate travel). The majority here asserts that certain recent decisions of the Supreme Court indicate that a third standard of review —an equal protection standard of intermediate scrutiny — is in the process of evolution. This standard is described by the majority as “a more flexible and equitable approach, which permits consideration to be given to evidence of the nature of the unequal classification under attack, the nature of the rights adversely affected, and the governmental interest urged in support of it.” The test proposed by the majority is that “[i]f the classification, upon review of facts bearing upon the foregoing relevant factors, is shown to have a substantial relationship to a lawful objective and is not void for other reasons, such as overbreadth, it will be upheld.” The majority further states that under the new test courts are “asked to do what courts are historically suited to do — apply the law to factual contexts rather than accept one hypothetical legislative justification to the exclusion of others that represent the true rationale of the classification.” I believe that the intensity and focus of judicial review required by the decisions cited by the majority differs substantially from the intensity and focus of the test proposed by the majority and applied by the majority to the present controversy. James v. Strange, 407 U.S. 128 (1972), a unanimous decision, probably is the best example of the Court’s new policy of judicial intervention without “strict scrutiny”. That decision held unconstitutional a Kansas statute for recoupment of legal defense fees expended for indigent defendants. What the Court found offensive about the statute was that a debtor in a recoupment action could not avail himself of a number of protective exemptions — including some restrictions on wage garnishment —afforded to other civil judgment debtors. It held that the distinction between these debtors and other civil judgment debtors with regard to the exemptions violated the equal protection clause because it was not based on “some rationality”. In Jackson v. Indiana, 406 U.S. 715 (1972), the Court held that the state’s provisions for pretrial commitment of mentally incompetent criminal defendants violated the equal protection clause. A comparison of the commitment laws applicable to a criminal defendant with those governing commitment of persons not charged with offenses disclosed that criminal defendants were subject to more lenient commitment standards and to a more stringent release standard. Accepting as legitimate the proffered state objective in committing criminal defendants, the Court decided that the difference between commitment procedures was not supported by any rational basis related to this objective. Weber v. Aetna Casualty and Surety Co., 406 U.S. 164 (1972), invalidated a statute which discriminated between legitimate children and dependent, unacknowledged legitimates in awarding workmen’s compensation benefits for the death of a common father. The Court held that the discrimination against illegitimates bore “no significant relationship to those recognized purposes of recovery which workmen’s compensation statutes commendably serve.” 406 U.S. at 175. The two decisions chiefly relied upon by the majority here, Eisenstadt v. Baird, 405 U.S. 438 (1972), and Reed v. Reed, 404 U.S. 71 (1971), strike me as not truly illustrative of the intensity and focus of review associated with the evolving equal protection standard. In both Baird and Reed, the Court did specify that the test being applied was a means-scrutiny test: whether the means actually were rationally related to a valid public purpose. But the actual scrutiny engaged in by the Court in each case seems more intense than required under the means-scrutiny test as defined. In Reed, the Court held unconstitutional an Idaho probate provision which gave men a mandatory preference over women when persons of the same priori-' ty class applied for appointment to administer a decedent’s estate. Chief Justice Burger found “some legitimacy” in the state’s proffered objective to simplify probate proceedings. Yet in testing the means solely as related to that aim the Court held that the sex classification was “arbitrary”. It seems clear that the means did contribute substantially to the state’s purpose, and that the rationality test was met. The more intense review engaged in by the Court, more characteristic of the strict scrutiny test than of the new rationality test, apparently reflected an unexpressed special suspicion of sex classifications. In Baird, the Court struck down Massachusetts; ban on the distribution of contraceptives to unmarried persons. The Court reached this result, however, by scrutinizing the legislation far more vigorously than it would have under the means-scrutiny standard. It rejected, as appropriate measures of the rationality of the means, two of the purposes in fact asserted by the state. The only purpose it found credible was a ban on contraceptives as such. It then stated that a distinction between married and unmarried persons was not rationally related to this objective. The Court appears to have reached a judgment as to the legitimacy of the ends by measuring their value against the individual interests affected. Since the interests involved were closely related to those protected in Griswold v. Connecticut, 381 U.S. 479 (1965), the Court was justified in subjecting the statute to intense scrutiny. The James, Jackson and Weber decisions clearly indicate that the Court is not content with the two-tier equal protection doctrine and they may well presage a new equal protection standard. Such standard would require modest intervention by a court to assure rationality of legislative means but without restricting legislative prerogatives regarding ends. Unlike the “strict scrutiny” test, the importance of the governmental interests apparently would not be weighed against the importance of the private interests impaired by the legislation. Courts would not defer to a broad range of imaginable legislative purposes, but if the ends proffered by the state were legitimate, and no right or value which has clear support in constitutional text and history were adversely affected, conflicting values would not be required to be weighed. The inquiry thus would be scrupulously focused on means rather than ends. The majority here states that “the nature of the right affected” should in part determine the rationality of the means. This indicates that the more “valuable” the right affected, the more intense should be the scrutiny and the more rational must be the means to achieve the objective. I do not find any support for this principle in the Supreme Court cases. In each of the decisions, except Reed and Baird, the intensity of review was of the same degree although the interests affected were different. A “sliding scale” approach may be appropriate in some contexts, but it seems to me to be inappropriate here. A court should not be required to attempt the impossible task of first assessing the precise value of a right or interest and then increasing or decreasing the intensity of its scrutiny accordingly. This approach would confer upon a judge wide discretion to overturn state and local legislation based largely on his own estimate of the value of competing interests — a highly abstract and individualistic determination. The recent Supreme Court decisions, in my view, require a judge to make only the narrow value judgments needed in evaluating means. A legislative classification must contribute substantially to the achievement of the state’s purpose. It must “rest on a ground of difference having a fair and substantial relation to the object of the legislation.” Reed v. Reed, supra, 404 U.S. at 76. This would indicate that grossly overinelusive or underinclusive classifications should not be readily tolerated. Nor should a reviewing court defer to imaginable facts that might justify the classification. But account should be taken of legislative realities and the need for legislative flexibility. In short, a legislature should be able to adopt any means that are reasonably effective in achieving a valid legislative end or ends. II. The Belle Terre ordinance clearly was not devised, nor has it been enforced, so as to discriminate against any group because of its racial, religious, or political characteristics. Reitman v. Mulkey, 387 U.S. 369 (1967). It does not operate to exclude the indigent from the Village. Norwalk CORE v. Norwalk Redevelopment Agency, 395 F.2d 920 (2 Cir. 1968). Appellants have not shown infringement of a constitutional right to freedom of association, NAACP v. Alabama ex rel. Patterson, 357 U.S. 449 (1958), or a right of privacy. Griswold v. Connecticut, 381 U.S. 479 (1965). While appellants’ rights to live together under the same roof free from the intrusion of government-are said to be important, in my view such rights do not rise to the status of “fundamental interests”. In short, the “strict scrutiny” standards should not be applied to test the validity of the ordinance. The majority believes that the new rationality test should be applied to zoning ordinances such as the Belle Terre ordinance. To me, it is not clear, however, that the Supreme Court is prepared to apply this invigorated rational basis for review to traditional “hands-off” areas of legislative activity. And I have my doubts that we should do so under our own steam. During this last term, the Supreme Court continued its reluctance to explore the welfare area when it found minimal rationality after examining legislation which discriminated in the allocation of welfare funds. Jefferson v. Hackmen, 406 U.S. 535 (1972); Richardson v. Belcher, 404 U.S. 78 (1971). See also Dandridge v. Williams, 397 U.S. 471 (1970). In the past, zoning has been another area which the Court traditionally has declined to explore. Euclid v. Ambler Realty Co., 272 U.S. 365 (1926). I therefore am more disinclined than is the majority to apply an intensified means-scrutiny test to this uncharted area of the law. For discussion purposes, however, I shall assume arguendo that the new standard of review should be applied to the Belle Terre ordinance. The Village of Belle Terre asserts that the primary purpose of its zoning ordinance is to maintain the one-family residential character of the Village for the welfare of its residents. The majority holds that this is not a valid zoning objective and, further, that the ordinance is not a rational means of achieving that objective. While I find it unnecessary to decide this difficult issue, because the ordinance is rationally related to other well-accepted zoning objectives, the majority’s treatment of the subject deserves some discussion. I believe that under the circumstances here the maintenance of the traditional family character of the Village arguably is a legitimate objective. It may be doubtful whether a local government in preplanning the development of a community could set aside an area solely for single-family dwellings with “family” defined as persons related by consanguinity or legal affinity, or as not more than two unrelated persons. But that is not the case here. The Belle Terre ordinance apparently was enacted for the purpose of zoning for a particular neighborhood character in a community that had always been of that character. The development decision was made over a period of time by the families moving into the Village. The zoning ordinance therefore merely reinforced the sum of many individual choices. See Mandelker, Managing Our Urban Environment 707 (2d ed. 1971). It is significant also that appellants have available to them similar housing in nearby areas. In assessing the legitimacy of a use limitation upon a particular area, a court should not ignore a relevant, larger pattern of development. As Judge Dooling stated below: “The safeguard against mistaking the effect of a particular ordinance is to see it in its total setting, recognizing that its effect, and, therefore, its validity, may be influenced by the way in which neighboring communities are zoned.” If the zoning ordinance of a small community is viewed from this broader perspective, its maintenance of a particular neighborhood character may not be seen as an expression of a parochial and exelusionist attitude, but instead as the proper use of the general welfare power to establish one segment of a beneficial larger scheme. A look at the entire Brookhaven area, which provides for varying uses and activities, indicates that Belle Terre’s ordinance was a proper exercise of the general welfare power. Certainly the ordinance is rationally related to this objective. The Village reasonably determined that two unrelated persons living in the same household would not substantially change the character of the neighborhood. Whether the limit should have been three or four unrelated persons, is a matter on which the Village is entitled to some flexibility. The limitation clearly contributes to the objective of preserving a family neighborhood. In addition to the objective of preserving the traditional family character of the neighborhood, the Village has specified several other purposes of the ordinance: (1) to control population density; (2) to avoid escalation of rental rates; and (3) to prevent parking, traffic and noise problems. These purposes • admittedly are not the primary purposes of the ordinance, but I believe that our inquiry should not be limited to its primary purposes. Subsidiary purposes also may support the rationality of a means. Judge Dooling observed that the ordinance “might well be all but impossible to justify if it had to be strictly justified by its service of such familiar zoning objectives” as those noted above. He did not decide whether the ordinance bore a significant relationship to these objectives. In my view, the ordinance is rationally related to each of these ends. I am reinforced in this view by the decision in Palo Alto Tenants Union v. Morgan, 321 F.Supp. 908 (N.D.Cal.1970), which upheld a zoning ordinance almost identical to the Belle Terre ordinance. The ordinance here involved obviously provides some controls over density by limiting the number of unrelated persons who may live in a single dwelling. It is argued, however, that the restriction is arbitrary because no corresponding limit is placed on the number of related persons living in a single dwelling. But traditional families do tend to be self-limiting, as the average size of a Belle Terre family (3 persons) demonstrates. Moreover, the Village has an interest in preserving the integrity of the biological or legal family and any discrimination against a large family-might run afoul of the Constitution. Cf. Griswold v. Connecticut, swpra. In short, while the ordinance is not perfectly efficient, it is highly effective,' given the realities of the situation. While there may be other, and perhaps more effective, means of curbing population density, the Village should be permitted to select any means that substantially further the legislative purpose. The ordinance in question clearly does so. The majority’s observation that other methods of density control are available which are less intrusive upon appellants’ rights strikes me as reminiscent of the “strict scrutiny” test which in my view is inapplicable here. The ordinance also is rationally related to the avoidance of rent inflation. Large groups of unrelated persons typically have several independent sources of income while the traditional family usually has only one basic source of income. Large groups therefore are willing and able to pay a higher rent than could a family. Thus, the whole rent structure of Belle Terre may well be affected by opening the area to large, unrelated living groups. Single families who rent may be forced to move out of the area when their landlord increases the rent to a level he knows large unrelated groups can and will pay. Perhaps rent controls would have been a better solution, as the majority suggests; but the rationality test does not demand that the means employed be the best means available. The restriction on the number of unrelated persons who may live in a single dwelling bears a significant relationship to rent control. Finally, the ordinance is related to the prevention of traffic, parking, and noise problems. These problems occur when one-family homes become occupied by large groups of unrelated persons. There are likely to be more people and more motor vehicles. The majority holds that the ordinance is not rationally related to these objectives for three basic reasons: (1) there was no evidence presented that groups of unrelated persons are always different from traditional families with respect to these problems; (2) there were more effective methods available to the Village to solve these problems; and (3) there were methods at least equally effective available to the Village which would have been less intrusive upon appellants’ rights. The Village need not establish that there always is a difference between unrelated groups and families with respect to these problems. It is enough that such differences usually exist. I believe that the Village has established that fact. Moreover, since the majority applies a new standard which requires proof by the Village of rationality, and the Village apparently did not anticipate such a standard, at the very least it seems to me that a remand should be ordered to allow the Village an opportunity to prove these matters. The fact that the means selected by the Village may not have been the most-efficient or the least intrusive of those available is legally immaterial under the means-scrutiny test. If the means selected contributes substantially to the end, the equal protection clause has not been violated. It is not our function to engage in such intense review of legislation unless the classification is suspect or a fundamental interest is adversely affected. I would affirm the judgment of the district court. ON DENIAL OF REHEARING EN BANC A poll of the judges in regular active service having been taken at the request of such a judge as to whether this action should be reheard en banc and there being no majority in favor thereof, it is Ordered that rehearing en banc is denied. Chief Judge FRIENDLY and Circuit Judges HAYS, MULLIGAN and TIMBERS dissent. TIMBERS, Circuit Judge (dissenting from denial of reconsideration en banc): In view of the unusual circumstances under which en banc reconsideration of this ease is being denied, I think that in fairness and in the public interest I should state my reasons for dissenting from the denial of en banc reconsideration. First, in this action involving the right of the 700 residents of the Village of Belle Terre, through their local government, to enact a one-family zoning ordinance, I have already stated in my panel dissent filed February 27, 1973, 476 F.2d at 818, the basis of my disagreement with the decision of the majority in striking down the Village’s zoning ordinance on the ground that it violates the equal protection clause. The crux of my disagreement with the majority centers upon its misapprehension of the Supreme Court’s most recent equal protection decisions and the new standard of judicial review that they require. Assuming arguendo that the new means-scrutiny equal protection standard (based on a correct reading of the Supreme Court’s recent decisions) should be applied to the uncharted area of zoning ordinances, then it seems to me that the Belle Terre ordinance is valid, for it bears a significant relationship to long recognized zoning objectives. Second, the en banc vote here is 4-4. It is another instance, during the period that our Court has consisted of eight active judges, where en banc reconsideration of a substantial question of unusual importance is being denied despite the vote of four of the active judges in favor of en banc—here, Chief Judge Friendly and Circuit Judges Hays, Mulligan and Timbers. Third, the decision of the panel majority in the instant case, when read in conjunction with recent decisions of other panels of our Court in Aguayo v. Richardson, 473 F.2d 1090 (2 Cir. 1973), and City of New York v. Richardson, 473 F.2d 923 (2 Cir. 1973), makes it virtually impossible for a district court in this Circuit, or a panel of our Court, to determine what equal protection standard to apply in a case before it. In Aguayo v. Richardson, we dealt with an equal protection challenge to New York experimental work project programs involving families receiving assistance under the AFDC program. We noted the development of a new equal protection standard which we described as either “a replacement for the ‘two-tiered equal protection’ which many have found unsatisfactory, . . . or as a narrowing of the gap between the tiers.” 473 F.2d at 1109. We held that the New York work project program satisfied the new standard because experimentation to determine whether improvements can be made in the welfare system is a legitimate government objective. We rejected a claim that some of the details of the program were arbitrary and unreasonable, noting that “ ‘when it is seen that a line or point there must be, and that there is no mathematical or logical way of fixing it precisely, the decision of the legislature must be accepted unless we can say that it is very wide of any reasonable mark.’ ” 473 F.2d at 1110, quoting Louisville Gas Co. v. Coleman, 237 U.S. 32, 41 (1928) (Holmes, J., dissenting). In City of New York v. Richardson, we were concerned with an attack upon New York State’s requirement that residents of local social service districts contribute to the state public welfare fund on the basis of the number of welfare recipients in the local district. We held that an equal protection claim sufficiently substantial to require the convening of a three-judge district court was stated where it was alleged that the contribution system in effect required New York City residents to finance 74% of the state program where only 45% of the State’s residents lived there. We reached this result by applying a new equal protection standard which we described as a “modified” rational relationship test. We observed that the Supreme Court’s recent decisions indicated that “[t]he two-tiered equal protection doctrine seems to have begun to give way to a more graduated, sliding-scale test.” 473 F.2d at 931. In the instant Bomas ease, the majority applied its own version of the new equal protection standard which it described as: “a more flexible and equitable approach, which permits consideration to be given to evidence of the nature of the unequal classification under attack, the nature of the rights adversely affected, and the governmental interest urged in support of it.” 476 F.2d at 814. The majority’s decision, striking down a village zoning ordinance which limits the number of unrelated persons who may live in a single dwelling, represents an unusually extensive judicial inquiry into regulation by local government of land use. The majority held that the ordinance was not “in fact substantially related” to the well-recognized zoning objectives asserted by the Village to justify its ordinance. Id. In my view, the equal protection standards applied in these three decisions within a period of less than six weeks are highly inconsistent. They demonstrate an urgent need for en banc reconsideration and restatement of the proper equal protection standard to be applied. As Judge Kaufman correctly observed, “the outer boundary of [the equal protection] inquiry remains ambiguous”. City of New York v. Richardson, supra, 473 F.2d at 931. In an area as vital as this one, we should not allow the equal protection standard to be applied by our Court to-remain so uncertain pending still further decisions by our Court or by the Supreme Court. The district courts in this Circuit are called upon to decide equal protection issues with increasing frequency, and on virtually a day to day basis. It is extremely important that we provide them with immediate useful guidance rather than abandon them to make what they will of recent Supreme Court decisions or, even worse, to confuse them with a series of conflicting decisions of our own. Certainly enough has been said in recent decisions of the Supreme Court to enable us to state with reasonable assurance some general guiding principles. I would do so by granting immediate en banc reconsideration of the instant case. Finally, the Supreme Court’s very recent decision in San Antonio Independent School District v. Rodriguez, 411 U.S. 1 (1973), 41 U.S.L.W. 4407 (U.S. March 21, 1973), strongly indicates that the traditional minimal scrutiny equal protection standard should have been applied in the instant ease. In Rodriguez, the Court held that “the traditional standard of review, which requires only that the State’s system be shown to bear some rational relationship to legitimate state purposes”, should be applied to determine whether a Texas program for financing public education complied with the equal protection clause. 411 U.S. at 40, 41 U.S.L.W. at 4419. The Court stated that, because “the Justices of this Court lack both the expertise and the familiarity with local problems so necessary to the making of wise decisions” with respect to the financing of public education, and because “in such a complex arena ... no perfect alternatives exist”, the Court would not “impose too rigorous a standard of scrutiny.” 411 U.S. at 41, 41 U.S.L.W. at 4419. In short, the Court refused to “intrude in an area in which it has traditionally deferred to state legislatures.” State or local decisions regarding limitations on the use of land traditionally have been accorded this same great deference by federal courts for the same reasons a state’s handling of public expenditures are not to be disturbed. Euclid v. Ambler Realty Co., 272 U.S. 365 (1926). In the light of Rodriguez, it seems to me that a fortiori the decision in the instant case, which surely constitutes a substantial interference with a municipality’s zoning policies, was erroneous. We should correct this error on our own initiative through en banc reconsideration rather than forcing the Village of Belle Terre to incur the unnecessary expenditure of time and money to obtain what would appear to be sure reversal by the Supreme Court. I do not think the Village of Belle Terre should be compelled to march up the hill for the sake of marching down again, in view of the Supreme Court’s decision of a fortnight ago in Rodriguez, For the reasons stated above, I respectfully but most emphatically dissent from the denial of reconsideration en banc. MANSFIELD, Circuit Judge: Some statements in the dissent of my distinguished brother Timbers from the Court’s denial of an en banc hearing call for a reply. Most members of this Court, including our dissenting brother, have construed certain recent Supreme Court decisions as indicating a trend toward modification or softening of what had previously been interpreted as a rigid, two-tiered Equal Protection doctrine. In my judgment there is no inconsisténcy between general observations voiced by different panels of this Court, including the majority in this case, on the subject of this apparent trend toward more elasticity in application of the basic principle of Equal Protection. But even if there were some differences in the broad language used by different panels, it would be pointless and unwise to attempt to express a standard in crystallized terms along the lines suggested by the dissent. An en banc hearing would not contribute in any significant way to clarity and coherence in the area of Equal Protection for the reason that in pursuing the elusive quest for standards we are dealing with broad general principles which must be capable of adaption to widely varying factual contexts. Nothing we might say about this proteus-like concept, therefore, could be sufficiently precise to have a binding effect throughout the Circuit in other cases, which would inevitably involve significantly different factors, especially since our views would be expressed by a divided court, with district judges looking primarily to the Supreme Court for ultimate guidance. At no time has the principle of Equal Protection been articulated by the Supreme Court or by ourselves as a “litmus-paper test” or precise rule. Indeed, the Supreme Court’s description of “Due Process” in Hannah v. Larche, 363 U.S. 420, 442, 80 S.Ct. 1502, 1514, 4 L.Ed.2d 1307 (1960), as an “elusive concept [whose] exact boundaries are undefinable and [whose] content varies according to specific factual contexts” applies with the same force to Equal Protection. While certainty in the law is a virtue, history discloses that resilience is equally essential. A certain degree of flexibility in describing Equal Protection must therefore be inevitable. Nor does the Supreme Court’s 5 to 4 decision in San Antonio Independent School District v. Rodriguez, 411 U.S. 1, 93 S.Ct. 1278, 36 L.Ed.2d 16 (Mar. 21, 1973), alter the foregoing. There the Court, following a well beaten path used in review of certain types of economic discrimination, applied “the traditional standard of review” to state legislation of an essentially economic nature, which was challenged because of its social consequences. Here we are not concerned with commercial legislation but with a local ordinance directed squarely against the personal right of individuals to associate and live together and found by the district court to be “impossible to justify” in terms of “such familiar zoning objectives as safety, adequate light and air, preservation of the lands from over-intensive use, avoiding crowding of the population, reduction of traffic congestion and facilitation of adequate transportation, water, sewerage, school, park and other public services.” If anything, our decision here is in accord with the Supreme Court’s decision in Rodriguez. In describing the standard applied by it, the Court there stated that “the Texas scheme must still be examined to determine whether it rationally furthers some legitimate, articulated State purpose” (id. at 17, 93 S.Ct. at 1288), that “the traditional standard of review . . . requires only that the State’s system be shown to bear some rational relationship to legitimate State purposes” (id. at 40, 93 S.Ct. 1300), and that “[t]he constitutional standard under the Equal Protection Clause is whether the challenged state action rationally furthers a legitimate state purpose or interest” (id. at 55, 93 S.Ct. at 1308). These statements not only are consistent with our review but would require us to nullify the Belle Terre ordinance for failure to further any legitimate zoning objective. This is not, therefore, one of those truly extraordinary cases that warrants review en banc. Nor would such a hearing render unnecessary the expenditure of time and money required to determine whether the Supreme Court will agree with our disposition of this case, since a majority of this Court might well, agree with the result reached by the majority of the panel and, if it did not, appellants would undoubtedly seek review by the Supreme Court. Belle Terre has open to it a simple and inexpensive solution. It can enact a new ordinance bearing some rational relationship to legitimate zoning objectives. . A one-family dwelling is defined as: “A detached house consisting of or intended to be occupied as a residence by one family only, as family is hereafter defined. In no ease shall a lodging house, boarding house, fraternity house, sorority house or multiple dwelling be classified or construed as a one family dwelling.” Building Zone Ordinance of the Village of Belle Terre, Art. I, § D-1.34a (1971). . Plaintiffs assert that this was the explanation given by one of the individual defendants, Francis R. Stolz, a Trustee of the Village. Other named defendants are James Philbin, Mayor of the Village, Robert Doerr, Deputy Mayor and Trustee, Vincent Bove, Trustee, and Vincent Karwowski, Trustee. . Specifically, the complaint alleged that the ordinance denied the plaintiffs’ equal protection of the law, violated their right of association as secured by the First and Fourteenth Amendments, intruded on their constitutionally protected right of privacy, and contravened their right to travel. On appeal, the primary reliance has been on the equal protection claim at least insofar as the ordinance allegedly impinged unequally on the other specified constitutional rights. . Boyle v. Landry, 401 U.S. 77, 91 S.Ct. 758, 27 L.Ed.2d 696 (1971); Samuels v. Mackell, 401 U.S. 66, 91 S.Ct. 764, 27 L.Ed.2d 688 (1971); Perez v. Ledesma, 401 U.S. 82, 91 S.Ct. 674, 27 L.Ed.2d 701 (1971); Dyson v. Stein, 401 U.S. 200, 91 S.Ct. 769, 27 L.Ed.2d 781 (1971); Byrne v. Karalexis, 401 U.S. 216, 91 S.Ct. 777, 27 L.Ed.2d 792 (1971). . The “Anti-Injunction” statute provides: “A court of the United States may not grant an injunction to stay proceedings in a state court except as expressly authorized by act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.” 28 U.S.C. § 2283 (1965). . Note, The Equal Protection Clause and Exclusionary Zoning After Valtierra and Dandridge, 81 Yale L.J. 61 (1971); Sager, Tight Little Islands: Exclusionary Zoning, Equal Protection, and the Indigent, 21 Stan.L.Rev. 767 (1969); Comment, All In The “Family”: Legal Problems of Communes, 7 Harv.Civ.Rights—Civ.Lib.L.Rev. 393 (1972). . See Gunther, The Supreme Court 1971 Term, Foreword, In Search of Evolving Doctrine on a Changing Court: A Model for a New Equal Protection, 86 Harv.L. Rev. 1, 10-20 (1972). . We disagree with our Brother Timbers’ interpretation of our decision as requiring the court to apply a flexible standard based upon balancing of the importance of the respective conflicting governmental and private interests affected by the legislation under review. We believe simply that the court is required to determine whether the legislative classification in foot (rather than hypothetically) has a substantial relationship to a lawful objective. That determination of necessity requires the court to consider evidence of the nature of the classification under aftack, the rights adversely affected and the governmental interest in support of it. We agree with Judge Timbers’ conclusion that in determining whether legislation under review denies equal protection “grossly overinclusive or underinelusive classifications should not be readily tolerated.” However, for reasons stated below (at 2010-2014) we conclude that even assuming arguendo that the Belle Terre ordinance had a legitimate objective, the means adopted cannot be justified under this standard. . See, e. g., Building Zone Ordinance of Village of Babylon, Art. I, § 100(28) ; Building Zone Ordinance of Village of Sag Harbor, Art. II, § 1(d); Ordinances of the Village of Bellport, Ch. 10, Art. II, § 206.1; Zoning Ordinance, General Regulations of Town of East Hampton, § 309.5; Unified Code of Ordinances, The Village of Oldfield, Art. VII, Ch. 7, Zoning, Part 7.2. . The majority relies primarily upon five decisions to support its formulation of a new rationality standard: James v. Strange, 407 U.S. 128 (1972); Jackson v. Indiana, 406 U.S. 715 (1972); Weber v. Aetna Casualty & Surety Co., 406 U.S. 164 (1972); Eisenstadt v. Baird, 405 U.S. 438 (1972); Reed v. Reed, 404 U.S. 71 (1971). Additional decisions might be cited to indicate that the Court recently may have been developing a third standard of review: Chicago Police Dept. v. Mosley, 408 U.S. 92 (1972); Humphrey v. Cady, 405 U.S. 504 (1972). See generally Gunther, The Supreme Court 1971 Term, Foreword, In Search of Evolving Doctrine on a Changing Court: A Model for A New Equal Protection, 86 Harv.L.Rev. 1 (1972). . Four decisions rendered by the Court last term indicate that it is not yet ready to abandon the “old equal protection” standard. Jefferson v. Hackney, 406 U.S. 435 (1972); Lindsey v. Normet, 405 U.S. 56 (1972); Schill v. Knebel, 404 U.S. 357 (1971); Richardson v. Belcher, 404 U.S. 78 (1971). . The difficulty in judging the relative value of an interest is illustrated by the Court’s hesitancy in expanding the list of “fundamental interests”. See, e. g., Lindsey v. Normet, 405 U.S. 56 (1972) (refusal to find housing a fundamental interest). Indeed, the Court’s use of the new means-scrutiny test may be viewed as a technique to avoid the troublesome value judgments required to identify new fundamental interests. . In Palo Alto, the court upheld a zoning law which maintained a “single family residential” neighborhood. “Single family” was defined as persons related by blood or law, or a group not exceeding four persons living as a single housekeeping-unit. The law was challenged by a group of more than four unrelated persons on the ground that it violated their rights of association and privacy. Applying the restrained “minimal scrutiny” test, the court held that the classification was rationally related to control of population density, avoidance of rent inflation, and prevention of parking, traffic, and noise problems. The cases relied upon by appellant, City of Des Plaines v. Trottner, 34 Ill. 2d 432, 216 N.E.2d 116 (1966), and Kirsch Holding Co. v. Borough of Manasquan, 59 N.J. 241, 281 A.2d 513 (N.J.Super.1971), are not persuasive. In City of Des Plaines, the court never reached the equal protection issue because it decided that the zoning law was ultra vires. In Kirsch Holding Co., the ordinance was declared unconstitutional after the court found that its objective was to prevent obnoxious behavior by persons renting during a particular season. The court held that the ordinance limiting the area to “families” was not rationally related to this objective. . See, e. g., Scenic Hudson Preservation Conference v. FPC, 453 F.2d 463, 494 (2 Cir. 1971) (en banc denied, 4-4), cert. denied, 407 U.S. 926 (1972); Zahn v. International Paper Co., 469 F.2d 1033, 1040-42 (2 Cir. 1972) (en banc denied, 4-3, i. e. 4 in favor of en banc, 3 against), cert. granted, 410 U.S. 925 (1973), 41 U.S.L.W. 3441 (U.S. Feb. 20, 1973); United States v. Puco, 476 F.2d 1099, 1111 (2 Cir. 1973) (en banc denied, 4-4), (May 4, 1973). But compare International Business Machines Corp. v. United States and Edelstein, 471 F.2d 507 (2 Cir. 1972) (en banc granted, 5-0, on February 14, 1973). It should be noted that in IBM, since three of the active judges were disqualified, the votes of all the remaining five active judges were required in order to en banc the case. See Zahn, supra, 469 F.2d at 1042. One of the five active judges concurred in the panel majority opinion. Another of the active judges wrote the panel dissenting opinion. If either of these two had voted against en bane, the case could not have been reconsidered en banc. Since each voted in favor of en banc, the desire of the other four to reconsider the case en banc was not thwarted. See International Business Machines Corp. v. United States and Edelstein, 480 F.2d 293, 303 (2 Cir. 1973) (en banc) (Timbers, J., dissenting), slip op. 3375, 3394 (May 8, 1973). . Both the majority opinion of Mr. Justice Powell and the crucial concurring opinion of Mr. Justice Stewart expressly relied upon Chief Justice Warren’s opinion in McGowan v. Maryland, 366 U.S. 420, 425-26 (1961). Mr. Justice Stewart referred to McGowan as “[t]his settled principle of constitutional law” and as “a specific application of one of the first principles of constitutional adjudication — the basic presumption of the constitutional validity of a duly enacted state or federal law.” 411 U.S. at 60, 41 U.S.L.W. at 4425. . I am mindful, of course, that none of us was aware of the Supreme Court’s decision in Rodriguez at the time of the en bane poll in the instant case. That is all the more reason for reconsideration en banc now — to harmonize the law of this Circuit with controlling Supreme Court law. ' . An en banc review was denied pursuant to the provisions of 28 U.S.C. § 46(e) because it was not requested by a “majority of the circuit judges of the circuit who are in regular active service.” . En banc review adds immeasurably to the expenditure of judicial time, energy and resources on the part of members of this already overburdened Court. Some idea of this Court’s current load of regular judicial business can be gathered from the fact that in the fiscal year 1972 it terminated 1,593 appeals, as compared with 959 appeals disposed of annually five years previously, or an increase of 66%. See Annual Report of the Director of the Administrative Office of the United States Courts for the Fiscal Year 1967, Table Bl, page 181, and for the Fiscal Year 1972, Table Bl, Appendix A-l. Yet the size of the Court has remained the same, with one judgeship now vacant for almost 17 months. Nor are en banced appeals, with rare exceptions, disposed of expeditiously, since all members of the Court are called upon to participate in the hearing and decision. Experience reveals that the en banc process may delay this Court’s ultimate decision of an appeal by more than six months. . Aguayo v. City of New York, 2 Cir. 1973, 473 F.2d 1090 at 1108-1110 (per Friendly, Waterman, Hays, C.JJ.); City of New York v. Richardson, 2 Cir. 1973, 473 F.2d 923 at 930-931 (per Kaufman, Lumbard, Mansfield, C.JJ.); Green v. Board of Education, Jan. 29, 1973, Slip Sheet 1723 at 1726-28 (per Feinberg, Lumbard, Mansfield, C.JJ.); Boraas v. Village of Belle Terre, 2 Cir. 1973, 476 F.2d 806 (per Mansfield, Oakes, Timbers, C.JJ.). . While we feel confident that our views will not be disapproved by the Supreme Court, we would not be so vain as to prediet that we are “sure” of its action in this fluid area of the law.

f2d_476/html/0829-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

KANSAS CITY SOUTHERN RAILWAY COMPANY, a corporation, Plaintiff-Appellant, v. ARKANSAS LOUISIANA GAS COMPANY, a corporation, Defendant-Appellee. FORT SMITH AND VAN BUREN RAILWAY COMPANY, a corporation, Plaintiff-Appellant, v. ARKANSAS LOUISIANA GAS COMPANY, a corporation, Defendant-Appellee. No. 72-1369. United States Court of Appeals, Tenth Circuit. Argued and Submitted Sept. 20, 1972 Decided March 27, 1973. Burton J. Johnson, Oklahoma City, Okl. (Watts, Looney, Nichols & Johnson, Oklahoma City, Okl., on the briefs) for plaintiffs-appellants. G. C. Mayhue, Jr., Ada, Okl. (Conn, Mayhue, Kerr & Mayhue, Ada, Okl., on the brief) for defendant-appellee. Before PHILLIPS, SETH and HOLLOWAY, Circuit Judges. ORIE L. PHILLIPS, Circuit Judge. The Kansas City Southern Railway Company and the Fort Smith and Van Burén Railway Company brought this action against the Arkansas Louisiana Gas Company. The two railways will be referred to collectively as the Railway Companies. By the Act of February 27, 1893, the predecessor of the Southern Railway Company was “invested and empowered with the right of locating, constructing, operating, using, and maintaining a railroad, telegraph, and telephone line through the Indian Territory, * * * with the right to construct, use, and maintain such tracks, turnouts, sidings, and extensions as said company may deem its interest to construct along and upon the right of way * * 27 Stat. 487. The pertinent parts of § 2 of such Act read as follows: “SEC. 2. That said corporation is authorized to take for all uses of a railroad, telegraph, and telephone line, and for no other purposes, a right of way one hundred feet in width through said Indian Territory, * * * with the right to use additional grounds where there are heavy cuts or fills as may be necessary for the construction and maintenance of the roadbed, * * And provided further, That no parts of the lands herein authorized to be taken shall be leased or sold by the company, and they shall not be used except in such manner and for such purpose only as shall be necessary for the construction and convenient operation of said railroad, telegraph, and telephone line, and when any portion thereof shall cease to be used, such portion shall revert to said nation or tribe of Indians from which the same shall have been taken.” By the Act of March 3, 1899, 30 Stat. 1368, the predecessor of the Fort Smith Railway Company was “invested and empowered with the right of locating, constructing, owning, equipping, operating, using, and maintaining a railway and telegraph and telephone line through the Choctaw and Creek nations, in the Indian Territory, * * The pertinent parts of § 2 of such Act read as follows: “SEC. 2. That said corporation is authorized to take and use for all purposes of a railway and telegraph and telephone line, and for no other purpose, a right of way one hundred feet in width through the said Choctaw and Creek nations * * * Provided further, That no part of the lands herein authorized to be taken shall be leased or sold by the company, and they shall not be used except in such manner and for such purposes only as shall be necessary for the construction and convenient operation of said railroad, telegraph, and telephone lines, and when any portion thereof shall cease to be so used, such portion shall revert to the Choctaw Nation or Creek Nation.” By the Act of April 26, 1906, 34 Stat. 137, the railroad companies which had acquired railroad rights of way through the Indian Territory were authorized to acquire the fee titles to the lands over which they had rights of way, under rules and regulations to be prescribed by the Secretary of the Interior, at a valuation to be determined by him, but such Act provided that if the railroad companies failed to make payment of the amount so fixed within the time prescribed in the regulations, title thereto “shall thereupon vest in the owner of the legal subdivision” adjoining such rights of way. It will be observed that in the Act of April 26, 1906, Congress characterizes a railroad right of way as “in the nature of an easement.” These cases, which were consolidated for trial, had their genesis when the Gas Company constructed 12 gas pipelines under the Railway Companies’ rights of way. The Gas Company brought a state court condemnation proceeding against each of the Railway Companies to acquire the right to lay 12 gas pipelines under the rights of way of the Railway Companies, but below any part of the rights of way being used for railroad purposes. Estimated compensation was deposited by the Gas Company in each of the state court condemnation proceedings, and it obtained orders of possession pursuant to which the 12 gas pipelines were constructed. The Railway Companies did not accept such deposits and the Gas Company withdrew them and dismissed the condemnation proceedings without prejudice. Prior to boring the holes for the gas pipelines, the Gas Company had paid the owners of the servient estates an agreed amount for the right to install gas pipelines underneath the rights of way of Railway Companies. After it had installed the 12 gas pipelines under the Railway Companies’ rights of way and had dismissed its condemnation proceedings, the Gas Company later installed two larger gas pipelines thereunder. The standard practice where gas pipelines are laid under a railroad right of way is to dig an open ditch on each side of the right of way, to, but not into the right of way, and then bore a hole under the right of way and beneath any construction or use made of it by the railroad company, from one ditch to the other. That practice was followed with respect to the first gas pipelines constructed under the Railway Companies’ rights of way. However, each of the other two crossings was for larger pipelines and open trenches were dug on the rights of way, and the pipelines laid beneath the surface of the rights of way and beneath any subsurface construction or any use made of the rights of way by the Railway Companies, and were both backfilled. The entrance of the Gas Company onto the surface of the rights of way was of short duration and did not interfere in any way with the use by the Railway Companies of their respective rights of way. The court found that the installation of the gas pipelines did not interfere in anywise with the Railway Companies’ construction, operation, maintenance or use of their respective railroads, telegraph and telephone lines, cuts, fills, and other structures. That finding is amply supported by the evidence and is not clearly erroneous. The gas pipelines might have interfered if they had been installed under tracks, in cuts, but that would be such an entirely impractical place to install a gas pipeline that we may assume that none of the pipelines here involved were installed under tracks, in cuts, of the Railway Companies. In the Southern Railway Company’s action against the Gas Company, the Railway Company alleged in its first cause of action that it had the right to the exclusive possession and occupancy of the 100-foot right of way strip; that without authority, permission or license so to do, the Gas Company in three separate locations dug, excavated and constructed its gas pipelines “over, across and under” the Railway Company’s right of way, and caused the Railway Company damages in the amount of $7,500; and that the Railway Company was entitled to triple that amount by reason of the Gas Company’s wilful trespass. In its second cause of action, the Southern Railway Company sought punitive damages in the amount of $15,000, by reason of the Gas Company’s alleged intentional, wilful, oppressive, fraudulent and malicious trespass; and in its third cause of action it sought recovery of $7,500, because of the additional expense it had to incur to make proper inspection of the gas pipelines. In its complaint against the Gas Company, the Fort Smith Railway Company made substantially the same allegations in its three causes of action, and sought to recover the same relief as the Southern Railway Company did in its action against the Gas Company. The Railway Companies rely strongly on the language of the United States Supreme Court in its opinion in Western Union Telegraph Co. v. Pennsylvania Railroad Co., 195 U.S. 540, 570, 25 S.Ct. 133, 141, 49 L.Ed. 312, reading: “ * * * a railroad right of way is a very substantial thing. It is more than a mere right of passage. It is more than an easement. We discussed its character in New Mexico v. United States Trust Co., 172 U.S. 171 [19 S.Ct. 128, 43 L.Ed. 407]. We there said (p. 183, 19 S.Ct. 128) that if a railroad’s right of way was an easement it was ‘one having the attributes of the fee, perpetuity and exclusive use and possession; also the remedies of the fee, and, like it, corporeal, not incorporeal, property.’ * * * “A railroad’s right of way has, therefore, the substantiality of the fee, and it is private property, even to the public, in all else but an interest and benefit in its uses. It cannot be invaded without guilt of trespass. It cannot be appropriated in whole or in part except upon the payment of compensation. In other words, it is entitled to the protection of the Constituion, and in the precise manner in which protection is given. It can only be taken by the exercise of the powers of eminent domain, * * They also rely on Midland Valley R. Co. v. Sutter, 8 Cir., 28 F.2d 163, 165, and particularly that part reading: “* * * The decisions of the national courts and of a majority of the state jurisdictions, however, are to the effect that the railroad company is entitled to the exclusive use and possession of its right of way, and that the owner of the servient estate has no right to occupy the surface of the land conveyed for right of way, in any mode, or for any purpose, without the railroad company’s consent. * * *” It should be noted that the opinion in Midland Valley states that “the owner of the servient estate has no right to occupy the surface of the land conveyed for right of way’’ (italics ours); and that neither of the opinions in such cases passed on the question of the right of the owner of the servient estate to occupy and use the strata of the land conveyed for the right of way, which is below the surface of such land, and also below any of the strata below such surface, used or needed by the railroad company in the construction, maintenance or operation of its railroad; and also where such occupancy and use by the owner of the servient estate will not in anywise interfere with nor in any manner affect the construction, maintenance or operation of its railroad by the railroad company. Moreover, the opinions in such two cases relied on by the Railway Companies should be read and considered in the light of the particular facts therein involved. That is particularly true here, because such facts differ so materially from the facts involved in the instant cases. In each of such cases there was invasion of the surface of the railroad’s right of way, and also of strata below the surface, used and needed by the railroad company in the construction, maintenance and operation of its railroad. In the first case, Western Union went upon the surface of. the land covered by the railroad’s right of way and erected poles, the lower ends of which were sunk into the ground below the surface, as also were stays for guide wires attached to the poles. It attached to the poles wires over which it sent telegraph messages, and it had to occupy the surface from time to time to repair and maintain such structures and wires. In the second case, the court enjoined the defendant, an oil and gas lessee, from entering on the railroad’s right of way and conducting drilling operations for the discovery of oil and gas and the production thereof, if found in paying quantities. It is clear that for the oil lessee to have conducted such drilling operations, it would have had to enter upon the surface of the land covered by the railroad’s right of way, erect drilling derricks, power plants, sumps for the deposit of material brought up by the drill or pumped up from the drill hole, and to continuously occupy such surface. It is apparent that the drill hole would pass from the surface down through the subsurface strata, a portion of which the railroad company would need for making fills, in constructing drainage ditches, in installing culverts, building bridges and other structures, and installing supports therefor beneath the surface of the land covered by the right of way. On the other hand, in the instant eases there was no invasion of the surface, except to dig the trenches in which the two larger gas pipelines were laid, lay the same, and backfill the trenches. Such invasion was temporary and of short duration, and did not in any way affect the subsurface strata which the Railway Companies used in the construction, maintenance and operation of their railways. The trial court found, and we agree, that the gas pipelines in no way interfered with the construction, maintenance, operation or use by the Railway Companies, either above or below the surface of the land over which the rights of way were granted. Each of the Acts of Congress granting the rights of way contained the following language: “That no parts [part in Act of March 3, 1899] of the lands herein authorized to be taken shall be leased or sold by the company, and they shall not be used except in such manner and for such purposes [purpose in Act of February 27, 1893] only as shall be necessary for the construction and convenient operation of said railroad, * * *>» And in § 14 of the Act of April 26, 1906, Congress said: “Provided further, That this section shall not apply to land reserved from allotment because of the right of any .railroad or railway company therein in the nature of an easement for right of way, depot, station grounds, water stations, stock yards or other uses connected with the maintenance and operation of such company’s railroad * * x hut if any such company x x x shall cease to use such land for the purpose for which it was reserved, title thereto shall thereupon vest in the owner of the legal subdivision of which the land so abandoned is a part, * * *.” (Italics ours.) The foregoing shows that Congress clearly intended that the rights of way granted to railroads and railways through the Indian Territory were to be in the nature of an easement, and that there was both a dominant and a servient estate. Moreover, this court has considered the rights of the owners of servient estates and those claiming under them, as against the rights of railroads, under rights of way through Indian Territory acquired under Acts of Congress not materially different from the Acts of Congress under which the Railway Companies obtained the rights of way involved in the instant cases, and has consistently held that such rights of way are in the nature of an easement and that the servient estate is in the owner of the abutting fee. Finally, counsel for the Railway Companies state in their brief: “The Court correctly ruled that the Railroads owned an easement for railway purposes and that the servient estate under the Railroad right-of-way was owned by the abutting landowners.” They further state in their brief: “It is' conceded by the Railroads that under Sec. 14 of the Act of April 26, 1906, 34 Stat. 137, the abutting landowners owned the servient estate under the Railroads right-of-way.” Of course, a railroad company which acquires a right of way over and through lands of another acquires more than the mere right of passage over such lands. It acquires the right to excavate drainage ditches; to construct beneath the surface supports for bridges and other structures; to erect and maintain telegraph lines and supporting poles with part of the poles beneath the surface ; to construct passenger and freight depots, using portions of the land below them for foundations; to construct signals ; to make fills and cuts to decrease the grades of their rail lines, and to use material from the land covered by the right of way to make such fills; and to construct a roadbed and lay its ties and rails thereon. Hence, it has substantial surface and subsurface rights, which it is entitled to have protected. But in our opinion it cannot deprive the owner of the servient estate or those claiming through such owner from making use of the land in strata below the surface and below substrata which are used or needed by the railroad company, and which in nowise, as in the instant cases, interferes with the construction, maintenance and operation of the railroad. With a minor exception, the trial court found that the Railway Companies were not entitled to recover any damages. It held that because of the construction of the gas pipelines, the Railway Companies had to make changes in their maps at a cost of $50 per pipeline crossing, and awarded damages to the Railway Companies against the Gas Company on that basis. It entered its judgment accordingly. For the reasons indicated above, we conclude that the decision of the trial court was in all respects correct, and it is therefore affirmed. . Hereinafter referred to as the Southern Railway Company. . Hereinafter referred to as the Fort Smith Railway Company. . Hereinafter referred to as the Gas Company. . Section 14 of the Act of April 26, 1906, in part reads: “ * * * Provided further, That this section shall not apply to land reserved from allotment because of the right of any railroad or railway company therein in the nature of an easement for right of way, depot, station grounds, water stations, stock yards or other uses connected with the maintenance and operation of such company’s railroad, title to which tracts may be acquired by the railroad or railway company under rules and regulations to be prescribed by the Secretary of the Interior at a valuation to be determined by him; but if any such company shall fail to make payment within the time prescribed by the regulations or shall cease to use such land for the purpose for which it was reserved, title thereto shall thereupon vest in the owner of the legal subdivision of which the land so abandoned is a part, except lands within a municipality the title to which, upon abandonment, shall vest in such municipality.” (Italics ours.) . See St. Louis-San Francisco Railway Co. v. Town of Francis, 10 Cir., 249 F.2d 546, 547-548, and cases therein cited on page 548.

f2d_476/html/0835-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Martha ISHAM, Plaintiff-Appellee, v. PACIFIC FAR EAST LINE, INC., Defendant-Appellant. No. 72-1438. United States Court of Appeals, Ninth Circuit. April 9, 1973. Rehearing Denied May 11, 1973. George L. Waddell (argued), Daniel M. Blumenfeld, William K. Mordock, Jr., Dorr, Cooper & Hays, San Francisco, Cal., W. Scott Barrett, Barrett, Ferentz & Bramhill, Agana, Guam, for defendant-appellant. Howard G. Trapp (argued), Trapp, Gayle & Co., Agana, Guam, for plaintiff-appellee. Before CHAMBERS, ELY and WALLACE, Circuit Judges. CHAMBERS, Circuit Judge: Martha Isham brought this personal injury action against Pacific Far East Line, Inc. (hereinafter Far East) in the District Court of Guam. Jurisdiction was based on diversity and the Organic Act of Guam, 48 U.S.C. § 1424(a). Her husband was stationed on Guam while serving in the Navy. In the spring of 1968, Mrs. Isham purchased a passenger ticket to travel on the Far East freighter, the India Bear, from San Francisco, California, to Guam. The India Bear made a stop at Honolulu to take on and discharge cargo. On May 5, 1968, the India Bear put in at Wake Island. Wake does not have a deep water harbor. Ships lie at anchor offshore, and landing craft (LCM’s) shuttle back and forth between ships and the docks. Wake is under the control of the Federal Aviation Administration (FAA). The FAA also operates the LCM’s that shuttle between the docks and ships at anchor. Far East crew-members who have shore leave and passengers who wish to visit Wake also ride in the LCM’s. On the evening of May 5, several passengers from the India Bear, including Mrs. Isham, went ashore to visit Wake. Around 10:00 p. m., the passengers and several crew-members boarded the LCM for the return to the India Bear. The LCM was operated by Ichito Nagao, an FAA employee. Shortly after leaving the dock, the LCM struck a barge because of Nagao’s carelessness. Mrs. Isham was thrown forward into the well of the ship. She broke both her wrists and injured her back. After receiving first aid at Wake, she was flown to Guam where she received care and recuperated in a U. S. Navy hospital. She continues to have some discomfort in her right wrist and occasional low back pains. Both ailments respond to aspirin. A jury awarded her $90,000 for her injuries, a rather handsome amount considering the injuries. Far East has appealed the judgment against it. We consider the extent of Far East’s duty to provide its passengers at wayports such as Wake with passage ashore. The parties agree that a shipowner owes his passengers a high degree of care. However, a passenger must recover, if at all, because of negligence; the shipowner does not owe a duty to passengers, as he does to seamen, to provide a “seaworthy” vessel. Tullis v. Fidelity & Casualty Co. of New York, 397 F.2d 22 (5th Cir. 1968). Also see The Oregon, 133 F. 609, 618 (9th Cir. 1904). Mrs. Isham has claimed all along that Far East has a non-delegable duty to provide proper and safe transportation between the India Bear anchorage and Wake Island. In order to recover on such a theory, a plaintiff must first establish the duty, then that duty’s nondelegability. The basis on which Mrs Isham seeks to establish the duty is the long-established rule that embarking and disembarking are a part of the voyage which the shipowner agrees to provide. In The Valencia, 110 F.2d 221 (D.Wash. 1901), aff’d sub nom Pacific Steam Whaling Co. v. Grismore, 117 F. 68 (9th Cir. 1902), miners traveling to Alaska to seek gold were put ashore at Nome with virtually no facilities for protection and without their baggage and equipment. The court granted them recovery for injuries suffered as a result of exposure to the elements caused by the negligent manner in which the shipowner provided for disembarking. Where a passenger or cruise vessel puts into numerous ports in the course of a cruise, these stopovers are the sine qua non of the cruise. In such a situation, the shipowner has a duty to exercise a high degree of care in seeing to the safe embarking and disembarking of the passengers. Lawlor v. Incres Nassau S.S. Lines, 161 F.Supp. 764 (D.Mass.1958). The question in this case is whether Far East had a duty to provide safe passage ashore at Wake. We believe that whether such a duty exists depends ultimately on the totality of circumstances. Cf. Kermarec v. Compagne Generale Transatlantique, 358 U.S. 625, 79 S.Ct. 406, 3 L.Ed.2d 550 (1959). The clearest case for requiring safe passage is presented in The Valencia, supra. Regardless of other factors, any vessel which engages in the carriage of passengers for hire has a duty to provide for embarking and disembarking at the beginning and end of the voyage. In so providing, he must exercise a high degree of care. Similarly, where, as in Lawlor, supra, a passenger cruise ship entices people aboard with the promise of stopovers in exotic ports, the shipowner must see to those passengers’ safe embarking and disembarking in each such port. In our case, Mrs. Isham purchased passage from San Francisco to Guam on a ship whose primary purpose was transportation of cargo. She was not told that she could expect a pleasure cruise. The India Bear carried a dozen or fewer passengers, and carrying passengers was incidental to the cargo business. The stop at Wake was for the purpose of taking on and discharging cargo. No showing was made that the stop at Wake'was part of the inducement offered her for traveling on the India Bear. Mrs. Isham was not encouraged to go ashore. The craft on which she went ashore and was to return was not owned by Far East. The ship made passage on the boat available to the crew and to such passengers who wished to use it. We hold that on the facts of this case Far East had no duty to provide passengers with transportation ashore at Wake. As to Mrs. Isham, this was not the beginning or the end of the voyage. Freighter passage is not ordinarily a pleasure cruise. If Far East had made a call at Wake a part of the inducement for passengers to travel Far East, we would have a different case. Mrs. Isham could have claimed that Far East was negligent in allowing her to use a craft that was known to be dangerous or that was known to be operated carelessly. No such claim was pleaded, and we do not believe that any such claim was raised by the proof. See F.R.Civ.P. Rule 15(b). On a related ground, Mrs. Isham contended throughout that Ichito Nagao, the LCM operator, was Far East’s agent, and therefore Nagao’s negligence should be imputed to Far East. All the evidence shows that Nagao was employed by and acting in behalf of the FAA. After the judge had instructed the jury, he asked counsel if they had any objections to the instructions or suggestions for further instructions. At the request of counsel for Mrs. Isham, the judge instructed the jury, “If in this ease you should find that the operator of the launch, Mr. Nagao, is negligent in his operation of such launch, that such negligence is imputed to the defendant, Pacific Far East Lines, Incorporated.” The instructions as given almost amounted to a directed verdict for the plaintiff. There may have been a good Federal Tort claims case based on liability of the FAA, but we cannot transfer its liability to Far East. The judgment is reversed. . While at Wake, Far East ships pay the FAA $30 per day for LCM service. . This duty exists for the owner of a freighter that carries passengers only incidentally as well as for the owner of a vessel primarily engaged in the carriage of passengers for hire. The Black Gull, 144 F.Supp. 47 (S.D.N.Y.1956). . See Restatement of the Law Second, Torts, §§ 416, et seq. (1965). . Mrs. Isham’s ticket contained a provision excluding liability for landings at intermediate stops. The ticket also stated that no launch would be provided at Wake, and that passengers used available facilities at their peril. We intimate no view of the validity of the ticket provisions purporting to exclude liability. See 46 U.S.C. § 183c. We think that the ticket was admissible to show Mrs. Isham’s reasonable expectations. . See Miles v. States Marine Lines, 325 F.Supp. 1370 (E.D.Tex.1971),

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2024-08-24T03:29:51.129235

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Robert L. HOECKER, Trustee in Bankruptcy of Anthony Colacci, Bankrupt, Plaintiff-Appellant, v. UNITED BANK OF BOULDER, Administrator C. T. A. of the Estate of Mike Colacci, a/k/a Michael Archangelo Colacci, et al., Defendants-Appellees. No. 72-1170. United States Court of Appeals, Tenth Circuit. Argued and Submitted Sept. 20, 1972. Decided March 29, 1973. As Amended on Denial of Rehearing April 23, 1973. Frederick T. Berhenke, Denver, Colo., for plaintiff-appellant. Don P. Stimmel, Boulder, Colo. (Paul A. Dupler, Boulder, Colo., on the brief), for defendants-appellees. Before PHILLIPS, SETH and HOLLOWAY, Circuit Judges. ORIE L. PHILLIPS, Circuit Judge. This is an appeal from a judgment dismissing the complaint, D.C., 334 F. Supp. 1080, on the ground that it did not state a claim upon which relief could be granted, in an action brought by Hoecker in his official capacity as trustee of the estate of Anthony Colacei, bankrupt. The defendants were the bankrupt; his brother, Joseph Colacei; his children, Toni Musgrove, Mary Motto, Patty Dondelinger, and Sally Colacei; and the United Bank of Boulder, Administrator C.T.A. of the estate of Michael Colacei, the deceased father of the bankrupt. For the purpose of deciding the issues presented on this appeal, we must accept as true the facts, but not the conclusions of law alleged in the complaint. We next set out the facts so alleged: On March 4, 1970, Mike Colacei died while domiciled in Boulder County, Colorado, leaving a last will and testament by which he devised and bequeathed all of his property to his two sons, Anthony Colacei and Joseph Colacei, in equal shares. The will provided that should either of the two sons predecease the testator, the share that would have gone to the predeceased son would go to his children, per stripes. On August 26, 1970, and within one year prior to the time Anthony Colacei filed his voluntary petition in bankruptcy, he executed an instrument which he filed on August 27, 1970, in the District Court of Boulder County, Colorado, the court which had jurisdiction of the estate of the testator. By such instrument, he disclaimed irrevocably the property he otherwise would have received under such will. At the time of the execution and filing of such disclaimer, there were existing creditors of the bankrupt who had provable claims against the estate of the bankrupt under the Bankruptcy Act. The bankrupt did not receive fair consideration for the execution and filing of such disclaimer, and in fact, received no consideration therefor. The fair salable value of the bankrupt’s property, exclusive of the share of the testator’s estate devised and bequeathed to him by the will, was less than the amount required to pay his debts, and without such share he was insolvent. The trustee sought a decree adjudging that the disclaimer was null and void and the claim of the children of the bankrupt to one-half of the estate which was devised and bequeathed to him was invalid, and requiring the Bank of Boulder to transfer and deliver to the trustee such one-half of the estate, or if the Bank had disposed of such one-half of the estate, requiring it to account to the trustee therefor. Section 67(d)(2) of the Bankruptcy Act, 11 U.S.C.A. § 107(d)(2), in part here pertinent reads: “Every transfer made and every obligation incurred by a debtor within one year prior to the filing of a petition initiating a proceeding under this title by or against him is fraudulent (a) as to creditors existing at the time of such transfer or obligation, if made or incurred without fair consideration by a debtor who is or will be thereby rendered insolvent, without regard to his actual intent; * * Section 1(30) of the Bankruptcy Act, 11 U.S.C.A. § 1(30), reads: “ ‘Transfer’ shall include the sale and every other and different mode, direct or indirect, of disposing of or of parting with property or with an interest therein or with the possession thereof or of fixing a lien upon property or upon an interest therein, absolutely or conditionally, voluntarily or involuntarily, by or without judicial proceedings, as a conveyance, sale, assignment, payment, pledge, mortgage, lien, encumbrance, gift, security, or otherwise; the retention of a security title to property delivered to a debtor shall be deemed a transfer suffered by such debtor.” At the time of the death of Mike Colacci and the filing of the disclaimer by the bankrupt, Colorado Revised Statutes 1963, 153-5-43, as amended in 1965, in part here pertinent provided: “Disclaimer — filing period. — (1) Any person who may be entitled to receive any property * * * under any will * * * shall have the right to disclaim irrevocably the whole or any part of such property * * * “(2) (a) In the case of an interest receivable under a will * * * if such disclaimer is made in writing and filed in the county court in which the estate is pending not later than six months after such will has been admitted to probate, * * * such disclaimer shall be made retroactive to the decedent's death, and in such case such property * * * so disclaimed shall pass in the same manner as if the person so disclaiming had predeceased such decedent, unless otherwise provided by the will in which case the will shall be controlling. ****** “(5) Unless a disclaimer under subsection (1) of this section is filed or delivered within the six months’ period to make it retroactive to decedent’s death * * * then such disclaimer shall be construed as an assignment of the interest disclaimed to those persons who would be entitled to take had the person disclaiming predeceased such decedent * * The disclaimer was in writing and was filed in the county court in which the administration of the estate was pending, prior to the expiration of six months after the will had been admitted to probate. With respect to the meaning of the word “transfer,” as used in § 67(d)(2) of the Bankruptcy Act, 11 U. S.C.A. § 107(d)(2), federal law is controlling. Moreover, the term “transfer” has been given an extremely broad meaning in the adjudicated cases and has been construed to include every method of disposing of or parting with property or possessions. See Pirie v. Chicago Title and Trust Company, 182 U.S. 438, 21 S.Ct. 906, 45 L.Ed. 1171. The term “transfer” would include the disclaimer filed by the bankrupt, if the effect of such disclaimer was to transfer from him to his children the property devised and bequeathed to him by the will. But the right to testamentary disposition and the right to succession by will of property within the jurisdiction of a state exists only by statutory enactment by such state so providing, and may be regulated, limited, conditioned, or wholly abolished by such state. Hence, the answer to the question we shall next set out, and which will determine the precise issue presented in this appeal, must be derived from a construction of the Colorado statute set out, supra, which is controlling. That question, then, is whether under such statute, notwithstanding the disclaimer was filed within six months after the will was admitted to probate, one-half of the property that was devised and bequeathed to the bankrupt by the will passed to him when he filed the disclaimer, or passed to him at any other time, so that the effect of the disclaimer was to transfer such one-half from him to his children. We think it perfectly clear from the language of § 153-5-43(2) (a) of the Colorado statute, set out above, that the Colorado legislature intended that where a beneficiary filed a disclaimer within the six-month period, none of the property disclaimed would pass to or be vested in the disclaiming beneficiary, or would pass from him to his children, but rather that such property would pass directly from the testator to the children. The Colorado statute plainly states that when property receivable by a person under a will is disclaimed by him by a writing filed within six months after such will is admitted to probate, the property so disclaimed shall pass in the same manner as if the person so disclaiming it had predeceased the testator. That could only mean, under the facts in the instant case, that it would pass directly from the testator to the children. The correctness of the construction we have placed on that part of the Colorado statute with respect to the effect of a disclaimer filed within the six-month period is made doubly clear by the provisions of § 153-5-43(2) (a) of such statute, with respect to the effect of a disclaimer filed after the expiration of the six-month period. Section 153-5-43(5) of the Colorado statute provides that if a disclaimer is filed after the expiration of the six-month period, it shall be construed as an assignment of the interest disclaimed to the person who would be entitled to take it, had the person disclaiming predeceased the testator. We think it all the more clear when § 153-5-43(2)(a) and § 153-5-43(5) are read together that it was the intent of the Colorado legislature to provide that if a disclaimer was filed within the six-month period, it would not operate as a transfer by the person so disclaiming to the persons who would be entitled to the property under the will of the decedent if the person so disclaiming had predeceased the testator, nor as a transfer in any way of any interest in the property disclaimed; whereas, if the disclaimer was filed after the expiration of the six-month period, then and only then would it operate as an assignment of the interest disclaimed to the person or persons who would have been entitled to take it if the person disclaiming had predeceased the testator. Accordingly, we conclude that under the Colorado statute the disclaimer did not operate as a transfer by the bankrupt of the property disclaimed to his children, and that there was no fraudulent transfer in violation of § 67(d) (2) of the Bankruptcy Act. For the reasons set forth by the trial court in his order denying the motion of the trustee for leave to file an amended complaint, we hold that such denial was proper. Affirmed. HOLLOWAY, Circuit Judge (dissenting) : I respectfully dissent. It is true that testamentary disposition and the rights to succession of property within the jurisdiction of a state are determined by its law and may be regulated, conditioned or abolished by state law. Here, however, the question is whether the disclaimer was a “transfer” within the meaning of § 67(d) (2) of the Bankruptcy Act, 11 U.S.C.A. § 107(d)(2). While the majority opinion recognizes that federal law is controlling as to the meaning of “transfer,” it nevertheless concludes because of intent of the Colorado legislature that a disclaimer filed within the six months’ period would not operate as a transfer, see 1965 Perm.Supp., C.R.S.1963, 153-5-43(2) (a), and because of the relation back provision, that there was no transfer alleged in violation of § 67(d)(2). While the case is not free from doubt, I cannot agree. To me the question is not one of the nature or extent of rights in property or of devolution of property — matters that state law decides. It is simply whether some power or right recognized by state law was exercised so as to amount to a “transfer” within the broad meaning of the term provided by federal law in § 1(30) of the Act, 11 U.S.C.A. § 1(30). That definition was broadly drawn to include a sale “. . . and every other and different mode, direct or indirect, of disposing of or parting with property or with an interest therein or with the possession thereof . . . .” All technicality and narrowness of meaning were precluded and the word was used in its most comprehensive sense to include every means by which property could pass from the ownership and possession of another. See Pirie v. Chicago Title & Trust Co., 182 U.S. 438, 444, 21 S.Ct. 906, 45 L.Ed. 1171. The Colorado statute recognizes that there is a limited power in the disclaim-ant to control the passing of his interest in the property during the six months’ period after the will is admitted to probate, as well as later. And if the right of disclaiming is then exercised “. . . such property or beneficial interest so disclaimed shall pass . ” as if he had predeceased the decedent, unless the will provides otherwise. See § 153-5-43(2)(a). Thus under state law there is a power which seems to me to be a “mode, direct or indirect,” of disposing or parting with his interest in the property and hence a transfer. Moreover, the provision of C.R.S.1963, 153-5-43(5) that a disclaimer made after the six months’ period “shall be construed as an assignment . . . ” is not persuasive to me. Again, we are not concerned with the characterization used in state law but with the meaning of “transfer” as defined in the Bankruptcy Act. What constitutes a transfer “ . . .is necessarily a federal question, since it arises under a federal statute intended to have uniform application throughout the United States.” McKenzie v. Irving Trust Co., 323 U.S. 365, 369-370, 65 S.Ct. 405, 408, 89 L.Ed. 305. Nor do I feel that the Colorado retro-activity provision concerning this disclaimer made within the six-months’ period should change the result. See § 153-5-43(2)(a). In a case brought under the federal statute providing for avoidance of fraudulent transfers we should not deny relief because of the state provision on relation back. Cf. In re Kalt’s Estate, 16 Cal.2d 807, 108 P.2d 401, 403. . McKenzie v. Irving Trust Co., 323 U.S. 365, 369, 65 S.Ct. 405, 89 L.Ed. 305. . Demorest v. City Bank Farmers Trust Co.; 321 U.S. 36, 48, 64 S.Ct. 384, 88 L.Ed. 526.

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In the Matter of the Petition for Naturalization of Antal Kovacs. Antal KOVACS, Petitioner-Appellant, v. UNITED STATES of America, Respondent-Appellee. No. 590, Docket 72-1243. United States Court of Appeals, Second Circuit. Argued March 21, 1973. Decided April 25, 1973. Edward L. Dubroff, Brooklyn, N. Y., for petitioner-appellant. Joseph P. Marro, Sp. Asst. U. S. Atty. (Whitney North Seymour, Jr., U. S. Atty., S. D. N. Y., Stanley H. Wallenstein, Sp. Asst. U. S. Atty., of counsel), for respondent-appellee. Before SMITH, FEINBERG and MANSFIELD, Circuit Judges. J. JOSEPH SMITH, Circuit Judge: This is an appeal from an order of the United States District Court for the Southern District of New York, the late Edward C. McLean, Judge, denying Antal Kovacs’ petition for naturalization on the ground that “petitioner has failed to establish that he is a person of good moral character.” We find no error and affirm. The relevant facts are not in dispute. Kovacs is a Hungarian national, who was admitted to the United States for permanent residence in 1959. In 1968, Kovacs submitted an Application to File a Petition for Naturalization with the Immigration and Naturalization Service. The application disclosed that Kovacs had been arrested and convicted on three occasions. The first occurred in 1959, where appellant pleaded guilty to a charge of disorderly conduct arising out of an arrest in a subway men’s toilet, where he was observed engaging in homosexual activity with another adult male. The second occurred in 1960, again in New York, and involved a charge of loitering. The third arose out of an arrest in the men’s room of a public theater in Los Angeles in 1962, again involving homosexual activities. Kovacs was questioned at length about these arrests by the naturalization examiner. In response to these questions, Kovaes maintained that he was not now a homosexual, had never been one, and had never engaged in homosexual acts other than the manual manipulation that he claimed took place in the two men’s room incidents. He specifically denied ever having committed fellatio. The hearing examiner then introduced into evidence an affidavit taken from Kovaes in 1962 in Los Angeles. In the affidavit, Kovaes admitted that he had engaged in a large number of homosexual acts, including about fifty acts of fellatio per year since 1959. In the affidavit, Kovaes also consented to an examination by a United States Public Health Service psychiatrist. The hearing examiner introduced a Medical Certificate resulting from that examination, diagnosing Kovaes as a “psychopathic personality — homosexual” and also his Selective Service file, classifying him as a “moral reject” and unfit for military service. Kovaes admitted signing the affidavit, but claimed that he had not known what he signed, and denied the description of his sexual activities contained therein. He admitted that the interview with the Public Health Service psychiatrist took place, but apparently did not explicitly attack the Medical Certificate. He then introduced the testimony of his former wife and two friends. All attested to Kovaes’ good moral character, and denied that he was a homosexual. The hearing examiner recommended naturalization. In so doing, he relied heavily upon Petition of Labady, 326 F.Supp. 924 (S.D.N.Y.1971), which held that the naturalization should not be denied simply because the applicant had engaged in private consensual homosexual acts. The examiner noted that there was no proof that Kovaes had engaged in any homosexual acts, public or private, within the statutory five year period of residence immediately preceding his petition, 8 U.S.C. § 1427(a). He went on to note, however, referring to Kovaes’ testimony about prior homosexual proclivities, that “petitioner’s denials in the face of the evidence are incredible indeed, and the Court could reasonably consider such testimony as less than truthful and deny the petition.” The final hearing was held before Judge McLean on September 13, 1971. Kovaes did not request a trial de novo, as was his right. 8 U.S.C. § 1447(b). The government opposed the petition, relying upon the minutes of the hearing before the examiner. Judge McLean, in a written memorandum, denied the petition, finding, inter alia, that “petitioner’s lack of candor in his testimony before the examiner is in itself incompatible with any reasonable standard of good behavior.” The Immigration and Nationality Act, 8 U.S.C. § 1427(a)(3), requires that an applicant be a person of “good moral character” at the time of his petition and in the five year period immediately preceding. This standard is fleshed out somewhat by 8 U.S.C. § 1101(f)(6), which provides that “one who has given false testimony for the purpose of obtaining any benefits under this chapter,” does not possess such character. The general law in this area is quite clear. The burden of proving good moral character is on the petitioner, Berenyi v. District Director, 385 U.S. 630, 637, 87 S.Ct. 666, 17 L.Ed.2d 656 (1967), with any doubts to be resolved against him, id. at 636-637, 87 S.Ct. 666; United States v. Macintosh, 283 U.S. 605, 626, 51 S.Ct. 570, 75 L.Ed. 1302 (1930). See also Tieri v. Immigration and Naturalization Service, 457 F. 2d 391 (2d Cir. 1972). And the false testimony relied upon to establish a lack of good moral character need not be material to the final merits of naturalization, i. e., the government need not show that truthful answers would havq barred granting of the petition. See Petition of Haniatakis, 376 F.2d 728 (3d Cir. 1967). Cf. Berenyi, swpra, 385 U.S. at 637-638, 87 S.Ct. 666. Under the facts of this case, we agree with Judge McLean that Kovacs failed to discharge his burden. It is true that, as the examiner noted, petitioner’s testimony had “not been proven false.” But the examiner himself found the testimony “unbelievable” and “incredible indeed,” and correctly noted that the district court could deny the petition on these grounds. Yet, despite these findings, Kovacs did not subject his credibility to reexamination by Judge McLean through a trial de novo, as was his right. Consequently, the record that was before the district court, to say the least, generates large doubts as to Kovacs” truthfulness at the initial hearing. Since those doubts are to be resolved against the petitioner, the denial must stand. See Tieri, supra. We pause to note what we are not holding. Petitioner is not being denied naturalization for his sexual activities —but rather for his lack of candor under oath. This is not a case like Labady, supra, where the applicant testified truthfully about prior homosexual acts, yet still was granted naturalization because of the private character of his sexual life. Had Kovacs testified truthfully about his past, the petition might well have been granted. Affirmed. . The affidavit and Medical Certificate were prepared in connection with deportation proceedings; these were discontinued when the Ninth Circuit held that the term “psychopathic personality” was void for vagueness as applied to homosexuality. Fleuti v. Rosenberg, 302 F.2d 652 (9th Cir. 1962), vacated and remanded on other grounds, 374 U.S. 449, 83 S.Ct. 1804, 10 L.Ed.2d 1000 (1963). . 8 U.S.C. § 1427(e) provides that the petitioner’s conduct prior to the five year period may be considered in determining whether the petitioner has met his burden of establishing good moral character, Consequently, there can be no question of the propriety of questioning Kovaes about his past history, which included several public acts. . While the order appealed from must be affirmed, we do note with some sympathy ICovaes’ contentions that his record since the 1962 arrest is unblemished. The petition here was filed before the Labady decison, and Kovacs may well have felt that admitting his past would have proved disastrous to his cause. Although his actions here cannot be praised, if his apparently exemplary public behavior continues, a greater exhibition of candor at a later date might well lead to a different result in his efforts to become a citizen.

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Hugh NAUGHTEN, Petitioner-Appellant, v. Hoyt C. CUPP, Superintendent, Oregon State Penitentiary, Respondent-Appellee. No. 71-3065. United States Court of Appeals, Ninth Circuit. May 24, 1972. As Amended on Denial of Rehearing Jan. 18, 1973. Dissenting Opinion Feb. 26, 1973. Certiorari Granted April 23, 1973. See 93 S.Ct. 1926. Ross R. Runkel (argued), Salem, Or., for petitioner-appellant. John W. Osburn, Sol. Gen. (argued), Jim G. Russell, Asst. Atty. Gen., Lee Johnson, Atty. Gen., Salem, Or., for respondent-appellee. Before JERTBERG, ELY, and HUFSTEDLER, Circuit Judges. ELY, Circuit Judge: Naughten is an Oregon state prisoner, convicted of the offense of armed robbery. His direct appeal in the Oregon state courts was unsuccessful. State v. Naughten, 90 Adv.Or. 1811, 471 P.2d 830 (App. 1970). Eventually, Naughten filed a petition for habeas corpus in the court below, and he now appeals from the denial of that petition. In the state court trial, the judge, over Naughten’s objection, instructed the jury as follows: “Every witness is presumed to speak the truth. This presumption may be overcome by the manner in which the witness testifies, by the nature of his or her testimony, by evidence affecting his or her character, interest, or motives, by contradictory evidence, or by a presumption.” Such an instruction has been almost universally condemned. See United States v. Birmingham, 447 F.2d 1313 (10th Cir. 1971); United States v. Stroble, 431 F. 2d 1273 (6th Cir. 1970); McMillen v. United States, 386 F.2d 29 (1st Cir. 1967), cert. denied, 390 U.S. 1031, 88 S.Ct. 1424, 20 L.Ed.2d 288; United States v. Dichiarinte, 385 F.2d 333 (7th Cir. 1967); United States v. Johnson, 371 F.2d 800 (3d Cir. 1967); United States v. Persico, 349 F.2d 6 (2d Cir. 1965). See also United States v. Safley, 408 F.2d 603 (4th Cir. 1969); Harrison v. United States, 387 F.2d 614 (5th Cir. 1968); Stone v. United States, 126 U.S.App.D.C. 369, 379 F.2d 146 (1967). In Stone v. United States, supra, Judge, now Chief Justice, Burger, wrote: “[This instruction] has a tendency to impinge on the presumption of innocence. Lurking in such an instruction is the risk that the jury might conclude that they were required to accept the testimony of the prosecution’s witnesses at face value, particularly when it is not contradicted by other witnesses.” 379 F.2d at 147. In the state court trial, Naughten did not testify, nor did he present any witnesses in his defense. Thus, the clear effect of the challenged instruction was to place the burden on Naughten to prove his innocence. This is so repugnant to the American concept that it is offensive to any fair notion of due process of law. See Bentley v. Crist, 469 F. 2d 854, 855 n. 2 (9th Cir. 1972). The appellee contends that other of the court’s instructions offset the vice of the instruction that we have quoted. We do not agree, for there was no instruction so specifically directed to that under attack as can be said to have effected a cure. The appelleee also contends that the instruction, even if fatally defective under the federal constitution, was, in the circumstances, harmless beyond all reasonable doubt. Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed. 2d 705 (1967). We reject this argument also. Once Naughten established the infringement of a constitutionally protected right, the burden shifted to the appellee to establish that the error was harmless under the Chapman standard. From our examination of the transcript of the trial proceedings, we conclude that the appellee could not, in this case, meet the burden. Cf. Anderson v. Nelson, 390 U.S. 523, 88 S.Ct. 1133, 20 L.Ed.2d 81 (1968). Naughten is entitled to a new trial; therefore, upon remand, the District Court will hold the petition in abeyance for a reasonable period, not to exceed sixty days, so as to afford Oregon the opportunity to reprosecute Naughten should it choose to do so. Reversed and remanded. ORDER ON PETITION FOR REHEARING The court amends its original opinion in the subject case as follows: (1) The insertion of a footnote reference after the word “objection,” the last word of the first line of the second paragraph of the slip opinion of May 24, 1972. (2) The addition of a footnote reading as follows: “The fact that Naughten made a timely objection to the instruction deserves emphasis. Absent such an objection, he would be in no position to challenge it. This is because, in the circumstances of a particular case and because of other contents of the instruction, an accused’s attorney might appropriately deem it strategically advantageous to the accused that the instruction be given.” The court’s original opinion having been thus amended, the panel as originally constituted has voted to deny the petition for rehearing and to reject the suggestion for en banc rehearing. The full court has been advised of the suggestion for en banc rehearing and has been advised of the foregoing amendments to the court’s original opinion. A judge in active service having requested that a vote be taken on the appellee’s suggestion for en banc rehearing, such a vote has been taken. Fed.R.App.P. 35(b). Judges Chambers, Koelsch, Wright, Trask, Goodwin, and Wallace would have granted en banc rehearing, and Judge Chambers wishes it recorded that he presently intends to write and file, at a later date, a separate opinion explaining his views. The other six judges in active service voted to reject the suggestion for en banc rehearing. The vote being equally divided, the suggestion for en banc rehearing is rejected. CHAMBERS, Circuit Judge (dissenting) : Naughten was charged with robbing a Quickie Mart drive-in grocery store in Portland, Oregon, on August 17, 1968. The evidence at trial consisted of the testimony of James R. Livengood, the proprietor of the store, the testimony of Larree E. Weissenfluh, a friend of Livengood who was in the store with Liven-good, and the testimony of the officers who arrested Naughten and investigated the crime. Livengood testified as follows: The store closed at midnight. Around midnight on August 17, 1968, Liven-good was in the store preparing the till change for the next morning. Liven-good’s friend Weissenfluh was in the store partly because Livengood did not like to be in the store alone late at night. The store was well-lighted, even after closing, since several of the banks of lights were left lighted all night. There were large glass doors at the front of the store. At approximately 12:10 a man entered the store, brandished a pistol and said, “This is a holdup.” The robber took three stacks of currency from the counter top where Livengood was working. There had been 21 $1. bills, 9 or 11 $5. bills, and 3 $10. bills. The robber told Livengood to open the safe. Livengood opened the safe, and the robber removed a small, brown paper grocery bag filled with quarters from the safe. The bandit ordered Livengood and Weissenfluh to the rear of the store to a walk-in cooler. After they had been in the rear of the store a short time, Weissenfluh said, “He’s gone.” Liven-good went to the front of the store, but the robber was still there. The robber ordered Livengood to get back to the rear of the store and stay there or the robber would use the pistol. The robber put the pistol to Livengood’s head and directed him to the rear of the store, threatening to pistol-whip him if he did not obey. After a moment, Weissenfluh said, “He's gone, I’m sure he’s gone this time.” Livengood went up front again, got his pistol from under the counter, and looked for the robber. The robber was gone. Livengood went out front and saw the robber in the parking lot of a tavern across the street for only a brief moment. Livengood called the police and reported the robbery, then stayed on the telephone watching the parking lot across the street. He saw a car leave, then another that appeared to be driven by the robber. A police car pulled up at that moment and stopped the car pulling out of the parking lot. Livengood went over to the car and identified the driver as the robber. He was not wearing the overcoat he had worn in the store, and Livengood did not see the pistol. Livengood described the robber’s pistol as being about six inches long, .22 calibre, and old and worn. Livengood said that the robber wore dark trousers, a light-colored shirt, and an overcoat. The robber was about two to three feet away from Livengood. The robber was in the store a total of fifteen minutes, and of that time Livengood observed him all but two or three minutes. Livengood identified Naughten at trial as the robber. The prosecutor asked, “Is there any doubt in your mind?” Livengood responded, “None whatsoever.” On cross-examination, Livengood denied that he had viewed any lineups or any photospreads containing pictures of Naughten. Livengood denied talking about the case with anyone except for answering some questions for the deputy district attorney the day before the trial. Livengood admitted being with Weissenfluh the evening before his testimony, but denied discussing the case except to wonder how long it would last. Liven-good said that he had never before testified in a case. Weissenfluh testified as follows: He was a shipping clerk, not employed at the Quickie Mart. On the night of the robbery he had been visiting with Livengood at the store since about 10:00 p. m. They planned to have a few beers after closing. At about 12:10, Weissenfluh was standing in front of the glass doors when Livengood said, “Turn around.” When Weissenfluh turned, he saw a man with a gun who said, “Don’t move.” The robber picked up the money from the counter, put it in his coat pocket, then ordered Livengood to open the safe. The robber reached into the safe and removed something Weissenfluh could not identify. The robber then marched Weissenfluh and Livengood to the cooler that covered the back wall. Weissenfluh thought he could see the store from the cooler and said, “He’s gone.” They both ran up front to get Livengood’s pistol. The robber was not gone. The robber marched them back to the cooler with pistol in Livengood’s neck. He threatened to pistol-whip Livengood. ■ Weissenfluh and Livengood waited until the robber left, then went up front. Livengood grabbed his gun from under the counter, Weissenfluh took it from him while Livengood got on the phone and called the police. Weissenfluh fired two shots at the fleeing robber. The robber went to a tavern parking lot across the street and Weissenfluh lost sight of him. Weissenfluh saw one car leave the lot across the street, then the car apparently driven by the robber. Livengood described the car with the robber in it to the police over the telephone. Just as the robber’s car was emerging from the lot, two police cars arrived and arrested the three occupants. Weissenfluh identified the driver as the robber. Although Weissenfluh could only see the head of the driver of the car, he had no difficulty in identifying him. As Weissenfluh said, “When someone sticks a gun in my ribs, I don’t forget their face.” Weissenfluh testified that the robber wore slacks, shirt and tweedy sport coat or car coat. He identified the pistol as a long-barreled .22 calibre. When the prosecutor asked Weissenfluh if the robber were in the court, Weissenfluh identified Naughten. . “Q Is there any doubt in your mind? “A No, there’s not, no doubt whatsoever.” On cross-examination, some inconsistencies developed between Livengood’s testimony and Weissenfluh’s. Livengood had testified that he had seen Weissenfluh at the police station when he went to sign a complaint. Weissenfluh denied ever having been in the police station. Weissenfluh stated that he had spent the night before testifying in Liven-good’s hotel room. (Livengood had moved away from.Portland.) Livengood had testified that they had only played pool the evening before. Livengood testified that he wanted Weissenfluh in the store for protection late in the evening. Weissenfluh said he was only there because he and Livengood were going to have a few beers later in the evening. In addition to Weissenfluh and Liven-good, two uniformed police officers and one detective testified. The officers testified that they had received a radio call to go to the Quickie Mart since there was a robbery in progress. They received a description of the car that Livengood thought he had seen the robber driving. As the officers arrived, they saw a car matching the description pull out of the tavern parking lot across the street. They pulled over the car and arrested all three occupants. One of the men identified Naughten, the driver, as the robber. Naughten was placed in the rear of one of the police cars. One of the officers saw Naughten attempting to conceal money in the crack of the seat of the police car. Naughten had his hands cuffed behind his back, and he was pulling the money from his right rear pants pocket and stuffing it into the crack. The officers seized the money and found 21 one dollar bills, eleven five dollar bills, and three ten dollar bills. Naughten was not wearing a coat, and a search of him and the car he was driving revealed no pistol. However, in searching the parking lot, the officers did find a bag of quarters near the rear door of the tavern. A detective on the case was not able to add much except to identify the clothes taken from Naughten the night of the robbery, and to testify that he had ordered the store dusted for fingerprints. Naughten offered no witnesses in his own defense. From the foregoing we see precious little discrepancies in the testimony— only the slight variances that tend to confirm veracity of two witnesses to the same event. Obviously, under Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1967) and Harrington v. California, 395 U.S. 250, 89 S.Ct. 1726, 23 L.Ed.2d 284 (1969), we can say beyond a reasonable doubt the alleged error was harmless. In a case so harmful to delicate state-federal relations we ought to take the case en banc. Cf. Leiter Minerals v. United States, 352 U.S. 220, 77 S.Ct. 287, 1 L.Ed.2d 267 (1957). It is clear the federal courts now on direct appeal, where objection was made timely in lower courts, usually reverse on the instruction. But I am unconvinced that the point rises to constitutional dimensions. The inept instruction obviously comes from Mathes and Devitt, Federal Jury Practice and Instructions § 72.01 (1965), and we must assume it has been given thousands of times. This sort of thing should be left to the states when it is a state case. ALFRED T. GOODWIN, Circuit Judge, concurs in the foregoing expressed dissent. . The fact that Naughten made a timely objection to the instruction deserves emphasis. Absent such an objection, he would be in no position to challenge it. This is because, in the circumstances of a particular ease and because of other contents of the instruction, an accused’s attorney might appropriately deem it strategically advantageous to the accused that the instruction be given. Editor’s Note: The changes have been made in the original opinion.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

GENERAL MOTORS ACCEPTANCE CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. No. 72-1128. United States Court of Appeals, First Circuit. Heard Feb. 6, 1973. Decided April 6, 1973. Edmond J. Dilworth, Jr., Detroit, Mich., with whom Ross L. Malone, Harry S. Benjamin, Jr., Eugene L. Hartwig, J. R. Wheatley, and Robert N. Price, Detroit, Mich., were on brief, for petitioner. Stanley J. Brown, Atty., Washington, D. C., with whom Peter G. Nash, Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, and Abigail Cooley Baskir, Atty., Washington, D. C., were on brief, for respondent. Before COFFIN, Chief Judge, McENTEE and CAMPBELL, Circuit Judges. McENTEE, Circuit Judge. In this proceeding General Motors Acceptance Corporation (GMAC or the company) seeks review of a Labor Board order holding that it violated § 8(a)(1) and (5) of the National Labor Relations Act. 29 U.S.C. § 158 (1970). Specifically, GMAC challenges Board findings that it coerced its employees in the exercise of their § 7 rights by suspending payment of merit increases and by soliciting signatures on letters repudiating the union; also that it violated § 8(a)(5) by failing to bargain in good faith. The Board cross-petitions for the enforcement of its order. For the reasons set forth below, we grant the petition for enforcement. The salient background facts are as follows. In early 1968 GMAC, a wholly owned subsidiary of General Motors Corporation which was engaged in the financing of motor vehicles, had in effect a program of semiannual merit reviews covering the performance of its field representatives in its San Juan, Puerto Rico office. The representatives whose work was rated “fair” or higher were usually given salary increases as a result of this review. In September 1968, when the union first made its presence known, the company discontinued this policy and informed the field representatives that no further raises would be given until the status of the union was settled. On November 21, 1968, following a consent election, the union was certified as the bargaining agent for the representatives. Negotiations between the union and GMAC began on December 12, 1968, and continued at a leisurely pace for the next seventeen months. Although the union was in part responsible for the slow-paced nature of the bargaining, the company’s selection of a team of negotiators based on the mainland and able to visit Puerto Rico only for very brief periods each month appears to have been a major source of delay. Also, throughout this period, while the company continued to conduct the semiannual employee evaluations and was forced by competitive conditions to pay higher salaries to newly hired employees, it persisted in withholding all merit increases. The upshot of this policy was that by December 1969 a number of experienced representatives were receiving salaries lower than those being paid to newly hired, inexperienced employees. As an outgrowth of this situation, the company began to receive a number of complaints about its freeze on merit increases. When the company insisted that its hands were tied until negotiations with the union were settled, employee dissatisfaction with the union soon became widespread. In the meantime, negotiations continued to proceed at a sluggish pace. Following a single half day meeting in December 1969, the parties met for two half days in both March and April. On May 4, 1970, a company official sent a letter to all employees which purported to summarize the status of the negotiations. This letter read in part as follows: “To summarize, I would say the present status of the negotiation is unclear. It does appear, however, that with the many items still remaining and judging from the pace of past bargaining and the results thereof, an early resolution is highly speculative. “In conclusion, I would like to make one more point. I have been told that the Field Representatives feel that without the Union to protect them, they would be discharged from their employment. This is completely false. Our objective is to manage fairly and with justice to all employees.” At the May 15 bargaining session the union abandoned all of its proposals and acceded to the company’s position on all issues except retroactivity. GMAC’s bargaining team then announced that they were returning to the mainland to study the union’s offer and to await union notification as to whether it found their retroactivity proposal satisfactory. Five days later, in spite of intense pressure from the employees to conclude the negotiations, the union informed the company that it was maintaining its position on this issue. The parties then agreed to meet again in Puerto Rico on June 10. During the first week of June, at the direction of the GMAC bargaining team, company officials in San Juan solicited and obtained the signatures of six field representatives, all of whom had previously expressed dissatisfaction with the union, on letters prepared by the company which stated that they, “voluntarily disavow [ed]” the union as their collective bargaining agent. At the June 10 meeting the company, relying on these letters and the numerous oral expressions of employee discontent it had received, withdrew recognition from the union expressing doubt as to its majority status. Thereupon the union filed the instant unfair labor practice charges. In October 1970, the company granted substantial non-retroactive merit increases to all of the field representatives which it conceded were “catch-up” raises for those which had been withheld for the previous two years. Based on this background a majority of the Board concluded that by “denying merit increases to its employees after awarding them satisfactory work performance ratings, implying that [they] should abandon the Union to obtain withheld merit increases, assisting its employees in the preparation of necessary papers for disaffiliation from the Union, delaying bargaining, and breaking off negotiations,” GMAC had, in effect, engaged in a systematic campaign designed to undermine employee support for the union. The company raises objections to each of these unfair labor practice findings. Turning first to the pivotal issue of the suspension of merit increases, the company contends initially that the Board was barred by § 10(b) of the Act, 29 U.S.C. § 160(b) (1970), from finding this conduct unlawful because the original decision to stop paying these raises was made more than six months before the complaint in this action was filed. The Board’s rejoinder, which we find persuasive, is that its finding on this charge is based not upon GMAC’s initial decision to take this action but rather upon a number of acts committed within the limitations period which, when viewed in the aggregate, indicate that GMAC was attempting to discredit the union by shifting full responsibility to it for the employees’ loss of the merit increases. For example, in May 1970 the company conducted a merit evaluation and informed individual employees how their work had been rated. When a number of representatives complained about not receiving increases following this evaluation, the company was quick to point out that no raises could be had until the negotiations were settled. The company’s letter of May 4 to all of the employees served only to exacerbate the situation. By characterizing the present status of the negotiations as “unclear” and the chances of an early settlement as “highly speculative,” the company further fanned the embers of employee discontent. The solicitation of the letters repudiating the union was the final step in this campaign. Given these events, all of which occurred within the limitations period and which, when considered in concert, are sufficient to make out the alleged violation, it is clear that this charge was not time barred. GMAC’s second line of defense, namely that it was required to suspend merit increases throughout the period of the negotiations under the mandate of NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962), is also without merit. In Katz the Supreme Court drew a distinction between merit increases which “were in line with the company’s long-standing practice of granting quarterly or semiannual merit reviews — in effect, were a mere continuation of the status quo” and those which were not. Id. at 746, 82 S.Ct. at 1113. Finding that the raises in question were of the latter variety, the Court held that Katz had violated § 8(a)(5) and (1) by unilaterally granting such increases while bargaining over similar raises with the union. In the instant case, however, the Board found that GMAC’s merit increase program fell within the former category. While recognizing that the company retained some discretion over whether increases would be granted to individual employees, depending upon the outcome of each individual’s merit review, the Board also found that the merit increase policy, when taken as a whole, was “an existing form of compensation, and a term and condition of employment regularly expected by the employees.” Evidence in the record lends substantial support to this conclusion. Given this finding, GMAC could have continued this program throughout the bargaining period without violating the Act providing it was willing to confer with the union if these raises were questioned. See, e. g., H. E. Fletcher Co., 131 N.L.R.B. 474 (1961), enforcement denied on other grounds, 298 F.2d 594 (1st Cir. 1962); Southshore Packing Corp., 73 N.L.R.B. 1116 (1947). Apart from this, however, if GMAC’s suspension represented merely a good faith attempt on its part to comply with its understanding of the rule in Katz, we would be reluctant to find a violation of the Act based upon such conduct. See J. J. Newberry Co. v. NLRB, 442 F.2d 897, 900 (2d Cir. 1971); NLRB v. Dorn’s Transportation Co., 405 F.2d 706 (2d Cir. 1969). The instant record, however, provides little support for GMAC’s claim that its motive for withholding these raises was innocent. The timing of the suspension, the company’s consistent effort to shift blame to the union for the freeze, and the evidence of additional coercive conduct in the record all support the trial examiner’s conclusion that GMAC “withheld the salary increases which the employees otherwise would have received, in reprisal for the unionization of this single branch of [its] world-wide nonunion operation and for the purpose of eliminating the Union.” In light of the preceding discussion, GMAC’s argument that its solicitation of the letters repudiating the union was not violative of the Act merits little comment. Aside from the fact that such “shepherding” of employees in the preparation of repudiation letters, where it rises above the level of the purely ministerial, has in itself been held to be unlawful, Cumberland Shoe Co., 160 N.L.R.B. 1256 (1966); Southwestern of Dallas Optical Co., 153 N.L.R.B. 33 (1965), this conduct, when considered in the context of the unlawfully withheld merit increases, appears clearly to have been just one further step in the company’s assault on the union’s majority. As such, its coercive impact upon the employees’ organizational rights cannot be disputed. In evaluating the Board’s bad faith bargaining finding, in light of the entire history of the negotiations, NLRB v. Reed & Prince Manufacturing Co., 205 F.2d 131, 139 (1st Cir.), cert. denied, 346 U.S. 887, 74 S.Ct. 139, 98 L.Ed. 391 (1953), we feel that the following facts are particularly pertinent. From the beginning of the negotiations until May 22, 1969, the parties met approximately twenty times and considered, among other things, the union’s proposed contract and the company’s counter-offer. In December 1970, following a seven month bargaining hiatus attributable in large part to the unavailability of the company’s bargaining team, the parties met again in Puerto Rico. When the union’s spokesman was unable to attend the first session, however, the company team chose to depart following a single half day meeting, informing the union that if it wished to meet again it should come to the mainland. When the union requested further bargaining on January 8, 1970, the company responded that it ■ was willing to continue negotiating in New York. This response led the union to file unfair labor practice charges against GMAC, but these charges were subsequently withdrawn. Before the company became aware of this withdrawal, however, it responded to the union’s March 9 bargaining request as follows: “In reply to your telegram of March 9, 1970 please advise us if you are willing to withdraw at the soonest time possible your unfair labor practice charge pending before the Puerto Rico office of the National Labor Relations Board. . . . We believe that it does not conform to the realities of the circumstances to suggest negotiations while the charge is pending resolution. . . . ” Thereafter the parties met in March, April, and May. During these sessions, although the union continually requested longer and more frequent bargaining meetings, the company refused to meet more often than two or three times per month and never for any longer than four or five hours a day. By the final meeting in May the union had accepted the company’s proposals on all issues except retroactivity and on this question the parties were not far apart. At the next session held on June 10, possibly because an agreement seemed imminent, the company, asserting doubt as to the union’s majority status, withdrew recognition from the union and refused to bargain with it further. On this background the Board found that by scheduling so few bargaining meetings with the union, by insisting for a time that the union come to New York for negotiations, and by conditioning further meetings on the union’s withdrawal of a pending unfair labor practice charge, GMAC had not lived up to its statutory duty to bargain in good faith. We conclude that this finding was wholly appropriate. When considered in light of the suspended merit increases, the company’s use of these pretexts to further delay negotiations appears to have been an integral part of its campaign to undermine the union. Under these circumstances the inference that GMAC had not entered negotiations with an open mind and a sincere desire to reach an agreement was clearly warranted. Finally, given our conclusion that the Board’s unfair labor practice findings are amply supported by the record, GMAC may not rely on any alleged “good faith doubt” as to the union’s majority status as a defense in this action since any loss in the union’s majority support was directly attributable to its own unlawful conduct. See Franks Bros. Co. v. NLRB, 321 U.S. 702, 704-705, 64 S.Ct. 817, 88 L.Ed. 1020 (1944). The petition to review is denied and the Board’s order may be enforced. . The Board’s decision and order are reported at 196 N.L.R.B. No. 13 (1972). . Congreso de Uniones Industriales de Puerto Rico. . A field representative’s primary duties include adjusting past due retail accounts and making wholesale collateral audits within an assigned territory. . For example, on February 27, 1970, five representatives met with company officials and, after expressing dissatisfaction with their current salary levels and also with the prolonged nature of the negotiations, asked what steps they might take to rid themselves of the union. Branch manager Marr replied “that they could get out of the union the same way they got in.” Similarly, in May 1970 when employee Cintron complained to Assistant Branch Manager Requena about his financial situation and the fact that new employees were earning more than he was, he was told “[t]hat due to the increase in the cost of living these people started with a higher salary but because of the problem between the company and the union . . . [you] did not get a raise.” . The parties’ course of conduct during the negotiations will be considered in detail, infra, in conjunction with the § 8(a)(5) charge. . Section 10(b) provides in part: “That no complaint shall issue based upon any unfair labor practice occurring more than six months prior to the filing of the charge with the Board. . . . ” As noted above, the company stopped paying merit increases in September 1968 and the complaint was filed on June 10, 1970. Thus, any conduct which took place before December 10, 1969, falls outside the limitations period. . This conclusion of course distinguishes the instant case from those relied on by the company, like Bonwit Teller, 96 N.L.R.B. 608 (1951), enforcement denied on other grounds, 197 F.2d 640 (2d Cir. 1952), cert. denied, 345 U.S. 905, 73 S.Ct. 644, 97 L.Ed. 1342 (1953) where the employer committed no unlawful conduct during the limitations period, and from our recent decision in NLRB v. Field & Sons, 462 F.2d 748 (1st Cir. 1972). Furthermore, in light of this conclusion, it was permissible for the Board to consider evidence about events which occurred more than six months before the instant complaint was filed. While such events standing alone will not support an unfair labor practice finding, the Board may look to them “to shed light on the true character of matters occurring within the limitations period.” Local Lodge No. 1424, IAM, AFL-CIO v. NLRB, 362 U.S. 411, 416, 80 S.Ct. 822, 826, 4 L.Ed.2d 832 (1960). . The company’s long established policy of making these increases, the testimony of a number of field representatives that they had come to expect these raises, the large number of complaints the company received when these increases were not paid, and the company’s payment of “catch-up” increases following the withdrawal of recognition all support the Board’s finding. Further, we note that throughout the bargaining period the company never justified the wage freeze to the employees on the ground that it had the discretion to withhold these increases; it chose rather to use the negotiations with the union as its explanation for this policy..

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

In re PUERTO RICO NEWSPAPER GUILD LOCAL 225, affiliated with the Newspaper Guild, AFL-CIO, CLC, a/k/a Union de Periodistas Artes Graficas y Ramas Anexas, and the Newspaper Guild, AFL-CIO, CLC, Respondents-Appellants. No. 72-1177. United States Court of Appeals, First Circuit. Heard Feb. 9, 1973. Decided April 18, 1973. Francisco Aponte Perez, Santuree, P. R., with whom George L. Weasler, Santurce, P. R., was on brief, for appellants. Marvin Roth, Supervisory Attorney, Washington, D. C., with whom Peter GNash, Gen. Counsel, Julius G. Serot, Sp. Counsel to the Gen. Counsel, and Edward A. Klein, Atty., Washington, D. C., were on brief, for appellee. Before COFFIN, Chief Judge, McENTEE and CAMPBELL, Circuit Judges. McENTEE, Circuit Judge. This is an appeal from a criminal contempt judgment entered against the appellants, Puerto Rico Newspaper Guild Local 225, (the Local) and the Newspaper Guild, AFL-CIO, CLC (the International) for violating a temporary restraining order issued by the district court pursuant to § 10(j) of the National Labor Relations Act, 29 U.S.C. § 160(j) (the Act). The primary question before us is whether the court, having denied appellants’ request for a jury trial, committed reversible error in sentencing them to pay aggregated fines in excess of $500. We conclude that, under the circumstances of this case, the court did not err in imposing a sentence of this magnitude, and since we find no merit in the other contentions raised by appellants, affirm the judgments below. The contempt order grew out of a strike by the members of Local 225 against El Mundo, Inc. (the Company). On March 16, 1972, the Regional Director of the National Labor Relations Board, acting pursuant to § 10(j) of the Act, petitioned the district court for a temporary restraining order preventing the appellants from engaging in mass picketing and other threats and acts of violence against persons attempting to enter or leave the premises of the Company. Finding reasonable cause to believe that unfair labor practices were being committed by the appellants, the court granted the Board’s request for a temporary restraining order, and on April 6 superseded this order with a temporary injunction. In the meantime, the Board had initiated the present contempt proceeding against the appellants for their violation of the original restraining order. In response to the Board’s motion, the unions filed an answer which in substance denied the allegations of the petition and raised various affirmative contentions, including a demand for a jury trial. The court subsequently denied this demand, but stated that any possible fine against the appellants would not exceed $500 for each individual act of contempt of which they were convicted. The court also refused to disqualify itself from hearing the contempt proceeding merely because it had issued the original restraining order, and similarly denied appellants’ motion to exclude the Board’s attorneys as co-counsel in the prosecution of the case. Following a three day hearing, the court found both unions guilty of multiple instances of contempt, and imposed varying fines of not more than $500 on each individual count. The total amount of the fines were $9,050 and $5,650 against the Local and the International respectively. Appellants’ argument that the court was precluded from imposing a fine of over $500 in the absence of a jury trial or a waiver thereof is dependent on both parts of a two-pronged analysis. First, appellants rely on Duncan v. Louisiana, 391 U.S. 145, 88 S.Ct. 1444, 20 L.Ed.2d 491 (1968) and Bloom v. Illinois, 391 U.S. 194, 88 S.Ct. 1477, 20 L.Ed.2d 522 (1968) to establish the proposition that when a fine exceeding $500 is imposed for contempt of court, the offense must be considered a “serious” one triable by jury as a matter of constitutional right. Secondly, appellants argue, citing United States v. Seale, 461 F.2d 345 (7th Cir. 1972) and In re Dellinger, 461 F.2d 389 (7th Cir. 1972), that this supposed limitation on a trial court’s power to impose contempt sentences in the absence of a jury trial may not be avoided by an aggregation of penalties, notwithstanding that the fine on each individual contempt count is less than $500. The issues thus presented, while not entirely novel to the federal courts, see United States v. R. L. Polk and Co., 438 F.2d 377 (6th Cir. 1971), are questions of first impression in this circuit. We may start from the common ground that there is a constitutional right to a jury trial in cases of serious criminal contempts, Bloom v. Illinois, supra, and that the seriousness of the offense is to be determined by reference to the penalty imposed. Id. 391 U.S. at 211, 88 S.Ct. 1477; see Cheff v. Schnackenberg, 384 U.S. 373, 86 S.Ct. 1523, 16 L.Ed.2d 629 (1966). Our problem in the present case, however, is that in defining the penalties which make a particular offense a serious one, the Supreme Court has addressed itself directly only to sentences of imprisonment, and not to the imposition of fines. See Baldwin v. New York, 399 U.S. 66, 90 S.Ct. 1886, 26 L.Ed.2d 437 (1970); Bloom v. Illinois, supra; Duncan v. Louisiana, supra; Cheff v. Schnackenberg, supra. Appellants point to the Court’s reliance in Duncan on the “objective criteria” set forth in 18 U.S.C. § 1 for a definition of serious and petty offenses. Since that section defines a petty offense as “[a]ny misdemeanor, the penalty for which does not exceed imprisonment for a period of six months or a fine of not more than $500, or both,” appellants contend that they were entitled to a jury trial under a logically necessary extension of Duncan and Bloom. Their position in this regard is not without authoritative and well-reasoned support. See United States v. R. L. Polk and Co., supra. The Polk case, however, involved a fine of $35,000 imposed on a corporation for a single instance of contemptuous conduct, and is therefore clearly distinguishable from the aggregated penalty situation now before us. Since we believe that appellants’ reliance on Seale and Dellinger in support of their second proposition is misplaced, we prefer not to consider the merits of the Polk holding in the present context. In Seale, the defendant was sentenced to consecutive terms of three months imprisonment for each of sixteen acts of misbehavior committed during the course of a criminal trial. These sentences were imposed summarily by the trial court after a mistrial had been declared as to Seale and his case severed from that of his codefendants. The Court of Appeals reversed Seale’s contempt conviction, holding that, where a trial judge postpones the exercise of his summary contempt power to the conclusion of court proceedings, the sentences imposed must be cumulated for purposes of determining the defendant’s right to a jury trial. In his persuasive opinion for the court, Judge Cummings emphasized the possible abuses to which the contempt power might be subjected, the difficulty of reviewing the trial court’s determination that the defendant’s contemptuous acts had indeed constituted discrete incidents, and the availability of the less potentially prejudicial alternative of an instantaneous, rather than a. postponed, exercise of the contempt power. The court, however, expressly refrained from passing on the question of whether the aggregation rule would apply in the case of an indirect contempt for violation of a court injunction, noting that in such instances the contempt power “is not necessarily susceptible to the same abuses and amenable to the same, less potentially prejudicial, immediate action alternative” which had led to the rule’s adoption. 461 F.2d at 356 n. 18. In answering the question thus left open by the court in Se ale, we note that in that case, the trial judge had been subjected to personal insults and villification of a kind highly likely to strike “at the most vulnerable and human qualities of a judge’s temperament.” Bloom v. Illinois, supra, 391 U.S. at 202, 88 S.Ct. at 1482. The appellate court’s consequent concern that a unitary course of contemptuous conduct might be “spread out” in order to punish a serious offense summarily may be best understood in light of these circumstances. The possibility of such abuse, however, is greatly reduced where, as here, the contumacious behavior involved is the violation of a court injunction rather than a direct contempt. Such conduct, while in disobedience of the court’s authority, does not involve the kind of affront to a trial judge likely to cause an identification of “offense to self with obstruction to law.” Offutt v. United States, 348 U.S. 11, 14, 75 S.Ct. 11, 13, 99 L.Ed. 11 (1954). Thus, since there is no particular need to be wary of the trial court’s detachment and judicial objectivity in the type of case before us, we think that appellate review of the original discreteness determination will adequately protect the rights of defendants not to receive “serious” sentences for criminal contempts without the benefit of a jury trial. There is also significance in the fact that the immediate action alternative in indirect contempt situations is neither convenient nor generally desirable. Although the Board could move the restraining court for a contempt citation immediately after the first violation, the procedure is far more cumbersome, ponderous, and costly than summary judicial sanction in the midst of a trial. In addition, were we to impose a general aggregation rule, we would encourage the mechanical application of the bludgeon when patience, mediation, negotiation, or even stern warning is the more appropriate response. Moreover, there is nothing novel in distinguishing direct from indirect criminal contempts for purposes of defining the procedural safeguards necessary to protect the rights of defendants. Rule 42(b) of the Federal Rules of Criminal Procedure, for example, disqualifies a judge from presiding over a contempt hearing where “the contempt charged involves disrespect to or criticism of [that] judge,” but disobedience of a court order has been held not to fall within this category. See Nilva v. United States, 352 U.S. 385, 395-396, 77 S.Ct. 431, 1 L.Ed.2d 415 (1957). Similarly, while due process requires that a judge who has been “reviled” by a defendant not sit at the alleged contemnor’s trial, not every challenge to the court’s authority will result in such a disqualification. Mayberry v. Pennsylvania, 400 U.S. 455, 465-466, 91 S.Ct. 499, 27 L.Ed.2d 532 (1971). In our view, these decisions buttress our conclusion that the Seale aggregation rule need not, absent exceptional circumstances, be extended to cases of indirect criminal contempts. Accordingly, the judgment below is affirmed. Affirmed. . In most situations, the seriousness of an offense will be determined by looking to the maximum penalty authorized by statute for its commission. Baldwin v. New York, 399 U.S. 66, 72-74, 90 S.Ct. 1886, 26 L.Ed.2d 437 (1970); Duncan v. Louisiana, 391 U.S. 145, 159, 88 S.Ct. 1444, 20 L.Ed.2d 491 (1968). Since Congress has left the penalty for criminal contempts within the discretion of the district court, however, the sentence actually imposed is the most relevant factor in such cases. Frank v. United States, 395 U.S. 147, 148-149, 89 S.Ct. 1503, 23 L.Ed.2d 162 (1969). . In the present case, appellants do not challenge the district court’s determination that the Local and International committed 21 and 13 separate acts of contempt respectively, a finding which, in any event, is amply supported by the record. Our holding in this regard is in no way inconsistent with our recent decision in Baker v. Eisenstadt, 456 F.2d 382 (1st Cir.), cert. denied, 409 U.S. 846, 93 S.Ct. 110, 34 L.Ed.2d 87 (1972). The issue in that case was whether multiple contempt sentences could properly be imposed for an illegitimate refusal to testify where (1) the recalcitrant witness had given notice at the outset of his “testimony” that he would refuse to answer all questions relating to a particular subject and (2) an answer to any of the questions propounded might have been construed as a waiver of a claimed fifth amendment privilege. Our holding in Baloer that, under these circumstances, each individual refusal to answer could not be treated as a separate contempt is clearly not determinative of the discreetness issue where multiple violations of a court injunction have taken place. . On this basis, we dispose of appellants’ contention that the court erred in not disqualifying itself from hearing the contempt proceeding because it had issued the original restraining order. . Finally, we find no merit in appellants’ contention that the district court erred in designating attorneys of the National Labor Relations Board to prosecute the criminal contempt proceedings. See, e. g., United States v. Lederer, 140 F.2d 136, 138 (7th Cir.), cert. denied, 322 U.S. 734, 64 S.Ct. 1047, 88 L.Ed. 1568 (1944); cf. Amalgamated Utility Workers v. Consolidated Edison Co., 309 U.S. 261, 269-270, 60 S.Ct. 561, 84 L.Ed. 738 (1940); Schauffler v. United Ass’n of Journeymen, 148 F.Supp. 704, 706 (E.D.Pa.1956), aff’d, 246 F.2d 867 (3d Cir. 1957).

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2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

BETHLEHEM MINES CORPORATION, a West Virginia corporation, v. UNITED MINE WORKERS OF AMERICA et al., Appellants. No. 71-2004. United States Court of Appeals, Third Circuit. Argued Dec. 1, 1972. Decided Feb. 12, 1973. Rehearing En Banc Denied April 20, 1973. Resubmitted Under Third Circuit Rule 12(6) on April 23, 1973 as a Result of an Order of April 20, 1973. Rehearing Denied April 24, 1973. Eugene A. Creany, Ebensburg, Pa., Edward L. Carey, Washington, D. C., Lloyd F. Engle, Jr., Melvin P. Stein, Kuhn, Engle & Blair, Pittsburgh, Pa., for appellants. Donald B. Heard, Kathleen A. Merry, Reed, Smith, Shaw & McClay, Pittsburgh, Pa., for plaintiff-appellee; Wm. J. Tattersall, Daniel C. Mills, Jr., Bethlehem, Pa., Bethlehem Mines Corp., of counsel. Before BIGGS, ADAMS and HUNTER, Circuit Judges. OPINION OF THE COURT ADAMS, Circuit Judge. In this appeal, defendant Local 1368 challenges an order of the district court adjudging it in civil contempt. Plaintiff, Bethlehem Mines Corp., brought suit under section 301 of the Labor-Management Relations Act of 1947 against the United Mine Workers of America, District No. 2, and Local 1368. Alleging an illegal strike in violation of the collective bargaining agreement, Bethlehem Mines sought to compel the defendants to return to work and to arbitrate the dispute. On February 18, 1971, the district court held a hearing on plaintiff’s application for a temporary restraining order and, after noting that the involved employees had returned to work, decided to take no action other than to retain jurisdiction. On February 26, 1971, after anotherwork stoppage, the district court held a further hearing and entered a temporary restraining order enjoining the strike and directing arbitration of the dispute. On March 4, 1971, the temporary restraining order was continued until March 9, 1971. After further proceedings, the district court, at a hearing on March 9, 1971, orally continued the temporary restraining order as a preliminary injunction, without objection from the defendants. Defendants neither moved to vacate the temporary restraining order or the preliminary injunction continuing it, nor did they file an appeal. On May 26, 1971, the district court, on plaintiff’s motion, issued a rule to show cause why defendant Local 1368 should not be adjudged in civil contempt because of further work stoppages. Hearing on this motion was continued. On August 19, 1971, however, after another work stoppage, plaintiff filed a second motion for a rule to show cause and a motion for adjudication of civil contempt. On August 23, 1971, the district court held a hearing on the motions filed on August 19. The next day the district court filed a memorandum and findings of fact and conclusions of law, dated August 23, 1971, and a memorandum and order adjudging defendant Local 1368 in civil contempt. Both in briefs and at oral argument, Local 1368 has mounted its assault on the district court’s order holding it in civil contempt, principally upon two grounds: (1) because of the Norris-LaGuardia Act the district court lacked the power to grant injunctive relief and erred in ruling that, under Boys Markets, Inc. v. Retail Clerks, 398 U.S. 235, 90 S.Ct. 1583, 26 L.Ed.2d 199 (1970), it had such power; (2) the district court did not have jurisdiction because it failed to make required findings of fact and conclusions of law in support of the preliminary injunction.- Although the Federal Rules of Civil Procedure provide for the filing of findings of fact and conclusions of law in support of an order granting a preliminary injunction, a failure to do so simultaneously with the decree does not deprive a court of jurisdiction and of power to adjudge in civil contempt those violating such order. Cf. United States v. Ingersoll-Rand Co., 320 F.2d 509 (3d Cir. 1963). The Norris-LaGuardia Act’s restriction on federal court power to grant injunctive relief in labor disputes is, in the posture of the present case, not controlling with respect to the question whether the court has the power to hold a defendant in contempt for refusing to obey its order. While the Norris-LaGuardia Act delimits the power of federal courts to issue injunctions, it does not remove federal jurisdiction to adjudicate controversies properly before the court. Even assuming, arguendo, that the district court may be ultimately deemed without power to grant a particular form of relief, that does not imply that the court is entirely without jurisdiction to determine, by an appropriate hearing, whether to consider the matter at all. In this case, to ascertain whether it had the power to grant injunctive relief, the district court had to examine the applicability of the Norris-LaGuardia Act and the Supreme Court’s decision in Boys Markets, swpra. The court certainly had jurisdiction to make that determination. And after the district court held that, under Boys Markets, it had the power to grant injunctive relief, any disagreement with that holding should have been settled by the orderly process of appellate review, not by purposeful disobedience of an order rendered by a court of competent jurisdiction. Under these circumstances, to permit by an appeal of the contempt citation an attack upon the basic order that was violated would undermine respect for legal process. Thus, the district court had jurisdiction to enter its orders in this case, at least jurisdiction sufficient to uphold an order of civil contempt. At oral argument and in supplemental briefs, it was suggested that the district court’s non-compliance with F.R.Civ.P. 58 may require reversal in this case. That rule states in part: “Every judgment shall be set forth on a separate document. A judgment is effective only when so set forth. . . . ” Here, the district court entered a temporary restraining order and later continued it orally as a preliminary injunction. Since the temporary restraining order had expired by its own terms when the preliminary injunction was granted, if defendant violated anything, it must have been the preliminary injunction. It was contended at oral argument that the preliminary injunction, never set forth on a separate document, was ineffective and that Local 1368, therefore, violated no valid court order. Rule 58, however, was intended primarily to clear up the uncertainties of determining when, for the purpose of appellate review, there is a final, appeal-able judgment. See e.g. United States v. Chambers, 429 F.2d 410 (3d Cir. 1970); Levin v. Wear-Ever Aluminum, Inc., 427 F.2d 847 (3d Cir. 1970); Pure Oil v. Boyne, 370 F.2d 121 (5th Cir. 1966); cf. Healy v. Pennsylvania R. Co., 181 F.2d 934 (3d Cir. 1950); In re D’Arcy, 142 F.2d 313 (3d Cir. 1944). In addition, the purpose of Rule 58 is to insure that parties know what is required of them, that the public has notice of the entry of judgments, and that an appellate court has sufficient information upon which to base its review. Under the facts of this case, none of these purposes of Rule 58 would be thwarted. There is no question involved of the time for filing an appeal or of any other matter dealing with an appeal. Defendant never attempted to appeal the granting of preliminary relief, nor has it alleged that it was in any way prevented from doing so. Moreover, the mere fact that the preliminary injunction was not in writing and set forth in a separate document has not been claimed, and, in the context of the present dispute, would not appear to prejudice anyone. The parties were present in court, either personally or by counsel, during the hearings on the temporary restraining order, when the preliminary injunction was granted, and also in subsequent conferenees with the judge. Because the oral preliminary injunction simply continued the earlier temporary restraining order which was set forth in a separate document, the record makes clear that the parties were fully aware of the existence and content of the injunction. No objection was made by the defendant to the granting of injunctive relief, nor was any appeal ever filed. Under these circumstances, we would be exalting form over substance if we were to hold that in failing to enter the preliminary injunction on a separate document, the district court thereby rendered itself powerless to adjudge violations in civil contempt. Accordingly, on the basis of the facts in this case, the failure to set forth the preliminary injunction order in a separate document did not preclude an adjudication of civil contempt. It should be stressed that Local 1368 pursued here a course of conduct in the clear belief, as the court below found, that such action would violate a valid court order. The integrity of the judicial process demands compliance with court orders until such time as they are altered by orderly appellate review. The concept of “a government of laws and not of men,” describes a critical quality of our political society. So strongly did the framers of the Constitution determine to secure a reign of law that they conferred unusual safeguards on the judicial office. No one, no matter what his position, nor how virtuous his impulse, was to be a judge in his own case. No type of dispute is more meet for judicial resolution than one calling into question the power of a court to decide. Jurisdictional controversies áre hardly appropriate for final determination by the self-interest of a party. Plaintiff here sought the aid of a court in circumstances attended with some doubt. Only when a court so obviously journeys outside its prescribed range as to be usurping judicial form may an order issued by it be disregarded. Whether a party may be called to the bar of justice is not for that party, himself, to decide. If a court had been clearly deprived of the power to act in a ease, it, of course, could not overcome such lack of power by a baseless or superficial inquiry into the question. Such would be a mere pretext. But that clearly was not the case here. And, in such circumstances, the direction of the court must be sustained, else we would risk rejecting the requirements of the judicial process. By deliberately disobeying the district court, the defendant attempted to take upon itself the power to determine what is law and, in doing so, subjected itself to civil contempt. An order affirming the judgment of the district court will be entered. OPINION SUR PETITION FOR REHEARING Appellants, United Mine Workers of America, et al., have petitioned for a rehearing of this Court’s decision of February 12, 1973, that affirmed a judgment of civil contempt in the amount of $500.-00. They rely primarily upon the ground that the panel failed to perceive a now-proffered distinction between criminal and civil contempt that, it is argued, affects the power of a court to punish for contempt when the validity of the underlying order is questioned. Insisting that the panel erred in concluding that the validity of the underlying order is not, in the circumstances of this case, a condition precedent to the proper affirmance by this Court of the judgment of civil contempt, appellants quote the following language from United States v. United Mine Workers, 330 U.S. 258, 67 S.Ct. 677, 91 L.Ed. 884 (1947), in support of their position: “It does not follow, of course that simply because a defendant may be punished for criminal contempt for disobedience of an order later set aside on appeal, that the plaintiff in the action may profit by way of a fine imposed in a simultaneous proceeding for civil contempt based upon a violation of the same order. The right to remedial relief falls with an injunction which events prove was erroneously issued, (citing cases) and a fortiori when the injunction or restraining order was beyond the jurisdiction of the court. ... If the Norris-LaGuardia Act were applicable in this case, the conviction for civil contempt would be reversed in its entirely.” 330 U.S. at 294-295, 67 S.Ct. at 696 (emphasis changed) (citations and footnotes omitted). Appellants, however, apparently misapprehend the important distinction between this dictum in United States v. United Mine Workers and the present ease. In the Supreme Court case, appeals were taken not only from the judgment of contempt, but also from the underlying order which the defendants had disobeyed. In the present case, the appellants neither objected to nor appealed from the underlying order, the preliminary injunction. It is with this distinction in mind that the above quotation must properly be read. Viewed in this way, the Supreme Court was saying only that if the underlying order is reversed or vacated during the orderly course of appellate review, then a judgment of civil contempt, though not criminal contempt, must also be set aside. Thus, the Supreme Court described the kind of order to which it was referring as: “an order later set aside on appeal” and “an injunction which events prove was erroneously issued. ...” 330 U.S. at 295, 67 S.Ct. at 696. Any doubt that the Supreme Court was distinguishing civil contempt from criminal contempt only for the purpose of cases in which the disobeyed order was “later set aside on appeal,” can be dispelled by a careful examination of the cases cited by the Supreme Court to support the proposition that “[t]he right to remedial relief falls with an injunction which events prove was erroneously issued. . . . ” 330 U.S. at 295, 67 S.Ct. at 696. Of the cases cited by the Supreme Court, Salvage Process Corp. v. Acme Tank Cleaning Process Corp., 86 F.2d 727 (2d Cir. 1936) (per curiam), is a good example of the kind of situation to which the Supreme Court was referring. The others are set out in the margin. In Salvage, the Second Circuit considered an appeal from an order adjudging the defendant in civil contempt for violating a preliminary injunction. The Second Circuit had held in a companion case decided the same day, in which the defendant appealed the underlying order, that the preliminary injunction was invalid. In the civil contempt appeal, the court, therefore, reversed the judgment of civil contempt on the ground that: “It is true that the reversal of the decree does not retroactively obliterate the past existence of the violation, yet on the other hand it does more than destroy the future sanction of the decree. It adjudges that it never should have passed; that the right which it affected to create was no right at all. To let the liability stand for past contumacy would be to give the plaintiff a remedy not for a right but for a wrong, which the law should not do.” 86 F.2d 727. It is clear from this statement that the court based its reasoning upon the fact that the underlying order, upon which the judgment of civil contempt rested, had been reversed on appeal, for in practically the same breath it declared: “It is indeed abundantly well settled that a defendant may not dispute the validity of an injunction upon a motion to punish him for contempt.” Id. In ,the present case, the appellants would have us hold that even though they “may not dispute the validity of an injunction upon a motion to punish [them] for contempt” id., they should be permitted to so attack the preliminary injunction, which they have not appealed directly, on review of the judgment of civil contempt. Such is not the law. Appellants made no objection to the order granting injunctive relief, nor was any appeal ever filed from such order. Under these circumstances, and in view of the above interpretation of the Supreme Court’s United Mine Workers case and cases cited therein, the appellants will not be heard to attack the validity of the preliminary injunction upon this appeal of the judgment of civil contempt. Because of our previous holding that the district court did not lack jurisdiction of the parties and of the subject matter at least sufficient to grant preliminary injunctive relief the present inquiry is at an end. An order will be entered denying the petition for rehearing by the panel. . Local 1386 has argued that Emery Air Freight Corp. v. Local 295, 356 F.Supp. 974, (E.D.N.Y., 1972) (Emery II), on remand from, Emery Air Freight Corp. v. Local 295, 449 F.2d 586 (2d Cir. 1972) (Emery I) bears upon the issues presented in this appeal. In Emery I, the Second Circuit examined a factual situation similar to that in the present case, except that there the union appealed the underlying preliminary injunction as well as the order of civil contempt. The court reversed the preliminary injunction as improper under the Norris-LaGuardia Act and the Boys Markets case, and set aside for reconsideration by the district court the order of civil contempt that had been issued without a prior hearing. The Second Circuit specifically left open for consideration by the district court the question which we address here: “Since compliance with the Norris-LaGuardia Act is a ‘jurisdictional’ requirement, say appellants, the district court had no ‘jurisdiction’ to enter the orders they allegedly ignored and, therefore, the contempt must be set aside. The questions raised by appellants . . . are substantial. However, we need not decide these delicate issues. ...” 449 F.2d at 592. On remand, in Emery II, the district court reconsidered the order of civil contempt and in a rather conclusory statement held: “This Court has fully reconsidered this matter in the light of the strong suggestions of the Circuit Court and concludes that the district court had no original jurisdiction.” 356 F.Supp. at 976. Although Emery II lends authority to Local 1368’s position in the present case, we decline to follow it since the absence of supportive reasoning for the district court’s conclusory statement does not convince us that the Emery II court appreciated the distinction between jurisdiction to adjudicate a controversy and power tó grant a particular form of relief. This is in contradistinction to our holding that the district court in the present case did not lack jurisdiction to adjudicate the controversy and to adjudge Local 1368 in civil contempt. . See United States v. United Mine Workers of America, 330 U.S. 258, 307, 67 S.Ct. 677, 91 L.Ed. 884 (1947) (Frankfurter, J. concurring). . The panel did examine and uphold the district court’s jurisdiction to enter the preliminary injunction. . Cf. United States v. United Mine Workers, 330 U.S. at 361 n. 26, 67 S.Ct. at 729 (Rutledge, J., dissenting) (“if an injunction is reversed on appeal”). . The Court cited in the text: Worden v. Searls, 121 U.S. 14, 7 S.Ct. 814, 30 L.Ed. 853 (1887); Salvage Process Corp. v. Acme Tank Cleaning Process Corp., 86 F.2d 727 (2 Cir. 1936); S. Anargyros v. Anargyros & Co., 191 F. 208 (C.C.N.D.Cal.1911). In footnote 61, the Court also cited, as providing some support, Leman v. Krentler-Arnold Co., 284 U.S. 448, 453, 52 S.Ct. 238, 76 L.Ed. 389 (1932); Gompers v. Bucks Stove & Range Co., 221 U.S. 418, 451-452, 31 S.Ct. 492, 55 L.Ed. 797 (1911); Bessette v. W. B. Conkey Co., 194 U.S. 324, 329, 24 S.Ct. 665, 48 L.Ed. 997 (1904); McCann v. New York Stock Exchange, 2 Cir., 80 F.2d 211, 214 (1935), cert. denied, 299 U.S. 603, 57 S.Ct. 233, 81 L.Ed. 444 (1936). . Although cited by the Supreme Court, most, but not all of these cases, see note 3, supra, present analogous situations. In Worden, the defendants appealed from the final decree, not just the contempt decree, and thus the Court stated: “We have jurisdiction to review the final decree in the suit and all interlocutory decrees and orders.” 121 U.S. at 25, 7 S.Ct. at 820. In Krentler-Arnold, the Court distinguished criminal contempt from civil contempt solely for the purpose of determining whether a federal court located in Massachusetts which had jurisdiction over a Michigan corporation, the plaintiff, during the proceedings that resulted in the grant of injunctive relief for the defendant, lost such personal jurisdiction for the purpose of a later civil contempt proceeding merely because the company committed the alleged contemptuous acts in Michigan, not in Massachusetts. In Gompers, the Court, distinguishing civil from criminal contempt, declined to enter a decree of civil contempt since the parties had settled the dispute and, therefore, the plaintiff did not require such relief. In Bessette, the Supreme Court stated that in a civil contempt case, if it is concluded on appeal from the final order of the case that the underlying order was erroneous, “[Tjhere would in most cases be great propriety in setting aside the punishment which was imposed for disobeying an order to which the adverse party was not entitled.” 194 U.S. at 329, 24 S.Ct. at 667. The original order in Anargyros had been reversed on appeal; therefore, the court reversed the judgment of civil contempt. McCann involved a situation in which the plaintiff, who was harassing the defendants, violated a preliminary injunction restraining him from doing so. The Second Circuit, in an opinion by Learned Hand, reversed the judgment of contempt, because it was unclear whether the district court had held the plaintiff in civil or criminal contempt. Far from undermining the panel’s decision in the present case, McCann supports the present disposition, for Judge Hand stated, after suggesting that the underlying preliminary injunction was erroneous: “Although, as we have indicated, that order was erroneous, the plaintiff was nevertheless bound to obey it, provided the judge had jurisdiction. We think that he did have jurisdiction and that the plaintiff was bound to obey, until the order was vacated or reversed.” 80 F.2d at 214 (citations omitted). It is interesting to note that this statement and the indication that the underlying order was erroneous were essentially gratuitous, since no appeal had been taken from the preliminary injunction. . Salvage Process Corp. v. Acme Tank Cleaning Process Corp., 86 F.2d 725 (2d Cir. 1936) (L. Hand, J.), cert. denied, 308 U.S. 599, 60 S.Ct. 131, 84 L.Ed.2d 501 (1939). . In addition to the cases cited in note 3, supra, see Jacksonville Paper Co. v. Tobin, 206 F.2d 333, 335 (5th Cir. 1953); Securities and Exchange Comm. v. Okin, 137 F.2d 862 (2d Cir. 1943); Metallizing Engineering Co. v. B. Simon, Inc., 67 F. Supp. 566, 569-570 (W.D.N.Y.1946); cf. Republic Electric Co. v. General Electric Co., 30 F.2d 99 (3d Cir. 1929); see also McComb v. Jacksonville Paper Co., 336 U.S. 187, 69 S.Ct. 497, 93 L.Ed. 599 (1949), part of the Jacksonville Paper Co. litigation, see 206 F.2d 333, in which the Supreme Court held, inter alia, that an adjudication of civil contempt would be proper even though it was at least questionable whether the administrative order upon which the district court’s violated injunction was based was not within the administrator’s statutory authority and that the injunction was ambiguous. 336 U.S. at 195-197, 69 S.Ct. at 501 (Frankfurter, J., dissenting). The Court noted, however, that “[T]liere was no appeal from [the district court’s injunction].... [T]here was a, method of relief apart from an appeal. Respondents could have petitioned the District Court for a modification, clarification or construction of the order. But respondents did not take that course either. • They undertook to make their own determination of what the decree meant. They knew they acted at their peril.” 336 U.S. at 192, 69 S.Ct. at 500. But cf. Hyde Construction Co. v. Koehring Co., 388 F.2d 501, 511 (10th Cir. 1968), in which the court permitted an attack upon the underlying order because it was a temporary restraining order which is generally not subject to challenge through direct appeal.

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2024-08-24T03:29:51.129683

ALLIED INDUSTRIAL WORKERS, AFL-CIO LOCAL UNION NO. 289, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cavalier Division of Seeburg Corporation and Cavalier Corporation, Intervenor. NATIONAL LABOR RELATIONS BOARD, Petitioner, v. CAVALIER DIVISION OF SEEBURG CORPORATION and Cavalier Corporation, Respondent. CAVALIER DIVISION OF SEEBURG CORPORATION and Cavalier Corporation, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. Nos. 71-1775, 71-1999 and 71-2030. United States Court of Appeals, District of Columbia Circuit. Argued Sept. 21, 1972. Decided Jan. 12, 1973. Reconsideration Denied Feb. 12, 1973. Mr. George H. Cohen, New York City, with whom Messrs. John S. Williamson, Jr., New York City, and Kenneth R. Loebel were on the brief, for petitioners in No. 71-1775. Mr. Steven R. Semler, Atty., N. L. R. B., with whom Mr. Marcel Mallet-Prevost, Asst. Gen. Counsel, N. L. R. B., was on the brief for petitioner in No. 71-1999 and respondent in Nos. 71-1775 and 71-2030. Mr. Nathan Lewin, Washington, D. C., with whom Mr. Martin D. Minsker, Washington, D. C., was on the brief, for petitioners in. No. 71-2030, respondent in No. 71-1999 and intervenor in No. 71-1775. Before TAMM, Circuit Judge, WADE H. McCREE, Jr., Circuit Judge (for the Sixth Circuit), and MacKINNON, Circuit Judge. Sitting by designation pursuant to 28 U.S.C. § 291(a) (1970). TAMM, Circuit Judge: In this consolidated statutory review proceeding under the National Labor Relations Act, the parties place in issue the Labor Board’s finding that Cavalier Division of Seeburg Corporation and Cavalier Corporation [hereinafter collectively “Employer” or “Company”] engaged in unfair labor practices in violation of § 8(a)(5), (3) and (1) of the Act, 29 U.S.C. § 158(a)(5), (3) and (1) (1970), by withholding accrued vacation pay from employees during the course of a strike, by discharging several employees for alleged misconduct during the strike, by eventually refusing to bargain with Allied Industrial Workers, AFL-CIO Local Union No. 289 [hereinafter “Local 289” or “Union”] and supply certain requested information to the Union, and by unreasonably delaying the reinstatement of strikers following their unconditional offer to return to work after the strike. Moreover, the parties challenge the Board’s finding as to the date that the strike was converted from an economic strike into an unfair labor practice strike. Having carefully considered the arguments advanced by the parties, with one modification indicated below we grant the Board’s application for enforcement of its order. I. Facts The Company and Local 289 had a bargaining relationship commencing with the Union’s first certification in 1955. Successive collective-bargaining agreements ensued, the most recent of which expired on July 13, 1969. A series of unfruitful bargaining sessions then transpired, culminating in a union membership vote to strike. The strike, economic in origin, began on July 21, 1969, and was destined to last until February of the following year. Several incidents which occurred during and immediately after the strike are the subject of this appeal. A. Withholding Vacation Pay On May 1, 1969, the Company posted a notice stating that employee vacations would be taken during the first two weeks in August. The notice was posted pursuant to the terms of the collective-bargaining agreement, which further provided that employees would be entitled to vacation pay each year in lieu of an actual vacation. While the Company maintained some discretion under the agreement in setting the precise dates, the vacation period was required to fall between June 15 and September 1. By letter to the Union dated July 28, 1969 — one week after the strike began ■ — the Company indicated that it had decided to delay commencement of vacations because of intervening events over which it had no control. The letter stated that the Union would be notified when a new decision concerning the vacation schedule had been reached. At the next bargaining session, held on or about July 31, the Union raised the topic of vacation pay. A Company representative stated that the letter spoke for itself, that no vacation could be rescheduled until after the strike, and that the matter of vacation pay would have to be decided later. The Union pressed the issue at the next bargaining session, held on August 5, asserting that the Company had a legal obligation to give the employees their vacation pay. The response was that “[t]he Company is not legally obligated to subsidize the strike.” Finally, on August 11, the Union president and a group of employees confronted Company officials with the same demand, to which the Company president responded “we are not going to pay the vacation pay until the strike is over.” The controversy remained unabated, the Company refusing vacation pay to both working and striking employees until October 30, at which time the sums were paid. B. Suspension and Discharge of Employees Between the August 5 session and November 12 there was a bargaining hiatus. During that period several incidents occurred involving employees Fletcher,Brewer, Snyder, Tarpley, Creek and Rollins. Some union members who previously had reported to strike returned to work. Among them was George Smith. Smith and several other nonstriking employees formed a car pool for the purpose of transportation to and from work. On the afternoon of September 23, as they were leaving the plant in Smith’s car and with Smith driving, they were followed for some time by a car containing Union president Fred Fletcher and two striking employees, Vernon Brewer and Edward Snyder. No threatening gestures, horn blowing or interference of any kind occurred between the groups. Ultimately, Smith pulled into the driveway of a parking lot opposite the home of one of the occupants of his car. Fletcher followed suit, stopping his car about thirty or forty feet away. Nothing transpired for about half a minute, at which point the doors of Smith’s car were abruptly opened and the occupants rushed to the front seat. It appeared to Fletcher that someone was sick in Smith’s car. Fletcher then started his car and drove off, unaware that the driver of the other car had died of a heart attack. On September 25, Fletcher, Brewer and Snyder were notified by letter from the Company that they were suspended pending investigation for misconduct. Ultimately, on August 10, 1970, the latter two individuals were discharged on the ground of misconduct during the strike. Whether by design or coincidence, more than the usual number of pickets appeared to picket on the morning of November 3, 1969. By the time nonstriking employees began to report to work, conditions had deteriorated considerably. Stones were thrown, obscenities and invectives uttered, and threatening gestures made by the strikers. At issue is the alleged misconduct of two picketing employees, Lora Creek and Barbara Tarpley. On the morning in question Tarpley and Creek shouted obscenities at people entering the plant and, on one occasion, yelled to an employee that they would “get” her. One of the two individuals also threw down a picket sign at or near an automobile entering the plant. In addition, they, occasionally joined hands on the sidewalk, thereby forcing employees to walk around them in order to enter the plant. Tarpley and Creek continued to strike and picket until the strike ended, at which point they requested reinstatement and unconditionally expressed their desire to return to work. The Company failed to respond in any manner until September 2, 1970, at which point the two individuals were informed by separate letters that they were discharged for misconduct during the strike. Also discharged for allegedly participating in and leading a secondary boycott, by letter dated February 13, 1970, in response to his application for reinstatement, was striker Leonard Rollins. Toward the end of October, 1969, at about the same time the Company began hiring permanent replacements for striking employees, Rollins became involved with a local civil rights leader, Reverend H. H. Wright. On or about October 5, following a meeting between Rollins and Reverend Wright, the details of which are undisclosed, the latter addressed a regular meeting of the Union. He expressed concern to the attending members over the hiring of replacements, inferring that this was part of a conspiracy against laborers and poor people. At a November 18 press conference, Rollins and Reverend Wright jointly announced the formation of a coalition between the two allegedly victimized groups to help those who had been “dismissed” by the Company. Rollins, while not mentioning the word “boycott,” did draw attention to the fact that the Company’s sole product was “co6lers” for Coca-Cola and that the “Coca-Cola industry” was its sole buyer. Reverend Wright supplemented that statement by urging the public to buy no more Coca-Cola. Several marches directed at convincing the public not to buy Coca-Cola were subsequently organized by the Reverend Wright and participated in by Rollins. One such march directly involved a customer of the Company, and during that episode the marchers interfered with ingress and egress to the Coca-Cola Bottling Company in Chattanooga. Finally, a handbill was distributed from the Union hall which found its way into the streets of Chattanooga urging the public to support the strike by refraining from purchasing Coca-Cola. The handbill could not be attributed to the leadership of the Union or to any other individual. Rollins, a rank and file member of the Union, participated in such activities without the sanction of the Union. Indeed, the International president of the Union specifically ordered the officers of the Union not to participate in boycott activities, an order which they heeded, and it was never established that the Union itself was directly involved in such activities. C. Refusal by the Company to Bargain and Events that Followed The parties met in bargaining sessions on August 5 and again on November 12, 1969. On December 2, the Union requested by letter to the Company that further bargaining ensue. The Company replied by letter on December 4: [P]lease be advised that we must at this time defer your request for further bargaining pending disposition by the National Labor Relations Board of the petition which has been filed, apparently raising a question concerning representation. When this matter has been resolved, we shall act accordingly. The Company’s board chairman testified to several additional factors influencing his decision to terminate bargaining although these were apparently not communicated to the Union at that time. First, he testified that 357 individuals were reporting to work, compared to 307 remaining strikers (some of whom had apparently found employment elsewhere) . Second, he testified to personal knowledge of “overwhelming sentiment” among the working employees to no longer be represented by the Union, although no evidence as to the identity of those expressing such sentiment or their number was proffered. On February 7, 1970, the Union notified the Company that the strike was ended and by letter requested reinstatement on behalf of all striking employees, indicating their willingness to return to work immediately and unconditionally. The Union also requested on that day that the Company supply it with certain information regarding employees who were presently filling production and nonproduction jobs, all job openings as of February 7, and other related matters. The Company responded to both requests on February 10, acknowledging termination of the strike but refusing to furnish the information because “We can perceive no legal duty to grant your request at this time,” and refusing to reinstate striking employees on the ground that more information was needed. Specifically, the Company indicated, its belief that some striking employees had obtained work elsewhere, others had moved out of the area, and still others did not desire to return to work, thereby raising questions concerning the Company’s reinstatement responsibilities. The Company then requested that the Union furnish it with a list of previous strikers who had not made application for reinstatement individually or who desired to preserve their rights with the Company. The letter concluded by stating: If we do not receive such a list within a reasonable time, we will assume that none other than those who have made individual application desire to preserve such rights as they may have at Cavalier. By letter dated February 18, 1970, the Company informed the employees who had been on strike that they must notify the Company individually of their willingness to return to work in order to be reinstated. Thereafter some employees who complied with this request were reinstated. The Union renewed its request of February 7 by letter dated February 27, and the Company replied on March 2 that such an “unconditional offer to return to work on behalf of striking employees is quite obviously too broad and inaccurate to be relied upon.” II. Conclusions by the NLRB To this point we have outlined the findings of the Trial Examiner which are of a purely factual nature and which were adopted by the Board. 192 N.L.R.B. No. 37 (1970). Not only are these findings supported by substantial evidence on the record as a whole, 29 U.S.C. § 160(e) and (f) (1970) and Administrative Procedure Act § 10(e), 5 U.S.C. §§ 701 and 706 (1970), but they are essentially uncontested by the parties for purposes of this appeal. We proceed now to consideration of whether the conclusions of law by the Board are warranted by the evidence. In agreement with the Trial Examiner, the Board found that the Company violated § 8(a)(5) and (1) of the National Labor Relations Act, 29 U.S.C. § 151 et seq. (1970), by refusing to bargain with the Company and furnish it with information. It also found that refusal to pay accrued vacation pay was a violation of § 8(a)(3) and (1) of the Act as was the discharge of employees Fletcher, Brewer, Snyder, Creek and Tarpley. Contrary to the Trial Examiner, the Board found no violation by the Company in suspending employees Fletcher, Brewer and Snyder pending investigation of the incident in question, but it did find a violation of § 8(a)(3) and (1) in the discharge of Rollins, the alleged participant in a secondary boycott. Finally, the Board and Trial Examiner were in agreement that the Company further violated § 8(a)(3) and (1) by unreasonably delaying the reinstatement of unfair labor practice strikers following their unconditional offer to return to work on February 7, 1970. The Board, however, modified the Trial Examiner’s finding that the strike was converted to an unfair labor practice strike on July 29, 1969, substituting therefor December 4, 1969. The Board entered an order requiring certain affirmative and negative acts by the Company directed at effectuating its holding. III. Conclusions A. Withholding Vacation Pay The Company’s challenge to the Board’s finding that it violated § 8(a)(3) and (1) of the Act is really twofold, and we shall consider those arguments in order. It first contends that the vacation pay had not accrued prior to its payment on October 30 and that its refusal to pay therefore cannot serve as a basis for violation of the Act. The 1966 contract provided, as did its predecessors, for one or two weeks of vacation pay to employees who had completed at least one or five years of continuous service, respectively. The relevant portions of the agreement follow: A first-year employee will receive his vacation pay upon completion of his 12 months of continuous service or at the vacation period, whichever comes last. His vacation pay thereafter will be issued to him at the time his vacation is taken, or on the first pay period in July if no vacation is scheduled for that year. The vacation period will be set by the Company to fall between June 15th and September 1st. Unless business reasons dictate a specific period the preference of the employees will be followed in choosing the vacation dates. The dates chosen will be announced not later than May 1st. Vacations are not cumulative and must be taken, or paid for, during each calendar year. It is beyond dispute that vacation pay would accrue and become due and payable in lieu of actual vacation. The question presented is whether it accrued prior to October 30, the date when the sums were finally paid, thereby rendering the Company’s refusal to pay after successive Union demands potentially violative of § 8(a)(3) and (1). Under any one of several interpretations the answer is indisputably yes, although for reasons which will become apparent it is unnecessary for us to determine the precise date. The contract unequivocally limits the dates within which the vacation period must fall- — between June 15 and September 1. Thus, once September 1 passed there can be no doubt that the amounts were due and payable. Moreover, since the vacation period of two weeks must fall rather than begin between those dates, the deadline must be considered to fall sometime in mid-August. Finally, we feel it is likely that the pay accrued at an even earlier date. The Company had no authority to reschedule vacations after the May 1 deadline specified in the contract. When it unilaterally made the decision to do so on about July 28 it was in the midst of an economic strike that may well have been anticipated to last well beyond mid-August. The letter itself arguably may have indicated the Company’s awareness that a vacation could not be scheduled within the time limits prescribed in the collective-bargaining agreement. Thus, the employees’ rights to vacation pay in lieu of actual vacation did accrue prior to October 30. The Company next urges that proof of antiunion motive is essential to a violation and that it did not harbor such a motive. The Trial Examiner found that the Company’s action of withholding accrued vacation pay had, indeed, been motivated by antiunion purposes. The Labor Board, while not in disagreement with this finding, held that it was unnecessary to reach the issue of motive in light of NLRB v. Great Dane Trailers, Inc., 388 U.S. 26, 87 S.Ct. 1792, 18 L. Ed.2d 1027 (1967). We feel that clarification is merited. In Great Dane Trailers, the respondent company, faced with an economic strike, refused to pay accrued vacation pay to striking employees while announcing its intention to award such benefits to working employees (which it did). A hearing before a trial examiner resulted in a finding that the company’s action constituted discrimination in the terms and conditions of employment which would discourage union membership as well as unlawfully interfere with a protected activity, thereby violating § 8(a)(3) and (1). The Labor Board adopted the conclusions but was reversed by the Court of Appeals on the ground that the company may have had any of a number of legitimate business purposes for such conduct. In the process of reversing and remanding with directions to enforce the Board’s order, the Supreme Court clarified the appropriate considerations for evaluating an alleged violation of § 8(a) (3): [S]everal principles of controlling importance here can be distilled. First, if it can reasonably be concluded that the employer’s discriminatory conduct was “inherently destructive” of important employee rights, no proof of anti-union motivation is needed and the Board can find an unfair labor practice even if the employer introduces evidence that the conduct was motivated by business considerations. Second, if the adverse effect of the discriminatory conduct on employee rights is “comparatively slight,” an antiunion motivation must be proved to sustain the charge if the employer has come forward with evidence of legitimate arid substantial business justifications for the conduct. 388 U.S. at 34, 87 S.Ct. at 1798. The Company mistakenly argues that since the conduct must be “discriminatory” before it can be “inherently destructive,” and since the Company refused to pay accrued vacation benefits nondiscriminatorily to all its employees, then the “comparatively slight” test enunciated in Great Dane Trailers must be applied. The Company then sets forth what it considers to be a “substantial business justification” for its conduct and contends that the Union has failed to successfully refute this evidence with proof of antiunion animus. The Company misconstrues § 8(a) (3). That section requires “discrimination” as a prerequisite to a violation whether the conduct be “inherently destructive” or “comparatively slight,” a point which is absolutely clear in Great Dane Trailers. Not only does the requirement of discrimination not afford a basis for distinguishing between the two standards, but it also fails to afford a basis for arguing that § 8(a)(3) is inapplicable to the facts of this case. The Company argues that all cases relied upon by the NLRB for authority involve a course of conduct which discriminates between strikers and nonstrikers, citing, inter alia, Flambeau Plastics Corp. v. NLRB, 401 F.2d 128, 135 (7th Cir. 1969), cert. denied, 393 U.S. 1019, 89 S.Ct. 625, 21 L.Ed.2d 563 (1969), and NLRB v. Frick Co., 397 F.2d 956, 961-963 (3d Cir. 1968). It then argues that it did not “discriminate” since it was completely impartial between strikers and nonstrikers. While we agree that the courts above were concerned with unequal treatment of strikers and non-strikers, we do not consider that to be dispositive. A practice applied uniformly to all employees may be discriminatory and violate the Act just as a discriminatory practice may be held to be perfectly innocuous. Compare American Ship Building Co. v. NLRB, 380 U.S. 300, 312-313, 85 S.Ct. 955, 13 L.Ed.2d 855 (1965) and United Steelworkers v. NLRB, 405 F.2d 1373 (D.C.Cir.1968) with NLRB v. Brown, 380 U.S. 278, 85 S.Ct. 980, 13 L.Ed.2d 839 (1965). Conduct by an employer which discourages a union activity protected by § 7 may also discourage and discriminate against membership in a labor organization. In the present case the Employer conditioned payment of accrued vacation compensation upon cessation of a union-instigated economic strike. It is unnecessary for us to tread the uneasy path between “inherently destructive” and “comparatively slight” discrimination since the Company failed to prove a substantial business justification for its conduct. See Great Dane Trailers, supra, and NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 88 S.Ct. 543, 19 L.Ed.2d 614 (1967). The Company introduced uncontradicted evidence illustrating financial problems which had recently befallen it. However, no testimony was introduced suggesting that the Company was unable to meet the financial burden of the vacation debt. In its simplist form the Company really argues that both sides anticipated economic hardship during the strike and that it was more appropriate for the Union than for the Company to absorb the loss of vacation funds even though the employees were lawfully entitled to them. B. Suspension and Discharge of Employees With respect to employees Fletcher, Brewer and Snyder, the Trial Examiner found that their purpose in following the automobile driven by Smith was to harass and coerce the riders in that car not to report to work, although he found no acts of physical interference whatsoever between the two vehicles. While the death of Smith was indeed unfortunate, an expert witness was totally unable to attribute it to the car following incident. The Trial Examiner noted that the Company had previously engaged in an unfair labor practice during the course of the strike by its refusal to pay accrued vacation pay, an action which “had an adverse effect . not only upon the outcome of the strike and the morale of the strikers, but against the very pocketbooks of the strikers themselves.” Applying the doctrine established in Local 833, UAW v. NLRB, 112 U.S.App.D.C. 107, 300 F.2d 699 (1962), cert. denied, 382 U.S. 836, 86 S.Ct. 82, 15 L.Ed.2d 79 (1965), and NLRB v. Thayer Co., 213 F.2d 748 (1st Cir. 1954), cert. denied, 348 U.S. 883, 75 S.Ct. 123, 99 L.Ed. 694 (1954), he found that the Company had violated § 8(a)(3) and (1). The Board agreed, stating that such conduct, protected by § 7, “while not to be condoned, was not so egregious as to render them unfit for further employment, and that their discharge after the strike was therefore violative of Section 8(a)(3) and (1).” A similar conclusion was reached with respect to employees Creek and Tarpley, who had shouted obscenities and engaged in other misconduct on the picket line. [N]ot every incident occurring on the picket line, though harmful to a totally innocent employer, justifies refusal to reemploy a picketing employee for acts that exceed the bounds of routine picketing. Impulsive behavior on the picket line is to be expected especially when directed against nonstriking employees or strike breakers. Montgomery Ward & Co. v. NLRB, 374 F.2d 606, 608 (10th Cir. 1967). See also Terry Coach Industries, Inc., 166 N.L.R.B. 560 (1967), enforced, 411 F.2d 612 (9th Cir. 1969); NLRB v. Buitoni Food Corp., 298 F.2d 169 (3d Cir. 1962); NLRB v. Efco Manufacturing, Inc., 227 F.2d 675 (1st Cir. 1955), cert. denied, 350 U.S. 1007, 76 S.Ct. 651, 100 L.Ed. 869 (1955); Stewart Hog Ring Co., Inc., 131 N.L.R.B. 310 (1961); Hartmann Luggage Co., 183 N.L.R.B. No. 128 (1970), enforced as modified, 453 F.2d 178 (6th Cir. 1971); and Schott v. Metal Products Co., 128 N.L.R.B. 415 (1960). Finally, while the Trial Examiner found that employee Rollins did engage in a leadership role in conduct that ultimately extended the strike beyond the domain of his immediate employer to one entity doing business with the employer, he held that this was not a boycott within the meaning of § 8(b)(4)(i)(ii)(A) and (B) of the Act. Nevertheless he found that Rollins’ discharge was for cause, a conclusion which the Board rejected: In all the circumstances, we find that Rollins’ conduct . . . while not to be condoned, was not so egregious as to render Rollins unfit for further employment .... While it is true that the Board offers little support for its conclusion, we note that not present here are any remarks or materials disparaging the quality of products of the employer which might bring the case within the rationale of NLRB v. Local 1229, IBEW, 346 U.S. 464, 74 S.Ct. 172, 98 L.Ed. 195 (1953). Nor was the handbill distributed at Union headquarters attributed to Rollins. Furthermore, the record fails to show whether any of the vending machines manufactured by the Company after the strike began were used by the Chattanooga Coca-Cola Bottling Company, nor does it show whether Rollins participated in the only march which directly involved a bottling plant. Clearly some types of impulsive behavior must have been within the contemplation of Congress when it provided for the right to strike. See NLRB v. Wichita Television Corp., Inc., 277 F.2d 579, 585 (10th Cir. 1960), cert. denied, 364 U.S. 871, 81 S.Ct. 113, 5 L.Ed.2d 93 (1960); NLRB v. Thor Power Tool Co., 351 F.2d 584, 587 (7th Cir. 1965). It is not unusual to become involved, as we are today, in balancing the employees’ right to organize and bargain collectively against the employer’s right to maintain order and respect and the public’s right to safety. See, e. g., Local 833, UAW, supra, 300 F.2d at 703 n. 10 and NLRB v. Thor Power Tool Co., supra, 351 F.2d at 58. This involves consideration of such opaque factors, many of which depend upon a sifting of conflicting testimony in an attempt to envision the totality of circumstances, as whether the misconduct “is so violent or of such serious character as to render the employee unfit for further service,” NLRB v. Illinois Tool Works, 153 F.2d 811, 816 (7th Cir. 1946); whether such misconduct constitutes “a trivial rough incident” or occurs in “a moment of animal exuberance,” Milk Wagon Drivers Union v. Meadowmoor Dairies, Inc., 312 U.S. 287, 293, 61 S.Ct. 552, 85 L.Ed. 836 (1941); whether the employer’s unlawful acts were serious or provocative, Local 833, UAW, supra, 300 F.2d at 703; and whether reinstatement would effectuate the policies of the Act, id. at 703. As the court in NLRB v. Thor Power Tool Co., supra, 351 F.2d at 587, aptly summarized: Initially, the responsibility to draw the line between these conflicting rights rests with the Board, and its determination, unless illogical or arbitrary, ought not be disturbed. We find that the Labor Board’s conclusions in these matters were neither arbitrary nor illogical and, with one exception, decline to comment further. The one particularly troublesome matter involves the suspension two days after the car following incident of employees Fletcher, Snyder and Brewer “pending investigation for misconduct.” While the suspension letter indicated no specific reason for such action, the Company concedes that it was largely meant “to advise the Company’s other employees . . . that misconduct resulting in death would not be tolerated . ” The fact that the re-' suiting death was apparently the primary reason for suspension leads us directly to the case of NLRB v. Burnup & Sims, Inc., 379 U.S. 21, 85 S.Ct. 171, 13 L.Ed.2d 1 (1964), In Burnup & Sims it was incorrectly brought to the employer’s attention that two employees who were attempting to organize the respondent company’s plant had threatened to dynamite the plant if they did not receive collective bargaining authorization. They were forthwith discharged. After finding that the employees were engaged in an activity protected by § 7, the Court held: Over and again the Board has ruled that § 8(a)(1) is violated if an employee is discharged for misconduct arising out of a protected activity, despite the employer’s good faith, when it is shown that the misconduct never occurred. . That rule seems to us to be in conformity with the policy behind § 8(a)(1). Otherwise the protected activity would lose some of its immunity, since the example of employees who are discharged on false charges would or might have a deterrent effect on other employees. 379 U.S. at 23, 85 S.Ct. at 172. Here the employees in question were alleged to have engaged in what may be characterized as two types of misconduct: First, merely following the Smith automobile; second, and more seriously, engaging in activity which “result[ed] in death.” It was for the latter reason that they were suspended, yet it later became clear that Smith’s death could not be attributed to these employees. As in Burnup & Sims the Company had acted under a good faith mistake of fact, and that case therefore controls. The Company urges us to distinguish Burnup & Sims on the ground that the employees there, unlike here, were engaged in activities protected by § 7. Compare NLRB v. Laney & Duke Storage Warehouse Co., 369 F.2d 859, 865-866 (5th Cir. 1966) with NLRB v. Big Three Welding Equipment Co., 359 F.2d 77, 84 (5th Cir. 1966). While some confusion is understandable in light of the Board’s order, its conclusion is nevertheless deducible and contrary to the Company’s contention. The trial examiner apparently concluded that the three employees were not engaged in protected activity, a finding which was rejected by the Board. Although the Board addressed only the issue of whether § 8(a)(3) and (1) had been violated by the discharge of the employees when it held that the discharge was “in contravention of their rights under Section 7,” it could not in the next breath consistently conclude that the employees were disassociated from § 7 rights for purposes of the suspension. Having concluded that Fletcher, Brewer and Snyder were not disassociated from § 7 activities during the car following incident, we find the outcome to be controlled by the rational espoused in Burnup & Sims —i. e. the suspension of the three employees pending investigation was a violation of § 8(a) (1) of the Act. We similarly reject the argument that the present case is distinguishable from Burnup & Sims in that the Board here found that the employees were engaged in misconduct, but not misconduct so egregious as to render them unfit for further employment. While we do not hold that all misconduct insufficient for dismissal is prima facie insufficient for suspension under the Burnup & Sims rationale we do note that the only other “misconduct” in which the three participated was that of following an automobile at 30 to 40 feet with no attempt to interfere or communicate. Thus, even assuming that this was the “misconduct” for which they were suspended rather than the fact that an employee coincidentally met his death, we find it insufficient to merit suspension for cause. C. Refusal of the Company to Bargain and Events that Followed The Company refused to comply with the Union’s December 2 request for further bargaining, stating as grounds therefor that a decertification petition was then pending with the National Labor Relations Board. Indeed, such a petition had been filed by an unknown number of dissident employees on December 1, although it was immediately suspended by the Board pending the outcome of the unfair labor practice proceeding. The Union was originally certified in 1955 and recertified in 1962 as well as by subsequent execution of a series of collective-bargaining agreements. After its first year of certification a rebuttable presumption of the union’s majority status exists. Unless the employer can prove that the union in fact no longer enjoys a majority, it can only overcome the presumption upon a showing of “sufficient evidence to cast serious doubt on the union’s continued majority status.” Stoner Rubber Co., Inc., 123 N.L.R.B. 1440, 1445 (1959). The pertinent standard has been interpreted to require both a reasonable basis in fact for the doubt and good faith by the employer. See, e. g., Lodges 1746 and 743, IMW v. NLRB, 135 U.S.App.D.C. 53, 416 F.2d 809, 812 (1969), cert. denied, 396 U.S. 1058, 90 S.Ct. 751, 24 L.Ed.2d 752 (1969); NLRB v. Frick Co., 423 F.2d 1327, 1330 (3d Cir. 1970). The naked showing that a decertification petition has been filed, with no indication of the number of signatories or other related matters, is an insufficient basis in fact for refusing to bargain since it establishes no more than that the petition was supported by the requisite 30% “showing of interest.” Wabana, Inc., 146 N.L.R.B. 1162, 1171 (1964). In the present case the Employer attempted to bolster this evidence by testifying that on December 4, the date on which it refused to bargain, more persons were crossing the picket line to work than were striking. It has been held time and again, however, that an employee’s return to work during a strike does not provide a reasonable basis for presuming that he has repudiated the union as his bargaining representative. See, e. g., NLRB v. Easton Packing Co., 487 F.2d 811, 814 (3d Cir. 1971); NLRB v. Frick Co., supra, 423 F.2d at 1333-34; and NLRB v. Little Rock Downtowner, Inc., 414 F.2d 1084, 1091 (8th Cir. 1969). Compare Terrell Machine Co. v. NLRB, 427 F.2d 1088, 1090 (4th Cir. 1970), cert. denied, 398 U.S. 929, 90 S.Ct. 1821, 26 L.Ed.2d 91 (1970). Absent supporting evidence it may mean no more than that he was forced to return to work for financial reasons or that he did not support the strike in question. See, e. g., NLRB v. Frick Co., supra, 423 F.2d at 1333. Finally, the Employer’s testimony to the effect that he had personal knowledge of “overwhelming sentiment” against the Union, with no indication of the number or identity of workers expressing such views nor any other corroboration, is no more than a “self-serving assertion,” NLRB v. Little Rock Downtowner, Inc., supra, 414 F.2d at 1091, which adds nothing to the preceding evidence. While we must consider the totality of such evidence in determining whether the employer had a reasonably grounded good faith doubt as to the Union’s majority status, we note that on two previous occasions within the course of the strike the Employer had engaged in unfair labor practices: First, by withholding accrued vacation pay; and second, by suspending employees Fletcher, Brewer and Snyder. As found by the Trial Examiner and supported by the evidence, these actions contributed to the loss of Union support and, when considered with the foregoing, preclude any possibility that the Company maintained a good faith doubt as to the Union’s continued majority status. See NLRB v. A. W. Thompson, Inc., 449 F.2d 1333, 1336 (5th Cir. 1971), cert. denied, 405 U.S. 1065, 92 S.Ct. 1497, 31 L.Ed.2d 795 (1972). We note additionally that refusal to furnish the Union with information essential to its bargaining obligation is yet another indication of bad faith. United Steelworkers v. NLRB, 132 U.S.App.D.C. 103, 405 F.2d 1373 (1968). We think the Board’s conclusion that the Company violated § 8(a)(5) and (1) of the Act by refusing to bargain on and after December 4 is amply supported by the record. D. Conversion into an Unfair Labor Practice Strike The Board found that by refusing to bargain with the Union on December 4, 1969, in violation of § 8(a)(5) and (1) of the Act the Employer prolonged the strike and consequently it converted as of that date into an unfair labor practice strike. It is undisputed that the strike was economic in nature at its outset. The Union takes issue with the standard applied by the Board in determining which of several unfair labor practices converted the strike. The Union, relying upon an isolated passage from Teamsters Local 992 v. NLRB, 138 U.S.App.D.C. 312 427 F.2d 582 (1970), contends that a strike is converted if the unfair labor practice in question merely “aggravates” rather than “prolongs” it. The issue involved in Teamsters Local 992 was whether substantial evidence supported the Board’s finding that a unilateral decision by the employer to increase wages by fourteen cents per hour converted an economic strike into an unfair labor practice strike. While it is true that the court referred to “aggravate” and “prolong” disjunctively, reliance upon such usage is misplaced as the following passage indicates : “[W]here a strike which initially involved no unfair labor practice is prolonged or aggravated by an employer’s unfair labor practice, the same rule applies as where the strike is the result of an unfair labor practice, and the employer is bound to reinstate all strikers . . . . ” Once it is shown that an employer’s unfair labor practice is a significant factor in a strike, the burden is “on the Company to show that the strike would have continued even if it had [not committed its unfair labor practice] .” 427 F.2d at 587. Thus, it is abundantly clear that the court in Local 992 was concerned with the effect of such practices on the longevity of the strike and not merely with whether the unfair labor practices aggravated the strike. This is consistent with the great weight of authority. It has been uniformly ruled and is now well settled that to entitle employees to reinstatement because of unfair [labor] practice of the employer, after a strike has been declared, it must appear that the practice prolonged the strike; and this necessarily follows from the fact that only then can it be that any part of the unemployment for which reinstatement is the remedy has resulted from a violation of the Act. NLRB v. James Thompson & Co., 208 F.2d 743, 749 (2d Cir. 1953) (footnote omitted). Accord, Electrical Workers Local 613 v. NLRB, 328 F.2d 723, 726 (3d Cir. 1964); Drivers Local 662 v. NLRB, 302 F.2d 908, 911 (D.C.Cir. 1962), cert. denied, 371 U.S. 827, 83 S.Ct. 48, 9 L.Ed.2d 65 (1962); NLRB v. Jackson Press, Inc., 201 F.2d 541, 546 (7th Cir. 1953). Having concluded that the Board applied the appropriate standard, we find the Board’s determination that the strike was, in fact, prolonged by the refusal to bargain to be supported by substantial evidence on the record as a whole. NLRB v. Frick Co., 397 F.2d 956, 964 (3d Cir. 1968). We therefore conclude that the order of the Board should be modified with regard to the suspension of employees Fletcher, Brewer and Snyder in accordance with this opinion, and so modified we grant the Board’s application for enforcement of its order. . 29 U.S.C. § 151 et seq. (1970). . The decision and order of the three-member panel of the National Labor Relations Board, empanelled pursuant to § 3(b) of the National Labor Relations Act, 29 U.S.C. § 153(b) (1970), is reported at 192 N.L.R.B. No. 37 (1970). . During the course of the proceedings before the Labor Board, Cavalier Division of Seeburg Corporation ceased to exist and Cavalier Corporation, which had previously been a sales branch, assumed its obligations and operations. There is no issue raised as to successorship and for purposes of this appeal they are treated as one and the same party. . Both parties concede that the impediment to negotiations was a combination of the Company’s recent financial problems and the effect of inflation on the employees’ real wages. . The Company’s practice was apparently to close down the entire plant for the two-week vacation period so that all employees, save a skeleton maintenance crew, would be on vacation at the same time. . With regard to employee Fletcher, see note 19, infra. . While Rollins was a past president of Local 289 and was still considered to be a leader by many union members, he apparently no longer held any union office. . In fact the Company engaged in the manufacture of soft drink vending machines which are purchased by the various Coca-Cola bottling companies throughout the United States. . The letter refers to a petition for decertification filed by some dissident union members which raised certain questions concerning representation. The petition was immediately suspended pending the outcome of the present proceedings before the NLRB. . 29 U.S.C. § 158(a) (1970) provides in relevant part: (a) It shall be an unfair labor practice for an employer— (1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title; (5) to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 159(a) of this title. . 29 U.S.C. § 158(a)(3) (1971) provides in relevant part: (a) It shall be an unfair labor practice for an employer— (3) by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization .... . Most significantly, the Company was ordered to cease and desist from those activities which were held to be violations and to offer reinstatement to the six discharged employees at the same or substantially equivalent positions with certain rights to back pay; to do the same for all employees who were on strike after December 4, 1969, on whose behalf an unconditional request for reinstatement was made by the Union; to make such employees whole for any loss of earnings suffered from February 12, 1970; and, upon request, to bargain collectively with Local 289 as the exclusive bargaining representative of the employees and make available to it certain information. . The relevant clause is as follows: Article 9, Section 1. An employee will be entitled to 1 week of vacation pay each year upon completion of 1 year of continuous service and 2 weeks of vacation pay for each year upon completion of 5 years of continuous service provided he has worked 1040 hours in the twelve-month period prior to the vacation date and is in the Company’s employ at the time the vacation period ' begins. . See also § 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a) (1970); and NLRB v. C & C Plywood Corp., 385 U.S. 421, 427, 87 S.Ct. 559, 17 L.Ed.2d 486 (1967). . The Company asserts as authority for its interpretation of the clauses in question a 1962 strike of 5 weeks duration wherein the Company rescheduled vacations. Not only was that situation dissimilar from the present one in several respects, but we also feel it is of little value since the terms of the 1966 contract are clear and unequivocal in this respect and since we do not consider one dissimilar situation occurring seven years prior to this dispute to establish “past practice.” The further argument that the Union somehow acquiesced in this interpretation prospectively by failing to bring an unfair labor practice charge in 1962 is devoid of any merit. . See also Wonder State Manufacturing Co. v. NLRB, 331 F.2d 737, 738 (6th Cir. 1964); Majestic Molded Products, Inc. v. NLRB, 330 F.2d 603, 606 (2d Cir. 1964); NLRB v. Frick Co., 397 F.2d 956, 962-963 (3d Cir. 1968); and Texaco, Inc., 179 N.L.R.B. 989, 993 (1969). See generally Christensen and Svahoe, Motive and Intent in the Commission of Unfair Labor Practices: The Supreme Court and the Fictive Formality, 77 Yale L.J. 1269 (1968). . Here, when the vacation pay demands were first made and refused, virtually all of the plant personnel were out in support of the strike and no serious effort was made to keep the plant in operation. The refusal to pay, as found by the Trial Examiner and not refuted by the Board, was diseriminatorily motivated. The fact that it was ultimately paid and paid to both strikers and nonstrikers does not remove the discriminatory taint — it was paid at a time when, according to the testimony of the Company, more individuals were working than striking and the plant was substantially operational once again. At that point the Company was obviously less concerned with the strikers than with satisfying and retaining the services of former strikers. . Indeed, even if the Company had succeeded in such an assertion it would still be held to have violated § 8(a) (3) and (1) on the basis of the Trial Examiner’s conclusion, unrefuted by the Board’s holding and supported by substantial evidence on the record as a whole, that the Company possessed the requisite antiunion motive to overcome a showing of substantial business justification. Moreover, even ' were we to accept the Company’s logic and find no “discrimination” within the meaning of § 8(a)(3), the Trial Examiner’s findings with respect to motive would support an independent violation of § 8(a)(1). See, e. g., NLRB v. Exchange Parts Co., 375 U.S. 405, 84 S.Ct. 457, 11 L.Ed.2d 435 (1964). . Actually, Fletcher was discharged by letter dated April 14, 1970, for certain picture-taking activities on the picket line. This, of course, makes it quite impossible for him to have been discharged again on August 10, 1970, for participation in the car following incident, absent an intervening reinstatement. The Board, affirming the Trial Examiner, held that the initial discharge of Fletcher was violativeof § 8 (a) (3) and (1) of the Act since it was not the type of conduct which warrants refusal to reinstate, a conclusion which is not challenged in this appeal. The Company does contend, however, that had it not suspended Fletcher for the picture-taking activities, it would have suspended him for the car following activities. We are not permitted to review hypothetical issues and hence are forced to limit our holding to the discharge of Brewer and Snyder, although we do note that absent circumstances which distinguish Fletcher’s conduct from that of the former two individuals, we cannot comprehend how such a discharge could be considered to be innocuous. . Rollins denied participation in that march. . Brief for Cavalier Division of Seeburg Corp., and Cavalier Corp. at 36. . Having found that the Company was obligated to bargain with the Union, we similarly hold, in agreement with the Board and the Trial Examiner, that failure to furnish to the Union, upon request, information necessary to fulfill its bargaining obligation resulted in an additional violation of § 8(a)(5) and (1). See Kayser-Roth Hosiery Co., Inc., v. NLRB, 447 F.2d 396 (6th Cir. 1971). . The issue, of course, is of significance to the parties in that unfair labor practice strikers are entitled to reinstatement regardless of whether the employer has replaced them, Mastro Plastics Corp. v. NLRB, 350 U.S. 270, 278, 76 S.Ct. 349, 100 L.Ed. 309 (1956), while economic strikers are entitled to reinstatement only if they have not been permanently replaced, NLRB v. MacKay Co., 304 U.S. 333, 346, 58 S.Ct. 904, 82 L.Ed. 1381 (1938). . The Board, affirming the Trial Examiner, also found that the employer violated § 8(a) (3) and (1) by repeatedly refusing to accept the Union’s unconditional offer on behalf of its employees to return to work, but instead insisting upon information to which it had no legal right. We affirm for reasons clearly set out in our recent decision of Retail Store Union v. NLRB, 466 F.2d 380, 385 (D.C.Cir. 1972).

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UNITED STATES of America v. Wilbur JONES, Appellant. No. 72-1479. United States Court of Appeals, District of Columbia Circuit. Nov. 28, 1972. Before BAZELON, Chief Judge, and TAMM and LEVENTHAL, Circuit Judges. ORDER PER CURIAM. On consideration of appellant’s motion for leave to file a non-conforming pleading, it is Ordered by the Court that the motion is granted and the Clerk is directed to file appellant’s lodged motion for release on non-financial conditions pending appeal, and appellee's lodged opposition thereto. On consideration of the foregoing, it is Further ordered by the Court that appellant’s aforesaid motion for release on non-financial conditions is denied. Chief Judge BAZELON would grant the motion for release on non-financial conditions pending appeal and may file an opinion at a later date.

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UNITED STATES of America, v. Claude L. SMITH, Appellant. UNITED STATES of America, v. James P. JARVIS, Appellant. Nos. 72-1593, 72-1600. United States Court of Appeals, District of Columbia Circuit. Nov. 21, 1972. Before BAZELON, Chief Judge, and LEVENTHAL and MacKINNON, Circuit Judges. ORDER PER CURIAM. On consideration of appellant’s (Jarvis) motion to amend application for bail pending appeal, of appellants’ (Smith and Jarvis) motions for bail pending appeal, and of the opposition filed with respect thereto, it is Ordered by the Court that appellant’s (Jarvis) motion to amend application for bail pending appeal is granted, and, it is Further ordered by the Court that appellants’ (Smith and Jarvis) motions for bail pending appeal are denied. Chief Judge BAZELON dissents from the foregoing order and may file an opinion at a later date.

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UNITED STATES of America v. Wilbur JONES, Appellant. UNITED STATES of America v. Claude L. SMITH, Appellant. UNITED STATES of America v. James P. JARVIS, Appellant. Nos. 72-1479, 72-1593 and 72-1600. United States Court of Appeals, District of Columbia Circuit. Jan. 18, 1973. Messrs. Robert Gray and Nathaniel P. Breed, Jr., were on the pleading for appellant Jones. Mr. Aubrey M. Daniel, III, Washington, D. C., was on the pleading for appellants Smith and Jarvis. Messrs. Harold H. Titus, Jr., U. S. Atty., John A. Terry and James W. Diehm, Asst. U. S. Attys., were on the pleading for appellee. BAZELON, Chief Judge, dissenting: Each of these defendants was convicted of a D.C.Code offense, and each moved for release pending appeal under D.C.Code § 23-1325(c). The trial judges denied the motions; my colleagues uphold the denials. I recognize that we are required to affirm if the trial judge’s holding is “supported by the proceedings below.” In these cases however, I do not find the denials to be properly supported; in my view the trial judges incorrectly applied the statutory formula governing release. I. Prior to the passage of the D.C.Code bail revisions, release for both D.C.Code and U.S.Code offenders was governed by the federal Bail Reform Act of 1966, which established a preference for release pending appeal. In passing the D. C. Court Reform and Criminal Procedure Act of 1970, Congress made clear its intention to reverse that preference; the result was D.C.Code § 23-1325, which directed the courts to take a considerably harsher stance in ruling on motions for release pending appeal. Nonetheless, the statute does permit release in certain circumstances; it sets forth two factors relevant to the question of release: 1) The likelihood that the appellant will flee or pose a danger to persons or property; and 2) The likelihood of reversal on appeal. In each of these cases, the trial judge considered only one of the two factors. In the Smith and Jarvis cases, the judge considered only the first factor; since he was unable to find that the defendants were not likely to flee or pose a danger, the judge did not discuss the substantiality of the appeal. Jones’ motion represents the converse; there the trial judge could not find a likelihood of reversal, and so denied release with no consideration of the risk of flight or danger. I believe that both judges erred. For the reasons set forth in Parts II and III of this opinion, I think the statute requires consideration of both likelihood of flight or danger and the substantiality of the appeal in every case. II. Failure to analyze the substantiality of the appeal — as occurred in the Smith and Jarvis cases — is problematic for two reasons. First, it assumes that the two statutory factors bearing on release are independent of each other. In fact, they are not independent. The likelihood that a convicted person will flee or pose a danger to persons or property is often directly related to the validity of his conviction. Thus it is normally impossible to make an adequate determination as to the risk of flight or danger without paying some attention to the strength of the appeal. The substantiality of the appeal should be a particularly important consideration when the issues raised on appeal directly concern whether or not the defendant committed the offense for which he was convicted. The case of Smith, one of the movants here, is illustrative. Smith is appealing his conviction in the murder of Elroy Williams. This murder appears to have been a significant factor in the trial judge’s determination as to Smith’s dangerousness. But Smith’s appeal raises a doubt as to whether he committed murder at all. Since the judge failed to consider the appeal in ruling on the motion for release, he ignored factors which challenge an important premise of his decision. Second, consideration of the appeal is mandated by the basic rationale for permitting release on appeal — the concern that a person may be confined under an erroneous judgment while the appeal is pending. Because of this concern, judges should be more receptive to a motion for release where the movant raises substantial doubt about the validity of his conviction. “[W]here compelling grounds for reversal are to be argued, this court has been especially reluctant to deny release pending appeal.” The D.C.Code provisions do not preclude such consideration. The legislative history indicates that the preference for detention in the code stems from the presumption that a conviction is “correct in law” and that a person who has been sentenced to jail is “dangerous.” Where the appeal raises substantial doubt about the conviction, these presumptions, and the preference for detention, are diminished. “There may be an offsetting consideration where the appellate court can discern that the papers demonstrate . . . that [appellant’s] claims are so substantial as to undercut any presumption that might attach to the verdict and judgment as indicators that he is guilty of the violence charged in the case at bar.” Banks v. United States, 134 U.S.App.D.C. 254, 259, 414 F.2d 1150, 1155 (1969) (Leventhal, J., dissenting.) Obviously the trial judge cannot make this kind of analysis if he fails to review the substantiality of the appeal. III. The problem posed by the trial judge’s decision on Jones’ motion — analysis of the substantiality of the appeal, but failure to consider the likelihood of flight or danger — is that such a failure provides an incomplete record for the appeltate court. Under D.C.Code § 23-1325 (d), this court must make a de novo finding as to the likelihood of reversal in reviewing motions for release. If we should find the appeal does raise a substantial question likely to result in reversal, we will need some information on the risk of flight or danger in order to rule on the motion for release. Where the trial judge makes no finding on this point, remand may be necessary. Such action is inefficient, unnecessary, and, as I said recently in United States v. Stanley, an impermissible infringement on the movant’s personal freedom. IV. For these reasons I believe proper consideration of motions for release under D.C.Code § 23-1325(c) requires analysis of both statutory factors in every case. Applying this analysis to the three motions at hand, I would dispose of them as follows: Smith — Claude L. Smith was convicted of second degree murder and carrying a deadly weapon. The convictions arose out of an argument on July 3, 1971, in which Smith shot and killed Elroy Williams, using a gun he had obtained shortly before from James P. Jarvis. Smith's defense at trial was self-defense; he maintained that he had shot Williams only after Williams lunged at him with a razor. The closest eyewitnesses on this crucial issue were two friends of Smith, Jerome Jackson and Frank Twitty. Both had accompanied Smith to the fatal confrontation with Williams. However, neither was charged by the government or even threatened with charges in connection with the shooting during the nine months between the incident and the trial. At the trial, Jackson testified for the government that Williams did not have a razor when he was shot. Twitty was apparently prepared to testify that Williams did. Before Twitty took the stand, however, the prosecutor met him outside the courtroom and threatened him with prosecution if he testified for the defense. As a result, Twitty exercised his Fifth Amendment privilege and did not testify. The prosecutor maintained that his talk with Twitty was a manifestation of his duty “as an officer of this court” to warn the witness of a potential prosecution. This is a questionable proposition. The language used was apparently more of a threat than a warning; and the prosecutor’s zeal to do his duty did not extend to Jackson, who was apparently given no “warning” before testifying for the prosecution. In effect, the prosecutor made a selective grant of immunity which preserved a significant piece of prosecution testimony but obstructed the defense’s exculpatory proof. “The right to offer the testimony of witnesses . . . is in plain terms the right to present a defense, the right to present the defendant’s version of the facts as well as the prosecution’s to the jury so it may decide where the truth lies.” Washington v. Texas, 388 U.S. 14, 19, 87 S.Ct. 1920, 1923, 18 L.Ed.2d 1019 (1967). The prosecutor’s interference with that right raises a substantial question as to whether he has carried out the duties imposed on him under Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963). Since we have not yet received the government’s brief or heard oral argument in this case, I cannot say with certainty that the prosecutor’s conduct compels a reversal. However, the Fourth and Ninth circuits have held, in somewhat analogous circumstances, that prosecutorial action making witnesses unavailable to the defense constitutes a denial of due process of law. This court has explicitly recognized the difficult problem raised by a selective grant of immunity such as that given here. Thus I believe there is a sufficient question on appeal to meet the statutory requirement for release. As to the likelihood of flight or danger, I note that Smith has extensive family ties in the community; he has been employed by his father, and will continue to be if released; he has a good record of appearance during previous periods of release; and none of his convictions pri- or to this one involved a “dangerous crime” or “crime of violence” under D.C.Code § 23-1331(3) and (4). In light of these factors, and the likelihood of reversal on appeal, and recognizing that the questions raised on appeal tend, in Judge Leventhal’s phrase, to “undercut any presumption that might attach to the verdict and judgment as indicators that he is guilty of the violence charged in the case at bar.” I think Smith’s release on appropriate conditions is justified under the statute. Jarvis — James P. Jarvis, Smith’s co-defendant, was convicted of second degree murder and carrying a deadly weapon. The government’s theory was that Jarvis aided and abetted Smith in the murder of Williams. Obviously the prosecutor’s obstruction of the defense’s case raises the same likelihood of reversal in Jarvis’ appeal that it raises in Smith’s. Although Jarvis has a number of disorderly conduct and other misdemeanor convictions, there is no indication in his record that he would pose a danger to the community if released. Prior to his conviction he ran two businesses in the District of Columbia. His attorney has made impressive arrangements for Jarvis to live and work with his step-father in a stable atmosphere pending the appeal. This evidence, together with the doubt as to Jarvis’ guilt of the present charges, creates a convincing case that Jarvis is not likely to flee or pose a danger if he is released under appropriate conditions. Jones — Wilbur Jones was convicted of manslaughter in the shooting of Garland Shorter. On April 14, 1971, Jones saw Shorter and two other men tampering with a car in front of Jones’ home. Taking a shotgun, Jones went outside and told the three to leave. An argument ensued, and Jones walked back toward the house. When he reached the porch, he turned and fired one shot which killed Shorter. After instructing a child in the house to call the police, Jones fled the scene. He turned himself in to the police about an hour later. Jones’ defense at trial was self-defense; he said that he fired the shot because he had seen Shorter pull a gun. The only eyewitness other than Jones was a twelve-year-old girl. Although she appeared as a government witness, she first testified that Shorter did pull a gun on Jones; under questioning by the prosecutor, she said there was no gun; on further questioning, she reversed and contradicted herself several times. It came out during the questioning that she had given statements prior to the trial to police officers and to a public defender attorney. In one statement, she said Shorter had a gun; in the other she said he did not. Jones contends on appeal that this evidence is not sufficient to meet the government’s burden of eliminating all reasonable doubt to the question of self-defense. United States v. Bush, 135 U.S.App.D.C. 67, 416 F.2d 823 (1969); Kelly v. United States, 124 U.S.App.D.C. 44, 361 F.2d 61 (1966). It is obvious from the trial transcript that this point troubled the trial judge as well; eventually, however, he resolved his doubts in favor of the government and allowed the case to go to the jury. Although I have reached no final view of the matter (the government’s brief has not yet been filed), I believe the trial judge’s decision raises a substantial question. The Bush case, supra, is similar to this one. There, as here, the government could produce only one witness (other than the accused) who saw the shooting. There, as here, the witness testified that the decedent brandished a weapon just before he was shot by the defendant. There, as here, the witness was confronted with a prior statement which “in one respect appeared to be in conflict with his testimony.” On that basis, this court held that the jury could not reasonably have negated the possibility of self defense. “Such a finding must have been based upon speculation, surmise, and the repudiation by the government of the case made by its own witnesses.” 135 U.S.App.D.C. at 69, 416 F.2d at 825. In Jones’ case, the repeated contradictions by an obviously confused and frightened twelve-year-old witness render her testimony all but meaningless. Thus the only evidence the jury had to refute Jones’ version of the shooting was whatever negative inference they might have drawn from the prosecutor’s attacks on Jones’ credibility. Accordingly, there is a substantial question whether the case was sufficient to go to the jury. In a recent narcotics case, this court stated: While it may be that the jury was well within its province in discrediting appellant’s version of what happened, the necessity remains for the Government to have adduced proof adequately supporting the jury’s verdict. The trial judge’s order denying the motion for release indicates that one reason he let the case go to the jury was the evidence that Jones concealed his gun and fled the scene after the shooting. This court has repeatedly noted that flight is an “unreliable indication” which may be “explained by terrorized innocence as well as by a sense of guilt.” Flight evidence is a particularly weak reed in Jones’ case, since he instructed someone to call the police immediately after the incident and turned himself in approximately one hour later. This tenuous corroboration does not seem to eliminate the substantial question concerning the sufficiency of the evidence in this case. There remains the question of the likelihood that Jones will flee or pose a danger if released pending appeal. As stated above, the trial judge made no reference to this question in denying the motion for release. Although in many cases such an omission would require a remand, that is not necessary here. For one thing, there is some information in the record concerning the defendant's residence, employment, and criminal record. More important, the trial transcript indicates that the trial judge permitted Jones to be released pending sentencing. Under D.C.Code 23-1325(b), that ruling required the judge to find “by clear and convincing evidence that the person is not likely to flee or pose a danger to any other person or to the property of others.” This is, of course, precisely the finding required to authorize release pending appeal. In light of this finding by the trial judge, and in light of the substantial doubt raised by the appeal as to Jones’ guilt, I believe his motion for release pending appeal should be granted. . The cases are discussed individually in Part IV of this opinion. . D.C.Code § 23-1324 (b). . 80 Stat. 215 (1966), as amended, 18 D.C. 170, at 174, 469 F.2d 576, at 580 (1972). . United States v. Stanley, 152 U.S.App.D.C. 170, at 174, 469 F.2d 576, at 580 (1972). . 84 Stat. 473 (1970). . See H.R.Rep. No. 91-907, 91st Cong., 2d Sess. 185-87 (1970). . The pertinent subsection provides that a person who has been convicted and sentenced “shall he detained unless the judicial officer finds by clear and convincing evidence that (1) the person is not likely to flee or pose a danger to any other person or to the property of others, and (2) the appeal . . . raises a substantial question of law or fact likely to result in a reversal or an order for a new trial.” D.C.Code § 23-1325 (c). (Emphasis added.) . It was that considerable difference that prompted this court's opinion in United States v. Thompson, 147 U.S.App.D.C. 7, 452 F.2d 1333 (1971). We noted there that thg DU.Code bail provisions single out a “powerless, voteless minority” — the residents of the District of Columbia — for special, and harsher, treatment. Such classification, we said, “must be subjected to the strictest possible review.” Applying that strict scrutiny to Thompson’s motion, we held that a limiting interpretation of the statute was necessary to avoid unconstitutional discrmination. Although Thompson did not concern the situation presented here — application of the D.C.Code bail provision to D.C.Code offenders — that opinion is instructive in this context. In Thompson we recognized that the discrimination imposed by the harsher release conditions may be permissible when Congress is dealing with local crimes unique to D.C. Not all of the offenses in the D.C.Code are uniquely local in character. United States v. Bland, 153 U.S.App.D.C. 254, at 256, note 3, 472 F.2d 1329, at 1331, note 3 (1972) (Statement of Bazelon, C. J.). Acting under its “special maritime and territorial jurisdiction,” Congress has enacted federal statutes covering many of the “street crimes” included in the D.C. Code. To treat a “local” offender more harshly than a “maritime or territorial” offender who has committed a similar offense may constitute the same unjustifiable discrimination that concerned the court in Thompson. Therefore, in cases involving D.C.Code provisions that are substantially similar to U.S.Code offenses, this court may be required to interpret the D.C.Code bail provisions in such a way as to avoid unconstitutional discrimination. . Smith and Jarvis were tried as codefendants ; thus their motions for release were both made to the same judge. . In his “Statement of Reasons Pursuant to Rule 9(b),” the judge did make a generalized statement that he could not recall any “substantial error” in the trial of Smith and Jarvis. He did not deal with any of the specific points of error raised by the appellants. He stated that such a discussion was unnecessary. . The fear is that the defendant will be “unnecessarily incarcerated and separated from his family.” Banks v. United States, 134 U.S.App.D.C. 254, 257, 414 F.2d 1150, 1153 (1969). Cf. Bandy v. United States, 81 S.Ct. 197, 5 D.Ed.2d 218 (Douglas, Circ. Justice, 1960). Although these cases arose under U.S.Code bail provisions, the possibility of unnecessary incarceration exists regardless of the bail statute being applied. . United States v. Long, 137 U.S.App.D.C. 275, 277, 422 F.2d 712, 714 (1970). . H.R.Rep. No. 91-907, 91st Cong., 2d Sess. 186-87 (1970). The report also suggests that detention is favored because of “whatever deterrent effect remains in the criminal law.” Whatever deterrent effect there is can certainly not be protected by incarcerating people who have not been validly convicted. . 152 U.S.App.D.C. 170, 469 F.2d 576 (1972) (dissenting opinion). Stanley involved a motion for release under the U.S. Code, but the delay caused by a remand to complete the record should be avoided regardless of which' statute governs the case. . . Where the trial judge’s decision is not supported by the proceedings below, this court is authorized to remand or to release on recognizance, bond, or conditions. D.C.Code §§ 23-1324(b), 23-1321(a). . D.C.Code § 22-2403. . D.C.Code § 22-3204. . With the jury absent from the courtroom, Twitty was questioned on this by defense counsel and the court: [Defense Counsel] : Do you remember telling me, sir, that you had been told by the Assistant United States Attorney, Mr. Hoffman, in this matter, that if you testified, you were told this yesterday, that if you testified in this case you would be charged with CDW, obstuction of justice, and as a principal in a murder? [Twitty] : You’re right. THE COURT: Did he say you could be, or would be? [Twitty] : Would be. T. 242-43. . Bray v. Peyton, 429 F.2d 500 (4th Cir. 1970). . United States v. Mendez-Rodriguez, 450 F.2d 1 (9th Cir. 1971). . In Earl v. United States, 124 U.S.App.D.C. 77, 361 F.2d 531 (1966), the court held that the government could not be compelled to grant immunity to a defense witness. However, the opinion noted that “We might have quite different, and more difficult, problems had the Government in this case secured testimony from one eyewitness by granting him immunity while declining to seek an immunity grant for [a defense eyewitness] . . . .” The Earl case involved statutory immunity procedures under 18 U.S.C. § 1406 (1964) ; the situation in the present case is analogous, although statutory immunity is not involved. . Banks v. United States, 134 U.S.App.D.C. 254, 259, 414 F.2d 1150, 1153 (1969) (dissenting opinion). . D.C.Code § 22-2403. . D.C.Code § 22-3204. . D.C.Code § 22-2405. . 135 U.S.App.D.C. at 69, 416 F.2d at 825. Apparently, however, the witness in Bush held to his testimony from the stand even when confronted with the prior statement. . United States v. Harling, 150 U.S.App.D.C. 87, 89, 463 F.2d 923, 925 (1972). . United States v. Harris, 140 U.S.App.D.C. 270, 435 F.2d 74, note 48 (1970), citing United States v. Vereen, 139 U.S.App.D.C. 34, 429 F.2d 713 (1970) and Austin v. United States, 134 U.S.App.D.C. 259, 414 F.2d 1155 (1969). . Austin v. United States, supra note 34, 134 U.S.App.D.C. at 261, 414 F.2d at 1157. . Jones is a resident of the District of Columbia; T. 197; he was employed prior to being convicted and again after the conviction while released pending sentencing. Sentencing T. 2. His criminal record consists of “one year he served back in . the early 50’s.” Sentencing T. 2.

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UNITED STATES of America v. Eugene R. FRAZIER, Appellant. No. 23528. United States Court of Appeals, District of Columbia Circuit. Jan. 26, 1973. Ira S. Siegler, Washington, D. C. (appointed by this court) was on the brief for appellant. Thomas A. Flannery, U. S. Atty., at the time the brief was filed, John A. Terry, Thomas C. Green and John O’Brien Clarke, Jr., Asst: U. S. Attys., were on the brief for appellee. Before BAZELON, Chief Judge, and WRIGHT, McGOWAN, TAMM, LEVENTHAL, ROBINSON, MacKINNON, ROBB, and WILKEY, Circuit Judges, sitting en banc. McGOWAN, Circuit Judge: The only issue before the court en banc in this appeal from a conviction of armed robbery (22 D.C.Code § 2901) is whether the District Court erred in its conclusion that, on the evidence before it, the Government had sustained its burden of establishing a knowing waiver by appellant of his right to independent legal assistance after his arrest. Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602,16 L.Ed.2d 694 (1966). When the case was first before a panel of this court, a majority thought that a circumstance appearing in the prosecution’s evidence at trial raised a doubt about the state of appellant’s mind in making the seeming waiver, which warranted a remand for a supplementary inquiry. Frazier v. United States, 136 U. S.App.D.C. 180, 419 F.2d 1161 (1969), Circuit Judge (now Chief Justice) Burger, dissenting. On remand, an evidentiary hearing was held at which the Government presented testimony with respect to appellant’s capacity to understand the proper warning concededly given him; and the District Court made findings of fact from which it concluded that such capacity existed. Although none of these findings were rejected by the panel on its second consideration of the case, a majority reversed the conviction in an opinion issued February 24, 1971, from which Judge Nichols of the United States Court of Claims, sitting by designation, dissented. We granted rehearing en banc because the sharp and persisting differences within the panel suggested that the case, although something of a sport on its facts, might have important implications with respect to judicial definition of the responsibilities of law enforcement officers in the administration of the Miranda rule. On the record made on remand, we sustain the District Court and affirm the conviction. I At the remand hearing, Officer Sandy of the Metropolitan Police Department testified that he had arrested appellant at 4:15 P.M. on September 7, 1966, under the authority of an arrest warrant issued in respect of the robbery of a business establishment known as Mike’s Carry-Out Shop. The arrest was made on the street, and Sandy promptly read to appellant the Miranda warning on a card known as P.D. Form 47. Appellant’s response was to say: “You didn’t have to read it to me in the first place. I already know my rights.” Appellant was then taken to the precinct station where he was searched and booked. Sandy telephoned Detective Keahon of the Robbery Squad at police headquarters — the officer who had procured the issuance of the arrest warrant — to report appellant’s arrest. Keahon asked that appellant be brought to his office, and that was done. Sandy testified that throughout this period he had no further conversation with appellant; and that appellant was completely cooperative, in apparent command of himself, and not under the influence of alcohol or narcotics. And I asked Mr. Frazier: Where did this money come from? From the holdup this morning? He looked at me and said, “You are not going to believe this, but I didn’t hold that lady up.” He said, “I was in that store.” He said that when the guy held them up and he ran out, he said, “I ran out after him.” He said, “He got away.” I asked him, I said, “Did you go back and see the lady, to see if she got hurt? And he said, “No, he got away, 'so I didn’t bother going back.” Detective Keahon testified that appellant was delivered to him at 5:20 P.M. His handcuffs were removed and he sat in a chair at Keahon’s desk. Only one other police officer — engaged in other duties — was in the large Robbery Squad office, and there was no noise or other disturbance that might be distracting or interfere with hearing. After telling appellant of the warrant under which he had been arrested, Keahon read to appellant the P.D. 47 card, and also a P.D. 54 form which states the Miranda warnings and contains a consent to speak. Both forms were given to appellant to read, which he did. He was asked if he understood the warnings, and replied that he did. He was asked specifically if he understood his right to have a lawyer; again the answer was positive, and appellant added that he didn’t want a lawyer. It was further Keahon’s testimony that: “I asked him if he knew that anything he said to us could be or would be used against him in court. And he stated that he did. He said, T know my rights.’ ” Thereafter he signed the P.D. 54 consent form at 5:30 P.M. Keahon testified that, as these procedures were completed, appellant broke in to say: “I want to clear Teddy. Teddy didn’t shoot the woman in that hold-up; I did.” This reference was to a robbery of a High’s Ice Cream store. Thereafter appellant referred in quick succession to certain other robberies, including Mike’s Carry-Out Shop and the Meridian Market. At some point in this colloquy Keahon decided that he should be taking notes of what was being said, and he reached for a pad and pencil. What happened then is described in Keahon’s testimony as follows: A. I started to write. The defendant Frazier said, “No, don’t put anything down.” He said, “Don’t write anything.” Q. How strenuous an objection was that, in your opinion ? A. Well, it wasn’t — to me, it didn’t seem like an objection. He just said, “Don’t write.” So, I didn’t press it at that time. Q. Why? A. Well, he was admitting these hold-ups and I didn’t want to start arguing with him as long as he was talking about hold-ups. And he was apparently being very truthful, because he was telling me things about the hold-ups that I didn’t know. I didn’t want to stop him. So, as soon as he said, “Don’t write,” I stopped writing and pushed the pad and pencil away. There is some confusion in the record as to whether this note-taking incident occurred before or after appellant had told of his participation in the robbery of the Meridian Market. The trial court was at some pains to get this matter cleared up, because Keahon appeared to be testifying on remand that it occurred after the Meridian Market admission, whereas his testimony at trial indicated it had been before. Keahon was asked to refresh his recollection during a recess; and his final testimony on this point is as follows: Q. Lt. Keahon, during the noon recess did you have an opportunity to read from certain portions of the original trial transcript in this regard? A. Yes, sir. Q. And has that refreshed your recollection as to the events which took place in the afternoon of September 6, 1966? A. Yes, sir. Q. September 7, excuse me. Going back to those events, sir, will you tell us at what point in your interview with the defendant, Mr. Frazier, did he request that you not write anything down? A. It was when he started mentioning the High Store hold-up, after he was advised of his rights and after I had read him the arrest warrant about the robbery-hold-up that he was charged with under the warrant of Mike’s Carry-Out Shop. Q. Well, after you read to him P.D. Form 47 and after he had executed the Form 54, what was the first topic of conversation? A. Well, I started talking to him about the Mike’s Carry-Out Shop hold-up. Q. At that point had you reached for a pad and pencil ? A. No, not at that time. Q. Had the defendant said anything to you about refraining from taking notes at that time ? A. No, not at that time. Q. Tell us, then, just what happened ? A. Well, it was after that. I don’t know the exact conversation, but I was talking to him about Mike’s Carry-Out. He did mention something about that afternoon. And then he started saying, “Well, I don’t care,” something to that effect, and he started into the High’s Store hold-up, where he said Teddy was involved and Teddy didn’t shoot the woman; “I shot the woman.” At that time was when I did reach for the pad and started to take notes. At that time he stated he didn’t want any notes taken. He said, “Don’t write anything down,” something to that effect. THE COURT: Was this before he mentioned anything about the Meridian Market? THE WITNESS: Yes, I believe it was. Detective Keahon testified that, in all, appellant told of several hold-ups and of one occasion on which he had shot his roommate. The woman who had been shot in the High’s Store robbery was brought down to the office, and appellant reenacted the incident in such a way that he convinced her that he was her assailant and not one Teddy Moore who was being held for that robbery. A victim of one of the other robberies recounted by appellant also identified him, aided by appellant’s volunteered recital of the events of that robbery. The interview ended around 7:30 P.M. Keahon testified that appellant had been not only cooperative but coherent, with no signs of emotional disturbance or physical discomfort of any kind. At the end, as indicated by Keahon’s testimony set forth in the margin, appellant rejected a suggestion that he write out, or sign a written version, of what he had said. Keahon was present the next morning when appellant was taken before the United States Commissioner on the Mike’s Carry-Out charge. Keahon testified — and the record of that proceeding recites — that, after full advice as to his rights, appellant “stated that he wanted a hearing now — that he wanted to get it over with and that he did not want a lawyer — of own choice or Legal Aid.” Commissioner Wertleb testified that his notes of that appearance showed that appellant “stated affirmatively that he did not want any lawyer.” A third police witness presented by the Government was Officer Durkey. He testified that on March 23, 1966, he had arrested appellant on a charge of assault with a gun, and that he had then both read to appellant a P.D. 47 card and given him a copy of it to keep. Aside from saying that he had not been in possession of the gun, appellant made no further response to the giving of these warnings. The Government’s first witness at the remand hearing was Dr. Stammeyer, a clinical psychologist on the staff of St. Elizabeths. Testifying from the records compiled by St. Elizabeths at the time appellant was committed for a mental examination on December 8, 1966, in the Mike’s Carry-Out case, Dr. Stammeyer testified that appellant was “a man of at least low average native abilities,” or “possibly even somewhat higher.” He said that there was “no indication of any significant impairment that would significantly interfere with his perception;” and no evidence was found of “any organic brain pathology or any acute emotional problems at that time, that would significantly interfere with his intellectual functioning.” The warnings in P.D. 47 were read to the witness, and he stated his opinion to be that appellant unquestionably “could understand and appreciate and comprehend” their meaning. On cross-examination, Dr. Stammeyer reported that, although he had agreed with the St. Elizabeths finding that appellant was competent to stand trial, he personally had not shared the view that appellant was without mental disorder. He characterized that disorder as a passive aggressive personality, contributed to by an unsatisfactory life pattern, perhaps due in some part to recurrent medical problems, including sickle cell anemia. Although pressed closely by defense counsel in the light of these disclosures to modify his earlier opinion as to appellant’s ability to understand the warnings given him, Dr. Stammeyer’s final conclusion was that “on the basis of what I know about this man, my reviewing the psychological examination and going over the record and having participated in the staff conference, I see no reason to believe that he could not fully comprehend, did not have the capability and competency to fully comprehend that statement read to him.” The defense offered no evidence at the remand hearing. Appellant’s counsel stated on the record that he would place appellant on the stand if the inquiry could be limited to “what his mental attitude was at the time of the alleged confession and not go into the elements of the confession or the elements of the crime.” The court indicated its doubt that such matters would be relevant in any event, but, even if they came out, the court represented its understanding of the law to be that such testimony could never be used against appellant in a trial of guilt or innocence. Although defense counsel appeared to accept this representation, after consulting with his client he reported that appellant did not desire to testify. The District Court found as facts that appellant had adequately and repeatedly been exposed to the requisite Miranda warnings; he was not under the influence of alcohol or narcotics at the time of his arrest; the noise level in the Robbery Squad room was not such as to interfere with his capacity to hear; the warnings unmistakably gave notice that what one says, as distinct from what one writes or signs, can and will be used in court; appellant’s mental abilities were such as to enable him to comprehend this meaning; and appellant was in no way subjected to involuntary or forced extraction of evidence. The court characterized appellant’s admissions as having “gushed out after numerous warnings, apparently starting with an effort by [appellant] to clear a friend of his from a crime that ... he committed and his friend had not, and then continued to these other crimes, which he, apparently, decided that once he had started, he might as well make a clean breast of.” Under these circumstances, concluded the court, there could be no question of the knowing and intentional nature of appellant’s purpose to forego rights available to him. In the panel opinion ordering remand, it was said (at p. 1169 of 419 F.2d): “. . . Appellant’s ban on note-taking inveighs against intelligent waiver, but this inference might be overcome, for example, if Sergeant Keahon admonished him that even an oral confession would be used against him, and appellant replied that he knew that but still did not want anything written down. Absent some additional evidence, comparable in quality, of understanding waiver, however, his confession cannot stand . . . ” (Emphasis supplied.) In his oral argument to the court for reversal at the close of the remand hearing, appellant’s counsel contented himself with simply saying that, since there was no evidence adduced that Keahon had supplemented the written warnings in the manner referred to by the panel, the Government had “failed to carry the heavy burden the Court of Appeals has placed on its shoulders. . . .” The burden which the Government had to carry on remand was, however, one that was placed upon it by the Supreme Court in Miranda, and not by this court. As the Supreme Court put it, an arrested person must be adequately apprised that “anything said can and will be used against the individual in court.” 384 U.S. at 469, 86 S.Ct. at 1625, 16 L.Ed.2d 694. And the Government’s burden of proof includes, in addition to the fact of such a warning a showing — if the issue is raised — -that the person warned was capable of understanding it. There was no question in this case as to the fact of warning. The concern which prompted the panel to remand was capacity — the state of appellant’s mind and understanding with respect to the terms of the warning. Its opinion indicated that there should be further evidence taken which would shed light on this question; and we, unlike appellant, do not read that opinion as saying that, unless Detective Keahon testified that he had elaborated on the language of the formal warnings by putting a legal gloss upon it, the Government must fail no matter what other evidence was forthcoming. At the remand hearing, the Government addressed itself to this task. Its principal witness in this regard was Dr. Stammeyer, who testified as an expert witness on the precise question of whether appellant had the capacity to understand the meaning of the warnings as given. That testimony was unrebutted, and the District Court surely committed no error in finding from it that appellant possessed such capacity. But even where capacity exists, it is sometimes true that understanding can be faulty or mistaken. Although fully able to understand the plain words of the warning, it may have been that appellant, through some quirk of misinformation or otherwise, did not take them at their face value. On this issue, of course, there was only one witness who could be useful— and this was appellant himself. It seems most unlikely that any member of the remanding panel thought other than that appellant would be a critically important witness on the remand hearing. In its opinion the panel majority was at some pains to remark that “ [Ajppellant, of course, may wish to testify at that hearing,” adding citations of Simmons v. United States, 390 U.S. 377, 389-394, 88 S.Ct. 967, 19 L.Ed.2d 1247 (1968), and Bailey v. United States, 128 U.S.App.D.C. 354, 389 F.2d 305 (1967), for the obvious purpose of reassuring appellant that nothing he said in that testimony could be used against him to prove the commission of criminal offenses. As it turned out, appellant chose not to testify, leaving the court with no direct evidence from appellant himself as to why he had asked that his statements not be noted down. Confronted with a similar situation in which an appellant failed to testify in a hearing on whether he had waived his Miranda, rights after warning, United States v. Hayes, 385 F. 2d 375 (1967), cert, denied, 390 U.S. 1006, 88 S.Ct. 1250, 20 L.Ed.2d 106 (1968), the Fourth Circuit, speaking through Judge Sobeloff, said (at p. 378): ’ “ . . . [Appellant] produced no witnesses putting in question his apparent intellectual endowments. Moreover, it is noteworthy that at no stage in the proceedings has the appellant ever denied that he understood the warnings given him, and while a defendant does not have the obligation to testify himself or to offer testimony, a court cannot supply evidence that is lacking . . . ” So here, appellant has never asserted that he misunderstood or misinterpreted the words of warning. When given the opportunity to do so, under the protections of the remand hearing, he failed to take it. Contrarily, the evidence that was before the District Court supported a finding of his capacity to understand, as well as an absence of any coercive or confusing influences in his communications with the police. Under these circumstances, we do not see how the District Court can be faulted for its conclusion that the Government has sustained its burden of establishing a knowing and voluntary waiver. In its consideration of the case after remand, a majority of the panel appeared to be of the view that, since Keahon failed to expand his testimony to include a statement that he had in fact explained to appellant that the legal rules governing the admissibility of evidence do not distinguish between oral and written confessions, there was, within the meaning of the remand opinion, no “additional evidence” relevant to waiver forthcoming. Further, the majority appears to have concluded that, absent such testimony, an element of coerciveness or at least unfair treatment by the police has entered the picture. We think, contrarily, that Dr. Stammeyer’s testimony was a highly significant and obviously relevant piece of “additional evidence,” basing as it did a finding that appellant had the capacity to comprehend the warnings as they were given to him. That finding, certainly in the absence of testimony from appellant, remits to sheer speculation the reason why appellant spoke as he did with relation to note-taking. We do not think the District Court was required to speculate about it, nor do we. What is clear is that the interpretation which the panel majority insists in placing upon it is simply one of several speculative hypotheses which might be indulged in, by no means all of which are incompatible with a legally sufficient waiver. Neither do we think that this conviction should be reversed on any theory that appellant was so shabbily dealt with by the police that emanations from the Due Process Clause point towards that result. It appears clearly from the record that appellant had already confessed his most serious crime (the armed robbery of a High’s Store in which he shot a female employee) before the note-taking episode occurred. From Detective Keahon’s standpoint, the procession of admissions which began to follow were of primary interest as clearing the police records, but of secondary importance in terms of appellant’s having voluntarily put himself in the toils of the law. Keahon’s purpose in reaching for pencil and paper was, as he testified, simply to keep track of what was pouring from appellant’s mouth on the heels of the High’s Store confession. Had the interview been stopped when appellant objected to the note-taking, the utility of that confession would not have been affected. Thus, it does not seem to us that there can be any suggestion that Keahon was deliberately luring appellant into the deeper and more dangerous waters of criminal admissions. Appellant had already taken that plunge. Moreover, we remind that one of the purposes of Miranda was to introduce into the post-arrest period more regularized procedures, eliminating the high degree of informality and variability which contributed heavily to the evils of stationhouse interrogation. Witness the care with which the Supreme Court spelled out the precise character of the words of warning to be given, and the wide extent to which law enforcement authorities have embodied such warnings in hetec verba on printed cards to be used by arresting officers. We doubt that the warmest friends of Miranda wish to see a return to the days when such officers, although not lawyers themselves, were free with legal advice to their prisoners. It was not for Keahon to place a legal interpretation on the language of Miranda warnings he was directed to give, and to continue or to suspend the interview in accordance with what that interpretation might be. He had given the warnings as required; appellant had signified his understanding and his wish to talk without a lawyer present; appellant had indeed already confessed a most serious crime before he objected to Keahon’s starting to take notes. We cannot see how, under these circumstances, Keahon’s allowing appellant to pursue his evident desire to keep on talking was either an unreasonable or deceptive tactic on Keahon’s part, falling short of those concepts of ordered liberty which are at the core of the concept of due process. Wise administration of the waiver of the Miranda rule is, of course, of central importance to the continued health of the rule itself, which was promulgated upon the explicit premise that it could be validly waived. When the police have, as here, faithfully followed the exact procedure prescribed by the Supreme Court, inferior courts should be slow to mandate, after the fact, enlarged responsibilities alien to the duties and the training of policemen. In any event, we see no basis in the record before us for overturning the District Court’s resolution of the issue entrusted to it upon remand. Affirmed. BAZELON, Chief Judge (dissenting): I dissent from the decision of the court today because it seems to me manifestly in error, but I am also concerned about the circumstances under which this decision has been rendered. I At issue in this case is the admissibility of certain statements made by Frazier during the course of police interrogation. It is undisputed that Frazier was advised of his rights under Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966), prior to the onset of the interrogation. And it is also agreed that he signed a written statement waiving the protection of those rights. But as soon as the interrogating officer attempted to take written notes on Frazier’s statements, Frazier refused to continue. However, when the officer ceased making contemporaneous notes, Frazier did make further statements. The confession at issue here was made during the latter period and involved a crime not discussed before the notetaking incident. The question in this case is whether, on the unusual facts presented, the government met its “heavy burden” of proving that the waiver was knowing and intelligent. When the case first reached this court, a panel concluded that Frazier’s unwillingness to have his statements recorded in writing may have signalled a mistaken assumption on his part that only written statements could be used against him. Frazier v. United States, 136 U.S.App.D.C. 180, 419 F.2d 1161 (1969). We therefore remanded the case to the trial court to afford the government an opportunity to meet its burden of showing a knowing and intelligent waiver by demonstrating, for example, that Frazier had been admonished that “even an oral confession would be used against him and [that he] replied that he knew that but still did not want anything written down.” However, on remand, the police interrogator stated why he did not admonish Frazier: “I didn’t want to start arguing with [appellant] as long as he was talking about hold-ups. . . . [H]e was telling me things about hold-ups that I didn’t know. I didn’t want to stop him. So, as soon as he said, ‘Don’t write,’ I stopped writing and pushed the pad away.” Thus the interrogator, with commendable candor, made absolutely clear that because he was aware of the appellant’s misunderstanding he elected not to risk any clarification for fear appellant would stop talking. Moreover, it is of critical importance that the trial court’s findings did not indicate the court had even considered the significance of Frazier’s ban on notetaking. Accordingly, when the case returned to this court for the second time, we held that the government had not met its burden of proving that Frazier’s statements were the product of a knowing and intelligent waiver, and we held the statements inadmissible. It is that decision which has now béen overturned by the court en banc. The purpose of the Miranda warnings is to convey information to the suspect. Plainly, one who is told something he does not understand is no better off than one who is told nothing at all. Without full understanding, the warnings are simply a “preliminary ritual.” The majority today concedes that Frazier may not have understood the warnings before he made his confession. But the court finds, nonetheless, that the government can meet its burden — and has met it here — by offering proof that the warnings have been given and by making “a showing — if the issue is raised — that the person warned was capable of understanding” the warnings. Majority opinion at 896 supra. Of course, the problem posed by this case would not exist if the warnings were so clear that no one possessing even minimal intelligence could possibly misunderstand them. But capacity to understand the warnings does not by any means guarantee that they will actually be understood. The available empirical evidence clearly indicates that many, if not most, defendants do not understand the warnings, even where the defendants are intelligent and well educated. The likelihood of understanding is necessarily reduced where, as here, the 28-year old defendant has been afflicted with sickle cell anemia for many years and used narcotic drugs to mitigate his pain. That is not to say, however, that Miranda requires an inquiry in every case into the special capacity to understand the warnings. If that were the case, the government could validly contend that the panel decision “forces the police to become mind-readers and then blames them if they guess wrong.” In fact, the government’s contention rests on a complete misunderstanding of the panel opinion. Miranda was designed as a prophylactic rule for the precise purpose of avoiding the morass into which the courts had previously slipped by attempting to judge, after the fact, — and from the inevitable swearing contest between the police and the accused as to what transpired — the precise subjective state of mind of every defendant whose confession was challenged as involuntary. In the usual case a written waiver obtained without coercion after a full and accurate explanation of the meaning of the rights and the consequences of waiving them is sufficient to meet the government’s burden regardless of any subsequent claim that the suspect did not understand what he was told. But where, at the time of the interrogation, the suspect says or does something sufficient to put a reasonable man on notice that the warnings may not have been understood even though a waiver was signed, the interrogation must stop until the matter has been clarified or all statements elicited thereafter will be inadmissible. The panel concluded that a reasonable police officer would have determined on the basis of Frazier’s objective behavior that he may not have grasped the meaning of the warnings. Far from requiring the police officer to read Frazier’s mind, our earlier decision required only that the officer clear up a possible misunderstanding that would have been apparent to any reasonable observer — as it was to the police interrogator here. II That the court should today carve out a highly damaging exception to a fundamental principle of Miranda is disquieting enough. But the court’s en banc decision here is disturbing in another regard. The panel decision in this case occasioned substantial, hostile comment in the news media. Plainly, widespread criticism of a decision is neither a cause for alarm nor a reason to insulate the decision from re-examination. What makes this case exceptional is that the nation’s highest law enforcement officer, the then Attorney General, saw fit to lash out publicly at the panel decision while the government’s petition for rehearing en banc was pending before the court. In a speech delivered to the National District Attorneys Association, the Attorney General singled it out as “Case No. 1” in his explanation of what he unfortunately sees as the “public’s los[s of] confidence in the ability of the courts to dispense justice.” I had understood that the Department of Justice’s professed policy was, wisely, to refrain from comment on pending cases and to make its argument in court. The Attorney General’s deviation from that sensible rule clearly endangers the integrity of the judicial process. In an appeal from a contempt conviction of a defense counsel for his public comments on a pending case, Mr. Justice Frankfurter issued the following warning: If the prosecutor in this case had felt hampered by some of the rulings of the trial judge, and had assailed the judge for such rulings at a mass meeting, and a conviction had followed, is it thinkable that this Court would have found that such conduct by the prosecutor was a constitutionally protected exercise of his freedom of speech, or, indeed, would have allowed the conviction to stand ? -X1 •X- •X* -X- -X- •X* The delicate scales of justice ought not to be willfully agitated from without by any of the participants responsible for the fair conduct of the trial. Circuit Judges J. SKELLY WRIGHT and SPOTTSWOOD W. ROBINSON, III, concur in Part I of this dissent and in the panel’s majority opinion attached hereto as an appendix. APPENDIX Opinions issued February 24, 1971, and vacated on September 24, 1971, by the Court en banc: Before BAZELON, Chief Judge, and ROBINSON, Circuit Judge, and NICHOLS, Judge, United States Court of Claims. BAZELON, Chief Judge: The sole question before us is the admissibility of certain statements made by appellant Frazier to a police interrogator. In an earlier appeal, we found strong indications in the record that appellant did not “knowingly and intelligently” waive his constitutional privilege against self-incrimination, and consequently that his statements were inadmissible under Miranda v. Arizona. Appellant had initially agreed to speak to the police interrogator, but he refused to continue if the officer took written notes. This refusal, we said, “inveighs against intelligent waiver,” but we remanded for a hearing specifically to afford the Government an opportunity to present evidence that the waiver was valid. On remand, the District Judge found a valid waiver, but we disagree. We think it plain that the Government did not discharge the “heavy burden” imposed by Miranda of establishing that appellant knowingly and intelligently waived his fifth Amendment rights. I At the remand hearing the Government introduced evidence showing the following facts. Appellant was arrested about 4:15 on the afternoon of September 7, 1966, on a ■ warrant for the robbery of Mike’s Carry Out. Appellant was advised of his rights, and taken to the Robbery Squad office, arriving, after processing, at about 5:20 p. m. Detective Sergeant Keahon read the Miranda warnings to appellant and gave him a copy of the warnings, which he read. The Sergeant then read to appellant a “Consent to Speak” form, which appellant read and signed at 5:30 p. m. Appellant, a man of at least low average mentality, told the officer that he understood his rights and that he did not want a lawyer. He was not distracted in any way while being given the warnings. Sergeant Keahon then started to ask appellant about the Mike’s Carry Out robbery, but appellant interrupted him to admit a robbery and shooting at High’s Market. According to the Sergeant, appellant said he was admitting this crime in order to clear another person who had already been charged with it. The officer reached for a pad and pencil to transcribe the confession. Appellant, however, said: “Don’t write anything down. I will tell you about this but I don’t want you to write anything down.” Sergeant Keahon put down the pad and said nothing. Appellant continued his description of the High’s Market episode, touched briefly on another crime, and then, about five minutes after he had barred transcription of his statements, admitted the Meridian Market robbery, the crime which underlies this conviction. A little while later appellant re-enacted the High’s Market robbery for the benefit of several witnesses who were unable to identify him by sight. The questioning ended at about 7:30 p. m. when appellant said: “That’s it; that’s all I know and that’s all I am going to tell you.” Sergeant Keahon then asked appellant to write out a statement himself or to sign a typewritten summary of his confession. Appellant refused, saying: “No, I’m not going to sign anything.” He was then taken to his cell. Throughout the entire investigation appellant cooperated with the police and was treated with courtesy by them. II The trial court concluded that the Government carried its “heavy burden” of establishing that appellant validly waived his privilege against self-incrimination. Since that conclusion was based on the uncontroverted facts in the record, and not on an assessment of the credibility of witnesses, it is settled that we are in as good a position as the District Judge to determine the effect of that evidence. It is highly significant in this connection that the District Judge gave no express consideration to the effect of appellant’s refusal to permit his statements to be reduced to writing, despite our emphasis on the point in our prior opinion. In our view, the evidence introduced by the Government cannot support the conclusion that appellant knowingly and intelligently waived his Fifth Amendment rights. Miranda teaches that after the warnings have been given, “the accused is entitled to the assistance of counsel before he is questioned and, in effect, that any confession he makes while in exclusive police custody prior to arraignment is presumptively inadmissible . . . . ” When the police continue to question a suspect in the absence of counsel a confession “can stand if, but only if, the accused affirmatively and under standingly waives his rights.” In order for a waiver to be effective, the accused must realize the consequences of his act — in particular he must understand that anything he says can and will be used against him in court. “It is only through an awareness of these consequences that there can be any assurance of real understanding and intelligent exercise of the privilege.” Furthermore, “a heavy burden rests on the government to demonstrate that the defendant knowingly and intelligently waived his privilege against self-incrimination.” A determination whether the accused made a valid waiver requires the court to examine “the particular facts and circumstances surrounding [the] case,” We said in the prior appeal that appellant’s ban on note-taking creates “[t]he strong implication that appellant thought his confession could not be used against him so long as nothing was committed to writing.” We said that this implication might be overcome, for example, [by evidence that] Sergeant Keahon admonished [appellant] that even an oral confession would be used against him, and [that] appellant replied that he knew that but still did not want anything written down. But we added: Absent some additional evidence, comparable in quality, of understanding waiver, however, his confession cannot stand. No such evidence was forthcoming. The record makes it crystal clear that the officers failed to correct appellant’s apparent misunderstanding — by explaining to him that an oral confession was as damaging as a written one — because they were afraid he would stop talking. Sergeant Keahon stated with commendable candor that I didn’t want to start arguing with [appellant] as long as he was talking about hold-ups. . . . [H]e was telling me things about hold-ups that I didn’t know. I didn’t- want to stop him. So, as soon as he said, “Don’t write,” I stopped writing and pushed the pad away. The Government says that it discharged its “heavy burden” by evidence that appellant was not interrogated in an oppressive manner nor subjected to physical or psychological coercion; and that he was given the warnings several times, said he understood them, and had sufficient mental capacity to understand them. Absent appellant’s ban on note-taking “[t]here [would indeed be] nothing in the surrounding circumstances peculiarly susceptible to the interpretation that appellant misapprehended what the officers said he was told.” But appellant attached a peculiar condition to his consent to speak, a condition that should have alerted the officers to the possibility of a misunderstanding. He may well have thought that the Government could make no use of an oral statement in court, and -there is no evidence that he was otherwise informed by the ' officers, by prior experience, by education, or otherwise. The Government contends that appellant’s ban on note-taking does not necessarily mean that appellant failed to understand the consequences of an oral confession. Appellant, says the Government, “may have reasoned that if he ever decided to recant his decision to talk, he could . . . deny he said anything [,] and it would then be his word against that of the police [in court].” At best, however, this speculation fits the facts only as well as any number of conceivable explanations. For example, appellant might have thought that by barring transcription of his statements he could clear a friend who had been charged with a crime while at the same time preventing the police from using his confession against him. In any event, this sort of speculation cannot meet the Government’s burden — established by ruling case law as well as the law of this case as set down on the prior appeal — of rebutting with affirmative and convincing evidence the inference that appellant did not validly waive his Fifth Amendment privilege. Ill The plain rule of Miranda requires us to reverse this conviction. The Supreme Court has often stated that a waiver of the right against self-incrimination is ineffective if there is any doubt that it was made with full understanding of the consequences. Since there is ample reason to doubt appellant’s understanding here, it was improper for the police officers to receive his statement, and error for the trial court to admit it. It is not our role to question the plain teaching of Miranda. But were we to do so, we would be compelled to conclude that the Miranda rule reflects a principle fundamental to a democratic society. The Fifth Amendment protects all persons ; it ensures that no individual need incriminate himself “unless he chooses to speak in the unfettered exercise of his own will.” Miranda is designed to make that protection meaningful for the man who has neither the education, the experience, nor the counsel that would enable him to -make an informed decision. Far from being a mere technicality, it touches the heart of a system of justice that purports to treat all of its citizens equally under the law. If we were to uphold this confession, then Miranda would indeed become “a preliminary ritual.” For the forms of Miranda were satisfied here: the officer read the warnings, and the suspect purported to waive his rights. But Miranda requires more of the interrogating officers. It requires them not only to recite the warnings, but also to be certain before questioning the accused that he understands his rights, realizes the consequences of speaking, and intelligently and voluntarily waives his privilege of silence. Where the police officers are dealing with ill-educated and uncounselled suspects, they have a special obligation to be alert for signs of misunderstanding or confusion. Here the officers had ample reason to doubt that the accused understood the warnings. Yet they took no further steps— such as admonishing- appellant that even an oral confession would be used against him in court, or halting the questioning until a lawyer could be obtained — to bring the warnings home to him in terms he could clearly comprehend. We recognize that we are vulnerable to the old criticism that criminals should not go free for the constable’s blunder. But the error involved in this case is no ordinary blunder. It is an egregious failure to observe a basic constitutional requirement. When we are ready to overlook errors of this type, we will have abandoned once and for all the effort to extend the same quality of justice to all persons, the ignorant as well as the educated, the poor as well as the rich. Reversed. . This offense, committed on July 26, 1966, is not the source of the appeal before us, which involves rather the robbery of the Meridian Market on August 24, 1966. Appellant, initially pleaded not guilty to the crime for which he was arrested, and ultimately went to trial on that charge after having been committed to St. Elizabeths for a mental examination, which found him competent to stand trial and free of mental disease. Before the trial was finished, however, appellant sought to substitute a plea of guilty and was given leave to do so. He was sentenced to a term of two to seven years, running concurrently with the sentence of five to fifteen years imposed in this case. That judgment has not been appealed. . Officer McGinnis, who was on patrol with Sandy at the time of the arrest, testified to the same effect. He added that, after the search at the precinct station which turned up $103.00 on appellant’s person, and while Sandy was telephoning Keahon, he [McGinnis] had the following interchange with appellant with relation to still another robbery which had occurred that morning: . P.D. 47 and P.D. 54 contain the same language of warning and advice of rights; and there is no issue raised as to the responsiveness of that language to the Miranda requirements. The warnings included these statements relevant to the issue which is raised on this appeal: “You have the right to remain silent. You are not required to say anything to us at any time or to answer any questions. “Anything you say can be used against you in court. “You have the right to talk to a lawyer for advice before we question you and have him with you during questioning. “If you cannot afford a lawyer and want one, a lawyer will be provided for you.” . Q. Did you make a second effort to prepare the written statement about these events ? A. After he had finished and told us in the Robbery Squad Office, he finished and said, “That’s it; that’s all I know and that’s all I’m going to tell you.” I asked him, I said, “Will you give us a statement in your own handwriting, or will you repeat what you have told me and I will put it in the form of a statement, in a typewritten statement, and would you sign it?” 1-Ie said, “No.” He said, “I’m not going to sign anything.” Then I said, “AVell, from what you have told me, I am going to write it up. AVill you read it and sign it?” And he said, “No, I’m not going to sign anything at all.” Q. Did he ever indicate that he did not want to tell you everything, though? A. No, sir. Q. Now, did there come a time that you reduced the substance of this conversation to writing? A. Yes. Q. When was that? A. Well, I reduced some of it into writing that night before I went home. I was working the 8:00 A.M. to 4:00 tour of duty. I reduced it briefly into writing for the benefit of my superior, Inspector Sullivan, so that he would have a brief summary of what took place on his desk when he came into work in the morning. . This approach had been foreshadowed at the very beginning of the remand hearing. When Dr. Stammeyer was presented as a witness, appellant’s counsel objected to his testifying on the ground that expert testimony as to the appellant’s capacity to comprehend would be relevant only to a defense of not guilty by reason of insanity. The following colloquy between court and counsel is indicative of the fact that counsel apparently believed that the only purpose of the remand inquiry was to determine whether Sergeant Keahon had made a further admonition of the kind referred to by the panel and that, if the Government could not prove that he had, reversal must ensue: THE COURT: You surely interpose the defense of being unable to comprehend or understand? MR. O’MALLEY: I disagree. THE COURT: If you do not, the Court of Appeals did. MR. O’MALLEY: I would object to the introduction of this testimony. THE COURT: I will admit it. . In United States v. McNeil, 140 U.S.App.D.C. 3, 433 F.2d 1109 (1969), the defendant testified at a pretrial suppression hearing that he had not, contrary to the arresting officer’s testimony, been given the requisite Miranda warnings at the time of his arrest. Both the police officer and defendant also testified at that hearing that the latter, after arrival at the stationhouse, refused to sign a form acknowledging that he understood the warnings. At trial, counsel renewed the motion to suppress, asserting that defendant’s refusal to sign the form indicated that he did not understand the warnings. The District Court’s rejection of that argument was affirmed by this court upon appeal. In doing so, this court stressed the fact that appellant had testified at the pretrial suppression hearing, and that “the judge could accept at face value appellant’s own testimony at the hearing that he did not sign the acknowledgement form, not for any stated reason that he did not understand the warnings, but simply because he was adverse to signing anything at all . . .” See also Pettyjohn v. United States, 136 U.S.App.D.C. 69, 419 F.2d 651 (1969), cert. denied, 397 U.S. 1058, 90 S.Ct. 1383, 25 L.Ed. 2d 676 (1970), where appellant’s testimony that he had refused to sign anything was urged as establishing his lack of understanding of the warnings. This court was not persuaded by that contention. . In McNeil, note 6 supra, this court said that “one can readily envision reasons for a declination to sign an acknowledgment of warnings that are entirely unrelated to an understanding of the warnings.” And see Judge Nichols’s dissent in this ease from the panel’s decision after remand. . “Confessions,” said the Supreme Court in Miranda,, “remain a proper element in law enforcement;.” and any statement “given freely and voluntarily without any cornpelling influences is, of course, admissible in evidence . . . ” P. 478 of 384 U.S., p. 1630 of 86 S.Ct. . The panel opinion in this case is reproduced as an Appendix to this opinion. . Miranda v. Arizona, 384 U.S. 436, 476, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966). . The authors of an extensive field study of the implementation of Miranda in this jurisdiction concluded: The ratings indicated that 15 per cent of the 85 “post-Miranda defendants” failed to understand the right to silence warning, 18 per cent failed to understand the warning of the right to presence of counsel, and 24 per cent failed to understand the warnings of the right to appointed counsel. Medalie, Zeitz & Alexander, Custodial Interrogation in Our Nation’s Capital: The Attempt to Implement Miranda, 66 Mich.L.Rev. 1347, 1375 (1969). The authors also considered the possibility of methodological bias in their study. Their conclusion was that “if anything, our results underestimate the defendants’ rate of misunderstanding of the warnings.” Id. at 1374 n. 101. In another article based on the same data, different methods of analysis led to the same conclusion. Zeitz, Medalie & Alexander, Anomie, Powerlessness and Police Interrogation, 60 J.Crim.L.C. & P.S. 314 (1969); see Note, Interrogations in New Haven: The Impact of Miranda, 76 Yale L.J. 1519 (1967). . The Supreme Court recently reversed the perjury conviction of a well-known movie producer arising from his unresponsive and misleading answer to a question about Swiss bank accounts. Chief Justice Burger, writing for a unanimous Court, observed that: [u]nder the pressures and tensions of interrogation, it is not uncommon for the most earnest of witnesses to give answers which are not entirely responsive. Sometimes a witness does not understand the question, or may in an excess of caution or apprehension read too much or too little into it. Bronston v. United States, 410 U.S. 352, 93 S.Ct. 595, 34 L.Ed.2d 568 (1973). The Court went on to observe that where an interrogating lawyer is confronted with such a possible misunderstanding: . . . the examiner’s awareness of unresponsiveness should lead . him to press another question or reframe his initial question with greater precision. Id. The juxtaposition of that decision with this one might cause some confusion about the meaning of the principle “Equal justice under law”. If the courts recognize the “pressures and tensions” on a prominent and prosperous professional man who is undergoing interrogation, they should be at least as solicitous when the person under interrogation is a poorly educated and downtrodden individual such as Frazier. If courts are going to require interrogators to display precision and ' caution in questioning Samuel Bronston, as a predicate to a perjury conviction, we should be at least as demanding of those questioning Eugene Frazier, as a precondition to a waiver of his constitutional rights. I recognize that the danger of misunderstanding arises in different contexts in the two eases. But just as Miranda prohibits a judge from speculating about the validity of a waiver, so Bronston prohibits a jury from “conjecture”. The central concern of both is the heavy responsibility imposed on the government when it seeks to use self-incriminatory information solicited from a defendant. The concern for the individual reflected in the Bronston opinion should be dispositive in this case as well. . This information appeared in a report submitted to the district court by St. Elizabeths Hospital on Feb. 8, 1967. . The Miranda rule leaves no room or occasion for choosing to believe either a defendant’s naked assertion that he did not understand the warnings, or the interrogator’s naked assertion that he believed the defendant had understood. . I do not suggest that any judge of this court was moved by the Attorney General’s remark to vote for rehearing en tono or reversal on the merits. The vote for rehearing was completed on April 15, 1971, long before the Attorney General’s speech on June 9, 1971. The order granting rehearing en tone was issued after the speech, however, and the case has been under consideration by this court since then. We cannot expect that our knowledge that we did not bow to external pressure is known either to the appellant or to the public. Therefore, that we did not bow does not make any less substantial the damage to the public confidence in the integrity of our decision-making process. . Since the Attorney General and his aides saw fit to refer to this case so critically and specifically, it must be presumed they were aware that the Department of Justice had filed a petition for rehearing that was still before the court. . In re Sawyer, 360 U.S. 622, 666-667, 79 S.Ct. 1376, 1398, 3 L.Ed.2d 1473 (1959) (Frankfurter, J., dissenting). Sitting by designation pursuant to Title 28, U.S.Code, Section 293(a). . Appellant was convicted of robbing the Meridian Market, and sentenced to a term of 5 to 15 years, see D.C.Code § 22-2901. . Frazier v. United States, 136 U.S.App.D.C. 180, 419 F.2d 1161 (1969). . 384 U.S. 436, 475, 86 S.Ct. 1602, 16 L.Ed. 2d 694 (1966). . Appellant offered no evidence at the remand hearing. Appellant’s failure to testify may have been the result of confusion on the part of appellant and his counsel about the use that could be made of his testimony, although we had indicated on the prior appeal that the rules of Simmons v. United States, 390 U.S. 377, 88 S.Ct. 967, 19 L.Ed.2d 1247 (1968) and Bailey v. United States, 128 U.S.App.D.C. 354, 389 F.2d 305 (1967), would protect appellant if he did take the stand, Frazier v. United States, supra note 2, 136 U.S.App.D.C. at 188 n. 36, 419 F.2d at 1169 n. 36. After the Government rested its case, appellant’s counsel (not his counsel on appeal) said: If we could limit the inquiry to what his mental condition was at the time of the alleged confession and not go into the elements of the confession or ele- ■ ments of the crime, I would place the defendant on the stand. The court then gave its view of the probable scope of examination, concluding that even “if something does come out about [criminal activity], [it] would not be admissible in other cases anyway.” Defense counsel replied : “I am not prepared to accept that.” The colloquy continued and then, after conferring with appellant several times, defense counsel announced: “Your Honor, I have counseled with the defendant and he at this time does not desire to take the stand.” . A police officer testified that when he gave appellant these warnings, appellant said: “You didn’t have to read it to me in the first place. I already know my rights.” Appellant had been given a copy of the warning form used by police, see note 6, infra, when he had been arrested in March 1966 for another offense, see note 19, infra. . The Police Department Form 47 read to appellant is printed in Pettyjohn v. United States, 136 U.S.App.D.C. 69, 70 n. 3, 419 F.2d 651, 652 n. 3 (1969), cert. denied, 397 U.S. 1058, 90 S.Ct. 1383, 25 L.Ed.2d 676 (1970). . The Police Department Form 54 which appellant read and signed is printed in Pettyjohn v. United States, supra note 6 at 71 n. 4, 419 F.2d at 653 n. 4. . See, e. g., Judd v. United States, 89 U.S.App.D.C. 64, 67, 190 F.2d 649, 652 (1951) (“The real issue is whether the evidence offered by the Government, taken at full value, meets the required standard.”) ; Weed v. United States, 340 F.2d 827 (10th Cir. 1965). See also E. F. Drew & Co. v. Reinhard, 170 F.2d 679, 684 (2d Cir. 1948); Dollar v. Land, 87 U.S.App.D.C. 214, 217-218, 184 F.2d 245, 248-249, cert. denied, 340 U.S. 884, 71 S.Ct. 198, 95 L.Ed. 641 (1950); United States v. Ziemer, 291 F.2d 100, 103-105 (7th Cir.), cert. denied, 368 U.S. 877, 82 S.Ct. 120, 7 L.Ed.2d 78 (1961) (Hastings, C. J., dissenting); Wabash Corp. v. Ross Electric Corp., 187 F.2d 577, 598-603 (2d Cir.), cert. denied, 342 U.S, 820, 72 S.Ct. 38, 96 L.Ed. 620 (1951) (Frank, J., concurring and dissenting). But of. e. g., Maxwell v. Stephens, 348 F.2d 325, 336 (8th Cir), cert. denied, 382 U.S. 944, 86 S.Ct. 387, 15 L.Ed.2d 353 (1965). . Frazier v. United States, supra note 2, 136 U.S.App.D.C. at 185, 419 F.2d at 1166. The Supreme Court said in Miranda, supra note 3 at 469 of 436 U.S., at 1625 of 86 S.Ct.: The circumstances surrounding in-custody interrogation can operate very quickly to overbear the will of one merely made aware of his privilege by his interrogators. Therefore, the right to have counsel present at the interrogation is indispensible to the protection of the Fifth Amendment privilege under the system we delineate today. Our aim is to assure that the individual’s right to choose between silence and speech remains unfettered throughout the interrogation process. A once-stated warning, delivered by those who will conduct the interrogation, cannot itself suffice to that end among those who most require knowledge of their rights. . Frazier v. United States, supra note 2, 136 U.S.App.D.C. at 185, 419 F.2d art 1166 (emphasis added). . Miranda v. Arizona, supra note 3 at 469, of 436 U.S., at 1625 of 86 S.Ct. . Id. at 475, 86 S.Ct. at 1628. . Johnson v. Zerbst, 304 U.S. 458, 464, 58 S.Ct. 1019, 1023, 82 L.Ed. 1461 (1938). . Frazier v. United States, supra note 2, 136 U.S.App.D.C. at 187, 419 F.2d at 1168. . Id. at 188, 419 F.2d at 1169. . Id. . Compare United States v. Nielsen, 392 F.2d 849, 853 (7th Cir. 1968). . Pettyjohn v. United States, supra note 6, 136 U.S.App.D.C. at 76, 419 F.2d at 658 (Robinson, J., concurring) (footnote omitted). . That appellant had previously been arrested in March 1966 and made only an exculpatory statement does not demonstrate that he knew that an oral confession could be used against him in court. . Brief for Appellee at 9-10 (footnote omitted). , . See page 893, supra. . Appellant’s refusal to speak if the officer took notes distinguishes this case from Pettyjohn v. United States, supra note 6, and United States v. McNeil, 140 U.S.App.D.C. 3, 433 F.2d 1109 (1969). In Pettyjohn the only indication of misunderstanding was the appellant’s refusal to sign a typewritten statement after the confession had been made. The Pettyjohn court specifically distinguished that case from Frazier’s on this ground, 136 U.S.App.D.C. at 73, 419 F.2d at 655. Similarly in MeNeil the only indication of misunderstanding was the appellant’s refusal to sign a form acknowledging that he understood the warnings, again after the confession had been made. The inference from this refusal that McNeil had misunderstood the warnings was negated by appellant’s own testimony that he simply “wouldn’t sign nothing,” 140 U.S.App.D.C. at 7, 433 F.2d at 1113 n. 23. . Miranda v. Arizona, supra note 3 at 475 of 436 U.S., 86 S.Ct. 1602, 16 L.Ed. 2d 694; cf. Blackburn v. Alabama, 361 U.S, 199, 208, 80 S.Ct. 274, 4 L.Ed.2d 242 (1960). See also Johnson v. Zerbst, supra note 13; Glasser v. United States, 315 U.S. 60, 70-71, 62 S.Ct. 457, 86 L.Ed. 680 (1942). . Malloy v. Hogan, 378 U.S. 1, 8, 84 S.Ct. 1489, 1493, 12 L.Ed.2d 653 (1964). . Miranda v. Arizona, supra note 3 at 476 of 436 U.S., 86 S.Ct. 1602. . See Frazier v. United States, supra note 2, 136 U.S.App.D.C. at 185 n. 24, 419 F.2d at 1166 n. 24. . See People v. Defore, 242 N.Y. 13, 21, 150 N.E. 585, 587 (1926) (Cardozo, J.). For an empirical study which concludes that the letter and spirit of Miranda are often violated in this jurisdiction, see Medalie, Zeitz & Alexander, Custodial Interrogation in Our Nation’s Capital: The Attempt to Implement Miranda, 66 Mich. L.Rev. 1347, 1394 (1968).

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SATURN AIRWAYS, INC., Petitioner, v. CIVIL AERONAUTICS BOARD, Respondent, Dan-Air Services Ltd. et al., Intervenors. Lynn Michelle TSCHIRHART and Paul Jeffrey Tschirhart, Petitioners, v. CIVIL AERONAUTICS BOARD, Respondent, Americans For Charter Travel Capitol International Airways, Inc., Intervenor. NATIONAL AIR CARRIER ASSOCIATION, INC., et al., Petitioners, v. CIVIL AERONAUTICS BOARD, Respondent, Dan-Air Services Ltd. et al., Intervenors. AVIATION CONSUMER ACTION PROJECT, Petitioners, v. CIVIL AERONAUTICS BOARD, Respondent, Capitol International Airways, Inc., Intervenor. TRANS WORLD AIRLINES, INC., Petitioners, v. CIVIL AERONAUTICS BOARD, Respondent, Lynn M. Tschirhart et al., Intervenors. PAN AMERICAN WORLD AIRWAYS, INC., Petitioner, v. CIVIL AERONAUTICS BOARD, Respondent, National Air Carrier Association, Inc., et al., Intervenors. AMERICAN AIRLINES, INC., Petitioner, v. CIVIL AERONAUTICS BOARD, Respondent, National Air Carrier Association, Inc., et al., Intervenors. Nos. 72-1904, 72-1905, 72-1908, 72-1942 and 72-2042 to 72-2044. United States Court of Appeals, District of Columbia Circuit. Jan. 9, 1973. Messrs. Harold L. Warner, Jr., and Edmund E. Harvey, New York City, were on the motions for stay and to re-transfer cases. Mr. R. Tenney Johnson, Gen. Counsel, C. A. B., and Mr. Howard E. Shapiro, Atty., Dept, of Justice, were on the responses by the C. A. B. Messrs. Robert M. Lichtman and Jerry D. Anker, Washington, D. C., were on the responses for National Air Carrier Assn., Inc., and others. Messrs. Paul Y. Seligson and Paul M. Ruden, Washington, D. C., were on the responses for Lynn Michelle Tschirhart and Paul Jeffrey Tschirhart. Messrs. Lester M. Bridgeman and Jeffrey M. Lang, Washington, D. C., were on the responses of Dan-Air Services, Ltd. Before BAZELON, Chief Judge, and LEVENTHAL, Circuit Judge. ORDER On consideration of petitioners’ motion for stay and motion to retransfer, and of the responsive pleadings filed by the parties with respect to the foregoing motions, it is Ordered by the Court that Petitioners’ aforesaid motions are denied for the reasons set forth in the opinion filed herein this date. PER CURIAM. In this case we must determine which court of appeals constitutes the circuit of first filing under 28 U.S.C. § 2112(a). On September 27, 1972, the Civil Aeronautics Board adopted regulations establishing a new class of charters, called Travel Group Charters (TGC), which substantially enlarge the class of passengers eligible for charter flights. On the same day the Board issued a press release describing the new TGC regulations in some detail. At 3 P.M. on September 28, 1972, the Board released to the public the actual text of the amendments to its regulations that implement the TGC experiment. On September 28, 1972 petitions for review of the CAB order were filed in this circuit by Saturn Airways, No. 72-1904 (filed at 8:34 A.M.), Lynn Michelle Tschirhart, et al., No. 72-1905 (filed at 8:34 A.M.), and the National Air Carrier Association (NACA), et al., No. 72-1908 (filed at 2:22 P.M.). On the same day, Trans World Airlines filed a petition for review in the second circuit at about 5 P.M. Pan American (October 5) and American Airlines (October 3) later also filed petitions for review in the second circuit. On October 26, 1972, the second circuit ordered, on motion of the CAB, the cases there filed to be transferred to this circuit. The text of the order granting the motion suggests that the second circuit has not determined that this is the circuit of first filing under 28 U.S.C. § 2112(a). Rather the order indicates that transfer was ordered to enable one circuit, with all the cases before it, to determine which circuit is the circuit of first filing. That issue is now squarely raised in this court by the major carriers motion to retransfer all 7 cases to the second circuit. In addition, the major carriers have moved for a stay pending appeal of the effectiveness of the Board’s new regulations. The major carriers offer two arguments in support of their retransfer request. First, it is argued that the petitions for review filed in this circuit were premature, and therefore invalid, because they preceded issuance of an order by the Board. Second, the major carriers contend that the petitioners in this circuit are not sufficiently aggrieved by Board action to give them standing to file petitions for review. We disagree with both arguments. Certainly if the petitions for review filed in this circuit were the only ones filed in this ease we would not be justified in dismissing the petitions for lack of jurisdiction. For at the time of filing it was clear both that the Board had taken what it deemed official action and that the substance of that action had been communicated to the public in some detail. Since this basis for the retransfer motion is premised on an erroneous belief in the initial failure of jurisdiction to attach in this circuit, it must fail. The argument that petitioners who filed for review in this circuit were not sufficiently aggrieved by Board action is also without merit. Petitioner NACA objects, inter alia, to the Board’s refusal to permit air carriers to deal directly with charter groups. Petitioners National Air Carriers Association and Lynn Tschirhart both object to the Board’s refusal to allow children the TGC pro rata price. Although the major carriers may in some sense be more aggrieved than these petitioners, it is obvious that their claims are not so inconsequential as to warrant retransfer on this ground. International Union, United Auto Workers v. NLRB, 126 U.S.App.D.C. 11, 373 F.2d 671 (1967). As a matter of our discretion under 28 U.S.C. § 2112(a), we do not think the major carriers have made a showing of inconvenience or injustice sufficient to warrant retransfer. Nor does the doctrine of forum non conveniens appear applicable. Although we deny the instant motion for retransfer, we wish to state our disapproval of instantaneous petitions for review filed without proper reflection. In the present case, it is plain that the petition for review was filed subsequent to the press release. If that could not be definitely ascertained, the court would in the interest of justice, under section 2112(a), order transfer of the case to the next circuit in which review was sought. The motion for a stay is denied. APPENDIX NATIONAL AIR CARRIER ASSOCIATION, INC. AND ITS MEMBER AIRLINES, ET AL., INTERVE-NORS Respondent, Civil Aeronautics Board (CAB), has moved for orders transferring the petitions for review of an order of the CAB in the above-entitled matters from this Court to the United States Court of Appeals for the District of Columbia Circuit. The petitioners oppose the motion, claiming that similar petitions for review allegedly filed in the District of Columbia Circuit were (1) prematurely filed prior to entry of the CAB’s regulations; (2) that they were so filed for the sole purpose of attempting to deprive this Court of jurisdiction (petitions seeking the same relief having been filed in this Court after the entry of the CAB’s regulations); (3) that they were not filed in good faith; and (4) that they were not filed by persons “substantially aggrieved” by the CAB’s Travel Group Charter Regulations. These are important and basic issues (dependent in large measure on the facts) which obviously should not be determined simultaneously by two separate courts trying to resolve identical issues. More seemly procedure calls for granting the Respondent’s motion to transfer the petitions filed here to the District of Columbia Circuit so that these issues, which may well affect jurisdiction, (and such others as may arise) may be resolved by that Court. Accordingly a transfer of the petitions filed herein to the United States Court of Appeals for the District of Columbia Circuit is hereby ordered. Paul R. Hays Leonard P. Moore October 26, 1972 William R. Mulligan Circuit Judges . That statute states, in pertinent part: If proceedings have been instituted in two or more courts of appeals with respect to the same order the agency, board, commission, or officer concerned shall file the record in that one of such courts in which a proceeding with respect to such order was first instituted. The other courts in which such proceedings are pending shall thereupon transfer them to the court of appeals in which the record has been filed. For the convenience of the parties in the interest of justice such court may thereafter transfer all the proceedings with respect to such order to any other court of appeals. . The new regulations amend 14 C.F.R. Section 372a (adopted September 27, 1972). . That order is attached to this opinion as an Appendix. . On November 13, 1972 acting Chief Judge Wright granted an unopposed motion to consolidate the seven petitions for review that were in this court as a result of the second circuit’s transfer order. . Compare Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 676, 70 S.Ct. 876, 94 L.Ed. 1194 (1950). . We do not intimate the view that such was the case here. . Attorneys representing Saturn Airways, Inc., Lynn Michelle Tschirhart and Paul Jeffery Tschirhart, and National Air Carrier Association, et al., also filed petitions for review in the District of Columbia Circuit.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Santos REYES v. The SECRETARY OF HEALTH, EDUCATION AND WELFARE. No. 71-1895. United States Court of Appeals, District of Columbia Circuit. Feb. 23, 1973. L. Patrick Gray, III, Asst. Atty. Gen. at the time the brief was filed, Harold H. Titus, Jr., U. S. Atty., Kathryn H. Baldwin and James C. Hair, Jr., Attys., Dept, of Justice, were on the brief for appellant. Rosalyn B. Bell, Washington, D. C., was on the brief for appellee. Before Mr. Justice CLARK, of the Supreme Court of the United States, and MacKINNON and ROBB, Circuit Judges. Mr. Justice Tom Clark, United States Supreme Court, Retired, sitting by designation pursuant to 28 U.S.C. § 294(a) (1970). MacKINNON, Circuit Judge: This action was instituted by claimant-appellee Reyes in the District Court pursuant to section 205(g) of the Social Security Act (42 U.S.C. § 405(g)) for review of the final decision of the Secretary of Health, Education and Welfare denying him certain Social Security benefits. The District Court granted plaintiff’s motion for summary judgment and thereby reversed that administrative determination. This appeal by the Secretary followed. In 1968, claimant applied for child’s disability insurance benefits under section 202(d) (1) (B) (ii) of the Social Security Act (42 U.S.C. § 402(d)(1)(B) (ii)) which provides for an award of benefits to an individual who is the son of and dependent upon an old-age beneficiary, if such individual is under a disability which began before he attained the age of eighteen. Claimant’s application was denied by the Social Security Administration initially on April 14, 1969 (Tr. 38-39) and again on reconsideration on July 25, 1969 (Tr. 47-48). Claimant then requested review by a Hearing Examiner (Tr. 16-17). The Hearing Examiner found that the medical evidence indicated, without clinical findings, that claimant had received some treatment for pulmonary tuberculosis in 1933 or 1934 (when he was 11 or 12), but that the disease apparently had been inactive or nonexistent thereafter until 1964 when it was detected and treated (Tr. 13-14). Accordingly the Hearing Examiner found that claimant’s impairment was not of such severity before age 18 as to prevent him from engaging in substantial gainful work and denied his application (Tr. 14-15). Claimant then sought review of the Hearing Examiner’s decision by the Appeals Council (Tr. 9-11) and, upon reconsideration of the entire record, the Appeals Council affirmed the Hearing Examiner’s decision and this became the final decision of the Secretary on December 30, 1969 (Tr. 8). This action in the United States District Court for the District of Columbia ensued and resulted in a reversal of this administrative decision from which the Secretary now appeals. Claimant, a resident of the Philippines, was born October 25, 1922 and is the unmarried son of a Social Security old-age beneficiary. As such he is eligible for the benefits in question if he “is under a disability (as defined in section [42 U.S.C. § 423(d)]) which began before he attained the age of 18.” In support of his application, claimant stated that as a child he tired easily, was confined mostly to bed and had to force himself to go out and play with other children (Tr. 46). He also related that he was compelled to quit school after the fourth grade because of his ailment and that he has never worked except to perform a few simple farm chores (Tr. 46). The medical evidence submitted by claimant consists of the reports of two physicians and a radiologist. One physician’s two-sentence report made in 1968 noted that claimant presently complained of certain tubercular symptoms and that he remembered treating him for pulmonary tuberculosis in 1933 (Tr. 57-58). Another doctor reported in 1968 that he had treated claimant with anti-tuberculosis drugs since about 1964. Also, a radiologist interpreted a 1968 chest x-ray as “minimal” tuberculosis (Koch’s pulmonary) and a physician’s review of that x-ray resulted in the conclusion that it showed “minimal to moderate fibro-nodular tuberculosis” (Tr. 62-63). This physician also supplied a supplementary report indicating that the claimant had not been hospitalized under his care (Tr. 59-60) and the claimant himself makes no assertion that he received any kind of treatment during the twenty-six years between 1938 and 1964 (Tr. 56). For purposes of section 202(d), under which appellee asserts his claims, the term “disability” is exhaustively defined in section 223(d) of the Act: (d) Same; disability. (1) The term “disability” means— (A)- inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months; * *X- * (2) For purposes of paragraph (1) (A)— (A) an individual . . . shall be determined to be under a disability only if his physical or mental impairment ■ or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy, regardless of whether such work exists in the immediate area in which he lives, or whether a specific job vacancy exists for him, or whether he would be hired if he applied for work. For purposes of the preceding sentence (with respect to any individual), “work which exists in the national economy” means work which exists in significant numbers either in the region where such individual lives or in several regions' of the country. ****** (3) For purposes of this subsection, a “physical or mental impairment” is an impairment that results from anatomical, physiological, or psychological abnormalities which are demonstrable by medically acceptable clinical and laboratory diagnostic techniques. ****** (5) An individual shall not be considered to be under a disability unless he furnishes such medical and other evidence of the existence thereof as the Secretary may require. 42 U.S.C. § 423(d). Further standards to aid in determining “disability” are provided by Social Security regulations. 20 C.F.R. § 404.1501 et seq. (Subpart P). The Hearing Examiner’s determination that appellee had failed to demonstrate the existence of a disability within the meaning of § 223(d) prior to age 18, was certainly supported by substantial evidence and should have been sustained. In these matters deference is to be afforded the administrative decision and it is not for the trial court to review de novo the Secretary’s final decisions as to findings of fact and the reasonable inferences to be drawn therefrom. Here there is no clinical, diagnostic evidence as to the claimant’s disease prior to age 18, but only the recollection, 35 years removed, of his current doctor. There is absolutely no objective evidence of claimant’s disability in the thirty years between 1934 and 1964. The only clinical, diagnostic medical evidence we have shows a minimal to moderate tuberculosis existing about 1964. Even at this time claimant was not hospitalized and his response to drug therapy was recorded as “quite favorable” (Tr. 50). Under these circumstances it cannot be said that the Secretary’s denial of benefits due to a failure of appellee to bear his evidentiary burden was arbitrary or capricious. Even assuming, arguendo, that appellee can be said to be presently totally disabled within the meaning of § 223(d), there is no showing that this is the same condition that began in 1933 and which at that time and at all times subsequent thereto was equally disabling to such a degree that appellee was prevented from engaging in substantial gainful work. The Hearing Examiner clearly had substantial evidence in the record before him upon which he could conclude that the condition either did not exist or was wholly inactive until 1964 (Tr. 14). Claimant also contends that he was denied due process of law in that he was not afforded a hearing in the Philippines.’ We find this argument without merit. Even if a nonresident alien were entitled to the protections of the due process clause in a case like this, it is exceedingly clear that the Secretary’s regulation requiring that all proceedings in the administration of the Act which cannot be conducted by mail, including hearings, must be conducted only within the boundaries of the United States, is clearly reasonable. It is neither an arbitrary requirement nor is it unduly discriminatory. We therefore find the Secretary’s final decision to have been correct and supported by substantial evidence and accordingly the District Court erred in setting it aside. Reversed. . The District Court made no findings of fact and conclusions of law, reversing the Secretary in a brief order. While this is legally sound under Fed.R.Civ.P. 52, since it was issued pursuant to a Rule 56 motion for summary judgment, it renders review particularly difficult in cases like this. We have remarked that where the trial court reverses an agency decision, apparently relying “on a lack of substantial evidence, it should at least state which findings are unsupported.” Einbinder v. Novinger, Inc., 115 U.S.App.D.C. 395 at n. 3, 320 F.2d 714 at n. 3 (1963). See also, Gardner v. Bishop, 362 F.2d 917 (10th Cir. 1966); Banks v. Celebrezze, 341 F.2d 801 (6th Cir. 1965). In Celebrezze v. Zimmerman, 339 F.2d 496 (5th Cir. 1964), involving an appeal under the Social Security Act in which the District Court similarly reversed the Secretary of H.E.W. on a summary judgment motion, the court stated: [I]n the rare case in which it is appropriate for the trial court to reverse the Secretary’s findings because there is no substantial evidence to support them it would make it much easier for this Court, on appeal, to have the benefit of the trial court’s analysis of the evidence, and the reasoning by which it arrives at its determination that it is unable to find support in the record for the Secretary’s findings. 339 F.2d at 498. However, since we are as fully capable as the trial court to review the record at hand, there is no need for a remand for this purpose. . Section 202(d) provides: (d) (1) Every child . . of an individual entitled to old-age insurance benefits ... if such child— (A) has filed application for child’s insurance benefits, (B) at the time such application was filed was unmarried and . . . (ii) is under a disability (as defined in section 423(d) of this title) which began before he attained the age of 18, and (C) was dependent upon such individual— (i) if such individual is living, at the time such application was filed, * * * * * shall be entitled to a child’s insurance benefit for each month, beginning with the first month after August 1950 in which such child becomes so entitled to such insurance benefits and ending with the month preceding . i',i -jfi sj« sk sk (G) if such child was under a disability (as so defined) at the time he attained the age of 18, the third month following the month in which he ceases to be under such disability .... 42 U.S.C. § 402(d) (1) (B) (ii). . In the reconsideration determination, claimant was informed that in lieu of a hearing, to which he was entitled only if he came to the United States at his own expense, he could request review of his claim by a Hearing Examiner and was advised to submit any additional evidence he might have with this request (Tr. 48) See note 7, infra. . Mitchell v. Gardner, 323 U.S.App.D.C. 195, 358 F.2d 826 (1966); Lessin v. Celebrezze, 114 U.S.App.D.C. 278, 314 F.2d 283 (1963). See also, Beane v. Richardson, 457 F.2d 758 (9th Cir. 1972); Flack v. Cohen, 413 F.2d 278 (4th Cir. 1969); Easttam v. Secretary of HEW, 364 F.2d 509 (8th Cir. 1966); Maloney v. Celebrezze, 337 F.2d 231 (3d Cir. 1964); Adams v. Flemming, 276 F.2d 901 (2d Cir. 1960). . Appellee has argued that section 202(d) (1) (B) (ii) does not require that a claimant for child’s benefits be disabled before he attains age 18, but requires only that a claimant’s present disability as defined in § 223(d) be the result of an impairment that began before he reached age 18. However, the legislative history of that section clearly precludes such an approach, indicating explicitly that the intent of Congress was to provide benefits for children who were permanently disabled prior to age 18 and have remained so continuously to the present- time. The Senate Finance Committee Report stated : The bill includes provision for payment of disabled child’s benefits to the dependent disabled child of a deceased or retired insured worker if the chili is permanently and totally disabled and has been so disabled since before he reached age 18. * * * Your committee’s bill -would provide benefits for a child who has been totally and permanently disabled before attaining age 18, if the child is totally and permanently disabled and dependent upon the parent at the time the parent dies or becomes entitled to retirement benefits. To be considered disabled the child would have to be unable to engage in any substantial gainful activity by reason of a severe mental or physical impairment that is expected to continue indefinitely. S.Rep.No.2133, 84th Cong., 2d Sess. 2, 5-6 (1956), U.S.Code Cong. & Admin. News 1956, p. 3877 (emphasis added). The House Report states that the bill provides for “continuation of monthly benefits to children who become totally and permanently disabled before age 18.’’ H.R.Rep.No.1189, 84th Cong., 2d Sess. 2 (1955) (emphasis added). See also, id. at 8, 24-25. . The Hearing Examiner was. entitled to rely on the Social Security regulations in this regard. For purposes of § 202(d) child’s disability insurance, 20 C.F.R. § 404.1506 adopts a list of impairments (Subpart P, App.) as an appendix in order to aid in reaching a determination of “disability” vel non. See 20 C.F.R. 404.1501. These regulations provide: B. Pulmonary tuberculosis is a communicable disease and disability is determined primarily on the basis of activity of the disease. Individuals with “inactive” or “quiescent” disease are not considered to be under a disability on the basis of tuberculosis, whereas individuals with “active” tuberculosis are considered to be under a disability. 20 C.F.R. Subpart P, App. 3.00(B). From the long period in which there was no medical record of treatment or hospitalization, the Hearing Examiner could correctly conclude that the claimant’s condition had entered an inactive or quiescent stage and as such he was not under a permanent disability sufficient to preclude him from engaging in substantial gainful work. . By long-standing practice, the Secretary has afforded claimants, whether United States citizens or foreign nationals, a hearing only within the United States. This was recently embodied in the regulation, see note 9, infra. . Traditionally the courts have held that the United States Constitution only operates within our territorial boundaries. Johnson v. Eisentrager, 339 U.S. 763, 70 S.Ct. 936, 94 L.Ed. 1255 (1950); Ross v. McIntyre, 140 U.S. 453, 464, 11 S.Ct. 897, 35 L.Ed. 581 (1891). The equal protection clause, for example, has been held explicitly to apply only to aliens within the jurisdiction of the United States. Wong Wing v. United States, 163 U.S. 228, 16 S.Ct. 977, 41 L.Ed. 140 (1896); Yick Wo v. Hopkins, 118 U.S. 356, 6 S.Ct. 1064, 30 L.Ed. 220 (1886). . 20 C.F.R. §§ 404.923, 404.934 (1971).f . There appears to be no legislative intent to the effect that the Social Security Act was to be administered outside the United States, and absent such a showing, it is familiar law that “the legislation of Congress will not extend beyond the boundaries of the United States unless a contrary legislative intent appears.” Steele v. Bulova Watch Co., 344 U.S. 280, 285, 73 S.Ct. 252, 255, 97 L.Ed. 252 (1952).

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Anna MASSZONIA et al., Appellants, v. Walter E. WASHINGTON et al., Appellees. No. 71-1164. United States Court of Appeals, District of Columbia Circuit. Argued June 13, 1972. Decided Feb. 27, 1973. Marsha A. Quintana, Washington, D. C., with whom Samuel B. Abbott, Boston, Mass., was on the brief for appellants. David P. Sutton, Asst. Corporation Counsel, D. C., with whom C. Francis Murphy, Corporation Counsel, D. C., and Richard W. Barton, Washington, D. C., were on the brief, for appellees. Before BAZELON, Chief Judge, ROBINSON, Circuit Judge and JAMESON, Senior District Judge for the District of Montana. Sitting by designation pursuant to the provisions of Title 28 U.S.C. § 294(d). JAMESON, District Judge: This is an appeal from an order denying a motion for a preliminary injunction and the appointment of a receiver ancillary thereto. The order of the district court entered January 26, 1971, 321 F.Supp. 965, contains detailed findings of fact which are not questioned on this appeal. Two issues are presented: (1) whether the district court erred in denying the motion, and (2) whether by reason of events intervening since the order was entered the case has become moot and should be dismissed. Factual Background The appellant Anna Masszonia, a disabled, low-income, welfare recipient, was tenant in a Washington, D. C. substandard apartment complex owned by ABC Realty Co., Inc. From 1961 through 1967 ABC Realty operated the complex under a license issued by the Department of Licenses and Inspections for the District of Columbia, without, however, applying for Certificate of Occupancy. Because of unabated housing regulation violations, applications for a renewal of the license for 1968 and subsequent years were denied on February 3, 1970, and the denials were sustained by the District of Columbia Board of Appeals and Review on May 20, 1970. .On February 26, 1970 a tenant commenced a class action against ABC Realty seeking to recover rents from 1961. Some of the tenants began withholding their rent while others continued paying rent until their June, 1970 rent payment was returned to them. About the time the action was commenced ABC Realty ceased to pay water, gas and electricity bills for the complex, which resulted in termination of water service on May 19, 1970 and threatened termination of gas and electricity. This class action was filed May 22, 1970 by appellant Masszonia on her own behalf and on the behalf of all tenants similarly situated against Walter E. Washington, Commissioner of the District; the Water Registrar of the District; and the president of ABC Realty, seeking equitable relief that the utilities be continued. In amended complaints ABC Realty and the two utilities were added as defendants. By order entered July 29, 1970 (opinion at 315 F.Supp. 529) the Commissioner and his subordinates were enjoined from refusing to provide water and sewer service and from refusing to enter into contracts with the utilities to provide gas and electricity, pendente lite, so long as the tenants lawfully occupied the premises, the court holding that it was the duty of the District of Columbia under District of Columbia Code, Section 5-313 (1967) to provide these services on a temporary and emergency basis. Between July 24 and July 27, 1970 the District served the tenants with orders to vacate the premises by August 3, 1970. On August 3 the district court enjoined the Commissioner and his subordinates from prosecuting any tenant for failure or refusal to vacate his apartment, and ordered the Commissioner to provide relocation services to the tenants within two weeks. On August 14, 1970 the appellant Masszonia moved for a preliminary injunction under a supplemental complaint, seeking the appointment of a receiver and an order requiring the Commissioner to make necessary repairs and assess a tax on the property for the costs. Order of January 26,1971 The order of January 26, 1971 enjoins appellees, pending appeal, from prosecuting or attempting to evict any tenant and requires appellees, pending appeal, to furnish utility services and provide the tenants with relocation services. The court refused to appoint a receiver and refused to order appellees to make the repairs sought by appellants. The order of January 26, 1971 adhered to the court’s conclusion in the July 29, 1970 order that “where low-income tenants who cannot immediately relocate face the imminent failure of essential utility services which are the landlord’s responsibility, and the landlord is beyond the effective power of the Court, it is the duty of the District of Columbia under District of Columbia Code, Section 5-313 (1967) to provide these services on a temporary and emergency basis.” The court held further that Section 5-313 “confers only a discretionary authority upon the Commissioner” to correct conditions existing in violation of law or regulation, and the court could not hold as a matter of law “that it would be an abuse of that discretion to fail to provide those utilities on a permanent, continuing basis or to fail to make the extensive repairs sought in this Motion for a Preliminary Injunction, the ultimate, permanent relief sought in the Supplemental Complaint.” Events Subsequent to January 26, 1971 Order On April 19, 1971 (after the record and appellants’ brief had been filed in this court) appellant Masszonia filed in the district court a “motion to modify the injunction pending appeal entered January 26, 1971” to order the defendant Washington to terminate the utility services and secure the buildings at 1401 and 1405 Girard Street, N.W., and to require proper securing of the buildings at 2804 Fourteenth St., N.W. in compliance with the January 26, 1971 order. Pursuant to this motion, the district court on April 22, 1971 ordered the Commissioner “to immediately secure the premises at 2804 Fourteenth Street, N.W. to prevent further access thereto * * * ”, to terminate the utilities at 1401-1405 Girard Street, N.W., and to “proceed immediately to make said premises secure by boarding up basement and first floor doors and windows and blocking fire escapes.” The Commissioner was also authorized to proceed with normal condemnation procedures with respect to the premises at 2804 Fourteenth Street, N.W. He was “enjoined to take no other or further action in any way affecting the premises at 1401 and 1405 Girard Street, N.W., without further order” of the court. On June 29, 1971 the district court, upon the motion of plaintiffs, vacated nunc pro tunc as of January 26, 1971 the paragraph of the January 26 order requiring the deposit of plaintiffs’ public assistance rent allotments into the Registry of the Court. Issue of Mootness Subsequent to oral argument, appellees filed a “Suggestion of Mootness”, with supporting affidavits, from which it appears that following the order of April 22, 1971 the premises at 2804 Fourteenth Street, N.W. were condemned and razed, and the premises at 1401-1405 Girard Street, N.W. were barricaded; that the Girard Street property has not since been inhabited, and is “uninhabitable by reason of its insanitary and structurally defective condition;” and that all tenants seeking assistance were relocated. Appellees contend that “against this background”, the “appellants have effectively abandoned the plainly uninhabitable Girard Street property, without likelihood or right of return and that they currently have no possessory interest in that property.” Accordingly they argue that the case should be remanded to the district court with directions to vacate its order of January 26, 1971 and to dismiss the case as moot. In her original and supplemental complaints and motion for a preliminary injunction, appellant Masszonia seeks an injunction which would require the Commissioner to (1) provide utilities on a permanent, continuing basis and (2) make whatever repairs might be necessary to bring the three buildings into compliance with the housing regulations. Ancillary thereto appellants seek the appointment of a receiver to take charge of the property and manage it, pendente lite. When the complaint was filed 66 units of the apartment complex were occupied. All were vacated prior to the district court’s order of April 22, 1971. Subsequent thereto the building at 2804 Fourteenth Street, N.W. was demolished, as authorized in the April 22 order. Under this order, however, the Commissioner was enjoined “to take no other or further action in any way affecting the premises at 1401 and 1405 Girard Street, N.W. without further order” of the court. If the district court finds, as stated in appellees’ affidavits, that these premises are now uninhabitable, barricaded, and scheduled for demolition, it would appear that the district court should revoke this provision of the April 22 order and dismiss the action as moot. We conclude that the questions here on appeal have become moot and do not reach the merits of the controversy. This appeal is dismissed as moot and the case is remanded to the district court for further proceedings consistent with this opinion. SPOTTSWOOD W. ROBINSON, III, Circuit Judge (dissenting in part): With the appeal now moot, and resultantly the need for its dismissal plain, the sole question remaining for our decision is the disposition which the District Court is to make of its order of January 26, 1971, to aspects of which the appeal is exclusively addressed. My views on this phase of the case differ significantly from those of my colleagues. I think appellees’ request that we direct the District Court to vacate the order should be denied as to the portions thereof which were not subjected to the appeal. But I also think United States v. Munsingwear, Inc., to which this circuit has long adhered, requires vacation of so much of the order as appellants sought to have us review. The court’s disposition of the present appeal leaves the order intact and that, I believe, is a clear departure from the wholesome practice which Munsingwear approved and which this court has adopted as its own. From such a disposition, I must respectfully dissent. I As Munsingwear reveals, the Supreme Court’s “established practice in dealing with a civil case from a court in the federal system which has become moot while on its way here or pending . decision on the merits is to reverse or vacate the judgment below and remand with a direction to dismiss.” The objective of this procedure, the Court explains, is to “clear [] the path for future relitigation of the issues between the parties and eliminate [] a judgment, review of which was prevented through happenstance.” Thus, “[w]hen that procedure is followed, the rights of all parties are preserved; none is prejudiced by a decision which in the statutory scheme [is] only preliminary.” The practice noted in Munsingwear has found frequent acceptance in the federal circuits. In this jurisdiction, we have taken Munsingwear as a mandate. In Acheson v. Droesse, decided shortly after Munsingwear, we read the latter as “apparently intended by the Supreme Court to announce a rule for the guidance of the United States Courts of Appeals in disposing of cases which become moot pending appeal.” “[T]he language of the Supreme Court in the Munsingwear case,” we said, “clearly directs the Courts of Appeals that in all civil cases in the United States courts which become moot pending appeal, and in which a motion to dismiss as moot is accompanied by a motion, to direct that the judgment below be vacated, both motions should be granted.” And down through the years since Acheson, we have consistently adhered to that understanding. The opinion in Munsingwear makes clear, however, that a party ordinarily entitled to the relief Munsingwear affords may debar himself from obtaining it. There the Government had filed a two-count complaint against Munsingwear alleging violations of a regulation establishing maximum prices for commodities which it sold. The first count sought an injunction, and the second treble damages; and, by agreement and an order of the court, proceedings on the second count were held in abeyance pending final determination of the first-count claim for injunction. A similar arrangement was made in a separate suit for treble damages raising the same issues for a different period. The District Court held that the questioned prices complied with the regulation and entered a judgment of dismissal. The Government appealed, and during the pendency of the appeal the involved commodity was decontrolled. On Munsingwear’s motion, the Court of Appeals dismissed the appeal for mootness, making no provision for vacation of the District Court’s judgment. Munsingwear then moved in the District Court for dismissal of the treble damage claims on the ground that the unreversed judgment of that court on the injunction phase was res judicata of those claims. The District Court granted the motion, the Court of Appeals affirmed, and the case then went to the Supreme Court. As the Court stated, had the Government insisted upon vacation of the District Court’s judgment when the Court of Appeals dismissed the appeal for mootness, it would have been entitled to a direction to that effect. But the Government did not pursue that course; it made no motion to vacate the judgment, but simply acquiesced in the dismissal. Consequently, the Court held, it was not entitled to relief — -in the form of an exception to the doctrine of res judicata — from the District Court’s judgment. It is against this backdrop that the disposition appropriate to the case at bar is to be fashioned. One question to be addressed is whether the situation presented falls within the general ambit of the Munsingwear doctrine. Another is whether the parties on either side of this appeal have disabled themselves from sharing in the benefits Munsingwear confers. To a consideration of these I now proceed. II The order subjected to this appeal— the order of January 26, 1971— favored appellants in some respects and appellees in others. To appellants’ detriment, it rejected the demand that the court direct repairs putting the premises in suit in habitable condition through the medium of a receivership or by imposition of that responsibility upon appellees. It was the refusal to grant the request in either alternative that appellants sought to have altered on this appeal. Now that the appeal must be dismissed for mootness, their entitlement under Munsingwear to vacation of those portions of the January 26 order appealed would normally follow. In my view, indeed it does. I am mindful of the fact that appellants here, like the Government in Munsingwear, have not requested vacation of any part of the order, but that, I think, could hardly justify us in ignoring the teachings of Munsingwear. Long before Munsingwear was decided, the Supreme Court declared that the practice it was later to describe in Munsingwear was “the duty of the appellate court.” To such a duty Munsingwear took pains to itself advert. As a judge, I endeavor to discharge what by higher authority I am told is my plain duty whether I am asked by litigants to do so or not. I perceive no obstacle to discharge of our Munsingwear duty here simply because the court reviewed in Munsingwear omitted a response to it there. In sum, I would abide Munsingwear sua sponte. I am mindful, too, that relitigation of the issues on which appellants lost in the District Court seems unlikely, but that does not argue effectively against an application of Munsingwear. That very consideration was advanced to us in Aeheson v. Droesse, where it was urged that we distinguish Munsingwear on that basis. We declined the invitation, pointing out that “among the cases cited by the Supreme Court in the” Munsingwear opinion “there are instances in which there was no possibility of further litigation of the issues between the parties in the case on appeal even arising, and yet the Court ordered the lower court’s judgment vacated.” The fact of the matter is that offtimes courts are not in position to know whether the controversy has ground to a definite halt or not, and this case is no exception. The better part of justice is to liberate the parties from the shackles of res judicata rather than hazard a guess as to what the future may hold. Turning now to appellees’ motion that the January 26 order be vacated in its entirety, that relief in their favor is neither warranted nor possible. The appeal in this case brought before us for review only the parts of the order appellants complained of — the provisions which were unfavorable to them. Since appellees took no appeal from that order, two consequences disastrous to their request follow. In the first place, the unappealed portions of the order have long since become final, and we now lack jurisdiction to disturb them. In the second place, the Munsingwear doctrine was never intended to afford protection to parties in the position occupied by appellees. Their evident objective is to avoid the conelusiveness of the declaration of principles representing appellants’ partial victory in the District Court. But obviously, as an eminent author has stated, “[i]t would be quite destructive of the principle of judicial finality to put such a litigant in a position to destroy the collateral eonclusiveness of a judgment by destroying his own right to appeal.” Nothing in Munsingwear supports such an approach; rather, the rule is well settled that the operation of the doctrine of res judicata is unaffected by the fact that the party sought to be concluded did not appeal from the adversity wrought by the judgment. The situation as to appellees is not one in which the January 26 order should at their behest be vacated in toto “to prevent a judgment, unreviewable because of mootness,” as distinguished from failure to appeal, “from spawning any legal consequences.” It is only as to the rulings against appellants which have since become “unreviewable because of mootness . ” that vacation is called for, but as to them the call, in my view, is clear. . The complex consisted of three six-story apartments located at 2804 Fourteenth Street, N.W., and 1401 and 1405 Girard Street, N.W. Approximately 66 units were occupied at the outset of this litigation. . The court found' that a “substantial number of housing regulation violations” had been noted from 1966 to July 21, 1970, when 1,053 unabated violations were noted in the three building complex, the violations consisting of “leaking ceilings, falling plaster, broken windows, inadequate locks, absence of shades and screens, backed-up and broken plumbing fixtures, insufficient heat and hot water, holes in walls, accumulations of trash, rats and roaches” which were “so numerous, extensive and substantial that the buildings constitute a danger to the health and safety of the occupants.” 321 F.Supp. at 968. . Mitchell v. ABC Realty Co., Civil Action No. GS 3522-70 District of Columbia Court of General Sessions. . The court found that ABO Realty had been served with all pleadings but had not entered an appearance. The court found further, however, that personal service had not been effected on its president and registered agent and that attempts to locate its officers had failed. 321 F.Supp. at 967. . The action was dismissed as to the two utilities. 315 F.Supp. 529, 530-531. At 533, the court noted that “the District may recoup any money expended for providing utilities by assessing a tax against the property. It may of course, also recoup by levying fines against the owner.” . Appellees are the Commissioner and the Water Registrar of the District of Columbia. As noted stipra (Note 4), ABC Realty, Inc. and Lyman C. Delle, its president, were not personally served and did not enter an appearance. Nor have they participated in this appeal. Their liability to the tenants and to the District of Columbia is not before this court. On the merits, this appeal concerns solely the duty of the District of Columbia to appellants to act upon the failure of ABC to correct conditions existing in violation of the law. . 321 F.Supp: at 970. . Section 5-313, D.C.Code 1967, provides that when the owner of real property fails or refuses after reasonable notice to correct conditions existing in violation of law or regulation, “the commissioners of the District of Columbia may, and they are authorized to, cause such conditions to be corrected; assess the cost of correcting such conditions and all expenses incident thereto * * * as a tax against the property on which such condition existed * * * and carry such tax on the regular tax rolls of the District, and collect such tax in the same manner as general taxes in said District are collected * * . 321 F.Supp. at 971. . Appellant also sought an order that ABC take no action, pendente lite, to interfere with the “continued assertion of plaintiff’s — and the class she represents — leasehold interest in the premises.” The motion alleges in part: “It is asserted, therefore, to allow the buildings to be preserved, pendente lite, and in fear for their lives that plaintiff, and others in the class she represents, vacate involuntarily and without any relinquishment of their legal tenancies. “Plaintiff represents, to the best of her knowledge, that temporary relocation services are being provided tenants of the complex by the Redevelopment Land Agency.” As set forth in Note 6, we are not here concerned with any claim appellants may have against ABC Realty Co. . Supporting affidavits indicate also that District authorities will recommend that the Girard Street property be condemned when the order of April 22, 1971 is vacated, and that in December, 1971 the area in which these buildings are located was added to the Neighborhood Development Program and designated for demolition. . With respect to appellant Masszonia, the affidavit of the Assistant Executive Director, Office of Relocation and Administration, recites that Mrs. Masszonia “moved to an address unknown on May 17, 1971. Various efforts had been made to relocate Mrs. Masszonia to standard housing, but she expressed plans to move on her own.” . In oral argument counsel for appellees relied heavily on the contention that the case is moot. Appellees were granted leave to file a motion to dismiss on that ground, and appellants were granted time for a reply. The motion and supporting memorandum and affidavits were filed by appellees. Appellants have not responded. In the absence of counter affidavits or other response, we accept as true the facts set forth in appellees’ affidavits. . As noted supra, the order of April 22, 1970 was entered after the appeal was taken to this court. In view of our disposition of the appeal it is unnecessary to consider the effect of this order or whether the district court was authorized to enter the order after the appeal was taken from the prior order. . Those provisions of the orders favorable to appellants, from which no appeal was taken, have been complied with or are no longer effective by reason of appellants’ abandonment of the property. All relief sought by appellants was based upon their occupancy of the property. If the affidavits filed by appellees are found by the district court to be true, nothing now remains to be litigated. . Mootness follows, not necessarily from appellants’ involuntary vacation of their apartments, see Robinson v. Diamond Housing Corp., 139 U.S.App.D.C. 339, 433 F.2d 497 (1970), reviewed on the merits, 150 U.S.App.D.C. 17, 463 F.2d 853 (1972); cf. Gaddis v. Dixie Realty Co., 136 U.S.App.D.C. 403, 420 F.2d 245 (1969), but from the impossibility, under the circumstances described in the majority opinion, of their ever regaining occupancy. . 340 U.S. 36, 71 S.Ct. 104, 95 L.Ed. 36 (1950). . Id. at 39, 71 S.Ct. at 106 (footnote omitted). . Id. at 40, 71 S.Ct. at 107. . Id. . See Lumus Co. v. Commonwealth Oil Ref. Co., 280 E.2d 915, 931-932 (1st Cir.), cert. denied, 364 U.S. 911, 81 S.Ct. 274, 5 L.Ed.2d 225 (1960); Bodkin v. United States, 226 F.2d 55, 56 (2d Cir. 1959); Industrial Dev. Co. v. Thompson, 231 F.2d 825, 828-829 (8th Cir. 1956); Sawyer v. Pioneer Mill Co., 300 F.2d 200, 201-202 (9th Cir.), cert. denied, 371 U.S. 814, 83 S.Ct. 24, 9 L.Ed.2d 55 (1962). . 90 U.S.App.D.C. 143, 197 F.2d 574 (1952). . Id. at 146, 197 F.2d at 577. . Id. at 147, 197 F.2d at 578. See text, infra at notes 19-22. . See Schoop v. Mitchell, 143 U.S.App.D.C. 405, 406, 444 F.2d 863, 864, cert. denied, 402 U.S. 988, 91 S.Ct. 1663, 29 L.Ed.2d 154 (1971); Cadillac Pub. Co. v. Summerfield, 105 U.S.App.D.C. 343, 344, 267 F.2d 620, 621 (1958); Anderson v. Morgan, 105 U.S.App.D.C. 66, 67, 263 F.2d 903, 904, cert. denied, 361 U.S. 846, 80 S.Ct. 99, 4 L.Ed.2d 84 (1959); Dulles v. Nathan, 96 U.S.App.D.C. 190, 192, 225 F.2d 29, 31 (1955). . Bowles v. Munsingwear, Inc., 63 F.Supp. 933, 938 (D.Minn.1945). . Fleming v. Munsingwear, Inc., 162 F.2d 125, 127-128 (8th Cir. 1947). . United States v. Munsingwear, Inc., 178 F.2d 204 (8th Cir. 1949). . United States v. Munsingwear, Inc., supra note 2. . 340 U.S. at 40, 71 S.Ct. 104. . Id. at 40-41, 71 S.Ct. 104. . Masszonia v. Washington, 321 F.Supp. 965 (D.D.C.1971). . Id. at 970-971. . See text supra at notes 15-16. . “Where it appears upon appeal that the controversy has become entirely moot, it is the duty of the appellate court to set aside the decree below and to remand the case with directions to dismiss.” Duke Power Co. v. Greenwood County, 299 U.S. 259, 267, 57 S.Ct. 202, 205, 81 L.Ed. 178 (1936) (Citations omitted). . United States v. Munsingwear, Inc., supra note 2, 340 U.S. at 39-40, 71 S.Ct. 104. . It will be noted that it was the Court of Appeals, Fleming v. Munsingwear, Inc., supra note 12, 162 F.2d at 127-128, not the Supreme Court, that dismissed the appeal without vacating the judgment appealed from. . Supra note 7. . 90 U.S.App.D.C. at 146-147, 197 F.2d at 576-577. . See United States v. Munsingwear, Inc., supra note 2, 340 U.S. at 39-40 n. 2, 71 S.Ct. at 106. . Acheson v. Droesse, supra note 7, 90 U.S.App.D.C. at 147, 197 F.2d at 577. The cases to which we referred were Brownlow v. Schwarts, 261 U.S. 216, 43 S.Ct. 263, 67 L.Ed. 620 (1923), and Berry v. Davis, 242 U.S. 468, 37 S.Ct. 208, 61 L.Ed. 441 (1917). . While appellants have thus far invoked only' equitable remedies, the possibility of relief of a different character is not foreclosed. And, as the District Court’s findings vividly attest, there is much that can be complained about. The apartment complex in which they resided was permitted to operate for eight years without a certificate of occupancy, and for two years within an apartment house license, Masszonia v. Washington, 315 F.Supp. 529, 531-532 (D.D.C.1970); Masszonia v. Washington, supra note 17, 321 F.Supp. at 967, and during those periods the premises deteriorated appallingly. In the words of the District Court, “ [a]s of May, 1970, the housing inspectors noted over 1,000 violations of the Housing Code on the premises in question, reflecting the general intolerable conditions that have existed for many years, unattended and unabated. ... In addition, the owner's rental of these structures was apparently contrary to law, and the authorities, who were aware of the situation, tolerated noncompliance.” Masszonia v. Washington, supra, 315 F.Supp. at 531. See also Masszonia v. Washington, supra note 17, 321 F.Supp. at 968. “These violations,” the court was later to add, “are so numerous, extensive and substantial that the buildings constitute a danger to the health and safety of the occupants.” Masszonia v. Washington, supra, note 17, 321 F.Supp. at 968. Even after the premises degenerated to this unsavory condition, the occupants’ woes continued to increase. The corporate landlord walked out on the 66 families then residing in the complex and the corporate officers could not be located. Id. at 967. But for the intervention of the District Court, the occupants would have been without basic utility services from mid-1970 onward. See Masszonia v. Washington, supra, 315 F.Supp. at 532-533. Matters finally worsened to the point that they had no choice but to move out. The original and primary transgression producing this shameful state of affairs was the landlord’s. But those legally charged with the duty of supervising leased housing in the District of Columbia do not appear to be free from blame. In this very litigation, “[t]he Corporation Counsel . . . point[ed] out that there are perhaps some 100,000 persons living in the District under conditions quite comparable to those which this complaint portrays.” Masszonia v. Washington, supra, 315 F.Supp. at 532. “Enforcement of the housing laws and regulations,” the court declared, “would have prevented the present situation from arising.” Id. The consequences of this lack of enforcement have fallen upon the group most dependent upon their local government for protection, for, as the District Court found, the named plaintiff in the litigation is “a disabled, low income welfare recipient, representing a class that is best described as generally Tow income with at least twenty-six (26) public assistance recipients. . . . ” Masszonia v. Washington, supra note 17, 321 F.Supp. at 966. In these circumstances, T cannot say that these hapless victims of official indifference would not have justiciable complaints against the public servants responsible for their plight. My colleagues, however, leave standing the adverse rulings of the District Court which appellants endeavored to have reviewed on this appeal. Since I am unable to say that those rulings might not bar any effort undertaken hereafter, I would vacate them. . See Fed.R.App.P. 4(a). See also cases cited infra note 29. . Hodgson v. United Mine Workers, 153 U.S.App.D.C. 405 at 413, 473 F.2d 118 at 124 (1972); Weedon v. Gaden, 136 U.S.App.D.C. 1, 5, 419 F.2d 303, 307 (1969); Lord v. Helmandollar, 121 U.S.App.D.C. 168, 170, 348 F.2d 780, 782 (1965), cert. denied, 383 U.S. 928, 86 S.Ct. 929, 15 L.Ed.2d 847 (1966); Whitehead v. American Sec. & Trust Co., 109 U.S.App.D.C. 202, 206, 285 F.2d 282, 286 (1961); Slater v. Peyser, 91 U.S.App.D.C. 314, 315, 200 F.2d 360, 361 (1952); Randolph v. Randolph, 91 U.S.App.D.C. 170, 172, 198 F.2d 956, 958 (1952). . See Masszonia v. Washington, supra note 17, 321 F.Supp. at 970-971. . IB Moore, Federal Practice ¶ 0.416 [6] at 2327 (2d ed. 1965). . United States v. Munsingwear, Inc., supra note 2, 340 U.S. at 39, 41, 71 S.Ct. 104; Angel v. Bullington, 330 U.S. 183, 189-190, 67 S.Ct. 657, 91 L.Ed. 832 (1947); Hubbell v. United States, 171 U.S. 203, 206-209, 18 S.Ct. 828, 43 L.Ed. 136 (1898); Wilson’s Ex’r v. Deen, 121 U.S. 525, 532-534, 7 S.Ct. 1004, 30 L.Ed. 980 (1887). . United States v. Munsingwear, Inc., supra note 2, 340 U.S. at 41, 71 S.Ct. 104, 107. . Id.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Harriet K. BROOKS et al., Petitioners, v. The ATOMIC ENERGY COMMISSION and United States of America, Respondents, Indiana & Michigan Electric Company and Indiana & Michigan Power Company, Intervenors. No. 72-2177. United States Court of Appeals, District of Columbia Circuit. Argued Feb. 14, 1973. Decided March 8, 1973. Rehearing Denied April 13, 1973. Lewis D. Drain, Grand Rapids, Mich., for petitioners with whom Myron M. Cherry, Chicago, Ill., was on the pleadings for petitioners. Jerome Nelson, Sol. U. S. A. E. C., for respondents with whom Edmund B. Clark, Atty., Dept, of Justice, was on the response for respondents. Gerald Charnoff, Washington, D. C., for intervenors, Indiana & Michigan Electric Co. and Indiana & Michigan Power Co., with whom Jay E. Silberg, Washington, D. C., was on the response for intervenors. Before BAZELON, Chief Judge, FAHY, Senior Circuit Judge, and MacKINNON, Circuit Judge. PER CURIAM: On March 25, 1969, the Atomic Energy Commission issued two provisional construction permits to the Indiana and Michigan Electric Company and the Indiana and Michigan Power Company (hereinafter Companies) for construction of Units 1 and 2 of the Donald C. Cook Nuclear Plant. In accordance with section 185 of the Atomic Energy Act the construction permits for the-two units stated the earliest and latest dates for the completion of construction. On October 10, 1972, the companies requested an extension of the latest permit completion date on both permits, citing bad weather, unexpected labor troubles and delay due to the redesign of certain reactor containment components. The Commission, on October 26, 1972, without notice or opportunity for hearing, entered an order extending the latest completion dates in the two construction permits as requested by the companies. Petitioners, persons who live and/or own property on Lake Michigan near the construction site of the Cook nuclear facility, claim, under several different theories, that they were entitled to notice and a hearing before the Commission summarily extended the construction permit completion dates. Petitioners ask that we reverse the Commission’s Order of October 26, 1972. For the reasons stated below, we grant summary reversal and order that the Commission promptly afford petitioners a hearing on the issue of the extension of the permit completion dates. We decline to order the suspensión of construction as requested by petitioners under the circumstances of tfhis case. In order fully to appreciate petitioners’ argument, it is necessary briefly to outline the action taken by the Commission with respect to the Cook nuclear facility in response to this Court’s decision in Calvert Cliffs’ Coordinating Committee, Inc. v. Atomic Energy Commission, 146 U.S.App.D.C. 33, 449 F.2d 1109 (1971). On June 29, 1972, the Commission published in the Federal Register a Notice of Consideration of Issuance of Facility Operating Licenses and Notice of Opportunity for Hearing. This notice provided that interested persons could request a hearing: (1) with respect to whether, considering those matters covered by appendix D to 10 CFR Part 50, the provisional construction permits should be continued, modified, terminated, or appropriately conditioned to protect environmental values; and (2) with respect to the issuance of the facility operating licenses. Petitioners, on July 28, 1972, filed a timely response to this notice requesting leave to intervene, and an opportunity for hearing, with respect to both the continuation, modification, or termination of the construction permits and the issuance of the facility operating licenses. On September 29, 1972, the Commission issued a memorandum opinion and order which stated that a hearing would be held on the applications for the issuance of operating licenses. The order admitted petitioners as parties to the operating license proceeding but inexplicably failed to advert to the noticed section C proceedings concerning the required NEPA review of the construction permits. We believe that petitioners are correct in contending that, apart from the full environmental review of the construction permits mandated by the NEPA regulations, 10 C.F.R. Part 50, App. D, Section C, they should have been afforded the opportunity for a hearing on the extension of the permit completion dates. Section 189(a) of the Atomic Energy Act provides, as amended: In any proceeding under this chapter, for the granting, suspending, revoking, or amending of any license or construction permit . . . the Commission shall grant a hearing upon the request of any person whose interest may be affected by the proceeding, and shall admit any such person as a party to such proceeding. . In cases where such a construction permit has been issued following the holding of such a hearing, the Commission may, in the absence of a request therefor by any person whose interest may be affected, issue an operating license or an amendment to a construction permit or an amendment to an operating license without a hearing, but upon thirty days’ notice and publication once in the Federal Register of its intent to do so. The Commission may dispense with such thirty days’ notice and publication with respect to any application for an amendment to a construction permit or an amendment to an operating license upon a determination by the Commission that the amendment involves no significant hazards consideration. The language of this section clearly seems to require that the Commission grant a hearing upon the request of any interested person in a proceeding amending a construction permit. The Commission and the Companies do not argue that the extension of the permit completion dates was not an amendment of the construction permit; they argue instead that the last two sentences of section 189(a), added to the section in 1962, indicate Congressional intent to dispense with hearings in construction permit amendment proceedings in the absence of a request therefor or when the Commission determines that the amendment'involves “no significant hazards consideration.” First of all, the Commission’s Order of October 26, 1972, extending the permit completion dates, gives no indication whatsoever that the amendment involved no significant hazards consideration. Where one of the reasons given by the Companies in requesting an extension is the necessity for redesign of certain reactor containment components, the Commission must surely make the required significant hazards determination, and note such determination in its order, if it intends to put forward such determination as the basis for its denial of a hearing. The necessity for administrative agencies to provide a statement of reasons, especially in cases such as this where the public interest demands close scrutiny of agency action, is a fundamental principle of administrative law. Secondly, and perhaps more to the point, the legislative history of the 1962 amendments indicates that it was Congress’ intent to lessen "the mandatory hearing requirement only when there was no request for a hearing. Both the Senate and House Reports contain the following language: Under this plan, the issuance of amendments to such construction permits . . . would be only after a 30-day public notice and an offer of hearing. In the absence of a request for a hearing, issuance of an amendment to a construction permit . . . would be possible without formal proceedings. It is altogether untenable to argue that petitioners made no formal request for a hearing on the amendment of the construction permit, and therefore the Commission did not err in issuing the order without notice and hearing. The 30-day public notice required by section 189(a) must, of course, precede the Commission’s action since the obvious purpose of such notice is to allow interested persons, such as petitioners, to decide whether they desire to exercise their statutory right and request a hearing. Indeed, the Senate and House Reports make this amply clear by stating that any regulatory action which takes place after the initial issuance of the construction permit “will take place only upon publication and sufficient advance notice to afford an interested party the opportunity to intervene.” Certainly logic compels the conclusion, as Congress recognized, that one may not timely request a hearing if he lacks notice that the Commission is about to take action. Especially, in a case such as this one, where petitioners had already formally expressed their interest in the continuation or modification of the construction permit by requesting intervention in the section C proceedings, elementary fairness as well as the clear language of section 189(a), demands that the Commission afford notice and an opportunity for hearing before extending the completion dates of the construction permits. Accordingly, petitioners’ motion for summary reversal is granted to the extent that the Commission is ordered promptly to afford the petitioners, and any other interested persons, an opportunity for hearing on the question of whether the Companies have shown “good cause” for extension of the permit completion dates. The continuing validity of the amendment of the construction permit is made subject to the outcome of a hearing on this issue. . 42 U.S.C. § 2235. . This Order by the Commission was published in the Federal Register on November 2, 1972. 37 Fed.Reg. 23373. Section 185 of the Atomic Energy Act of 1954, 42 U.S.C. § 2235, provides that if construction is not completed by the latest completion date, the construction permit shall expire, and all rights thereunder be forfeited, “unless upon good cause shown, the Commission extends the completion date.” The Commission’s own regulations provide that all rights under the construction permit shall be forfeited if the facility is not completed by the latest completion date unless the Commission extends the completion date “upon good cause shown.” 10 C.F.R. § 50.55(b). . The Commission’s regulations implementing the National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. § 4321 et seq., are found in 10 C.F.R. Part 50, Appendix D. . 37 Fed.Reg. 12866. . Id. Section C of Appendix D to 10 C.F.R. Part 50 provides, in compliance with this Court’s decision in Calvert Cliffs’ Coordinating Committee v. AEC, supra at 1128, that a full NEPA review be conducted to determine whether construction permits issued prior to the effective date of NEPA, as were those in this case, should be continued, modified, terminated, or appropriately conditioned to protect environmental values. . The Commission hns represented in its papers before this Court, and at oral argument, that the intent of the September 29 Order was to afford petitioners a hearing on both issues, that is the continuation, modification, or termination of the construction permits and the issuance of the operating licenses. These hearings, which will be before a duly designated Atomic Safety and Licensing Board, are presently scheduled to begin sometime in the summer of 1973. . See note 5 supra. . 42 U.S.C. § 2239(a). . Pub.L.No. 87-615, § 2, 76 Stat. 409. . It is highly instructive to note the Commission’s Draft Environmental Statement, issued in December, 1972, where it is stated at pages IV-6-7 : The purpose of the reactor containment is to safeguard against releases of radioactivity to the environs in the highly unlikely event of a major loss of coolant accident postulated (for analytical purposes) to occur within the containment. The design criteria for the Station reactor containment and its components were reviewed and found acceptable by the staff, and were, among other things, the subject of a licensing hearing prior to the issuance of the construction permits. During the course of the staff’s review of the application for an operating license for the Station, certain components designed, fabricated and installed within the containment were found not to meet the design criteria earlier found acceptable by staff during the construction permit review. Consequently, redesign and testing of these components are required in order to achieve an adequate safety system. The environmental impact of accidents occurring within the context of such a system is discussed in Section VI. . See, e. g., Citizens Ass’n of Georgetown v. Zoning Commission, 155 U.S.App.D.C. _, 477 F.2d 402 (1973); Greater Boston Television Corp. v. FCC, 143 U.S.App.D.C. 383, 393, 444 F.2d 841, 851 (1971); Environmental Defense Fund v. Ruckelshaus, 142 U.S.App.D.C. 74, 80-88, 439 F.2d 584, 596-598 (1971). . S.Rep.No.1677, 87th Cong., 2d Sess. 8 (1962), U.S.Code Cong. & Admin.News 1962, p. 2207; H.R.Rep.No.1966, 87th Cong., 2d Sess. 8 (1962). . Id. . The hearing which we order in this case is in addition to the hearings required by 10 C.F.R. Part 50, Appendix D, presently scheduled for this summer, on the continution, modification, termination, or conditioning of the construction permits and the issuance of the operating licenses.

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Caselaw Access Project

2024-08-24T03:29:51.129235

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UNITED STATES of America, v. Gerald O. MORGAN, Appellant. No. 72-1317. United States Court of Appeals, District of Columbia Circuit. Decided March 19, 1973. As Amended March 19, 1973. William J. Boyd, Washington, D. C., and James R. Fox (appointed by this court) were on the brief for appellant. Harold H. Titus, Jr., U. S. Atty., John A. Terry, Brian W. Shaughnessy, and Joseph E. di Genova, Asst. U. S. Attys., were on the brief for appellee. Before McGOWAN, Circuit Judge, EDWARDS, United States Circuit Judge for the Sixth Circuit, and TAMM, Circuit Judge. Sitting by designation pursuant to Title 28 U.S.C. § 291(a). PER CURIAM: Appellant was convicted after jury trial in the United States District Court for the District of Columbia on charges of first degree burglary while armed, armed robbery, and assault with a deadly weapon. He was sentenced to concurrent terms of three to ten years on each count. The evidence at trial showed that there was one witness to the alleged crime, the complaining witness George C. Lucas. He testified that on October 10, 1971, in the early morning hours, three men whom he had never seen before, two of whom were armed, burst into his room, that he sought to resist but was overcome by them when one of them struck him with a revolver and that they then robbed him of several dollars and left. Lucas also testified that he followed the bandits out of the room, saw them enter a car driven by a man he recognized as Leroy Price, whom he knew. Lucas called the police who responded and found the room in a state of disorder. Some days later Lucas advised the police of the name of those whom he alleged to be his assailants. He testified that he had gotten their names from Price. Appellant’s was one of those names. The only appellate issue of significance concerns appellant’s claim of error in being refused the opportunity properly to impeach the complaining witness. This occurred as a result of the following colloquy: MR. MENARD [Counsel for defendant Dennis G. Morgan]: Your Honor, under D.C.Code convictions, those ten years from the present cannot be used for witnesses or for defendants. The star witness for the Government, the complaining witness, has a conviction of more than ten years $nd in spite of the D.C.Code, I would argue under the general principles, Your Honor, of criminal law, that we should be allowed to use that conviction. THE COURT: What is the conviction? MR. MENARD: Making a false report to the Police Department and that is the gravamen of our defense in this case. MR. SHAUGHNESSY [Assistant United States Attorney]: Don’t you have another conviction that is more recent? MR. MENARD: Yes. It is the na-' ture of that other conviction that we want. THE COURT: If it is more than ten years old, that will not be used, of course. MR. SHAUGHNESSY: I don’t know if there was a trial in that ease or a forfeit. MR. MENARD: Yes. THE COURT: There very seldom is. MR. MENARD: I think he got 30 days. The applicable statute provides in relevant part that “no evidence of any conviction ... is admissible . if a period of more than ten years has elapsed since the later of (i) the date of the release of the witness . . . for his most recent conviction of any criminal offense, or (ii) the expiration of the period of his parole, probation or sentence . . . imposed with respect to his most recent conviction of any criminal offense.” 14 D.C.Code § 305(b) (1)(B)(ii) (Supp. V; 1972). The complaining witness in this case, George Lucas, had been found guilty of making a false report to the police and sentenced to 30 days imprisonment on July 11, 1957. Additionally, on December 30, 1969, he pled guilty to the charge of assault with a dangerous weapon and was sentenced to two to seven years in prison. Execution of that sentence was suspended subsequently, and Lucas was placed on probation for •five years. The effect of the rulings of the District Judge was to allow impeachment of Lucas on the basis of the second conviction but not on the basis of the first. This latter ruling was plainly in error under the D.C.Statute, and the Government concedes as much. The Government’s argument on appeal is that the error was harmless when the case is considered as a whole, citing Davis v. United States, 133 U.S.App.D. C. 172, 409 F.2d 453 (1969). We consider the Davis ease to be easily distinguishable from the instant facts and we believe this conviction must be reversed and the case remanded for new trial. The conviction for making a false police report was admissible under the specific language employed in the statute recently adopted by Congress. Additionally, the making of a false police report represents the exact sort of dishonest conduct on the part of the complaining witness which appellant’s alibi defense implied. The Government proofs in this case were far from overwhelming. There is no corroboration of the offense beyond the inconclusive report of the police officers who responded to the scene after the event concerning the complaining witness’ allegations as to the commission of the crime. And there is no corroboration at all as to the complaining witness' identification of appellant as one of his alleged assailants. The get-away ear driver, Price, was never indicted, and although complaining witness Lucas identified Price as his source of information as to the names of the defendants, he was never called as a Government witness. We do not recite these facts to show that the proofs were insufficient to support a verdict of guilty by the jury, but rather to show that failure to allow impeachment based on a conviction involving a false police report may have been a genuinely prejudicial factor in relation to defendant’s conviction. In Gordon v. United States, 127 U.S.App.D.C. 343, 383 F.2d 936 (1967), this court said: In common human experience acts of deceit, fraud, cheating, or stealing, for example, are universally regarded as conduct which reflects adversely on a man’s honesty and integrity. Acts of violence on the other hand, which may result from a short temper, a combative nature, extreme provocation, or other causes, generally have little or no direct bearing on honesty and veracity. Id. at 940. (Footnote omitted.) Here the complaining witness’ honesty and veracity was at issue and the error in excluding his earlier conviction may have affected the jury verdict. The conviction is reversed and the case is remanded to the District Court for new trial. . 14 D.C.Code § 305 (Supp. V, 1972) provides in pertinent part: (b) (1) Except as provided in paragraph (2), for the purpose of attacking the credibility of a witness, evidence that the witness has been convicted of a criminal offense shall be admitted if offered, either upon the cross-examination of the witness or by evidence aliunde, but only if the criminal offense (A) was punishable by death or imprisonment in excess of one year under the law under which he was convicted, or (B) involved dishonesty or false statement (regardless of punishment). A party establishing conviction by means of cross-examination shall not be bound by the witness’ answers as to matters relating to the conviction. % % * * (B) in addition, no evidence of any conviction of a witness is admissable under this section if a period of more than ten years has elapsed since the later of (i) the date of the release of the witness from confinement imposed for his most recent conviction of any criminal offense, or (ii) the expiration of the period of his parole, probation, or sentence granted or imposed with respect to his most recent conviction of any criminal offense.

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In re David C. NIBLACK, Appellant. No. 72-1086. United States Court of Appeals, District of Columbia Circuit. March 8, 1973. Rehearing Denied June 5, 1973. Arthur J. Whalen, Jr., Washington, D. C., with whom Joan M. McIntyre, Washington, D. C., was on the brief for appellant. Harold H. Titus, Jr., U. S. Atty., John A. Terry, Brian W. Shaughnessy and Gregory C. Brady, Asst. U. S. Attys., were on the brief for appellee. Before BAZELON, Chief Judge, and ROBINSON and ROBB, Circuit Judges. PER CURIAM: This is an appeal from a conviction of criminal contempt pursuant to 18 U.S.C. § 401 (1970). Appellant, a member of the District of Columbia bar, was appointed by the district court to represent one Lee, who was charged with violations of the National Firearms Act. 26 U.S.C. § 5861 (1970). (United States v. Malcolm D. Lee, Criminal No. 2042-71). Lee was arraigned before a district judge on November 30, 1971. The appellant Niblack was present on behalf of his client and on that date a motion hearing was scheduled for 9:30 A.M. on December 15, 1971. Lee appeared at the appointed hour on December 15, 1971 but the appellant did not arrive until 11:20 A.M. After hearing the appellant’s attempted explanation for his tardiness the district court found him in contempt and imposed a fine of $50.00 or imprisonment for ten days. The district judge observed that he had warned the appellant “time and time again about being on time.” Relying upon Klein v. United States, 80 U.S.App.D.C. 106, 151 F.2d 286 (1945), and Sykes v. United States, 144 U.S.App.D.C. 53, 444 F.2d 928 (1971), the appellant contends that his conduct was not contempt in the actual presence of the court within the meaning of Rule 42(a) of the Federal Rules of Criminal Procedure and 18 U.S.C. § 401 (1970), and that his conviction therefore cannot stand. We think the cited cases can be distinguished. Klein’s alleged contempt was his refusal to return from New York to Washington and resume his place at the trial table. We held only that his action in New York was not “misbehavior in the presence of the court, or so near thereto as to obstruct the administration of justice.” We recognized that as construed by the Supreme Court the words “so near thereto” have a geographical connotation. Our opinion emphasized that the contempt proceeding was not for violation of a court order, since it was “not claimed or shown” that the court had entered any order directing Klein to return ; thus the decision did not relate to contempt committed by violation of such an order. Here, as the district judge found, Niblack disobeyed the order that he be in court at a specified hour to proceed with a hearing. This misconduct was different from that attributed to Klein and clearly fell within the scope of 18 U.S.C. §401(3). In the Sykes case we held only that the evidence did not justify a finding that Sykes “deliberately or recklessly disregarded his obligation to the court, or that he intended any disrespect for the court”; in other words we held that the record disclosed “no evidence of any criminal intent on the part of” Sykes. We said there were no unusual circumstances warranting a conclusion that the conduct of Sykes was reckless, but on the contrary it appeared that his default had resulted from a lapse of memory and was an isolated aberration. We noted further that “[t]he judge prefaced his ruling with statements to the effect that he was reluctant to find the appellant in contempt, since he had had ‘very favorable experiences’ with the appellant, who had ‘served the court’ ”. In the present case, however, the district judge stated that the failure of Niblack to appear was not an isolated aberration but had “happened many times in the past” and that the appellant had been repeatedly warned about such misconduct. In Sykes v. United States we discussed the Klein decision. Some clarification of that discussion may be appropriate. The Klein case did not hold that a failure to appear at a time ordered by the court could not be a contempt in the presence of the court; as we have said, the holding was only that Klein, in New York and under no order to appear, was not guilty of contempt in the presence of the court or so near thereto as to obstruct the administration of justice. In any event our discussion of the Klein ruling was not necessary to our decision with respect to Sykes, which rested on our analysis and evaluation of the evidence and our conclusion that the proof did not disclose any wilfulness on the part of Sykes. We think the record in this case justifies the conclusion that the appellant’s conduct was in reckless and wilful disregard of the court’s order that he appear promptly for the scheduled hearing. Thus, the record supports a finding that the appellant’s disobedience of the Court’s order met the test of criminal intent applied in Sykes v. United States. We think also that when a lawyer, in wilful disregard of a court’s order, appears almost two hours after the appointed hour he subjects himself to discipline pursuant to Rule 42(a), Fed.R.Crim.P. The judgment is affirmed. . Rule 42(a), Fed.R.Crim.P. provides: Summary Disposition. A criminal contempt may be punished summarily if the judge certifies that he saw or heard the conduct constituting the contempt and that it was committed in the actual presence of the court. The order of contempt shall recite the facts and shall be signed by the judge and entered of record. 18 U.S.C. § 401 provides : A court of the United States shall have power to punish by fine or imprisonment, at its discretion, such contempt of its authority, and none other, as— (1) Misbehavior of any person in its presence or so near thereto as to obstruct the administration of justice; (2) Misbehavior of any of its officers in their official transactions ; (3) Disobedience or resistance to its lawful writ, process, order, rule, decree, or command. . These facts should have been, but were not, recited in the order of contempt filed by the District Court pursuant to Rule 42 (a), Fed.R.Crim.P. Nevertheless, since the appellant was fully advised of all the facts and circumstances upon which the district judge based his order, and was given an opportunity to respond, we think the omission does not warrant reversal. In the future, district judges should be careful to include a full statement of the facts in any order of contempt. Cf. United States v. Schiffer, 351 F.2d 91 (6th Cir. 1965), cert. denied, 384 U.S. 1003, 86 S. Ct. 1914, 16 L.Ed.2d 1017 (1966), rehear. denied, 385 U.S. 890, 87 S.Ct. 12, 17 L.Ed.2d 121 (1966).

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UNITED STATES of America v. Douglas F. BROWN, a/k/a Douglas Brown, Appellant. No. 72-1208. United States Court of Appeals, District of Columbia Circuit. March 16, 1973. J. Gordon Arbuckle, Washington, D. C., was on the brief for appellant. Harold H. Titus, Jr., U. S. Atty., John A. Terry, Brian W. Shaughnessy, Philip L. Cohan, and John J. Mulrooney, Asst. U. S. Attys., were on the brief for appellee. Before BAZELON, Chief Judge, ELBERT P. TUTTLE United States Senior Circuit Judge for the Fifth Circuit, and MacKINNON, Circuit Judge. Sitting by designation pursuant to 28 U.S.C. § 294(d). PER CURIAM: Appellant, who was convicted of possession of a sawed-off shotgun, raises a number of issues, only one of which deserves comment. Before trial, appointed defense counsel apprised the court of appellant’s prior criminal record, and inquired whether any of appellant’s prior convictions would be admissible to impeach him. The court ruled it would only admit the most recent conviction — for assault with intent to commit robbery in 1968. The trial judge thus appears to have exercised his discretion, foreclosing any challenge to the 1970 amendments to the Luck statute in this case. Defense counsel seems to have acquiesced in the trial court’s decision — there was no mention of a Luck hearing nor argument for the judge to exercise his discretion to exclude the most recent conviction as well. This court has repeatedly held that the burden is on defense counsel to invoke Luck and to show why the court should exercise its discretion to render a prior conviction unavailable for impeachment. The failure of the court to hold a Luck hearing is therefore not grounds for reversal in this case. Appellant notes that there is substantial indication that defendants with court-appointed lawyers fare far worse than those with retained attorneys. As he points out, an indigent’s advocacy alternatives are limited and the efforts of his appointed counsel are often hampered by institutional pressures. Thus, appellant asserts, sole reliance on the adversary system to protect the defendant’s rights is unrealistic. Appellant would have us take these facts into consideration in applying the plain error rule when a court appointed counsel has failed to register an objection. Appellant urges that these considerations should also apply to ameliorate the burden on counsel to invoke the Luck rule. But we think it would be unwise to act on that suggestion now. There is nothing in the record before us to indicate whether counsel’s failure to ask for a Luck hearing was an informed tactical choice or a decision undertaken out of ignorance of the relevant law or indifference to her client’s interests. Although appellant’s counsel on appeal (who is not trial counsel) disclaims reliance on ineffectiveness of counsel, that issue necessarily lurks in the suggestion that the defendant should not be bound by the failures of his trial attorney. This court has held, however, that we will not resolve the matter of the effectiveness of trial counsel where, as here the record is inadequate for the purpose of deciding whether counsel’s challenged decision was a deliberate, knowing and rational tactical choice. Appellant is not deprived of a remedy for a meritorious claim; he may seek to raise the issue of ineffectiveness and support his claim with evidence dehors the record either on a timely motion for a new trial or on collateral attack. Affirmed. . Appellant was convicted of possession of an unregistered firearm, 26 U.S.C. § 5861 (d); possession of a firearm not identified by serial number, 26 U.S.C. § 5861 (i); and possession of a prohibited weapon, 22 D.C.Code § 3214(a). . Appellant also asserts as error the improper admission of evidence of the factual circumstances of his arrest and the prosecutor’s discussion of the legal concept of possession in his summation. We find neither an adequate reason for reversal. . Defense counsel recited a series of charges against appellant dating back to 1965, including a recent sentence under the Youth Corrections Act. . 14 D.C.Code § 305 (Supp. V 1972) (purporting to preempt the trial judge’s discretion by permitting the impeachment of a witness by any of a specified group of crimes for which the witness had been convicted.) The constitutionality of this statute is currently under consideration by this court in United States v. Henson, No. 71-1456 (D.C.Cir. filed June 13, 1971); United States v. Marshall, No. 71-1491 (D.C. filed June 10, 1971); United States v. Brown, 71-1497 (D.C.Cir. filed June 18, 1971); United States v. Jeffries, 71-1356 (D.C.Cir. filed May 3, 1971). . United States v. Coleman, 137 U.S.App.D.C. 110, 113, 420 F.2d 1313, 1316 (1969); Smith v. United States, 132 U.S.App.D.C. 131, 131-132, 406 F.2d 667, 667-668 (1968), cert. denied, 394 U.S. 963, 89 S.Ct. 1315, 22 L.Ed.2d 564 (1969); Evans v. United States, 130 U.S.App.D.C. 114, 118, 397 F.2d 675, 678-679 (1968); Gordon v. United States, 127 U.S.App.D.C. 343, 346, 383 F.2d 936, 939 (1967), cert. denied, 390 U.S. 1029, 88 S.Ct. 1421, 20 L.Ed.2d 287 (1968). . See, e. g., Summers, The Tilted Scales of Criminal Justice: The Plight of the Indigent Defendants, 5 Crim.L.Bull. 508 (1969); D. Oaks & W. Lehman, A Criminal Justice System and the Indigent: A Study of Chicago and Cook County, 108-38, 150-67 (1966); United States v. Martin, No. 71-1457, 154 U.S.App.D.C. _ at _, 475 F.2d 943 at 956 (1973) (Chief Judge Bazelon dissenting) (citing a study by the Administrative Office of the U. S. Courts showing that offenders with appointed counsel receive longer sentences than offenders with privately retained attorneys). . See, e. g., ABA Project on Minimum Standards for Criminal Justice, Standards Relating to Providing Defense Services, Approved Draft 1968, § 1.4 commentary (b) at 20-21 (an “assigned lawyer . . . may not have the same freedom of action in defending his client before the judge responsible for the assignment that retained counsel would have”) ; A. Blumberg, Criminal Justice 3-38, 95-116 (1967); L. Downie, Justice Denied 173-77, 179-82 (1971); President’s Commission on Law Enforcement and the Administration of Justice, Task Force Reports: The Courts 57-61 (1967). . See United States v. Martin, No. 71-1457, 154 U.S.App.D.C. _ at _, 475 F.2d 943 at 954 (1973), (Chief Judge Bazelon dissenting). . See, e. g., People v. Ibarra, 60 Cal.2d 460, 34 Cal.Rptr. 863, 386 P.2d 487 (1963) (Justice Traynor, writing for the court, reversed a conviction for ineffectiveness where counsel failed to move for the suppression of evidence because of his ignorance of the relevant law). . See United States v. Benn & Hunt, _ U.S.App.D.C. _, 476 F.2d 1127 (1972). . Fed.R.Crim.P. 33; see, United States v. Thompson, No. 71-1182, 154 U.S.App.D.C. _, 475 F.2d 931 (1973); United States v. Smallwood, 153 U.S.App.D.C. 387 at 393, 473 F.2d 98 at 104 (Nov. 9, 1972) (Bazelon, Chief Judge, concurring); Marshall v. United States, 141 U.S.App.D.C. 1, 5 n. 11, 436 F.2d 155, 159 n. 11 (1970). A motion for a new trial on the grounds of newly discovered evidence may be made within two years of final judgment. Fed.R.Crim.P. 33. Where evidence of the ineffectiveness of trial counsel is brought to the attention of the court for the first time in support of the motion, that evidence is “newly discovered” for the purposes of Rule 33. See United States v. Thompson, No. 71-1182, 154 U.S.App.D.C. _, 475 F.2d 931 (1973). . 28 U.S.C. § 2255.

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Joseph Charles JAMES, Appellant, v. UNITED STATES of America, Appellee. No. 72-1783. United States Court of Appeals, Eighth Circuit. Submitted March 16, 1973. Decided April 20, 1973. Joseph Charles James, pro se. Bethel B. Larey, U. S. Atty., and Sam Hugh Park, Asst. U. S. Atty., Fort Smith, Ark., on brief for appellee. Before VAN OOSTERHOUT, Senior Circuit Judge, HEANEY, Circuit Judge, and VAN SICKLE, District Judge. Sitting by designation. PER CURIAM. This is a timely appeal by Joseph Charles James, hereinafter called defendant, from order denying his 28 U.S. C. § 2255 petition to vacate a five-year sentence imposed upon him after his plea of guilty to a charge of possession of an explosive bomb, in violation of 26 U.S.C. §§ 5861(d) and 5871. We will briefly summarize the background facts. Defendant waived indictment and was charged by information in Count I with possession of an explosive bomb in violation of 26 U.S.C. §§ 5861(d) and 5871, and in Count II with possession of a pistol by a convicted felon, in violation of 18 U.S.C. App. § 1202(a). Defendant was represented by counsel and entered a voluntary plea of guilty to each count which was accepted by the court. Defendant was sentenced to five-years imprisonment on Count I, under which a sentence up to ten years was permissible, and was given a two-year concurrent sentence on Count II. In the § 2255 hearing here involved, the trial court upheld defendant’s contention that his conviction on Count II was invalid under United States v. Bass, 404 U.S. 336, 92 S.Ct. 515, 30 L.Ed.2d 488 (1971), decided subsequently to the imposition of sentence, and set aside and vacated the conviction and sentence on Count II. The court denied relief as to the Count I sentence, stating: “It is further ordered and adjudged that the petition of Joseph Charles James as to Count I of the information be denied and the sentence entered by the Court on June 22, 1971, be and the same is hereby in all respects affirmed.” Defendant, relying upon United States v. Tucker, 404 U.S. 443, 92 S.Ct. 589, 30 L.Ed.2d 592 (1972), urges that he is entitled to have his Count I sentence vacated with a remand to the trial court for re-sentencing upon the ground .that it is not established that the trial court did not rely on the invalid Count II conviction in imposing the Count I sentence. The Supreme Court in Tucker states that the vital issue for determination is “whether the sentence . . . might have been different if the sentencing judge had known that at least two of the respondent’s previous convictions had been unconstitutionally obtained.” 404 U.S. 443, 448, 92 S.Ct. 589, 592, 30 L.Ed.2d 592. Similarly here, the critical issue is whether the sentence imposed on Count I might have been different if the sentencing judge had known at the time of the sentencing that the Count II conviction was invalid. This court has on several occasions subsequent to Tucker remanded for re-sentencing where it appeared possible that a sentencing judge might have relied in part on an unconstitutional conviction. Taylor v. United States, 472 F.2d 1178 (8th Cir. 1973); Garrett v. Swenson, 459 F.2d 464 (8th Cir. 1972). In Taylor we stated: “A sentencing judge might still render a lesser sentence where the petitioner’s record appears in a ‘dramatically different light’ notwithstanding that the original sentence was within permissible limits of the lesser category of recidivists.” 472 F.2d 1178, 1180. In McGee v. United States, 462 F.2d 243 (2d Cir. 1972), concurrent sentences of two years were imposed upon each of four counts upon which defendant was convicted. The conviction on Count I was later invalidated. The court in remanding counts two to four for resentencing states that on a silent record it is impossible to determine whether the sentences on the remaining counts were in part induced by conviction on the count which was subsequently invalidated. The court also states: “When the invalidity of the conviction on one count which may have influenced the sentence becomes apparent on an appeal, whether on direct or collateral attack, the proper course is usually to vacate the sentences and remand for resentencing on the valid counts without consideration of the invalid one.” 462 F.2d 243, 246. To like effect, see Martinez v. United States, 464 F.2d 1289 (10th Cir. 1972). In McAnulty v. United States, 469 F.2d 254 (8th Cir. 1972), we held no remand for resentencing was required where the trial judge in the § 2255 proceeding stated that six years was the appropriate sentence regardless of the invalidity of previous convictions. In our present case, the trial court made no express statement with respect to the consideration if any given to the Count II conviction subsequently invalidated in imposing sentence on the valid conviction. The fact that the sentencing judge reaffirmed the sentence on Count I in the present § 2255 proceeding after he had invalidated the Count II conviction lends support to the Government’s view that the Count II conviction had no influence on the Count I sentence and that a remand for resentencing will accomplish nothing. The court could in the § 2255 proceeding vacate the Count I conviction and resentenee the defendant if he believes the Count II conviction influenced the Count I sentence. However, such is the position taken in Tucker by the dissenting opinion of Mr. Justice Black-mun, concurred in by the Chief Justice, which position was rejected by the Court majority in footnote 8, p. 449 of 404 U.S., 92 S.Ct. 589. The burden imposed on the trial court on remand for resentencing will be slight. A record can then be made which will clearly reflect whether the sentence imposed on Count I was in any way influenced by the Count II conviction. The bulk of the cases passing upon the issue before us interpret Tucker as requiring a remand under the circumstances of this case. This case is remanded to the trial court with direction to vacate the sentence imposed on Count I and to resentence the defendant upon such count. . Defendant at footnote 1 of his reply brief states that the trial court at the time of imposing sentence considered and relied upon four previous convictions of the defendant which defendant now claims were constitutionally invalid. Defendant concedes such issue was not raised in the trial court and that hence it cannot be considered upon this appeal. We suggest that the trial court in event it considers any previous convictions in passing sentence on Count I allow the defendant to attack the validity of such convictions upon the basis that such procedure might be helpful in bringing about an early termination of this litigation.

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In the Matter of IREDALE’S LTD., a co-partnership composed of William E. Iredale and Genevieve M. Iredale, Bankrupt. In the Matter of William E. IREDALE, Bankrupt. In the Matter of Genevieve M. IREDALE, Bankrupt. BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, Petitioner-Appellant, v. Carl W. VROOMAN, Trustee-Appellee. No. 71-1703. United States Court of Appeals, Ninth Circuit. March 15, 1973. Ralph M. Abee (argued), Harris B. Taylor, Los Angeles, Cal., for petitioner-appellant. Sandor T. Boxer (argued), of Coskey & Coskey, Los Angeles, Cal., for trusteeappellee. Before KOELSCH, KILKENNY, and GOODWIN, Circuit Judges. PER CURIAM: Bank of America appeals from a judgment upholding the referee’s decision in a bankruptcy contest over the proceeds of the bank’s liquidation of certain stock originally owned by the bankrupt, Ire-dale. Iredale, to secure a loan from the bank, pledged as collateral 547 shares of Sears, Roebuck and Company stock. The collateral pledge agreement contained a “dragnet clause,” a common provision in collateral agreements purporting to give a secured lender the right to look to all the debtor’s assets in the lender’s hands to cover all the debtor’s liabilities to the lender, past and future as well as present. After he had concluded the loan transaction by pledging his stock as collateral in this open-ended fashion, the borrower entered into an equipment-lease agreement with the same bank. No new collateral was pledged. Still later, Iredale defaulted on the loan agreement, and the bank sold the stock. From the proceeds of the sale the bank satisfied Iredale’s unpaid balance on the loan. The bank then applied the surplus to the amount due, and in arrears, under the equipment lease. The referee decided that this application was unauthorized. The district court sustained the referee’s decision that the dragnet clause could not authorize the bank’s application, as against other creditors, of the surplus collateral to the equipment lease. This view finds some support in the result of National Acceptance Co. v. Blackford, 408 F.2d 20 (5th Cir. 1969). However, National Acceptance turned in part on statutory considerations not applicable in this case. After the district court had ruled, this court decided Kesling v. Bank of America Nat’l Trust & Sav. Ass’n, 449 F.2d 770 (9th Cir. 1971). Kesling holds that a security agreement is not rendered invalid merely because it creates a lien to secure future indebtedness. In the absence of evidence indicating that the dragnet clause was not intended to mean what it says, or that it contravened some provision of local law, the clause will be enforced. The district court failed to give effect to the expressed intentions of the parties to the agreement, and thereby denied the lender the benefit of its security. The trustee does not argue that the security agreement or the lease was in conflict with California’s version of the Uniform Commercial Code, Cal. Commercial Code § 9402. Accordingly, we do not reach questions that could arise if a security agreement is challenged on statutory grounds. Reversed.

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UNITED STATES of America ex rel. John FORD, Petitioner-Appellant, v. C. Murray HENDERSON, Warden, Louisiana State Penitentiary, Respondent-Appellee. No. 72-3505 Summary Calendar. United States Court of Appeals, Fifth Circuit. April 18, 1973. John Ford, pro se. William J. Guste, Jr., Atty. Gen., Baton Rouge, La., for respondent-appellee. Before BELL, GODBOLD and INGRAHAM, Circuit Judges. Rule 18, 5 Cir., Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I. PER CURIAM: John Ford, a prisoner of the State of Louisiana, has appealed from the district court’s denial of his petition for habeas corpus relief. We affirm the ruling below. Appellant Ford is confined by authority of a 21-year sentence for manslaughter which was imposed on November 27, 1967 by the Criminal District Court of Orleans Parish, Louisiana. The judgment resulted from Ford’s plea of guilty. There was no direct appeal; but state post-conviction remedies have been exhausted in compliance with the requirements of 28 U.S.C. § 2254(b). The state trial court held an evidentiary hearing on the merits of Ford’s habeas corpus petition, following which it denied relief. Ford’s application to the Louisiana Supreme Court for habeas relief also was denied. State ex rel. Ford v. Henderson, La.1972, 256 So.2d 440. In his habeas petition filed in the United States District Court, Ford alleged that (1) his plea of guilty was not knowingly and understandingly made; and (2) he was denied the assistance of counsel. The district court denied relief on the basis of the state record, as is authorized by pertinent provisions of 28 U.S.C. § 2254. The transcript of the evidentiary hearing held in the state trial court shows that Ford did not testify as to any constitutional rights of which he was ignorant when he pled guilty. He testified that his former court-appointed counsel had negotiated a plea of manslaughter for him, whereupon the pending charges of murder and attempted armed robbery would be dismissed. Ford testified that he refused to accept the arrangement at that time because he would have had to accept a 21-year sentence, whereas he was unwilling to accept a sentence of more than 15 years. The trial court allowed that attorney to withdraw, and appointed as Ford's new counsel, the attorney who had been retained to represent Ford’s co-defendant. The appellant testified that when he pled guilty he was not represented by any counsel, but the transcript shows that the attorney represented both defendants in these pre-Boykin proceedings. Appellant stated that then he decided to go ahead and plead guilty (knowing that he would receive 21 years), although he knew he still had the right to a trial after his co-defendant pleaded guilty. Ford conceded that his plea was entirely voluntary. The attorney who represented Appellant Ford and his co-defendant testified that he discussed the plea bargain with Ford; and that he had thoroughly investigated the cases which were pending against the two men. Under these and other circumstances shown by the record, we have no doubt that Ford’s plea was knowingly and understandingly made, and that he was accorded the effective assistance of counsel. See Busby v. Holman, 5th Cir. 1966, 356 F.2d 75; Cooper v. Holman, 5th Cir. 1966, 356 F.2d 82, cert. denied 385 U.S. 855, 87 S.Ct. 103,17 L.Ed.2d 83; Parrish v. Beto, 5th Cir. 1969, 414 F.2d 770; Roberts v. United States, 5th Cir. 1978, 472 F.2d 1195 (1973); Weaver v. State, 5th Cir. 1973, 474 F.2d 1135 (1973). The district court’s order denying habeas corpus relief to Appellant Ford is hereby affirmed. Affirmed. . Boykin v. Alabama, 1969, 395 U.S. 238, 89 S.Ct. 1709, 23 L.Ed.2d 274.

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UNITED STATES of America, Plaintiff-Appellee, v. STATE OF MISSISSIPPI et al. (Smith County School District), Defendants-Appellants, Sylvarena Baptist Academy, Defendant-Appellant. No. 72-2521. United States Court of Appeals, Fifth Circuit. April 11, 1973. Heber Ladner, Jr., Sp. Asst. Atty. Gen., A. F. Summer, Atty. Gen. of Miss., Jackson, Miss, for State of Miss. Marvin Oates, Bay Springs, Miss., M. M. Roberts, Hattiesburg, Miss., for Sylvarena Baptist Academy. L. D. Pittman, Raleigh, Miss., for School Board. Robert E. Hauberg, U. S. Atty., Jackson, Miss., Daniel F. Rinzel, Richard H. Swan, Andrew J. Ruzicho, Civil Rights Div., Dept, of Justice, Washington, D. C., for plaintiff-appellee. Before COLEMAN and SIMPSON, Circuit Judges and ESTES, District Judge. PER CURIAM: In 1968, the Board of Supervisors of Smith County, Mississippi, leased for a 25-year period the Sylvarena School, a vacant public school building located on certain sixteenth section lands, to the Sylvarena Civic Center Association for the sum of $5.00 per year. On August 11, 1970, some seventeen months after the original lease, the district court ordered the Smith County Board of Education to terminate operation of a racially dual system of public schools. Some five months later, on January 15, 1971, the Sylvarena Civic Center Association subleased the Sylvarena School premises to the Sylvarena Baptist Academy for the unexpired term of the Civic Center’s lease to be used as a private, segregated school serving only white students. The sublease provides that the yearly rentals of $5.00 be paid directly to the County Superintendent of Education. The United States moved for supplemental relief in the district court, which had retained jurisdiction of the cause to insure compliance, on the basis that the leases were being used to reestablish a dual school system by unlawfully providing state financial assistance to the operation of the private, segregated school. The district court granted the United States the relief sought, enjoining the selling, leasing or subleasing of sixteenth section land to any organization for use as a segregated private school, and declaring the original lease of the Sylvarena School premises to the Civic Center null and void. The court held that the Smith County Board of Supervisors had the right to renew the lease to the Civic Center provided that any lease contain the provision that any sixteenth section land premises may not be leased or subleased for the use of a segregated school or for any use which interferes with any school desegregation plan. We hold this order of the district court overbroad and modify it in accord with McNeal v. Tate County School District, 460 F.2d 568, 574 (5th Cir. 1972). Although under Mississippi law the Smith County Board of Supervisors is entitled to lease sixteenth section land for a nominal sum, it is well established that the state, acting through its various local bodies, is charged with the affirmative duty to take whatever steps might be necessary to bring about a unitary educational system free of racial discrimination. Green v. County School Board of New Kent County, 391 U.S. 430, 88 S.Ct. 1689, 20 L.Ed.2d 716 (1968); McNeal v. Tate County School District, 460 F.2d 568 (5th Cir. 1972); Gilmore v. City of Montgomery, 473 F. 2d 832 (5th Cir. 1973). Where, as here, the state is the lessor of a former public school converted into a segregated private school, located on property specifically designated for the benefit of the public schools, there is a state involvement with such schools. Under these circumstances the proscriptions of the Fourteenth Amendment against racial discrimination by the state must be complied with by the lessee and sublessee as certainly as though they were binding covenants written into the agreement itself. See Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961). At the time the district court granted the relief requested by the United States by voiding the lease between the Board of Supervisors and the Civic Center, it did not have the benefit of this court’s decision on petition for rehearing in McNeal v. Tate County School District, supra, 460 F.2d at 574. In light of our decision on reconsideration in McNeal, we now vacate the order of the district court voiding the lease between the Board of Supervisors and the Civic Center, and remand the case with directions to enter an order upholding the lease and sublease but enjoining the Civic Center and the Sylvarena Baptist Academy, or any members, successors or assigns from using the property for the operation of a segregated private school. The injunction of the district court shall provide that if the Sylvarena School is used as a private school, such school shall be operated without any discrimination of any kind or character based upon race, creed, color or national origin, and the doors of any such school shall be open at all times to all qualified applicants on an equal basis. Remanded, with directions. . Legal title to the sixteenth section of each township is vested in the State of Mississippi to be held in trust for the maintenance and support of public schools for inhabitants of each township. Lambert v. State, 211 Miss. 129, 51 So.2d 201 (1951). Though title remains in the state, the Mississippi legislature has provided that each county shall control all the sixteenth section land located within it. Miss.Code Ann. § 6598-01 (Supp. 1972).

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Randall F. PAINTER, suing as the Administrator of the Estate of Elvon A. Painter, Deceased, Plaintiff-Appellant, v. TENNESSEE VALLEY AUTHORITY et al., Defendants-Appellees. Fred CAMPBELL, suing as Admr. of the Estate of Beverly Campbell, Deceased, Plaintiff-Appellant, v. TENNESSEE VALLEY AUTHORITY et al., Defendants-Appellees. Nos. 72-3690, 72-3691 Summary Calendar. United States Court of Appeals, Fifth Circuit. March 28, 1973. Alva C. Caine, Birmingham, Ala., for plaintiffs-appellants. Robert H. Marquis, Gen. Counsel, Beauchamp E. Brogan, Asst. Gen. Counsel, Beverly S. Burbage, and Charles A. Wagner, III, Tenn. Valley Authority, Knoxville, Tenn., for defendants-appellees. 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.). PER CURIAM: These two actions brought under the Alabama wrongful death act against the Tennessee Valley Authority [TVA] were dismissed for failure to state a claim upon which relief could be granted. We affirm. The TVA is a federally owned corporation and it is conceded to be an agency or instrumentality of the United States. Though it may sue or be sued in contract or tort, Congress has made no provisions allowing suit against it for punitive damages. The plaintiffs candidly concede that pursuant to Alabama law the only damages recoverable under the wrongful death statute are punitive damages. There is no provision in Alabama law establishing a right in the decedent’s survivors to recover compensatory damages for a wrongful death. Moreover, we reject the argument that the damages awarded under the statute are, regardless of the label applied by the Alabama courts, inherently compensatory to any extent. Since the objectives of punitive damage awards are totally unrelated to the purposes of compensation, it would be a mere happenstance if a verdict for punitive damages equalled compensatory damages in this cause. The purpose of this law as declared of the courts of Alabama is binding on this court. It simply will not do to allow plaintiff’s to utilize Alabama’s wrongful death law authorizing punitive recovery as a surrogate authority to recover compensatory damages by assuming our own view of its true purpose or measure of damages to be awarded which the statute does not authorize and Alabama courts declare is not present. See Massachusetts Bonding & Insurance Company v. United States, 352 U.S. 128, 77 S. Ct. 186, 1 L.Ed.2d 189 (1956). The district court concluded, on the authority of Littleton v. Vitro Corp. of America, 130 F.Supp. 774 (N.D.Ala. 1955), that the action for punitive damages would not lie against the TVA, under the established rule that punitive damages cannot be recovered from the United States or its agencies. See Missouri Pacific R. R. v. Ault, 256 U.S. 554, 41 S.Ct. 593, 65 L.Ed. 1087 (1921); Reconstruction Finance Corp. v. Texas, 229 F.2d 9 (5th Cir.), cert. denied, 351 U.S. 907, 76 S.Ct. 695, 100 L.Ed. 1442 (1956). See also Fowler v. Tennessee Valley Authority, 208 F.Supp. 828 (E.D.Tenn. 1962), aff’d on other grounds, 321 F.2d 566 (6th Cir. 1963). It is altogether anamolous that similarly situated survivors could maintain this action against the TVA under the law of practically any other state while those who have the misfortune of being relegated to the use of Alabama law are permitted no right of action at all. This lack of uniformity of tort responsibility of a federal institution based on the fortuity of geography is irrational. However, this inferior federal court has no power and declines to assume the temerity to so intrude in matters traditionally committed to the States as to declare the existence of a federal right in the survivors to recover for a decedent’s death, even though the “policy ... [of recognizing such a right] has become itself a part of our law, to be given its appropriate weight not only in matters of statutory construction but also in those of decisional law.” Moragne v. States Marine Lines, Inc., 398 U.S. 375, 390-391, 90 S.Ct. 1772, 1782, 26 L.Ed.2d 339 (1970). The aberration in such cases must find its remedy through an appropriate Congressional waiver of the TVA’s immunity to punitive damages or by the creation of some uniform federal right of action, or by Alabama’s amendment or reinterpretation of its law. The decisions in these cases are in all respects Affirmed. . Ala.Code tit. 7, § 123 (1960). . 16 U.S.C.A. § 831c (b); Keifer & Keifer v. Reconstruction Finance Corp., 306 U.S. 381, 59 S.Ct. 516, 83 L.Ed. 784 (1939); Adams v. Tennessee Valley Authority, 254 F.Supp. 78 (E.D.Tenn. 1965); Littleton v. Vitro Corp. of America, 130 F.Supp. 774 (N.D.Ala. 1955). . The same district court which decided Littleton v. Vitro Corp. of America, supra, has reached similar results in at least three other cases, one of which was decided as early as 1940. During this time the State of Alabama has not seen the need to amend the statute or to change its construction. . In Massachusetts Bonding & Ins. Co. v. United States, supra, the Supreme Court observed that apparently the punitive construction of wrongful death statutes prevailed only in Massachusetts and Alabama. . An analogous result obtained in actions brought under the Federal Tort Claims Act, 28 U.S.C. § 2671 et seq., prior to its amendment in 1947. The present 28 U.S.C. § 2674 provides: The United States shall be liable, respecting the provisions of this title relating to tort claims, in the same manner and to the same extent as a private individual under like circumstances, but shall not be liable for interest prior to judgment or for punitive damages. If, however, in any case wherein death was caused, the law of the place where the act or omission complained of occurred provides, or has been construed to provide, for damages only punitive in nature, the United States shall be liable for actual or compensatory damages, measured by the pecuniary injuries resulting from such death to the persons respectively, for whose benefit the action was brought, in lieu thereof. The Federal Tort Claims Act does not apply, however, to actions against the Tennessee Valley Authority. 28 U.S.C. § 2680(l).

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UNITED STATES of America, Appellee, v. Connie STUMPF, Appellant. No. 73-1054. United States Court of Appeals, Fourth Circuit. Argued April 4, 1973. Decided April 18, 1973. Alfred D. Swersky, Alexandria, Ya., for appellant. K. Gregory Haynes, Asst. U. S. Atty., Alexandria, Va., for appellee. Before WINTER and FIELD, Circuit Judges, and BLAIR, District Judge. PER CURIAM: Defendant, who entered a guilty plea to the misdemeanor charge of willful obstruction of mail, 18 U.S.C. § 1701 (1970), was sentenced to imprisonment for a period of 120 days. Although she was interviewed by a probation officer prior to sentencing, she suppressed the fact that she had ever experienced psychiatric difficulties. After sentence was imposed, she moved for a reduction of sentence under Rule 35, F.R.Crim.P., supporting her motion with a letter from her family doctor which related that she had had “a very distorted life history since her adoption,” that she had been treated at “Pratt Institute,” Baltimore, Maryland, and escaped from this institution, and that she was “in a very unstable mental wandering and probable self-destructive state of mind [sic].” The district court, after reviewing the papers and hearing the comments of counsel, denied the motion and also denied a request that she be permitted to remain at liberty on bond pending an appeal. Defendant appealed from denial of her motion for reduction, and a judge of this court granted a 5-day stay of the execution of the sentence (later extended), on condition that defendant consult a private psychiatrist to obtain a determination of her mental condition and the effect of incarceration thereon. The examination and report were made by Dr. Erich M. Reinhardt, a qualified psychiatrist who was privately engaged by defendant. Dr. Reinhardt’s report elaborated upon defendant’s unstable background and her “fragile, emotional equilibrium,” which he-described as “prone to disintegration even under minor stress,” and as “very precarious, with the threat of a prison sentence hanging over her . . ..” He stated that “she has made suicidal gestures, talks suicide, and has reached the point of making unwise and unrealistic decisions ..” He expressed the view that if incarcerated, “I am sure that psychiatric hospitalization would become a necessity.” In a supplemental report he added that, in his opinion, defendant “should not be incarcerated at the present time, since most likely confinement would cause a mental breakdown.” Limiting ourselves to the record before the district court, we see no merit in defendant’s appeal. A motion for reduction of sentence under Rule 35 is addressed to the sound discretion of the district court, and it follows that the district court’s disposition of the motion is not reviewable on appeal except for a clear abuse of discretion. United States v. Harbolt, 455 F.2d 970 (5 Cir. 1972); United States v. Krueger, 454 F.2d 1154 (9 Cir. 1972). The sentence of the district court did not exceed the statutorily authorized maximum penalty of $100 fine, or six months imprisonment, or both, and the information brought to the attention of the district court was not so positive that we think there was any abuse of discretion, let alone a clear abuse, in its declining to modify the sentence. At the same time, we are sure that the district court would share our concern, generated by the more detailed and corroborating information and opinion of Dr. Reinhardt, were these facts before it, and would agree that they warrant further exploration either by way of interrogating Dr. Reinhardt, or by the selection of a court-appointed psyehiatrist to make another evaluation, or both, or even by other means. Cf. Leach v. United States, 118 U.S.App.D.C. 197, 334 F.2d 945 (1964). Not lightly nor likely do we think that incarceration would be ordered if there is in fact a substantial likelihood of an attempt at suicide or a mental breakdown. Accordingly, we will vacate the order denying the motion and remand the case so as to give the district court the opportunity to conduct such further proceedings as it, in its sound discretion, deems proper, to determine if these dangers are real, and if so, how they may best be met. The mandate will issue forthwith, but we will grant a further stay of execution of the sentence to continue until the motion has been further considered and decided by the district court. Vacated and remanded; stay granted. The Sheppard Enoch Pratt Hospital is a private hospital, outside of Baltimore, whieh specializes in the treatment of mental and nervous disorders.

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UNITED STATES of America, Plaintiff-Appellee, v. John K. BRIGGS et al., Defendants-Appellants. No. 72-3459 Summary Calendar. United States Court of Appeals, Fifth Circuit. April 2, 1973. Doris Peterson, James Reif, Morton Stavis, Nancy Stearns, c/o Center for Constitutional Rights', New York City, Cameron Cunningham, Brady S. Coleman, Austin, Tex., Larry Turner, Gaines-ville, Fla., attys. for defendants-appellants. William H. Stafford, Jr., U. S. Atty., Pensacola, Fla., Stewart J. Carrouth, Asst. U. S. Atty., Tallahassee, Fla., William M. Piatt, Internal Security Div., Dept, of Justice, Washington, D. C., attys. for plaintiff-appellee. Before WISDOM, GODBOLD and RONEY, 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 district court’s decision setting bail for each of the eight named defendants in the amount of $10,000 cash or surety bond and denying defendants’ motion to be released on their personal recognizance or in the custody of counsel or upon a 10% deposit of the amount fixed for the bond. Previously, we remanded the cause to enable the district court to comply with rule 9(a) of the Federal Rules of Appellate Procedure by stating in writing the reasons for imposing or refusing to impose conditions of release. United States v. Briggs, et al., 5 Cir. 1973, 472 F.2d 1229. The district court has since issued an order stating its reasons for denying the defendants’ motion to reduce bail. On reexamination of our previous decision, we find that we were not sufficiently explicit in our directions to the district court. We are compelled, therefore, again to remand the cause. It is complained that the District Court fixed a uniform blanket bail chiefly by consideration of the nature of the accusation and did not take into account the difference in circumstances between different defendants. If this occurred, it is a clear violation of Rule 46(c). Each defendant stands before the bar of justice as an individual. Even on a conspiracy charge defendants do not lose their separateness or identity. While it might be possible that these defendants are identical in financial ability, character and relation to the charge — elements Congress has directed to be regarded in fixing bail — I think it violates the law of probabilities. Each accused is entitled to any benefits due to his good record, and misdeeds or a bad record should prejudice only those who are guilty of them. The question when application for bail is made relates to each one’s trustworthiness to appear for trial and what security will supply reasonable assurance of his appearance. In its written order, the district court stated that it considered several factors in determining what conditions of release were appropriate. The court relied primarily on the seriousness of the charges alleged in the indictment but also considered the potential penalty which could be imposed if the defendants were convicted, the defendants’ ties to the Gainesville, Florida, community (the site of the trial), and the defendants’ attitude toward the legal system. The court concluded that these factors justified a fixed bond for each of the defendants in the amount of $10,000 cash or surety bond. The district court’s statement of reasons does not clarify the basic ambiguities in its decision that necessitated our initial remand order. The district court’s order does not consider the factors with respect to each defendant that would justify the conditions of release imposed in this case. Rather, it lumps all the defendants together and concludes that a uniform blanket bail is appropriate. The Bail Reform Act, however, clearly contemplates that each person has the right to separate consideration, to stand or fall on the merits of his own case rather than on the misdeeds of his co-defendants. “Each defendant stands before the bar of justice as an individual.” Moreover, judicial review is effectively thwarted if the appellate court cannot determine the factors relied upon by the district court in reaching its decision. By referring to the eight defendants as if they were a single, homogeneous entity, the district court has prevented consideration of the specific circumstances of each defendant. Here, there are several relevant differences among the defendants. Not all the defendants are charged with the many substantive offenses cited by the district court. Six of the eight defendants are charged with only one offense, conspiracy in violation of 18 U.S.C. § 371; one defendant is charged with both conspiracy and commission of the substantive offenses; and another defendant is charged not with conspiracy but with being an accessory. From the affidavits submitted by the defendants, it also appears that three of the defendants have resided in Gainesville for some time and that one of the defendants owns a home there. Two other defendants have ties in the state of Florida, and one owns a home in Hialeah, Florida. Despite these differing circumstances, the district court set a uniform blanket bail in the amount of $10,000 without stating the reasons for its decision. Without expressing any view as to the merits of the defendants’ claims, we think that at a minimum each defendant is entitled to know the reasons why the particular conditions of release were imposed in his case. The Bail Reform Act expressly requires this. We therefore remand the cause to the district court for a statement of the reasons for imposing the conditions of release with respect to each defendant. Remanded. RONEY, Circuit Judge (specially concurring): I concur with the majority because the remand on summary disposition is the quickest way to reach a final conclusion in this matter, given the position that the majority of this panel takes as to the District Court’s order. Otherwise, I would affirm the District Court’s order on the ground that, while the exercise that the remand requires of the District Court might be technically correct and reveal reasons for increased bail as to certain defendants, the District Court’s recitation of those factors common to all defendants convinces me that in no ease could the $10,000 bail requirement be regarded as an abuse of dis-, cretion nor as excessively high bail.’ Under such circumstances, I would ordinarily think that the remand creates an added expense for the defendants and can only result in a needless expenditure of judicial time. . Mr. Justice Jackson made the following observation in a concurring opinion in Stack v. Boyle, 1951, 342 U.S. 1, 9, 72 S.Ct. 1, 6, 96 L.Ed. 3, 9, a case very similar to the one at bar:

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Lawrence HOLZMAN, Appellant, v. L. H. J. ENTERPRISES, INC., Appellee. No. 72-1208. United States Court of Appeals, Ninth Circuit. April 5, 1973. Rehearing Denied June 15, 1973. Eric T. Lodge (argued), Theodore W. Graham, Luce, Forward, Hamilton & Scripps, San Diego, Cal., for appellant. James W. Hodges (argued), Herbert Katz, Hinchy, Katz, Witte, Wood & Anderson, Leland Featherman, San Diego, Cal., for appellee. Before MERRILL and KILKENNY, Circuit Judges, and TAYLOR, District Judge. Honorable Fred M. Taylor, United States District Judge for the District of Idaho, sitting by designation. MERRILL, Circuit Judge: In this appeal from order of a referee in bankruptcy, affirmed by the District Court, the issue is whether a nonpossessory security interest can, under California law, be taken as to after-acquired items of inventory of a retail merchant. Appellant is trustee in bankruptcy for Pasqual Patrick Piro, Jr. On July 20, 1966, appellee sold to Piro, doing business as Boys Towne, an inventory of boys’ clothing, receiving in payment a promissory note in the sum of $18,584.-55, secured by an agreement giving appellee a security interest “in all of the inventory of boys’ clothing * * * and any and all additions, accessions and substitutes thereto or therefor.” The security agreement was duly filed and recorded pursuant to state law. At the time petition in bankruptcy was filed, Piro had a substantial inventory of boys’ clothing on hand but only a small portion of it constituted items sold by appellee on July 20, 1966. The rest had been bought by Piro subsequent to that date. The inventory on hand was sold by appellant, as trustee, with appellee’s lien attaching to the proceeds. It was stipulated that $500 of that sum represented that portion of the inventory actually bought July 20, 1966. Appellee claimed that the entire proceeds were subject to his lien. Section 9102(4), California Commercial Code, reads: “Notwithstanding anything to the contrary in this division, no nonpossessory security interest, other than a purchase money security interest, may be given or taken in or to the inventory of a retail merchant held for sale, except in or to inventory consisting of durable goods having a unit retail value of at least five hundred dollars ($500) or motor vehicles, house trailers, trailers, semitrailers, farm and construction machinery and repair parts thereof, or aircraft.” The question is whether a lien on after-acquired inventory can qualify as a “purchase money security interest.” Section 9107, California Commercial Code, defines the term: “A security interest is a ‘purchase money security interest’ to the extent that it is (a) Taken or retained by the seller of the collateral to secure all or part of its price; or (b) Taken by a person who by making advances or incurring an obligation gives value to enable the debtor to acquire rights in or the use of collateral if such value is in fact so used.” The referee and the District Court ruled that under these statutory provisions appellee’s lien extended to after-acquired inventory and accordingly that the entire proceeds of sale were subject to it. We affirm. Section 9102(4) is a California departure from the Uniform Commercial Code, which was insisted upon by the state legislature. Appellant contends that this demonstrates legislative intent that pre-Commercial Code restrictions upon inventory lien should continue to apply and that nonpossessory security interests should be restricted to those which had then been recognized: chattel mortgages, conditional sales and trust receipts. As to inventory liens, law prior to the Commercial Code had expressly denied them to retail merchants. We cannot accept this construction. If a purchase money security interest in retail inventory is to have any commercial usefulness, it must accommodate the resale of the inventory under lien. Resale of that inventory is the very reason for its purchase. This could be accomplished by an elaborate and cumbersome arrangement whereby the resale of any item subject to lien is permitted by the lienholder, the proceeds of such resale are impounded to apply upon the note, and the lien-holder then consents to use of the impounded sums for purchase of replacement items of inventory, taking a new lien on such new purchases. The floating lien on after-acquired inventory items is but a shorthand version of this arrangement. By consenting to resale of the collateral and use of the proceeds of such resale to acquire replacement items, the seller (lender) has given value to enable the purchaser (borrower) to acquire the new collateral. In effect, he has renewed his advance by releasing the proceeds of resale. Accordingly in our view the lien on inventory items subsequently acquired as replacement for the original items subject to lien is a “purchase money security interest” under § 9107. This does not serve to read § 9102(4) out of California’s Commercial Code. Inventory liens remain strictly limited to that which was purchased, or the replacement of that which was purchased. General inventory liens or those for other than purchase obligations are still forbidden. The state requirement for giving notice of the financial arrangements serves to protect future sellers of inventory as well as general creditors. California courts have not ruled on the issue here presented. Cases on which appellant relies deal with law prior to the Commercial Code or with instances in which notice of the financial arrangement had not properly been given. One court has, however, discussed the question in dicta which support our conclusion. Needle v. Lasco Industries, 10 Cal.App.3d 1105, 1107, 89 Cal.Rptr. 593, 595 (Ct.App. 2d Dist. 1970). Judgment affirmed.

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Sonia F. ALLAND, Plaintiff-Appellant, v. CONSUMERS CREDIT CORPORATION, Defendant-Appellee. No. 410, Docket 72-1917. United States Court of Appeals, Second Circuit. Argued Jan. 24, 1973. Decided March 28, 1973. Bradley R. Brewer, Maull & Soeiro, New York City, for plaintiff-appellant. Joseph Feldman, New York City (Jerome Handler, Paul M. Godlin, Schur, Rosenberg, Handler & Jaffin, New York City, of counsel), for defendant-appellee. Before MOORE, HAYS and MANSFIELD, Circuit Judges. MOORE, Circuit Judge: Sonia Alland, a citizen of New York, appeals from that part of a final judgment of the United States District Court for the Southern District of New York dismissing on the merits Claim 3 of her complaint, by which she sought to recover $6,066 as reasonable attorney’s fees for costs incurred in suing upon two promissory notes. The district court granted the relief sought on Claims 1 and 2 of the complaint and awarded Mrs. Alland, pursuant to the confession of judgment contained in the notes, $18,200 plus interest, which represented the amount owed by the appellee. Neither party appeals from the judgment as to the first two claims; Mrs. Alland appeals only the dismissal of her Claim 3. I. The district court, whose opinion is reported at 54 F.R.D. 252 (S.D.N.Y. 1971), found the following facts. The appellee Consumers Credit Corporation (“the finance company”), an Ohio corporation with principal place of business in Cleveland, was organized in 1951 with money provided by Mrs. Alland’s father, Louis Feldman. The stock of the new corporation was divided among his three children: appellant Sonia Alland, he.' brother Raymond Feldman, and Alex Shepard (or his wife, Helen Feldman Shepard, appellant’s sister). Alex Shepard has been president, chief executive officer, and general manager of the finance company since its inception. On November 1, 1966, appellant and her husband, Alexander Alland, Jr., sold all their stock in the finance company to the company. Alex Shepard, in his capacity as president, executed two promissory notes as part of the sale agreement. Note 1 was payable to appellant, in the amount of $42,000, and Note 2 was payable to her husband, in the amount of $2,000. Both notes provided for payment of principal in installments on stated dates, and both contained an acceleration provision to become operative thirty days after notice of default. The appellee finance company defaulted on payments due on both notes on November 1, 1970. Notice of default was mailed to appellee on December 9, 1970, and again on January 27, 1971. Acting on behalf of the company, Alex Shepard refused to make payment of the balance owing on either note. Appellant retained counsel in her effort to collect on the notes. Counsel contacted Shepard by telephone on March 2, 1971, for the purpose of informing him that appellant would not commence legal action if appellee made full payment of the amounts owing by March 5, 1971. Shepard indicated his awareness of the default, but he informed counsel that he had decided not to pay until compelled to do so. Appellant moved ex parte for a judgment by confession in the Southern District of New York on March 27, 1971. In Claim 1 of her complaint appellant sought recovery of the balance owing on Note 1, $17,304 ($16,800 principal plus $504 interest); in Claim 2 she sought recovery of the balance owing on Note 2, $896 ($800 principal plus $96 interest). Claim 3 of the complaint, seeking $6,066 attorney’s fees as “costs of suit” in recovering on the notes, was based on the following language which appeared in both notes: If any installment of this note, or interest thereon, be not paid within thirty (30) days after written notice that it is overdue, then the entire unpaid balance hereof shall at once become due and payable at the option of the holder hereof, and the undersigned hereby authorizes any attorney at law to appear in any Court of Record in the United States, after the above obligation becomes due as aforesaid, and waive the issuing and service of process and confess a judgment against the undersigned in favor of the holder hereof for the amount then appearing due, together with costs of suit, and thereupon to release all errors and waive all right of appeal, (emphasis added) The district court, finding that the sale agreement was “a product of arms-length bargaining between the parties,” 54 F.R.D. at 254; that “the corporate promissor was completely familiar with the language of promissory notes and with the legal consequences thereof,” id. at 255; that “both promissory notes were either drafted by defendant’s own attorneys or carefully reviewed by them before being executed by its president, signing officer and sole shareholder, Alex Shepard,” id.; and that “Shepard stated that he was aware that he was in default, but had decided not to pay the notes until forced to do so,” id., entered judgment in favor of appellant on Claims 1 and 2. Id. at 256. As to Claim 3, however, the district court dismissed, ruling that: Plaintiff’s claim for $6,066 attorney’s fees, however, is denied. “Costs of suit” reasonably refers to mere filing fees rather than attorney’s fees. 54 F.R.D. at 256. The narrow issue we must determine on appeal, then, is whether the district court erred in ruling that “costs of suit” as used in the parties’ contractual agreement refers only to court filing fees, to the exclusion of attorney’s fees. Resolution of this question depends, we think, on ascertaining the intent of the parties in their use of those words in the agreement. II. We note that there is no question of subject matter jurisdiction here; federal court jurisdiction exists by reason of diversity of citizenship. 28 U.S. C. § 1332. And since in the promissory notes the appellee finance company, in case it defaulted, “authorize[d] any attorney at law to appear in any Court of Record in the United States * * * and waive the issuing and service of process and confess a judgment against [the finance company],” appellee consented in advance to in personam jurisdiction in federal district court. See Atlas Credit Corp. v. Ezrine, 25 N.Y.2d 219, 227, 303 N.Y.S.2d 382, 250 N.E.2d 474, 479 (1969). Neither party contests the district court’s ruling that appellee’s “consent to the jurisdiction of this Court as expressed in the two promissory notes was intelligently given.” 54 F.R.D. at 254. See National Equipment Rental, Ltd. v. Szukhent, 375 U.S. 311, 316, 84 S.Ct. 411, 11 L.Ed.2d 354 (1964); Bowles v. J. J. Schmitt & Co., Inc., 170 F.2d 617, 622 (2d Cir. 1948). And although the district court correctly ruled that the entry of a confessed judgment “is a matter of procedure where the federal rules govern” for purposes of Erie, see Bowles, supra, 170 F.2d at 620, questions regarding the interpretation to be given language in the confession of judgment are governed, as are other written agreements, by substantive state law. The general rule is that a federal court will apply the law of the forum state, including that state’s choice of law rules. Klaxon v. Stentor Elec. Mfg. Co., Inc., 313 U.S. 478, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Patch v. Stanley Works (Stanley Chemical Co. Div.), 448 F.2d 483, 487 (2d Cir. 1971); Pryor v. Swarner, 445 F.2d 1272, 1274 (2d Cir. 1971). Under New York choice of law principles, the substantive law of New York is here concededly applicable. See Auten v. Auten, 308 N.Y. 155, 124 N.E.2d 99 (1954); Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743, 191 N.E.2d 279 (1963). Careful research in the New York authorities indicates that no New York court has yet construed the phrase “costs of suit” within the context of a contractual agreement between private parties. Appellee finance company has cited numerous cases that have construed the term “costs”, or “expenses”, to support its argument that the generally understood legal meaning attached to those words excludes attorney’s fees. See, e. g., Matter of Poersch, 28 A.D.2d 1040, 283 N.Y.S.2d 926, 928 (App.Div., 3d Dep’t 1967); Pelella v. Pelella, 13 Misc.2d 260, 265, 176 N.Y.S.2d 862, 867 (Sup.Ct., Kings Co. 1958), aff’d, 9 A.D. 2d 897, 195 N.Y.S.2d 599 (App.Div., 2d Dep’t 1959); Royal Discount Corp. v. Luxor Motor Sales Corp., 9 Misc.2d 307, 308, 170 N.Y.S.2d 382, 383 (App.T., 1st Dep’t 1957); Mutual Life Ins. Co. v. Kroehle, 29 Misc. 481, 483, 61 N.Y.S. 944, 945 (Sup.Ct., N.Y. Co. 1899); Caperna v. Williams-Bauer Corp., 185 Misc. 687, 688, 57 N.Y.S.2d 254, 255 (City Ct., N.Y. Co.), aff’d, 186 Misc. 27, 58 N.Y.S. 2d 876 (App.T., 1st Dep’t 1945). We find these eases to be of little help, however, for we deal in this appeal not with the more commonly used term “costs”, which does indeed carry the technical meaning urged by appellee (i. e., mere court fees), nor with a statute by which a legislative body has provided for the awarding of “costs” to a successful litigant. See Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 720, 87 S.Ct. 1404, 18 L.Ed.2d 475 (1967). Rather, we have here a contract in which the words “costs of suit” were intended to carry a meaning as understood by both parties to the agreement. While it is true that each party to a litigation normally must bear its own expenses, it is clear that the parties may by contract agree to permit recovery of attorney’s fees as part of plaintiff’s expenses in prosecuting suit. See Swiss Credit Bank v. International Bank, Ltd., 23 Misc.2d 572, 573, 200 N.Y.S.2d 828, 830 (Sup.Ct., N.Y. Co. 1960). See also 49 C.J.S. Judgments § 154, p. 287 (1947); 6 J. Moore, Federal Practice, ¶ 54.77[2], at 1349 (1971). And wherever they are valid under applicable state law, contractual rights to attorney’s fees are enforceable in federal court. United States v. Carter, 217 U.S. 286, 322, 30 S.Ct. 515, 54 L.Ed. 769 (1910). We fully agree with appellee that no ambiguity exists as to what is commonly meant by the term “costs” as that word is used by courts, legislatures, and attorneys, and that the term does not normally refer to counsel fees. Appellee’s lawyers, however, did not employ the term “costs” when they drafted or reviewed the agreement; they chose instead the more expansive “costs of suit”. On this point “we deem it significant, as did the district court, that the appelleepromisor is a finance company which deals daily with promissory notes and confessed judgments, and which must therefore be presumed to be completely familiar with the legal effect of the language used in such notes; that the notes here in question were either drafted by appellee’s attorneys or carefully reviewed by them before being executed by Shepard; and that appellant Sonia Alland is a layman who is not expected to have familiarity with the technical, legal meanings of words which, although ordinary enough to laymen, have assumed specific legal significance when used by lawyers. Notwithstanding the fact that appellant is not expected to be familiar with legal jargon, however, if appellee’s lawyers had used the term “costs” our task here would be much simplified, for that term would have expressed precisely what appellee now urges was intended by “costs of suit”, and there could have been no room for doubt or mistake. But ambiguity was created by appellee’s use of “costs of suit”, and our inquiry thus centers upon what the parties must be reasonably held to have expected from the execution of the document in the form and language used, see Bowles, supra, 170 F.2d at 622. We therefore look for guidance to the rules of construction established by the New York cases, mindful of the well-settled principle that: In construing contracts, words are to receive their plain and literal meaning, even though the intention of the party drawing the contract may have been different from that expressed. A party to a contract is responsible for ambiguity in his own expressions, and has no right to induce another to contract with him on the supposition that his words mean one thing while he hopes the court will adopt a construction by which they would mean another thing more to his advantage. Calderon v. Atlas Steamship Co., 170 U.S. 272, 280, 18 S.Ct. 588, 591, 42 L.Ed. 1033 (1898). III. In Hoffman & Place v. Aetna Fire Ins. Co., 32 N.Y. 405, 412-413 (1865) the New York Court of Appeals early held that: It is a rule of law, as well as of ethics, that where the language of a promisor may be understood in more senses than one, it is to be interpreted in the sense in which he had reason to suppose it was understood by the promisee. * * * It is also a familiar rule of law, that if it be left in doubt, in view of the general tenor of the instrument and the relations of the contracting parties, whether given words were used in an enlarged or a restricted sense, other things being equal, that construction should be adopted which is most beneficial to the promisee, (citations and emphasis in original omitted) See also Dennis v. Massachusetts Benefit Ass’n, 120 N.Y. 496, 503, 24 N.E. 843, 844 (1890); Moran v. Standard Oil Co. of New York, 211 N.Y. 187, 196, 105 N.E. 217, 220 (1914); Lee v. State Bank & Trust Co., 54 F.2d 518, 521 (2d Cir. 1931) (“the law of contracts does not judge a promisor’s obligation by what is in his mind, but by the objective test of what his promise would be understood to mean by a reasonable man in the situation of the promisee.”) Since the promissory notes were drafted by appellee’s lawyers or scrutinized by them before being executed by Shepard, the language contained therein must be construed most strongly against appellee, the promisor, Darrow v. Family Fund Soc’y, 116 N.Y. 537, 544, 22 N.E. 1093, 1095 (1889), and in favor of appellant, the promisee, id.; see also Hoffman, supra, 32 N.Y. at 413; Paul v. Travelers’ Ins. Co., 112 N.Y. 472, 479, 20 N.E. 347, 349 (1889); Gillet v. Bank of America, 160 N.Y. 549, 554-555, 55 N.E. 292, 293 (1899). Moreover, the words used should be given the meaning which a layman would reasonably have attributed to them, Moran v. Standard Oil Co. of New York, supra, 211 N.Y. at 196, 105 N.E. at 220; Gillet v. Bank of America, supra, 160 N.Y. at 555, 55 N.E. at 294. When the foregoing canons of construction are applied to the facts presented, it must be concluded that a reasonable layman would have been justified in believing that in the event appellee subjected him to any cost in suing on the promissory notes appellee would assume liability for all costs of such a suit. It is obvious that the finance company here could have avoided the resulting costs of a lawsuit by not defaulting on the notes, or could have minimized such costs by paying the amounts owing at any time during the early stages of what became a protracted litigation. Instead, appellee chose a course of action which not only put appellant to substantial attorney’s fees, but which reflects a bad faith intent successfully to use the $18,200 owing to appellant at an interest rate (6%) more favorable than could be obtained from a commercial lender, for a period measured by the date of default (November 1, 1970) and the date on which the district court entered judgment in favor of appellant (August 31, 1971). And we note that neither in district court nor in this Court has appellee raised any defense or justification for defaulting on the notes, for dragging appellant through months of costly litigation in two federal district courts, or for burdening the courts with what appears to have been an unmeritorious, indeed, an indefensible, refusal to comply with the contractual agreement. Appellee, a finance company, is not a stranger to the coercive advantages provided by the confessed judgment device; undoubtedly, it is fully aware that the procedure allows a creditor to avoid formal, lengthy, and expensive legal proceedings in order to collect from his debtor, and that it is precisely for this reason that lenders use the confessed judgment. See, e. g., 49 C.J.S. Judgments, § 134 and cases cited therein; cf. American Cities Co., Inc. v. Stevenson, 187 Misc. 107, 110, 60 N.Y.S.2d 685, 688 (Sup.Ct., N.Y. Co.1946). Certainly, when appellee finds itself in its more customary role as a creditor, and not as here a debtor, it relies on the judgment of confession to avoid the type of attorney’s fees which appellant was here forced to undergo. And yet, occupying the position of debtor in this appeal, appellee, with no apparent justification in law or in fact, sought to frustrate its creditor’s reliance on an ambiguously worded agreement which appears to have been drafted by its lawyers. As a consequence, appellant has had to expend for attorney’s fees alone ($6,066 in district court plus attorney’s fees occasioned by this appeal) more than one-third the amount owed to her by appellee ($18,200) — again, with no defense proffered by appellee. Appellee’s course of conduct in this action manifests an intention to use our already over-crowded court dockets and the time-consuming judicial process as means to securing financial advantage. Such conduct bespeaks a willingness, therefore, to abuse the processes of the federal court system. This alone might well provide adequate grounds for awarding reasonable attorney’s fees to one in appellant’s position. See Newman v. Piggie Park Enterprises, Inc., 390 U.S. 400, 402 n. 4, 88 S.Ct. 964, 19 L.Ed.2d 1263 (1968) (per curiam) (“a federal court may award counsel fees to a successful plaintiff where a defense has been maintained ‘in bad faith, vexatiously, wantonly, or for oppressive reasons,’ 6 Moore’s Federal Practice 1352 (1966 ed.)”); Stolberg v. State Colleges of the State of Connecticut, 474 F.2d 485, 490 (2d Cir. 1973); Kahan v. Rosenstiel, 424 F.2d 161, 167 (3d Cir.), cert. denied, Glen Alden Corp. v. Kahan, 398 U.S. 950, 90 S.Ct. 1870, 26 L.Ed.2d 290 (1970); Rolax v. Atlantic Coast Line R.R., 186 F.2d 473, 481 (4th Cir. 1951). We need not invoke this Court’s equity power, however, to determine the proper resolution of the present appeal; the agreement of the parties, as construed under applicable New York contract law, provides the answer to the question presented. Applying the above-cited rules of construction to the contractual agreement before us, we conclude that a reasonable layman in appellant’s position would have been justified in believing that “costs of suit” would include all the reasonable expenses of prosecuting a lawsuit, including attorney’s fees. If appellee had wished to limit its liability for such expenses to mere court costs or filing fees, it would have used the unambiguous term “costs”. We therefore hold that appellant is entitled to reasonable attorney’s fees and that it was error for the district court to dismiss Claim 3 of her complaint. We remand the cause to the district court in order that appellant may present itemized evidence with respect to “costs of suit”, including reasonable attorney’s fees for prosecuting this action both in district court and on appeal. The district court shall enter judgment accordingly, in an amount so determined by it. . The language contained in Note 1 was as follows: PROMISSORY NOTE $42,000.00 November 1,1966 FOR VALUE RECEIVED, the undersigned promises to pay to the order of SONIA F. ALLAND the sum of Forty-Two Thousand Dollars ($42,000.-00) with interest computed from November 1, 1966 on the unpaid balance at the rate of six percent (6%) per annum, computed and payable quarterly on the unpaid balance, with the first installment of interest to be paid on February 1, 1967. The principal sum due hereunder shall be payable in five (5) equal consecutive annual installments of Eight Thousand Four Hundred Dollars ($8,-400.00) each, the first such installment being due on the 1st day of November, 1967. Payment of one or more installments in advance of the dates herein provided may be made at the option of the maker without penalty. If any installment of this note, or interest thereon, be not paid within thirty (30) days after written notice that it is overdue, then the entire unpaid balance hereof shall at once become due and payable at the option of the holder hereof, and the undersigned hereby authorizes any attorney at law to appear in any Court of Record in the United States, after the above obligation becomes due as aforesaid, and waive the issuing and service of process and confess a judgment against the undersigned in favor of the holder hereof for the amount then appearing due, together with costs of suit, and thereupon to release all errors and waive all right of appeal. CONSUMERS CREDIT CORPORATION By /s/ Alex J. Shepard President Except for the amounts involved, the language of Note 2 was identical to that of Note 1. . On March 25, 1971, Alexander Alland had assigned to his wife all his rights in Note 2. . Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). . But see John Deere Co. of Baltimore, Inc. v. Cerone Equip. Co., Inc., 33 A.D. 2d 257, 307 N.Y.S.2d 129, aff’d, 27 N.Y.2d 926, 318 N.Y.S.2d 143, 266 N.E.2d 822 (1970), where the term “costs” was given a more inclusive meaning. In that case, plaintiff brought a summary judgment action to recover equipment in defendant’s possession, pursuant to an agreement which gave plaintiff a security interest in the equipment. Plaintiff sought to recover, as an item of “costs”, a surety premium of $7,407 which plaintiff had been forced to pay in order to obtain and post the bond necessary to its repossession procedure. -The Appellate Division held, and the New York Court of Appeals affirmed, that where “despite [plaintiff’s] appellant’s unquestionable right to possession of the items of equipment involved, respondent prevented peaceful repossession and rejected an opportunity to satisfy Lis obligation by paying over the amount due,” and, moreover, where defendant- ' respondent had “interposed no defense in tire action that could be denominated in the slightest as meritorious * * * the premium was a reasonable expense necessary to preserve appellant’s unquestioned security rights in the equipment” which appellant was entitled to recover as an item of “costs”. 33 A.D.2d at 258-259, 307 N.Y.S.2d at 131. The court’s order demonstrates that even though the statute relevant to the action (CPLR- 8301, subd. [a], 1)12) did not provide for recovery of the $7,407 bond premium as an item of “costs”, the particular circumstances involved, including defendant’s totally unmeritorious defense, justified the awarding of that amount as part of plaintiff’s “costs.” . Even after appellant obtained judgment in the District Court for the Southern District of New York, 54 F.R.D. 252 (S.D.N.Y.1971), appellee delayed further the date of payment. Appellant sought to enforce the judgment in the District Court for the Northern District of Ohio pursuant to 28 U.S.C. § 1963. The record shows that appellee employed various procedural devices to prolong the litigation, and to add further to appellant’s attorney and other fees. See Order of Chief Judge Battisti, District Court for the Northern District of Ohio, No. C71-910 (1971), denying appellee’s motion to quash registration of the judgment rendered by the Southern District of New York.

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UNITED STATES of America, Appellee, v. Lester Masao UYEDA, Appellant. No. 72-3075. United States Court of Appeals, Ninth Circuit. March 27, 1973. David Bettencourt (argued), Honolulu, Hawaii, for appellant. Thomas P. Young, Asst. U. S. Atty. (argued), Robert K. Fukuda, U. S. Atty., Honolulu, Hawaii, for appellee. Before BROWNING and GOODWIN, Circuit Judges, and TAYLOR, District Judge. The Honorable Fred M. Taylor, United States District Judge for the District of Idaho, sitting by designation. PER CURIAM: Lester Uyeda was convicted of refusing induction. He appeals on several bases, but asserts primarily that his local board erroneously denied him a I-S(c) student deferment. The I-S(c) classification is nondiscretionary. The local board must grant a I-S(c) to any qualified registrant. To qualify, the registrant must be, at the time he receives his order for induction, “satisfactorily pursuing a full-time course of instruction,” 50 U.S.C. App. § 456(i)(2); 32 C.F.R. § 1625.3(b); and must have enrolled in school before he received his induction order. United States v. Bray, 445 F.2d 819 (9th Cir. 1971). The registrant has the duty of presenting to the local board facts establishing his entitlement to a I-S(c). United States v. Lewis, 448 F.2d 1228 (9th Cir. 1971). During 1970 Uyeda was enrolled at the University of Hawaii and had a II-S student deferment. He lost this deferment on December 1, 1970, for failure to make satisfactory academic progress. On January 1, 1971, Uyeda received an academic suspension from the University of Hawaii. On January 18, he enrolled for the coming semester at Leeward Community College, where classes were to start on February 1,1971. The local board did not learn of Uyeda’s suspension from the University of Hawaii until after January 27, 1971, the date that the board sent Uyeda an order to report for induction on February 17. This order had attached to it, however, a letter telling Uyeda that he need not report on that date because he appeared to be eligible for a I-S(c) deferment. On February 2, the local board, having learned of Uyeda’s suspension, directed him to report for induction on February 17. On February 4, 1971, Uyeda wrote the local board reporting his enrollment at Leeward and requesting a I-S(c) so that he could complete the semester. At the bottom of his letter, Uyeda stated, “I had begun school after my induction order.” If at this time Uyeda had correctly stated the facts to the board, the board would have been required to reopen and reclassify Uyeda I-S(c). 32 C.F.R. § 1625.3(b). However, the board, apparently misled by Uyeda’s statement, believed that he had enrolled after receipt of his order. Uyeda did not fulfill his duty of presenting the facts which entitled him to a I-S(c) at this time. Before the date on which Uyeda was ordered to report, the local board received an authentication of his student status at Leeward. However, this document did not reveal the date of enrollment. Uyeda did not report for induction on February 17. When requested by the local board to give his reasons, Uyeda replied in a letter which fully set forth the facts entitling him to a I-S(c). The local board nevertheless issued a new order to Uyeda, directing him to report on April 14. He did not report on that date. At Uyeda’s trial, the first count, charging failure to report on February 17, was dismissed. The first count was a valid count. But Uyeda was convicted of the second count (refusal to report on April 14). The second order to report was invalid. Before it was issued Uyeda had sufficiently established his entitlement to a deferment. The first order was valid. Before the date of Uyeda’s scheduled induction he had not presented the facts to the local board as required. However, the first order was not the basis for the conviction here. The second order cannot be characterized as a eontinuingduty-to-report order. The second order was fatally defective because it was issued after the board had knowledge of facts precluding such an order. Therefore, Uyeda’s conviction cannot stand. Reversed.

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UNITED STATES of America, Plaintiff-Appellee, v. ONE 1969 PLYMOUTH FURY AUTOMOBILE, SERIAL NO. PM43G9D199088, Defendant. Ford Motor Credit Company, Intervenor-Appellant. No. 72-2844. United States Court of Appeals, Fifth Circuit. April 19, 1973. Michael Lowenberg, Molly Bartholow, Dallas, Tex., for intervenor-appellant. Frank D. McCown, U. S. Atty., Roger J. Allen, Asst. U. S. Atty., Dallas, Tex., for plaintiff-appellee. Before WISDOM, GEWIN and COLEMAN, Circuit Judges. PER CURIAM: Ford Motor Credit Company (FMCC) appeals from a summary judgment forfeiting title and possession of a 1969 Plymouth Fury automobile to the United States. The record owner was charged and convicted of using the automobile for the unlawful transportation of counterfeit federal reserve notes. 49 U.S.C. §§ 781, 782. The owner had paid $100 down; FMCC’s security interest exceeded the value of the car. We affirm. FMCC contends that: (1) the forfeiture provisions found in 49 U.S.C. §§ 781, 782 were unconstitutionally applied; (2) the forfeiture statutes found in 49 U.S.C. §§ 781, 782 are unconstitutional on their face because they authorize deprivation of property without due process of law and the taking of property from a totally innocent party without just compensation; and (3) 49 U.S.C. § 782 is so discriminatory that it violates due process of law. These are serious contentions well-briefed and well-argued by counsel for FMCC. There is, of course, a distinction between a title-holder and the holder of a security-interest; a company financing the purchase of automobiles knows that it runs the risk of having its interest forfeited, if the car is used to transport contraband. On the other hand, it is incongruous that an innocent lienor whose equitable interest may far exceed the owner’s interest is in a worse position than an innocent record owner. It may even be said that the forfeiture is an anachronistic relic of deodand. If this were a case of first impression, we would examine closely and weigh carefully the competing values in the opposing arguments. But we are bound by decisions of this Court too numerous to cite upholding such forfeitures. FMCC argues, however, that in United States v. United States Coin and Currency, 1971, 401 U.S. 715, 91 S.Ct. 1041, 28 L.Ed.2d 434, the Supreme Court took a new look at forfeitures and interpreted the statute as applicable only when the owner has “significantly participated in the criminal enterprise”. The Court said: “The Government contends that the guilt of the owner of the money is irrelevant. . . . If we were writing on a clean slate, this claim that § 7302 operates to deprive totally innocent people of their property would hardly be compelling. Although it is true that the statute does not specifically state that the property shall be seized only if its owner significantly participated in the criminal enterprise, we would not readily infer that Congress intended a different meaning.” In that case an owner, not a lienor, was involved, a difference that arguably is a significant distinction. In United States v. One 1970 Buick Riviera, 5 Cir. 1972, 463 F.2d 1168, the contentions were similar to those raised here. This Court rejected the due process and just compensation arguments and, importantly, concluded that United States v. United States Coin and Currency was inapplicable. We note also that 19 U.S.C. § 1618 allows remission or mitigation of the penalty at the discretion of the Secretary of the Treasury: “[T]he Secretary of the Treasury, if he finds that such fine, penalty or forfeiture was incurred without willful negligence or without any intention on the part of the petitioner to defraud the revenue or to violate the law, or finds the existence of such mitigating circumstances as to justify the remission or mitigation of such fine, penalty, or forfeiture, may remit or mitigate the same upon such terms and conditions as he deems reasonable and just, . . .” Here FMCC took advantage of this provision but was unsuccessful in convincing the Secretary of the Treasury that he should remit or mitigate the forfeiture of the Plymouth Fury to the extent of its lien interest in the automobile. The judgment must be affirmed.

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UNITED STATES of America, Plaintiff-Appellee, v. Clyde Lee DAUGHERTY, Jr., Defendant-Appellant. No. 72-2898. United States Court of Appeals, Ninth Circuit. April 3, 1973. Rehearing Denied May 31, 1973. Martin Henner (argued), Palo Alto, Cal., for defendant-appellant. Joseph E. Reeves, Asst. U. S. Atty, (argued), James L. Browning, U. S. Atty., Chester G. Moore, III, F. Steele Langford, Asst. U. S. Attys., Criminal Division, San Francisco, Cal., for plaintiff-appellee. Before WRIGHT and WALLACE, Circuit Judges, and KELLEHER, District Judge. Honorable Robert J. Kelleher, United States District Judge, Central District of California, sitting by designation. PER CURIAM: Daugherty appeals from his conviction, after trial by the Court, of failing to report for induction in violation of 50 U.S.C., App. § 462(a). Each of appellant’s arguments has been considered. Only the contention that appellant was “passively misled” by his draft board deserves discussion. For the reasons indicated below we find it without merit and we affirm the judgment. On February 26, 1971, an order to report for induction on March 24, 1971, at Oakland, California, was mailed by the board to appellant at his address of record in the Oakland area. Because he had moved to Hawaii, the order to report for induction was not received by him until March 7, 1971. On March 9, 1971, appellant wrote a letter to his local board, which was received by the Oakland board on March 15, 1971, stating that he was unable to report as ordered for induction as he was in Hawaii and did not have the money necessary to fly to Oakland, and requesting that his registration be transferred to Hawaii. On March 22, 1971, the local board replied by letter to appellant’s request informing him that his registration could not be transferred but that he could arrange to transfer his induction to Hawaii by reporting to a Hawaii local board. However, this letter was not received by appellant until March 25, 1971, the day after appellant’s induction date. Appellant asserts that the local board’s delay in responding to his request for transfer of his registration, which indicated his misunderstanding of the law, amounts to no response since the letter was received after appellant’s induction date. On this basis appellant invokes United States v. Timmins, 464 F.2d 385 (9th Cir. 1972), for its holding that passively misleading conduct by a local Selective Service Board reasonably relied upon by a registrant may serve as a defense to a criminal chafge of refusing to report for induction. Appellant’s reliance on Timmins is misplaced. Even if we assume passively misleading conduct on the part of the board, as to which there is some doubt on this record, appellant’s reliance upon that conduct is unreasonable. Appellant testified that he read the instructions contained on his order to report for induction. Appellant knew therefrom of his right and duty to go immediately to any local board and make a written request of transfer of his induction if he was unable to comply with the order to report for induction in Oakland. He had adequate time between March 9th and 24th to do so. On the entire record, the trial court had ample evidence on which to reject appellant’s contention and to find him guilty. Affirmed.

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Eugene Harry WARD, Plaintiff-Appellant, v. Harold C. KELLY, Superintendent of Education, et al., Defendants-Appellees. No. 72-2279. United States Court of Appeals, Fifth Circuit. March 16, 1973. Nausead Stewart, Melvyn R. Leventhal, Jackson, Miss., for plaintiff-appellant. T. H. Campbell, III, John C. Satterfield, Yazoo City, Miss., for defendantsappellees. Before GEWIN, SIMPSON and RONEY, Circuit Judges. PER CURIAM: We affirm the District Court’s determination that this is not a proper class action because the size of the class is demonstrably small. Each member of the alleged class could be joined in this litigation without undue burden on the plaintiff. We reverse and remand on the issues concerning plaintiff’s dismissal, demotion, and failure to be rehired by the school board. A hearing before the school board cannot be substituted as a trial of the issues before the District Court. This case is remanded to the District Court for further proceedings consistent with our opinion in Thompson et al. v. Madison County Board of Education et al., 476 F.2d 676 (5th Cir. 1973), a case in which the District Court followed essentially the same procedure which we find objectionable here. Affirmed in part and reversed and remanded in part.

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Harry Lee BELL, #016599, Petitioner-Appellant, v. Louie L. WAINWRIGHT, Director, Division of Corrections, Respondent-Appellee. No. 73-1260 Summary Calendar. United States Court of Appeals, Fifth Circuit. April 18, 1973. Charles W. Musgrove, Public Defender, 15th Judicial Cir. of Fla., West Palm Beach, Fla., for petitioner-appellant. Robert L. Shevin, Atty. Gen., Tallahassee, Fla., Nelson E. Bailey, W. Palm Beach, Fla., for respondent-appellee. Before WISDOM, AINSWORTH and CLARK, 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: Appellant, a Florida state prisoner, appeals from the denial by the United States District Court of habeas corpus relief. We affirm. Bell originally pled not guilty in Florida State Court to an information charging him with grand larceny and three additional offenses. Subsequently he withdrew his plea and entered a plea of guilty to attempted grand larceny. Still later he withdrew this guilty plea. Thereafter the State of Florida filed a new four-count information identical to that originally filed except that the charge of grand larceny was omitted and the charge of robbery was included. A jury found appellant guilty of robbery and possession of a short-barreled shotgun (one of the counts contained in the information). On direct appeal to Florida State Court, Bell contended his trial, on a charge higher than that to which'he had pled, constituted double jeopardy. The Florida appellate court affirmed the judgment of the trial court on the merits as well as on the basis of waiver brought about by appellant’s failure to raise the issue of double jeopardy at trial. Bell v. State, Fla.App., 1972, 262 So.2d 244. Appellant again raises the issue of double jeopardy in these federal habeas proceedings. We find his contentions to be without merit. As the Federal District Court correctly observed, the inclusion of an additional charge in a separate information does not constitute double jeopardy. United States v. Jasso, 5 Cir., 1971, 442 F.2d 1054. But there are even more cogent reasons for denying relief. Jeopardy is reached when a jury has been selected and sworn. Downum v. United States, 372 U.S. 734, 83 S.Ct. 1033, 10 L.Ed.2d 100 (1963). Jeopardy had not attached when the second bill of information was filed. Bell had voluntarily withdrawn his plea by that time. By his own affirmative action he prevented jeopardy from attaching. Affirmed. . Under Florida law, robbery involves the element of force which is not a factor in the crime of larceny. Florida Statutes §§ 813.011, 811.021, F.S.A. , 2. We need not consider the procedural aspect of the case inasmuch as appellant cannot under the circumstances prevail on the merits. Nevertheless, we note that under recent Supreme Court decisions great deference is accorded to rules of criminal pleading peculiar to an individual state, the constitutionality of whicli is not at issue, in determining the validity of a double jeopardy claim, See Duncan v. Tennessee, 405 U.S. 127, 92 S.Ct. 785, 31 L.Ed.2d 86 (1972); Illinois v. Sommerville, 410 U.S. 458, 93 S.Ct. 1066, 35 L.Ed.2d 425 (February 27, 1973). . Reyes v. Kelly, Fla., 1969, 224 So.2d 303, relied on by appellant, is inapposite, Unlike the present case, Reyes did not withdraw, his plea of guilty. Instead the State, for the purpose of indicting Reyes for a more serious crime, attempted to enter a nolle prosequi.

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UNITED STATES of America, Appellee, v. Frederick P. SELBY, Defendant-Appellant. No. 755, Docket 73-1044. United States Court of Appeals, Second Circuit. Argued March 30, 1973. Decided April 11, 1973. Jay Horowitz, Asst. U. S. Atty. (Whitney North Seymour, Jr., U. S. Atty., S. D. N. Y., and John W. Nields, Jr., Asst. U. S. Atty., of counsel), for appellee. Jesse Climenko, New York City (Shea, Gould, Climenko & Kramer and Ira Postel, New York City, of counsel), for defendant-appellant. Before FRIENDLY, Chief Judge, LUMBARD, Circuit Judge and THOMSEN, District Judge. Of the District Court for the District of Maryland, sitting by designation. PER CURIAM: Frederick P. Selby appeals from a conviction on his plea of guilty to one count of a four count indictment in the District Court for the Southern District of New York. The indictment charged that Selby had engaged in tax evasion in violation of 26 U.S.C. § 7201 for the tax years 1965 and 1966 and in wilful subscription under penalties of perjury to false federal income tax returns for the same years in violation of 26 U.S.C. § 7206(1). The gravamen of both charges was the deliberate omission of interest on a Swiss bank account; Selby claimed he had been advised by an unidentified Swiss lawyer that the interest did not become taxable until brought into the United States. After pleading not guilty, Selby moved to suppress records relating to the Swiss bank account, alleging that these had been furnished to the Internal Revenue Service in consequence of a representation by Revenue Agent John Flynn to Selby’s attorney, Emilio A. Dominianni, on October 3, 1967, that the Service had not received a letter concerning the Swiss account from F. Roberts Blair, the attorney for Selby’s wife, with whom Selby was having marital troubles, whereas, unbeknownst to Flynn, Blair had delivered such a letter to Special Agent Wolff. After Judge Cannella denied the motion, the Government agreed to accept a plea of guilty to the count charging tax evasion for 1966. The judge imposed a sentence of one year’s imprisonment and a fine of $10,000; however, he directed that Selby be confined to a jail-type institution for only two months, the balance of the prison sentence being suspended and defendant being placed on probation. The attempt to appeal flies in the face of our decision in United States v. Doyle, 348 F.2d 715, 718 (2 Cir.), cert. denied, 382 U.S. 843, 86 S.Ct. 89, 15 L.Ed.2d 84 (1965), where we said, quoting from United States v. Spada, 331 F.2d 995, 996 (2 Cir.), cert. denied, 379 U.S. 865, 85 S.Ct. 130, 13 L.Ed.2d 67 (1964), “[t]he cases are legion that ‘[a] plea of guilty to an indictment is an admission of guilt and a waiver of all non-jurisdictional defects.’ ” See also McMann v. Richardson, 397 U.S. 759, 766, 90 S.Ct. 1441, 25 L.Ed.2d 763 (1970); United States v. Mann, 451 F.2d 346 (2 Cir. 1971). While at the time of the plea there was some discussion of appeal, particularly in the context of 28 U.S.C. § 1292(b) and apparently without realization that the interlocutory appeal statute does not apply in criminal cases, the situation was wholly unlike Jaben v. United States, 333 F.2d 535 (8 Cir. 1964), aff’d without discussion of the point, 381 U.S. 214, 85 S.Ct. 1365, 14 L. Ed.2d 345 (1965), where, as brought out in our Doyle opinion, 348 F.2d at 719, a plea of nolo contendere was accepted on the express condition that the defendant was preserving his right to seek review of his claim that the indictment was barred by the statute of limitations. Although the Judicial Conference of the United States has considered the possible desirability of allowing a defendant to plead guilty but preserve the right to appeal the denial of a suppression motion, Reports of the Proceedings of the Judicial Conference (Mar. 16-17, 1970) at 16, and (Mar. 15-16, 1971) at 41, as the New York Legislature has provided, N.Y.Crim.Proc.Law § 710.70(2) (McKinney’s Consol.Laws, c. 11-A, 1971), nothing has been done to implement this, and we must take the law as it is. Selby could have preserved his right to appeal the denial of the suppression motion by going to the trial for which a jury had already been chosen; instead his counsel worked out an arrangement whereby he was allowed to plead guilty to one count rather than risk conviction on four. The choice was wise since the suppression motion was wholly lacking in merit. As early as September 14, 1967, Blair told Dominianni that he was going to write the Internal Revenue Service about the Swiss bank account. On September 20 he wrote Dominianni that he had done so. Dominianni’s advice to Selby to make a clean breast in the hope that this might avoid criminal prosecution was based on his belief that the Service would surely learn of the Swiss account from Blair, who was acting not simply out of spite but to keep Mrs. Selby from being prosecuted. Even if the principle of Giglio v. United States, 405 U.S. 150, 154, 92 S.Ct. 763, 31 L.Ed. 2d 104 (1972) — that a promise by one member of a prosecutor’s office must be attributed to the Government even if unknown to his successor — were applicable to a case like this, of which we are extremely doubtful, it is impossible to believe that a lawyer of Dominianni’s experience would have given different advice if he had been told by Flynn that the IRS in fact had received Blair’s letter. Beyond this, Flynn denied that any discussion of the Swiss bank account occurred on October 3, and his notes reflect that on December 12, 1967, long before any records were furnished, he discussed the Swiss account with Dominianni. While Dominianni’s records failed to show any meeting with Flynn on the latter date and he did not recall one, the judge would have been warranted in accepting Flynn’s record about an event in the life of a busy lawyer five years before the hearing. Beyond all this, the record is murky whether the figures concerning the Swiss account were in fact ultimately furnished by Selby at all; such evidence as there is suggests that they were supplied to the IRS by his wife. If we had power to decide the appeal, we would dismiss it as frivolous. The appeal is dismissed; the mandate shall issue forthwith.

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Mrs. Lorena C. REDDISH, Plaintiff-Appellee, v. LIBERTY NATIONAL LIFE INSURANCE CO., Defendant-Appellant. No. 73-1111 Summary Calendar. United States Court of Appeals, Fifth Circuit. April 13, 1973. William E. Smith, Americus, Ga., for defendant-appellant. J. Frank Myers, Americus, Ga., for plaintiff-appellee. Before GEWIN, COLEMAN and MORGAN, Circuit Judges. Rule 18, 5th Cir. See Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5th Cir. 1970, 431 F.2d 409, Part I. PER CURIAM: In this case we are asked to decide whether under all the evidence presented the district court committed error in refusing to grant appellant’s motion for judgment notwithstanding the verdict of the jury or in the alternative to grant a new trial. The district court concluded that the appellant did not meet the burden of proof necessary to show that appellee’s husband was within the terms of the exclusion clause stated in the policy. The insurance policy provided for double indemnity coverage if the insured died as the result of an accident. The insured met his untimely death along with his brother when the plane in which he was riding crashed. The insured’s wife then instituted this present action under review seeking the double recovery under the insured’s policy with the appellant. The appellant defended on the grounds that the double indemnity clause was not applicable to the wife’s claim because of the exclusion clause contained within the insurance contract. The district court noted that it could not say with assurance that there was no adequate basis for the jury’s conclusion. After reviewing the evidence, we con-elude that reasonable men could reach different conclusions from the evidence presented. See, Boeing v. Shipman, 411 F.2d 365, 374 (5th Cir. 1969). The judgment of the district court is affirmed. Affirmed. . “Exclusions from coverage . . . Benefits for accidental death . . . shall not be payable if the death or loss results directly or indirectly from (f) Operating or riding in or descending from, any kind of aircraft of which the insured was pilot, officer or member of the crew or in which the insured was given or receiving training or instruction or had any duties.”

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UNITED STATES of America, Plaintiff-Appellee, v. Robert Perry FROGGE and Clyde E. Hall, Defendants-Appellants. No. 72-2980 Summary Calendar. United States Court of Appeals, Fifth Circuit. April 11, 1973. Rehearing Denied May 10, 1973. Clyde E. Hall, pro se. Marion Lawrence Hicks, Jr., Dallas, Tex. (Court appointed), for Hall. Dan C. Rhodes, Houston, Tex. (Court appointed), for Frogge. Roby Hadden, U. S. Atty., Dennis R. Lewis, Dale Long, Asst. U. S. Attys., Tyler, Tex., for plaintiff-appellee. Before GEWIN, COLEMAN and MORGAN, Circuit Judges. Rule 18, 5th Cir. See Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5th Cir. 1970, 431 F. 2d 409, Part I. PER CURIAM: The appellants in this case, Robert Perry Frogge and Clyde E. Hall, were charged in a two count indictment with (1) attempting to escape from federal custody, 18 U.S.C. § 751(a), and (2) assaulting two Deputy U.S. Marshals engaged in the performance of their duties, 18 U.S.C. § 111. A jury trial was held and both were found guilty as charged. We affirm. The appellants assert that the trial court committed the following reversible errors: (1) failed to give an adequate definition of “attempt to escape”; (2) denied appellants’ motion for transfer from the Sherman Division; (3) denied appellants’ motion for a continuance and (4) refused to grant appellants’ motion for the employment of a court appointed polygraph examiner. Frogge makes the additional contention that the evidence was insufficient under count II to convict him of assaulting the two Deputy U.S. Marshals. We have carefully reviewed the briefs and record in this case and find all of these contentions to be without merit. The trial court’s instructions to the jury concerning the appellants’ defense to the attempt to escape count were, in our opinion, eminently fair. If we were to assume arguendo that the two Deputy U.S. Marshals in charge of appellants accepted the alleged bribe offer and acquiesced in the escape plan as contended by them on appeal, it is highly doubtful that such acquiescence would rise to the level of an affirmative defense. Cf. United States v. Allen, 432 F.2d 939 (10th Cir. 1970); United States v. Greenwell, 379 F.2d 320 (4th Cir. 1967); Mullican v. United States, 252 F.2d 398, 403 (5th Cir. 1958). The trial court, nevertheless, treated the appellants’ acquiescence theory as an affirmative defense and told the jury to return a verdict of acquittal if they believed it. This was done without a specific request on the part of either appellant. We hold that the trial court gave full and adequate instructions to the jury as to all defenses raised for which there was a foundation in the evidence. Perez v. United States, 297 F.2d 12, 15-16 (5th Cir. 1961). We are similarly unconvinced by the argument that the trial court erred when it refused to authorize the polygraph examinations requested by the appellants. Though a trend may be emerging towards loosening the restrictions on polygraph evidence, see e. g., People v. Houser, 85 Cal.App.2d 686, 193 P.2d 737 (1948), the rule is well established in federal criminal cases that the results of lie detector tests are inadmissible. United States v. Rodgers, 419 F.2d 1315, 1319 (10th Cir. 1969); Frye v. United States, 54 App.D.C. 46, 293 F. 1013 (1923). Nothing in United States v. Ridling, 350 F.Supp. 90 (E.D.Mich. Oct. 6, 1972), heavily relied upon by the appellants, persuades us to abandon the traditional view. No discussion of the appellants’ remaining contentions is necessary except to state that the appellants failed to establish reversible error as to any of them. The judgments of conviction are affirmed. . The trial court sentenced each appellant to 5 years under Count I and 3 years under Count II.

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Elliott Arthur WILLIAMS, Appellant, v. UNITED STATES of America. No. 72-1380. United States Court of Appeals, Third Circuit. Submitted Feb. 12, 1973. Decided March 22, 1973. Elliott Arthur Williams, pro se. Richard L. Thornburgh, U. S. Atty., Samuel J. Orr, III, Asst. U. S. Atty., Pittsburgh, Pa., for appellee. Before VAN DUSEN and ADAMS, Circuit Judges, and BRODERICK, District Judge. OPINION OF THE COURT PER CURIAM: This appeal presents the issue of whether 18 U.S.C. § 5010(d) requires that a sentence imposed by a district judge on a 19-year-old convicted felon be vacated because the judge did not make a formal finding that the defendant “will not derive benefit from treatment under” 18 U.S.C. § 5010(b) and (c) of the Youth Corrections Act, Chap. 402 of Title 18, 18 U.S.C. § 5005 et seq., even though the judge, at the time of sentencing, indicated in open court that he had given considerable thought to the sentence and had decided not to sentence the defendant under that Act, and in denying a motion to vacate the jugment of conviction and sentence, filed approximately four-and-one-half years after the sentence, stated: “The fact that the Court did not sentence the defendant under the Youth Corrections Act but sentenced under the statute governing the offense for which he was convicted represented a finding that he would not benefit by treatment under the Youth Corrections Act.” See Memorandum of March 2, 1972, in Williams v. United States (Civil No. 72-24, W.D.Pa.). We agree that the record must demonstrate that the district court has made the finding that “the youth offender will not derive benefit from treatment under subsection (b) or (c)” in order to sentence a defendant-youth offender under 18 U.S.C. § 5010(d). See Cox v. United States, 473 F.2d 334, Part III (4th Cir., 1973), and cases cited in notes 2-4 below. After consideration of this record, we have concluded that the district court order of March 2, 1972, denying the motion to vacate the conviction and sentence, must be affirmed. We note that other federal courts considering subdivision (d) and other subdivisions of 18 U.S.C. § 5010 have held that a sentence under such subdivisions is valid if “the record as a whole” “either explicitly or implicitly” shows that the findings required by the applicable subdivision have been made. In view of the increasing number of federal cases raising problems similar to that involved in this appeal, and for the guidance of the district courts of this Circuit, we suggest that the findings prescribed by Congress in 18 U.S.C. § 5010(b-d) be made in open court on the record so that the transcript or tape of the sentencing proceeding will clearly disclose that such findings have been made. We do not consider it necessary that the district courts of this Circuit adhere to all the requirements stated as mandatory in United States v. Coefield, 476 F.2d 1152 Part III (D.C.Cir. 1973). For the above reasons, the order of March 2, 1972, will be affirmed. . 18 U.S.C. § 5010(d) provides: “(d) If the court shall find that the youth offender will not derive benefit from treatment under subsection (b) or (c), then the court may sentence the youth offender under any other applicable penalty provision.” The purposes of the Youth Corrections Act have been set forth in Brisco v. United States, 368 F.2d 214 (3d Cir. 1966), and its terms as applied to persons under 22 years of age described in United States v. Waters, 141 U.S.App.D.C. 289, 437 F.2.d 722, 724 (1970), on remand, 324 F.Supp. 1056 (D.C.1971). . See Rogers v. United States, 326 F.2d 56, 58 (10th Cir. 1963). . United States v. Waters, 141 U.S.App. D.C. 289, 437 F.2d 722, 725 (1970), on remand, 324 F.Supp. 1056, 1060 (D.C. 1971) ; see also Cox v. United States, supra; Cherry v. United States, 299 F. 2d 325 (9th Cir. 1962). . Cf. United States v. Malcolm, 432 F.2d 809 (2d Cir. 1970), and cases there cited, as well as cases cited in notes 2 and 3 above. . For example, the requirement of a statement of reasons for the finding under 18 U.S.C. § 5010(d) manifesting, inter alia “an accurate understanding of the scope of his [trial judge’s] discretion under the Act” (476 F.2d at page 1157). Presentence reports are available to the district judges of this Circuit in all such cases and there has been no evidence of the problems which the Ooefield decision indicates have been arising in the District of Columbia.

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In the Matter of Bernard Christian SLAUGHTER v. Andrew J. WINSTON. Bernard Christian SLAUGHTER, Appellant, v. CITY OF RICHMOND, Appellee. No. 72-2371. United States Court of Appeals, Fourth Circuit. Argued April 2, 1973. Decided May 1, 1973. JeRoyd X. Greene, Richmond, Va., for appellant. James R. Saul, Asst. City Atty., for the City of Richmond (Conrad B. Mattox, Jr., City Atty., for the City of Richmond, on brief) for appellee. Before HAYNSWORTH, Chief Judge, RUSSELL, Circuit Judge, and BLAIR, District Judge. PER CURIAM: For reasons sufficiently appearing in the opinion of the District Judge, 347 F.Supp. 1221, we conclude that under Virginia law an appropriation of funds by the City of Richmond for the operation of its jails and Office of City Sergeant did not create an ordinary debt subject to garnishment. Affirmed.

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Michael Erin MICK, by his next friend, his father, Billee Scott Mick, Individually and on behalf of all others similarly situated, Appellants, v. Robert SULLIVAN, Principal, Lewis County High School, Weston, West Virginia et al., Appellees. No. 72-2160. United States Court of Appeals, Fourth Circuit. Argued Feb. 7, 1973. Decided April 16, 1973. David G. Hanlon, Harrisville, W. Va., for appellants. Willis O. Shay, Clarksburg, W. Va. (John S. Holy, Weston, W. Va., on brief), for appellees. Before CRAVEN and.RUSSELL, Circuit Judges, and MURRAY, District Judge. PER CURIAM. This is a hair case brought by plaintiff as a class action seeking declaratory and injunctive relief from the application of a public school dress code regulating the style and length of male students’ hair. Even though plaintiff is not now eligible to attend the Lewis County High School, we think the case is not moot since it was brought as a class action. The district court recognized the law of this circuit that the right to choose one’s hairstyle is one aspect of the right to be secure in one’s person guaranteed by the due process clause and the equal protection clauses of the Fourteenth Amendment. Massie v. Henry, 455 F.2d 779 (1972). Even so, the district court denied relief, expressing its sympathy with the standards and ideals of a sparsely populated, local community as expressed in the school regulation, and its apprehension that long hair might have a potentially disruptive effect on school discipline. Such a basis for decision was specifically rejected in Massie v. Henry, 455 F.2d 779, 783 (4th Cir. 1972). The judgment of the district court will be vacated and on remand an appropriate judgment will be entered granting the declaratory and injunctive relief sought by the plaintiff and his class. Vacated and remanded with instructions.

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A. H. ALEXANDER and Mary Alexander, Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee. No. 72-1014 Summary Calendar. United States Court of Appeals, Fifth Circuit. April 12, 1973. Morley H. White, Houston, Tex., for petitioners-appellants. Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Atty., Tax Div., U. S. Dept, of Justice, K. Martin Worthy, Chief Counsel, Eugene F. Colella, Internal Revenue Service, Washington, D. C., for respondent-appellee. Before BELL, GODBOLD and INGRAHAM, 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: In this civil action for assessment of additional wagering income taxes, the taxpayer asserts that evidence gathered by the government for use in a prior criminal action through the device of a search warrant was inadmissible. The taxpayer urges that the Supreme Court’s decision in Marchetti v. United States, 390 U.S. 39, 88 S.Ct. 697, 19 L.Ed.2d 889 (1968), and Grosso v. United States, 390 U.S. 62, 88 S.Ct. 709, 19 L.Ed.2d 906 (1968), necessitate a declaration that the warrant was per se invalid. While this circuit has given full effect to a retroactive application of the Marchetti-Grosso rule, United States v. Lucia, 423 F.2d 697 (5th Cir., 1970), cert. denied 402 U.S. 943, 91 S.Ct. 1607, 29 L.Ed.2d 111 (1971), we are not compelled to declare the warrant a nullity. The aforementioned Supreme Court decisions did not abolish the wagering tax statute nor did it abolish the criminal offenses therein specified. Washington v. United States, 402 F.2d 3 (4th Cir., 1968), cert. denied 402 U.S. 978, 91 S.Ct. 1641, 29 L.Ed.2d 145 (1971). They did provide a complete defense to a criminal conviction where the accused properly raises his constitutional privilege against self-incrimination. In the case at hand we find the warrant to have been proper in all respects. We further find appellants’ remaining contentions without merit. The judgment of the Tax Court is affirmed. . United States v. Scaglione, 446 F.2d 182 at 184-187 (5th Cir., 1971.)

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Lloyd I. HUGHES, Plaintiff-Appellee, v. J. William SHARP, Defendant-Appellant. No. 71-2792. United States Court of Appeals, Ninth Circuit. April 11, 1973. Stanley N. Gleis, Robert Ferguson, Beverly Hills, Cal., for defendant-appellant. Max L. Gillam, Philip F. Belleville, Joseph A. Wheelock, Jr., Fredric J. Zepp, Latham & Watkins, Los Angeles, Cal., for plaintiff-appellee. Before CHAMBERS, HUFSTEDLER and WALLACE, Circuit Judges. OPINION PER CURIAM: J. William Sharp appeals from an order of the district court holding him in civil contempt for failure to appear at an examination of judgment debtor in proceedings ancillary to execution of judgment. Sharp was fined the amount of his opponent’s attorney’s fees and costs and ordered confined until he had purged himself of the contempt. Sharp does not contend at this time that he is not the judgment debtor of Hughes. He does contend that he was not properly brought before the court, and that therefore the court lacked personal jurisdiction over him. He also attacks the district court’s subject matter jurisdiction. We express no view on these arguments. Since Sharp is a party to the pending proceedings, and since those proceedings are still under way, we lack jurisdiction to consider the purported appeal from the district court’s contempt order. That order is interlocutory. See Fox v. Capitol Co., 299 U.S. 105, 57 S. Ct. 57, 81 L.Ed. 67 (1936); Western P.R.R. Corp. v. Western P.R.R. Co., 216 F.2d 513 (9th Cir. 1954); and Hodgson v. Mahoney, 460 F.2d 326 (1st Cir. 1972). Although this result seems harsh, Hughes was not left without recourse. He can always purge himself of the contempt. Or, he might have moved to quash the process that he now seeks to challenge; and if that motion had been denied, such denial would generally be appealable. Edwin Raphael Co. v. Maharam Fabrics Corp., 283 F.2d 310 (7th Cir. 1960). Finally, he could have sought leave to bring an interlocutory appeal from the contempt order. See 28 U.S.C. § 1292(b). Notice of appeal was filed on August 4, 1971. The brief for Hughes was filed on April 7, 1972. In that brief Hughes raises the issue of this court’s jurisdiction. The proper course when counsel for Hughes discovered the defect in our jurisdiction was to file a motion to dismiss the appeal. The result of failure to make such a motion has been substantial unnecessary delay in disposition of this cause. The appeal is dismissed.

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Dohn B. BROADWELL, and Charlotte L. Broadwell, Appellants, v. UNITED STATES of America, Appellee. Waverly C. BROADWELL and Nancy W. Broadwell, Appellants, v. UNITED STATES of America, Appellee. Nos. 72-2477, 72-2478. United States Court of Appeals, Fourth Circuit. Argued April 2, 1973. Decided April 18, 1973. M. Alexander Biggs and Frank P. Meadows, Jr., Rocky Mount, N. C. (Biggs, Meadows & Batts, Rocky Mount, N. C., on brief), for appellants in Nos. 72-2477 and 72-2478. Janet R. Spragens, Atty., Tax Division, U. S. Department of Justice (Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwaeks, and Paul M. Ginsburg, Attys., Tax Division, U. S. Department of Justice, and Warren H. Coollidge, U. S. Atty., on brief), for appellee in Nos. 72-2477 and 72-2478. Before SOBELOFF, Senior Circuit Judge, and FIELD and WIDENER, Circuit Judges. PER CURIAM: These are actions for refund of federal income taxes. The basic question presented is the perennially thorny issue of whether the profit from the sale of an option on land is properly treated as capital gain or ordinary income. The plaintiffs, Dohn and Waverly Broadwell, and their respective spouses opted for a jury trial. They made no objection to the instructions given the jury by the District Judge. After the jury’s verdict was entered against them and in favor of the Government, the Broadwells sought to have the District Judge grant either a motion for judgment notwithstanding verdict or a motion for a new trial on the theory that evidence would not support the jury verdict. The District Judge denied these motions and the present appeal ensued. It may well have been a strategic error for the plaintiffs to opt for a jury trial. Nonetheless, the Broadwells deliberately elected to have the fate of their claim settled by a jury. They chose to have them rather than a judge make the factual inquiry of whether the option in question was held for sale to customers in the course of the sellers’ trade or business. Thus, the only question for the court on this appeal is whether the verdict of the jury was clearly erroneous. See Tidwell v. Commissioner, 298 F.2d 864, 866 (4th Cir. 1962); Lakin v. Commissioner, 249 F.2d 781, 783 (4th Cir. 1957). Having reviewed the record on appeal, and the briefs of both parties, we find that the Government presented evidence, which if viewed in the light most favorable to it, could support the jury’s verdict. The judgment of the lower court is therefore Affirmed.

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T. L. BISHOP et al., Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant. Joe MAGEE et al., Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant. Nathan BOUDOIN et al., Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant. GULF TRAWLERS, INC., Sidney E. Herndon, d/b/a Herndon Marine Products Co., Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant. JOHNSON & JOHNSON PROCESSORS, INC., Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant. No. 71-3550. United States Court of Appeals, Fifth Circuit. Feb. 27, 1973. Ben A. Douglas, Atty., Tax Div., Dept. of Justice, Dallas, Tex., Anthony J. P. Farris, U. S. Atty., James R. Gough, Asst. U. S. Atty., Houston, Tex., Scott P. Crampton, Asst. Atty. Gen., Tax Div., Meyer Rothwacks, Chief, Appellate Section, Issie L. Jenkins, Atty., Dept. of Justice, Washington, D. C., for defendant-appellant. Joseph J. Lyman, Washington, D. C., Eli Mayfield, Palacios, Tex., for plaintiffs-appellees. Before JOHN R. BROWN, Chief Judge, and GODBOLD and SIMPSON, Circuit Judges. JOHN R. BROWN, Chief Judge: The ten year Odyssey of who is the employer — shipmaster or shipowner — of crew members of fishing vessels working on a lay for the payment of FICA and FUTA taxes commenced in an abortive effort to enjoin the Government, Enochs v. Williams Packing Co., 1962, 870 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d 292; but followed shortly by the unfavorable decision to the Government in Crawford Packing Co. v. United States, S.D., Texas, 1962, 228 F.Supp. 549, aff’d., 5 Cir., 1964, 330 F.2d 194, sustained momentarily in Webb I, United States v. Webb, Inc., 5 Cir., 1968, 402 F.2d 956, but stranded by Supreme Court reversal, 1970, 397 U.S. 179, 90 S.Ct. 850, 25 L. Ed.2d 207, with a holding for the Government in Webb II on remand to us, United States v. Webb, Inc., 5 Cir., 1970, 424 F.2d 1070, and extended articulation of controlling principles in Anderson v. United States, 5 Cir., October 1971, 450 F.2d 567; may hopefully, cf. Parr v. United States, 5 Cir., 1972, 469 F.2d 1156, be closer to an end as we dispose of a series of cases decided subsequent to our per curiam reversal in Webb II, but prior to our October 1971 decision in Anderson. We hold that the seamen are employees of the shipowner, not the ship-master, and once again reverse. To bring this nearer to a close what we write is not for those to read who run. Without repetition we start against the background of what has been written and done before. But in the quest for standards to guide both litigants and District Courts we think some things merit brief discussion. As before, our contrary conclusion does not rest on a rejection of the trial Judge’s findings of fact, so we need not resolve the oft-times troublesome problem of deciding whether our review is of facts as to which the Plimsoll line of F. R.Civ.P. 52(a) cases is the determinant or whether it is a case for unrestricted review as a question of law. We simply determine that the facts found by the District Court are not significantly different from those in Anderson and— as there and in Webb II — we hold that they are insufficient to make out the requisite surrender of control of the vessel by her owner to the master. With that we could perhaps rest without saying more. But in view of the tenacity of counsel for all of the litigating shipowners who has persevered undaunted with that “ant-like persistence of solicitors,” Lyon v. Boh, S.D.N.Y., 1924, 1 F. 2d 48, 50, we think some further discussion is appropriate. Having failed in Anderson for “application of a sort of brackish form of land-based common law principles,” 450 F.2d at 570 and n. 5, the taxpayers no longer urge us to dilute its salinity. What they seek now is not a maritime law for the Medes and Persians which altereth not. Rather they seek a maritime law of demise charter for injury-death-Jones Act-Sieracki-Ryan-Yaka purposes on a stricter “humanitarian” basis and another parallel, but much looser, standard for “commercial” purposes which would obviously include tax cases. This argument is essentially built on the cautious words of the Supreme Court as it (i) held that maritime standards should control but (ii) did not undertake to assay either what that law was or what the Fifth Circuit would or should do under it. In Webb I we stated that if “ * * * we were free to apply maritime law •x- -x- we woui(j reverse * * * because it is clear that under maritime law the captain is the agent of the owner * * * and the crew hands are employees.” Because in this Webb I discussion we had referred to injury/ death/Jones Act situations, shipowners then focused on the Supreme Court’s reservation: “We are not called upon to, and do not, intimate any view on the correctness of the Court of Appeal’s statement on this score.” 397 U. S. at 182, n. 4, 90 S.Ct. at 851, n. 4, 25 L.Ed.2d at 210, n. 4. But this argument is not sound and, worse, it is two cases too late so far as this panel’s ability or willingness to take action short of an en banc — which we do not suggest. Of importance to the Supreme Court was the question — and its decision — of maritime principles. Having decided that, it properly left the elucidation of those principles to the lower courts. And when it came back to us in Webb II we effectively answered the question that such injury/death cases were a proper source of maritime law. And this was reiterated in Anderson. But, more fundamentally, there is no basis for thinking, as the District Judge characterized it, that courts have “deviated from the general maritime law in personal injury cases” in determining the existence of a demise charter. There is but a single, not as urged a double, standard: Has the shipowner surrendered virtually complete possession, control and navigation to the non-owner (charterer) ? If so, it is, if not, it’s not, a demise. More than that, the law respecting injury/death is not some recent intrusion on maritime law. It is a part of the whole. What the maritime jurisprudence would compel is to be influenced by its presence as a part of the whole, not as some supposed outside, foreign principle. And as with any growing decisional-oriented body of law, current developments in response to contemporary problems may well bring about a modification of formerly settled principles m related or adjacent areas. In Webb II and Anderson we have not depended solely on injury/death holdings. But they have been, now are, and will be — along with the full body of charter party law — a significant permissible source for the conclusion that these arrangements lack that “nearly total relinquishment of control” to constitute “a bare boat, or demise, charter”, 397 U.S. at 192, 90 S.Ct. at 856, 25 L.Ed.2d at 216. We need not catalogue beyond that done in Anderson the factors, plus or minus, bearing on demise. One is critical, another significant. Although in practice the masters chosen to take over a vessel tended to serve for a considerable time, the Court expressly found that either could terminate at any time — certainly on sale of the catch at the port of arrival. Considering the relative economic disparity between the owner of an expensive ocean-going vessel with high costs for operation, bunkering, maintenance and insurance, and a prospective master whose only investment in the enterprise is his time and energy, this right to terminate is a powerful force. The notion that such a master really has the full command, possession and control of the ship to do as he pleases in that fishing trade is simply not realistic. See Stevens v. Seacoast Co., 5 Cir., 1969, 414 F.2d 1032. That leads to the other factor we described as significant. Except for extraordinary situations the master was to deliver the catch for sale or receipt at a specified place. Lacking any real economic independence in the employment of the vessel vis-a-vis the shipowner, the master and his crew are really a part of the owner’s enterprise and all of the various parts of the arrangement are simply a means of calculating compensation. The so-called independence of these masters from detailed orders on how to perform their work is beguiling. But this is not unique to the arrangement. This inheres in the calling of those who go down to the sea in ships. On the most obscure of vessels the master is the Lord of the Quarter Deck. See United Geophysical Co. v. Vela, 5 Cir., 1956, 231 F.2d 816, 819. He may receive a barrage of radio messages but he is in command. Indeed, reserving the right to direct navigational details would violate not only the traditions of the sea which form a significant part of maritime law, but would also expose such an unwitting owner to a certain loss of his right to limitation of liability, 46 U.S.C.A. § 183 et seq. On the saline standards of maritime law — the common law of the sea — the shipowners retained significant control and the master and crew members are his employees for life, death and taxes. Reversed. . Elizabeth Ann, Inc. v. United States, 5 Cir., 1973, 476 F.2d 980; Carleen F. Inc. v. United States, 5 Cir., 1973, 476 F.2d 981; Mayport Fisheries Company v. United States, 5 Cir., 1973, 476 F.2d 981. . See Bishop v. United States, S.D.Texas, May 1971, 334 F.Supp. 415, 421-425, for the Court’s finding of fact. . See Anderson, 450 F.2d 570, n. 8, which quotes in full from Webb I. . This was preceded by the recital from our Webb I (see note 3, supra) and the Court’s statement: “It [Court of Appeals] reviewed the facts and observed that ‘it is clear that under maritime law the captain is the agent of the owner * * * and the crew hands are employees,’ and that ‘if we were free to apply maritime law as a test of the employer-employee relationship we would reverse the decision of the district court.’ ” 397 U.S. at 182, 90 S.Ct. at 851, 25 L. Ed.2d at 210. . Certiorari was denied, 1970, 400 U.S. 902, 91 S.Ct. 138, 27 L.Ed. 138 but the Court is free and just might, re-review it in the current cases. See Hughes Tool Co. v. TWA, 1973, 409 U.S. 363, n. 1, 93 S.Ct. 647, 34 L.Ed.2d 577 [January 10, 1973]. . “The courts have deviated from the general maritime law in personal injury and wrongful death cases by requiring, for humanitarian reasons, that fishermen, being wards of the sea, not be precluded ipso facto from recovery simply by the construction of an implied demise. The Court does not believe that cases which create an enlarged standard for humanitarian purposes should be considered as changing the general maritime law or the maritime common law.” D. C., 334 F.Supp. at 418. . We cannot improve on Anderson, 450 F.2d at 572, n. 13, in the articulation of criteria. . In Vela, we made the following observation about the authority of the ship master: “But navigation in these circumstances is left neither to Judges nor the Elder Brethren of Trinity House nor those who, in the garb of experts, from the security of a swivel chair now lay out the course with great conviction. “The master is the commander of the ship— lord of his little world. He is master in every sense of the word * * * ” The Balsa, 3 Cir., 10 F.2d 408, 409. Whether he has bridge or quárterdeek to stalk, as long as he commands, he is master. It is the Master, then, who must make these decisions and who, clothed with great responsibility, enjoys the greatest and widest of good faith latitude in professional judgment.” 231 F.2d at 819. But see Avera v. Florida Towing Corp., 5 Cir., 1963, 322 F.2d 155, 164; Boudoin v. McDermott & Co., 5 Cir., 1960, 281 F.2d 81, 87. . Shipowners stress some early cases which have held in their situations that to be a demise the charterer did not have to provide fuel, stores, victuals, etc. Significantly, Congress requires this to qualify as a vessel owner for limitation of liability, 46 U.S.C.A. § 186.

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ELIZABETH ANN, INCORPORATED, et al., Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant. No. 71-3376. United States Court of Appeals, Fifth Circuit. Feb. 27, 1973. Scott P. Crampton, Asst. Atty. Gen., Tax Div., Dept, of Justice, Washington, D. C., Anthony J. P. Farris, U. S. Atty., James R. Gough, Asst. U. S. Atty., Houston, Tex., Michael D. Cropper, Meyer Rothwacks, Issie L. Jenkins, Attys., Tax Div., Dept, of Justice, Washington, D. C., for defendant-appellant. Eli Mayfield, Palacios, Tex., Joseph Lyman, Washington, D. C., for plaintiffs-appellees. Before JOHN R. BROWN, Chief Judge, and GODBOLD and SIMPSON. Circuit Judges. PER CURIAM: This case is substantially the same as, and controlled by, Bishop v. United States, 5 Cir., 1973, 476 F.2d 977. Reversed.

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CARLEEN F, INCORPORATED, et al., Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant. No. 71-3377. United States Court of Appeals, Fifth Circuit. Feb. 27, 1973. Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Tax Div., Dept, of Justice, Washington, D. C., Anthony J. P. Farris, U. S. Atty., James R. Gough, Asst. U. S. Atty., Houston, Tex., Michael D. Cropper, Issie L. Jenkins, Attys., Tax Div., Dept, of Justice, Washington, D. C., for defendant-appellant. Eli Mayfield, Palacios, Tex., Joseph Lyman, Washington, D. C., for plaintiffs-appellees. Before JOHN R. BROWN, Chief Judge, and GODBOLD and SIMPSON, Circuit Judges. PER CURIAM: This case is substantially the same as, and controlled by, Bishop v. United States, 5 Cir., 1973, 476 F.2d 977. Reversed.

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MAYPORT FISHERIES COMPANY et al., Plaintiffs-Appellees, v. UNITED STATES of America, Defendant-Appellant. No. 71-3046. United States Court of Appeals, Fifth Circuit. Feb. 27, 1973. Gerald Gallinghouse, U. S. Atty., New Orleans, La., Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Fred B. Ugast, Issie L. Jenkins, Attys., Tax Div., U. S. Dept, of Justice, Washington, D. C., for defendant-appellant. David E. Hogan, New Orleans, La., Joseph J. Lyman, Washington, D. C., Dorothy Cowen, New Orleans, La., for plaintiffs-appellees. Before JOHN R. BROWN, Chief Judge, and GODBOLD and SIMPSON, Circuit Judges. PER CURIAM: On facts significantly less favorable to taxpayers this case is controlled by Bishop v. United States, 5 Cir., 1973, 476 F.2d 977. Reversed.

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SIRBO HOLDINGS, INC., Petitioner-Appellant, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee. No. 167, Docket 72-1617. United States Court of Appeals, Second Circuit. Argued Nov. 6, 1972. Decided March 23, 1973. James R. McGowan, Providence, R. I. (Lester H. Salter, Salter, McGowan, Arcaro & Swartz, Providence, R. I., of counsel), for petitioner-appellant. Mary J. McGinn, Atty., Dept, of Justice, Washington, D. C. (Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Ernest J. Brown, Attys., Tax Div., Dept, of Justice, Washington, D. C., of counsel), for respondent-appellee. Before FRIENDLY, Chief Judge, MANSFIELD and TIMBERS, Circuit Judges. FRIENDLY, Chief Judge: The issue is whether a tenant’s payment to its landlord of $125,000 in satisfaction of the tenant’s obligation to restore leased premises to their pre-lease condition is entitled, in whole or in part, to long-term capital gains treatment under § 1231 of the Internal Revenue Code of 1954. The Commissioner determined the payment, which was received by petitioner, Sirbo Holdings, Inc. (“Sirbo”) from its tenant, to be taxable as ordinary income, and accordingly found a deficiency in petitioner’s income tax for the taxable year ending June 30, 1964, which was upheld by the Tax Court. Petitioner then sought review pursuant to 26 U.S.C. § 7482. The essential facts are undisputed: At all relevant times Sirbo was engaged in the trade or business of renting real estate. In 1944 it purchased premises at 254-6 West 54th Street, New York, N. Y., which consisted of a building with offices and a theatre called The New Yorker Theatre, subject to an existing lease of the theatre to the Columbia Broadcasting System, Inc. (“CBS”), which used it for radio broadcasting purposes. In July, 1944, Sirbo notified CBS that it had purchased the entire building and would assume all the terms and obligations of the theatre lease. In anticipation of the expiration of the existing lease term in 1948, Sirbo in November, 1947, negotiated a new lease of the theatre to CBS. Thereafter Sirbo continuously rented the theatre to CBS under several successive leases until at least December 31, 1968. Each lease gave CBS the “right to use the premises as a theatre, and for radio broadcasting and television purposes of its business.” Until 1964 each lease provided that at the expiration of the lease term CBS “shall restore the premises substantially to the condition in which they existed on November 14, 1947, reasonable wear and tear and damage by the elements excepted, and . . . shall fully indemnify [Sirbo] for every and all costs and expenses of whatsoever name or nature that may be required for the purposes of reinstating the premises to said condition.” Prior to December 31, 1963, according to findings of the Tax Court, CBS, becoming concerned over rising construction costs which made it difficult to predict its ultimate cost of fulfilling its obligations to restore premises leased by it, determined as a matter of corporate policy to eliminate or update restoration clauses from leases it held for theatres in New York and so advised Sirbo. The parties negotiated the terms of the 1964 lease, including an “updated” restoration clause which limited CBS’ terminal obligation to restore the theatre to removal of alterations or additions made after January 1, 1964, and repair of any damage caused thereby. Thereupon they entered into separate negotiations for settlement of CBS’ obligation under the former lease to restore the theatre to its 1947 condition. Each party caused appraisals of the cost of restoration to be made. Estimates of $70,000 and $200,000 were made by representatives of CBS and Sirbo, respectively, and the sum of $125,000 was agreed upon as a compromise figure. The sizable cost estimates reflected the changes CBS had made after 1947 to adapt the former legitimate theatre for use as a television studio. As found by the Tax Court, these “changes included the removal of approximately 300 to 400 theatre seats, . all carpeting, chandeliers, and stage curtains; the extension of the stage area . . ., a change in the floor level and the elimination of the ‘loop’ in the former seating arrangement, the construction of walls and partitions and appropriate structural changes to accommodate control rooms, the alteration of bathrooms and the heating system, and the installation of thousands of feet of electrical wiring.” The restoration clauses contained in the leases covering the period from 1953-1964 implicitly recognized the alterations made by CBS by providing for the eventual replacement of the removed seats, the removal of the control booths, and the removal of the extension of the stage apron. In a settlement signed on January 31, 1964 but backdated to December 31, 1963, CBS paid Sirbo the $125,000 sum for the release of any claims, injury or damage Sirbo might have as a result of the provisions of the restoration clause contained in the lease dated July 15, 1958. The release stated that Sirbo had claimed at the expiration of the lease term that CBS had partially destroyed the premises and Sirbo therefore requested indemnification for the cost of reinstating the premises to their condition in 1947; CBS acknowledged its obligation so to indemnify Sirbo. No portion of the payment was used to restore the structure to its former use as a legitimate theatre, however, since CBS continued in occupancy. Indeed, the Tax Court found that, after entering into the 1964 lease, CBS made further modifications in the theatre to adapt it for use as a color television studio. On its corporate tax return for. its taxable year ending June 30, 1964, Sirbo reported as long-term capital gain resulting from “involuntary conversion as a result of partial destruction of property used in trade or business,” the amount by which the $125,000 received from CBS exceeded Sirbo’s adjusted basis in the entire property, $93,333.51 (including the leased theatre as a part), i. e., $31,666.49. The Commissioner determined that the $125,000 payment from CBS was taxable as ordinary income rather than as long-term capital gain and accordingly noted a deficiency in Sirbo’s tax liability for the taxable year in question. Sirbo’s ordinary income was increased by that amount and capital gain was decreased by $31,666.-49, resulting in a net deficiency in income tax of $53,573.30. Sirbo was allowed additional depreciation for the year in issue in the amount of $4,444.44, however, which had not been taken because the taxpayer had claimed an involuntary conversion of the property. The government does not dispute that the property to which the release of the obligation to restore related was “property used in [Sirbo’s] trade or business” within the meaning of § 1231. It denies, however, that the $125,000 payment constituted either gain on its compulsory or involuntary conversion, or from its sale or exchange. Insofar as petitioner rested its claim to capital gains treatment on the involuntary conversion clause of § 1231, we agree with the Tax Court that it failed. The New Yorker Theatre was voluntarily leased to CBS with the understanding that it might be converted for use as a television studio. When CBS sought to be released from its obligations to restore the theatre to its 1947 condition and to indemnify Sirbo for the cost of doing so, Sirbo voluntarily agreed to accept a cash payment rather than enforce these obligations. This was understandable from Sirbo’s vantage point, since CBS wanted to continue to occupy the converted theatre and use it as a television studio at a substantial rental. But the decision to accept the $125,000 rather than hold CBS to its obligation to restore was not “compulsory or involuntary.” It is not claimed that it resulted from duress or some external force over which Sirbo had no control, such as occurs when property is destroyed by natural causes, is stolen or seized, or is transferred under power or threat of eminent domain. The cases relied upon by petitioner on this point are distinguishable. In Guy L. Waggoner, 15 T.C. 496 (1950), the taxpayers leased property to the United States under threat of condemnation. The lease gave the government a qualified right to alter the premises, but provided for restoration at the ■ taxpayers’ request. When the taxpayers subsequently requested restoration, the United States decided to pay the cost of repair for damage it had caused while in possession rather than itself restore the premises. Thus, as the Tax Court held, the property altered or destroyed was involuntarily converted into money within the meaning of the predecessor to § 1231, and the taxpayers’ acceptance of compensation for the property in lieu of actual restoration “did not alter the character of the lease agreement.” 15 T.C. at 503. See also C. I. R. v. Gillette Motor Transport, Inc., 364 U.S. 130, 135-136, 80 S.Ct. 1497, 4 L.Ed.2d 1617 (1960). Sirbo, however, was neither forced to lease the premises to CBS nor compelled to accept the payment instead of requiring renovation. The settlement it reached with its tenant did not arise from an occupancy imposed upon it pursuant to law, but from an occupancy it sought as part of its normal business operations. Unlike the taxpayers in Guy L. Waggoner, supra, it could choose whether it would lease its premises, the identity of the person to whom it might lease them, and the conditions of occupancy. Similarly, in Walter A. Henshaw, 23 T.C. 176 (1954), and United States v. Pate, 254 F.2d 480 (10 Cir. 1958), the property of the taxpayer used in the trade or business (oil in place in Henshaw, a building in Pate) was physically damaged under circumstances beyond the taxpayer’s control, namely through the negligence of others. In both eases the taxpayer recovered monetary damages as a result of litigation, and the sums were taxed as long-term capital gains from the compulsory or involuntary conversion of the damaged property. Here the structural modifications needed to convert the theatre to a television studio were contemplated as a distinct possibility under the lease agreement and were essentially made with Sirbo’s consent, subject to the obligation to restore. Relying on Grant Oil Tool Co. v. United States, 180 Ct.Cl. 620, 381 F.2d 389 (1967), Sirbo urges that prior contemplation of alterations in the leased structure does not deprive the lessee’s conversion of its involuntary character, even when the lease agreement provides for restoration or compensation to the lessor. We disagree. Grant Oil Tool Co. differs in a crucial respect. There the taxpayer could not have had restoration of the destroyed property, whereas Sirbo could. In that case a manufacturer leased oil well drilling tools to drillers for use in their business, subject to loss in the drill hole, misplacement, or damage beyond repair due to the driller’s negligence in use. The decision to abandon or try to retrieve the tools lost in the drill hole was found to be exclusively that of the driller-lessee, who was obligated in either event to reimburse the lessor at the sale price of new equipment. These payments were held to be entitled to capital gains treatment pursuant to § 1231(a) as a “compulsory or involuntary conversion,” for the reason that the “complete and unwanted destruction of [the] taxpayer’s tool bodies” which brought it “within the definition of ‘involuntary conversion’ as set forth in § 1231(a),” id. at 395-396, was beyond the taxpayer’s control once its property was leased. As far as the lessor was concerned the property destroyed in the lessee’s operations was irretrievably lost without opportunity of restoration or recovery. See also Philadelphia Quartz Co. v. United States, 179 Ct.Cl. 191, 374 F.2d 512 (1967). In contrast, not only did Sirbo have the power to fashion the lease agreement to prevent CBS from making the extensive alterations which were the subject of the payment, but it had the right to pursue the possible avenue of requiring CBS to restore the property to its former condition and voluntarily chose not to do so. While involuntary conversion was the ground most strongly argued by Sirbo, it contended in the alternative that the transaction constituted the sale or exchange of property used in the trade or business. Judge Quealy rejected that contention, largely on the basis of extensive dicta in this court’s decision in Billy Rose’s Diamond Horseshoe, Inc. v. United States, 448 F.2d 549, 551-552 (2 Cir.), aff’g 322 F.Supp. 76 (S.D.N.Y.1971). In there holding that a landlord receiving a series of notes in satisfaction of an obligation to restore was not entitled to the benefits of the installment sales provision of I.R.C. § 453(a), the court noted that the landlord’s relinquishment of its rights to have the property restored caused these rights to have come “to an end and vanished” and thus could not constitute a “sale or other disposition of real property” under § 453(b)(1)(A). At least as applied to the question of capital gains treatment under § 1231, this seems to be taking somewhat of a keyhole view. Sirbo’s claim for capital gains treatment does not rest entirely on the release of the covenant to restore, which clearly was not “property used in the trade or business,” but it is based at least in part on CBS’ payment for removal or destruction of “property” such as the theatre seats, carpeting, chandeliers, stage curtains and various structural features of the theatre. Realistically CBS was paying Sirbo for what it had done to this property over the years. Under our decision in C. I. R. v. Ferrer, 304 F.2d 125, 131 (2 Cir. 1962), see Eustiee, Contract Rights, Capital Gain and Assessment of Income — the Ferrer Case, 20 Tax L.Rev. 1, 7-34 (1964), it would not be fatal that this property did not “pass” to CBS. If the lease, in lieu of an obligation to restore, had obligated CBS from the outset to pay for the property to be removed or damaged by it, there could be little question but that the payment would be viewed as a sale or exchange of property used in the trade or business, see Hamilton & Main Inc., 25 T.C. 878 (1956); Washington Fireproof Building Co., 31 B.T.A. 824 (1934), since the government does not contend that such a payment would represent “collapsed income.” See, e. g., Hort v. C. I. R., 313 U.S. 28, 61 S.Ct. 757, 85 L.Ed. 1168 (1941); Holt v. C. I. R., 303 F.2d 687 (9 Cir. 1962); W. Lawrence Oliver, 24 T.C.M. 438 (1965). From a practical standpoint it is hard to see why the transaction here at issue should be treated differently. Classification of CBS’s payment as ordinary income merely because of the parties’ failure to east the transaction at least partly in the form of a sale of the removed or damaged property would appear to exalt form over substance. What makes a hard ease even harder is the following: Two months after the decision here, Judge Raum of the Tax Court accorded capital gains treatment to a payment almost identical in nature. Boston Fish Market Corp., 57 T.C. 884 (March 29, 1972). Sirbo immediately moved for reconsideration, but its motion was denied without a word of explanation. The government does not assert any pertinent distinction between the facts of the two cases; rather, it seeks to explain the disparate results on the ground that the taxpayer’s contention in Boston Fish Market was that the lessee’s payment was not income at all in light of the provision of I.R.C. § 109 excluding from gross income the value of a lessee’s improvements to which the lessor falls heir on the termination of a lease and, once that point was decided against the taxpayer, the Commissioner abandoned his challenge to the propriety of capital gains treatment, see 57 T.C. at 887 n. 2. The attempted explanation does not explain, for two reasons. The first is that the Commissioner has a duty of consistency toward similarly situated taxpayers; he cannot properly concede capital gains treatment in one case and, without adequate explanation, dispute it in another having seemingly identical facts which is pending at the same time. Compare Moog Industries, Inc. v. FTC, 355 U.S. 411, 414, 78 S.Ct. 377, 2 L.Ed.2d 370 (1958), with FTC v. Universal-Rundle Corp., 387 U.S. 244, 250-252, 87 S.Ct. 1622, 18 L. Ed.2d 749 (1967); K. C. Davis, Discretionary Justice: A Preliminary Inquiry, ch. VII (1969); L. Jaffe, Judicial Control of Administrative Action 700 (1965). That the Commissioner’s seeming inconsistency may have arisen from the right hand’s ignorance of the posture of the left is little solace to taxpayers who are entitled to a non-discriminatory administration of the tax laws by him, much less to a taxpayer like Sirbo who is disadvantaged by the discrimination in its ease. The second reason is that Judge Raum did not rest on the Commissioner’s concession. He said squarely that payments like that in Boston Fish Market and here “have generally been regarded as having been received in sale or exchange of the unrestored property,” 57 T.C. at 889, citing several cases including the highly pertinent one of Hamilton & Main, Inc., supra, 25 T.C. at 882, and Judge Murdock’s concurring opinion in Washington Fireproof Building Co., supra, 31 B.T.A. at 827-28. The Tax Court’s failure to reconcile its decision here with that in Boston Fish Market, cf. IRC § 7460(b), may have rested, although this is only speculation, upon a belief that, under its ruling in Jack E. Golsen, 54 T.C. 742, 756-58 (1970), it was bound in this case by the dicta in Billy Rose, supra, 448 F.2d 549. We say dicta because, as indicated, the issue in that case was not whether the transaction came within I.R.C. § 1231 but whether a series of payments like the single payment here in question constituted income from “a sale or other disposition of real property” or “a casual sale or other casual disposition of personal property” so as to qualify for treatment as an installment sale under I.R.C. § 453(b). In view of the background of the installment sale provisions, which are to be strictly construed, see 2 Mertens, Law of Federal Income Taxation, § 15.01 (1967); see, e. g., Harry Leland Barnsley, 31 T.C. 1260, 1263 (1959), one could conclude that the transaction in Billy Rose was not a “sale or other disposition of real property” for purposes of § 453(b) without deciding whether the income it generated should be treated as capital gains or ordinary income under § 1231 — an issue which the taxpayer in that case did not raise. The case law offers examples of transactions allowed installment treatment under § 453(b)(1)(A) which were treated successively as capital gains and as ordinary income when the tax law changed before an installment obligation matured. See Murray v. United States, 192 Ct.Cl. 63, 426 F.2d 376, 381 (1970) (“The function of section 453 is one of timing, not characterization. [U]se of the installment method defers the reporting of taxable gain, but in no way characterizes the nature of the gain.”) See also Snell v. C.I.R., 97 F.2d 891 (5 Cir. 1938); Zola Klein, 42 T.C. 1000 (1964); 2 Mertens, supra, § 15.11. Furthermore, the committee reports on § 212(d) of the Revenue Act of 1926, 44 Stat. 23, which purported to “define the situations and business to which such [installment] basis might be applied,” neither made explicit reference to characterization as capital gains nor referred solely to classes of transactions which today would demand capital gains treatment. H.R.Rep. No. 1, 69th Cong., 1st Sess. (1926), reprinted in Cum.Bull. 1939-1 part 2, at 346-47. In view of the different purposes of the two provisions, Congress might well be thought to have intended a more restrictive meaning for “sale or other disposition” in § 453(b) than for “sale or exchange” in § 1231(a). We freely concede that the Billy Rose court apparently considered the issues under §§ 453(b) and 1231 to be identical and that Judge Quealy cannot be faulted for believing that the Billy Rose panel would have rejected Sirbo’s claim. But the Tax Court fulfills its duties under Jack E. Golsen, supra, if it respects decisions of a court of appeals to which appeals will be taken and should be free to voice its disagreement with statements not essential thereto; indeed, Golsen speaks of a duty to follow a “Court of Appeals decision which is squarely in point.” 54 T.C. at 757. This is particularly true when, despite attempted distinction, Billy Rose, supra, 448 F.2d at 552 & n. 1, the statements here relied upon by Judge Quealy are to some extent inconsistent with the main thrust of this court’s earlier decision in Ferrer, which has been followed elsewhere. See, e. g., United States v. Dresser Industries, Inc., 324 F.2d 56, 59 (5 Cir. 1963). The basic inconsistency in approach between Ferrer and Billy Rose has already attracted comment, see 14 B.C. Ind. & Comm.L.Rev. 183 (1972). It may be that en banc proceedings will be needed to resolve this. However, even though the question is one of law, this court, before going down that path, should have the benefit of the considered views of the Tax Court, hopefully the full court, I.R.C. § 7460(b), on whether it would follow Boston Fish Market on the facts here if it deemed itself free to do so, as we think it is. The judgment of the Tax Court is vacated and the cause remanded for further proceedings consistent with this opinion. Costs shall abide the event. . For the taxable year involved in this appeal, 26 I.R.C. § 1231 provided in relevant part: § 1231. Property used in the trade or business and involuntary conrersions (a) General rule. — If, during the taxable year, the recognized gains on sales or exchanges of property used in the trade or business, plus the recognized gains from the compulsory or involuntary conversion (as a result of destruction in whole or in part, theft or seizure, or an exercise of the power of requisition or condemnation or the threat or imminence thereof) of property used in the trade or business and capital assets held for more than 6 months into other property or money, exceed the recognized losses from such sales, exchanges, and conversions, such gains and losses shall be considered as gains and losses from sales or exchanges of capital assets held for more than 6 months. . % :¡: í*í * (b) Definition of property used in the trade or business. — For purposes of this section— (1) General rule. — The term “property used in the trade or business” means property used in the trade or business, of a character which is subject to the allowance for depreciation provided in section 167, held for more than 6 months, and real property used in the trade or business, held for more than 6 months, which is not— (A) property of a kind which would properly be includible in the inventory of the taxpayer if on hand at the close of the taxable year, (B) property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business, or (G) a copyright, a literary, musical, or artistic composition, or similar property, held by a taxpayer described in paragraph (3) of section 1221. . . The full leasehold obligation contained in the indenture covering the period July 1, 1958 through December 31, 1963, which is the subject of the payment in issue in this case, provides: Fourth: — At the expiration or other termination of the term hereby granted, the Tenant shall and will leave the said premises and the theatre whole and in good order and condition and will remove therefrom every and all its equipment, goods, and effects, and those of all persons claiming under it, and will deliver up the demised premises in good order and condition, reasonable wear and tear and damage by the elements excepted, it being understood that all scenery therein, stage hangings, properties, decorations and equipment, including but not limited to radio and/or audio equipment, and its associated equipment, installed and paid for by the Tenant, which may be affixed to or contained in the herein demised, premises may be removed by the Tenant whether the same constitutes fixtures or not, provided, however, that the Tenant shall restore the premises substantially to the condition in which they existed on November 14, 1947, reasonable wear and tear and damage by the elements excepted, and the Tenant shall fully indemnify the Landlord for every and all costs and expenses of whatsoever name or nature that may be required for the purposes of reinstating the premises to said condition. Tenant agrees to restore any and all seats heretofore removed by Tenants, to remove the control booths installed by Tenant and to remove the extension of the stage apron installed by Tenant. The prior instruments contained essentially the same provision. . The Tax Court’s findings of fact are published in Sirbo Holdings, Inc., 57 T.C. 530 (January 27, 1972). . See note 2 supra. . In addition, for nominal consideration, the parties mutually executed general releases from any liability arising out of the 1958 lease. In the release dated December 23, 1963, CBS also discharged Sirbo from any liability arising from the use and occupancy of its premises by CBS, and in the release dated January 31, 1964, Sirbro discharged CBS from any liability arising out of the “use, occupancy, alteration, addition, removal, or improvement” of the premises by CBS. Both general releases were to be held in escrow pending execution of the new lease which was to be simultaneous with the first installment of the payment by CBS for the “purchase” of the theatre equipment. A separate letter casting the $125,-000 payment by CBS in the form of the purchase price of personal property and theatre equipment owned by Sirbo, but not yet inventoried, was apparently never signed. . The Tax Court found that Sirbo had never apportioned the basis of the building between the theatre and the offices which make up the remainder, but that the adjusted basis for the whole building (cost basis of $266,666.67 less accumulated depreciation to 1964 of $173,-333.16) was $93,333.51. . This is not a situation where the Commissioner is obliged to take inconsistent positions in order to prevent the government from being whipsawed. See United States Steel Corp. v. United States, 445 F.2d 520, 525 n. 7 (2 Cir. 1971), cert. denied, 405 U.S. 917, 92 S.Ct. 940, 30 L.Ed. 2d 786 (1972). . Earlier Revenue Acts had provided for installment sales treatment only by implication. Regulations promulgated by the Commissioner, dating from 1919, providing for such treatment were ruled invalid or severly limited by earlier Board of Tax Appeals decisions. See Manomet Cranberry Co., 1 B.T.A. 706, 708 (1925); B.B. Todd, Inc., 1 B.T.A. 762, 767 (1925). The 1926 Act section was designed to “validate” these regulations. The 1926 provision has remained basically intact, undergoing only “the usual development in the case of new statutory provisions dealing with complicated problems.” 2 Mertens, supra, § 15.02, at 7. . We agree with the Commissioner that taxpayer’s attempt to use its basis for the entire building to determine the amount of gain was unwarranted. But there would be no more difficulty in allocating taxpayer’s basis in this case than in Boston Fish Market, see 57 T.C. at 889-90. . The Tax Court should require the Commissioner to explain and justify the different positions taken by him in this ease and in Boston Fish Market.

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CREDIT BUREAU REPORTS, INC., Plaintiff-Appellee-Cross Appellant, v. RETAIL CREDIT COMPANY et al., Defendants-Appellants-Cross Appellees. CREDIT MARKETING SERVICES, INC., Plaintiff-Appellant, v. CREDIT BUREAU REPORTS, INC., Defendant-Appellee. No. 72-1572. United States Court of Appeals, Fifth Circuit. Rehearing and Rehearing En Banc Denied June 7, 1973. Leroy Jeffers, Charles T. Newton, Jr., Harry Reasoner, Houston, Tex., for Retail Credit and others. John H. Boman, Jr., Kent E. Mast, Atlanta, Ga., for Credit Marketing and others. William C. Harvin, Houston, Tex., King & Spalding, Atlanta, Ga., E. William Barnett, John L. Jeffers, Jr., William R. Burke, Jr., Houston, Tex., for appellee. Before JONES, GODBOLD and INGRAHAM, Circuit Judges. GODBOLD, Circuit Judge: Credit Bureau Reports, Inc. (CBR) brought this anti-trust suit in the U. S. District Court for the Southern District of Texas, against Retail Credit Company (RCC) and its subsidiaries, seeking an injunction and a decree of divestiture under § 16 of the Clayton Act (15 U.S.C. § 26). CBR charged RCC with price fixing in the nonlocal credit reporting market in violation of § 1 of the Sherman Act (15 U.S.C. § 1), with monopolization of the insurance reporting market and attempted monopolization of the nonlocal credit reporting market in violation of § 2 of the Sherman Act (15 U.S.C. § 2), and with having violated § 7 of the Clayton Act (15 U.S.C. § 18) by acquisition of more than 100 local credit bureaus, which tended to lessen competition in the reporting markets. CBR alleges that these asserted violations significantly threatened its operations in the nonlocal credit reporting market and its potential entry into the insurance reporting market where it would be a competitor of RCC. After CBR’s complaint was filed, Credit Marketing Services, Inc. (CMS), a subsidiary of RCC, brought suit in the U. S. District Court for the Northern District of Georgia, charging CBR with price fixing and monopolization in non-local credit reporting in violation of §§ 1 and 2 of the Sherman Act and seeking injunctive relief under § 16 of the Clayton Act. The Georgia federal court transferred CMS’s suit to the Southern District of Texas where it was consolidated with the action filed by CBR. The District Court, sitting without a jury, found that RCC had not fixed prices in the nonlocal credit reporting market but had violated § 2 of the Sherman Act by monopolizing the insurance reporting market and by attempting to monopolize nonlocal credit reporting, and had violated § 7 of the Clayton Act by acquiring the local credit bureaus. The court enjoined RCC from (1) withdrawing its local bureaus from membership in CBR for three years; (2) from going forward in any manner to compete with CBR for the marketing of nonlocal credit reports for three years; and (3) from acquiring additional local bureaus for five years. The court refused to require divestiture of the local bureaus RCC had acquired. As to CMS’s complaint, the court found that, while owned by the local bureaus which provided the information it sold, CBR was a sole entity merely selling its own product, credit reports. The court held that CBR, therefore, had not violated the Sherman Act by conspiring with any other entity to fix prices, allocate territory, or refuse to deal. RCC appeals from the order enjoining its activities and CBR cross-appeals from the refusal to order divestiture. We affirm on the basis of the District Court’s opinion, Credit Bureau Reports, Inc., v. Retail Credit Co. et al., 358 F. Supp. 780 (S.D.Tex.1971), and of the following discussion. On appeal the parties have focused upon three issues: the “prematurity” of the interest of CBR which the District Court found to be threatened and for which CBR was granted injunctive protection, the requisites of the showing of a causal nexus between that interest and the antitrust law violations found by the District Court, and the claim that CBR has engaged in illegal territorial allocation. 1. Prematurity. Section 16 of the Clayton Act entitles private litigants to injunctive relief from threatened injury resulting from a violation of the antitrust laws. To obtain such relief the complaining party must prove that the alleged offender either already has violated the antitrust laws or that such violation is impending and that, because of this violation, he is threatened with loss or injury. Zenith Radio Corp. v. Hazeltine Research, 395 U.S. 100, 130, 89 S.Ct. 1562, 23 L.Ed.2d 129, 152 (1969). A mere showing by the private plaintiff of a violation of the antitrust laws has no actionable significance because, while in a government action there need be established only an antitrust violation, a private litigant “ ‘must not only show the violation of the antitrust laws, but show also the impact of the violations upon him,’ i. e., some injury (or threatened injury where injunctive relief only is sought) proximately resulting from the antitrust violation.” McKeon Construction Co. v. McClatchy Newspapers, 1970 Trade Cas. ¶¶ 73, 212 (N.D.Cal.1969), quoting from Simpson v. Union Oil Company, 311 F.2d 764, 767 (9th Cir. 1963), rev’d on other grounds, 377 U.S. 13, 84 S.Ct. 1051, 12 L.Ed.2d 98 (1964). The District Court’s grant of injunctive relief here was carefully premised upon three related determinations. First, it found that RCC had violated the antitrust laws by monopolizing the insurance reporting market, by attempting to monopolize the nonlocal credit reporting market, and by acquiring local credit bureaus. Second, it determined that CBR was a potential entrant into the insurance reporting market and that its interest as a potential entrant was protected by the antitrust laws. Third, the court determined that “defendants’ Clayton Act violations and their attempts to monopolize the nonlocal credit reporting market significantly threaten CBR [by closing tightly the door to the insurance reporting market] and entitle it to injunctive relief on that basis,” and that “CBR is threatened with injury because of the existence of RCC’s monopoly power in the field of insurance reporting.” RCC’s “prematurity” argument is essentially an attack upon the court’s second determination, directed not at the correctness of the fact findings underlying it but at the sufficiency of those facts to establish that CBR was a potential entrant into the insurance reporting market. The evidence relied upon by the court related to the decisions of CBR executives to begin preparation for entry into the market, and to a survey conducted by CBR to determine local bureau interest in participation through CBR in insurance reporting. RCC contends that this evidence failed to establish that CBR was presently ready, willing, and able to enter the market. Also, RCC points to countervailing evidence relating to the existence of barriers, not caused by RCC, to CBR’s actual entry into the market, and to acknowledgment by CBR that when suit was filed, it did not have a product acceptable to the insurance companies. Additionally, RCC notes evidence showing that until recently CBR executives thought that ‘the Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.) would impose upon local bureaus performing telephone investigations of potential insureds, legal duties and potential liability too onerous to accept. RCC made the same arguments at trial, and the District Court correctly rejected them. The evidence relied upon was sufficient to establish that CBR had done enough to make its presence on the edge of the insurance reporting market have “competitive significance,” notwithstanding whether it ever would or could be able to actually enter that market because of the existence of other barriers not caused by RCC. In United States v. El Paso Natural Gas Co., 376 U.S. 651, 84 S.Ct. 1044, 12 L.Ed.2d 12 (1965), the government has sued for an order requiring El Paso to divest itself of Pacific Northwest, contending that the acquisition of Northwest had violated § 7 of the Clayton Act by removing El Paso’s potential competitor in the California gas market. The trial court found that Northwest could not have obtained a contract from California distributors, could not have received gas supplies or financing for a pipeline project to California and could not have put together a project acceptable to the regulatory agencies. 376 U.S. at 657-658, 84 S.Ct. 1044, 12 L.Ed.2d at 17-18. The Supreme Court, however, held that those findings were irrelevant, 376 U.S. at 658, 84 S.Ct. 1044, 12 L.Ed.2d at 18, and that a § 7 violation had been established because the mere existence of Northwest as a potential competitor on the edge of the California market — without regard to whether it would ever be able to actually enter that market — had “competitive significance” in the California market. Similarly in Zenith Radio, supra, the Court reinstated injunctive- relief the trial court had granted Zenith against continued participation by Hazeltine Research in English and Australian patent pooling arrangements which created barriers to Zenith’s potential entry into those markets. 395 U.S. at 132-133 and n. 26, at p. 132, 89 S.Ct. 1562, 23 L.Ed. 2d 153 and n. 26, at 153. The relief was reinstated notwithstanding the Court’s earlier holding that treble damages were properly denied because Zenith had not shown that its failures to enter those markets were proximately caused by the defendants’ antitrust violations. The Court had noted that other restraints— Zenith’s failure to develop a television set which could operate on the different signals transmitted in England, government trade barriers, and high shipping costs — existed to block Zenith’s actual entry. 395 U.S. at 125-126, 129, 89 S.Ct. 1562, 23 L.Ed. 149-151. See also United States v. Falstaff Brewing Corp., 410 U.S. 526, 93 S.Ct. 1096, 35 L.Ed.2d 475 (1973). 2. Causation. In finding that the antitrust laws were violated by RCC’s acquisitions of local credit bureaus and its attempt to monopolize, the District Court assessed the effects of those acts in the nonlocal credit reporting market, while the interest protected by the injunction was CBR’s potential entry into the insurance reporting market. RCC contends that the causal nexus required by § 16 of the Clayton Act between the antitrust violations and the interest of the private litigant allegedly threatened cannot be established where the violations and the threatened interest reside in different markets. This argument must be rejected. The District Court expressly found that it is necessary to enjoin RCC from withdrawing its local bureaus in order to allow CBR to establish a beachhead in insurance reporting. To effectively compete on a national scale, that is, by selling reports on prospective insureds residing in one section to prospective insurers whose decisions to insure are made at offices located in other sections, CBR would necessarily rely on the nationwide coverage created by the geographical dispersion of its member locals. But, as CBR contended, RCC, by merely withdrawing from CBR membership the locals it owns (which constitute about 5% of CBR’s membership and accounted for 12.5% of CBR’s gross revenue in 1970 and which are concentrated in several metro-areas), could create large geographical gaps in CBR’s ability to service the needs of national insurance companies. To hold here that CBR must wait for injunctive protection until RCC has actually withdrawn its locals, acts which would have immediate effects in the same market for which CBR is a potential entrant, would be to strip this private plaintiff of the remedy clearly granted it by § 16 for impending violations, see Zenith Radio, supra, and relegate § 16 to cases of post-horse barn door closings. Furthermore it would contravene the congressional policies expressed in § 7 of the Clayton Act of protecting against the elimination of potential competitors and of arresting the anticompetitive effects of § 7 violations in their incipiency. “[Tjhere is certainly no requirement that the anticompetitive power manifest itself in anticompetitive action before § 7 can be called into play.” F. T. C. v. Procter & Gamble, 386 U.S. 568, 577, 87 S.Ct. 1224, 1229, 18 L.Ed.2d 303, 309 (1967). Our conclusion that the court was correct in finding sufficient causation to warrant injunctive protection for CBR’s potential entry into insurance reporting is further supported by the fact that, while the court did not so find, the record would fully support a determination that RCC’s acquisitions also had the § 7 proscribed effect of substantially lessening competition in the insurance reporting market. Moreover, even if we thought sufficient causation was not shown between the violations found in the nonlocal credit reporting market and CBR’s potential entry into the insurance reporting market, we would not reverse. The District Court also premised its grant of relief upon the alternative causation determination that “CBR is threatened with injury because of the existence of RCC’s monopoly power in the field of insurance reporting.” This links CBR’s threatened interest to an antitrust violation found by assessing its effects. in the same market as CBR’s interest. 3. Illegal territorial allocation by CBR. RCC contends that in light of the Supreme Court’s decision in United States v. Topco Associates, 405 U.S. 596, 92 S.Ct. 1126, 31 L.Ed.2d 515 (1972), decided after judgment was entered for CBR, the court erred in determining that CBR was a sole entity and therefore did not violate § 1 of the Sherman Act by generally restricting membership to only one local credit bureau in each city. That error requires a reversal, RCC argues, because § 16 of the Clayton Act permits injunctions to be granted in private actions only “when and under the same conditions and principles as injunctive relief ... is granted by courts of equity,” and courts of equity do not grant injunctions to protect an unlawful scheme. We do not agree that reversal is required, even if Topeo, supra, compels a different result on the issue of CBR’s alleged illegal territorial allocation and even if we assume that the doctrine of unclean hands is still available to RCC as a means of defending against a request for injunctive relief under the antitrust laws. What we said in Sunshine Packers, Inc. v. American Oil Co., 395 F.2d 86 (5th Cir. 1968), in reliance upon Kelly v. Kosuga, 358 U. S. 516, 79 S.Ct. 429, 3 L.Ed.2d 475 (1959), concerning the restricted ambit of the in pari delicto defense is equally applicable here. See especially, Sunshine Packers, supra, 395 F.2d at 87-88 and n. 1, at 88. The illegality vel non of CBR’s conduct in allocating territories would not constitute a defense against the injunctive relief unless that injunctive relief itself enforces, maintains, or protects “the precise conduct” by CBR allegedly made unlawful by the antitrust laws. Kelly v. Kosuga, supra, 358 U.S. at 520-521, 79 S.Ct. 429, 3 L.Ed.2d at 478-479. There has been no showing here that CBR’s alleged territorial allocation is supported by the order enjoining RCC from withdrawing its local bureaus, from going forward with its own marketing service, and from acquiring additional local bureaus. Affirmed. . The court defined the nonlocal credit reporting market as the servicing of needs of nonlocal credit grantors, such as oil companies, mail-order houses, bank charge-card systems, for information collected by local credit bureaus relevant to credit ratings of locally residing individuals. . The insurance reporting market was defined by the court as the gathering and the sale to insurance companies of information about prospective insureds, to guide the companies in making underwriting decisions, i. e., the determinations of whether to issue policies' and, if so, what premiums to charge. As defined by the court, this market includes both reports used for life and health policies and fire and casualty policies. . CBR alleged that these acquisitions had the § 7 proscribed effect of lessening com-, petition in both nonlocal credit reporting and insurance reporting. The court, however, determined that RCC’s acquisitions violated § 7 by assessing their effect only in the nonlocal credit reporting market. See infra Part 2, at 993. . RCC contended at trial that insurance companies would not accept reports prepared in the usual manner of CBR’s credit reports, from t.elenhone conversations. RCC’s insurance reports were prepared from data obtained through its investigators’ personal interviews. . In Topeo the Court held that a cooperative purchasing association of grocery chains, owned by its members who possessed power to exclude competitors operating in their areas from membership, had engaged in per se illegal territorial allocation. . See Skil Corp. v. Black & Decker Mfg. Co., 351 F.Supp. 65 (M.D.Ill.1972) and compare Singer v. A. Hollander & Son, 202 F.2d 55 (3rd Cir. 1953); Graham v. Triangle Publications, 233 F.Supp. 825 (E.D.Pa.1964); and Louisiana Petroleum Retail Dealers v. Texas Co., 148 F.Supp. 334 (W.D.La.1956) with Hawaiian Tuna Packers v. International L & W Union, 72 F.Supp. 562 (D.Haw.1947); and Magna Pictures Corp. v. Paramount Pictures Corp., 265 F.Supp. 144 (C.D.Cal.1967). . Prior to its demise in Perma Life Mufflers, Inc., v. International Parts Corporation, 392 U.S. 134, 88 S.Ct. 1981, 20 L.Ed.2d 982 (1968). See also Hobart Bros. v. Gilliland, 471 F.2d 894, n. 5 at 901 (5th Cir., 1973). The District Court relied upon Perma Life to reject RCC’s attempted defense, even if CBR were guilty of antitrust violations.

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Irby SPROUSE, Jr., Petitioner-Appellant, v. Charles C. MOORE, Caseworker, U. S. Penitentiary, and J. D. Henderson, Warden, etc., Respondents-Appellees. No. 72-3426 Summary Calendar. United States Court of Appeals, Fifth Circuit. April 24, 1973. Irby Sprouse, Jr., pro se. John W. Stokes, Jr., U. S. Atty., Anthony M. Arnold, Asst. U. S. Atty., Atlanta, Ga., for respondents-appellees. Before WISDOM, AINSWORTH and CLARK, 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: Appellant, an inmate of the federal penitentiary in Atlanta, Georgia, appeals from the denial by the United States District Court of his petition for mandamus to force the prison authorities to allow him the use of typewriters for legal correspondence and matters other than formal motions to the courts. We affirm. As we just recently said in Stubblefield v. Henderson, 5 Cir., 1973, 475 F.2d 26: 433 F.2d 958; Durham v. Blackwell, 5th Cir., 1969, 409 F.2d 838; see also Tarlton v. Henderson, 5th Cir. 1972, 467 F.2d 200. It follows, therefore, that an inmate has no federally protected right to use typewriters for correspondence, whether personal or legal.” “It is well established that an inmate has no federally protected right to the use of typewriters to prepare legal writs. Williams v. United States Department of Justice, 5th Cir., 1970, Affirmed.

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UNITED STATES of America, Plaintiff and Appellee, v. George Winslow PEARSON, Jr., Defendant and Appellant. In re Sherman ELLISON. No. 73-1280. United States Court of Appeals, Ninth Circuit. April 10, 1973. Sherman Marshall Ellison, Beverly Hills, Cal., for defendant and appellant. James L. Browning, Jr., U. S. Atty., San Francisco, Cal., for plaintiff and appellee. ORDER ASSESSING PENALTY Before CHAMBERS and KILKENNY, Circuit Judges, and KING, District Judge. For failure to prosecute the appeal with due diligence, Counsel Sherman Ellison is assessed a penalty of $100, in accordance with the provisions of Rule 46(c), Federal Rules of Appellate Procedure. The said sum should be paid into the registry of the clerk of the District Court for the Northern District of California within 14 days from the filing of this order. The Honorable Samuel P. King, United States District Judge for the District of Hawaii, sitting by designation.

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UNITED STATES of America, Plaintiff-Appellee, v. Roscoe Lee FARMER, Defendant-Appellant. In re Lawrence MARQUETTE, Esq. No. 72-2696. United States Court of Appeals, Ninth Circuit. April 13, 1973. Lawrence Marquette (present, order to show cause), Sausalito, Cal., for defendant-appellant. Janet Aitken, Asst. U. S. Atty. (appeared, order to show cause), James L. Browning, Jr., U. S. Atty., San Francisco, Cal., for plaintiff-appellee. Before CHAMBERS and TRASK, Circuit Judges, and CONTI, District Judge. The Honorable Samuel Conti, United States District Judge for the Northern District of California, sitting by designation. It is the ORDER of this court that Attorney Lawrence Marquette is relieved as counsel in the above appeal. For failure to prosecute the appeal with due diligence, Attorney Lawrence Marquette is assessed a penalty of $779.-40 in accordance with the provisions of Rule 46(c) of the Federal Rules of Appellate Procedure, this sum being the amount paid by the government for preparation of the reporter’s transcript on appeal. The said sum shall be paid into the registry of the clerk of the United States District Court for the Northern District of California within eight weeks from the filing of this order.

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Application of Charles L. CORMANY et al. Patent Appeal No. 8775. United States Court of Customs and Patent Appeals. April 19, 1973. Mark Levin, Pittsburgh, Pa., atty. of record, for appellants; Chisholm & Spencer, Pittsburgh, Pa., Jones & Lockwood, George R. Jones, Arlington, Va., of counsel. S. Wm. Cochran, Washington, D. C., for Commissioner of Patents. Jack E. Armore, Washington, D. C., of counsel. Before MARKEY, Chief Judge, and RICH, ALMOND, BALDWIN and LANE, Judges. RICH, Judge. This appeal is from the decision of the Patent Office Board of Appeals affirming the examiner’s rejection of claims 3-5, 7, and 9-12 of application serial No. 565,704, filed July 18, 1966, entitled “Stabilization.” We affirm. The invention relates to the stabilization of methylchloroform, also called 1,-1,1-trichloroethane, a solvent having utility in industrial degreasing in both liquid and vapor phase. When so employed, methylchloroform has a tendency to decompose rapidly, especially when in contact with aluminum and other light metals, and in decomposing also has a corrosive effect on the metals. The claims are all directed to stabilized methylchloroform compositions in which the stabilizer is a mixture of a nitroalkane, such as nitromethane, and an organic epoxide having 2 to 8 carbon atoms, such as butylene oxide or propylene oxide. Claim 12 is the main claim involved. It reads (emphasis ours): 12. Methylchloroform having therein dissolved the combination of (a) a minor amount of a nitroalkane selected from the group consisting of nitromethane and nitroethane large enough to stabilize liquid methylchloroform refluxing under atmospheric conditions under total reflux and in which is immersed an aluminum strip, and (b) from 0.05 to 10 percent by weight of an organic epoxide having 2 to 8 carbon atoms. The emphasized quantity limitation is important to the main issues, as will appear. All other claims except claim 11 are dependent on claim 12. Claim 11 reads: 11. A composition of matter comprising methyl chloroform containing a stabilizing amount of a mixture of propylene oxide and a nitroalkane having 1 to 3 carbon atoms. There are three closely interrelated grounds of rejection, one under 35 U.S. C. § 103, the other two being under 35 U.S.C. § 112. The only prior art relied on to support the § 103 rejection for obviousness consists of counts 1 and 2 of Interference No. 93,486 which involved appellants’ parent application, serial No. 812,791 (1959), and a patent to Brown, No. 3,049,571. Priority was awarded to Brown. Appellants prosecuted an intermediate application, serial No. 293,273 (1963), filed as a continuation-in-part of the one in interference, and the present application is a continuation of the latter. The examiner’s rejection under § 103 was on the ground that all claims on appeal are unpatentable over the counts of the interference. The examiner stated: The determination of the optimum amounts of stabilizer to use is within the expected skill of a chemist in the art. No unobviousness is seen in the recitation of nitroethane (claims 4-5) and propylene oxide (claim 11) since these compounds would clearly be suggested by the homologous compounds recited in the Counts. The § 112 rejections were newly made in the Examiner’s Answer and, as sustained by the board, apply to all appealed claims except claim 11. The grounds of rejection were that the claims are “indefinite and inadequately supported” in the specification. Concerning ourselves for the present with all claims except claim 11, it appears from appellants’ brief that, notwithstanding the adverse award of priority, they have “continued to press for allowance of claims to the present invention” on the theory that they are distinguishing from the lost counts in their use of the quantitative limitation we have emphasized in claim 12, supra, “to set apart the claimed invention from the invention for which Brown was awarded priority.” Thus that limitation becomes the crux of this appeal. Appellants are candid in stating that for them to prevail this court must recognize that the board erred in holding “the claim language is indefinite and inadequately supported.” We regard indefiniteness of claim language and inadequate support for it in the specification to be distinct questions, In re Borkowski, 57 CCPA 946, 422 F.2d 904 (1970); In re Hammack, 57 CCPA 1225, 427 F.2d 1378, 166 USPQ 204 (1970); In re Swinehart, 58 CCPA 1027, 439 F.2d 210, 169 USPQ 226 (1971), and we shall therefore consider them separately, the former being a question of compliance with the second paragraph of § 112 and the latter a question of compliance with the first paragraph. Appellants have chosen to define the amount of nitroalkane used for stabilization by the phrase “large enough to stabilize liquid methylchloroform refluxing under atmospheric conditions under total reflux and in which is immersed an aluminum strip.” Why does the Patent Office deem that definition of quantity indefinite? Enough is enough. It is because of the word “stabilize.” The board said, “the stabilization standard in claim 12 and the claims dependent thereon is indefinite because the degree of stabilization is uncertain.” (Emphasis added.) Translated in terms of a § 112, second paragraph, requirement, it is apparent that the board’s holding was that claim 12, and the claims dependent thereon, do not particularly point out and distinctly claim the subject matter which applicants regard as their invention. If that be true, the rejection of those claims must be sustained. In re Prater, 415 F.2d 1393, 56 CCPA 1381 (1969); In re Borkowski, supra; In re Moore, 439 F.2d 1232, 58 CCPA 1042 (1971); and In re Cohn, 438 F.2d 989, 58 CCPA 996 (1971). Speaking of the requirement of the second paragraph of § 112, we said in Moore: * * * the definiteness of the language employed must be analyzed— not in a vacuum, but always in light of the teachings of the prior art and of the particular application disclosure as it would be interpreted by one possessing the ordinary level of skill in the pertinent art. Footnote 2 to that statement reads: Discussing the second paragraph § 112 requirement in Borkowski, supra, we said: If the scope of subject matter embraced by a claim is clear, and if the applicant has not otherwise indicated that he intends the claims to be of a different scope [citing Prater, supra, as an example of such a case], then the claim does particularly point out and distinctly claim the subject matter which the applicant regards as his invention. [Emphasis added.] The Prater exception emphasized in the above quotation is what is important here. The relevant portion of the Prater opinion is the discussion of claim 9, as to which we first expressed our agreement with appellants that “claim 9 cannot be read in a vacuum but instead must be read in the light of the specification.” We next found that, so reading the claim, it “read on a mental process augmented by pencil and paper markings” and was not limited to a “machine-implemented process.” We had already found — not on the basis of anything in the Prater specification but on the basis only of contentions and admissions of the appellants in briefs and arguments — that they did not regard as their invention and did not intend their claim to cover a process which could be carried out by mental operations aided by pencil and paper. Having construed claim 9 in the light of the specification and found it to be of such scope as to include what appellants said they did not intend to include, we therefore held the claim did not comply tvith the second paragraph of § 112. As we shall show, we have a similar situation here. The first step in the demonstration is to construe claim 12 in the light of appellants’ specification, having particular reference to the meaning of the word “stabilize.” The specification teaches that unstabilized methylehloroform decomposes within “all too brief a period,” and “loses its practical value.” It decomposes in five minutes at reflux temperature in the presence of aluminum. It is disclosed that nitromethane alone may be used as a stabilizer in various concentrations between 2 and 10 per cent by weight of the methylehloroform. The discussion of the use of nitromethane by itself concludes with the sentence, Lower concentrations, e. g., 0.5 weight per cent, are possible but not, as a rule, recommended when nitromethane is the sole stabilizing component of the composition. But this is not the invention of claim 12, which is limited to stabilization by a mixture or “combination” of nitroalkane and certain epoxides. Using such mixtures, the teaching of the specification is in these words: With other stabilizing materials, these lower concentrations are useful. An illustrated concentration range of nitromethane is, therefore, from 0.01 to 3.0 weight per cent. There are two specific examples in the specification of the use of nitromethane in each of which the amount used is 3% by weight of the methylehloroform. On the basis of this disclosure, there are two possible constructions of the key clause in claim 12. If we read “amount * * * large enough to stabilize” as referring .to a stabilizing amount of nitroalkane used alone, the disclosure teaches a lower “possible,” albeit not as a rule recommended, amount of “0.5 weight per cent.” If we read it as meaning enough nitroalkane to stabilize in the composition claimed, which includes organic epoxide, the lower amount is 0.01 weight percent. Taking the view most favorable to appellants— which is the former reading — we think the claim clearly includes as little as 0.5 weight percent. As we pointed out in Prater, citing many precedents, claims in pending applications must be given the broadest reasonable interpretation consistent with the specification. With the possibility of reading claim 12 to include 0.01 percent we think reading it to include 0.5 percent is very reasonable. Appellants’ brief has no adequate refutation to the propriety of the board having so read it and we so read it. We turn now to the evidence which shows that appellants do not regard 0.5 weight percent of nitroalkane alone as “large enough to stabilize” and hence not within their invention. The evidence is in the form of two Reich affidavits filed under Rule 132. The first affidavit makes the following points : (1) Half a volume percent of nitromethane in methylehloroform in the presence of aluminum is not a stabilizing concentration. (2) 0.7 volume percent stabilizes methylehloroform for 20 minutes and 1.0% for 240+ hours; the former is not regarded as stabilized. (3) When butylene oxide, 0.5% by weight, is added to 0.5% by volume of nitromethane, the mixture “will not protect liquid methylehloroform against the aluminum induced decomposition.” (4) A “nitromethane concentration of at least about one weight percent is necessary to impart a significant degree of protection against the type of methyl-chloroform decomposition for which the procedure [of] Example I of this application tests.” The second Reich affidavit compares decomposition times of methylehloroform containing various concentrations of nitromethane, using the test procedure of Example I of the application, leading the affiant to conclude "• * * that the minimum nitromethane concentration methylehloroform must contain to pass the test of the aforesaid Example I and demonstrate a stability under reflux conditions in the presence of aluminum is in excess of 0.85 volume percent and at least 0.9 volume percent. [Emphasis ours.] Thus, to summarize appellants’ ov(m proofs, they establish that what they mean by “stabilize” is a condition brought about by the use of at least 0.9 volume percent of nitromethane. That amount is said to have prevented decomposition for 75 hours. In the test using 0.85% nitromethane decomposition occurred in 15 minutes. From this evidence we are bound to conclude, first, that 0.9% is a critical minimum and, second, that “stabilize” means to appellants something of the order of 75 hours or better and not a mere matter of minutes. Applying the law of § 112, second paragraph, as we have construed it in the cases referred to above, claim 12 and the claims dependent thereon include within their scope the use in the composition of an amount of a nitroalkane as small as 0.5 weight percent. Appellants’ affidavits make clear that this is not an “amount * * * large enough to stabilize” under the test conditions prescribed in these claims and that they do not regard it as within their invention. These claims, therefore, do not particularly point out and distinctly claim what appellants regard as their invention and do not comply with § 112, second paragraph. For this reason alone their rejection must be affirmed. Turning to the other aspect of the § 112 rejection, the same facts discussed above establish that claim 12 and its dependent claims are not supported by the disclosure. This rejection rests on the first paragraph of § 112. The proofs show an amount “large enough to stabilize” is at least 0.9 volume percent. The specification not only lacks support for this but is in direct conflict with it. Furthermore, nowhere does the specification teach that when a mixture of stabilizers is used, as all the claims require, the nitroalkane component, by itself, must be in an amount sufficient to stabilize the methylchloroform. This ground of rejection was therefore well taken. We have left for consideration only claim 11. The rejection for unpatentability over the counts lost to Brown is the only one before us as to this claim. The board said: Brown being prior to appellants with a composition wherein the epoxide is butylene oxide, the only issue is the obviousness of substituting the closely related homologous epoxide propylene oxide. On its face, such substitution would be obvious within the meaning of 35 U.S.C. § 103, and appellants have furnished neither argument nor data to establish any semblance of unobviousness. Appellants argue that “Brown is not prior as to the composition of this claim except for having used butylene oxide rather than propylene oxide,” which is a tacit admission that as to a butylene oxide-nitromethane mixture as stabilizer for methylchloroform Brown was prior. Moreover, the counts speak for themselves. Appellants appear to concede that 35 U.S.C. § 102(g) makes the prior invention of another, as established by an adverse award of priority, a bar to the patentability of the identical subject matter involved in the priority award. However, they contend that because the Brown invention “was unknown” it is not “prior art” under § 103. We have held otherwise in In re Taub, 348 F.2d 556, 52 CCPA 1675 (1965), and In re Risse, 378 F.2d 948, 54 CCPA 1495 (1967). It is not a relevant consideration that Brown’s prior invention was unknown, either under § 102(g) or the Taub and Risse cases. The subject matter of count 2, which presents the clearest case, being the prior invention of another, is, under the above cases, prior art under § 103 and the holding of obviousness by the board is without error. The decision of the board is affirmed. Affirmed. BALDWIN, Judge, (concurring). I agree with Judge Lane’s treatment of the rejection of claims 3-5, 7, 9, 10 and 12 based on the first paragraph of section 112. The entire court having thus concluded that the rejection of the claims on that basis was correct, it becomes unnecessary for the disposition of this case to even consider any rejection which might have been made based on the second paragraph of section 112. With regard to claim 11, I agree that appellants have neither established that the judicial doctrine of lost counts, with the limitations placed on it in Risse, should be overruled nor that it is not applicable to the facts before us. Appellants make much of the fact that because their application was in interference with a patent, they could not introduce a count covering the propyl species into the interference. At the same time, however, appellants appear to concede that Brown’s butyl species was prior to their own propyl species. That being the case, appellants could not have obtained a claim to the propyl species under the doctrine of lost counts even if they could have introduced into the interference a claim covering the propyl species, and thus could have brought in evidence showing their invention date regarding that species. LANE, Judge, concurring, with whom MARKEY, Chief Judge, joins. The board held claims 3-5, 7, 9-10 and 12 to be “inadequately supported” by the specification and sustained the rejection of those claims under 35 U.S.C. § 112. It did so on the finding that: At no point in the application is there any indication that, when a mixture of nitroalkane and epoxide is used, the former component should be used in amount “large enough to stabilize liquid methylchloroform refluxing under atmospheric conditions under total reflux and in which is immersed an aluminum strip.” The board’s holding was that there is no description of the claimed invention in the specification as required toy the first paragraph of § 112. In re Smith, 458 F.2d 1389, 59 CCPA _, _ (1972). That conclusion is well founded. Appellants rely on example I of their specification in which 3.0% nitromethane was found sufficient to stabilize methylchloroform and was also used in conjunction with 1.0% butylene oxide to give an even longer stabilization period. That example does not suggest the claim limitation. It is at best only consistent with the claims. The example fails to indicate to one of ordinary skill in the art that the quantity of nitroalkane to be used when an epoxide stabilizer is added is an amount “large enough to stabilize liquid methylchloroform refluxing under atmospheric conditions under total reflux and in which is immersed an aluminum strip.” See In re Smith, supra; In re Lukach, 442 F.2d 967, 58 CCPA 1233 (1971). The board’s decision is clearly sustainable on the ground that the specification lacks a legally sufficient description of the claimed subject matter. Affirmance on that basis renders consideration of the § 112, second paragraph, rejection unnecessary, and we do not reach it. Although the principal opinion would sustain the second paragraph rejection as well as the first paragraph rejection, we are not convinced of its correctness on the facts of this case. Having determined that the specification does not describe the claimed invention, we see no reason to attempt to define the claim language by reference to that specification. We affirm the board’s decision with respect to claims 3-5, 7, 9-10 and 12 on the basis of the § 112, first paragraph, rejection. We agree that In re Risse, 378 F.2d 948, 54 CCPA 1495 (1967) is controlling with respect to claim 11 and the board’s decision as to that claim is also affirmed. . The interference counts read: Cotint 1 A composition of matter comprising methyl chloroform containing a minor amount of nitromethane and dissolved therein a stabilizing amount of vicinal monoepoxide having from 4 to 6 carbon atoms. Count 2 A composition of matter comprising methyl chloroform containing a stabilizing amount of nitromethane and from 0.10 to 1.5 weight per cent of butylene oxide. . It is important here to understand that under this analysis claims which on first reading — in a vacuum, if you will — appear indefinite may upon a reading of the specification disclosure or prior art teachings become quite definite. It may be less obvious that this rule also applies in the reverse, making an otherwise definite claim take on an unreasonable degree of uncertainty. [Citing the Cohn and Hammach cases, supra.]

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SMITH BROTHERS MANUFACTURING COMPANY, Appellant, v. STONE MANUFACTURING COMPANY, Appellee. Patent Appeal No. 8947. United States Court of Customs and Patent Appeals. April 19, 1973. George R. Douglas, Jr. (Misc.ades & Douglas), Washington, D.C., attorneys of record for appellant; Sherman Levy, Washington, D.G., of counsel. B. P. Fishburne, Jr., Washington, D. C., attorney of record, for appellee. Before MARKEY, Chief Judge, RICH, BALDWIN, and LANE, Judges, and ALMOND, Senior Judge. RICH, Judge. This appeal is from the decision of the Patent Office Trademark Trial and Appeal Board, one member dissenting, 168 USPQ 190 (1970), dismissing an opposition to the registration of “MERRY CAPERS” for “blouses, shirts, shorts, slacks, overalls, playsuits, jumpers, dresses and lingerie for infants, children and ladies,” application serial No. 278,534, filed August 17, 1967. Opposer relies on prior use of “CAPER Casuals” on men’s and boys’ slacks or trousers. Both parties produced evidence in the form of answers to interrogatories and exhibits. Both have had substantial sales and advertising expenditures. Op-poser’s priority is clear, its sales dating from 1956, whereas applicant’s business under the mark “MERRY CAPERS” commenced in July 1967. Applicant introduced thirteen third-party registrations of marks consisting of or including “Caper” or “Kaper” for clothing of various kinds, granted between 1940 and 1968. The sole issue is likelihood of confusion, mistake, or deception under section 2(d) of the Trademark Act (15 U.S.C. § 1052(d)). The board divided on the question, the majority being of the view that “the mere inclusion of the word ‘caper’ or ‘capers’ in both marks is insufficient to create a likelihood of confusion or mistake.” The dissenting opinion reads: It is my opinion that the word “CAPER” or “CAPERS” is not only completely arbitrary as applied to the goods here involved, but it is the characterizing feature of the marks of both parties. Such being the case, I would sustain the opposition. The marks must, of course, be considered in their entireties. In doing so, however, the term “Casuals” in op-poser’s mark is seen to have the obviously descriptive connotation of casual clothes, leaving “CAPER” as the distinguishing or origin-indicating part of the mark. In applicant’s mark “MERRY” obviously stands in an adjectival or modifying position relative to the word “CAPERS,” which therefore stands out as the dominant feature of the mark. We agree with the dissenting member of the board that “CAPER,” in the singular or plural form, is arbitrary as applied to clothing, though highly suggestive of a fun thing, of frisking, frolicking, romping, prancing, and dancing, and hence of casual clothes. Considering the marks as a whole and the total impressions they create, we believe that purchasers, actual or prospective, familiar with the “CAPER Casuals” line of men’s and boys’ slacks and trousers might well think that “MERRY CAPERS” infants’, children’s, and ladies’ casual clothing had a common source, and vice versa. We therefore think there is likelihood of confusion as to the origin of the goods sold by the parties, if sold under these two marks and the prior user is therefore entitled to have its opposition to registration by the latecomer sustained. We have considered the cited third-party registrations and accept them as evidence that the term “Caper” has in the past appealed to others in the clothes-merchandising field as an appropriate term to use as a mark, or part of a mark, on various items of clothing. But in the absence of any evidence showing the extent of use of any of such marks or whether any of them are now in use, they provide no basis for saying that the marks so registered have had, or may have, any effect at all on the public mind so as to have a bearing on likelihood of confusion. The purchasing public is not aware of registrations reposing in the Patent Office and though they are relevant, in themselves they have little evidentiary value on the issue before us. The decision of the board is reversed. Reversed. MARKEY, C. J., and BALDWIN, J., dissent. The Petition of Appeal states that appellant has complied with the provisions of 35 U.S.C. §§ 142 and 143, which pertain to appeals in patent rather than trademark cases. However, we have construed the appeal as if filed pursuant to 15 U.S.C. § 1071(a), the provision governing appeals to this court in trademark cases.

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Joseph A. ABEEL and Charles L. Schrieber, Appellants, v. Julius HEZLER, Jr. and George C. Barnier, Appellees. Patent Appeal No. 8910. United States Court of Customs and Patent Appeals. April 19, 1973. Walter S. Zebrowski, Big Flats, N. Y., of record, for appellants. Dean L. Ellis, of record, for appellees. Before MARKEY, Chief Judge, RICH, BALDWIN, LANE, Judges, and ALMOND, Senior Judge. BALDWIN, Judge. This is an appeal from the decision of the Board of Patent Interferences awarding priority of invention as to counts 1 and 2 in interference No. 96,469, to Hezler et al. (Hezler). The counts correspond to claims of Hezler patent No. 3,214,213, issued October 26, 1965, on an application filed April 30, 1963. Abeel et al. (Abeel) copied the counts in application serial No. 388,350, filed August 5, 1964, which was accorded, through an intermediate parent application, the benefit of the May 31, 1962, filing date of grandparent application serial No. 199,118 (’118 application). The invention relates to the structure of a vehicle body having a curved window opening and suitable window closure guides in combination with a cooperating flexible window pane. The pane, which may be flexible glass, is preformed to some predetermined degree of curvature differing from the curvature of the window opening and possibly from the curvature of the guides. Count 1 reads (paragraphing ours): In a vehicle body, the combination comprising, means defining a curved window opening in said body, guide means mounted on said body adjacent said opening and merging with said window opening defining means, said guide means being adapted to guidingly restrain edges of a window closure and having a degree of curvature substantially differing from the degree of curvature of said opening, and a window closure of resilient semirigid construction mounted for movement in said guide means between a retracted position within said body wherein edges of said closure are substantially wholly restrained within said guide means and an extended position wherein edges of said closure are substantially wholly without said guide means and otherwise substantially wholly unrestrained, said closure being preformed into a degree of curvature substantially differing from both the degree of curvature of said window opening and of said guide means, said closure upon movement to said extended position thereof being resiliency bendable from said preformed curvature into a degree of curvature conforming to that of said window defining means and upon movement to the retracted position thereof being resiliently bendable from said predetermined curvature into a degree of curvature conforming to that of said guide means. Count 2 is similar, containing substantially the same limitation which we find decisive of the appeal as to count 1. That limitation, as well as an additional pertinent requirement in count 2 only, is described more fully hereinafter. The sole issue is whether appellants’ ’118 application supports the counts since appellants rely only on it for priority, the intermediate and involved applications having been filed subsequent to appellees’ filing date. The form of invention in appellants’ ’118 application most pertinent to the issue is that shown as a “cross sectional elevation of a curved window assembly” in Fig. 9 thereof as follows: The application states: Fig. 9 illustrates flexible glass body assembly suitable as an omnibus side window, a station wagon type vehicle rear window or the like, wherein a window pane 90, consists of a flexible glass sheet which is either prebent, partially prebent or flat. Window tracks 92, disposed at opposite sides of said pane, engage the pane edge portions of pane 90 in the lowered position and form a desired path for said pane, which path may be oblique to the pane edges. As pane 90 is raised by suitable means, such as handle 94, the pane edges are engaged by window tracks 96 disposed within the roof portion 98 of the vehicle. Window tracks 96 may be formed to conform generally with the contour of said roof portion and form a path for said pane which is oblique to the pane edges. As pane 90 is raised, tracks 96 confine the pane edges causing the pane to follow the curved path, thereby bending said pane to substantially conform to the contour of said roof portion. The board found, with the parties agreeing, that the count language is not ambiguous, and it held that the language was thus entitled to “the broadest interpretation which it reasonably will support.” Considering the limitation in count 1 concerning the “degree of curvature” of the elements, the board stated: * * * we feel that contrary to the implications Abeel seeks us to draw from his arguments, the “guide means” must be those within the roof of the vehicle body since the window closure is “substantially wholly restrained within said guide means” only in the body. Turning to Abeel’s disclosure, it cannot accurately be said that the tracks 96 clearly have a “degree of curvature substantially differing from the degree of curvature” of the window opening. The board next expressed the view that certain of the language of count 1 setting forth characteristics of the window closure was met by the ’118 application. However, it pointed out that “count 1 (and count 2 as well) explicitly requires that the ‘window closure’ ” be: mounted for movement in said guide means between a retracted position within said body wherein edges of said closure are substantially wholly restrained within guide means and an extended position wherein edges of said closure are substantially wholly without said guide means and otherwise substantially wholly unrestrained. [Emphasis by board.] and count 1 (and count 2 as well) then further requires that said closure upon movement to said extended position thereof have the capability of bending as set forth in the language of the * * * lines of count 1 quoted above. With respect to these requirements, the board then held: We have found no basis in the overall disclosure of Abeel and he has failed to point out any disclosure clearly providing any basis for the concept defined in the above-quoted count language. There is nothing in Abeel’s application indicating any such concept much less providing clear support for the count language defining it. The board next turned its attention to limitations appearing only in count 2 and held: Further, solely in the interest of completeness we hold that the language of count 2, “sealing abutment shoulder means mounted adjacent said window opening” considered in the overall context of the count language with the recitation that the closure upon movement to said extended position thereof (“wholly without said guide channel means and otherwise substantially wholly unrestrained”) being resiliently bendable . . . into engagement with said abutment should [er] means . . . (our insertions) finds no support in Abeel’s disclosure; and particularly none in the structure adjacent to the handle 94 and in the cooperating spaced wall structure of the tail gate. * * * Before us, appellants have filed a brief, including appendix, of 76 pages. Rather than limiting their argument to the ’118 application, which they admit must support the counts if they are to prevail, appellants refer at some length to their other applications which include additional subject matter. Various different embodiments of automobile door and window assemblies illustrated in the application, along with a statement therein that “the window tracks may be either suitably grooved and shaped channels or shaped bars,” are relied on as teaching that the channel-like tracks shown in the Fig. 9 structure, supra, be replaced by a single bar on the inside at each side of the opening to provide a condition where the edges of the pane are outside the guide means and unrestrained. While appellants’ application does describe an embodiment using curved bars, engaging only one side of the pane, that embodiment uses the bars to constrain the pane against its prestressed curvature when the window is open. Nowhere in the application is there even the remotest suggestion that appellants’ preformed pane might be allowed to protrude outside of the window opening, unrestrained by any window tracks. Indeed, whether the window tracks be channels or bars the term “tracks” itself suggests some means which would conduct the pane into the shape of the window. It is thus clear that the modification of the Fig. 9 structure, that appellants advance is not disclosed in the application. We have thoroughly considered all of appellants’ arguments that are even remotely related to the issue, but we find that appellants have failed to show any error in the board’s decision or its reasons therefor. Accordingly, the decision is affirmed. Affirmed. . Appellees initially raised this issue through a motion to shift the burden of proof. Consideration of that motion, along with one questioning appellants’ right to make in their involved application, was deferred to final hearing because the Board of Appeals had rendered a decision touching on these matters, favorable to appellants. See Janeway v. Nystrom, 77 USPQ 229 (Com’r.Pats.1946). . The pertinent language of count 2 is not precisely, the same as that the board quoted from count 1 but is very similar. . Appellants identify their second or intermediate application as a continuation-in-part of ’118 and the involved application a “continuation” of the second.

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UNITED STATES of America, Plaintiff-Appellee, v. Anthony Joseph GARGOTTO, Defendant-Appellant. No. 72-1862. United States Court of Appeals, Sixth Circuit. Argued Feb. 16, 1973. Decided April 24, 1973. Frank E. Haddad, Jr., Louisville, Ky., for defendant-appellant. James H. Barr, Asst. U. S. Atty., Louisville, Ky., for plaintiff-appellee; George J. Long, U. S. Atty., Louisville, Ky., on brief. Before CELEBREZZE, KENT and LIVELY, Circuit Judges. LIVELY, Circuit Judge. Appellant was convicted on 13 counts of filing false wagering excise tax returns and two counts of failing to file such returns and was sentenced to five years imprisonment on each count, the sentences to run concurrently. On appeal, he contends that his conviction flowed directly from a search of the building owned by him and seizure of documents there and that such search and seizure violated rights guaranteed to him by the Fourth Amendment. Appellant owned a three-story building in the central area of Louisville which contained a movie theatre on the first floor. According to prosecution witnesses the second and third floors were used for a handbook operation where bets were taken on horse races and other sporting events. At about 8:00 o’clock on the morning of March 22, 1969 a fire was discovered in the building of appellant, and a number of units of the Louisville Fire Department responded to an alarm. At about 8:20 a. m. the commanding officer at the fire called Lieutenant William Foushee, an arson investigator, and requested him to come to the scene because of his suspicions about the origin of the fire. Lieutenant Foushee testified that when he arrived 25 to 30 minutes after receiving the call, the fire had been extinguished but the equipment and fire fighters were still at the scene. Shortly after his arrival and after discussing the fire with the commanding officer, Lieutenant Foushee noticed that Detective John Aubrey of the Intelligence Division of the Louisville Police Department was at the scene and requested his assistance in making an investigation. Detective Aubrey testified that he had noticed the fire while on his way to work, and after checking in at his office had returned to the scene of the fire to see if his services were needed. Having been advised that the fire originated above the first floor of the building, the two men entered by a front stairway and climbed to the second floor. It was immediately obvious to them that there were numerous separate and unrelated fires, and at the top of the stairway they found very sharp burn patterns which indicated that some sort of flammable liquid had been used to set the fire. In addition to a hallway, the second floor of the building contained two rooms, and trash appeared to have been set on fire in at least one of the rooms. The third floor apparently consisted of one large room where one or more trash fires had been set. The two investigators noticed a number of papers scattered on the floor of both the second and third floor rooms. Some of the papers appeared to have been scattered out on the floor by the stream of water from hoses of the firemen and these were placed in a fire fighter’s coat which was spread on the floor. In addition to the papers on the floor, Lieutenant Foushee directed Detective Aubrey to remove papers from cabinets which were located in the various rooms on the second and third floors. The papers from the different rooms were commingled, and those taken from the cabinets were commingled with the papers picked up from the floor. Although some of the papers were wet and a few were scorched, there was no evidence that flammable liquids or other fire accelerants had been applied to any of the papers which were collected by the investigators. Lieutenant Foushee said that he realized the papers were records of some sort but that he did not take the time to study them that day. Detective Aubrey said that he thought he recognized the papers as containing betting records, but that he did not advise Lieutenant Foushee of this. Lieutenant Foushee testified concerning the purpose of picking up the papers as follows: “Since we were unaware at this point as to who may have set the fire or what might be behind this setting of the fire I felt it necessary to remove any evidence that we could find, which included records.” All of the records taken from the two rooms on the second floor and the one large room on the third floor were bundled up in a single fire fighter’s coat and were taken to Detective Aubrey’s office at police headquarters. There apparently was never any attempt to separate the records taken from the various rooms or to keep those picked up off the floor separate from those removed from cabinets. At the time the investigation was begun the premises were secured by the fire and the police departments and no one other than officials were permitted inside the building. Detective Aubrey described his part in the investigation as follows: “ . . .we spoke and he asked me if I would mind going in with him and that he suspected arson in this particular case, and help him pick up some things that he wanted to seize as evidence.” He said that Lieutenant Foushee picked up various items and put them in the fire coat and pointed to other things which he wanted removed and that he, Aubrey, put those items in the coat and it was all wrapped up and brought out together. He specifically recalled that there was a desk and metal cabinet in one room and that he and Lieutenant Foushee opened drawers and took papers from the desk and cabinet. It was testified that although the appellant, Gargotto, was at the scene of the fire he was not advised that papers had been removed from the rooms on the second and third floors. Although the two investigators agreed that the fire had been extinguished and the building secured, nevertheless Detective Aubrey said that there were a number of firemen in the building still using hoses and axes and working on hot spots in the walls. He said that he and Lieutenant Foushee worked right in the middle of the firemen. After the papers were taken to police headquarters, the two men just looked at them briefly and locked them in a room. Lieutenant Foushee testified that he was needed back at the scene of the fire and did not have time to examine the papers carefully. Detective Aubrey said that he merely confirmed that the papers contained some sort of betting records but did not examine them closely. Lieutenant Foushee testified that he never examined the papers to determine whether they might furnish evidence of a motive for the fire because someone other than Mr. Gargotto was arrested the same day and charged with arson, and no charges were ever made against Mr. Gargotto in connection with the fire. About a week after the fire all of the records were delivered to the office of the Commonwealth Attorney where Mr. Gargotto appeared and demanded their return. Detective Aubrey testified that although he couldn’t tell by looking at the papers that any federal crime had been committed, the day after the fire he called an agent iii the Intelligence Section of the Internal Revenue Service and advised him that he might be interested in looking at the records. Two agents of the Internal Revenue Service contacted Lieutenant Foushee and he gave them permission to examine the records which they proceeded to do in Detective Aubrey’s office. Aubrey testified that the IRS agents brought their own copying equipment and microfilmed all of the records. This took place two days after the fire. A timely motion was made by the appellant to suppress all evidence seized from the premises of the fire and any evidence derived therefrom. Following a hearing, the trial judge overruled the motion and also overruled objections to introduction of the evidence at the trial and the renewal of the motion to suppress made at the conclusion of the trial. It is not questioned that Lieutenant Foushee had the duty under relevant statutes of the Commonwealth of Kentucky and ordinances of the City of Louisville to investigate the cause and circumstances of the fire for the purpose of detecting arson and related offenses. Kentucky Revised Statutes § 227.220(2) (a); 227.240. Specific authority to enter the property of appellant is conferred by KRS § 227.270(2) which provides: (2) The commissioner may at all reasonable hours of the day or night enter in or upon any property to make an inspection or investigation for the purpose of preventing fire loss or determining the origin of any fire, but this subsection shall apply to the interior of private, occupied dwellings only when a fire has occurred therein or when the officer has reason to believe that unsafe fire conditions exist in the building. At the time material to this case there was no Kentucky statute describing the authority of arson investigators. However, by a law enacted in 1972 such officers were given “ . . . the general powers of peace officers for the enforcement of other offenses against the Commonwealth.” Regardless of state authority, when challenged on Fourth Amendment grounds the acts of the state officers must be judged by federal standards. Preston v. United States, 376 U.S. 364, 84 S.Ct. 881, 11 L.Ed.2d 777 (1964); Elkins v. United States, 364 U.S. 206, 223, 80 S.Ct. 1437, 4 L.Ed.2d 1669 (1960); Rios v. United States, 364 U.S. 253, 80 S.Ct. 1431, 4 L.Ed.2d 1688 (1960). An effective investigation of the origin of the fire required a prompt inspection of the building. Admittedly neither Lieutenant Foushee nor Detective Aubrey had a search warrant. However, upon reaching the landing at the top of the stairs at the second floor of the building, the investigators found definite evidence that a fire accelerant had been used in the building. Though the fire had been extinguished, the firemen were still using water hoses and axes in the burned areas. A warrantless search is per se unreasonable, and therefore prohibited by the Fourth Amendment, unless the facts of a particular case bring it within one of the specifically established exceptions to this rule. Coolidge v. New Hampshire, 403 U.S. 443, 454, 91 S.Ct. 2022, 29 L.Ed.2d 564 (1971); Katz v. United States, 389 U.S. 347, 357, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967). In Brinegar v. United States, 338 U.S. 160, 175-176, 69 S.Ct. 1302, 1311, 93 L.Ed. 1879 (1949), the Supreme Court defined the “probable cause” exception to the requirement of a warrant as follows: “Probable cause 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 has been or is being committed. Carroll v. United States, 267 U.S. 132, 162, 45 S.Ct. 280, 69 L.Ed. 543.” We believe there was sufficient evidence of arson to establish probable cause for a further search when viewed by a “man of reasonable caution” or a “man of prudence and caution.” Carroll v. United States, 267 U.S. 132, 161, 45 S.Ct. 280, 69 L.Ed. 543 (1925). Furthermore, the fact that the fire had been so recently extinguished and the firemen were still working in the area where the records were found was an “exigency” which completed the justification for proceeding to search without a warrant. Coolidge v. New Hampshire, supra, 403 U.S. at 463-464, 91 S.Ct. 2022. The rooms from which the papers of the appellant were taken were the locations of several fires involving trash and debris, although there was no indication that an accelerant had been used in any of them. In pursuing their investigations of the cause or origin of the fire, the investigators saw papers scattered on the floor in each of these rooms. These were obviously in plain view, and Lieutenant Foushee testified that often papers and records provide evidence of the purpose of a fire. These objects were subject to seizure under the circumstances because they fit the “plain view” exception to the prohibition against warrantless seizures. In Coolidge v. New Hampshire supra, the requirements for a valid seizure of evidence in plain veiw without a warrant were set forth. The first requirement is that the officers’ “initial intrusion” be justified. This requirement has been met in the present case, as we have held that the officers had probable cause to enter pursuant to the statute, and to search for evidence of arson under the exigencies of the situation. The second requirement is that the discovery of the evidence in plain view must be “inadvertent.” Since the investigators had no prior knowledge of the location of the gambling records in appellant’s building, their discovery was an inadvertent result of the lawful search for evidence of arson. It was not a “planned” warrantless search. We hold that the seizure of the documents on the floor, and otherwise in plain view, was not unreasonable within the meaning of the Fourth Amendment. We do not believe that Colonnade Catering Corporation v. United States, 397 U.S. 72, 90 S.Ct. 774, 25 L.Ed.2d 60 (1970); Camara v. Municipal Court, 387 U.S. 523, 87 S.Ct. 1727, 18 L.Ed.2d 930 (1967), or See v. City of Seattle, 387 U. S. 541, 87 S.Ct. 1737, 18 L.Ed.2d 943 (1967), all cited by appellant, are controlling here. Those cases did not deal with administrative inspection at the time of an unusual occurrence or emergency situation such as the fire which caused the officers to conduct the search and seizure in this case. The same is true of State of Indiana v. Buxton, 238 Ind. 93, 148 N.E.2d 547 (1958), where the arson investigation was not conducted at the time of the fire and the court held that a search warrant was required. The appellee relies on Bennett v. Commonwealth, 212 Va. 863, 188 S.E.2d 215 (Va.1972), where two distinct arson investigations were made. The first was carried out while the building was still burning and the evidence seized was a plastic jug containing a flammable fluid. It was in plain view near the rear of the house and was obviously subject to seizure under the circumstances. The second search, of the interior of the house, by an arson investigator took place the day following the fire. No search subsequent to the time of the fire is involved in the present case, and the validity of such a search is not before us. The appellant further contends that the evidence seized consisted of private, personal papers and its introduction violated his right against self-incrimination guaranteed by the Fifth and Fourteenth Amendments. The records here involved are similar to those considered by this Court in United States v. Blank, 459 F.2d 383 (6th Cir. 1972). Although that case dealt with a prosecution for unlawfully conducting a gambling business rather than irregularities in filing returns, we believe that its holding controls the motion to suppress on grounds of self-incrimination in the present case. To the extent that any of the records are found to have been legally seized, they will not be subject to suppression as violative of the privilege against self-incrimination. Appellant also argues that even if his records were legally seized by Officers Foushee and Aubrey, they had no right to deliver them to the federal agents. Lieutenant Foushee testified that he knew the records had nothing to do with the fire when he turned them over to the agents of the I.R.S. Appellant relies on United States v. Birrell, 470 F.2d 113, decided December 4, 1972 by the Second Circuit. In that case, evidence which was legally seized in a state murder investigation came to the attention of federal authorities through a news story. The federal district attorney, believing this evidence might be relevant to a pending charge against the owner of the seized property, obtained permission from the state authorities to examine it. Before the examination was made, the federal agents were advised that the owner had demanded that the property be returned to him. The court held that under the particular facts presented in that case a motion to suppress the evidence should have been granted. The court emphasized the fact that the demand by the owner that the property be returned put the state officials on notice that a search by officers of the federal government for a different purpose could not be made without a warrant. In the present case there was no demand by appellant for return of the papers until after the federal agents had completed their examination of them. Furthermore, in this case the initiative was by the state officials who contacted the I.R.S. agents and suggested that they might be interested in the records. Thus there are factual differences between Birrell and the present case and these very facts were emphasized in the opinion. Evidence legally obtained by one police agency may be made available to other such agencies without a warrant, even for a use different from that for which it was originally taken. Gullett v. United States, 387 F.2d 307 (8th Cir. 1967), cert. denied 390 U.S. 1044, 88 S.Ct. 1645, 20 L.Ed.2d 307 (1968). There remains the difficult question of the proper disposition of evidence consisting of documents which were removed from drawers in the desks and cabinets. After describing the “plain view” exception, the opinion of the Court in Coolidge continues, at page 466, 91 S.Ct. at page 2038: Of course, the extension of the original ' justification is legitimate only where it is immediately apparent to the police that they have evidence before them; the ‘plain view’ doctrine may not be used to extend a general exploratory search from one object to another until something incriminating at last emerges. (Citations omitted) While it was immediately apparent to Lieutenant Foushee that the papers on the floor might supply evidence of a motive for burning the buliding, was it reasonable to extend the search to the drawers for further evidence? Or should the search have been broken off until a search warrant could be obtained? The answers to these questions depend upon an understanding of the conditions existing at the time the officers were required to make a decision. These facts were not sufficiently developed at the hearing on appellant’s motion to suppress for this Court to make a determination from the record. Upon remand the District Court will hold an evidentiary hearing to determine (1) whether the exigencies of the sitúation were such at the time the search was extended to the drawers of the desks and cabinets to justify such search, and seizure of the contents, without a warrant; and, if no such justification is found, (2) whether the papers found in plain view can be identified and segregated from those that were removed from drawers. The results of the hearing will determine whether or not a new trial is required. The case is remanded to the District Court for proceedings consistent herewith.

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Larry LUKE, Individually, et al., Appellants, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Appellee. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Appellant, v. Larry LUKE, Individually, et al., Appellees. Nos. 71-1348, 71-1374. United States Court of Appeals, Eighth Circuit. Submitted June 12, 1972. Decided Nov. 2, 1972. Submitted March 12, 1973. On Rehearing En Banc April 16, 1973. Rehearings Denied May 21, 1973. Gerald L. Reade and John R. Kabeiseman, Yankton, S. D., for Luke. J. B. Shultz, Sioux Falls, S. D., for American Family Mut. Ins. Co. Before VAN OOSTERHOUT, Senior Circuit Judge, and LAY and HEANEY, Circuit Judges. LAY, Circuit Judge. The plaintiffs, Larry Luke, individually and as the administrator of the estate of Lisa Luke, and Kathleen Luke, are the assignees of the insured, Herbert Carl Llewellyn, and the holders of judgments totaling $138,840.12 plus interest, costs and attorney fees against Llewellyn. The plaintiffs alleged that American Family wrongfully denied coverage under its policy with Llewellyn. Plaintiffs further charged that the company in bad faith failed to settle within the policy limits of its insured’s policy. Both parties moved for summary judgment. The trial court found that coverage existed but refused to allow damages in excess of the policy limits. 325 F.Supp. 1330 (D.S.D.1971). Cross appeals followed. The insurance carrier contests the finding of coverage, and the plaintiffs appeal from the denial of the damages over the policy limits. We affirm the trial court’s finding that coverage should have been afforded the insured, however, we find that the insurer was liable for the full amount of the judgment in excess of its policy limits. We deny plaintiffs their requested attorney fees. The insured owned a 1966 Pontiac which was covered by American Family’s liability policy No. 40-054467. On October 15, 1966, while the 1966 Pontiac was in possession of the insured’s estranged wife, Llewellyn purchased for $460 under a conditional sales agreement a 1959 Oldsmobile for his use from Wilson Motor Company of Sioux City, Iowa. An Iowa certificate of title was issued in Llewellyn’s name with the car dealer holding it for security. Llewellyn made no effort to insure this car. On January 15, the Oldsmobile became disabled with engine trouble, and Llewellyn had Wilson Motor tow the car to their garage. Llewellyn still owed $350 on the purchase price. On January 31, 1967, Wilson Motor Co. legally repossessed the Oldsmobile and transferred the title back to its name, however, Llewellyn could have reacquired the title by payment of the contract balance before February 9, 1967. Wilson Motor Co. later sold the car for salvage. On January 16, the day after Llewellyn had Wilson Motor tow in his Oldsmobile, he purchased a 1967 Pontiac from another car dealer in Sioux City. On February 4, 1967, Llewellyn, while intoxicated and driving on the wrong side of the road, was involved in the accident with the Luke family. He was subsequently convicted for manslaughter and sent to prison. The basic issue as to coverage concerns the “newly acquired automobile” clause under Llewellyn’s insurance contract with American Family. The clause reads: “Owned automobile means b. a private passenger or utility automobile ownership of which is acquired by the named insured during the policy period, provided the named insured within 30 days after its acquisition notifies the company thereof and of his election to make the insurance afforded by this and no other policy . issued by the company applicable to such automobile and . (2) the company insures under the Liability Coverage, all private passenger and utility automobiles owned by the named insured on the day of its acquisition . . . .” (Emphasis ours.) American Family denied coverage arguing that Llewellyn was still the legal title holder to the uninsured Oldsmobile on the date of acquisition of the 1967 Pontiac, therefore, it did not insure all automobiles owned by the insured on that date. As a result automatic coverage of the 1967 Pontiac was not afforded. The district court held that the 1967 Pontiac was covered under the policy since the 1959 Oldsmobile was not an “owned” automobile within the meaning of the “newly acquired automobile” provision at the time the 1967 Pontiac was purchased. We affirm this ruling. American Family contends that the construction of the newly acquired automobile clause is controlled strictly by the Iowa Certificate of Title statute; however, the trial court, citing Canal Insurance Company v. Brooks, 201 F.Supp. 124, 128 (W.D.La.1962), aff’d, 309 F.2d 751 (5 Cir. 1962), held that “the phrase ‘all private passenger and utility automobiles owned by the named insured’ contained in this policy ‘does not contemplate a vehicle which is in such a position or condition that a reasonable person would not include it in a policy of public liability insurance.’ ” 325 F. Supp. at 1332. Other courts construing the same provision have almost uniformly defined an owned automobile within the policy coverage as an operable automobile, one capable of being used on the streets and highways. See e. g., Glens Falls Insurance Company v. Gray, 386 F.2d 520 (5 Cir. 1967); Patrick v. State Farm Mutual Automobile Insurance Company, 90 N.J.Super. 442, 217 A.2d 909, 912-913 (1966); cf. Lynam v. Employers’ Liability Assurance Corp., 218 F.Supp. 383, 385 (D.Del.1963), aff’d 331 F.2d 757 (3 Cir. 1964). The ownership of an automobile which is junk or needs major repairs can hardly be thought to be ownership for liability insurance purposes “since the principal purpose of such insurance is to provide coverage for an automobile which is to be driven and which may become involved in an accident or other mishap.” Glens Falls Insurance Company v. Gray, supra 386 F.2d at 524-525. Cases which have differed from this view have usually done so where the car is temporarily inoperable and is being repaired for future service. Williams v. Standard Accident Insurance Company, 158 Cal.App.2d 506, 322 P.2d 1026 (Cal.App.1958); cf. Allstate Insurance Company v. Stevens, 445 F.2d 845 (9 Cir. 1971). The 1959 Oldsmobile in the present ease was disabled with engine trouble; in fact, Wilson Motor was able to sell it for only $75 to a salvage dealer (the car was “junked out”). After January 15 the Oldsmobile was at all times in the possession of Wilson Motor, and Llewellyn showed no intention of reclaiming it. Moreover, on the day following the vehicle’s failure Llewellyn unsuccessfully attempted to purchase a replacement automobile from Wilson Motor, and later that day he bought the 1967 Pontiac from another dealer. Thus, we agree with the trial court that a reasonable construction of American Family’s policy would not include the inoperable and abandoned Oldsmobile as an owned automobile. LIABILITY FOR EXCESS DAMAGES The district court found that American Family exercised good faith in refusing to provide coverage and therefore was not liable for damages over the limits afforded. In Kunkel v. United Security Insurance Company of New Jersey, 84 S.D. 116, 168 N.W.2d 723, 726 (1969), the Supreme Court of South Dakota, in passing on the question of liability of an insurance carrier for excess damages in refusing to settle within policy limits, stated: “The trial court submitted the matter to the jury under the bad faith rule which we believe to be the better rule and the one prevailing in the majority of jurisdictions and we approve it. . However, . . . the character and extent of the insurer s negligence are factors to be considered by the trier of fact in determining if there is bad faith. The insured has the burden of establishing his claim by a preponderance of the evidence.” The federal district court acknowledged two lines of authorities, one holding that good faith in refusing to defend is not a valid defense in an excess action where there has been a reasonable offer to settle, and the other line of cases holding a good faith decision in refusing to defend does constitute a defense to an excess action even when accompanied by a refusal to settle within policy limits. The trial court observed that the issue was one of first impression in South Dakota and concluded that the South Dakota Supreme Court would apply the Kunkel good faith test to the present situation. The district court then found that the carrier was in good faith in initially refusing coverage and therefore denied liability for damages in excess of the contract coverage afforded. Although this court gives special weight to the determination of local law by a federal district judge, a court of appeals cannot be irrevocably bound by a district judge’s choice of one of two or more alternative rules to follow in a diversity ease. To hold otherwise would be to abdicate our appellate responsibility. In the instant case American Family was presented with several demands by the plaintiffs and its assured to settle the three cases for $49,000 which was within the limits of the $25,000-50,000 policy. These demands were repeatedly ignored. At one time the plaintiffs offered to hold their suits in abeyance to provide the company an opportunity to file a declaratory judgment suit to determine whether coverage was provided. Although the liability of the company’s assured was clear, and the potential damages for the wrongful death of the infant and for the serious injuries to the other plaintiffs were obviously greater than the policy limits, the company refused to consider both settlement and declaratory relief. The rule announced by the South Dakota court in Kunkel is not apposite in determining the precise problem before us. Kunkel involved an insurer who assumed its obligation to defend its assured but exercised bad faith in refusing to settle within the policy limits. There exists an important difference between the liability of an insurer who performs his obligation to defend the insured but fails to exercise good faith in settling within the policy limits and an insurer who breaches his contract by failing to defend and who then rejects a reasonable offer to settle. When it is alleged that the sole breach of duty by the carrier is its refusal to settle within the policy limits, good faith becomes the central issue to be decided. On the other hand, good faith is not relevant to an insurer’s wrongful breach of its contract to provide coverage. A breach of contract is never justified simply because the offending party in good faith believed he was entitled to refuse performance. When a breach occurs the basic question then concerns the proper measure of damages which flow from the breach. When an insurer refuses to defend and, additionally, refuses to accept a reasonable settlement within the policy limits, the company’s liability for damages may be measured as well by its rejection of the offer to settle and may thus exceed the policy limits. As stated by the California Supreme Court in Comunale v. Traders & General Insurance Co., 50 Cal.2d 654, 328 P.2d 198, 202 (Cal. 1958): “An insurer who denies coverage does so at its own risk, and, although its position may not have been entirely groundless, if the denial is found to be wrongful it is liable for the full amount which will compensate the insured for all the detriment caused by the insurer’s breach of the express and implied obligations of the contract. Certainly an insurer who not only rejected a reasonable offer of settlement but also wrongfully refused to defend should be in no better position than if it had assumed the defense and then declined to settle. The insurer should not be permitted to profit by its own wrong.” See also Landie v. Century Indemnity Co., 390 S.W.2d 558, 564-565 (Mo.App. 1965). Although there exists some authority to the contrary, the vast number of jurisdictions which have considered the .question hold that when an offer of settlement within the policy limits has been made and ignored, a good faith refusal to defend is not a valid defense to a claim in excess of the policy limits. Western Casualty & Surety Company v. Herman, 405 F.2d 121 (8 Cir. 1968); Trahan v. Central Mutual Insurance Company, 219 So.2d 187 (La.App.1969); Jenkins v. General Accident Fire & Life Assurance Corp., 349 Mass. 699, 212 N.E.2d 464, 467 (1965); American Fidelity Fire Insurance Company v. Johnson, 177 So.2d 679 (Fla.App.1965), cert. denied, 183 So.2d 835 (1966); Landie v. Century Indemnity Company, 390 S.W. 2d 558 (Mo.App.1965); Comunale v. Traders & General Insurance Company, 50 Cal.2d 654, 328 P.2d 198 (1958). Cf. Cheek v. Agricultural Insurance Company of Watertown, New York, 432 F.2d 1267 (5 Cir. 1970); Foundation Reserve Insurance' Company v. Kelly, 388 F.2d 528, 530-532 (10 Cir. 1968); Seward v. State Farm Mutual Automobile Insurance Company, 392 F.2d 723 (5 Cir. 1968); Prince v. Universal Underwriters Insurance Company, 143 N.W.2d 708 (N.D.1966); American Home Assurance Company v. Sand, 253 F.Supp. 942, 949 (D.Ariz.1965). There exists another compelling reason for rejecting the company’s defense of good faith in denying coverage. By statute South Dakota has adopted a measure of damages for breach of contract which would allow recovery “for all the detriment proximately caused” by the breach. A more simple or explicit expression of the allowable damages can hardly be imagined. S.D.C.L.Ann. § 21-2-1 (1967) states: “General measure of damages for breach of contract — Uncertain damages not recovered. — For the breach of an obligation arising from contract, the measure of damages, except where otherwise expressly provided by this code, is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby, or which, in the ordinary course of things, would be likely to result therefrom. No damages can be recovered for a breach of contract which are not clearly ascertainable in both their nature and their origin.” (Emphasis ours.) In Comunale v. Traders & General Insurance Company, supra, 328 P.2d at 202, the California Supreme Court interpreted Section 3300 of the California Civil Code, which is identical to the South Dakota statute (except for the last sentence), to authorize a recovery in excess of the insurer’s policy limits upon a breach of the insurance contract. The court declared: “A breach which prevents the making of an advantageous settlement when there is a great risk of liability in excess of the policy limits will, in the ordinary course of things, result in a judgment against the insured in excess of those limits. Section 3300 of the Civil Code provides that the measure of damages for a breach of contract is the amount which will compensate the party aggrieved for all the detriment proximately caused by the breach, or which, in the ordinary course of things, would be likely to result from it. . “It is clear that section 8300 of the Civil Code authorizes a recovery in excess of the policy limits, . . .” Comunale is convincing authority for the proposition that this statutory measure of damages authorizes recovery for the entire judgment even though it exceeds the policy limits. Comunale concerned an insurer who had wrongfully refused to defend and settle within the policy limits. The assured in Comunale, however, was able to employ competent counsel to represent him. In the present case not only did American Family refuse to defend or negotiate a settlement for Llewellyn, but it wrongfully abandoned its assured when he was unable to afford legal counsel and, because of his imprisonment, was unable to conduct his own defense. Cf. Siegel v. William E. Bookhultz & Sons, Inc., 136 U.S.App.D.C. 138, 419 F.2d 720, 725 (1969). We find the entire judgment was the natural consequence and proximate result of the defendant’s breach of its obligation to defend its assured. ATTORNEY FEES Plaintiffs have also appealed under South Dakota law the denial of attorney fees against the insurer. S.D.C.L. Ann. § 58-12-3 (1967) reads: “In all actions hereafter commenced against any insurance company, including any reciprocal or interinsurance exchange, on any policy or certificate of any type or kind of insurance, if it appears from the evidence that such company or exchange has refused to pay the full amount of such loss, and that such refusal is vexatious or without reasonable cause, the court, if judgment is rendered for plaintiff, shall allow the plaintiff a reasonable sum as an attorney’s fee to be recovered and collected as a part of the costs, provided, however, that when a tender is made by such insurance company or exchange before the commencement of the action in which judgment is rendered and the amount recovered is not in excess of such tender, no such costs shall be allowed.” Plaintiffs bring this action under an assignment from the assured and as such possess his rights and claims. The issue of whether there has been a vexatious refusal or a refusal made without reasonable cause is one of fact depending upon the existing circumstances. Wilson v. Allstate Insurance Co., 186 N.W.2d 879, 883 (S.D.1971); Tracy v. T & B Construction Co., 182 N.W.2d 320, 323 (S.D.1970). The trial court held that plaintiffs were not entitled to attorney fees since there was reasonable cause for American Family’s refusal of coverage. Plaintiffs have failed to allege any dispute of fact which ordinarily might be left for the jury to resolve. As the trial judge pointed out in discussing the refusal to provide coverage : “(1) [Defendant conducted a thorough investigation into the facts relative to the existence of policy coverage; (2) Llewellyn was promptly notified of the decision to deny coverage; (3) the clause upon which coverage turns has not been interpreted by the state supreme court; and (4) the interpretation relied upon by the insurer in reaching its decision to deny coverage under the policy was not unreasonable.” 325 F.Supp. at 1334. We find in the trial court’s discussion sufficient basis on which the denial of attorney fees can be affirmed. Even though good faith is not a valid defense for breach of the contract, good faith is essentially relevant to the issue as to whether the refusal was “vexatious or without reasonable cause.” Judgment affirmed in part and reversed in part. The claim is remanded to the trial court for entry of judgment in accordance with our opinion. ON REHEARING EN BANC Before MATTHES, Chief Judge, VAN OOSTERHOUT, Senior Circuit Judge, and MEHAFFY, GIBSON, LAY, HEANEY, BRIGHT, ROSS and STEPHENSON, Circuit Judges, en banc. On motion for rehearing it is urged that the South Dakota statute, S.D.Code Ann. § 21-2-1 (1967), governing damages for breach of contract is not applicable in measuring damages arising .from the insurer’s failure to settle within the policy limits. However, assuming arguendo that this is true, under the facts of this particular case, we would reach the same result in holding that the insurer is liable for the damages over and above its policy limits. Assuming the statute is not applicable, the insurer’s liability must be measured by the “bad faith” standard set forth in Kunkel v. United Security Insurance Company of New Jersey, 84 S. D. 116, 168 N.W.2d 723 (1969). Under the Kunkel test the insurer who breaches his contract by refusing to defend would be placed in the same shoes as the insurer who assumes coverages but refuses to settle by accepting an offer to settle within the policy limits. Applying the Kunkel rule of bad faith, it remains undisputed on the present record that the insurer failed to fulfill its responsibility to its insured. The record shows that once the insurer refused coverage it failed to investigate further or even consider the likelihood of excess damage to its insured in light of the facts and circumstances of the case. Under the facts existing here we hold the insurer was guilty of bad faith in refusing to settle as a matter of law. The defendant urges, however, that a finder of fact should be able to consider the “good faith” of the insurer in denying coverage as one of the factors in considering its good faith in refusal to settle. We reject this argument for the reasons set forth by Judge Van Oosterhout in Western Casualty & Surety Company v. Herman, 405 F.2d 121 (8 Cir. 1968), adopting the language of Landie v. Century Indemnity Company, 390 S.W.2d 558 (Mo.App.1965), that notwithstanding an honest belief by the insurer that the policy is not in effect, the company must in good faith consider offers for settlement within the limits of the insurance policy. The effect of this holding is that an insurer who breaches its contract to provide coverage is placed in no better and in no worse position than if it had assumed coverage when considering whether it acted in good faith in refusing to settle. We, therefore, reaffirm our prior holding. Circuit Judges VAN OOSTERHOUT, LAY and HEANEY adopted our prior opinion; Chief Judge MATTHES and Circuit Judges MEHAFFY and ROSS concur only on the basis set forth in this opinion filed on rehearing. BRIGHT, Circuit Judge, separately concurring and dissenting, in which GIBSON and STEPHENSON, Circuit Judges, join. I join in the concurring and dissenting opinion of Judge Stephenson but add my additional views in this case. I feel this case is important, relating, as it does, to the imposition of liability upon an insurer to pay to claimants an amount in excess of policy limits. The obligation of the insurer toward its insured needs to be evaluated realistically, not by way of hindsight. In this case, application of the literal language of the policy might not impose any liability on the insurer. The language of the policy extended coverage to a newly acquired automobile if the company insures “all * * * automobiles owned by the insured on the date of its acquisition.” While the insured purchased a “newly acquired” 1967 Pontiac automobile, he retained ownership of a disabled Oldsmobile which was never brought under the liability policy coverage as well as a 1966 Pontiac which was specifically described in the policy. However, the district court determined that American Family’s liability policy extended to the third (Pontiac) automobile because the second (Oldsmobile) automobile, when delivered to the seller’s garage, proved to be unrepairable and thus no longer needed to be considered as a car owned by the insured. Thus the “newly acquired automobile” clause applied to the 1967 Pontiac acquired by the named insured only because the trial court created an exception to the literal language of the policy. Although this construction may be a permissible one, nothing in this record indicates that the insurance carrier should have reasonably anticipated that ruling. Given the paucity of authority on the subject, we believe the insurer was entitied to view its policy defense as meritorious and justified, subject only to the usual vagaries and uncertainties of litigation. The panel hearing this appeal initially, on the basis of the Comunale case, ruled that the insurer’s good faith could not limit its liability for all damages flowing from a breach of contract. Thus, under this contract theory, the insurer who mistakenly relies on a policy coverage defense and fails to consider a settlement within the policy limits becomes strictly liable to the insured for a judgment in excess of the policy limits. As I understand the opinion on rehearing, three judges not on the original panel and the three concurring and dissenting judges reject the application of the Comunale rule to this case. Although the strict liability rule in Comunale has been frequently cited, this rule has been infrequently applied. Moreover, the Comunale decision was based upon a particular interpretation of California contract law, which is distinguishable from the construction given by the South Dakota Supreme Court to sections of the South Dakota Code which deal with the measure of damages flowing from breach of contract. Recently, the South Dakota Supreme Court, in Big Band, Inc. v. Williams, 202 N.W.2d 121 (S.D.1972), said of these sections: When the action is for breach of contract, plaintiff is entitled to recover all his detriment proximately caused by the breach, not exceeding the amount he would have gained by full performance. (Emphasis supplied) [Id. at 123.] The limiting phrase emphasized in the above quotation casts grave doubt upon the applicability in South Dakota of the sweeping pronouncement of Comunale. The strict liability doctrine of Comunale represents a minority view which I do not believe would be followed in South Dakota and which the trial court properly rejected. Courts seem to have applied three different rules in circumstances analogous to those in the instant case, as follows: 1) A rule that a good faith but mistaken declination of coverage insulates the insurance carrier from an excess judgment for refusal to accept an offer of settlement within the policy coverage. This is the rule which Judge Nichol applied in the trial of this case and which was also applied by the Fifth Circuit in Beck v. Pennsylvania National Mutual Cas. Ins. Co., 429 F.2d 813 (1970) (Pennsylvania law), the Tenth Circuit in State Farm Mutual Ins. Co. v. Skaggs, 251 F.2d 356 (1957) (Oklahoma law), and National Service Fire Ins. Co. v. Williams, 454 S.W.2d 362 (Tenn.App.1969). 2) The Comunale rule, Comunale, supra, 50 Cal.2d 654, 328 P.2d 198, of per se liability based on the California statutory law, which rule is not applied in this ease by a majority of the court. 3) A middle view which holds an insurer liable for more than the policy limits when the insurer, after declining coverage in good faith, is shown to have failed to exercise good faith in refusing to settle or consider settlement of the claim within the limits of the policy. I construe the following cases to reflect this view: Western Casualty & Surety Co. v. Herman, 405 F.2d 121 (8th Cir. 1968); Foundation Reserve Ins. Co. v. Kelley, 388 F.2d 528 (10th Cir. 1968) (undisputed facts demonstrate bad faith refusal to settle as a matter of law); Gordon v. Nationwide Mutual Ins. Co., 30 N.Y.2d 427, 334 N.Y.S.2d 601, 285 N.E.2d 849 (1972); Landie v. Century Indemnity Co., 390 S.W.2d 558 (Mo.App. 1965). The initial panel opinion adopted the second rule. Although the majority of judges sitting en banc adopt the third rule, three judges of this en banc court join in the reversal of the district court for an alternate reason. These judges hold that, in considering whether a refusal to settle is in good or bad faith, the trier of fact should not give weight to a policy defense held in good faith by the insurer. I believe this view to be erroneous. The rule applied does not reflect South Dakota law. I note with interest that the majority of this court has adopted this rule as the law of South Dakota without giving the trial judge an opportunity to state his views of South Dakota law. The alternate theory rests solely on the language of two cases arising under Missouri law; Western Casualty, supra, and Landie, supra. The opinion on rehearing cites no South Dakota case. Yet in Kunkel v. United Security Ins. Co. of New Jersey, 84 S.D. 116, 168 N.W.2d 723 (S.D.1969), in applying a “bad faith” standard in establishing an insurer’s liability to pay more than policy limits for refusing to settle, but where no coverage issue existed, the South Dakota Supreme Court indicated that “any * * * factors tending to establish or negate bad faith on the part of the insurer” should be considered. The Kunkel court said: Good faith is a broad and comprehensive term. Whether an insurer had adhered to it usually depends upon circumstances and elements involved in a particular case. The decision not to settle must be thoroughly honest, intelligent, and impersonal. It must be a realistic decision tested by the expertise which an insurer necessarily assumes under the terms of its policy. * * * * * * While no single satisfactory test has been formulated as to what constitutes good or bad faith courts uniformly hold that the insured’s interests must be considered. It appears to have been most frequently held the insured’s interests must be given “equal consideration” with those of the insurer * * *. [168 N.W.2d at 726.] In light of this language of the Supreme Court of South Dakota, the majority has ignored the local law in this diversity case contrary to the mandate of Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). In summary, the majority of judges on this en banc court have disapproved of the application of the per se rule of the Comunale case, discussed above. I join in this disapproval. The majority of the court, however, have ruled that the insurer’s good faith policy defense should not be considered as a factor in determining whether the insurer’s refusal to settle a case was in bad faith. I join Judges Gibson and Stephenson in rejecting this theory. Bad faith, or its converse good faith, is discernable only by taking into account all the circumstances of a particular case. The strength of a policy defense plays an important role in the evaluation of a settlement offer. Logically, this factor should be assessed in determining the existence of good faith of the insurer in refusing a settlement offer. In this case, that offer was for almost the full amount of the policy limits. I do not believe the views of the majority can be justified on the basis of sound judicial policy applicable to cases of this kind nor as consistent with South Dakota law as reflected in Kunkel, supra. Accordingly, I would remand this case to the district court for its further consideration. STEPHENSON, Circuit Judge, with whom GIBSON and BRIGHT, Circuit Judges, join, concurring and dissenting. We concur with the majority in affirming the trial court’s finding of coverage. We dissent on the excess liability issue. We specifically reject the contention that South Dakota would apply the rule of Comunale which it is claimed holds that an insurer who denies coverage does so at its own risk, and, that a good-faith-but-mistaken declination of coverage followed by a refusal to consider a settlement offer within the policy limits makes the insurer strictly liable for the amount of any judgment rendered against the insured including the excess over the policy limits. It is our view that the ultimate test to be applied under South Dakota law in determining whether an insurer is liable for damages in excess of the policy limits is, “was the insurer guilty of bad faith in refusing to settle within the policy limits?” Kunkel v. United Security Ins. Co. of New Jersey, 84 S.D. 116, 168 N.W.2d 723 (S.D.1969). This is a fact question to be determined from all the circumstances and elements involved in a particular case. Kunkel, supra,, at pp. 726, 730; see also, Dairyland Insurance Company v. Hawkins, 292 F.Supp. 947 (S.D.Iowa 1968); Landie v. Century Indemnity Company, 390 S.W.2d 558 (Mo.App.1965). In determining the issue of bad faith in refusing to settle within the policy limits the trier of fact is entitled to consider, among other factors, the good faith of the insurer in refusing to defend because of the circumstances indicating lack of coverage. “Obviously, in considering its own interest the insurer may, in good faith, determine whether, under the circumstances, it would be held liable at all, i. e., whether there is coverage” Beck v. Pennsylvania National Mutual Cas. Ins. Co., 429 F.2d 813, 819 (CA5 1970). The refusal to defend and refusal to settle within the policy limits are often interrelated. See, Gordon v. Nationwide Mutual Ins. Co., 30 N.Y.2d 427, 334 N.Y.S.2d 601, 285 N.E.2d 849 (1972); National Service Fire Ins. Co. v. Williams, 454 S.W.2d 362 (Tenn.App. 1970). In the latter case the Tennessee Court of Appeals in reversing the trial court held that the insurer did not act in bad faith in refusing to defend and settle within the policy limits where the insured named in the policy unequivocally stated that the defendant driver did not have permission to drive the insured’s automobile at the time of the accident. The trial court found from other evidence that the driver in question did have permission to drive and that the insurance company acted in bad faith in refusing to defend and in refusing to consider or make settlement. In reversing the appeals court observed: “We think an insurer, under circumstances such as depicted in this case, is justified in accepting as true the information given it by its named insured which has a bearing on the liability of the insurer under its policy, and that the insurer can act reasonably on the basis of the information without being guilty of bad faith.” The above case demonstrates the fundamental unfairness of a “refusal to defend at your own risk” doctrine. In the matter at hand the trial court held as a matter of law that the defendant was not guilty of bad faith in its denial of coverage and refusal to defend, and therefore, denied the claim for damages in excess of the policy limits. 325 F.Supp. at 1334. It is our view that the controlling issue is whether the insurer’s refusal to settle was in bad faith and that the good faith refusal to defend must be considered along with all other circumstances in making a finding with respect thereto. We would remand for a determination of that issue by the trier of fact. . Iowa Code Ann. § 321.45 reads in part: “2. No person shall acquire any right, title, claim or interest in or to any vehicle subject to registration under this chapter from the owner thereof except by virtue of a certificate of title issued or assigned to him for such vehicle or by virtue of a manufacturer’s or importer’s certificate delivered to him for such vehicle . . . . ” . It should be noted that “[i]n general the ‘newly acquired automobile’ clause is intended for the benefit of the insured and should be liberally construed in his favor.” Glacier General Assurance Company v. State Farm Mutual Automobile Insurance Company, 150 Mont. 452, 436 P.2d 533, 535 (1968). See also, Canal Insurance Company v. Brooks, 201 F.Supp. 124, 128 (W.D.La.1962), aff’d, 309 F.2d 751 (5 Cir. 1962); 12 Couch on Insurance 2d § 45:185, at 235-236 (1964). . In adopting this position the South Dakota Supreme Court rejected those decisions which premise liability on evidence of negligence. See generally, 14 Couch on Insurance 2d § 51.5 at 510-511 (1965). . See e. g., Herman v. Western Casualty & Surety Co., 271 F.Supp. 502 (E.D.Mo. 1967), aff’d, 405 E.2d 121 (8 Cir. 1968); Comunale v. Traders & General Insurance Co., 50 Cal.2d 654, 328 P.2d 198 (Cal. 1958). . See e. g., State Farm Mutual Automobile Ins. Co. v. Skaggs, 251 F.2d 356 (10 Cir. 1957); Dairyland Ins. Co. v. Hawkins, 292 F.Supp. 947 (S.D. Iowa 1968). . This circuit has often stated that where the trial judge arrives at a permissible conclusion with respect to the law of his state, such conclusion will be binding on appeal. H. K. Porter Co. v. Wire Rope Corporation of America, Inc., 367 F.2d 653, 662-663 (8 Cir. 1966); Homolla v. Gluck, 248 F.2d 731, 733-734 (8 Cir. 1957). Only the Sixth Circuit has recited a similar position. See Lee Shops, Inc. v. Schatten-Cypress Co., 350 F.2d 12, 17 (6 Cir. 1965), cert. denied, 382 U.S. 980, 86 S.Ct. 552, 15 L.Ed.2d 470 (1966); Rudd-Melikian, Inc. v. Merritt, 282 F.2d 924, 929 (6 Cir. 1960). The continued application of such a rule has been soundly criticized. See 1 Barron & Holtzoff, Federal Practice and Procedure § 8, at 42-43 (1960); 1A Moore’s Federal Practice § .309 [2], at 124-125 n. 15 (1971 Supp.); Wright, Law of Federal Courts § 58, at 241 (1970). The legal effect of this principle on questions of first impression is to preclude appellate consideration of an issue involving a significant question of law. The impropriety of the rule is pointed up by Mr. Justice Frankfurer’s observation in Bernhardt v. Polygraphic Company, 350 U.S. 198, 209, 76 S.Ct. 273, 100 L.Ed. 199 (1956) (concurring opinion) : “[T]he defendant is entitled to have the view of the Court of Appeals on Vermont law and cannot, under the Act of Congress, be foreclosed by the District Court’s interpretation.” See also, Huddleston v. Dwyer, 322 U.S. 232, 236, 64 S.Ct. 1015, 1018, 88 L.Ed. 1246 (1944) (“It is the duty of the federal appellate courts, as well as the trial court, to ascertain and apply the state law where [that law] controls [the] decision.”) See generally Kurland, Mr. Justice Frankfurter, The Supreme Court and the Erie Doctrine in Diversity Cases, 67 Yale L.J. 187, 216-218 (1957). Other circuits have not “bound” themselves to the district judge’s initial choice of state law. Rather, they tend to accord “great weight” to the district court’s determination of local law unless they believe it to be clearly erroneous. See e. g., Freeman v. Heiman, 426 F.2d 1050, 1053 (10 Cir. 1970); Minnesota Mutual Life Insurance Co. v. Lawson, 377 F.2d 525, 526 (9 Cir. 1967); Lomartira v. American Automobile Insurance Co., 371 F.2d 550, 554 (2 Cir. 1967). We feel future adherence to the principle set forth by the Fifth Circuit more adequately reflects a court of appeals’ proper course of review: “We give great weight to the view of the state law taken by the district judge experienced in the law of that state, although of course the parties are entitled to review by us of the trial court’s determination of state law just as they are of any other legal question in a case.” Freeman v. Continental Gin Co., 381 F.2d 459, 466 (5 Cir. 1967). See also Stool v. J. C. Penney Co., 404 F.2d 562, 563 (5 Cir. 1968). . It is generally held that where the only wrongful act of the insurer is the refusal to defend, the liability of the insurer is ordinarily confined to the limits of the policy. Fidelity & Casualty Co. of New York v. Gault, 196 F.2d 329, (5 Cir. 1952); Myers v. Farm Bureau Mutual Insurance Co. of Michigan, 14 Mich.App. 277, 165 N.W.2d 308 (1968); Mannheimer Brothers v. Kansas Casualty & Surety Co., 149 Minn. 482, 184 N.W. 189 (1921). This follows from the general contract principle that upon breach of a contract a party is only entitled to be restored to the same position he was in before the breach. Liability for excess damages does not follow from the failure to defend when there has been no offer to settle within the policy limits. When an assured hires his own counsel it is generally reasoned that damages would not be any less if the insurance company had provided the defense. Furthermore, if the assured is indigent and cannot afford a defense, it can only be assumed a court will allow damages, even upon default, which are prima facie commensurate and reasonable to compensate the injury suffered. . See note 5, supra. The cases holding that good faith in refusing coverage is a proper defense to excess liability fail to offer any reason for the adoption of the rule. The apparent rationale seems to be that since bad faith must be shown on the refusal to settle it necessarily follows that the same rule is applicable when there has been a refusal to defend. Most legal commentators have rejected the good faith defense to excess liability when applied to the carrier’s decision not to defend. Cf. Keeton, Liability Insurance and Responsibility for Settlement, 67 Harv.L.Rev. 1136 (1954). See also 47 Geo.L.J. 601 (1959); 57 Mich.L.Rev. 775 (1959); 107 U.Pa.L.Rev. 571 (1959); 10 Hastings L.J. 198 (1958). . The annotation to South Dakota Statute 21-2-1, under “source” cites earlier South Dakota statutes and Section 3300 of the California Civil Code. . The states of Montana and North Dakota have similar statutes and their supreme courts follow the same rationale as Comunale. Lewis v. Mid-Century Insurance Co., 152 Mont. 328, 449 P.2d 679, 682-683 (1968); Prince v. Universal Underwriters Insurance Co., 143 N.W.2d 708, 715-717 (N.D. 1966). . This statute was amended in 1972 to provide attorney fees on appeal as well. . It is likewise doubtful whether the issue of vexatious or unreasonable refusal to provide coverage is one for a jury to resolve. By statute the attorney fees are to be determined and awarded by the court. . For instance, the case of Canal Insurance Co. v. Brooks, 201 F.Supp. 124, 127 (W.D.La.1962), aff’d, 309 F.2d 751 (5th Cir. 1962), relied upon by the district court for its decision on coverage, is not directly in point. In the Canal Insurance Co. case, the omission of the insured, pointed to by the insurer, was the failure to list a certain boat trailer and other unserviceable semitrailers as vehicles which the insured owned. The policy called for a listing of all owned automobiles. No South Dakota court had considered a similar problem of coverage. . Comunale v. Traders & General Ins. Co., 50 Cal.2d 654, 328 P.2d 198 (Cal.1958). . The panel decision has cited Western Casualty & Surety Co. v. Herman, 405 F.2d 121 (8th Cir. 1968), and Landie v. Century Indemnity Co., 390 S.W.2d 558 (Mo.App.1965), as cases supporting the application of the Comunale rule. In Herman, our affirmance rested upon a specific finding of fact by the district court, Herman v. Western Casualty & Surety Co., 271 F.Supp. 502 (E.D.Mo. 1967), that the insurer was guilty of bad faith in refusing to settle, notwithstanding that it had sought to litigate a good faith policy defense. In Landie, the case authority which underlay our Herman decision, the Missouri court, in affirming an excess judgment over the policy limits, made this xiertinent observation, From this fact situation the jury could well have found, as they did, that the [insurance] company acted in bad faith in refusing to settle. [Landie, supra, 390 S.W.2d at 566.] . The pertinent sections read : For the breach of an obligation arising from contract, the measure of damages, except where otherwise expressly provided by this code, is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby, or which, in the ordinary course of things, would be likely to result therefrom. No damages can be recovered for a breach of contract which are not clearly ascertainable in both their nature and their origin. [S.D.C.L. § 21-2-1 (1967).] Notwithstanding the provisions of these statutes, no person can recover a greater amount in damages for the breach of an obligation than he could have gained by the full performance thereof on both sides [with exceptions not here applicable], [S.D.C.L. § 21-1-5 (1967).] . In fact, the majority has completely disregarded the obligation to give “special weight” to the determination of local law by a district judge. Panel slip opinion at 7. Although the district court, on determining good faith, initially gave conclusive weight to the insurer’s assertion that it did not believe the insured to be covered under the policy, the majority has declined to allow the trial judge to determine whether, under South Dakota law, a refusal to grant policy coverage made in good faith is even a factor in assessing whether a rejection of a settlement offer was made in good faith. . Commuale v. Traders & General Ins. Co., 50 Cal.2d 654, 328 P.2d 198, 68 A.L.R.2d 883 (Cal.1958).

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Plaintiff-Appellee, v. Belmer Lewis WRIGHT, Jr., Defendant-Appellant. No. 72-3137 Summary Calendar. United States Court of Appeals, Fifth Circuit. Feb. 27, 1973. Rehearing Denied March 28,1973. Sam Houston Clinton, Jr., Austin, Tex., for defendant-appellant. Anthony J. P. Farris, U. S. Atty., James R. Gough, Asst. U. S. Atty., Houston, Tex., Dan Alfaro, Asst. U. S. Atty., Laredo, Tex., 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 Company of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I. PER CURIAM: On appeal from a conviction of possession with intent to distribute 319 pounds of marijuana, a violation of 21 U.S.C.A. § 841, Appellant Wright raises only one contention — that the search of his vehicle which produced the voluminous quantities of the forbidden weed was violative of the guarantees of the Fourth Amendment, even under the broad “border search” rubric. We hold that the instant search falls well within the bounds of the border search doctrine and, accordingly, affirm. Appellant and a female companion were stopped by agents of the Immigration and Naturalization Service at a point approximately 11 miles north of Laredo, Texas, and the Mexican border. According to the testimony of Immigration Officer James W. Knight, the officers’ suspicions were somewhat aroused by the presence of a spare time in the back of Appellant’s 1971 Ford station wagon. This seemingly harmless factor was suspicious when viewed through the eyes of these officers because of their knowledge and experience that spare tire wells were often used to conceal aliens. Officer Knight requested the Appellant to open the rear door of the station wagon. Looking inside the vehicle, the Officer saw that the floor deck was covered by a white cloth. He pulled back the cloth and opened the rear seat compartment which was under it. Officer Knight observed several large heavily wrapped, plastic covered bundles in this compartment. Detecting an odor of marijuana, he promptly placed the Appellant under arrest. Upon further inspection it was determined that the bundles contained the marijuana. It is a well-settled principle of law in this Circuit that Immigration Officers may search any vehicle which they have a reasonable suspicion to believe may contain aliens. United States v. McDaniel, 5 Cir., 1972, 463 F.2d 129; United States v. De Leon, 5 Cir., 1972, 462 F.2d 170; United States v. Maggard, 5 Cir., 1971, 451 F.2d 502; United States v. Bird, 5 Cir., 1972, 456 F.2d 1023. The test is not one of probable cause, but “reasonable suspicion”. “In substance, the term ‘border search’ is merely a short-hand method of stating that a search is, under the circumstances, a ‘reasonable’ stretch of the usual Fourth Amendment standard of ‘probable cause’ because of the proximity of an international frontier and other attendant factors.” McDaniel, supra, 463 F.2d at 132. In his excellent brief on appeal, Appellant seeks to distinguish McDaniel on several grounds. First, he suggests that because the internal check point therein was merely a temporary one rather than the permanent one in McDaniel there is less of a right to search. We fail to see the logic in this distinction, for, as we have stated, the Immigration Officers are authorized by statute and regulation to search at any point within a “reasonable distance” from the border line. The effectiveness of the Border Patrol would be greatly diminished if the law required them to become creatures of their own habit. Appellant also suggests that McDaniel requires “something more than just the stop before approving a search for aliens.” Under McDaniel, a border search for aliens may be conducted if, in light of all the apparent facts at the time, government agents have adequate grounds for a reasonable suspicion that illegal aliens may be concealed within the vehicle, United States v. McDaniel, supra, at 133. In this case, Officer Knight’s observation of a spare tire in the luggage compartment of the station wagon coupled with his knowledge that spare tire wells were often used to conceal aliens, justified his decision to open the rear compartment. While the Immigration Officers are powerless to search bound bags too small to conceal aliens under the auspices of their immigration badges, the Court below found, as in McDaniel, supra, that Agent Knight and his partner had two badges — they were not only agents of the Immigration and Naturalization Service, but were also authorized Customs Officers. As such, they are authorized to search any package which they may have a reasonable suspicion to believe contains merchandise which was imported contrary to law. Thus, it was perfectly permissible for the Agents to convert what began as a search for aliens into a detailed search for contraband. McDaniel, supra at 134. Affirmed. . Actually the compartment was designed to hold the fold-down third rear seats. Being unfamiliar with the design on a 1971 Ford station wagon, Officer Knight did not know that this was not the spare tirewell. Of course this simple factual mistake has no bearing on the validity of the search — Immigration agents are authorized by law to search any compartment where an unauthorized alien might be concealed. Thus, 8 U.S.C.A. § 1357 (a) (3) gives immigration officers the authority : “(3) within a reasonable distance from any external boundary of the United States, to board and search for aliens any vessel within the territorial waters of the United States and any railway car, aircraft, conveyance, or vehicle, and within a distance of twenty-five miles from any such external boundary to have access to private lands, but not dwellings, for the purpose of patrolling the border to prevent the illegal entry of aliens into the United States.” . “The term ‘reasonable distance,’ as used in [8 U.S.C.A. § 1357(a) (3)] of the Act, means within 100 air miles from any external boundary of the United States or any shorter distance which may be fixed by the District Director.” 8 C.F.R. § 287.1(a)(2). Of course mere presence within the hundred mile limit of the border does not, without more, justify all searches. See Carroll v. United States, 1925, 267 U.S. 132, 154, 45 S.Ct. 280, 285, 69 L.Ed. 543, 552; Marsh v. United States, 5 Cir., 1965, 344 F.2d 317, 324. . In order to foreclose the possibility that any wolf could slip by the border in sheep’s clothing, Congress has granted extensive authority to the Customs Agents for the search of vehicles, beasts and persons: “Any of the officers or persons authorized to board or search vessels may stop, search, and examine, as well without as within their respective districts, any vehicle, beast, or person, on which or whom he or they shall suspect there is merchandise which is subject to duty, or shall have been introduced into the United States in any manner contrary to law, whether by the person in possession or charge, or by, in, or upon such vehicle or beast, or otherwise, and to search any trunk or envelope, wherever found, in which he may have a reasonable cause to suspect there is merchandise which was imported contrary to law,; and if any such officer or other person so authorized shall find any merchandise on or about any such vehicle, beast, or person, or in any such trunk or envelope, which he shall have reasonable cause to believe is subject to duty, or to have been unlawfully introduced into the United States, whether by the person in possession or charge, or by, in, or upon such vehicle, beast, or otherwise, he shall seize and secure the same for trial.” 19 U.S.C.A. § 482. See also 19 U.S.C.A. § 1581; United States v. Caraway & Scales, 5 Cir. 1973, 474 F.2d 25.

f2d_476/html/1031-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL UNION, AFL-CIO, Respondent. CATALYTIC INDUSTRIAL MAINTENANCE COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. Nos. 72-1347, 72-1379. United States Court of Appeals, First Circuit. April 17, 1973. Alan H. Randall, Hato Rey, P. R., with whom Edward M. Borges and O’Neill & Borges, Hato Rey, P. R., were on brief, for petitioner. Lawrence D. Levien, Atty., Washington, D. C., with whom Peter G. Nash, Gen. Counsel, Patrick Hardin, Marcel Mallet-Prevost, Asst. Gen. Counsels, and Elliott Moore, Deputy Asst. Gen. Counsel, Washington, D. C., were on brief, for respondent. Ginoris Vizcarra De Lopez-Lay, San Juan, P. R., with whom Lopez-Lay & Vizcarra, San Juan, P. R., was on brief, for intervenor, Oil, Chemical and Atomic Workers International Union, AFL-CIO. Before COFFIN, Chief Judge, McENTEE and CAMPBELL, Circuit Judges. COFFIN, Chief Judge. These proceedings involve an application for enforcement and petition for review of an order of the National Labor Relations Board (the Board) issued pursuant to a settlement agreement between the General Counsel and the Oil, Chemical and Atomic Workers International Union, AFL-CIO (the Union) entered into after an unfair labor practice complaint issued pursuant to the charges filed by the Catalytic Industrial Maintenance Company (the Company). The principal issue raised by the Company’s challenge to the consent order concerns the conditions under which a charging party, dissatisfied with a consent order issued by the Board against a charged party, is entitled to an administrative hearing on its objections. On March 17, 20, and April 3, 1972, the Company filed charges with the Regional Director alleging that since March 15, the Union had engaged in conduct violative of Sections 8(b)(1) (A) and 8(b)(4)(i) and (ii)(B). Specifically, one charge alleged that in the course of an organizational strike against the Company at the Puerto Rico Olefins job site, the Union coerced and restrained employees in the exercise of their rights under section 7 of the Act by blocking ingress and egress from the premises, threatening violence against those who entered the premises, and by mass picketing. The other charges were that by these and other means the Union prevented employees of other companies from working at the Olefins and later the so-called PPG Industries job site. Subsequently, after a complaint issued, the Union and the General Counsel entered into a proposed consent settlement. The Company objected to the non-admission of proscribed conduct clause, claiming that this would prevent the Board from using the settlement as either a basis for court contempt proceedings or a broad Board order in the event of future violations. It also objected to the absence of the admittedly unusual remedy of back pay to employees who had been prevented from working during the strike. Pursuant to § 101.9(c) of the Board’s Rules, 29 C.F. R. § 101.9(c), the Regional Director and the General Counsel each in turn wrote letters to the Company explaining their reasons for rejecting the Company’s objections. After receiving a further statement of these objections, the Board finally approved the settlement. After the Board applied to us for enforcement of its order, # 72-1347, the Company filed a motion to intervene, which the Board opposed. Because of our doubts as to the availability of intervention to a charging party opposing parts of a consent judgment in light of UAW, Local 283 v. Scofield, 382 U.S. 205, 86 S.Ct. 373, 15 L.Ed.2d 272 (1965), we suggested that the Company file a petition for review of the Board’s order which it did shortly thereafter, # 72-1379. The Union subsequently submitted an unopposed motion to intervene in the latter case to defend the consent order. We now deny the Company’s motion to intervene in the Board’s application for enforcement and grant the Union’s motion to intervene in the Company’s petition for review. We find Scofield controlling, although it does not deal explicitly with this problem. There the Supreme Court held that a successful charging or successful charged party could intervene in the subsequent application for enforcement or petition for review. The Court found in each instance several policy reasons for permitting intervention. One underlying concern was that denying intervention to the winner would create the anomaly that the right to participation in subsequent court proceedings would hinge on the nature of the decision of the Board, the loser having an absolute statutory right to petition for review under § 10(f), 29 U.S.C. § 160(f), but the winner being made to “suffer by his own success”. See 382 U.S. at 210, 216, 222, 86 S.Ct. 373. The Court’s ruling there created a simple and clear procedural rule: the party supporting a Board order, or the part challenged, may intervene, while the party opposing a Board order or a portion of it may petition for review. We see no reason why this rule which applies when the Board issues an order after full adjudication should not apply when it does so based on a settlement agreement. Since the Union is supporting the Board’s order insofar as it rejected the Company’s objections, it may intervene; since the Company is attacking the Board’s order, it may come into court only on its petition for review. This leads us to the Company’s principal contention — that the charging party in an unfair labor practice proceeding has a right to a hearing before the Board on its objections to a proposed settlement between the Board and the charged party. We reject that claim here both because the charging party did not present this claim to the Board and, assuming in light of the Board’s stance in this court that such a presentation would have been unavailing and that we can consider the claim, because we find that the right to a hearing is not absolute and the necessary pre-conditions do not exist in this case. Initially, we agree with the Second Circuit, Local 282, International Brotherhood of Teamsters v. N.L.R.B., 339 F.2d 795 (2d Cir. 1964), that section 5(b) of the Administrative Procedure Act, 5 U.S.C. § 554(c), does not guarantee the charging party a hearing on its objections to a settlement. We note first that were § 554(c) applicable it would not merely provide a right to a hearing on objections to a settlement, as the Third Circuit indicated, Marine Engineers Beneficial Ass’n No. 13 v. N.L.R.B., 202 F.2d 546 (3d Cir.), cert. denied, 346 U.S. 819, 74 S.Ct. 32, 98 L.Ed. 345 (1953), but would permit obstruction of the settlement itself and a right to a hearing on the merits of the complaint. If a charging party were held to be an “interested party” under that subsection, it could decide whether to “determine [the] controversy by consent” or insist on a “hearing and decision on notice”. It would then have “a complete veto on the public interest in compromise”, 339 F.2d at 801, a power wholly out of step with the unique and carefully structured role of a charging party in labor cases, see discussion infra. Moreover, the language of the APA does not compel such a holding. The term “interested parties” is not as broad as the term “person aggrieved” to whom rights to petition for court review are granted by the Labor Act or the term “persons entitled to notice of an agency hearing” used in the preceding subsection (b) of 5 U.S.C. § 554. “In this context, ‘interest’ means a legally recognized private interest and not simply a possible pecuniary benefit resulting from an agency’s enforcement of a public right.” 339 F.2d at 800. As the court there notes, a person can make such a showing “only if the statute can fairly be construed as vesting him with a new private right.” Id. Amalgamated Utility Workers v. Consolidated Edison Co., 309 U.S. 261, 60 S.Ct. 561, 84 L.Ed. 738 (1940), established that the ban on unfair labor practices was created to enforce the public’s interest in peaceful and fair settlement of labor disputes and not to enhance the property rights of the labor disputants. Finally, the legislative history of the APA indicates that Congress did not intend more than to insure the availability of informal means of settlement; it did not address the question of who was entitled to demand a hearing. 339 F.2d at 801. Since 5 U.S.C. § 554(c) is not applicable, it neither permits the charging party to obstruct a settlement nor bestows any rights to a hearing on objections to a settlement. Turning to the Labor Act, we note that courts of appeals have reacted variously to a charging party’s claim to a hearing on its objections. At one end of the spectrum, the Third Circuit, in Marine Engineers, supra, held that a charging party is always entitled to a hearing on its objections to a settlement once a complaint has issued. This view was reaffirmed in Leeds & Northrup Co. v. N.L.R.B., 357 F.2d 527 (3d Cir. 1966), on which the petitioner heavily relies, and in Terminal Freight Cooperative Ass’n v. N.L.R.B., 447 F.2d 1099 (3d Cir. 1971), cert. denied, 409 U.S. 1063, 93 S.Ct. 553, 34 L.Ed.2d 516 (1972), in which the court refused to extend its holding to cases in which a complaint has not issued. In International Union, United Automobile, Aircraft, and Agricultural Implement Workers of America v. N.L.R.B., 231 F.2d 237 (7th Cir.), cert. denied, 352 U.S. 908, 77 S.Ct. 146, 1 L.Ed. 2d 117 (1956), the Seventh Circuit adopted the position enunciated in Marine Engineers. At the other extreme, the Second Circuit held in Local 282, Teamsters, supra, that the charging party has no rights at all to a hearing on its objections. The remaining circuits have taken intermediate positions. In Textile Workers Union of America v. N.L.R.B., 111 U.S.App.D.C. 109, 294 F.2d 738 (1961), the District of Columbia Circuit refused to lay down a general rule, insisting rather that: “Regard must be had to the particular circumstances bearing upon whether or not there would be an abuse of discretion in entering a consent order without a hearing notwithstanding detailed and substantial objections and request for a hearing thereon.” 294 F.2d at 741. Under the circumstances of that case, the court held that the order could not stand without “either (1) a reasonable opportunity for the Union to be heard on its objections or (2) a presentation on the record of reasons for acceptance of the stipulation . . . notwithstanding the Union’s objections.” Id. [Emphasis added.] After an extensive survey of the problem, the Fifth Circuit held that a charging party: This position was reaffirmed in Poloron Products of Mississippi, Inc. v. N.L.R.B., 450 F.2d 793 (5th Cir. 1971), and expressly followed by the Ninth Circuit in N.L.R.B. v. International Brotherhood of Electrical Workers, Local 357, 445 F.2d 1015 (9th Cir. 1971). “must be afforded (1) an evidentiary hearing on any material issues of disputed fact presented by [the] objections . . . and (2) a presentation on the record of reasons for acceptance of the settlement agreement . notwithstanding [the] objection.” Concrete Materials of Georgia, Inc. v. N.L.R.B., 440 F.2d 61, 68 (5th Cir. 1971). [Emphasis added.] The Company has asked us to follow the Third and Seventh Circuits but argues that even under the more moderate approaches of the Fifth, Ninth, and District of Columbia Circuits, it is entitled to a hearing. The Board asks us to adopt the Concrete Materials standard adopted by the Fifth and Ninth Circuits. Essentially for the reasons stated in that opinion, we adopt the Concrete Materials standard and find that under it, this charging party is not entitled to a hearing. As the other courts have noted, the charging party in an unfair labor practice proceeding possesses a unique legal status. Although like a complaining witness in a criminal prosecution in that it cannot compel issuance of a complaint, it has far greater powers once the complaint issues. By Board rule, 29 C.F.R. § 102.8, pursuant to statutory authorization; 29 U.S.C. § 160(b), it is considered a “party”, and may, subject to limitations imposed to parallel the extent of its interest, participate fully in the subsequent hearing and proceedings before the Board, by introducing and objecting to evidence, cross-examining witnesses, filing exceptions, arguing orally before the Board, and petitioning for reconsideration. If its position is unsuccessful before the Board, it may petition the appropriate court for review, as “a person aggrieved” under § 10(f), 29 U.S.C. § 160(f). Finally, if successful before the Board, it may intervene in the court proceeding brought by the Board to enforce its order. See Scofield and discussion, supra. On the other hand, the charging party is not the alter ego of the Board or the equivalent of a civil litigant. It may not overrule a decision not to issue a complaint. See Vaca v. Sipes, 386 U.S. 171, 182, 87 S.Ct. 903, 17 L. Ed.2d 842 (1967). Its consent is not necessary for a stipulated settlement. It may not move a court to enforce a Board order or to find a party in contempt of an order already enforced. Amalgamated Utility Workers, supra. It is rather the gadfly insuring that the Board considers all relevant facts and acts in the public interest and the enforcer of whatever private rights the Act recognizes. Scofield, supra, 382 U.S. at 218-221, 86 S.Ct. 373. This dual role suggests the scope of a charging party’s participation in a settlement proceeding. That it may file and press objections, 29 C.F.R. § 101.-9(c), even by court petition, is a reflection of its role both in keeping the Board within the statute and the public interest and in presenting its private interest in the dispute. That it may not obstruct the settlement by its disapproval is a corollary of the Board’s ultimate and exclusive power to enforce the unfair labor practice provisions of the Act. Amalgamated Utility Workers, supra. Similarly, we believe that its right to obtain a hearing is limited to those instances in which it alleges facts which are both disputed and material to the Board’s decision; to give a broader opportunity would be to render private rights predominant and obstruct expeditious Board dispositions without concomitant benefit to its decision-making process. In addition, since court review is available, it must be made meaningful. It cannot be without a statement by the administrative agency of its reasons for rejecting the challenge. Only then can the charging party, the public and the court be sure that the Board in fact gave consideration to the objections raised and only then can the court intelligently review the decision, to insure its compliance with law and the scope of agency discretion. Textile Workers, supra, 294 F.2d at 741. Accordingly, we hold, with the Fifth and Ninth Circuits, that after the filing of an unfair labor practice complaint and presentation of a settlement agreement, the charging party must be afforded: (1) an evidentiary hearing on any material issues of disputed fact presented by its objections; and (2) a presentation on the record of reasons for acceptance of the settlement agreement notwithstanding the objections. The Company here raises no material issue of disputed fact. It objects to the non-admission clause first on the grounds that it renders the resulting consent order an insufficient basis for a court contempt citation should the Union subsequently violate the consent order and hence the court judgment enforcing it. We note initially that the sufficiency of the consent order for contempt purposes is a matter of law, probably resolved in the Board’s favor by Swift & Co. v. United States, 276 U.S. 311, 48 S.Ct. 311, 72 L.Ed. 587 (1928), and N.L.R.B. v. Ochoa Fertilizer Corp., 368 U.S. 318, 82 S.Ct. 344, 7 L.Ed.2d 312 (1961). Moreover, insofar as courts might hesitate to use their power to cite for contempt when the underlying conduct is not admitted, a proposition for which the Company cites N.L.R.B. v. International Hod Carriers Union, 228 F.2d 589 (2d Cir. 1955), the decision whether to accept the non-admission clause and risk court reluctance to find contempt rather than adjudicate the issue of guilt is a matter for the Board’s administrative discretion, which we cannot say was here abused. The Company also objected to the non-admission clause because it would be an insufficient basis for a subsequent broad order against the Union —prohibiting it from engaging in similar conduct at any location — if it repeated the illegality in the future. When this objection was rejected by the General Counsel in part because there was no evidence of Union “proclivity” to violence, stated to be the applicable standard, the Company claimed, both before the Board and here, that the record was sufficient justification for a broad order now. Given the Company’s concession that there are no other prior proven instances of this Union’s violence, we think the Board was justified in not finding “proclivity” and thus not seeking a broad order in the settlement. The Regional Director admitted that a Board order issued by consent is not considered by the Board in a subsequent proceeding with regard to whether a. broad order should then issue. But again, as he noted in his letter to the Company, the decision whether to accept the non-admission clause in a consent settlement, which as here fully remedies all of the violations listed in the charges filed by the Company and the complaint, or to expend the time and money required to litigate the issue of culpability before the Board and court so that the order could be used in the future to remedy broadly repeated violations is a matter for the Board’s sound discretion, which we again cannot say was improperly exercised here. Lastly, the Company seeks the unusual remedy of back-payments by the Union to the employees prevented from working because of the Union’s conduct. Again, the appropriate remedy is a matter for administrative judgment. Butz v. Glover Livestock Commission Co., Inc., 411 U.S. 182, 93 S.Ct. 1455, 36 L.Ed.2d 142 (1973). The Board has a long-standing policy against such awards in this type of case, Colonial Hardwood Flooring Co. Inc., 84 N.L.R.B. 563 (1949), grounded in sound policy, Long Construction Co., 145 N.L.R.B. 554 (1963), which it has recently reaffirmed, over dissent, in the face of contrary recommendations by the General Counsel and the Administrative Law Judge. Union de Tronquista de Puerto Rico, Local 901 (Lock Joint Pipe & Co. of Puerto Rico, 24-CB-774, 775 (N.L.R.B. Mar. 15, 1973). We can see no error in enforcing what was then and still is existing Board policy. Nor can we say that that policy, or its application in this case, is “unwarranted in law” or “without justification in fact” Glover Livestock, supra, 411 U.S. 186, 93 S.Ct. 1455. In addition, we find that the Company has received the statement of reasons for acceptance of the settlement and rejection of its objections to which it is entitled. Both the Regional Director and General Counsel wrote letters, the first quite extensive, answering specifically each of the objections raised, generally with the explanations given above. Finally, the Board, in an extensive footnote to its decision and order, described the Company’s objections and the General Counsel’s responses and, after careful review of the record and the recommendations of the Regional Director and General Counsel, stated its approval of the stipulation and dismissal of the objections as lacking in merit. Both the Board and its agents have fully and carefully presented their decision and the factors weighed in reaching it; this is all that is necessary for intelligent and fair review. We find no merit in the Company’s other contentions. In # 72-1347, the Company’s motion to intervene is denied and the order is enforced. In # 72-1379 the Union’s motion to intervene is granted and the petition is denied. Costs to the Board in both cases and to the Union in # 72-1379. . In Scofield, the Board argued to the Supreme Court that a decision there permitting court intervention by the successful charging party in the Board’s application for enforcement would make it possible for the charging party to thwart settlements while the case was pending before the Court of Appeals. The Court refused to consider that argument, 382 U.S. at 222, 86 S.Ct. 373 n. 19, finding nothing in the record to support the claim. That argument is of course not applicable here — the whole purpose of the Company’s participation in these court proceedings is to thwart a settlement arrived at during agency consideration, a role the Board does not claim is improper. . In neither its letter of June 6 to the Regional Director nor its letter of August 8 to the Board did petitioner request or argue its right to a hearing. The first letter closed with a statement of petitioner’s correct understanding of the procedure under § 101.9(c), which does not mention hearings. The second letter closed with the sentence: “If the Board desires further detailed argument, I will submit it upon request.” [Emphasis added.] The Board could hardly be expected to construe this as a request for an evidentiary hearing as of right. . We note that it is the Union and not the Board which objects here on the grounds that the Company failed to raise this issue before the Board. . Section 554(c) provides in full: “(c) The agency shall give all interested parties opportunity for — (1) the submis-, sion and consideration of facts, arguments, offers of settlement, or proposals of adjustment when time, the nature of the proceeding, and the public interest permit; and (2) to the extent that the parties are unable so to determine a controversy by consent, hearing and decision on notice and in accordance with sections 556 and 557 of this title.”

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

Bruce H. RICHMOND, United States Army, by Daniel Kallen, his next friend and attorney, Plaintiff-Appellant, v. General Stanley LARSON, Commanding Officer, United States Army, Presidio, San Francisco, California, et al., Defendants-Appellees. No. 71-2741. United States Court of Appeals, Ninth Circuit. March 5, 1973. Michael E. Somers, Daniel Kallen, Santa Monica, Cal., for plaintiff-appellant. James L. Browning, Jr., U. S. Atty. Robert E. Carey, Jr., F. Steele Langford, Asst. U. S. Attys., San Francisco, Cal., for defendants-appellees. Before ELY, HUFSTEDLER, and GOODWIN, Circuit Judges. HUFSTEDLER, Circuit Judge: Richmond appeals from an order denying his habeas petition seeking release from the Army after it had rejected his application for discharge based on his claim of conscientious objection. Richmond was a small-town Ohio boy from a family of modest means. His mother, a devout churchgoer, saw to it that he was a steady attendant at Sunday school and church services. He achieved honor status in the Boy Scouts. In his early teens, he became disaffected with organized religion because, in his view, the adherents were hypocritical. When he became 17 in 1967, he dropped out of high school and enlisted in the Army where he received- training as a field wire maintenance man. In 1968, his father fell ill and his family’s financial condition was precarious. He reenlisted in the Army at that time because he could thereby give greater support to his family. He was thereafter trained as a crewman for the Nike missile program. In late 1969 and early 1970, he began to think seriously about his beliefs. He read books, talked to people about war, and participated in some peaceful antiwar demonstrations. Sometime in June 1970, he received orders to report to Korea; he knew that there was a possibility of going to Viet Nam. Richmond testified that his conscientious objector beliefs began to crystallize when he knew that he would have to face war and killing. He received orders of reassignment to Viet Nam in July 1970. He refused his orders and was imprisoned for 51 days. A general court martial was authorized. During the investigation made as a part of the court martial preliminaries, he testified that he was not afraid for his own life, but he could not kill. He was told that a general court martial could result in his imprisonment for up to six years and that the court martial would be dropped if he agreed to go to Viet Nam. He refused the offer. (The general court martial was later dropped anyway.) His efforts to file conscientious objector application were briefly delayed while the court martial proceedings were commenced, but before the end of July 1970 he filed his application. He was interviewed by a chaplain, Captain Towne, on October 23, 1970. Captain Towne recommended that the application be granted, stating that he believed Richmond “is conscientiously opposed to participating in the Army in any way. He has convinced me that the basis for the application is religious . . . . He believes it is wrong to kill and, also, that it is just as wrong to be a contributor to the act of killing, irregardless of how small or far removed.” On November 9, 1970, a hearing was held before Captain C. D. Waite, a full transcript of which is in the record. Captain Waite recommended disapproval of Richmond’s application. He gave these reasons: “Based upon my two-hour plus interview with him, it is my opinion that Pfc. Richmond should not be granted conscientious objector status. I do feel that he is essentially a moral person. However, it seems to me that his primary motive is to evade military service in the interest of his own personal safety and even more importantly, to stand up for his current political convictions. He repeatedly indicated that he wanted ‘to stand up and be counted’ as one who didn’t support war. Furthermore, his objections seemed geared almost entirely to a particular war (Viet Nam).” The decision was reviewed by an Army board. The board rejected the application, stating: The Board finds that the applicant’s request is based solely upon considerations of policy, pragmatism, or expediency and uses the following evidence from the record to support its findings. The timing of PFC Richmond’s application casts serious doubt on the sincerity of his professed beliefs. He applied only after receipt of orders of reassignment to the Republic of Vietnam. “Sudden excessions of belief may be utterly sincere, as the memorable one on the Damascus Road; but they seldom synchronize so perfectly as (Richmond’s) with external facts making them convenient . . .” United States v. Corliss [D.C.S.D.N.Y.1959) 173 F.Supp. 677]. The Board also noted from the report of the psychiatrist that the applicant is presently applying for a hardship discharge in addition to this application for discharge as a conscientious objector. Additionally, the Board noted that PFC Richmond’s application lacks the depth of conviction required to qualify for discharge as a conscientious objector. There is no reason stated in the application for this change in the basic beliefs of the applicant which now make him feel that he can no longer continue in the military service. The Board is left to conclude that the orders for Vietnam play an important part in this decision to file for conscientious objection. In the letter of support from PFC Richey A. Clark it is stated “Bruce’s beliefs have matured since I’ve known him and even more so since he found out he was on orders for Vietnam.” CPT C. D. Waite, an officer knowledgeable in the policies and procedures relating to conscientious objection matters and before whom PFC Richmond personally appeared stated in his report of that interview “However, it seems to me that his primary motive is to evade military service in the interest of his own personal safety and even more important to stand up for his current political convictions. He repeatedly indicated that he wanted to stand up and be counted as one who didn’t support war. Furthermore, his objections seem here almost entirely to a particular war (Vietnam).” In answer to one of CPT Waite’s questions “If you had the opportunity, would you leave the United States than go to Fort Levinworth to prison for not going to Vietnam for refusing orders ?” The applicant answered “I’ve thought about this quite often and I don’t know it’s kind of another balance I have made yet, whether it would be worth it to go to Canada and be against it there or go to jail and show people who believe that the war is wrong, show them that somebody has stood up — just showing people that there’s other people against the war. It’s an example to follow if you want to say as such.” This leaves the Board to find that the applicant’s request is based on objection to a particular war rather than opposition to war in any form. Richmond exhausted his Army remedies by applying for further review to the Secretary of the Army. The Secretary disapproved the application, stating “Applicant lacks the depth of conviction required to qualify for discharge as a conscientious objector, also, applicant’s request is based solely upon considerations of policy, pragmatism, or expediency.” The sole objective facts in the record that can be cited to support these multiple conclusions are that Richmond did not file his application for conscientious objector status until he received orders to report to Viet Nam and that he had also filed for a hardship discharge after his father was disabled. All of the letters filed with Richmond’s application attest to his sincerity and to the depth of his convictions. His mother expressed her opposition to his decision to seek discharge from the Army, but she affirmed that his conscientious beliefs were sincere. She observed that “punishment will not change his views, even if it were possible to force him into subjection.” The transcript of the hearing before Captain Waite is replete with testimony to the same effect. The record is barren of any evidence to sustain Captain Waite’s conclusion that Richmond was motivated by his political views. It is full of evidence that Richmond’s aversion to war was not selective. The board quoted the only passage in the entire transcript which remotely suggests selectivity. Read in context, the statement does not support an inference that his objection to war was limited to Viet Nam. The record also fails to sustain the board's statement that Richmond gave no reasons for a change in his beliefs which now make him feel that he could not continue in military service. He stated the growth and development of his ideas, the increasing struggle with his conflicts, and the crystallization of his beliefs that occurred when he received orders to Viet Nam. The key to the board’s decision is its statement: “The Board is left to conclude that orders for Vietnam play an important part in this decision to file for conscientious objection.” The record fully supports that statement because, according to Richmond’s consistent testimony, it was his orders that compelled him to resolve his conflict and to make his choice between duty to the Army and duty to his conscience. Each level of Army consideration was pinned to the timing of his application. Each officer inferred that a claim of crystallization based on receipt of orders could not be sincere. Yet, human experience repeatedly contradicts the inference: We again and again fail to decide what we think about a situation until we must confront it. Recognizing this reality, we have held that crystallization of conscientious objector views upon receipt of orders to Viet Nam is not an indicium of insincerity. (Tressan v. Laird (9th Cir. 1972) 454 F.2d 761; cf. Rastin v. Laird (9th Cir. 1971) 445 F.2d 645.) We also recognize how extremely difficult it is for career military personnel to accept as sincere convictions of persons such as Richmond when those views are directly opposed to their own. (Some of the literature on the subject is collected in Ehlert v. United States (1971) 402 U.S. 99, 108, 91 S.Ct. 1319, 28 L.Ed.2d 625 (Douglas, J., dissenting).) For these and reasons further expressed in Tressan, we reverse the order and remand the cause with instructions that the Army be allowed a reasonable time within which to grant discharge to Richmond pursuant to Army regulations applicable to conscientious objectors, failing which the writ shall be granted by the district court. ALFRED T. GOODWIN, Circuit Judge (dissenting). I dissent from the reversal in this case for the reason that I believe that the scope of judicial review of military personnel decisions is narrower than that implied in the majority opinion. The personal tragedy of a mixed-up young man naturally places a reviewing court in a difficult position. But as I understand our duty on habeas corpus, we can intervene in the administration of military separation policy only when there is no evidence to support the administrative decision. I cannot say in this very close case that there is no evidence to support the Army’s decision. . Tangential references to politics were made by the interrogator, not by Richmond. Typical exchanges are these: “Q. What do you think about the present administration’s handling of the war in the last few months “A. That’s a strange thing — I don’t know really what to think of it. It’s confused and the reports on it, I can’t believe them all so I can’t really say because we get conflicting reports such as the Laos reports, so I can’t be sure exactly what they’re doing. I can’t know exactly what their policies are because they don’t always say. “Q. Do you know the difference between politicians and professional diplomats? “A. Not really. “Q. Do you happen to know Senator Muskie’s political beliefs as far as the war in Viet Nam? “A. No, I don’t. “Q. Do you know of any Senators or Congressmen who are opposed to the war in Viet Nam and have beliefs similar to you or many of these people that aren’t in government that have been discussed here today? “A. From what I understand McGovern and Hatfield are against it and the Massachusetts governor was trying to pass laws on it.” . For example: “Q. Is that the only reason that you refused those orders [to Viet NamJ ? “A. Because I could not kill and I could not go along with the war, any war.” Asked about whether he would have joined the war effort in World War II, he replied: “If I was placed in the situation where I was in World War II and I believed the same as I do now, how would I react? Is that what you’re asking? If I reacted at all towards the war, I would stay at home and I would work for the people at home — the ones that were suffering during the time of the war at home. I could not join the war.” “Q. Just give me a rundown of what you feel now about war, killing, people— tell me what your beliefs are that you based your application as conscientious objector on and how you felt you arrived at those beliefs. You can do this however you want. “A. As far as my beliefs go, I believe that killing is wrong and especially war. It seems unnecessary to waste these lives and I think that we have reached a stage where war can be avoided. It could have been avoided before but especially now. Through things that have happened towards mass media, towards getting things out to the people, I think that war can be avoided. I think that killing is just a waste of human life which could be put to some constructive use. Every individual life is worth so much more than just a piece of dirt to be sent out and killed. I think that human lives are not just numbers, they’re people and that they are important. It’s just unnecessary to kill especially en masse. I’ve reached these beliefs through books that I’ve read, people that I’ve known, things that I’ve done, seen, in everyday life these things have come through. Even in some simple books that don’t seem like they have anything in them, you can find where there’s beauty and there’s a necessity for people to live. It is possible for people to live and pass productive lives that are useful.”

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NATIONAL LABOR RELATIONS BOARD, Petitioner, v. NATCHEZ TRACE ELECTRIC POWER ASSOCIATION, Respondent. No. 72-2286. United States Court of Appeals, Fifth Circuit. April 19, 1973. Marcel Mallet-Prevost, Asst. Gen. Counsel, N. L. R. B., Washington, D. C., John J. A. Reynolds, Jr., Director, Region 26, N. L. R. B., Memphis, Tenn., Kenneth B. Hipp, N. L. R. B., Washington, D. C., for petitioner. Laurence J. Cohen, Washington, D. C., for intervenor Broth, of Elec. Wkrs., AFL-CIO. Taylor B. Smith, Columbus, Miss., for respondent. Before GEWIN, SIMPSON and RONEY, Circuit Judges. GEWIN, Circuit Judge: In this case the National Labor Relations Board has petitioned for enforcement of its order entered against respondent Natchez Trace Electric Power Association requiring the Association to bargain with the union certified by the Board. Natchez Trace is incorporated under the provisions of Mississippi’s Electric Power Association Act for the purpose of distributing electrical power to its members. It is a nonprofit organization, and its membership consists not only of farm and residential consumers within the predominantly rural territory it serves but also all federal, state, county, and city agencies and offices in its area. It purchases the power it distributes from the Tennessee Valley Authority. Upon the petition of the International Brotherhood of Electrical Workers, AFL-CIO the Board ordered a representation election held among the Association’s employees. In the representation proceeding Natchez Trace had objected to the Board’s jurisdiction on the sole ground that as a “political subdivision” of Mississippi it was not an “employer” subject to Board jurisdiction under § 2(2) of the National Labor Relations Act, as amended by the Labor Management Relations Act of 1947. When the union won the election and was certified by the Board as the bargaining representative of the'Association’s employees, Natchez Trace steadfastly refused to recognize and bargain with the union. An unfair labor practice proceeding followed at the conclusion of which the Board reaffirmed its position that Natchez Trace was an “employer” and not a “political subdivision” as contended. Consequently the Board held that the Association’s refusal to bargain constituted an unfair labor practice violative of §§ 8(a)(1) and 8(a)(5) of the Act. The critical issue in this enforcement proceeding, then, is whether Natchez Trace is a “political subdivision” within the meaning of the National Labor Relations Act. We agree with the Board that it is not and accordingly grant enforcement of the Board’s order. The term “political subdivision” is nowhere defined in the National Labor Relations Act, and the legislative history of the Act does little to remedy this deficiency other than to reveal that in enacting the § 2(2) exemption Congress meant to exclude the labor relations of federal, state, and municipal governments from Board cognizance because governmental employees did not usually enjoy the right to strike. With this purpose in mind the Board has long limited the exemption for political subdivisions to entities that are either (1) created directly by the state, so as to constitute departments or administrative arms of the government, or (2) administered by individuals who are responsible to public officials or to the general electorate. The Supreme Court recently had occasion to review the Board’s reading of the political subdivision exemption in NLRB v. Natural Gas Utility District of Hawkins County; like Natchez Trace, the Hawkins County Utility District had refused to bargain with the Board-certified union on the ground that under § 2(2) of the Act it was not an employer subject to Board jurisdiction. While the Court was quick to declare that the Board’s construction of the statutory term is entitled to great respect, it refused to hold that an entity must necessarily meet one or the other of the criteria deemed conclusive by the Board in order to qualify for the § 2(2) exemption. Instead it looked at a variety of factors, including the criteria emphasized by the Board, in deciding that the Hawkins County Utility District was a political subdivision and not an employer subject to Board cognizance. In discussing the actual operations and characteristics of the Hawkins County Utility District thought to be indicative of its public character, the Court attached great significance to the fact that it was administered by a Board of Commissioners initially appointed by an elected county judge and subject to removal procedures applicable to all public officials. In this respect it was an entity administered by individuals responsible to public officials or to the general electorate, and as such it did meet one of the two criteria considered by the Board to be decisive. Other characteristics of the Hawkins County District considered of substantial importance by the Court were its power of eminent domain which could be exercised even against other governmental units, its obligation to maintain records open for public inspection and to publish an annual statement of its financial condition, and its exemption from all state, county, and municipal taxes. In addition the Hawkins County District was given an extremely broad grant of all the powers necessary for the aeeomplishment of its purpose capable of being delegated by the legislature and was declared by the statute under which it was established to be a “municipality.” And lastly, it was required to consider any protest of the rates it charged at a public hearing and afterwards publish written findings as to their reasonableness. Viewing these characteristics in the aggregate, the Supreme Court was satisfied that the Hawkins County Utility District was so closely related to the State of Tennessee as to be a political subdivision of it within the meaning of § 2(2) of the Act. With Hawkins County as our guide, we must now examine the actual formation, operations, and characteristics of respondent to determine whether they place Natchez Trace in so intimate a relationship to the State of Mississippi as to make Natchez Trace a political subdivision of that state. Under the authority of Mississippi’s Electric Power Association Act private citizens can organize nonprofit corporations like respondent in order to facilitate the economical distribution of electric power. A certificate of incorporation must first be filed with the Secretary of State; the certificate is examined for illegalities by the Attorney General, and, if found satisfactory, is then submitted to the Governor for approval. The Governor’s approval is apparently a matter for his discretion; the statute provides no yardstick —such as requiring a showing that the “public convenience and necessity” will be served — to guide him in reaching this decision. Once the Governor’s approval is obtained, operations may begin immediately. Natchez Trace was formed according to the procedure outlined. It was not created directly by the state and is not a governmental department in the sense contemplated by the Board when it established this attribute as one which qualifies an entity for the political subdivision exemption. Rather it was organized by private citizens acting pursuant to the appropriate enabling statute, and in this respect its formation was no different from that of any private corporation organized under Mississippi law. In fact entities created under the Electric Power Association Act are termed “corporations”, whereas the utility district in Hawkins County was declared by its enabling statute to be a “municipality”. The directors of a corporation formed under Mississippi’s Electric Power Association Act are initially those named by the citizens filing the certificate of incorporation ; they serve a three-year term without compensation. Their successors are elected by the corporation’s members and also serve for three years. The directors are empowered to do all things necessary or convenient in conducting the business of a corporation. The Act makes no provision for their removal from office for misfeasance or nonfeasance, and, in spite of respondent’s assertion to the contrary, it is by no means settled that they are “public officers” subject to removal for misconduct under § 4053 of the Mississippi Code. Thus unlike the Hawkins County District, Natchez Trace is not administered by individuals who are responsible to public officials or to the general electorate; instead its directors are elected by its members and apparently are accountable only to them. The general public exercises no control over them. Not being created directly by the state and not being administered by individuals responsible to the public, Natchez Trace fails to meet either of the criteria one of which the Board requires of an entity before it can qualify for the political subdivision exemption. Furthermore Natchez Trace possesses few of the other characteristics which the Supreme Court deemed indicative of the Hawkins County Utility District’s public nature. For instance, Mississippi’s Electric Power Association Act does not shield corporations formed under its provisions from state and local taxes but instead expressly provides that they are to be taxed “in the same manner and to the same extent as privately owned utilities.” It subjects Natchez Trace to none of the extensive public surveillance which was statutorily imposed upon the Hawkins County Utility District; it does not require Natchez Trace to maintain records open for public inspection, to publish annual statements, or to hear and respond to rate protests. All that it requires is that the Association’s rates be “reasonable”, apparently giving the corporation’s directors broad discretion in determining whether that standard is being met. In order to carry out its functions, Natchez Trace is granted, in addition to all the powers of a private corporation, all power necessary or requisite for the accomplishment of its corporate purpose. Specifically included in this grant is the power of eminent domain. It is true that to an extent the powers delegated to Natchez Trace by the Act are similar in scope to those granted the utility district in Hawkins County. But Natchez Trace’s eminent domain power is limited in that it cannot be exercised against other governmental bodies, and for the purposes of the political subdivision exemption the significance of this power and the others delegated to respondent by the Act is somewhat mitigated by the fact that in Mississippi all private utility companies are granted powers equal to those possessed by Natchez Trace, including a limited power of eminent domain. The foregoing analysis compels us to conclude that Natchez Trace is not a political subdivision of the State of Mississippi. Neither created directly by the state nor administered by individuals who are responsible to public officials or to the general electorate, Natchez Trace possesses neither of the characteristics one of which the Board requires of an entity before it can qualify for the § 2(2) exemption. It is markedly different from the utility district found to be a political subdivision in Hawkins County insofar as it is not termed a “municipality”, its operations are not subject to any significant public scrutiny, and its property and revenue are not shielded from state and local taxes. In all these respects Natchez Trace resembles a private utility company far more than it does an arm of the state. Its possession of the eminent domain power does nothing to upset this resemblance because in Mississippi all private utility companies possess a similar power of eminent domain. In short we find that Natchez Trace is far less intimately related to the state than was the Hawkins County District and that instead it exists as an essentially private venture not much different from any private utility company, or other private corporation, in the State of Mississippi. Since the Board correctly determined that Natchez Trace lacks the essential attributes of a political subdivision within the meaning of § 2(2) of the Act, its order requiring respondent to bargain with the union must be enforced. Enforcement granted. . 21 Miss.Code Ann. § 5463 et seq. (1942), as amended (Supp.1971). . 29 U.S.C. § 152(2) (1964 ed.) provides: “The term ‘employer’ . . . shall not include . . . any State or political subdivision thereof, . . . ” . 29 U.S.C. §§ 158(a) (1) and 158(a) (5) (1964 ed.). . N.L.R.B. v. Natural Gas Utility District, 402 U.S. 600, 604, 91 S.Ct. 1746, 29 L.Ed.2d 206 (1971). . 402 U.S. 600, 91 S.Ct. 1746, 29 L.Ed.2d 206 (1971). In addition to indicating what characteristics make an entity a political subdivision, the Supreme Court in Bawkins County held that federal, rather than state law, governs this determination. 400 U.S. at 602-603, 91 S.Ct. 1746. . 21 Miss.Code Ann. § 5468 (1942). . See 21 Miss.Code Ann. § 5309-01 et seq. (Supp.1971). . 21 Miss.Code Ann. § 5469 (Supp.1971). . 21 Miss.Code Ann. § 5470 (1942). . 21 Miss.Code Ann. § 4053 (1942). See McClure v. Whitney, 120 Miss. 350, 82 So. 259 (1919). . 21 Miss.Code Ann. § 5486 (1942). . 21 Miss.Code Ann. § 5681 (1942). . 21 Miss.Code Ann. § 5470 (1942). . 21 Miss.Code Ann. § 5473 (1942). . 21 Miss.Code Ann. § 5474 (1942). . See Mississippi Power & Light Co. v. Blake, 236 Miss. 297, 109 So.2d 657 (1959).

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UNITED STATES of America, Plaintiff-Appellee, v. Robert Lee BELL, Defendant-Appellant. No. 71-1606. United States Court of Appeals, Seventh Circuit. Argued Oct. 18, 1972. Decided Feb. 27, 1973. Rehearing Denied May 7,1973. George C. Pontikes, Chicago, Ill., for defendant-appellant. James R. Thompson, U. S. Atty., William T. Huyck, and Theodore T. Seudder, Asst. U. S. Attys., Chicago, Ill., for plaintiff-appellee. Before KILEY and SPRECHER, Circuit Judges, and GRANT, Senior District Judge. Senior District Judge Robert A. Grant of the Northern District of Indiana is sitting by designation. GRANT, Senior District Judge. The defendant, Robert Lee Bell, appeals his conviction by the district court, sitting without a jury, for failure to submit to induction into the armed forces in violation of 50 U.S.C. App. § 462. We affirm. On 24 April 1969 defendant was ordered to report for induction on 12 May 1969. Defendant requested a postponement of the induction in order to finish a school semester. A postponement was granted by the State Director of Illinois until the first induction call after 31 May 1969. On 20 May 1969 his local Board issued a rescheduling letter ordering defendant to report for induction on 2 June 1969. Defendant failed to report. No further postponements of the order were issued by either the local Board or the State Director. On 5 June 1969 the local Board mailed a “Delinquent Registrant Report” to the United States Attorney, the report noting the defendant’s failure to report and explaining that the prior postponement had been given only until the first induction call in June which happened to fall on June 2nd. Defendant was later interviewed by an FBI agent who was told by defendant that he would contact his local Board and report for induction “if given another chance”. The agent reported defendant’s statement to the local Board. Two days later, on 29 September 1969, the local Board received a letter from the defendant which stated as follows: “Having had a great deal of time to think this summer, I would like to declare myself to be a conscientious objector. I hereby request that forms SSS-150 and SSS-151 be sent to me. Thank you.” The local Board requested instructions from the State Director and was advised to issue a second SSS Form 150, “Special Form for Conscientious Objectors,” and to consider it. The form was sent to the defendant who returned the completed form on 31 October 1969. On 7 November 1969 the local Board reviewed the form and defendant’s file but decided not to reopen his classification, there being no change in defendant’s status resulting from circumstances over which he had no control. See 32 C.F.R. § 1625.2 (1971). Both the defendant and the United States Attorney were notified of the Board’s action. On 18 November 1969 the United States Attorney wrote the local Board stating as follows: “It is ■ suggested that the above-captioned registrant be reordered for immediate induction. This is to keep the record in good prosecutive order, if he fails to so appear, since his previous order to report was in effect cancelled because of his subsequent C. O. claim.” On 19 November 1969 the local Board mailed a new rescheduling letter which ordered the defendant to report for induction on 1 December 1969 at which time the defendant again failed to report. Defendant first notes that Selective Service regulations provide that (1) a local Board may postpone an order to report for induction but only for a maximum of 120 days and (2) the local Board must mail a copy of the postponement to the registrant. Defendant then argues that the failure of his local Board to further postpone the order of induction beyond 2 June 1969 rendered the original order and a fortiori, the rescheduling letter of 18 November 1969 null and void, citing Liese v. Local Board No. 102, 440 F.2d 645 (8th Cir. 1971). In particular, defendant notes that the original reporting date was 12 May 1969 and that the postponement regulation would only authorize a maximum postponement to 9 September 1969. Thus, when defendant filed his SSS From 150 on 31 October 1969, the original order was no longer in effect. Defendant concludes that his request for conscientious objector status “. . . should have been treated as a pre-induction claim, requiring reopening with the right to a personal appearance and an appeal. United States v. Freeman, 388 F.2d 246 (7th Cir. 1967), Mulloy v. United States, 398 U.S. 410, 90 S.Ct. 1766, 26 L.Ed. 2d 362 (1970). Instead, local board 214 treated the claim as a post-induction claim refusing to reopen the classification. (A. 12). Without the reopening and the right to a personal appearance or appeal, no valid induction order could be issued against the defendant, including the order issued on November 19, 1969.” The government contends that once the defendant refused to comply with his induction order, he was no longer entitled to any postponement. It correctly notes that not every delayed induction order constitutes a “postponement” of the type regulated by 32 C.F.R. § 1632.2(a) (c). That regulation “. . . refers to a postponement due to specified circumstances such as death or ‘other extreme emergency beyond registrant’s control.’ This type of ‘formal postponement’ ordinarily would result from a request initiated by the registrant himself.” United States ex rel. Luster v. McBee, 422 F. 2d 562, 570 (7th Cir. 1970), cert. denied 400 U.S. 854, 91 S.Ct. 74, 27 L.Ed.2d 92, reh. denied 400 U.S. 931, 91 S.Ct. 190, 27 L.Ed.2d 192 (1970). The delay occurring in the instant case was not the result of the “circumstances” contemplated by 32 C.F.R. § 1632.2 nor was there a request by the defendant for a postponement pursuant to the regulation. To the contrary, any delay which occurred was occasioned by defendant’s failure to report as ordered and his subsequent conscientious objector claim. Thus the delay in induction was for defendant’s own benefit. See United States v. Foster, 439 F.2d 29, 31 (9th Cir. 1971). As such the delay could not possibly have prejudiced the defendant. Luster, supra, 422 F.2d at 570; United States v. Watson, 442 F.2d 1273, 1278 (8th Cir. 1971), cert. denied 404 U.S. 848, 92 S.Ct. 152, 30 L.Ed.2d 85. Furthermore, and more importantly, it is well established that the one-hundred-twenty (120) day limitation on postponements under Section 1632.2 does not apply to a registrant who has failed to appear for and submit to induction. United States v. Brunner, 457 F.2d 1301, 1302 (9th Cir. 1972); United States v. White, 447 F.2d 1124, 1126 (9th Cir. 1971), cert. denied 404 U.S. 1049, 92 S.Ct. 714, 30 L.Ed.2d 740 (1972). We believe this rule to be particularly applicable where, as in the case at bar, the delay in the induction was caused by the registrant and for his own benefit. It should also be noted that despite defendant’s self-created postponement or delay in his induction, he was under a continuing duty to report for induction. Luster, supra, 422 F.2d at 570. 32 C.F.R. § 1632.14(a) (1969) provides in pertinent part that “[I]f the time when the registrant is ordered to report for induction is postponed, it shall be the continuing duty of the registrant to report for induction upon the termination of such postponement and he shall report for induction at such time and place as may be fixed by the local board. Regardless of the time when or the circumstances under which a registrant fails to report for induction when it is his duty to do so, it shall thereafter be his continuing duty from day to day to report for induction to his local board. . . . ” (our emphasis). The Liese case relied upon by defendant is factually distinguishable. Liese involved a registrant whose order to report for induction was issued prior to the effective date of the Random Selection Sequence, i. e., the draft lottery. After receiving his notice of induction but prior to his reporting date, the registrant was arrested for a peace disturbance and released on bond. His trial was set for a date subsequent to the date he was to have reported for induction. Upon learning of the situation, the local Board attempted to orally postpone the registrant’s induction without sending the registrant a postponement notice as required by 32 C.F.R. § 1632.-2(b). The Court held that the postponement irregularities “. . . had the effect of cancelling his order to report and returned him to the overall pool, bringing him under the Random Selection Sequence. Accordingly, since his lottery number has not yet been reached, his induction was unlawful.” Liese, supra, 440 F.2d at 646. However, the Court noted that “Liese was neither a delinquent nor under a validly postponed induction order. .” Id. at 647. (Our emphasis.) We find the non-delinquent status of the registrant in Liese to be a critical distinction from the instant case. To the extent that Liese might be interpreted as holding that all postponements or delays in induction are controlled by the requirements of 32 C.F.R. § 1632.2, we refuse to follow it. See Luster, supra, 422 F.2d at 570; see also Swift v. Director of Selective Service, 145 U.S. App.D.C. 224, 448 F.2d 1147, 1151, n. 16 (D.C.Cir.1971). At oral argument defendant’s counsel contended that Luster is limited by United States ex rel. Iverson v. Rhodes, 465 F.2d 402 (7th Cir. 1972), and that the latter case controls the instant ease. We disagree. The registrant in Iverson had been classified as a conscientious objector and had reported for civilian work on March 15 at Goodwill Industries in Indianapolis as ordered by the local Board. Goodwill had no work available so both Iverson and a Goodwill officer wrote the local Board and informed it of this fact. The local Board took no action other than writing Iverson and informing him that his file had been forwarded to state headquarters and that he would be notified when the Board decided what step to take in his case. On 13 October 1971, almost eight months later, the local Board ordered Iverson to again report to Goodwill. This Court held that the local Board should have complied with the requirements of Section 1632.2 and issued a formal postponement notice. In so doing, the Court noted that other courts had enforced the requirements of Section 1632.2 “even though the local board did not purport to act under that regulation or the delay was not occasioned by the kind of ‘extreme emergency’ mentioned in the regulation.” Id. at 404. The Court recognized that Luster was to the contrary but noted that it was distinguishable : “Luster is distinguishable because there petitioner was informed that his induction was delayed under an army regulation to determine whether he • was medically acceptable. The delay of induction was less than 120 days; nothing occurred in the meantime to change petitioner’s status. Finally, petitioner did not even contend that the original order was cancelled or in any way invalidated.” Id. at 405, n. 2. The case before us is even more readily distinguishable since the delay in the induction, as stated previously, was caused by defendant’s failure to report and his belated conscientious objector claim. No postponement was sought by the local Board nor was there any suggestion that it should have done so. The fault lies entirely with the defendant. To ignore his failure to report, would be to permit defendant to profit by his own wrongs. This we cannot allow. Finally, we find little merit in defendant’s suggestion that the government should be bound by the opinion of the United States Attorney, expressed in his letter of November 18, 1969, to the local Board, that defendant’s belated conscientious objector claim may have cancelled his prior induction order. Suffice to say that the opinion was incorrect. Ehlert v. United States, 402 U.S. 99, 91 S.Ct. 1319, 28 L.Ed.2d 625 (1971); White, supra, 447 F.2d at 1125. The judgment of the district court is affirmed. . The pertinent sections of 32 C.F.R. § 1632.2 (1971) are as follows : (a) In case of death of a member of the registrant’s immediate family, extreme emergency involving a member of the registrant’s immediate family, serious illness of the registrant, or other extreme emergency beyond the registrant’s control, the local Board may, after the Order to Report for Induction (SSS Form No. 252) has been issued, postpone the time when such registrant shall so report for a period not to exceed 60 days from the date of such postponement, subject, however, in cases of imperative necessity, to one further postponement for a period not to exceed 60 days. . (b) The local Board shall issue to each registrant whose induction is postponed a Postponement of Induction (SSS Form No. 264), shall mail a copy of such form to the State Director of Selective Service, and shall file a copy in the registrant’s Cover Sheet (SSS Form No. 101). The local Board shall note the date of the granting of the postponement and the date of its expiration in the “Remarks” column of the Classification Record (SSS Form No. 102).

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UNITED STATES of America, Plaintiff-Appellee, v. Alfred Marion SPOONHUNTER, Sr., Defendant-Appellant. No. 72-1600. United States Court of Appeals, Tenth Circuit. April 10, 1973. Richard A. Stacy, Asst. U.S. Atty., Cheyenne, Wyo. (Richard V. Thomas, U. S. Atty., and Tosh Suyematsu, Asst. U. S. Atty., Cheyenne, Wyo., on the brief), for plaintiff-appellee. Richard F. Pickett, Cheyenne, Wyo., for defendant-appellant. Before SETH, McWILLIAMS and BARRETT, Circuit Judges. BARRETT, Circuit Judge. Alfred Marion Spoonhunter, Sr., appeals from a jury conviction of guilty and subsequent sentence wherein he was charged with the commission of the crime of forcible rape on the person of Beatrice Mae Potter on July 13, 1971, within the Wind River Indian Reservation, Wyoming. His sentence was entered July 21, 1972, for a term of five years pursuant to 18 U.S.C. § 4208(a) (2). The defense was that of alibi. Although the appellant did not testify at trial, his wife, his brother, and some five or six additional witnesses testified that on the evening of the alleged rape the appellant was in their presence until about 5:00 a. m. at a beer-drinking get-together at the Felter home. Beatrice Potter testified that she was forcibly raped in her home which is some distance from the Felter residence. She said that the rape occurred between 4:00 a. m. and 4:45 a. m. Spoonhunter’s wife testified that she, appellant and his brother, Adam, went directly home from the party, arriving shortly after 5:00 a. m. and that appellant and she went to bed in their home. She further testified that appellant slept until after 10:00 on July 13, 1971. Beatrice Potter’s husband was away from the Potter home at the time of the rape. Beatrice and her five children were in their home located some five to ten minutes walking distance from the Spoonhunter home. The doors and window screens were locked or latched. Beatrice related that she was asleep in her bed with a couple of her children, including Donna, then six years of age, when she was yanked out of bed by a man and dragged into the living room, and then past the open bathroom door where the light was on. She testified that it was then that she definitely identified Spoonhunter as her attacker; that they struggled into the kitchen area, upsetting things during the struggle; that she scratched at Spoonhunter and knocked off his eyeglasses in the kitchen; and that he dragged her into the bathroom entry area again, and it was there that she believed she was “hit” in the stomach and then fainted. She further testified that when she recovered consciousness she was lying on the bed in the south bedroom, and that Spoon-hunter was engaged in sexual intercourse with her. Her daughter, Donna, who was age seven at time of trial, testified that it was Spoonhunter who was in their home that night and that she saw Spoonhunter hit her mother in the stomach, in the area of the south bedroom. Spoonhunter had been at the Potter home only once before, and was known by both Beatrice and Donna. There was evidence tending to corroborate the facts that a struggle had occurred, and that Beatrice bore abrasions, swellings, and for some time complained of stomach pains; that intercourse had occurred with Beatrice within a few days of the alleged rape (while admittedly it could have been attributed to voluntary intercourse between Beatrice and her husband); that the right side bow of a pair of eyeglasses was found in the Potter kitchen the morning following the rape; and that when Spoonhunter was arrested later that day he was seen wearing glasses with the right bow removed, and that they fell off when he departed from a police car. On appeal, Spoonhunter raises five basic contentions of error. We shall consider each. I. Appellant alleges prejudicial error in that the trial court did not properly qualify seven-year old Donna Potter as a witness, and in overruling his continuing objection to her testimony on the ground that she was incompetent because of her age. The first part of the allegation goes to the voir dire conducted by the trial court after Donna was called as a witness by the Government and objection was made by the appellant on the ground, of incompetency. The trial court’s voir dire was as follows: THE COURT: I’ll ask her a few questions. Donna, how old are you? DONNA: Seven. THE COURT: You are seven? DONNA: Uh-huh. THE COURT: You were six years old then on July 13, 1971? DONNA: Uh-huh. THE COURT: What grade are you in school ? DONNA: Second. THE COURT: Do you think you remember what occurred on the night of July 13, 1971? DONNA: Yes. THE COURT: Do you know what it is to tell the truth when you raise your hand and are sworn ? DONNA: Yes. THE COURT: And if I administer the oath to you, you will swear to tell the truth and you know that you can be punished if you don’t tell the truth? You understand that? DONNA: Yes. THE COURT: I think she is qualified. You raise your right hand then (Sworn). THE COURT: Do you so swear, do you? DONNA: Yes. THE COURT: Very well. The continuing objection of the appellant to Donna’s testimony was based upon the fact that she was under the age of ten years and that § 1-138, Wyoming Statutes, 1957, provides that children under the age of ten years are incompetent to testify if they “ . appear incapable of receiving just impressions of the facts and transactions respecting which they are examined, or of relating them truly.” The above cited Wyoming statute does not apply in this case because the crime charged is a federal offense. In federal prosecutions the admissibility of evidence and the determination of competency of witnesses is dictated by federal law, as reason and experience may dictate, and not by state law. Funk v. United States, 290 U.S. 371, 54 S.Ct. 212, 78 L.Ed. 369 (1933); Olmstead v. United States, 277 U.S. 438, 48 S.Ct. 564, 72 L.Ed. 944 (1928); Rogers v. United States, 369 F.2d 944 (10th Cir. 1966), cert. denied 388 U.S. 922, 87 S.Ct. 2125, 18 L.Ed.2d 1371 (1967); Rule 26, Fed.R.Crim.P., 18 U.S.C.A. In any event, we find no inconsistency in the cited statute and our rule: the capacity of a person offered as a witness is presumed, and in order to exclude a witness on the ground of mental incapacity, the existence of the incapacity must be made to appear. Sinclair v. Turner, 447 F.2d 1158 (10th Cir. 1971), cert. denied 405 U.S. 1048, 92 S.Ct. 1329, 31 L.Ed.2d 590 (1972). Whether an infant is competent is largely in the discretion of the trial judge. The test, even as applied to an infant five and one-half years of age, is whether it was shown on examination of the infant that he was intelligent, and whether he understood the difference between truth and falsehood, and the consequences of falsehood, and what was required by the oath. Wheeler v. United States, 159 U.S. 523, 16 S.Ct. 93, 40 L.Ed. 244 (1895). In Antelope v. United States, 185 F.2d 174 (10th Cir. 1950) the appellant contended that in his prosecution for statutory rape, the thirteen-year old prosecutrix was without sufficient capacity to testify because of her age. The appellate court looked to the record in testing the contentions of incompetency. While noting that the prosecutrix was a “young, timid Indian girl” who was embarrassed and who testified in a halting manner, she was nevertheless held to be competent. There the Court allowed the District Attorney to ask her leading questions. Wigmore sets forth some essential requirements to test the competency of infants: Capacity to observe, capacity to recollect, capacity to communicate, capacity to understand questions put and to frame and express intelligent answers and a sense of moral responsibility. II Wigmore on Evidence § 506 (3rd ed. 1940). The trial court did not err in admitting Donna Potter’s testimony, finding, as it did, that she met each of these tests, even though there was some discrepancy in her recollection of facts developed on cross-examination. Donna’s testimony corroborated her mother’s testimony. She positively identified Spoonhunter as the man who was in the Potter home at an early morning hour on July 13, 1971, and stated that she saw him dragging her mother and striking her in the stomach while in the home. Donna’s competency was tested on cross-examination. The record reflects that the cross-examination failed to establish her incompetency. Cross-examination is often used to test competency. 98 C.J.S. Witnesses § 378 (1957). Finally, we note that the methods of ascertaining a child’s testimonial capacity are the same as those employed for the oath. II Wigmore on Evidence § 508 (3rd ed. 1940). The voir dire examination of a child is generally conducted by the judge under Rule 26, Fed.R.Crim. P. to determine competency. If counsel believes that the voir dire is inadequate he has an obligation to propose certain voir dire questions to the court, to request the right to conduct independent examination relating thereto, or to object to the adequacy of the Court’s examination, just as counsel is required to act in challenging the qualification and competency of jurors. VI Wigmore on Evidence § 1820 (3rd ed. 1940); Lowther v. United States, 455 F.2d 657 (10th Cir. 1972), cert. denied 409 U.S. 857, 93 S.Ct. 139, 34 L.Ed.2d 102 (1972); Kreuter v. United States, 376 F.2d 654 (10th Cir. 1967), cert. denied 390 U.S. 1015, 88 S. Ct. 1267, 20 L.Ed.2d 165 (1968). The record evidences no error in the admission in evidence of the testimony of Donna Potter. II. Appellant alleges error by the trial court in refusing to grant his motion for a continuance immediately prior to trial for the reason that all of his witnesses could not be located for the purpose of being subpoenaed. The prosecution had been granted two prior continuances because the prosecutrix had become ill and was unable to appear for trial. Appellant alleges that the trial court’s refusal to grant his motion for a continuance was arbitrary primarily because of the two prior continuances. The allegation does not have merit when we consider that: (1) the prior continuances were predicated upon medical determinations that Beatrice Potter could not appear at trial; (2) the Government made good faith efforts to obtain the three additional “alibi” witnesses, Fridon, White-man and Bell, as requested by the appellant; and (3) there is nothing in this record which would indicate that had these three witnesses appeared that they would have lent any greater weight to the credibility of the “alibi” defense testified to at length by seven or eight other defense witnesses, nor that one or more of the three witnesses would have “shed some light upon the character of Beatrice Mae Potter, the complaining witness.” There was no offer of proof in relation to the “character” testimony. Certainly the testimony of the three witnesses in relation to the facts of the beer party at the Felter home, or the approximate time of Spoonhunter’s departure, would have been cumulative only. Seven or eight witnesses testified that the appellant attended the party. The trial court is vested with discretion as to granting a continuance. Its exercise will not be disturbed on appeal in the absence of a clear showing of abuse resulting in manifest injustice. Avery v. Alabama, 308 U.S. 444, 60 S.Ct. 321, 84 L.Ed. 377 (1940); United States v. Eagleston, 417 F.2d 11 (10th Cir. 1969). No such prejudice has been demonstrated here. United States v. Harris, 441 F.2d 1333 (10th Cir. 1971). III. Appellant alleges error in the Court’s refusal to give his proposed Instruction No. 1 that: “You are instructed that in this case the prosecution relies for conviction upon the testimony of Beatrice Potter, the prosecuting witness, and no other witness was called by the State to testify directly to the time and place or circumstances of the alleged offense; and you are instructed in cases where the State relies, upon the uncorroborated testimony■ of the prosecutrix unsupported by other evidence, that you must view such testimony with great caution.” (Emphasis ours). Spoonhunter’s reliance upon the Wyoming eases of State v. Slane, 48 Wyo. 1, 41 P.2d 269 (1935) and Strand v. State, 36 Wyo. 78, 252 P. 1030 (1927), is misplaced, in view of the fact that the record adequately confirms that the testimony of Beatrice Potter was corroborated in material part by the testimony of Donna Potter, Dr. Manges, George Philip Moss, Leona St. Clair, P. Rene Bidez and Stanford St. Clair. The jurors weighed their testimony against the numerical superiority of Spoonhunter’s countervailing alibi witnesses in finding against him beyond a reasonable doubt. The trial court’s instructions fairly and adequately guided the jurors in their deliberations. Seldom in cases of this sort is there direct corroboration; more often in eases of rape the corroboration, as here, is circumstantial in character. Jurors are charged with the duty of assessing the credibility of witnesses, and that is not a function for the appellate court. United States v. Miller, 460 F.2d 582 (10th Cir. 1972); United States v. Sierra, 452 F.2d 291 (10th Cir. 1971). It is for the jury to determine the weight to be given to any testimony. Their assessment in this regard takes into consideration the appearance and general demeanor of each and every witness. Such an evaluation of aspects of credibility is not available to the appellate court from a review of the “cold” record on appeal, and we cannot draw controlling inferences contrary to those reasonably drawn by the jury from the evidence, both direct and circumstantial. United States v. Miller, supra; United States v. Wheeler, 444 F.2d 385 (10th Cir. 1971); Bailey v. United States, 410 F.2d. 1209 (10th Cir. 1969), cert. denied 396 U.S. 933, 90 S.Ct. 276, 24 L.Ed. 232 (1969). We are not a forum for trial de novo. Dailey v. City of Lawton, Oklahoma, 425 F.2d 1037 (10th Cir. 1970). Our review, following conviction, dictates that we must view the evidence, direct and circumstantial, together with all reasonably drawn inferences in a light favorable to the prosecution. Lewis v. United States, 420 F.2d 1089 (10th Cir. 1970); Mares v. United States, 409 F.2d 1083 (10th Cir. 1968), Cert. denied 394 U.S. 963, 89 S.Ct. 1314, 22 L.Ed.2d 564 (1969). And when different inferences may be drawn, appellate courts will not substitute their judgment for that of the trial court or jury. Colby v. Cities Service Oil Company, 254 F.2d 665 (10th Cir. 1958). The Court did not err in refusing to give the proffered instruction. IY. Spoonhunter alleges that the trial court erred in sustaining the Government’s objection to the proffered testimony of one Ben Earl Brown who would have testified that about one week prior to the rape incident he had had sexual intercourse with Mrs. Potter at her home after she picked him up that evening. Spoonhunter argues that this testimony was critical not only to place Beatrice Potter’s character in issue but to show a course of conduct on her part while her husband was away from home during the weekdays. Appellant cites no case authority in support of his argument. In his brief he acknowledges that in rape prosecutions the law does not allow the complaining witness’s character to be put in issue ordinarily when the defense is alibi and that generally it is only allowed when the defense is one of consent. Brown’s proffered testimony would not have established any conduct upon Beatrice Potter’s part beyond the single occurrence. The testimony was properly excluded. In order to establish the defense of “alibi”, the evidence thereof when considered by the jury, along with the other evidence in the case pertinent to the issue, must be sufficient to engender in the minds of the jury a reasonable doubt that the accused, at the time the offense was committed was not present at the place of its commission. United States v. Carter, 433 F.2d 874 (10th Cir. 1970); United States v. Booz, 451 F.2d 719 (3rd Cir. 1971); United States v. Marcus, 166 F.2d 497 (3rd Cir. 1948); 67 A.L.R. 138 (1930). The very nature of the alibi defense raises no issue that the crime charged did not in fact occur. It simply raises the issue that it could not have involved the accused. It is therefore inconsistent to permit an accused who presents an alibi defense to present evidence of the prosecutrix’s character which goes beyond evidence of her general reputation in public opinion. A character witness’s knowledge of particular acts is not admissible to prove character in the sense of a general trait for honesty, temperance or carefulness; it is relevant only if it specifically designates or demonstrates a regular practice in the nature of habit of meeting a particular kind of situation with a certain type of conduct. Frase v. Henry, 444 F.2d 1228 (10th Cir. 1971); III Wigmore on Evidence, §§ 943, 944, 963 (3rd ed. 1940); 75 C.J.S. Rape § 63 (1952). We hold that testimony of unchastity on the part of the prosecutrix proffered by a witness to one claimed prior act of intercourse is not evidence of her reputation for unchastity. The trial court did not err in denying the Brown testimony. V. Appellant alleges that the trial court committed prejudicial error in not granting his Motion to Dismiss because he was not granted a speedy trial. Although the Government was granted two continuances in view of the’ prosecutrix’s illness, Spoonhunter did not object until the second continuance was granted. He did not demonstrate any prejudice. Barker v. Wingo, Warden, 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101 (1972) requires the trial judge to determine whether the defendant has been deprived of his right to a speedy trial considering: (1) the length of the delay; (2) the reason for the delay; (3) the defendant’s assertion of his right; and (4) the prejudice to the defendant. The mere passage of time does not, per se, establish an unconstitutional denial of a right to a speedy trial. Hampton v. State of Oklahoma, 368 F.2d 9 (10th Cir. 1966). The appellant has not demonstrated that the continuances deprived him of a fair trial. McManaman v. United States, 327 F.2d 21 (10th Cir. 1964). Affirmed.

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GOVERNMENT OF the VIRGIN ISLANDS v. Raphael PARROTT, Appellant. No. 71-1934. United States Court of Appeals, Third Circuit. Argued Jan. 29, 1973. Decided April 18, 1973. Joseph L. Costello, Bryant & Costello, Christiansted, St. Croix, V. I., for appellant. Gary P. Naftalis, Sp. Asst. U. S. Atty., S. D. New York, New York City, for appellee. Before MARIS, VAN DUSEN and ROSENN, Circuit Judges. OPINION OF THE COURT MARIS, Circuit Judge. This is an appeal by the defendant from a judgment of the District Court of the Virgin Islands convicting him of robbing one Howard Hambler of a sum of money. The offense was committed in the evening when Hambler was walking with two companions on the Long Bay Road in the vicinity of the Paul M. Pearson Gardens in St. Thomas. The defendant did not demand a jury trial and the case was tried to the judge alone. The defendant was identified in court by Hambler and by one Samuel Davis who lived in Pearson Gardens, knew the defendant and who came to Hambler’s assistance at the time of the robbery. The defendant testified that during the evening in question he was playing basket ball in Pearson Gardens, was later playing cards there and at the time of the robbery was in a nearby restaurant. He produced a number of witnesses who testified that they were with, or saw, or spoke to him at various times on the evening in question. Concluding that the government witnesses were credible, that there were conflicts in the testimony of the defendant and his witnesses, and that in any event the defendant under his own evidence could have committed the robbery, the trial judge found the defendant guilty beyond a reasonable doubt of the offense charged and entered the judgment of conviction here appealed from. On this appeal the defendant contends that the trial judge’s finding of guilty was not supported by the evidence. It is argued that the defendant’s evidence that he was elsewhere when the crime was committed raised a reasonable doubt which required a finding of not guilty. Our consideration of the evidence which was before the trial judge satisfies us, however, that it amply supports the finding of guilty. The “elsewhere” where the defendant claims to have been and where his witnesses said they saw him, was in fact in the immediate vicinity of the scene of the robbery, which he could have committed without absenting himself for any substantial period of time from the places where he claimed to have been. We find no merit in the contention of the defendant that the evidence did not support his conviction. The defendant further contends, a contention asserted for the first time on this appeal, that he was denied the right to a jury trial because he was not accorded such a trial although he did not expressly waive it in the manner prescribed by Rule 23(a) of the Federal Rules of Criminal Procedure. Admittedly he did not demand such a trial, as is required by section 26, as amended, of the Revised Organic Act of the Virgin Islands. The question is thus squarely raised as to whether the procedure for determining whether or not the defendant desires to exercise his right to a jury trial in a criminal case in the District Court of the Virgin Islands is governed by Rule 23(a), F.R.Cr.P., or by section 26 of the Revised Organic Act. It is clear that whatever may have been the situation in the Virgin Islands prior to 1968, section 11 of the Act of August 23, 1968, 82 Stat. 837, 841, by extending the Sixth Amendment to the Constitution of the United States to the territory conferred upon persons accused of crimes triable in the District Court of the Virgin Islands the right to trial by jury. It is equally clear that this right is a privilege which need not be invoked if the accused does not desire to do so. Patton v. United States, 1930, 281 U.S. 276, 50 S.Ct. 253, 74 L. Ed. 854; Adams v. United States ex rel. McCann, 1942, 317 U.S. 269, 63 S.Ct. 236, 87 L.Ed. 268. The question before us, however, is not the existence of the right to trial by jury but rather the procedure by which an accused may exercise his option whether or not to invoke the right. One form of procedure would be to require the accused desiring to enjoy the right to a trial by jury to demand it of the court and to assume in the absence of such a demand that he does not desire a jury trial. This is the procedure provided by section 26 of the Revised Organic Act. Another approach would be to require the accused who does not desire to exercise the right to a jury trial so to state to the court and to assume in the absence of such a statement that the accused desires such a trial. This, of course, is the procedure provided by Rule 23(a) of the Federal Rules of Criminal Procedure. The question accordingly comes down to whether Rule 23(a), F.R.Cr.P., or section 26 of the Revised Organic Act controls the procedure in this regard in the District Court of the Virgin Islands. Rule 23(a) was one of the original rules of criminal procedure which were adopted by the Supreme Court on December 26, 1944, pursuant to the Act of June 29, 1940, 54 Stat. 688, which was subsequently codified in Title 18, U.S.C., as § 3771. By Rule 54(a)(1) the rules were made applicable, inter alia, to the District Court of the Virgin Islands. The Revised Organic Act of the Virgin Islands was enacted by the Act of July 22, 1954, 68 Stat. 497. Section 26 of the Act in its original form carried forward the provisions of section 31 of the Organic Act of 1936, 43 Stat. 1814, in substantially their original form. Section 26 was amended, however, by section 8 of the Act of August 28, 1958, 72 Stat. 1095. In its amended form, the section was drastically rephrased so as to make perfectly clear that a defendant would receive a jury trial if he demanded it. That it was the intention of Congress to clarify this appears from the legislative history. The procedural rule embodied in Rule 23(a) of the Federal Rules of Criminal Procedure, having been adopted by the Supreme Court pursuant to Congressional authority, was subject to being repealed, amended or superseded in whole or in part by Congress as well as by the Court. Hawkins v. United States, 1958, 358 U.S. 74, 78, 79 S.Ct. 136, 3 L.Ed.2d 125. We think that this is exactly what has happened here and that by the Congressional amendment in 1958 of section 26 of the Revised Organic Act the procedural provisions of that section have superseded, for the District Court of the Virgin Islands, the earlier provisions of Rule 23(a), F.R.Cr.P. The provisions of section 26 as amended thereby became the Congressionally established procedure under which an accused in the Virgin Islands invokes his right to a trial by jury. The procedure thus established by Congress for the Virgin Islands, namely, that the duty is laid upon the accused to ask for a jury trial if he desires one, appears to be quite appropriate for the territory in view of the fact that the use of a jury in the trial of criminal eases is of comparatively recent origin in the Islands. There is no ancient or deep-seated tradition that jury trial is the usual and preferred method of trial, as is true in the continental United States. On the contrary, the use of a jury in criminal cases appears to have been first introduced in the Virgin Islands by the Municipal Codes of 1920 and 1921, and then only for felony cases if demanded by the accused. Prior to that time and in the time of Danish rule the use of juries was unknown and criminal trials were by the presiding judge alone or with associate lay judges. This would appear to have been a not impermissible procedure. And we may take judicial notice of the fact that even after jury trials became permissible their use was the rare exception until quite recently and even today a great many criminal cases continue to be tried to the judge alone in accordance with the older tradition. We recognize that the right to a jury trial under the Sixth Amendment is not effectively waived unless there is a knowing and intelligent waiver of such right by the defendant himself, as required in Johnson v. Zerbst, 304 U.S. 458, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938). See also Boykin v. Alabama, 395 U.S. 238, 243, 89 S.Ct. 1709, 23 L.Ed.2d 274 (1969); Adams v. United States ex rel. McCann, 317 U.S. 269, 280-281, 63 S.Ct. 236, 87 L.Ed. 268 (1942) ; Patton v. United States, 281 U.S. 276, 312-313, 50 S.Ct. 253, 74 L.Ed. 854 (1930). We are in no way persuaded that the traditional Virgin Islands practice now codified in section 26 is inconsistent with the constitutional requirement that a waiver be knowing and intelligent. In Johnson v. Zerbst, the Court said, inter alia: “The determination of whether there has been an intelligent waiver of the right to Counsel must depend, in each case, upon the particular facts and circumstances surrounding that case, including the background experience and conduct of the accused.” 304 U.S. at p. 464, 58 S. Ct. at p. 1023. We believe that the procedure now assured by the Criminal Justice Act of 1964, 18 U.S.C.A. § 3006A, under which every defendant in the District Court of the Virgin Islands who cannot afford to retain counsel is provided with counsel at the expense of the United States, will in most cases result in knowledge by the accused that he has the right to request a jury trial and must make such request. Thus, with the rarest exceptions, every person accused of crime who appears in the district court has the benefit of the advice of counsel who, of course, knows of his client’s basic right to a jury trial and should clearly and positively inform him of it, so that it may be decided whether or not, as a matter of trial strategy, the right should be demanded. On the record in the present case, defendant does not allege that he did not know of his right to a jury trial and that he was not in a position to make an informed choice. He was advised by a lawyer of his choice, the late Francisco Corneiro, one of the ablest members of the Virgin Islands bar, who was a former United States Attorney and Attorney General of the territory. Under these circumstances, he has no grounds to complain that he did not receive the jury trial for which he did not ask.' The defendant’s remaining contentions are so wholly without merit as to require no discussion. The judgment of the district court will be affirmed. . “Rule 23. Trial by Jury or by the Court (a) Trial by Jury. Cases required to be tried by jury shall be so tried unless the defendant waives a jury trial in writing with the approval of the court and the consent of the government.” . “All criminal cases originating in the district court shall be tried by jury upon demand by the defendant or by the Government. If no jury is demanded the case shall be tried by the judge of the district court without a jury, except that the judge may, on his own motion, order a jury for the trial of any criminal action. The legislature may provide for trial in misdemeanor cases by a jury of six qualified persons.” 48 U.S.C.A. § 1616. . For a discussion of this see Government of the Virgin Islands v. Bodle, 3 Cir. 1970, 427 F.2d 532, footnote 1. . Senate Report No. 2267, 85th Congress, 2d session, on H.R. 12303, U.S.Code Cong. & Admin.News 1958, pp. 4334, 4336, which was enacted as the Act of August 28, 1958, states with respect to section 8: “Section 8 clarifies section 26 of the Revised Organic Act of the Virgin Islands which concerns the right to trial by jury in criminal cases.” . Code of Laws of the Municipality of St. Croix, approved June 15, 1920, effective August 1, 1920, Title V, Chap. 12, Sec. 1; Code of Laws of the Municipality of St. Thomas and St. John, approved March 17, 1921, effective July 1, 1921, Title V, Chap. 12, Sec. 1. . See Soto v. United States, 3 Cir. 1921, 273 F. 628. . Palko v. Connecticut, 1937, 302 U.S. 319, 325, 58 S.Ct. 149, 152, 82 L.Ed. 288: ■ “ . . . The right to trial by jury and the immunity from prosecution except as the result of an indictment may have value and importance. Even so, they are not the very essence of a scheme of ordered liberty. To abolish them is not to violate a ‘principle of justice so rooted in the traditions and conscience of our people as to be ranked as fundamental.’ . . New would be so narrow or provincial as to maintain that a fair and enlightened system of justice would be impossible without them.” . In the case of those rare defendants who choose to defend themselves without counsel, the district court should, of course, inform them of their right to demand a jury trial.

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Siegfried WACHTEL and Wife, Roberta S. Wachtel, Plaintiffs-Appellants, v. Bryce WEST and Wife, Frances West, Defendants-Appellees. No. 72-1800. United States Court of Appeals, Sixth Circuit. Argued Feb. 6, 1973. Decided April 11, 1973. Thomas E. Watts, Jr., Nashville, Tenn., for plaintiffs-appellants. J. Stanley Rogers, Garrett, Shields, Rogers & Parsons, Manchester, Tenn., for defendants-appellees. Before PHILLIPS, Chief Judge, LIVELY, Circuit Judge, and YOUNG, District Judge. The Honorable Don J. Young, District Judge of the United States District Court for the Northern District of Ohio, sitting . by designation. LIVELY, Circuit Judge. This case concerns the Truth in Lending Act of 1968, 82 Stat. 146, 15 U.S.C. § 1601 et seq. More specifically involved is a portion of the Act codified as 15 U.S.C. § 1640, which provides civil liability for failure to make any of the disclosures required by the Act. Subsection (e) of Section 1640 is as follows: (e) Any action under this section may be brought in any United States district court, or in any other court of competent jurisdiction, within one year from the date of the occurrence of the violation. Appellants filed this action in the district court, asserting that jurisdiction was based on Title 15 U.S.C., Section 1640. The complaint alleged that the plaintiffs had borrowed money from the defendants on October 28, 1970, giving a second mortgage on their residence as security. It further alleged that the defendants failed to make the disclosures to them that are required by 15 U.S.C. § 1631. In a separate paragraph the plaintiffs stated that they had notified the defendants of their intention to rescind the mortgage transaction for failure to make the required disclosures but that the defendants had taken actions inconsistent with rescission. The prayer for relief was three-fold: (1) . . . for the damages permitted and described in title 15 U.S. C. § 1640, together with their costs and a reasonable attorney’s fee in the cause; (2) for a preliminary injunction to restrain the defendants from enforcing any remedy against the plaintiffs upon the second mortgage ; and (3) that the court declare the mortgage void and the preliminary injunction be made permanent. The complaint was filed on April 25, 1972, and the defendants filed a timely motion to dismiss for failure to bring the action within one year of the accrual of the claim stated. The district court granted the motion and entered a judgment dismissing the action on its merits. The opinion of Judge Neese appears at 344 F.Supp. 680 (E.D.Tenn.1972). The narrow question presented on appeal is whether a violation of the duty to disclose information to a borrower occurs at the time such disclosure is first required to be made, or whether it is a continuing violation until such time as the disclosure is actually made. In order to decide this question we must examine the overall purpose of the Act as well as the particular sections referred to in the complaint. The purpose of Congress in enacting the Truth in Lending Act is set forth in 15 U.S.C. § 1601 as follows: § 1601. Congressional findings and declaration of purpose The Congress finds that economic stabilization would be enhanced and the competition among the various financial institutions and other firms engaged in the extension of consumer credit would be strengthened by the informed use of credit. The informed use of credit results from an awareness of the cost thereof by consumers. It is the purpose of this subchapter to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit. Pursuant to § 1604 the Board of Governors of the Federal Reserve System issued its Regulation Z (12 CFR § 226 (1969)) which provides, in part, as follows : REGULATION Z PART 226 — TRUTH IN LENDING § 226.1 Authority, scope, purpose, etc. (a) Authority, scope, and purpose. (1) This part comprises the regulations issued by the Board of Governors of- the Federal Reserve System pursuant to title I (Truth in Lending Act) and title V (General Provisions) of the Consumer Credit Protection Act, as amended (15 U.S.C. Section 1601 et seq.). Except as otherwise provided herein, this part applies to all persons who in the ordinary course of business regularly extend, or offer to extend, or arrange, or offer to arrange, for the extension of consumer credit as defined in paragraph (k) of § 226.2 and to all persons who issue credit cards. (2) This part implements the Act, the purpose of which is to assure that every customer who has need for consumer credit is given meaningful information with respect to the cost of that credit which, in most cases, must be expressed in the dollar amount of finance charge, and as an annual percentage rate computed on the unpaid balance of the amount financed. Other relevant credit information must also be disclosed so that the customer may readily compare the various credit terms available to him from different sources and avoid the uniformed use of credit. This part also implements the provision of the Act under which a customer has a right in certain circumstances to cancel a credit transaction which involves a lien on his residence. Advertising of consumer credit terms must comply with specific requirements, and certain credit terms may not be advertised unless the creditor usually and customarily extends such terms. This part also contains prohibitions against the issuance of unsolicited credit cards and limits on the cardholder’s liability for unauthorized use of a credit card. Neither the Act nor this part is intended to control charges for consumer credit, or interfere with trade practices, except to the extent that such practices may be inconsistent with the purpose of the Act. The purpose of disclosure is clearly to give the borrower an opportunity to do some comparative shopping for credit terms. In the words of Congressman Helstoski, the Act affords the consumer an opportunity to ascertain which offer (of credit terms) “ . is best in terms of dollars and to obtain a better ‘buy.’ ” 114 Congressional Record 1614 (Permanent Ed. Jan. 31, 1968). See Ratner v. Chemical Bank New York Trust Co., 329 F.Supp. 270, 276 (S.D.N.Y.1971); Bissette v. Colonial Mortgage Corporation, 340 F.Supp. 1191 (D.D.C.1972). Though the Act is primarily concerned with sales of personal property involving consumer financing, credit card purchases and open-end credit, it also applies to real estate transactions, and special consideration is given to a very limited type - of real estate credit transaction. Under 15 U.S.C. § 1635 a right of rescission is given to a borrower to whom credit is extended in a transaction where a security interest (other than a first lien to finance acquisition) is created or retained on real estate used or expected to be used as the principal residence of the obligor. This right does not depend on any wrongdoing by the lender, but may be exercised by the borrower for any reason so long as he acts within the prescribed time and follows the prescribed procedure. He (the borrower) may rescind this type transaction at any time until midnight of the third business day following consummation of the transaction, or the delivery of the required disclosures, “whichever is later.” Section 226.9 of Regulation Z contains detailed rules which are designed to compel notification to the borrower of his right to rescind and which require a delay in closing the credit transaction until the rescission period has passed. Taking the allegations of the complaint as true, it appears that the appellees have violated the provisions of the Act and of Regulation Z. Because the right of rescission exists until the end of the third business day, or until disclosure, whichever is later, and it is alleged that no disclosure has ever been made, it may be that this remedy is still available to the appellants. The Act does not contain a statute of limitations for enforcement of the right to rescind. However, since rescission is an equitable remedy, presumably the defenses of laches or estoppel could be interposed to prevent a borrower from enjoying the benefit of the credit for a long period of time and then succeeding in having the transaction avoided to the detriment of the lender. It should be noted that the Act does not specifically provide that federal courts have jurisdiction of actions for rescission. The appellant has attempted to en-graft the “whichever is later” provision of § 1635 onto this action for damages under § 1640. However, this case is not concerned with the right of rescission, and at least one court has held that the two remedies are inconsistent, so that the election to proceed under one theory constitutes an abandonment of the other. Bostwick v. Cohen, 319 F.Supp. 875 (N.D.Ohio 1970). Here the complaint premised jurisdiction on § 1640, which provides for damages for failure to disclose the information set forth in the Act and specifically, on subsection (e), which confers jurisdiction upon United States district courts, together with other courts of competent jurisdiction. The same subsection requires an action under “this section” to be brought within one year from the date of the occurrence of the violation. We must determine when the violation occurs in a case where the required disclosures are not made. The stated purpose of the Act is to enable the consumer “to compare more readily the various credit terms available to him and avoid the uninformed use of credit.” 15 U.S.C. § 1601. In order to make the opportunity for comparison meaningful, the borrower must have the required information in his possession before he becomes committed to any particular lender. This is expressed in § 1639(b), which provides: Form and timing of disclosure (b) 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) The Act does not define the term [when] “the credit is extended,” prior to which time it requires disclosures to be made. However, Regulation Z, § 226.-2(cc) is helpful in this respect. It reads as follows: (cc) A 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. It thus appears that a credit transaction which requires disclosures under the Act is completed when the lender and borrower contract for the extension of credit. The disclosures must be made sometime before this event occurs. If the disclosures are not made, this violation of the Act occurs, at the latest, when the parties perform their contract. The provisions with respect to the right of rescission seem to contemplate a continuing violation when the disclosures are not made, but such is not the case when damages are sought. In the present case performance of the contract and violation of the disclosure requirement took place on October 28, 1970, and the one-year statute of limitations began to run on that date. This action, filed one year five months and 28 days later, was barred. The judgment is affirmed. DON J. YOUNG, District Judge, (dissenting) . I respectfully dissent. The statute states: It is the purpose of this [title] . to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit. 15 U.S.C. § 1601. Congress, to effectuate this end, requires that a creditor make certain disclosures to the consumer. 15 U.S.C. §§ 1632-39. If the disclosures are not made, there are civil sanctions which may be imposed on the creditor, 15 U.S. C. § 1640, but the “action under this section may be brought . . . within one year from the date of the occurrence of the violation.” 15 U.S.C. § 1640(e). The statute also gives the consumer the right to rescission, 15 U.S.C. § 1635, as explained in the majority opinion. The majority holds that the rescission remedy provides sufficient protection for the consumer so that the violation as mentioned in § 1640(e) occurs at the time the parties entered into the agreement and the statute of limitations begins to run at that time. If the statute is to be interpreted as the majority have construed it, its effectiveness is limited. It is not difficult to imagine a situation where a consumer has entered into an agreement with a creditor which requires repayment of a loan over a period of five years or more. The creditor does not make disclosures as required by the Act and the consumer is an uninformed one whom the Act was designed to protect. The terms of the agreement are such that the offensive part of the financing does not evidence itself in the loan repayment schedule until after the first year. Under the majority opinion, the consumer will not be able to sue for damages when he becomes aware of the offensive financing since the statute of limitations has run. The consumer at this point is left with the rescission remedy only. Assuming a successful suit by the consumer, it still provides little deterrent effect for the creditor who chose not to disclose since the parties are merely returned to their original positions. In other words, if no disclosures are made the creditor need only fear that the contract may be rescinded but he need not fear any civil liability. To protect the creditor from civil liability in these situations is to take much of the effectiveness out of the statute, since a creditor who chose not to make disclosures to an uninformed consumer would only have to delay the operation of an offensive part of the agreement until one year after the parties entered into it. As a general rule, statutes of limitations in actions for fraud commence to run at the time when the fraud is discovered, not when the fraudulent acts occurred. Basically, the statute involved here is designed to prevent frauds being perpetrated by sophisticated lenders upon uniformed borrowers. It would therefore appear that these general principles should be applied to the limitation period in the statute here involved. If the limitation of the statute is thus construed, the “violation” occurs when the consumer knows or should know of the undisclosed credit terms. This would make the knowledge of the violation a factual matter. For example, in the hypothetical situation posed above, the consumer knew or should have known of the violation the moment the offensive financing arrangement surfaced in the loan repayment schedule. Under my construction of the Act, the consumer then has one year from this point in time to initiate his action. Obviously, the creditor has it within his power to avoid any liability under the statute by making disclosures as required by law prior to entering into the agreement. I would hold that the one year limitation did not commence to run until the plaintiffs discovered the defendants’ violation of the statute and made the demand for rescission which was refused by the defendants. If, as the majority suggests, there was at that time a requirement to elect between the legal and equitable remedies, the plaintiffs made that election by commencing this action, which was done well within the statutory one year limitation after plaintiffs discovered the violation of their rights under the Act. The judgment of the District Court should be reversed, and the case remanded. . § 1631. General requirement of disclosure (a) Each creditor shall disclose clearly and conspicuously, in accordance with the regulations of the Board, to each person to whom consumer credit is extended and upon whom a finance charge is or may be imposed, the information required under this part. (b) If there is more than one obligor, a creditor need not furnish a statement of information required under this part to more than one of them.

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2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Plaintiff-Appellee, v. Robert Leslie ABRAMS, Defendant-Appellant. No. 72-1370. United States Court of Appeals, Seventh Circuit. Argued Jan. 17, 1973. Decided March 27, 1973. Rehearing Denied May 31, 1973. George C. Pontikes, Chicago, Ill., for defendant-appellant. James R. Thompson, U. S. Atty., William T. Huyck, Terry M. Gordon, Asst. U. S. Attys., Chicago, Ill., for plaintiff-appellee. Before DUFFY, Senior Circuit Judge, KILEY and STEVENS, Circuit Judges. DUFFY, Senior Circuit Judge. A grand jury indictment was returned in April 1971 charging defendant Abrams with a one count violation of 50 U.S.C. App. § 462, that on or about April 8, 1970 and continuing to and including the date of the indictment, Abrams wilfully and knowingly neglected, failed and refused to report for induction as ordered. A jury was waived. The trial judge found defendant Abrams guilty as charged and he was sentenced to the custody of the Attorney General for a term of three years. The evidence adduced at trial revealed that defendant was ordered to report for induction on three separate occasions by Local Board No. 151, Waukegan, Illinois. On November 18, 1969, Abrams was ordered to report for induction on December 1, 1969. On December 1, 1969, defendant’s induction was postponed “until further notice” pursuant to 32 C.F.R. § 1632.2. The reason for the postponement of induction was to allow completion of a medical review of the defendant at his request which was then being conducted by the Surgeon General. A postpone- • ment order dated December 16, 1969 was issued by the local board nunc pro tunc so as to be effective from the date of postponement, December 1, 1969. A second order for induction dated January 27, 1970 was mailed to defendant ordering him to report on February 16, 1970. Reference to his prior order was included in the new order. Abrams failed to report as ordered, but telephoned the local board on the afternoon of February 16th informing them that he failed to appear for induction because at the time he was being treated in the Intensive Care Unit of the Highland Park Hospital for an overdose of drugs. The local board requested that he tender an explanatory letter to them which request he fulfilled on February 18th. The local board also received a substantiating letter from one Dr. Rosenberg stating that defendant had been treated for an overdose of sleeping pills on the 16th of February. A third order for induction dated March 18, 1970 was mailed to the defendant at 1055 County Line Road, Highland Park, Illinois, which was the last address the defendant supplied to his local board. This order made reference to the previous induction date of February 16, 1970 and instructed the defendant to report on April 8, 1970. Defendant Abrams failed to report as ordered. The F.B.I. entered the case to determine why defendant had not reported as requested. In July 1970 the Bureau wrote to defendant’s father indicating that defendant was delinquent with his local board. On August 18, 1970, Agent Kneibert visited the Abrams’ home and was informed that defendant was located in Ann Arbor, Michigan but was expected to return within a month. Agent Kneibert instructed the parents to have defendant call the F.B.I. on his return. Defendant returned home on September 7, 1970 but failed to contact the F.B.I. Agent Kneibert then visited defendant at his home on September 17, 1970 and informed him of the outstanding order to report. Defendant admitted he received the two previous orders but denied receipt or knowledge of the order of April 8, 1970. At this interview, Agent Kneibert asked defendant what his action would be if future induction notices were sent to him. Defendant indicated that he would require the assistance of counsel before he could reply to such a question. Abrams was arrested on October 7, 1970 by the F.B.I. and the indictment was returned in April 1971. From the record, it is evident that at no time after February 1970 did defendant attempt to contact his local board. I. The principal defense propounded by the defendant at trial and in issue on appeal was that he was not in receipt of the order of induction mailed on March 18, 1970. The trial court made a finding contrary to this contention to the effect that given the fact that the third notice was mailed to the last address supplied by the defendant to his local board, and that such letter was not returned to the board, the presumption of regularity of board procedures and mailing attested to the receipt of the notice of induction by defendant Abrams. On appeal, despite the finding to the contrary by the trial court, defendant argues that he presented sufficient evidence at trial to rebut the presumption of receipt, thereby rendering the trial court’s finding erroneous. Defendant produced evidence that from Saturday March 21,. 1970 at midnight until Monday, March 24, 1970, at midnight, there was a work stoppage at the Highland Park Illinois Post Office and after delivery of mail was resumed, four days were required to distribute accumulated mail. There was also testimony of a two-day work stoppage at Waukegan in which city the office of defendant’s draft board was located. However, the officer in charge at the Waukegan Post Office testified that there was no accumulation of out-going mail during the work stoppage. The officer also testified that a letter mailed in the vicinity of the defendant’s local board before 5:00 p. m. on March 19, 1970 would not have been delayed as a result of the work stoppage. Defendant’s father and mother both testified to the effect that no communication had been received from the draft board concerning their son's selective service status between February 1970 and July 1970 when they were contacted by the F.B.I. The government offered as evidence the testimony of Theolene Dixon, secretary to the Local Board Operations in Chicago who stated at trial that the third induction notice had been mailed to defendant on March 18, 1970 to his last known address. Although defendant Abrams insists that he never received the induction order dated March 18, 1970, nevertheless we must accept the findings of the trial court to the contrary unless they are clearly erroneous. United States v. Keefer, 464 F.2d 1385 (7 Cir., 1972); United States v. Ganter, 436 F.2d 364, 368 (7 Cir., 1970). We are of the opinion after considering the evidence preserved in the record of the proceedings below and the presumption of receipt of Selective Service mailings provided in 32 C.F.R. § 1641.3 relied upon by the trial court, that the evidence was sufficient for said court to conclude that defendant received the order. Furthermore, regardless of defendant’s claim of nonreeeipt of the letter order, further notice of the order was provided to Abrams in person by Agent Kneibert on September 17, 1970. Such notification by itself coupled with defendant’s subsequent inaction would be sufficient evidence to sustain a conviction for failure to report for induction. United States v. Williams, 433 F.2d 1305 (9 Cir., 1970). II. A second argument raised by defendant on appeal is whether the offense of failure to report for induction imposes a continuing duty to report after non-compliance with an outstanding induction order. Defendant argues that the statutory mandate of 50 U.S.C. App. § 454(a) is insufficient to impose a continuing duty to report. Abrams relies on Toussie v. United States, 397 U.S. 112, 90 S.Ct. 858, 25 L.Ed.2d 156 (1970) in support of his position and analogizes the continuing duty to register considered in that case to the continuing duty to report in issue before us. The government argues that the law which upholds the continuing offense theory for refusing induction is not affected by the Toussie decision because of the fundamental distinction between the statutes and policies involved in the Toussie case and in the case at bar. We agree. In Toussie, the narrow issue before the Supreme Court was whether for the purpose of tolling the statute of limitations, the obligations of refusing to register for the draft is a continuing one, so that an indictment returned 8 years after defendant Toussie’s 18th birthday would not be barred. In Toussie, a decision in favor of the government would have had the effect of permitting an indictment to be brought against a person who had failed to register any time from his 18th birthday to his 31st birthday. The court held that such a result should not be reached “ . . . unless the statute itself, apart from the regulation, justifies that conclusion”. 397 U.S. at page 121, 90 S.Ct. at page 863. We hold contrary to the contention of the defendant that Toussie applies to the case at bar. As our court stated in United States v. Bruckman, 466 F.2d 754 (7 Cir., 1972) at page 757, in a similar challenge to the continuing duty to report, “In the case before us, however, there is no statute of limitations problem. We are not presented with the ‘compounding of a single offense into a multitude for purposes of avoiding the statute of limitations.’ Williams, supra, 433 F.2d at 1306. Furthermore, the Court in Toussie did not, as Bruckman contends, invalidate the continuing duty regulation. As the Court in Owens stated, 431 F.2d at 351: The Court did not . . . outlaw the continuing duty regulation; rather, it explicitly excepted it from the sweep of the opinion. The exception referred to was footnote 17 in Toussie: We do not hold, that as the dissent . seems to imply . . . that the continuing duty regulation is unauthorized by the Act. All we hold is that neither the regulation nor the Act itself requires that failure to register be treated as the type of offense that effectively extends the statute of limitations. 397 U.S. at 121, n. 17, 90 S.Ct. at 864.” We are of the opinion that a registrant who fails to report for induction as ordered is under a continuing duty thereafter to report, thereby precluding defendant’s challenge to the continuing duty to report herein. United States v. Bruckman, supra; Silverman v. United States, 220 F.2d 36 (8 Cir., 1955); United States v. Williams, supra; United States v. Preston, 420 F.2d 60 (5 Cir., 1969); Simmons v. United States, 406 F.2d 456 (5 Cir., 1969); White v. United States, 403 F.2d 1005 (8 Cir., 1968). III. A third issue raised by defendant on appeal concerns the quantum of proof necessary to establish the criminal intent for an offense under the applicable statute. Defendant asserts that the government failed to prove that he wilfully and knowingly failed to report for induction beyond a reasonable doubt. As we have previously determined in this case, the trial court properly held that Abrams was in receipt of his March 18th induction order. Furthermore, it is established from the record that he failed to report or contact his board after actual notice of induction was received from Agent Kneibert. The last time defendant did, in fact, contact his draft board before his indictment was on February 20, 1970 concerning his second postponement of induction. Given the facts and circumstances of this case, we are of the opinion that the evidence adduced by the government was adequate to support a finding by the trial court with respect to defendant’s knowing and wilful failure to report. Defendant’s claim that his failure to report was “inadvertent” relying on United States v. Rabb, 394 F.2d 230 (3 Cir., 1968) is negated by the fact that even after actual notice was provided, he failed to report. We hold that viewing the evidence in a light most favorable to the government, the trial court properly found the evidence sufficient to prove defendant’s criminal intent, that he knowingly and willingly failed to report for induction. United States v. Ebey, 424 F.2d 376 (10 Cir., 1970). See also United States v. Williams, 421 F.2d 600 (10 Cir., 1970). IV. The last argument advanced by defendant on appeal is that the last two induction orders mailed January 27, 1970 and March 18, 1970, respectively, were invalidated by the failure of the local board to comply with the Selective Service Regulations applicable to postponement of induction. Defendant contends that the postponement of December 16, 1969 of his initial December 1, 1969 induction date, nunc pro tunc, extended over 60 days until his second induction date of February 16, 1970 and hence violated 32 C.F.R. § 1632.2(a). Abrams additionally argues that the postponement regulation (§ 1632.2) was also violated because more than 120 days, the maximum allowable postponement, elapsed between December 1, 1969 and April 8, 1970. With respect to defendant’s first claim that more than 60 days had run between his first induction date and the corresponding postponement and his second date of induction, it is settled that only delays attributable to administrative inertia or undue delay in processing on the part of the draft board may warrant invalidation of an induction order. Where delays occur at the request or for the benefit of a registrant or inductee, such delays may not be challenged except for the exceptional case where the delay causes undue prejudice to a registrant. Here, it is quite evidence that the initial postponement was for the benefit of the registrant and was instigated by him to process late-filed medical claims. Thus the delay was for his own benefit and may not be raised on appeal as a claim of procedural error, necessitating a cancellation of an induction order. United States v. Foster, 439 F.2d 29, 31 (9 Cir., 1971); United States v. Bell, 476 F.2d 1046 (7 Cir., 1973). Furthermore, upon considering defendant's related claim that a postponement of 120 days elapsed between his initial induction and the third date of induction, it is well established that the 120 day limitation does not apply to a registrant who has failed to appear for and submit to induction. United States v. Bell, supra; United States v. Brunner, 457 F.2d 1301 (9 Cir., 1972); United States v. White, 447 F.2d 1124 (9 Cir., 1971), cert. denied 404 U.S. 1049, 92 S.Ct. 714, 30 L.Ed.2d 740 (1972). Here there was no need for a further postponement nor does defendant have access to a claim of an excessive period of postponement when in fact he failed to appear for the scheduled induction on February 16, 1970. United States v. White, supra. Defendant’s reliance on United States ex rel. Iverson v. Rhodes, 465 F.2d 402 (7 Cir., 1972) is misplaced. The facts in that case depicting inexcusable administrative inertia are easily distinguishable from the case at bar where any delay in the induction process was a consequence of the defendant’s own design. For the reasons hereinbefore discussed, the judgment of conviction of the District Court is Affirmed. . While the government asserts the time interval between the date of postponement and the second date of induction was exactly 60 days (December 16, 1969-February 16, 1970) we note that the postponement was issued mino pro tuno which reverts said order to the December 1, 1969 date. Therefore, the statutory period commenced on December 1, 1969 and if such a postponement were not for the benefit of the defendant, a procedural violation possibly could be asserted.

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Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Appellee, v. Jack Edward GALARDI, Appellant. UNITED STATES of America, Appellee, v. Angel Jerrold GALARDI, Appellant. UNITED STATES of America, Appellee, v. Peter Michael LAFKAS, Appellant. Nos. 72-2817, 72-2743, 72-2777. United States Court of Appeals, Ninth Circuit. April 4, 1973. Rehearing Denied May 17, 1973. William C. Miller, Los Angeles, Cal., for appellant, Jack Edward Galardi. William D. Keller, U. S. Atty., Eric A. Nobles, Asst. U. S. Atty., Crim. Div., David H. Fox, Asst. U. S. Atty., Asst. Chief, Crim. Div., Los Angeles, Cal., for appellee. Michael F. Richman (argued), Ball, Hunt, Hart, Brown & Baerwitz, Long Beach, Cal., for appellant, Lafkas. Michael D. Nasatir (argued), Nasatir, Sherman & Hirsch, Beverly Hills, Cal., for appellant, Angel Jerrold Galardi. Before BROWNING, KILKENNY and TRASK, Circuit Judges. KILKENNY, Circuit Judge: Appellants appeal from certain judgments of conviction and sentences. Count One charges the Galardis with conspiracies in violation of 18 U.S.C. § 371; Counts Two and Four charge the Galardis with violations of 18 U.S.C. § 2115 and 18 U.S.C. § 2 in aiding and abetting another in forcibly breaking into a Post Office building; Counts Three and Five charge the Galardis with a violation of 18 U.S.C. § 641 in receiving stolen United States Postal Money Orders; Count Six charges the Galardis and appellant Lafkas with a violation of 18 U.S.C. § 371 in conspiring to commit an offense against the United States by transporting in foreign commerce certain United States Postal Money Orders of a value exceeding $5,000.00, which money orders had been stolen; Count Seven charges appellant Lafkas with a violation of 18 U.S.C. § 2314 and 18 U. S.C. § 2 in aiding and abetting appellant, Jack Edward Galardi, in transporting in foreign commerce postal money orders of a value exceeding $5,000.00. Additionally, Lee Spencer Parker was named as a co-defendant in Counts One through Six. Prior to trial, he entered a plea of guilty to Counts One, Two and Four and then appeared as a principal witness for the government. Angel Jerrold Galardi was sentenced to imprisonment for a term of five years on each of the Counts One through Six with the sentences to run concurrently, a total period of incarceration of five years. Jack Edward Galardi was sentenced to imprisonment for a term of five years on each of the Counts One through Seven with the sentences to run concurrently, a total period of incarceration of five years. Peter Michael Lafkas was sentenced to imprisonment for a term of four years on each of Counts Six and Seven with the sentences to run concurrently, a total period of incarceration of four years. THE GALARDI APPEALS Inasmuch as the Galardi appeals present essentially the same contentions, we shall treat them together. The evidence, viewed in a light most favorable to appellee, Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680 (1942), Vitello v. United States, 425 F.2d 416, 421 (CA9 1970), cert, denied 400 U.S. 822, 91 S.Ct. 43, 27 L.Ed.2d 50 (1970), convincingly establishes that the Galardis actively participated in the robbery of two United States Post Offices in California during the summer of 1968. Stolen in the robberies were blank United States Postal Money Orders with a potential value of in excess of $200,000.00. The Galardis hid the money orders on the premises of a bar and warehouse which they owned in Long Beach. Subsequently, they entered into an agreement with appellant Lafkas to transport the money orders to Viet Nam where Lafkas would cash them on the black money market. Following through on this arrangement, over 1,600 of the stolen money orders were cashed in the Far East for more than $160,000.00. The money orders were recovered and received in evidence during the course of the trial. On a substantial number of the orders were the fingerprints of the appellants. CONTENTIONS (1). In claiming unreasonable pre-indictment delay, appellants point to the fact that the crime was committed in the summer of 1968 and that they were not indicted until September, 1971. The appellee responds by saying that much of the government’s evidence was not secured until a few months prior to the indictment. It wasn’t until May 24, 1971, that the co-conspirator Parker signed a sworn statement with reference to appellants’ participation in the crime. As we read the record, the appellants have not brought themselves within the exceptions stated in United States v. Marion, 404 U.S. 307, 320-323, 92 S.Ct. 455, 30 L.Ed.2d 468 (1971), by showing that they were in any way prejudiced by the delay. The mere dimming of a memory is not sufficient.' United States v. Griffin, 464 F.2d 1352, 1354 (CA9 1972). The assertion that a missing witness might have been useful does not show the “actual prejudice” required by Marion. (2) Appellants’ argument on post-indictment delay is also without merit. The record makes it clear that much of the delay was occasioned by a belief on the part of the United States Attorney that appellants wished to follow the procedure outlined in Rule 20, F.R.Crim.P. The appellants, upon arrest, were immediately admitted to bail. The trial judge found that appellants had shown na prejudice by the delay and that the claim of dimmed memory was conclusory and insufficient. His finding and conclusion are well supported by the record and by the authorities. Barker v. Wingo, 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101 (1972); United States v. Lewis, 406 F.2d 486 (CA7 1969), cert. denied 394 U.S. 1013, 89 S. Ct. 1630, 23 L.Ed.2d 39. (3) Co-defendant Parker appeared as a witness for the government. During the course of his examination, the defense made reference to an alleged inconsistency between his testimony and his prior written statements. Later, the statements were admitted in evidence over appellants’ objections. The judge ruled that appellants had emphasized an inconsistency between the statements and the testimony in the record. The record supports this view. In these circumstances, the statements were properly admitted. Kaneshiro v. United States, 445 F.2d 1266 (CA9 1971), cert. denied 404 U.S. 992, 92 S.Ct. 537, 30 L.Ed.2d 543. (4) Next, appellants attempt to utilize Lenske v. United States, 383 F.2d 20 (CA9 1967), in their argument that the testimony before the grand jury should have been recorded. The author of Lenske criticized the government for recording and using only a part of the grand jury testimony. Tersely stated, Lenske has no application. Appellants do not argue that the facts of this case present “a clear indication of prejudice.” United States v. Thoresen, 428 F.2d 654, 666 (CA9 1970). (5) Appellants would have us abandon our time honored rule that the uncorroborated testimony of an accomplice is sufficient to convict. Such an action would require in banc consideration. Aside from that fact, the evidence of Parker, the accomplice, is amply corroborated by other evidence, for example, the fingerprints on the Orders. In any event, we are not inclined to depart from the rule stated in Caminetti v. United States, 242 U.S. 470, 37 S.Ct. 192, 61 L.Ed. 442, 495 (1917); United States v. Hibler, 463 F.2d 455, 458 (CA9 1972), and authorities therein cited. There is nothing in this record which would indicate a possible miscarriage of justice, such as mentioned in Hibler, p. 459. (6) Although the trial judge castigated counsel for Angel Galardi for continually ignoring the court’s order with reference to responding to objections, and the judge at one point indicated that he might be compelled to employ a contempt proceeding, our examination of the record convinces us that the court’s remarks were justified. Moreover, the record convincingly demonstrates that counsel was in no way intimidated by these remarks. THE LAFKAS APPEAL The Lafkas challenge to the convictions under Counts Six and Seven calls for the construction of 18 U.S.C. § 2314, as applied to the record before us. In this argument, he concedes that the money orders were stolen and were transported in foreign commerce in violation of the first paragraph of § 2314, and that the proof demonstrates that the money orders were altered before they were transported in foreign commerce and, consequently, fell within the exclusion of the section. The challenge involves the basic facts and a study of the history of the legislation. The basic facts are simple. The money orders were “in blank” when stolen. The Galardis, with stolen equipment, filled in the value on each bond at $100.-00. The money orders were forged and altered before they left the United States and placed in foreign commerce. United States Money Orders are “obligations” or “other securities” of the United States within the meaning of 18 U.S.C. § 2311, defining securities. See Nelson v. United States, 406 F.2d 1136, 1138 (CA10 1969); United States v. Powers, 437 F.2d 1160, 1161 (CA9 1971) [American Express Money Orders], Clearly, the stolen money orders were forged and altered securities of the United States within the meaning of the exclusion to the statute unless, as argued by the government, the exclusion has no application to the paragraph making it a crime to transport stolen securities in foreign commerce. The legislation in question is a splendid example of what happens to statutes when an exclusion or exception is taken out of context and placed with its initial subject and other existing laws in an overall revision or codification. On June 25, 1948, the Congress of the United States passed an Act to “. . . revise, codify and enact into positive law, Title 18 of the United States Code, entitled ‘Crimes and Criminal Procedure’ ”. In this revision and codification, the Congress passed the present Section 2314, which is a combination of previously distinct offenses patterned into one section. See 62 Stat. 683, 806, 807. A casual look into the statute’s history reveals that the parent of the paragraph of the statute under which Lafkas was indicted and the exclusion were part and parcel of the same section. The applicable section [53 Stat. 1178, Act of August 3, 1939] reads as follows: “AN ACT To amend the National Stolen Property Act. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 3 of the National Stolen Property Act, approved May 22, 1934 (48 Stat. 794; U.S.C., title 18, sec. 415), be, and the same is hereby, amended to read as follows: ‘SEC. 3. Whoever shall transport or cause to be transported in interstate or foreign commerce any goods, wares, or merchandise, securities, or money, of the value of $5,000 or more theretofore stolen, feloniously converted, or taken feloniously by fraud or with intent to steal or purloin, knowing the same to have been so stolen, feloniously converted, or taken, or whoever with unlawful or fraudulent intent shall transport or cause to be transported in interstate or foreign commerce any falsely made, forged, altered, or counterfeited securities, knowing the same to have been falsely made, forged, altered, or counterfeited, or whoever with unlawful or fraudulent intent shall transport, or cause to be transported in interstate or foreign commerce, any bed piece, bed plate, roll, plate, die, seal, stone, type, or other tool, implement, or thing used or fitted to be used in falsely making, forging, altering, or counterfeiting any security, or any part thereof, shall be punished by a fine of not more than $10,000 or by imprisonment for not more than ten years, or both: Provided, That the provisions of this section shall not apply to any falsely made, forged, altered, counterfeited, or spurious representation of (1) an “obligation or other security of the United States” as defined in section 147 of the Criminal Code (U.S.C., title 18, sec. 261) or (2) an obligation, bond, certificate, security, treasury note, bill, promise to pay, or bank note, issued by any “foreign government” as defined in the Act of June 15, 1917, title VIII, section 4 (U.S.C., title 18, sec. 288), or by a bank or corporation of any foreign country.’ ” [Emphasis supplied.] 18 U.S.C. § 261 defining “obligation or other security of the United States” mentioned in the initial legislation is now 18 U.S.C. § 8. To be noted is the fact that the language of the present exclusion “. an obligation or other security of the United States . . . ” is precisely the same as the language of the initial exclusion, the enactment of August 3, 1939. The legislative background leading up to the passage of the 1939 amendment makes it apparent that the Congress intended to exclude falsely made, forged, altered or counterfeited securities of the United States from what is now, with slight modification, the first paragraph of § 2314. From that report and the amendment itself, it is manifest that the Congress intended to include for the first time “. . . transportation of falsely made, forged, altered or counterfeited securities . . .”, and at the same time determined that this inclusion should not apply to United States obligations for the reason that existing statutes adequately dealt with trafficking in such securities. The Attorney General of the United States, in a letter to William B. Bankhead, Speaker of the House of Representatives, from which we quote in relevant part, expressed the same viewpoint: -X- * -x- * * “It is also desirable to include the transportation of counterfeit securities within the prohibitions of the statute. It need not, however, embrace counterfeit Government obligations or counterfeit foreign obligations, as the statutes relating to counterfeiting penalize their possession." H.R.Rep.No.422, 76th Cong., 1st Sess. (1939). [Emphasis supplied.] The Attorney General directed a letter, using the same language, to Henry F. Asher, the Chairman of the Senate Judiciary Committee, containing the same language as used in the communication to Speaker Bankhead. Under the provisions of 18 U.S.C. § 471, anyone who, with intent to defraud, falsely makes, forges, counterfeits or alters any obligation or other security of the United States is guilty of a crime. This law was passed on March 4, 1909, 35 Stat. 1115, long prior to the 1939 legislation and, no doubt, was one of the laws to which the legislative history makes reference. 18 U.S.C. § 500 making it a crime for any one to falsely alter in any material respect any money order is another statute under which appellants could have been indicted. In other words, one who forges or alters an obligation or other security of the United States, or falsely alters a money order, is guilty of a crime without the necessity of crossing a state line. To invoke the Commerce Clause of the Constitution in order to provide federal jurisdiction, in these circumstances, would be an exercise in futility. Worthy of more than just casual notice is the fact that the use of the language “this section” in the exclusion was carried through in the codification and revision in 1948. Clearly, the exclusion was intended to apply to each paragraph, including the first. Aside from the clarity with which the congressional history exposes the congressional intent, we find no vagueness or ambiguity in the statute itself. The appellee argues that the exclusion is inapplicable to the present case for the reason that the appellant was indicted for transporting stolen money orders, not falsely made United States Postal Money Orders. The answer to the argument is that the language of the exclusion “. . . this section . . .’’is all inclusive and applies to the para-graph under which the indictment was returned with the same degree of exclusion as it does to others. Even if we could say that there was some doubt as to the meaning of the exclusion, the government would still be in trouble. It is well settled that any ambiguity or vagueness in a criminal statute must be resolved in favor of lenity. Rewis v. United States, 401 U.S. 808, 91 S.Ct. 1056, 28 L.Ed.2d 493 (1971); United States v. Campos-Serrano, 404 U.S. 293, 92 S.Ct. 471, 30 L.Ed.2d 457 (1971); United States v. Bass, 404 U.S. 336, 92 S.Ct. 515, 30 L.Ed.2d 488 (1971). As recently as February 22, 1973, the Supreme Court in United States v. Emmons, 410 U.S. 396, 93 S.Ct. 1007, 35 L.Ed.2d 379, has reaffirmed the rule stating: “. . . this being a criminal statute, it must be strictly construed, and any ambiguity must be resolved in favor of lenity. a Finally, the government argues that even though the exclusion might prevent appellants’ prosecution under Count Seven, charging a violation of § 2314, nevertheless, Count Six, the conspiracy count, must stand. The government’s argument falls of its own weight. It should require no citation of authority to say that a person cannot conspire to commit a crime against the United States when the facts reveal there could be no violation of the statute under which the conspiracy is charged. If, as we have just held, the exclusion prevents prosecution under § 2314, then the appellants cannot be guilty of conspiring to commit that offense against the United States. They are charged only with conspiring to violate 18 U.S.C. § 2314. That section does not apply to falsely made and altered obligations of the United States. Although the case is factually distinguishable, the language of Justice Stewart in Ingram v. United States, 360 U.S. 672, 680, 79 S.Ct. 1314, 1320, 3 L.Ed.2d 1503 (1958), “. . . Smith and Law were not liable for the wagering tax. . They could not, therefore, have been convicted of the crime which they were charged with having conspired to commit. To sustain their conviction on this record would be to make of the crime of conspiracy just that ‘dragnet to draw in all substantive crimes’ against which the Court warned in . ”, is very much in point and persuades us to the conclusion just reached. United States v. Smith, 200 F.Supp. 227 (E.D. Tenn.1961), construing 18 U.S.C. § 2314 on a conspiracy charge in connection with falsely made obligations of a foreign corporation [Canada] is also in point. Obviously, the conspiracy charge cannot stand. OTHER CONTENTIONS Appellants’ other contentions with reference to: (1) prosecutorial misconduct, (2) Parker’s motives for testifying, (3) alleged hearsay within hearsay, (4) alleged declarations after the conspiracy had ended, (5) rulings on cross-examination of Parker, and (6) instructions as to money order valuation, are either patently groundless or the errors, if any, clearly harmless under Rule 52(a), F.R.Crim.P. CONCLUSION The judgments and sentences against Jack Edward Galardi and Angel Jerrold Galardi under Counts One, Two, Three, Four and Five are affirmed. The judgments and sentences of Angel Jerrold Galardi, Jack Edward Galardi and Peter Michael Lafkas under Count Six are reversed. The judgments and sentences of Jack Edward Galardi and Peter Michael Lafkas under Count Seven are reversed. It is so ordered. . Also, inferentially challenged by the Galardis. . * * * “Whoever transports in interstate or foreign commerce any goods, wares, merchandise, securities or money, of the value of $5,000 or more, knowing the same to have been stolen, converted or taken by fraud; . . . ” . * * * “This section shall not apply to any falsely made, forged, altered, counterfeited or spurious representation of an obligation or other security of the United States, . . . ” . The previous statute did not have the exclusion. 48 Stat. 794. . 18 U.S.C. § 8. “§ 8. Obligation or other security of the United States defined Tlie term ‘obligation or other security of the United States’ includes all bonds, certificates of indebtedness, national bank currency, Federal Reserve notes, Federal Reserve bank notes, coupons, United States notes, Treasury notes, gold certificates, silver certificates, fractional notes, certificates of deposit, bills, checks, or drafts for money, drawn by or upon authorized officers of the United States, stamps and other representatives of value, of whatever denomination, issued under any Act of Congress, and canceled United States stamps.” . We quote from the report of the Committee on the Judiciary of the House. * * * * “Section 1 Section 3 of the Stolen Property Act makes it a Federal criminal offense knowingly to transport in interstate or foreign commerce stolen property, securities, or money of tlie value of $5,000 or more. This section of the law is amended by section 1 of the reported bill to include such transportation of property, securities, or money of the same minimum value which have been feloniously converted, and also to include transportation of falsely made, forged, altered, or counterfeited secu,rities of the apparent or purported value of $3,000 or more. Counterfeited securities of the United States and foreign governments are exempted by a proviso because they are dealt with adequately by other provisions of existing law.” [Emphasis supplied.] [H.R.Rep.No.422, 76th Cong., 1st Sess. (1939)]. . 18 U.S.C. § 471. “§ 471. Obligations or securities of the United States Whoever, with intent to defraud, falsely makes, forges, counterfeits, or alters any obligation or other security of the United States, shall be fined not more than $5,000 or imprisoned not more than fifteen years, or both.” Emphasis supplied.

f2d_476/html/1079-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

The CONNECTICUT LIGHT & POWER COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. Nos. 339, 340, Dockets 72-1664, 72-1816. United States Court of Appeals, Second Circuit. Argued Jan. 16, 1973. Decided April 6, 1973. Harold N. Mack, Boston, Mass. (Morgan, Brown, Kearns & Joy, Boston, Mass., on the brief), for petitioner. Allison W. Brown, Jr., Atty., NLRB, Washington, D. C. (Peter G. Nash, Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, and Steven C. Kahn, Atty., NLRB, Washington, D. C., on the brief), for respondent. Milton A. Smith and Otto F. Wenzler, Washington, D. C., and Gerard C. Smetana and Lawrence M. Cohen, Chicago, 111., for The Chamber of Commerce of the United States, amicus curiae. Before FRIENDLY, Chief Judge, and OAKES and TIMBERS, Circuit Judges. TIMBERS, Circuit Judge: The Connecticut Light & Power Company (the Company) has petitioned to review and set aside an order of the National Labor Relations Board issued May 8, 1972, 196 N.L.R.B. No. 149 (1972), which essentially required that the Company bargain in good faith with the Union as to the selection of an insurance carrier for the Company’s employee medical-surgical benefits plan. The Board has cross-petitioned for enforcement of its order. We agree with the Company that the selection of an insurance carrier under the circumstances presented here is not a mandatory subject for bargaining within Section 8(d) of the National Labor Relations Act (the Act), 29 U.S.C. § 158(d) (1970). We therefore grant the petition to review and set aside the Board’s order, and we deny the cross-petition to enforce the order. I. The Company is a Connecticut corporation. It is a public utility engaged in the production, distribution and sale of electricity and gas. It is engaged in commerce within the meaning of the Act. System Council U-24, International Brotherhood of Electrical Workers, AFL-CIO, and its Local Unions 420, 753, 1045, 1175, 1226, 1317 and 1817 (the Union), are labor organizations within the meaning of the Act. Together they serve as the exclusive representative for all the Company’s employees within the relevant bargaining unit. For many years, the Company and the Union have had a collective bargaining relationship. The Company has long provided its employees with a non-contributory, Company-paid medical-surgical insurance plan. Since 1967 the carrier of this insurance plan, which includes major medical coverage, has been the Aetna Life Insurance Company (Aetna). For several years prior to 1967, the Company had contracted with Blue Cross-Connecticut Medical Service (Blue Cross) for the basic medical-surgical insurance, and with the Hartford Accident and Indemnity Company for major medical insurance. In 1969, the Union informed the Company of its dissatisfaction with Aetna’s administration of the insurance plan. As a result, the Company secured various changes from Aetna. Nevertheless, during the 1971 collective bargaining negotiations, the Union again expressed its dissatisfaction with Aetna and sought to include in those negotiations the reinstatement of Blue Cross as the carrier for the employee insurance plan. The Company did bargain during the 1971 negotiations with respect to coverage, benefits and administration of the plan; but it steadfastly refused to bargain as to the selection of the carrier, maintaining that it had the right unilaterally to choose the carrier. On May 14, 1971, the Union filed a charge with the Board, alleging a refusal by the Company to bargain, in violation of Section 8(a)(1) and (5) of the Act, 29 U.S.C. § 158(a)(1) and (5) (1970). That charge resulted in the issuance of a complaint by the General Counsel on July 19, 1971. A hearing was held before a trial examiner on October 18, 1971. On February 2, 1972, the examiner filed a decision, in which he found that the Company had unlawfully refused to bargain as to the selection of an insurance carrier for the employee medical benefits plan. On May 8, 1972, the Board affirmed the trial examiner’s decision and adopted his recommended order. It ordered the Company to cease and desist from refusing to bargain collectively as to the selection of an insurance carrier, to bargain in good faith on that subject upon request of the union, and to take certain other affirmative action to comply with the order. The sole issue before us on the Company’s petition to review and the Board’s cross-petition to enforce is whether the Board correctly concluded that the selection of an insurance carrier under the circumstances presented here is a mandatory subject for bargaining within the meaning of Section 8(d) of the Act. II. The requirement that an employer bargain collectively with the representatives of its employees, pursuant to Section 8(a) (5) of the Act, is limited by Section 8(d) to an obligation to confer as to “wages, hours, and other terms and conditions of employment . . . . ” 29 U.S.C. § 158(d) (1970). It is well established that included within that language are such “non-wage” benefits as the group health insurance here involved. E. g., W. W. Cross & Co. v. NLRB, 174 F.2d 875, 878 (1 Cir. 1949); Inland Steel Co. v. NLRB, 170 F.2d 247, 251 (7 Cir. 1948), cert. denied, 336 U.S. 960 (1949) (accepting the Board’s conclusion that “the term ‘wages’ . must be construed to include emoluments of value, like pension and insurance benefits, which may accrue to employees out. of their employment relationship . . . . Realistically viewed, this type of wage enhancement or increase, no less than any other, becomes an integral part of the entire wage structure . . . .”). The Company here does not dispute the inclusion of the instant group insurance plan within the term “wages”. Indeed, it has at all times freely negotiated with regard to the benefit levels and administration of the plan. Further, as noted above, it successfully obtained various changes from Aetna following notification from the Union of the latter’s dissatisfaction with certain aspects of the plan. In Chemical Workers, Local 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157 (1971), the Court was asked to decide whether retirees’ benefits — i. e., benefits for former employees already retired — is a mandatory subject for bargaining under Section 8(d). In holding that, because retirees are not “employees” under Section 2(3) of the Act, 29 U.S.C. § 152(3) (1970), the refusal to bargain was proper, the Court observed that it was required also to consider whether such benefits nevertheless were within the ambit of compulsory negotiation topics: “Section 8(d) of the Act, of course, does not immutably fix a list of subjects for mandatory bargaining .... But it does establish a limitation against which proposed topics must be measured. In general terms, the limitation includes only issues that settle an aspect of the relationship between the employer and employees.” 404 U.S. at 178. This, as the Court observed, depends on whether the matter “vitally affects the ‘terms and conditions’ of [the] employment.” 404 U.S. at 179. (emphasis added). A recent Sixth Circuit decision examined the applicability of that standard to the selection of a carrier for an employee medical-surgical insurance plan. In Bastian-Blessing, Division of Golconda Corp. v. NLRB, 474 F.2d 49 (6 Cir. 1973), the court held that under the specific facts of that case the naming of an insurance carrier for an employee group benefit plan was a mandatory subject for bargaining. We find Bastían distinguishable from the instant case in significant respects. There, Aetna had been the carrier of the group plan since World War II. The plan was contributory in nature, the employees paying approximately 40% of the cost. In 1970, the company unilaterally cancelled the Aetna policy and began a self-insurance plan. The Board found that the change adversely affected the employees in important respects: (1) the new plan “omitted entirely two significant employee benefits: a conversion privilege without evidence of insurability, and the certainty of coverage of new-born babies under the $20,000 major medical benefit”; (2) it deprived the employees of “enforceability of the prior master contract and of Aetna’s administration of that contract”; and (3) a degree of uncertainty was created as to the funding of the new plan which the Board considered to have “an adverse impact on the employees’ previously negotiated benefits.” 474 F.2d at 51-52. The court’s conclusion that the company had violated Section 8(a)(5) of the Act clearly was based on the unilateral changes in the terms of the insurance plan, referred to above. The court noted that it had found no case law which squarely supports “the proposition that the specific insurance carrier for a group health plan is a mandatory subject for bargaining.” 474 F.2d at 53-54. Instead, it chose to confine its ruling to the facts of the case before it, where it was impossible “to find a way to separate the carrier from the benefits.” 474 F.2d at 54. And it concluded that: “We emphasize that the conclusion reached herein is governed by the facts of this case and is not to be interpreted as a ruling by this Court that the naming of an insurance carrier for an employee group benefit plan, in the absence of other considerations, is a mandatory subject for bargaining.” 474 F.2d at 54. Similarly, the other cases cited to us which required bargaining with regard to the carrier of the employees’ insurance plans involved substantive changes in benefits which dictated the results. E. g., Wisconsin Southern Gas Co., 173 N.L.R.B. 480 (1968); Wabana, Inc., 146 N.L.R.B. 1162 (1964). Here, there have been no specific allegations of any changes in coverage, levels or administration of the plan. All the Union has alleged is general “dissatisfaction” with Aetna. Equally important, the Company has responded to specific complaints with good faith negotiation; and, as the Board found, the Company has been able to obtain modifications from Aetna. Consequently, we are unable to conclude that the Company has violated its obligation to bargain under Pittsburgh Plate Glass. The Company at no time has refused to negotiate with the employees as to any subject that “vitally affects the ‘terms and conditions’ of their employment.” Chemical Workers, Local 1 v. Pittsburgh Plate Glass Co., supra, 404 U.S. at 179. In Westinghouse Electric Corp. v. NLRB, 387 F.2d 542, 548 (4 Cir. 1967) (en banc), the court observed that: “[Sjince practically every managerial decision has some impact on wages, hours, or other conditions of employment, the determination of which decisions are mandatory bargaining subjects must depend upon whether a given subject has a significant or material relationship to wages, hours, or other conditions of employment.” The benefits, coverage and administration of the plan in the instant case clearly are proper bargaining subjects. We hold that the Company, having negotiated about those matters, was free to choose any carrier that would satisfy the Company’s agreement with the Union. III. Our holding as stated above, however, should not be construed to mean that in all cases may the selection of a carrier be divorced from the elements of employee health insurance that traditionally have been held to be mandatory subjects of bargaining. As in Bastían, we are reluctant to attempt to formulate a test for determining in which cases the identity of the insurance carrier itself vitally affects the terms and conditions of the employment. In Bastían, the court found a sufficient interrelationship to require 'bargaining. Here, on the other hand, we find that all the matters within the bargaining requirement can be, and have been, the subject of negotiations between the Company and the Union without reference to the identity of the carrier. Moreover, should the Company’s choice of a carrier produce a situation where the Company is unable to fulfill its agreement under the collective bargaining contract, the Union has a remedy under Section 301 of the Labor-Management Relations Act, 29 U.S.C. § 185 (1970). Thus, while a different result might be necessary where, as in Bastían, a change of carrier were found to affect the bargained-for terms of the employee insurance plan, or where, for example, the mal-administration of the plan by the company-selected carrier were found to be so pervasive and pernicious as to have the “vital effect” contemplated in Pittsburgh Plate Glass, we do not pass on such matters here because they are not before us. All that the Union has alleged here is an undefined “dissatisfaction” with Aetna’s administration. We hold that the Board on the facts of this case erroneously concluded that the Company had violated its duty to bargain. The petition to review and set aside the Board’s order is granted; and the cross-petition for enforcement is denied. . Our summary of the facts is based on the trial examiner’s findings, all of which were affirmed by the Board. . Prior to the Blue Cross-Hartford arrangement, the coverage was secured from Aetna and Blue Cross alternately. . In addition to the Company’s refusal to bargain as to the selection of an insurance carrier, the charge and the complaint alleged a refusal to bargain as to retirees’ benefits. The trial examiner dismissed that portion of the complaint on the authority of Chemical Workers, Local 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157 (1971), which held that retirees’ benefits are not a mandatory subject of bargaining within Section 8(d) of the Act. The Board affirmed that ruling. The issue has not been raised before us. . Even if we were to find such prior administrative decisions to have dealt with facts indistinguishable from those at bar, they of course would not be controlling here as to the legal issues involved. “Reviewing courts are not obliged to stand aside and rubber-stamp their affirmance of administrative decisions that they deem inconsistent with a statutory mandate or that frustrate the congressional policy underlying a statute.” NLRB v. Brown, 380 U.S. 278, 291 (1965).

f2d_476/html/1083-01.html

Caselaw Access Project

2024-08-24T03:29:51.129235

2024-08-24T03:29:51.129683

UNITED STATES of America, Plaintiff-Appellant, v. William Earl MATTLOCK, Defendant-Appellee. No. 72-1449. United States Court of Appeals, Seventh Circuit. Argued Nov. 30, 1972. Decided Feb. 5, 1973. Certiorari Granted May 29, 1973. See 93 S.Ct. 2734. John O. Olson, U. S. Atty., Madison, Wis., for plaintiff-appellant. Donald S. Eisenberg, Madison, Wis., for defendant-appellee. Before HASTINGS, Senior Circuit Judge, CAMPBELL, Senior District Judge, and MORGAN, District Judge.* Senior District Judge William J. Campbell of the United States District Court for the Northern District of Illinois and Chief Judge Robert D. Morgan of the United States District Court for the Southern District of Illinois -are sitting by designation. ROBERT D. MORGAN, District Judge. This appeal is prosecuted by the United States to review an order of the court below suppressing certain evidence seized by state officers and FBI agents in three separate warrantless searches of a residence house. On November 12, 1970, at about 9:30 a. m., sheriff’s officers of Columbia County, Wisconsin, arrested defendant, a bank robbery suspect, in the yard of a residence house rented by a Walter Marshall and Elaine Marshall, the arrest being made some distance from the house itself. Residents of the house at the time were Elaine Marshall, Gayle Graff, a daughter of the Marshalls, Graff’s infant son, at least two younger Marshall children, and the defendant. Immediately after the arrest, certain of the officers went to the house and were admitted by Graff. The officers told Graff that they were looking for money and a gun and wished to search the house. Graff consented. The officers seized $4,995 and certain other items from a closet and a dresser drawer in a second floor bedroom, identified in the record as the east bedroom. The same officers conducted a second search shortly after the first was concluded. Graff again admitted them to the house and consented to a further search. Certain items were then seized from a closet on the first floor of the house. The second search began about 10:15 a. m. The third search was conducted about 4:30 p. m. of the same day by FBI agents and local officers. Three of the officers were admitted to the house by one of the younger children, where they waited while the fourth officer involved brought Mrs. Marshall from her place of employment to the house. Mrs. Marshall signed a written consent to search. During that search, certain items were seized from a dresser drawer in the east bedroom. Others were seized from locations on the first floor. Following extensive evidentiary hearings, the court found and concluded that the government had proved that it reasonably appeared to the several officers, just prior to the searches, that facts existed in each instance from which the officers could reasonably believe that both Graff and Mrs. Marshall had authority to consent to a search and that their respective consents would be binding upon the defendant. The evidence related to Graff’s apparent authority to consent was that she and defendant, among others, resided in the house; that she admitted the officers while dressed in night clothes and a robe; that she then told the officers that she and defendant both occupied the east bedroom, and that women’s clothing therein contained was hers; and that she had told the officers that she used the two upper drawers of a dresser in the room and the defendant used the two lower drawers. The appearance of Mrs. Marshall’s authority was found in the fact that she and her husband were the lessees of the whole premises from a third party owner. Though finding apparent authority to consent, the trial judge expressed his incredulity of the fact that none of the officers had asked Mrs. Marshall about the arrangement under which 'defendant occupied the east bedroom. The judge expressed a reservation as to search of the bottom two dresser drawers, since there was no testimony as to whether Graff’s statement that defendant, only, used those drawers was made before or after the search, saying that if the information was known prior to the search, there was no apparent authority to bind defendant by Graff’s consent. From Mrs. Marshall’s testimony, the court found that a rental agreement had existed between defendant and Mrs. Marshall, pursuant to which he paid her $25.00 per week for the use of the east bedroom and board. The court found and concluded that prior to the several searches, facts did not exist which would render the consent of either Graff or Mrs. Marshall to a search of the east bedroom binding upon the defendant. In that regard, the court refused to consider the hearsay evidence that Graff had stated to the searching officers that she occupied the east bedroom with the defendant, and that certain clothing there located was hers, as substantive evidence^ that the room was jointly occupier by her and the defendant. The court ordered that all evidence seized from the east bedroom be suppressed. Defendant’s motion to suppress evidence seized from other areas of the house was denied on the ground that defendant had no standing to object to a search of any part of the house except the east bedroom. The government’s principal contention against the suppression order is that appearance of authority to consent satisfies Fourth Amendment requirements, and that the court erred in requiring proof of facts showing actual authority to consent. Thus, the government argues that an imposter, having no connection with a residence searched, would bind a putative defendant if it reasonably appealed to the searching officer that the imposter had the right to consent to a search. Statement of the argument is largely its own refutation. Furthermore, the government bases its position to a great extent upon United States v. Rabinowitz, 339 U.S. 56, 70 S.Ct. 430, 94 L.Ed. 653 (1950). Rabinowitz can only be viewed as shaky authority, since the broad rationale of that case was quite generally overruled in Chimel v. California, 395 U.S. 752, 768, 89 S.Ct. 2034, 23 L.Ed.2d 685 (1969). Security in one’s home from unreasonable searches and seizures is a personal right, e. g., Stoner v. California, 376 U.S. 483, 489, 84 S.Ct. 889, 11 L.Ed.2d 856 (1964); Anderson v. United States, 399 F.2d 753, 755 (10 Cir., 1968), not to be eroded “by unrealistic doctrines of ‘apparent authority.’ ” Stoner v. California, supra, at 488, 84 S.Ct. at 892. One of joint occupants of a residence may consent to a search of the premises jointly occupied and by his consent bind the nonconsenting occupant to face the evidence seized. E. g., United States v. Stone, 471 F.2d 170, 7 Cir. 1972; United States v. Airdo, 380 F.2d 103 (C.A.7 1967), cert. denied, 389 U.S. 913, 88 S.Ct. 238, 19 L.Ed.2d 260. The government relies wholly on such cases. United States v. Wixom, 441 F.2d 623 (C.A.7 1971); United States v. Botsch, 364 F.2d 542 (C.A.2 1966), cert. denied, 386 U.S. 937, 87 S.Ct. 959, 17 L.Ed.2d 810 and Drummond v. United States, 350 F.2d 983 (C.A.8 1965), cert. denied, 384 U.S. 944, 86 S.Ct. 1469, 16 L.Ed.2d 542, all involving consent by one of partners in crime to search premises to which all had equal access; United States v. Airdo, supra, involved admitted joint occupancy; Burge v. United States, 342 F.2d 408 (C.A.9 1965), cert. denied, 382 U.S. 829, 86 S.Ct. 63, 15 L.Ed.2d 72, joint occupants of a bathroom searched; Weaver v. Lane, 382 F.2d 251 (C.A.7 1967), cert. denied, 392 U.S. 930, 88 S.Ct. 2289, 20 L.Ed.2d 1390, consent by hostess to search room of temporary visitor; Gurleski v. United States, 405 F.2d 253 (C.A.5 1968), involved joint use and possession of automobile. It is equally clear that a landlord cannot by his consent waive a tenant’s right to be free from an unreasonable search. Chapman v. United States, 365 U.S. 610, 81 S.Ct. 776, 5 L.Ed.2d 828 (1961). Nor can a person having no right of occupancy of premises bind another by his consent to a search of the premises. Stoner v. California, supra. A comparison of the many cases reveals that a vicarious consent is sustained only when actual authority to consent is shown to have existed when consent was given. In our view, Judge Doyle has simply articulated the correct principle which courts until now have applied without clear articulation thereof. He correctly held that defendant’s constitutional rights could be waived only if it was proved that reasonable appearance of authority to consent existed and, also, that just prior to the search, facts existed showing actual authority to consent. We cannot reject his finding that the government failed to prove that actual authority did exist. Such actual authority is, of course, to be distinguished from actual permission to consent, which need not be proved. The court below correctly placed the burden upon the government to prove that defendant’s Fourth Amendment rights were waived. E. g., Vale v. Louisiana, 399 U.S. 30, 34, 90 S.Ct. 1969, 26 L.Ed.2d 409 (1970); Chimel v. California, 395 U.S. 752, 761, 89 S.Ct. 2034, 23 L.Ed.2d 685 (1969); Stoner v. California, 376 U.S. 483, 486, 84 S.Ct. 889, 11 L.Ed.2d 856 (1964). The government appears before the court asserting misplaced reliance upon inapposite cases dealing with either the challenged validity of a search warrant or the issue of standing to move to suppress seized evidence. E. g., Jones v. United States, 362 U.S. 257, 261, 80 S.Ct. 725, 4 L.Ed. 2d 697 (1960), and Brandon v. United States, 106 U.S.App.D.C. 118, 270 F.2d 311, 312-313 (1959), cert. denied, 362 U.S. 943, 80 S.Ct. 808, 4 L.Ed.2d 771 (issue was standing to pursue motion to suppress); United States v. Rellie, 39 F.Supp. 21 (E.D.N.Y.1941) (challenged legality of a warrant). The government also challenges the court’s statement that the authority of the consenter to bind a putative defendant must be proved “to a reasonable certainty, by the greater weight of the credible evidence” as applying an erroneous standard of proof. The sustaining of the contention that a constitutional right has been waived invokes a high standard of proof of facts showing waiver. Miranda v. Arizona, 384 U.S. 436, 475, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966); Johnson v. Zerbst, 304 U.S. 458, 464, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938); United States v. Coleman, 322 F.Supp. 550, 553 (E.D.Pa.1971); United States v. Cole, 325 F.Supp. 763, 768 (S.D.N.Y.1971). The district court’s statement of the standard of proof required to prove the fact of authority to bind defendant is consistent with the principle enunciated in those cases and is not subject to abstract criticism. Finally, the government contends that the court erroneously excluded extra judicial statements and other hearsay evidence as bearing upon the issue of the existence of actual authority to bind the defendant by Graff’s consent. Thus, the court excluded Graff’s hearsay statements to officers that she occupied the east bedroom with defendant and testimony that both defendant and Graff had stated publicly several times that they were married. The evidence was properly excluded pursuant to the well established rule that hearsay is not admissible as substantive evidence to prove the existence of a fact in issue. Bridges v. Wixon, 326 U.S. 135, 153-154, 65 S.Ct. 1443, 89 L.Ed. 2103 (1945); 29 Am.Jur.2d, Evidence, §§ 493, 495. The hearing below cannot be equated with that on a petition for a search warrant, as the government contends. An unreasonable, warrantless search is not insulated against constitutional objection by the fact that probable cause did in fact exist. Vale v. Louisiana, supra, 390 U. S. at 34, 90 S.Ct. 1969; Chimel v. California, supra, 395 U.S. at 762, 89 S.Ct. 2034. A search warrant should have been obtained in this case. The record supports the findings that a rental agreement did exist between defendant and Mrs. Marshall, and that there was no proof of facts showing actual authority in either Graff or Mrs. Marshall to consent to a search of the east bedroom. The court below did not direct what disposition was to be made of the cash and other evidence suppressed. It should do so. The judgment will be affirmed and the cause remanded to the court below for that determination and such further proceedings as may be required. Affirmed and remanded. . The court did not consider the question whether Graff’s consents were voluntary, in light of the fact that she was never advised that she had the right to refuse consent. . That hearsay evidence was admitted and considered for its bearing upon the question of the reasonableness of appearance to the officers of Graff’s authority to bind defendant by her consent.

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Caselaw Access Project

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Henry G. LAHR, Administrator of the Estate of Peter Lahr, Deceased, Plaintiff-Appellant, v. Elliot L. RICHARDSON, Secretary of Health, Education and Welfare, Defendant-Appellee. No. 71-1721. United States Court of Appeals, Seventh Circuit. Argued Sept. 13, 1972. Decided March 23, 1973. Donald M. Orstrom, Ervin D. Snyder, Glen Ellyn, Ill., for plaintiff-appellant. James R. Thompson, U. S. Atty., William T. Huyck, Kenneth R. Siegan, Asst. U. S. Attys., Chicago, Ill., for defendant-appellee. Before KNOCH, Senior Circuit Judge, and FAIRCHILD and PELL, Circuit Judges. KNOCH, Senior Circuit Judge. This matter arises out of the decision of a hearing examiner for the Social Security Administration of the Department of Health, Education and Welfare, denying the claim of plaintiff, Henry G. Lahr, Administrator of the Estate of Peter Lahr, deceased, that old age insurance benefits were due Peter Lahr for the period from September, 1963 through April, 1968. The decision further ordered plaintiff to reimburse the Social Security Administration the sum of $2,940 which had been paid him on behalf of Peter Lahr for the period May, 1961 through August, 1963. The hearing examiner relied on the facts that Peter Lahr had been placed in a nursing home about 1% years prior to May 30, 1961, because of his child-like behavior, the result of brain syndrome following an accident. He had been adjudicated incompetent on April 25, 1961. Payment of benefits was made to Henry Lahr who had been appointed conservator. The nursing home was about 150 yards from the lake, access to which was possible at two close locations. On two occasions, Peter Lahr, without notice, had left the home where he had some complaints about his treatment. Because of this potentially dangerous behavior, plaintiff was considering removal of his father to another institution. On May 30, 1961, at the age of 72 years and in excellent physical condition (as distinguished from mental condition) Peter Lahr disappeared from the home and has not been heard of since. The hearing examiner determined that he died on May 30, 1961, most likely having gone into the lake which was so close at hand. Meanwhile, the Circuit Court of Cook County, Illinois, determined that the father died on May 30, 1968, presuming death after seven years of unexplained absence. The Appeals Council, of the Social Security Administration, affirmed the decision of the hearing examiner, as did the District Court, 1971, 328 F.Supp. 996. The District Judge also denied plaintiff’s motion to vacate that judgment. Plaintiff contends that the Court was bound by the presumption of death to the extent that it might not examine the evidence apart from that presumption. Plaintiff also contends that there is no substantial evidence in the record to rebut that presumption. Plaintiff’s position is that here, as in In re Chicago and N. W. Ry. Co. (Carlson v. Thomson), 7 Cir., 1943, 138 F.2d 753, the appellee had the burden of proving that Peter Lahr died at the time asserted and has failed to sustain that burden by anything other than conjecture or surmise. In Carlson, an elderly man, suffering only from a degree of deafness and melancholy because of his wife’s death, was last seen leaving a train in an area where there were abandoned mines and pits. An intensive search failed to disclose any trace of a body that might have been his. Peter Lahr, however, was not mentally competent and the lake does not always give up its dead. It was reasonable for the examiner to conclude that it was extremely unlikely that an individual in Peter Lahr’s circumstances would have survived where no sign was found even in a search by the Chicago Police Department. The Secretary’s decision with respect to Peter Lahr’s benefits must be affirmed if it accords with applicable law and is supported by substantial evidence. See Title 42 U.S.C. § 405(g); Sykes v. Finch, 7 Cir., 1971, 443 F.2d 192, 194 ftn. 2; Kutchman v. Cohen, 7 Cir., 1970, 425 F.2d 20, 23. We may not make our own appraisal of the evidence. Carqueville v. Flemming, 7 Cir., 1959, 263 F.2d 875, 877. In Gardner v. Wilcox, 9 Cir., 1966, 370 F.2d 492, 494-495, the Court held that it was for the hearing examiner to balance the probabilities and likelihoods of life or death in the light of all the known facts as part of the fact-finding function. In Tobin v. United States Railroad Retirement Board, 6 Cir., 1961, 286 F.2d 480, on which plaintiff relies, the Court held that the 7-year presumption of death was not conclusive and was not to be rigidly observed without regard to the circumstances, but made specific reference to the absence of any apparent peril or danger and the strong motives for Mr. Tobin’s possible desire to escape from the institution in which he was confined and the daughter who had caused his confinement there. Mr. To-bin was described as able-bodied, strong and husky, physically very powerful for his age and in possession of money and identification. Since Tobin the Railroad Retirement Act, Title 45 U.S.C. § 228c(g), has been amended to provide that no annuity shall accrue to an annuitant who disappears until he is shown to have been alive for the period in question. There was evidence that Peter Lahr had previously placed himself in a dangerous position by walking down the middle of the busy thoroughfare on which the home was situated. The proximity of the lake, Peter Lahr’s mental incompetence, his inability to take care of his daily needs, his failing memory, his frequent irrationality, support the finding that he did not survive the day he disappeared. In any case, plaintiff argues that § 204(b) of the Social Security Act [Title 42 U.S.C. § 404(b)] bars recovery of payments made as he is a person who is without fault and recovery would defeat the purpose of the Act or be against equity or good conscience. Plaintiff disagrees with the hearing examiner that he knew or should have known that the payments were incorrectly made. He states that the payments were expended for ordinary and necessary expenses to cover the costs of the conservatorship, attorneys’ fees, insurance premiums and bank charges, which he characterizes as a necessary part of managing any incompetent’s estate. Having no evidence of death, plaintiff asserts that he was obliged to pay insurance and bond premiums and attorneys’ fees up to the expiration of the 7-year period. Plaintiff at no time notified the Social Security Administration of his father’s disappearance. He ought to have known that this was material information which should not be withheld. The inequities to which the statute refers would be those suffered by Peter Lahr, should he be deprived, for example, of income for current living expenses. Title 42 U.S.C. § 404(a)(1) does not specify the payment of interest on the amount overpaid. Even if an award of interest would be authorized, on the amount overpaid or the judgment as here affirmed, we do not consider such allowance equitable and appropriate under the circumstances of this case. Affirmed.

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UNITED STATES of America, Plaintiff-Appellee, v. Sam Lee FOWLER, Jr., Defendant-Appellant. No. 72-1042. United States Court of Appeals, Seventh Circuit. Argued Oct. 25, 1972. Decided April 4, 1973. George R. Ripplinger, Jr., Belleville, Ill., for defendant-appellant. Henry A. Schwarz, U. S. Atty., Frederick J. Hess, Asst. U. S. Atty., E. St. Louis, Ill., for plaintiff-appellee. Before KILEY and STEVENS, Circuit Judges, and KILKENNY, Senior Circuit Judge. Senior Judge John F. Kilkenny of the Ninth Circuit, sitting by designation. KILEY, Circuit Judge. Defendant Fowler, a sixteen year old boy, was committed to the custody of the United States Attorney General “during his minority” following a proceeding in which he was found delinquent because of his participation in the burglary of a United States post office. He has appealed. We reverse. Fowler was arrested as a suspect in the burglary of the post office in Colp, Illinois. Thereafter he was interrogated by a postal inspector in the Carbondale, Illinois police station. He orally confessed to his participation in the offense and subsequently joined two juvenile accomplices in a common affidavit admitting the offense. As permitted by 18 U.S.C. § 5032, Fowler consented to be prosecuted as a juvenile rather than an adult. The government then filed an information instead of an indictment charging him with the burglary offense. Fowler’s pre-trial motion to suppress his confession was denied, and the confession and joint affidavit were introduced into evidence over objection at the subsequent bench trial. He was found to be “delinquent” and his commitment followed. I. The first issue presented is whether Fowler was entitled to Miranda warnings before he confessed to his participation in the burglary. The Supreme Court in a series of cases has departed from the Parens Patriae Doctrine which denied juveniles vital rights accorded their elders. This is particularly true in the case of In re Gault, 387 U.S. 1, 87 S.Ct. 1428, 18 L.Ed. 2d 527 (1967), where the Court struck down the Arizona Juvenile Code as unconstitutional. The Court found that the Code permitted the denial of due process to a fifteen year old during a juvenile delinquency proceeding because the Code deprived juveniles of the exercise of the rights to confrontation, cross-examination, appellate review and notice to the juvenile’s parents of the right to counsel in the proceedings. In finding that the juvenile was denied the privilege against self-incrimination, the Court said “[i]t would indeed be surprising if the privilege against self-incrimination were available to hardened criminals but not to children.” Id., at 47, 87 S.Ct. at 1454. We hold therefore, by virtue of In re Gault, that Fowler had the right to Miranda warnings prior to confessing to his participation in the burglary. II. The next issue raised is whether Fowler was adequately warned of his rights prior to interrogation as required by Miranda. The evidence at the trial which implicated Fowler in the alleged burglary was the testimony of the postal inspector and - the joint affidavit which read “we” confess. The inspector’s trial testimony shows that he did not tell Fowler, before the confession, that any answers he gave to questions could be used against him later in court. And the joint affidavit omitted to warn defendant that he had a right to an attorney before answering questions. We think these deficiencies indicate that on neither occasion were the “full” Miranda warnings given defendant. It might be argued that although both the oral and written warnings were each deficient, when considered together they were complementary so as to meet the requirements of Miranda. We reject the argument in this case, since we cannot see that either warning or both considered together were meaningful to Fowler. When his confession was made Fowler was sixteen years of age. So far as the record shows he had not previously been arrested, had not previously been in jail, nor had he ever been interrogated by law enforcement officials. One need only recall his own adolescence to appreciate the impact upon this boy, alone in a jail room, in custody of a postal inspector, being warned of his constitutional rights. “That which would leave a man cold and unimpressed can overawe and overwhelm a lad in his early teens [fifteen years old].” Haley v. Ohio, 332 U.S. 596, 599, 68 S.Ct. 302, 304, 92 L.Ed. 224 (1948). In these circumstances it is difficult to accept the notion that defendant fully comprehended what he was being told. Fowler’s father was sent for, and was present in the jail at some time while the joint confession was being prepared. He was not present, however, when the oral interrogation began so that Fowler could be helped in understanding the gravity of his answers to the postal inspector’s questions. When the father was present, he did not ask for advice about, or any explanations of, his son’s rights so that he could aid in his son’s understanding of them. Seemingly unconcerned with his son’s understanding of the seriousness of what he was doing in signing the affidavit, he encouraged his son to “tell the truth.” His concern appeared to be mostly whether his son’s trouble would prevent him from getting into the “Job Corps.” What Fowler needed at the time was “counsel and support if he [was] not to become the victim first of fear, then of panic.” Id., at 600, 68 S.Ct. at 304. The father, however, did not fill this need. We hold that the Miranda warnings as given Fowler were inadequate and that the admission of his confession and the affidavit into evidence requires reversal of the judgment. The government’s argument places reliance on two cases which do not militate against our holding. In West v. United States, 399 F.2d 467 (5th Cir. 1968), full Miranda warnings were given, and the record disclosed several circumstances indicating the juvenile’s maturity and independence. Those circumstances are not present here. In the case’ of United States ex rel. Richardson v. Vitek, 395 F.2d 478 (7th Cir. 1968), the matter had been tried before In re Gault was decided. Moreover, this court’s affirmance of the dismissal of the juvenile’s habeas proceeding was based on the Illinois Supreme Court record and on the fact that both the Illinois and district courts reached the same conclusion that the juvenile had been advised of his right to remain silent, was able to inform his parents of his whereabouts, and his confession was “freely given.” In the recent Pennsylvania Supreme Court case, Commonwealth v. Porter, 449 Pa. 153, 295 A.2d 311 (1972) (two justices dissenting), the court decided that a sixteen year old boy’s murder confession was not involuntary simply because his mother was not permitted to be present during the interrogation. A comparison of the facts of the instant case and those in Porter demonstrates that the two cases differ in significant respects. First, the Porter facts reveal that full Miranda warnings were given to the juvenile defendant with no question remaining as to right to counsel or to remain silent. Secondly, the Porter facts are similar to the West facts, because a showing of independence is evident. More precisely, the evidence in Porter indicated that the juvenile defendant did not want his mother to be present during his interrogation. The facts of the present case, however, are void of any showing of independence. We limit our holding — that the district court committed constitutional error in admitting Fowler’s confession and the affidavit — to the facts in this case. We need not hold that a juvenile’s confession, or that absence of an attorney for a juvenile at interrogation, per se renders the confession involuntary. But see Gallegos v. Colorado, 370 U.S. 49, 54, 82 S.Ct. 1209, 8 L.Ed.2d 325 (1962), and Lewis v. State, 288 N.E.2d 138 (Ind., 1972). Neither do we consider the governments’ argument that Fowler was competent to waive his constitutional rights. For the reasons given, the judgment is reversed. KILKENNY, Senior Circuit Judge (dissenting): Assuming, arguendo, that Miranda warnings are required, nevertheless, the judgment of the lower court should be affirmed. There is nothing in the record to indicate that appellant had less than the normal intelligence of an average sixteen year old boy. Since Miranda does not require “. . .a ritual of words to be recited by rote according to didactic niceties”, Coyote v. United States, 380 F.2d 305, 308 (C.A.10 1967), I would hold that the oral and written warnings, when read together, fully comply with the Miranda requirements. United States v. Hilliker, 436 F.2d 101 (C.A.9 1970), cert. denied 401 U.S. 958, 91 S.Ct. 987, 28 L.Ed.2d 242 (1971), is closely in point and supports this view. I would affirm. . 18 U.S.C. §§ 2 and 2115. . § 5032. Proceeding against juvenile delinquent A juvenile alleged to have committed one or more acts in violation of a law of the United States not punishable by death or life imprisonment, and not surrendered to the authorities of a state, shall be proceeded against as a juvenile delinquent if he consents to such procedure, unless the Attorney General, in his discretion, has expressly directed otherwise. In such event the juvenile shall be proceeded against by information and no criminal prosecution shall be instituted for the alleged violation. . Haley v. Ohio, 332 U.S. 596, 68 S.Ct. 302, 92 L.Ed. 224 (1948), and Gallegos v. Colorado, 370 U.S. 49, 82 S.Ct. 1209, 8 L.Ed. 2d 325 (1962), (in both cases juvenile’s confession violated right to due process) ; Kent v. United States, 383 U.S. 541, 86 S.Ct. 1045, 16 L.Ed.2d 84 (1966), (right to hearing on juvenile court’s waiver of jurisdiction). . See this court’s Geboy v. Gray, 471 F.2d 575 (7th Cir. 1973), written for the court by Judge Sprecher, where the right of a juvenile to counsel at a hearing on waiver of juvenile jurisdiction was sustained. Id., at 6, 87 S.Ct. 1428. . Fowler was given the following warning by Barnes: I told him who I was and identified myself. I explained to him that I wanted to discuss a matter with him that I was investigating, but that it might or could involve a violation of the law; and because of that it was necessary for him to understand his constitutional rights. I explained to him that he did not have to talk to me or answer any questions, if he chose not to do so and I explained to him that he had the right to the services of an attorney; and that if he could not afford an attorney, one could be appointed for him. I explained to him that if he answered questions, that he could refuse to answer any question or stop answering questions at any time. (H-5) . The joint affidavit read in pertinent part: We have been advised of our constitutional rights, that we do not have to make a statement, that anything we say can be used against us in court, that we have the right to an attorney and if we cannot afford an attorney, one can be appointed for ns. We wish to make the following statement of our own free will without any threats or coercion used against us. We are making this statement so that the true facts can be known. I have grave doubts as to the validity of the assumption.

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UNITED STATES of America, Plaintiff-Appellee, v. Donald Alan BUSH, Defendant-Appellant. No. 72-1013. United States Court of Appeals, Seventh Circuit. Argued Dec. 1, 1972. Decided March 15, 1973. Rehearing Denied May 10, 1973. George C. Pontikes, Chicago, Ill., for defendant-appellant. James R. Thompson, U. S. Atty., William T. Huyck, and Theodore T. Seudder, Asst. U. S. Attys., Chicago, Ill., for plaintiff-appellee. Before SWYGERT, Chief Judge, CASTLE, Senior Circuit Judge, and MORGAN, District Judge. Chief Judge Robert D. Morgan of the Southern District of Illinois is sitting by designation. MORGAN, District Judge. Defendant appeals a judgment finding him guilty of the offense of wilfully and knowingly failing to submit to induction into the armed forces of the United States in violation of 50 Appendix, United States Code, Section 462. The basic contention for reversal is defendant’s assertion that he was entitled to a conscientious objector classification. Defendant filed his original selective service questionnaire in late 1964, in which he asserted no physical or mental disqualification and no claim to conscientious objector status. He did state that he was a student at Purdue University. His local board granted him a student deferment. On December 15, 1965, defendant reported to his board that he had withdrawn from Purdue. On a current status questionnaire filed thereafter, defendant asserted a mental condition. He also requested a form for claiming classification as a conscientious objector. He filed the latter form on January 11, 1966, asserting that he was conscientiously opposed to war by reason of his belief in and adherence to the philosophical theories of Immanuel Kant. The board classified defendant 1-A, available for military service. Defendant was so notified by mail, such notice containing advice of his right to appeal and the time and manner for appealing that classification. About two weeks thereafter, defendant filed a current information questionnaire, reporting a change of employment. He did not request an appeal of his classification. Months later he did request an appeal, upon the sole ground that he had been working in Indianapolis and only returned on weekends to the Cincinnati mailing address which he had supplied to the board. The board refused to extend the time limit for appeal. On June 26, 1966, following a pre-induction Army physical examination and his being notified that he was qualified for military service, defendant filed another current information questionnaire in which he reported that he was a student at Ohio State University, but he claimed no disqualifying conditions. Defendant was classified 1-A. He sought and obtained a personal appearance before the local board, followed by an appeal to the appeal board. That appearance and appeal were limited to his claim for a student deferment, a classification which was granted to him in late May, 1968. In the meantime, defendant had written to the board on May 2, 1968, stating that he would like to appeal his then 1-A classification on the ground that “I am a conscientious objector as described” in the form “filled out in late 1965 or early 1966.” Later the same date defendant wrote to the board regarding his C-0 claim, stating that he would “defer that appeal” because he was “primarily interested in regaining my II-S status.” As graduation from Ohio State approached, defendant was reclassified 1-A and notified. On December 2, 1968, he wrote to the board saying that he wanted to appeal “on the grounds of a hardship deferment.” Later he wrote to the board withdrawing the hardship claim, stating, “This being the case I would like to reopen an appeal of my beliefs (as explained in a C-0 form on record with your office since 1965) * * Thereafter, on defendant’s request, the local board scheduled an interview with defendant for February 25, 1969, at which time defendant was invited to appear. He could not appear, but submitted to the board a written statement repeating and expanding his beliefs based upon the Kantian philosophy. He was reclassified 1-A. An appeal was taken and the appeal board reclassified him 1-A. An induction order for defendant, issued October 1, 1969, was postponed because of defendant’s enrollment in Northwestern University School of Business. A rescheduled induction order was issued June 29, 1970. Thereafter, defendant requested from his board another conscientious objector form. That form was mailed to him, but never returned by him to the board. He reported for induction on August 13, 1970, but refused to submit to induction. It is patent upon this record that defendant failed to exhaust his administrative remedies by either requesting an interview with his board or an appeal to the appeal board upon denial of his C-0 claim in 1966. The guidelines for applying the exhaustion principle, as established by the Supreme Court, are contained in representative statements by that Court as follows: “ * * * [Petitioner’s] failure either to secure a personal appearance or to take an administrative appeal— implicates decisively the policies served by the exhaustion requirement, especially the purpose of insuring that the Selective Service System have full opportunity to ‘make a factual record’ and ‘apply its expertise’ in relation to a registrant’s claim. When a claim to exemption depends ultimately on the careful gathering and analysis of relevant facts, the interest in full airing of the facts within the administrative system is prominent, * * *.” McGee v. United States, 402 U.S. 479, 489-490, 91 S.Ct. 1565, 1571, 29 L.Ed.2d 47 (1971). “In the circumstances of this case, petitioner’s failure to take an administrative appeal not only deprived the appeal board of the opportunity to ‘apply its expertise’ in fact-finding to the record that was available; it also removed an opportunity to supplement a record containing petitioner’s own submission but not containing the results of any specific inquiry into sincerity.” Ibid, at 490-491, 91 S.Ct. at 1572. “Conscientious objector claims * * * would appear to be examples of questions requiring the application of expertise or the exercise of discretion. * * * The Selective Service System is empowered by Congress to make such discretionary determinations and only the local and appeal boards have the necessary expertise.” McKart v. United States, 395 U.S. 185, 198, 89 S.Ct. 1657, 1665, 23 L.Ed.2d 194 n. 16 (1969). In applying the exhaustion of remedies principle, this court has recently held that the exhaustion principle should be applied by the courts except where exceptional circumstances are shown to have existed. United States v. Rabe, 466 F.2d 783, decided by this court on August 11, 1972. Absent such circumstances, failure to request a personal appearance before the local board or to appeal to the appeal board has been repeatedly held to bar a defense to prosecution, based upon a conscientious objector claim. E. g., United States v. Lyzun, 444 F.2d 1043, 1044 (C.A.7 1971); United States v. Smogor, 411 F.2d 501, 503 (C.A.7 1969), cert. denied, 396 U.S. 972, 90 S.Ct. 460, 24 L.Ed.2d 440; United States v. Goodman, 435 F.2d 306, 313-314 (C.A. 7 1970); United States v. Kurki, 384 F.2d 905, 907 (C.A.7 1967), cert. denied, 390 U.S. 926, 88 S.Ct. 861, 19 L.Ed.2d 987. The Regulations vest discretion in a local board to enlarge the time for appeal when it is shown that failure to request an appeal within the time specified was without the registrant’s fault. 32 C.F.R. 1626.2(d). Here, notice of classification was mailed to the address supplied by defendant, and his only suggestion was that he did not receive such notice because he was absent from such address except on weekends. Failure of the board to extend time under those circumstances was neither arbitrary nor an abuse of the board’s discretion. E. g., United States v. McDuffie, 443 F.2d 1163, 1165 (C.A.5 1971); Gretter v. United States, 422 F.2d 315, 317 (C.A.10 1970); United States v. Haseltine, 415 F.2d 334, 336 (C.A.9 1969). It is clear upon this record that defendant asserted his conscientious objector claim when his first student deferment ended, and that he thereafter failed to pursue it except as it seemed convenient to do so. From time to time in addition to his student and C-0 claims, defendant claimed deferment upon the basis of hardship, mental disability, and the physical impairment of a tendency to flat feet. The C-0 claim is shown to have been reasserted by defendant only when one or more of such pending claims were either withdrawn by him or rejected by the board. There is no merit to defendant’s contention! that the board was required to find facts showing that he was not entitled to his claim of conscientious objection. By his failure to follow the appeal procedures provided for him, defendant never invoked the statutory processes which would have initiated a factual inquiry into the sincerity of his claim. McGee v. United States, supra. The judgment is Affirmed. SWYGERT, Chief Judge (dissenting). I respectfully dissent. Under the circumstances of this case, the defendant Bush must be presumed to have stated a prima facie case of conscientious objection when he reasserted his 1-0 claim before his board in 1969. This requires reversal of his conviction under United States v. Lemmens, 430 F.2d 619 (7th Cir., 1970), unless he failed inexcusably to exhaust administrative remedies. For the reasons set out below, I do not think Bush may be charged with a failure to exhaust. As the majority correctly recognizes, Bush failed to appeal from his board’s 1966 denial of 1-0 status until December, 1968, when he wrote: I would now like to open an appeal on the basis of my beliefs (As explained in a C.O. Form on record with your office since 1965); this is an appeal for classification into the C.O. class. This in effect was a request for a reopening of his classification, since the period for a proper appeal had expired long prior to the date of the letter. United States v. Vincilli, 215 F.2d 210 (2d Cir., 1954); United States ex rel. Berman v. Craig, 207 F.2d 888 (3d Cir., 1953); 32 CFR § 1626.2(c). The board responded by scheduling Bush for a personal appearance on February 25, 1969. Bush never appeared. By letter dated February 5, 1969, he informed the board that he would be unable physically to appear as scheduled and requested in lieu thereof that the board consider a lengthy written explication of his moral beliefs. Bush’s next communication from the board was a notice of classification as I-A (SSS Form 110) and a classification advice (SSS Form 111). The mailing of these forms takes on importance when viewed in conjunction with the regulations in effect at the time. 32 C.F.R. § 1625.4 (revised Dec. 9, 1971) dealt with the criteria governing reopening and the procedure to be followed by a local board upon a determination not to reopen: When a registrant, any person who claims to be a dependent of a registrant, any person who has on file a written request for the current deferment of the registrant in a case involving occupational deferment, or the government appeal agent 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 the information accompanying such request fails to present any facts in addition to those considered when the registrant was classified or, even if new facts are presented, 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. In such a case the local board, by letter, shall advise the person filing the request that the information submitted does not warrant the reopening of the registrants’s classification and shall place a copy of the letter in the registrant’s file. No other record of the receipt of such a request and the action taken thereon is required, (emphasis added) When a board reopened a registrant’s classification, it was required to reclassify him, 32 C.F.R. § 1625.11, and notify him as follows under 32 C.F.R. § 1625.12 (revised Dec. 9, 1971): When the local board reopens the registrant’s classification, it shall, as soon as practicable after it has again classified the registrant, mail notice thereof on Notice of Classification (SSS Form No. 110) to the registrant and on Classification Advice (SSS Form No. Ill) to the persons entitled to receive such notice or advice on an original classification under the provisions of § 1623.4 of this chapter. The fact that Bush was mailed Forms 110 and 111 by his board is thus highly significant; under the applicable regulations — which we must presume were adhered to by the board — the mailing signifies that Bush’s classification was reopened. This the board could not have done without making a twofold determination: (1) that Bush had presented new matter in support of his 1-0 claim, and (2) that his file, new matter included, contained sufficient information to state a prima facie case of conscientious objection. These determinations by the board are not subject to reexamination on appeal. See generally, Joseph v. United States, 405 U.S. 1006, 92 S.Ct. 1274, 31 L.Ed.2d 473 (1972); Lenhard v. United States, 405 U.S. 1013, 92 S.Ct. 1296, 31 L.Ed.2d 477 (1972); United States v. Dziemiela, No. 72-1465 (7th Cir., Sept. 28, 1972); United States v. Nelson, No. 71-1812 (7th Cir., July 12, 1972); United States v. Hulsey, 463 F.2d 1071 (7th Cir., 1972); Memorandum for the United States in Joseph v. United States, 18-22; c. f. United States v. Hershey, 451 F.2d 1007 (3d Cir., 1971). That the board found a prima facie case of conscientious objection and failed to state reasons for its denial of a 1-0 exemption calls Lemmens immediately into play. And the board’s finding that Bush had presented it with new matter by his letter of February 5 is relevant to refute the Government’s assertion that he failed to exhaust administrative remedies. The majority implies that Bush’s failure to exhaust remedies on his 1-0 claim in 1966 precludes his effective exhaustion in 1969, when he admittedly took an appeal from the board’s denial of that claim. As I see it, this view is persuasive only if the board rejected the 1-0 claim in 1969 for failure to state “any facts in addition to those considered when the registrant was classified.” 32 C.F.R. § 1625.4. But the board found the opposite, for it reopened Bush’s classification. It follows that the 1969 prosecution by Bush of his conscientious objection claim must be assessed apart from his 1966 prosecution of that claim and that his 1966 failure to exhaust Selective Service remedies cannot be carried over to taint his full attempt to exhaust those remedies in 1969. Since I also reject the Government’s argument that Bush’s Selective Service file displays enough objective indicia of insincerity regarding his 1-0 claim to eliminate his defense under Lemmens, I would reverse. . This would not be the case if Bush had appeared in person before the board. He would then have received Forms 110 and 111 even if the board had decided not to reopen his ease. 32 C.F.R. § 1624.2(d) states: After the registrant has appeared before the member or members of the local board designated for the purpose, the local board, as soon as practicable after it again classifies the registrant, or determines not to reopen the registrant’s classification, shall mail notice thereof on Notice of Classification (SSS Form No. 110) to the registrant and on Classification Advice (SSS Form No. Ill) to the persons entitled to receive such notice or advice on an original classification under the provisions of § 1623.4 of this chapter, (emphasis added) Bush did not appear, however, and this section raises no ambiguity as to the import of the board’s action. . In the cited cases, it was inferred from the fact of reopening only that a local board had found a registrant’s file to state a prima facie case for statutory exemption. This is attributable, I think, to the fact that new matter unquestionably was involved in each case, and not to any judicial (or prosecutorial) reluctance to extend Joseph to its logical limit. Given the fact that an offering of new matter and presentation of a prima facie case are parallel requirements of a reopening under 32 C.F.R. § 1625.4, I can see no reason to read Joseph as inferring only a prima facie case from the fact of reopening. . This would have been possible, even in light of the board’s mailing of Forms 110 and .111, if Bush had shown up for his personal appearance. See note 1, supra. We might then have to embark on a careful analysis of Bush’s Selective Service file to determine if the board’s decision to retain Bush as I-A could have been based on his failure to present new matter or a prima facie case for exemption. Here, however, Joseph forecloses this inquiry.

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UNITED STATES of America, Appellee, v. Albert PUCO, Defendant-Appellant. No. 197, Docket 72-1737. United States Court of Appeals, Second Circuit. Argued Oct. 30, 1972. Decided Jan. 11, 1973. Rehearing Denied May 4, 1973. Jay Goldberg, New York City, for appellant. John H. Gross, Asst. U. S. Atty. (Whitney North Seymour, Jr., U. S. Atty. for Southern District of New York, John W. Nields, Jr., Asst. U. S. Atty., on the brief), for appellee. Before LUMBARD, FEINBERG and OAKES, Circuit Judges. FEINBERG, Circuit Judge: Albert Puco was convicted in April 1972 by a jury in the United States District Court for the Southern District of New York, Arnold Bauman, J., of selling narcotic drugs to an undercover federal agent in violation of 26 U.S.C. §§ 4705(a) and 7237(b). Puco was sentenced on May 22, as a second time narcotics law violator, to 14 years in prison. This was Puco's third trial on two counts of conspiracy to sell narcotic drugs and sale of such drugs. At a trial in February 1970, Puco and a co-defendant, Robert Gonzalez, were convicted on each count, but their convictions were reversed because of improper prosecutorial comment. United States v. Puco, 436 F.2d 761 (2d Cir. 1971) (reversal of Gonzalez’s conviction, April 16, 1971, is unreported). A superseding indictment was filed the same month, again charging conspiracy and sale of narcotics. At their second trial, in June 1971, both defendants were again found guilty on each count. On appeal Puco’s conviction was once more reversed — because of use of a 21-year old conviction in cross-examining him — and his case was remanded, 453 F.2d 539; the conviction of Gonzalez was affirmed. 460 F.2d 1286. At Puco’s third trial, he was acquitted of the conspiracy charge but convicted on the sale charge. It is from this conviction that he now appeals. For reasons set forth below, we affirm the conviction. I The events leading to Puco’s arrest began when agents of the Bureau of Narcotics and Dangerous Drugs, together with an informer, contacted Gonzalez, a suspected narcotics dealer, to discuss a possible heroin purchase. At their first meeting, in late June 1969, Gonzalez was unable to reach his “connection” by phone. The next day Gonzalez again met with the agents and described his contact as Italian and as having “a legitimate business front.” During this meeting Gonzalez placed a call to his contact, known as “Al”; one of the agents sought to arrange a transaction with him, but the negotiations stalled. Four days later, the agents again met with Gonzalez. Once again, the heroin deal foundered, but another of the agents, George Ellin, reached an agreement with Gonzalez for a separate purchase of cocaine, to be supplied by Al. On July 2, by prearrangement, Ellin met Gonzalez and they drove, at Gonzalez’s direction, to White Plains Road in the Bronx. When they were near Wood Avenue and White Plains Road, Gonzalez stated that this was the block where the sale would be made and that his connection owned a store in the area and used a nearby building for drug deliveries. Later they parked across the street from the block in question, and Gonzalez pointed out one building as the place where the delivery would be made at 8:00 o’clock. The two men waited; at 8 P.M. appellant Puco left the TV repair shop that he owned on the block, carrying a “suitcase type of bag.” Gonzalez then reportedly said to Ellin, “There’s my man now, the individual with the bag. He carries the merchandise in the bag.” Puco entered the building that Gonzalez had earlier identified, which was immediately next door to Puco’s shop. Gonzalez left the car and followed Puco into the building, emerging “less than a minute” later with a brown paper bag containing one-half kilo of cocaine. On a signal from Ellin, surveilling agents closed in and arrested Gonzalez. Ellin then identified Puco as he came out of the building, still carrying his bag, and Puco was arrested as well. No money had changed hands prior to the arrest. The most substantial arguments on appeal relate to the remarks Gonzalez allegedly made to Agent Ellin. At trial (Puco’s third), Ellin described the events of the day in question, including, over defense objection, the alleged statements of Gonzalez identifying Puco as his connection. As part of the defense case, Puco’s counsel sought to introduce into evidence a transcript of Gonzalez’s testimony at his — and Puco’s — first trial, in which Gonzalez denied that he had seen Puco at all at the time and place in question. The asserted reason for introducing this transcript was to impeach the hearsay declarant, Gonzalez. After ascertaining that the Government was willing to produce Gonzalez, who was then in jail, as a defense witness, Judge Bauman refused to allow introduction of the transcript on the ground “that Mr. Gonzalez is readily available and the best way to hear what Mr. Gonzalez has to say is to produce Mr. Gonzalez.” Defense counsel declined to call Gonzalez, principally because to do so might give the prosecution an opportunity to question him about certain statements incriminating Puco that Gonzalez had purportedly made to an Assistant United States Attorney shortly after his arrest. II Appellant’s most challenging argument is, in effect, an attack on the constitutionality of the standard exception to the hearsay rule for the extrajudicial declarations of a defendant’s alleged co-conspirator. Puco claims that the Government should have been required to call Gonzalez as a witness before allowing Agent Ellin to report Gonzalez’s alleged statements and that the failure to do so deprived Puco of his sixth amendment right “to be confronted with the witnesses against him.” Ellin’s testimony as to what Gonzalez had said, though hearsay, was admitted as reporting statements made in furtherance of a conspiracy. See, e. g., Lutwak v. United States, 344 U.S. 604, 617, 73 S.Ct. 481, 97 L.Ed. 593 (1953). That the testimony was admissible in spite of its hearsay character does not, however, end our inquiry. Although there has not been a consensus in the Supreme Court as to the scope and substance of the Confrontation Clause, the Court has clearly stated that the Clause is not merely a codification of the hearsay rule. See Dutton v. Evans, 400 U.S. 74, 81-82, 91 S.Ct. 210, 27 L.Ed.2d 213 (1970) (opinion of Stewart, J.), quoting California v. Green, 399 U.S. 149, 155-56, 90 S.Ct. 1930, 26 L.Ed.2d 489 (1970). Nonetheless, recent Court decisions indicate that the considerations governing the hearsay rule also animate the principles of the confrontation guarantee. Although careful to avoid placing evidentiary rules in a constitutional strait jacket, the Court has emphasized the importance of subjecting evidentiary statements to challenge by cross-examination of the declarant during at least some stage in the judicial proceedings against a defendant. Thus, in California v. Green, supra, testimony at a preliminary hearing at which counsel conducted cross-examination was held admissible at trial because of that prior cross-examination, regardless of whether the witness was available at trial, 399 U.S. at 165-66, 90 S.Ct. 1930; and the Court also held that since the witness was available for cross-examination at trial, the preliminary hearing testimony would have been admissible even if there had been no opportunity to cross-examine. Id. at 157-64. See Douglas v. Alabama, 380 U.S. 415, 85 S.Ct. 1074, 13 L.Ed.2d 934 (1965) (conviction invalid as prosecutor read to jury confession of accomplice, who invoked fifth amendment privilege and thus effectively prevented cross-examination). The function of the cross-examination requirement is to assure that “the trier of fact has a satisfactory basis for evaluating the truth of the prior statement” introduced into evidence at trial, whether by transcript of a prior hearing or by hearsay testimony. California v. Green, supra, 399 U.S. at 161, 90 S.Ct. 1930. However, some statements are, because of their content or the circumstances in which they were uttered, obviously reliable even in the absence of cross-examination of the declarant. Thus, in Dutton v. Evans, supra, 400 U.S. at 89, 91 S.Ct. 210, the Court indicated that the presence of sufficient “indicia of reliability” may, in some circumstances, permit the prosecution to introdüce out-of-court statements into evidence even though the declarant is available to it and the defendant has never had an opportunity to cross-examine him. Justice Stewart’s plurality opinion in Dutton, which was joined by three other justices, indicates that the exact scope of this exception to the usual requirement of an opportunity to cross-examine must be worked out on a case-by-case basis, id. at 86, 91 S.Ct. 210, but the exception apparently applies at least where the statement is clearly trustworthy and is not “crucial” to the prosecution or “devastating” to the defendant. See United States v. Adams, 446 F.2d 681 (9th Cir.), cert. denied, 404 U.S. 943, 92 S.Ct. 294, 30 L.Ed.2d 257 (1971); cf. United States v. Clayton, 450 F.2d 16, 19-20 (1st Cir. 1971), cert. denied, 405 U.S. 975, 92 S.Ct. 1200, 31 L.Ed.2d 250 (1972). While the latter standards are fairly general, it should be noted that the prosecution in Dutton apparently had a very strong case. Twenty witnesses testified against the defendant, including an eyewitness who identified him as one of the participants in the triple murder, and the plurality opinion characterized the hearsay testimony there in question as “of peripheral significance at most.” 400 U.S. at 87, 91 S.Ct. 210. Although the holding in Dutton is apparently not sui generis, its scope is uncertain in view of both the facts of the case and other recent decisions. See, e. g., Mancusi v. Stubbs, 408 U.S. 204, 92 S.Ct. 2308, 33 L.Ed.2d 293 (1972) (transcript of principal witness from first trial admissible at second trial as witness not available and there was adequate cross-examination at first trial); California v. Green, supra; Barber v. Page, 390 U.S. 719, 88 S.Ct. 1318, 20 L.Ed.2d 255 (1968) (transcript of preliminary hearing testimony inadmissible at trial despite availability of cross-examination at earlier hearing unless Government makes reasonable effort to produce witness at trial); see generally, Davenport, The Confrontation Clause and the Co-Conspirator Exception in Criminal Prosecutions: A Functional Analysis, 85 Harv.L.Rev. 1385 (1972). Nonetheless, applying the standards of Dutton as we understand them, we conclude that the Confrontation Clause did not bar admission of Agent Ellin’s testimony reporting Gonzalez’s. statements. There is no reason to question the accuracy of Gonzalez’s identification of Puco as his source. Gonzalez undoubtedly believed Ellin to be merely an “innocent” purchaser, not a government agent; otherwise Gonzalez would not have been there. Thus, Gonzalez’s voluntary disclosure of his source was presumably not tainted by any motive to falsify the identification. Nor is there any reasonable possibility that Gonzalez was in error in his statements since at 8:00 o’clock, the predicted time, Puco appeared and entered the predicted building with a “suitcase type of bag,” Gonzalez followed Puco into the building and emerged almost immediately with the agreed-upon cocaine, and was followed shortly by Puco, still carrying his bag. Moreover, Gonzalez’s earlier description of his source — as Italian, as answering to the name Al, as owning a legitimate business—is consistent with identification of Puco as the source. In view of all these circumstances, the statements of Gonzalez, if made, were reliable. As for the question whether the reported statements were in fact ever made, no confrontation issue is raised by the use of Ellin’s testimony. As the Supreme Court said with reference to this problem in Dutton, 400 U.S. at 88, 91 S.Ct. at 219: The hearsay rule does not prevent a witness from testifying as to what he has heard; it is rather a restriction on the proof of fact through extrajudicial statements. From the viewpoint of the Confrontation Clause, a witness under oath, subject to cross-examination, and whose demeanor can be observed by the trier of fact, is a reliable informant not only as to what he has seen but also as to what he has heard. [Footnote omitted.] We also cannot say on these facts that Gonzalez’s statement to Ellin was “devastating” or “crucial,” although ordinarily a verbal identification of a defendant might well be. Admittedly, these terms do not offer a precise standard, but we interpret them as requiring that the evidence be in some way essential, indeed central, to the prosecution’s case. It is true that Ellin’s testimony about what Gonzalez had said to him on July 2 was more important than was the hearsay statement quoted in Dutton. But even though evidence of Gonzalez’s verbal identification of Puco was helpful to the prosecution, it came as part of a sequence of events that made the statement almost unnecessary. Given what had occurred prior to 8:00 P.M. on July 2, even if Gonzalez had said nothing to Ellin when Puco appeared, Gonzalez’s immediate departure from the car and entry into the building spoke volumes. A jury could well have convicted Puco based upon prior events and what Ellin had observed of Puco’s and Gonzalez’s entries into the building and their respective departures from it, Gonzalez with the cocaine. Finally, on the peculiar facts of this case Gonzalez was “available” to the Government as a witness more in theory than in fact. At the second trial of Gonzalez and Puco, Gonzalez took the stand in his own defense. The Government confronted him with a statement made after his arrest admitting that Puco was his source of narcotics; Gonzalez denied making the statement and the trial judge refused to permit the Assistant United States Attorney to whom Gonzalez had allegedly made it to so testify. On the appeal from that second trial, Puco asserted that the denial of his motion for severance had prejudiced him because the Government, in cross-examining Gonzalez, had referred repeatedly to his post-arrest statement that Puco was his source, even though Gonzalez was then unwilling to so testify. Presumably, if the Government had called Gonzalez as a hostile witness in Puco’s third trial, the defense would have complained vigorously — and quite possibly successfully — when Gonzalez was again confronted with his statement. See 3A J. Wigmore, Evidence §§ 904, 905 (Chadbourn Rev.1970). Since Gonzalez was not called, the defense had the choice of leaving him out of the trial altogether or calling him as a defense witness with the possibility of impeachment. To this it might be said that the Government, by Ellin’s testimony, injected Gonzalez’s statements into the case, because Ellin could have told his story without referring to these statements of Gonzalez. But, as already shown, that evidence was clearly admissible, and in large part inferable merely from Ellin’s presence at White Plains Road with Gonzalez and the accompanying events and circumstances. In sum, we regard Dutton as requiring a careful case-by-ease analysis of the effect of the co-conspirator rule. When Gonzalez identified Puco as “my man,” Gonzalez had no motive to falsify. Moreover, his remark was almost unnecessary in view of his immediate action and the events preceding and following it. Finally, the Government was uniquely hampered from putting Gonzalez on the stand. On these facts, application of Dutton suggests that no constitutional error was committed. Ill Appellant also objects to the refusal of the court to permit introduction of the earlier testimony of Gonzalez after agent Ellin had quoted him. Citing a number of authorities, e. g., 3A J. Wigmore, supra, § 884; 4 B. Jones, The Law of Evidence § 936, at 1764 (5th ed. 1958), Puco asserts that he is entitled to use the inconsistent statements of a hearsay declarant (Gonzalez) in order to attack his credibility, and that he need not lay a foundation otherwise required for use of such statements, see, e. g., United States v. Hayutin, 398 F.2d 944, 952-953 (2d Cir.), cert. denied, 393 U.S. 961, 89 S.Ct. 400, 21 L.Ed.2d 374 (1968), since the prosecution did not call the declarant. Although we can accept the general validity of appellant’s premise, cf. Carver v. United States, 164 U.S. 694, 697-698, 17 S.Ct. 228, 41 L.Ed. 602 (1897), his conclusion that the district court erred in rejecting his claim does not follow. By use of this theory, appellant actually seeks to introduce the evidence of Gonzalez’s denials of Ellin’s story not primarily to discredit the reliability of Gonzalez’s alleged identification of Puco, but rather to contradict and discredit Ellin’s version of the events of July 2. Used in this manner, the prior testimony is submitted for the truth of its content and is thus hearsay, which Judge Bauman could properly exclude, even though it may have had some very marginal probative value on the credibility of Gonzalez. Apparently in anticipation of this conclusion, appellant also cited to the court below the prior recorded testimony exception to the hearsay rule. See C. McCormick, Handbook of the Law of Evidence ch. 25 (2d ed. 1972). However, this exception has traditionally been predicated upon the unavailability of the witness. See, e. g., id. § 255, at 617; Proposed Rules of Evidence, 51 F.R.D. 315, 440 (Advisory Committee’s Note to Rule 804). Here the prosecution declared in open court its willingness to produce Gonzalez, but defense counsel declined. That Puco’s attorney did not wish to expose such a witness to possibly damaging cross-examination does not justify introduction of Gonzalez’s prior testimony under this exception to the hearsay rule. Puco’s final argument goes to the sufficiency of the evidence against him. We have already indicated that there was ample evidence for a jury to convict. Judgment affirmed. We wish to compliment appellant’s assigned counsel, Jay Goldberg, for his excellent briefs and argument. ON PETITION FOR REHEARING FEINBERG, Circuit Judge: The United States has petitioned for a rehearing by the panel, and, in view of the statements contained in petitioner’s brief, it seems appropriate to comment briefly on them. The United States claims that the panel decision has unveiled a new test which, as a pre-condition to admitting a declaration of a co-conspirator, requires not only the usual findings that the declaration is in furtherance of a conspiracy of which the defendant was then a member, but the additional findings that the declaration is “reliable” and that it is not “crucial” to the Government’s case or “devastating” to the defense. In addition, the United States claims that the “new test” is unsupported by Dutton v. Evans, 400 U.S. 74, 91 S.Ct. 210, 27 L.Ed.2d 213 (1970), and that that decision, if anything, stands for the proposition that the traditional co-conspirator rule in the federal courts should remain untouched. We believe that the Government reads too little into Dutton and too much into the panel decision in this case. While the Court did state in Dutton that “we do not question the validity of the co-conspirator exception applied in the federal courts,” id. at 80, 91 S.Ct. at 215, it did so only to make clear what the issue was before it. The analysis in Dutton, as indicated by the panel opinion in this case, requires another look at the traditional co-conspirator rule in the federal courts. The amicus brief filed by the Solicitor General of the United States in Dutton itself went into that question extensively. At least four circuit courts that have encountered the question since Dutton was decided have felt compelled to consider whether the Court’s decision in Dutton affected the traditional co-conspirator rule, see the authorities collected in footnote 11 of the panel opinion, and two of them have gone through the same analysis as the panel opinion in this case. United States v. Adams, 446 F.2d 681, 682-84 (9th Cir.), cert. denied, 404 U.S. 943, 92 S.Ct. 294, 30 L.Ed.2d 257 (1971); United States v. Weber, 437 F.2d 327, 335-40 (3d Cir. 1970), cert. denied, 402 U.S. 932, 91 S.Ct. 1524, 28 L.Ed.2d 867 (1971). Therefore, we adhere to the position that ignoring the implications of Dutton is unwarranted and unwise. The United States claims that as a result of the panel decision application of the co-conspirator rule in the district courts in this circuit will be unworkable. The Government suggests that from now on, because of the panel opinion, before a district judge decides that the declaration of a co-conspirator may be admitted, the judge must determine not only that the declaration is “reliable” but also that it is neither “crucial” to the Government’s case nor “devastating” to the defense. The panel opinion made no such holding. In referring to the latter two criteria, we were acting out of caution — perhaps with an excess of that quality — to satisfy ourselves that the declarations of Puco’s co-conspirator, Gonzalez, were properly admitted regardless of how broadly Dutton might be construed. We did not hold that Dutton had to be so expansively construed, and we do not do so now. Specifically, we did not and do not hold that a trial judge must find, before admitting a co-conspirator’s declaration, that it is not “crucial” to the Government’s case or “devastating” to the defense. For future applications of Dutton to similar situations, we suggest that when a co-conspirator’s out-of-court statement is sought to be offered without producing him, the trial judge must determine whether, in the circumstances of the case, that statement bears sufficient indicia of reliability to assure the trier of fact an adequate basis for evaluating the truth of the declaration in the absence of any cross-examination. That this is not an insuperable problem is indicated by the decisions cited above. Thus, in United States v. Weber, supra, Judge Adams pointed out that the co-conspirator’s declarations in that case presented “the traditional hallmarks of reliability because they were uttered spontaneously” and were against his penal interest when made. 437 F.2d at 340; cf. United States v. Glasser, 443 F.2d 994, 999 (2d Cir. 1971). In most cases the determination that a declaration is in furtherance of the conspiracy a determination that the trial judge now must make in every case for admissibility—will decide whether sufficient indicia of reliability were present. While there may be exceptions, we do not think that they will be frequent. ' Finally, we note that Puco’s counsel apparently intends to petition the Supreme Court for certiorari. If the Government desires a further clarification of the implications of Dutton for the co-conspirator rule, it can choose to support Puco’s petition in order to obtain guidance from the most reliable source for interpretation of Dutton. Petition for rehearing denied. LUMBARD, Circuit Judge (dissenting) : I dissent. The panel should grant the government’s petition for rehearing to make clear that we adhere to the well established law of this Circuit concerning the admissibility of statements made by co-conspirators in furtherance of the conspiracy. Until now the generally accepted rule, not only in the Second Circuit but elsewhere, has been that where the judge is satisfied by independent evidence that the defendant was a party to a conspiracy, what another member said during the course of the conspiracy in order to carry it out is admissible against him. This time-honored rule is sound, sensible, and workable, and there is nothing in Dutton v. Evans, 400 U.S. 74, 91 S.Ct. 210, 27 L.Ed.2d 213 (1970), or in policy which should cause us to abandon or qualify it now. The testimony at issue here concerned what Gonzalez said to Agent Ellin when they saw Puco emerge from his TV repair shop. Ellin had previously arranged with Gonzalez to purchase cocaine which Gonzalez was to secure through his contact, “Al.” For this purpose Ellin met Gonzalez and they drove to White Plains Road near Wood Avenue. Gonzalez pointed out the building where the delivery would be made at 8 o’clock. He had told Ellin that his connection owned a store in the area and used a nearby building for deliveries. At 8:00 P.M. Ellin and Gonzalez saw Puco leave his TV repair shop carrying a bag. Ellin testified that at this point Gonzalez said to him: “There’s my man now, the individual with the bag. He carries the merchandise in the bag.” Puco then entered the building which Gonzalez had earlier pointed out. Gonzalez followed Puco into the building and came out almost immediately thereafter with a brown paper bag which contained one-half kilo of cocaine. What Gonzalez said to Ellin, about Puco was the statement of a co-conspirator made during the course of the conpiracy and in furtherance of it. As such it was admissible under the traditional co-conspirator hearsay exception which has been the law of this Circuit from time immemorial. Out of a host of cases, some before and some after Dutton v. Evans, supra, it suffices to cite United States v. Renda, 56 F.2d 601 (2d Cir. 1932); United States v. Geaney, 417 F.2d 1116 (2d Cir. 1969), cert. denied, sub nom. Lynch v. United States, 397 U.S. 1028, 90 S.Ct. 1276, 25 L.Ed.2d 539 (1970); and United States v. Projansky, 465 F.2d 123 (2d Cir. 1972). Nothing in the plurality opinion of Mr. Justice Stewart in Dutton v. Evans, supra, undermined this long standing doctrine. The statement at issue in Dutton was not made during the course of the conspiracy but after the conspiracy was at an end, while one of the conspirators was in prison. This evidence would not have been admissible in a federal prosecution, but was permitted in a Georgia state court murder trial under a Georgia rule which allowed proof of statements made during the concealment phase of the conspiracy. Mr. Justice Stewart made it unmistakably clear that the Court was dealing only with the situation presented in the Georgia trial. Thus at 400 U.S. page 80, 91 S.Ct. page 215, he stated: “Appellee does not challenge and we do not question the validity of the eoconspirator exception applied in the federal courts” , and he went on, at page 81, 91 S.Ct. at page 215 to define that exception as being one “that allows evidence of an out-of-court statement of one conspirator to be admitted against his fellow conspirators ... if the statement was made in the course of and in furtherance of the conspiracy, and not during a subsequent period when the conspirators were engaged in nothing more than the concealment of the criminal enterprise.” If the Court had meant to upset a doctrine that had prevailed in the federal courts for years with specific Supreme Court approval, e. g., Wong Sun v. United States, 371 U.S. 471, 490-91, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963), it would not have left the matter to inference. Despite the fact that the statement admitted against Evans did not fall within the well-recognized federal hearsay exception, the Court proceeded to analyze the Georgia rule in the context of the Sixth Amendment. Finding that the statement was not “crucial” or “devastating” and that there were sufficient “indicia of reliability,” the Court concluded that the use of the evidence did not violate the Sixth Amendment and that it was therefore admissible. Thus, nothing in Dutton v. Evans, supra, cast doubt on the settled federal rule. I see no reason for casting doubt upon the rule regarding the admission of co-conspirator’s statements. Before the declaration of a co-conspirator can be admitted, the judge must be satisfied “by a fair preponderance of the evidence independent of the hearsay utterances,” see United States v. Geaney, supra, 417 F.2d at 1120, that the conspiracy existed and that the defendant was a member; and the statement itself must have been made in the course of the conspiracy and in furtherance of it. These requirements protect against the use of unreliable evidence, since the circumstances in which the statement is made— prior to detection and for the purpose of implementing the illegal scheme of which the defendant has been shown to be a part — tend to assure the reliability of the declarant and the accuracy of the statement. To the contrary, the statements received by the Georgia court in Dutton were made after the conspiracy had ended and were therefore subject to a host of reliability problems, including the possibility of improper motive or bias on the part of the declarant. As regards statements within the traditional co-conspirator rule, it is of no moment in determining admissibility that these may be “crucial” or “devastating.” Prejudice and relevance are inseparable in such cases, and if the statement is made during the course and in furtherance of the conspiracy, its obvious relevance must carry the day. Whenever a criminal offense has been carried out by more than one person, and this is charged in a large percentage of federal criminal prosecutions, statements made by those who are the leaders, or by their confederates, in an effort to carry it out, are necessarily the heart of the offense. When taken together with the other evidence in the ease, these statements, without any further proof, necessarily constitute reliable evidence of the kind which judge and jury are well equipped to evaluate. There is no logical reason to impede unnecessarily the use of this evidence as the panel opinion seeks to do. It may be that panels of the Third and Ninth Circuits have regarded Dutton as a justification for changing the law in their respective circuits, see United States v. Weber, 437 F.2d 327, 335-40 (3rd Cir. 1970) cert. denied 402 U.S. 932, 91 S.Ct. 1524, 28 L.Ed.2d 867 (1971). and United States v. Adams, 446 F.2d 681 (9th Cir.), cert. denied, 404 U.S. 943, 92 S.Ct. 294, 30 L.Ed.2d 257 (1971), although in both cases, as here, the decision was in the government’s favor and it was thus precluded from seeking certiorari. But a contrary result was reached by the First Circuit in United States v. Clayton, 450 F.2d 16 (1st Cir. 1971), where the defendant’s petition for certiorari was denied, 405 U.S. 975, 92 S.Ct. 1200, 31 L.Ed.2d 250 (1972). I think my colleagues are unjustified in unsettling the law of this Circuit without positive en banc approval of a majority of the active judges of the Circuit. The fact that only Chief Judge Friendly and Judges Hays and Timbers voted to en banc this case by no means implies that a majority of the active judges approve the panel opinion; I know from experience how difficult it is to persuade a majority of the active judges of a busy court to agree to en banc consideration where they believe the panel has reached the right result simply because they disagree with the opinion. In my view the panel committed serious error in an opinion, which should now be corrected. I note that the panel has since filed a supplemental opinion on petition for rehearing. Although the panel has retreated somewhat from its original position, it has not gone nearly far enough. While the deletion of the “crucial” or “devastating” test is most welcome — although hard to understand if Dutton were really applicable — the panel still takes the position that the district judge must determine if a declaration by one of the co-conspirators in furtherance of the conspiracy sought to be admitted against a defendant presents “sufficient indica of reliability” — without offering any guidance as to what indicia will suffice. The supplemental opinion states that the determination that a declaration is in furtherance of the conspiracy will generally supply the needed “indicia of reliability.” However, since the majority would give the defendant a chance to question this, it seems clear that, as a practical matter, the necessity of ascertaining whether statements made by co-conspirators during the course of the conspiracy are “reliable” will needlessly delay the trial of many federal cases. If trial judges should follow the lead of the dicta of the panel in this matter — and I hope they will not — they must either hold a pre-trial hearing, or, more likely suspend the taking of evidence before the jury in order to go into this collateral question. It now takes at least twice as long to try the average criminal case as it did ten years ago due in large part to the fact that before or during trial, hearings may now be required to determine the legality and admissibility of a search and seizure, a confession, or an identification. To this list my panel colleagues now would add a further test for statements by co-conspirators. Rather than further complicating and lengthening criminal conspiracy, trials in this manner, I submit there is every reason for keeping the trial procedures as simple as possible, and for adhering to long accepted principles unless and until the Supreme Court should clearly instruct otherwise. For these reasons, I would grant the government’s motion for rehearing. I would strike from the panel opinion the seven pages of discussion under the section marked “II,” pages 1102 to 1105 and substitute in its place the following: “The objection to Ellin’s testimony regarding what Gonzalez said to him about Puco when they saw Puco emerge from his TV repair shop carrying a bag and then enter the building next door is entirely without merit. Gonzalez’s statement was the statement of a conspirator made in the course of the conspiracy to further the success of the conspiracy. Dutton v. Evans, 400 U.S. 74 [91 S.Ct. 210, 27 L.Ed.2d 213] is not in point. That case did not involve a statement made in the course of the conspiracy and in furtherance of it. In Dutton the Georgia state court had admitted a statement made by a co-conspirator after he had been committed to prison and arraigned on a charge of committing the same murders with which the defendant was charged. Thus the need for showing additional characteritics of reliability which Mr. Justice Stewart’s opinion considered needed to save the conviction in that case are not required here.” ORDER DENYING REHEARING AND REHEARING EN BANC. A petition for a rehearing containing a suggestion that the action be reheard en banc having been filed herein by counsel for the appellee, a poll of the judges in regular active service having been taken at the request of such a judge, and there being no majority in favor thereof, Upon consideration thereof, it is Ordered that said petition be and it hereby is denied. Chief Judge FRIENDLY dissents in an opinion in which Circuit Judge HAYS and TIMBERS concur. Circuit Judge MANSFIELD also dissents. FRIENDLY, Chief Judge (dissenting) : FRIENDLY, Chief Judge, with whom HAYS and TIMBERS, Circuit Judges, join, dissenting from the denial of reconideration en banc: Like former Chief Judge Lumbard, I find it impossible to understand how two members of a panel can modify a rule of evidence applied by this Circuit in scores of decisions, approved by all the commentators, see, e.g., 4 Wigmore, Evidence § 1079 (Chadboum Rev. 1972); McCormick, Evidence § 267, at 645-46 (Cleary ed. 1972); ALI, Model Code of Evidence, Rule 508(b); Commissioners’ Uniform Rules of Evidence 63(9) (b); Proposed Federal Rules of Evidence, Rule 801(d)(2), recognized by the Supreme Court in cases as old as United States v. Gooding, 12 Wheat. (25 U.S.) 460, 469-470, 6 L.Ed. 693 (1827), and as recent as Wong Sun v. United States, 371 U.S. 471, 490, 83 S.Ct. 407, 9 L.Ed.2d 441 (1963), and expressly preserved by the very decision, Dutton v. Evans, 400 U.S. 74, 91 S.Ct. 210, 27 L.Ed.2d 213 (1970), now claimed to have qualified it. The expression by the panel majority, unreviewable at the instance of the government since the decision was in its favor, is bound to create chaos in the administration of criminal justice in this circuit. Some judges may decide to disregard it. Others will attempt to apply it, although I am at a loss to know how they can since the panel supplies no guidelines as to what additional “indicia of reliability” will suffice. In some cases where a judge who regards himself as bound by the panel’s expression finds insufficient indicia, exclusion will result in an acquittal, unjustified under the long-standing rule of law, from which the government will be unable to appeal. In others, where the declaration has been admitted and the defendant convicted, panels of this court will be obliged to face the question á majority of the active judges seek to avoid today. There will be many months of uncertainty before the law in this circuit can be put back where the Supreme Court meant to leave it, as it ultimately will be either by this court or by higher authority. I cannot think of a case more clearly demanding en banc consideration. . Both provisions were repealed, effective May 1, 1971, by the Comprehensive Drug Abuse Prevention and Control Act § 1101 (b)(3)(A), (4) (A), 84 Stat. 1292. (The equivalent provisions are now found at 21 U.S.C. §§ 828(a), 841(a)(1), (b)(1) (A).) However, under § 1103(a) of the new Act, the repealed sections are still applicable to “ [p] rosecutions for any violation of law occurring prior to the effective date of section 1101 . ” . Puco is free on bail pending this appeal. . The Supreme Court has characterized the co-conspirator rule as a hearsay exception. See Dutton v. Evans, 400 U.S. 74, 80-81, 91 S.Ct. 210, 27 L.Ed.2d 213 (1970). However, the question whether the admissibility of admissions (of which the co-conspirator rule is one aspect) is in fact an exception to the hearsay rule has been much debated, compare Morgan, Admissions as an Exception to the Hearsay Rule, 30 Yale L.J. 355 (1921) (exception to hearsay rule), with IV J. Wigmore, Evidence §§ 1048-49 (3d ed. 1940)- (use of admissions is consistent with, not exception to, hearsay rule), and the new federal rules of evidence adopt the latter view. Fed.R.Evid. 801(d)(2), 56 F.R.D. 183, 293 (1972) (eff. July 1, 1973, subject to congressional veto). . The defendant in Dutton v. Evans was tried for participating in the murder of three police officers in Georgia. Among the witnesses called by the prosecution was a prison inmate, who testified that, his cellmate, also charged with the murders, had exclaimed, on returning to his cell from the arraignment: “If it hadn’t been for that dirty son-of-a-bitch Alex Evans, we wouldn’t be in this now.” The testimony was admitted under a Georgia statutory hearsay exception, and the Supreme Court, in a 5-4 decision, rejected defendant’s claim that he had been denied his constitutional right to confront the declarant, whom the state had never called to testify. . The deciding vote was cast by Justice Harlan, who, in a concurring opinion, elaborated a very narrow interpretation of the Confrontation Clause as incorporating only the traditional rule that a defendant be permitted to cross-examine all witnesses testifying against him in court. See 400 U.S. at 94, 91 S.Ct. 210. According to Justice Harlan, the issues discussed in the other opinions were properly questions of due process, and he found the procedures used at trial to be reasonable under that standard. . Whether the evidence in question must be “crucial” or “devastating” to escape the Dutton holding is not explicitly stated, but Justice Stewart does distinguish the Court’s prior decisions on that ground, among others. See 400 U.S. at 87, 91 S.Ct. 210. . Defendant did not object to this earlier testimony by Ellin. . We also note that, unliké in Dutton, see note 4 supra, there is no ambiguity in Gonzalez’s statements. Hence, while cross-examination might arguably have been helpful to defendant in elucidating a possible non-incriminatory meaning in Dutton, see 400 U.S. at 103-104, 91 S.Ct. 210 (Marshall, J., dissenting), such was not the case here. . As indicated above, this court did not rule on that issue but reversed on another ground. . Similarly, in Dutton, the out-of-court declarant was available to defendant, who chose not to call him. 400 U.S. at 88 n. 19, 91 S.Ct. 210. . AVe note in passing that since the decision in Dutton, four circuits have upheld the constitutionality of the co-conspirator exception in general or at least in circumstances analogous to those found here. See, e. g., United States v. Cerone, 452 F.2d 274, 283 (7th Cir. 1971), cert. denied, 405 U.S. 964, 92 S.Ct. 1168, 31 L.Ed.2d 240 (1972); United States v. Clayton, supra, 450 F.2d at 19-20; United States v. Adams, supra; United States v. Weber, 437 F.2d 327, 335-40 (3d Cir. 1970), cert. denied, 402 U.S. 932, 91 S.Ct. 1524, 28 L.Ed.2d 867 (1971); cf. Childs v. Cardwell, 452 F.2d 541 (6th Cir. 1971), cert. denied, 407 U.S. 912 (1972); United States v. Glasser, 443 F.2d 994, 998-99 (2d Cir.), cert. denied, 404 U.S. 854, 92 S.Ct. 96, 30 L.Ed.2d 95 (1971). . Thus, appellant wanted to introduce, inter alia, the following testimony of Gonzalez from the first trial: Gonzalez — direct Q. But, sir, you were sitting in the car with Agent Ellin, were you not? A. Yes. Q. Around 8:00 o’clock? A. Yes. Q. Before you came out of the car to go into 1382 White Plains Road, sir? A. Yes. Q. Is that correct? A. Yes. Q. Now, according to the testimony of Agent Ellin, you said, when the man came by, “That’s my man,” or “That’s the man,” or words to that effect? A. No. Q. Did you see Mr. Puco around there at that point? A. I didn't see Mr. Puco at all. Gonzalez — cross Q. I see. Now, you were asked before, and I wish to ask you here, you drove up to 1380 White Plains Road, is that correct, sir? A. I didn’t drive. Q. You mean the other, the agent drove, right? A. Yes. Q. And at that time, when you got there, did you at that time tell the agent that this was where your connection was? A. No, I didn’t. Q. What did you tell the agent at that time? A. I told him that they have told me that the package was to be picked up at 8:00 o’clock on that hallway, and that’s all I said to him. . Justice Stewart’s opinion in Dutton makes clear that the fact that an out-of-court declaration comes within a traditional hearsay exception does not in itself assure the constitutionality of its admission into evidence. See 400 U.S. at 81-82, 91 S.Ct. 210. Decisions not dealing with the confrontation question are not controlling on this issue. . Along with the determination that there is sufficient other evidence to establish that the defendant against whom the declaration is offered was a member of the conspiracy when the declaration was made. . Appellant filed a motion, -which was granted, to stay the issuance of the mandate pending the filing of a petition for certiorari. . If the judge should rule erroneously against the government on this issue, he may well produce an unjustified acquittal, from which the prosecution has no recourse.