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106,073	Brennan, Frankfurter, Harlan, Stewart, Whittaker	1960-06-13	false	hoffman-v-blaski	Hoffman	Hoffman v. Blaski	HOFFMAN, U. S. DISTRICT JUDGE, v. BLASKI Et Al.	Charles J. Merriam argued the cause for petitioner in No. 25. With him on the brief was Samuel B. Smith., John C. Butler argued the cause and filed a brief for petitioner in No. 26., Daniel V. O’Keeffe argued the cause for respondents in No. 25. With him. on the brief were Lloyd C. Root and John O’C. FitzGerald., Warren E. King argued the cause and filed a brief for respondents in No. 26.	null	null	null	null	null	null	null	Argued April 19-20, 1960.	null	null	414	Published	null	<parties id="b383-4"> HOFFMAN, U. S. DISTRICT JUDGE, <em> v. </em> BLASKI et al. </parties><br><docketnumber id="b383-6"> No. 25. </docketnumber><otherdate id="Aij_"> Argued April 19-20, 1960. </otherdate><decisiondate id="ARg"> Decided June 13, 1960. <a class="footnote" href="#fn" id="fn_ref"> * </a> </decisiondate><br><attorneys id="b383-11"> <em> Charles J. Merriam </em> argued the cause for petitioner in No. 25. With him on the brief was <em> Samuel B. Smith. </em> </attorneys><br><attorneys id="b383-12"> <em> John C. Butler </em> argued the cause and filed a brief for petitioner in No. 26. </attorneys><br><attorneys id="b383-13"> <em> Daniel V. O’Keeffe </em> argued the cause for respondents in No. 25. With him. on the brief were <em> Lloyd C. Root </em> and <em> John O’C. FitzGerald. </em> </attorneys><br><attorneys id="b383-14"> <em> Warren E. King </em> argued the cause and filed a brief for respondents in No. 26. </attorneys><div class="footnotes"><div class="footnote" id="fn" label=""> <a class="footnote" href="#fn_ref"> </a> <p id="b383-17"> Together with No. 26, <em> Sullivan, Chief Judge, U. S. District Court, </em> v. <em> Behimer et al., </em> argued April 20, 1960, also on certiorari to the same Court. </p> </div></div>	[ "4 L. Ed. 2d 1254", "80 S. Ct. 1084", "363 U.S. 335", "1960 U.S. LEXIS 1998" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 3458, "opinion_text": "\n363 U.S. 335 (1960)\nHOFFMAN, U. S. DISTRICT JUDGE,\nv.\nBLASKI ET AL.\nNo. 25.\nSupreme Court of United States.\nArgued April 19-20, 1960.\nDecided June 13, 1960.[]\nCERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT.\nCharles J. Merriam argued the cause for petitioner in No. 25. With him on the brief was Samuel B. Smith.\nJohn C. Butler argued the cause and filed a brief for petitioner in No. 26.\nDaniel V. O'Keeffe argued the cause for respondents in No. 25. With him on the brief were Lloyd C. Root and John O'C. FitzGerald.\nWarren E. King argued the cause and filed a brief for respondents in No. 26.\nMR. JUSTICE WHITTAKER delivered the opinion of the Court.\nTo relieve against what was apparently thought to be the harshness of dismissal, under the doctrine of forum 336 non conveniens, of an action brought in an inconvenient one of two or more legally available forums, Gulf Oil Corp. v. Gilbert, 330 U.S. 501, and concerned by the reach of Baltimore & Ohio R. Co. v. Kepner, 314 U.S. 44,[1] Congress, in 1948, enacted 28 U.S. C. § 1404 (a), which provides:\n\"§ 1404. Change of venue.\n\"(a) For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.\"\nThe instant cases present the question whether a District Court, in which a civil action has been properly brought, is empowered by § 1404 (a) to transfer the action, on the motion of the defendant, to a district in which the plaintiff did not have a right to bring it.\nNo. 25, Blaski.Respondents, Blaski and others, residents of Illinois, brought this patent infringement action in the United States District Court for the Northern District of Texas against one Howell and a Texas corporation controlled by him, alleging that the defendants are residents of, and maintain their only place of business in, the City of Dallas, in the Northern District of Texas, where they are infringing respondents' patents. After being served with process and filing their answer, the defendants moved, under § 1404 (a), to transfer the action to the United States District Court for the Northern District of Illinois.[2] Respondents objected to the 337 transfer on the ground that, inasmuch as the defendants did not reside, maintain a place of business, or infringe the patents in, and could not have been served with process in, the Illinois district, the courts of that district lacked venue over the action[3] and ability to command jurisdiction over the defendants;[4] that therefore that district was not a forum in which the respondents had a right to bring the action, and, hence, the court was without power to transfer it to that district. Without mentioning that objection or the question it raised, the District Court found that \"the motion should be granted for the convenience of the parties and witnesses in the interest of justice,\" and ordered the case transferred to the Illinois district. Thereupon, respondents moved in the Fifth Circuit for leave to file a petition for a writ of mandamus directing the vacation of that order. That court, holding that \"[t]he purposes for which § 1404 (a) was enacted would be unduly circumscribed if a transfer could not be made `in the interest of justice' to a district where the defendants not only waive venue but to which they seek the transfer,\" denied the motion. Ex parte Blaski, 245 F.2d 737, 738.\nUpon receipt of a certified copy of the pleadings and record, the Illinois District Court assigned the action to Judge Hoffman's calendar. Respondents promptly moved for an order remanding the action on the ground that the Texas District Court did not have power to make the transfer order and, hence, the Illinois District Court was not thereby vested with jurisdiction of the action. 338 After expressing his view that the \"weight of reason and logic\" favored \"retransfer of this case to Texas,\" Judge Hoffman, with misgivings, denied the motion. Respondents then filed in the Seventh Circuit a petition for a writ of mandamus directing Judge Hoffman to reverse his order. After hearing and rehearing, the Seventh Circuit, holding that \"[w]hen Congress provided [in § 1404 (a)] for transfer [of a civil action] to a district `where it might have been brought,' it is hardly open to doubt but that it referred to a district where the plaintiff . . . had a right to bring the case,\" and that respondents did not have a right to bring this action in the Illinois district, granted the writ, one judge dissenting. 260 F.2d 317.\nNo. 26, Behimer.Diversity of citizenship then existing, respondents, Behimer and Roberts, residents of Illinois and New York, respectively, brought this stockholders' derivative action, as minority stockholders of Utah Oil Refining Corporation, a Utah corporation, on behalf of themselves and others similarly situated, in the United States District Court for the Northern District of Illinois against Standard Oil Company and Standard Oil Foundation, Inc., Indiana corporations but licensed to do and doing business in the Northern District of Illinois, for damages claimed to have been sustained through the alleged illegal acquisition by defendants of the assets of the Utah corporation at an inadequate price.\nAfter being served with process and filing their answer, the defendants moved, under § 1404 (a), to transfer the action to the United States District Court for the District of Utah.[5] Respondents objected to the transfer on the 339 ground that, inasmuch as the defendants were not incorporated in or licensed to do or doing business in, and could not be served with process in. the district of Utah, the courts of that district lacked venue over the action[6] and ability to command jurisdiction over the defendants;[7] that therefore that district was not a forum in which the respondents had a right to bring the action, and, hence, the court was without power to transfer it to that district. Without mentioning the question raised by that objection, the court found that the proposed transfer would be \"for the convenience of the parties and witnesses and in the interest of justice,\" and ordered the case transferred to the district of Utah.\nRespondents then filed in the Seventh Circuit a petition for a writ of mandamus directing the District Court to reverse its order. After hearing, the Seventh Circuit, following its decision in Blaski v. Hoffman, supra, granted the writ. 261 F.2d 467.\nTo settle the conflict that has arisen among the circuits respecting the proper interpretation and application of § 1404 (a),[8] we granted certiorari. 359 U.S. 904; 361 U.S. 809.\n340 Without sacrifice or slight of any tenable position, the parties have in this Court commendably narrowed their contentions to the scope of the only relevant inquiry. The points of contention may be sharpened by first observing what is not in contest. Discretion of the district judges concerned is not involved. Propriety of the remedy of mandamus is not assailed. No claim is made here that the order of the Fifth Circuit denying the motion of respondents in the Blaski case for leave to file a petition for writ of mandamus, 245 F.2d 737, precluded Judge Hoffman or the Seventh Circuit from remanding that case.[9] Petitioners concede that these actions were 341 properly brought in the respective transferor forums; that statutory venue did not exist over either of these actions in the respective transferee districts,[10] and that the respective defendants were not within the reach of the process of the respective transferee courts.[11] They concede, too, 342 that § 1404 (a), being \"not unlimited,\" \"may be utilized only to direct an action to any other district or division `where it might have been brought,' \" and that, like the superseded doctrine of forum non conveniens, Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507, the statute requires \"an alternative forum in which plaintiff might proceed.\"\nPetitioners' \"thesis\" and sole claim is that § 1404 (a), being remedial, Ex parte Collett, 337 U.S. 55, 71, should be broadly construed, and, when so construed, the phrase \"where it might have been brought\" should be held to relate not only to the time of the bringing of the action, but also to the time of the transfer; and that \"if at such time the transferee forum has the power to adjudicate the issues of the action, it is a forum in which the action might then have been brought.\"[12] (Emphasis added.) They argue that in the interim between the bringing of the action and the filing of a motion to transfer it, the defendants may move their residence to, or, if corporations, may begin the transaction of business in, some other district, and, if such is done, the phrase \"where it might have been brought\" should be construed to empower the District Court to transfer the action, on motion of the defendants, to such other district; and that, similarly, if, as here, the defendants move to transfer the action to some other district and consent to submit to the jurisdiction of such other district, the latter district should be held one \"in which the action might then have been brought.\" (Emphasis added.)\nWe do not agree. We do not think the § 1404 (a) phrase \"where it might have been brought\" can be interpreted to mean, as petitioners' theory would require, 343 \"where it may now be rebrought, with defendants' consent.\" This Court has said, in a different context, that § 1404 (a) is \"unambiguous, direct [and] clear,\" Ex parte Collett, 337 U. S., at 58, and that \"the unequivocal words of § 1404 (a) and the legislative history . . . [establish] that Congress indeed meant what it said.\" United States v. National City Lines, Inc., 337 U.S. 78, 84. Like the Seventh Circuit, 260 F.2d, at 322, we think the dissenting opinion of Judges Hastie and McLaughlin in Paramount Pictures, Inc., v. Rodney, 186 F.2d 111 (C. A. 3d Cir.), correctly answered this contention:\n\"But we do not see how the conduct of a defendant after suit has been instituted can add to the forums where `it might have been brought.' In the normal meaning of words this language of Section 1404 (a) directs the attention of the judge who is considering a transfer to the situation which existed when suit was instituted.\"\nIt is not to be doubted that the transferee courts, like every District Court, had jurisdiction to entertain actions of the character involved, but it is obvious that they did not acquire jurisdiction over these particular actions when they were brought in the transferor courts. The transferee courts could have acquired jurisdiction over these actions only if properly brought in those courts, or if validly transferred thereto under § 1404 (a). Of course, venue, like jurisdiction over the person, may be waived. A defendant, properly served with process by a court having subject matter jurisdiction, waives venue by failing seasonably to assert it, or even simply by making default. Commercial Ins. Co. v. Stone Co., 278 U.S. 177, 179-180; Neirbo Co. v. Bethlehem Shipbuilding Corp., Ltd., 308 U.S. 165. But the power of a District Court under § 1404 (a) to transfer an action to another district is made to depend not upon the wish or waiver of the defendant but, rather, upon whether the transferee district was one 344 in which the action \"might have been brought\" by the plaintiff.\nThe thesis urged by petitioners would not only do violence to the plain words of § 1404 (a), but would also inject gross discrimination. That thesis, if adopted, would empower a District Court, upon a finding of convenience, to transfer an action to any district desired by the defendants and in which they were willing to waive their statutory defenses as to venue and jurisdiction over their persons, regardless of the fact that such transferee district was not one in which the action \"might have been brought\" by the plaintiff. Conversely, that thesis would not permit the court, upon motion of the plaintiffs and a like showing of convenience, to transfer the action to the same district, without the consent and waiver of venue and personal jurisdiction defenses by the defendants. Nothing in § 1404 (a), or in its legislative history, suggests such a unilateral objective and we should not, under the guise of interpretation, ascribe to Congress any such discriminatory purpose.\nWe agree with the Seventh Circuit that:\n\"If when a suit is commenced, plaintiff has a right to sue in that district, independently of the wishes of defendant, it is a district `where [the action] might have been brought.' If he does not have that right, independently of the wishes of defendant, it is not a district `where it might have been brought,' and it is immaterial that the defendant subsequently [makes himself subject, by consent, waiver of venue and personal jurisdiction defenses or otherwise, to the jurisdiction of some other forum].\" 260 F.2d, at 321 and 261 F.2d, at 469.\nInasmuch as the respondents (plaintiffs) did not have a right to bring these actions in the respective transferee districts, it follows that the judgments of the Court of Appeals were correct and must be\nAffirmed.\n345 MR. JUSTICE STEWART, concurring in No. 25.\nTwo Courts of Appeals disagreed about the meaning of a federal law, as conscientious federal courts sometimes do. From the point of view of efficient judicial administration the resulting history of this litigation is no subject for applause. But, as the Court points out, no claim was made here that the decision of the Fifth Circuit precluded Judge Hoffman or the Seventh Circuit from remanding the case, and on the merits of that question I agree with the Court that principles of res judicata were inapplicable. In any event, the conflict between the Circuits is now resolved, and what happened here will not happen again.\nMR. JUSTICE FRANKFURTER, whom MR. JUSTICE HARLAN and MR. JUSTICE BRENNAN join, dissenting.[]\nMy special disagreement with the Court in this case concerns a matter of judicial administration arising out of the fact that after the question on the merits had been considered by the Court of Appeals for the Fifth Circuit, the same question between the same parties was later independently again adjudicated by the Court of Appeals for the Seventh Circuit. I cannot join the Court's approval of the right of the Seventh Circuit to make such a re-examination. It is true that in its opinion in this case and No. 26, Sullivan v. Behimer, decided today, the Court settles the question over which the two Courts of Appeals disagreed, so that it should not recur. This is not, however, an isolated case. A general principle of judicial administration in the federal courts is at stake. In addition, while the Court today settles one problem arising in the application of § 1404 (a), other questions involving that section may readily give rise to conflicting 346 views among the eleven Courts of Appeals. Under the Court's opinion, for example, transfer always depends upon the meaning of the federal venue statutes, and upon the jurisdiction of the transferee court over the person of the defendant, which may be a problem of constitutional dimensions, and there is obviously a substantial opportunity for conflict between the Courts of Appeals over those matters. We ought to forestall in other situations of potential controversy the kind of judicial unseemliness which this case discloses.\nPlaintiffs brought this action for patent infringement in the United States District Court for the Northern District of Texas. Defendants moved pursuant to 28 U.S. C. § 1404 (a) to have it transferred to the Northern District of Illinois. Finding transfer to be \"for the convenience of parties and witnesses, in the interest of justice,\" the Texas District Court granted the motion and transferred the action to Illinois. Plaintiffs sought a writ of mandamus in the Court of Appeals for the Fifth Circuit to require the Texas District Court to set aside the transfer. In plaintiffs' view the Northern District of Illinois was not a place where the action \"might have been brought,\" and thus the Texas District Court had no power to transfer the action there under § 1404 (a). The Fifth Circuit fully examined the merits of this claim and rejected it, holding that in the circumstances before the court the Northern District of Illinois was a jurisdiction where the action \"might have been brought.\" Leave to file a mandamus petition was therefore denied, and the action was duly transferred. 245 F.2d 737.\nUpon the assignment of the action to the calendar of the United States District Court for the Northern District of Illinois, plaintiffs moved that court to disregard the explicit decision of another District Court in the same case, sustained by the appropriate Court of 347 Appeals, and to send the case back to Texas. Plaintiffs advanced precisely the claim already rejected by the Fifth Circuit, namely, that the Northern District of Illinois was not a place where the action \"might have been brought\" within the proper meaning of § 1404 (a). Transfer had, in their view, erroneously been ordered by the Texas District Court and the power to transfer erroneously approved by the Fifth Circuit. Plaintiffs' application was denied by the Illinois District Court. Still not accepting the decision against them, plaintiffs again sought an appellate remedy by way of mandamus, this time in the Court of Appeals for the Seventh Circuit. Initially, mandamus was denied. On rehearing, however, the Seventh Circuit held that the prior decision of the Fifth Circuit was wrong. It held that § 1404 (a) did not authorize transfer to Illinois, and it ordered the action \"remanded\" to the Texas District Court within the Fifth Circuit, from whence it had come, to go forward there. 260 F.2d 317. That \"remand\" is the order which is here on certiorari. 359 U.S. 904.\nThe Court of Appeals for the Seventh Circuit has thus refused to permit an Illinois District Court to entertain an action transferred to it with the approval, after full consideration of the problem involved, of the Court of Appeals for the Fifth Circuit. The Seventh Circuit considered no evidence not before the Fifth Circuit in so deciding. It considered precisely the same issue and reached a contrary legal conclusion. This was after explicit prior adjudication of the question at the same level of the federal system in the same case and between the same parties. Because the question involved is the transferability of the action, the consequence of the Seventh Circuit's disregard of the Fifth Circuit's prior decision is not only that a question once decided has been reopened, with all the wasted motion, delay and 348 expense which that normally entails. Unless and until this Court acts, the litigants have no forum in which trial may go forward. Each Court of Appeals involved has refused to have the District Court in its Circuit hear the case and has sent it to a District Court in the other.\nThis is the judicial conduct the Court now approves. The Court does not suggest that the Court of Appeals for the Fifth Circuit was powerless, was without jurisdiction, to review, as it did, the question of the applicability of § 1404 (a) to this case. The occasion for the Fifth Circuit's review by way of mandamus may have been, as the Court suggests, \"to protect its appellate jurisdiction,\" but there can be no question that the Fifth Circuit undertook to and did resolve on its merits the controversy between the parties regarding the meaning of § 1404 (a). Yet the Court decides that the review in the Fifth Circuit was so much wasted motion, properly ignored by the Court of Appeals for the Seventh Circuit in arriving at a contrary result. The case is treated just as if the Fifth Circuit had never considered the questions involved in it. I am at a loss to appreciate why all the considerations bearing on the good administration of justice which underlie the technical doctrine of res judicata did not apply here to require the Court of Appeals for the Seventh Circuit to defer to the previous decision. \"Public policy dictates that there be an end of litigation; that those who have contested an issue shall be bound by the result of the contest, and that matters once tried shall be considered forever settled as between the parties. We see no reason why this doctrine should not apply in every case where one voluntarily appears, presents his case and is fully heard, and why he should not, in the absence of fraud, be thereafter concluded by the judgment of the tribunal to which he has submitted his cause.\" Baldwin v. Traveling Men's Assn., 283 U.S. 522, 525-526. One would suppose that these considerations would be 349 especially important in enforcing comity among federal courts of equal authority.\nThe fact that the issue involved is the propriety of a transfer of the action only makes the case for deference to the previous decision of a coordinate court in the same litigation that much stronger. The course of judicial action now approved by the Court allows transfer over a persisting objection only when concurred in by two sets of courts: those in the place where the case begins, and those in the place to which transfer is ordered. Not only does the place of trial thus remain unsettled for an unnecessarily long time to accommodate double judicial consideration, but, as this case shows, the result of a disagreement between the courts involved is that the litigation cannot go forward at all unless this Court resolves the matter. Surely a seemly system of judicial remedies, especially appellate judicial remedies, regarding controverted transfer provisions of the United States Code should encourage, not discourage, quick settlement of questions of transfer and should preclude two Courts of Appeals from creating, through their disagreement in the same case, an impasse to the litigation which only this Court can remove. Section 1404 (a) was meant to serve the ends of \"convenience\" and \"justice\" in the trial of actions. It perverts those ends to permit a question arising under § 1404 (a), as here, to be litigated, in turn, before a District Court and Court of Appeals in one Circuit, and a District Court and Court of Appeals in another Circuit, one thousand miles distant, thereby delaying trial for a year and a half, only to have the result of all that preliminary litigation be that trial may not go forward at all until this Court shall settle the question of where it shall go forward, after at least another year's delay.\nWe are not vouchsafed claims of reason or of the due administration of justice that require the duplication of 350 appellate remedies approved by the Court in this case. Why is not a single judicial appellate remedy in a Court of Appeals entirely adequate for one aggrieved by a transfer? Once the Court of Appeals for the Fifth Circuit had decided, after due consideration, that the proper meaning of § 1404 (a) included Illinois as a place where the action \"might have been brought,\" this should have ended the matter, except of course for this Court's power of review of that decision through the writ of certiorari, a power which we declined to exercise in this case. Nor does such a view of right and wise judicial administration depend upon the nature of the procedural or even jurisdictional issue in controversy. Technically, res judicata controls even a decision on a matter of true jurisdiction. \"We see no reason why a court, in the absence of an allegation of fraud in obtaining the judgment, should examine again the question whether the court making the earlier determination on an actual contest over jurisdiction between the parties, did have jurisdiction of the subject matter of the litigation.\" Stoll v. Gottlieb, 305 U.S. 165, at 172. See also Baldwin v. Traveling Men's Assn., supra, 283 U.S. 522. Surely, a prior decision of a federal court on the unfundamental issue of venue ought to receive similar respect from a coordinate federal court when the parties and the facts are the same. The question is of the appropriate scheme of judicial remedies for enforcing rights under a federal remedial statute aimed at enhancing the fair administration of justice in the federal courts. It is not consonant with reason to permit a duplicate appellate procedure for questions under this statute, thereby forestalling final decision on a pre-trial matter which ought to be decided as expeditiously as possible, causing wasteful delay and expense, and thus depriving the statutory motion to transfer of effectiveness in achieving the ends of \"convenience\" and \"justice\" for which it was created.\n351 MR. JUSTICE FRANKFURTER, whom MR. JUSTICE HARLAN and MR. JUSTICE BRENNAN join, dissenting.[]\nThe problem in this case is of important concern to the effective administration of justice in the federal courts. At issue is the scope of 28 U.S. C. § 1404 (a), providing for the transfer of litigation from one Federal District Court to another. The main federal venue statutes necessarily deal with classes of cases, without regard to the occasional situation in which a normally appropriate venue may operate vexatiously. Section 1404 (a) was devised to avoid needless hardship and even miscarriage of justice by empowering district judges to recognize special circumstances calling for special relief. It provides that an action, although begun in a place falling within the normally applicable venue rubric may be sent by the District Court to go forward in another district much more appropriate when judged by the criteria of judicial justice.\nThe terms of § 1404 (a) are as follows:\n\"For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.\"\nThe part of § 1404 (a) the meaning of which is at issue here is its last phrase, \"any other district or division where it [the action] might have been brought.\" The significance of this phrase is this: even though a place be found to be an overwhelmingly more appropriate forum from the standpoint of \"convenience\" and \"justice,\" the litigation may not be sent to go forward there unless it is a 352 place where the action \"might have been brought.\" Upon the scope to be given this phrase thus depends almost entirely the effectiveness of § 1404 (a) to insure an appropriate place of trial, when the action is begun in an oppressive forum.\nOne would have to be singularly unmindful of the treachery and versatility of our language to deny that as a mere matter of English the words \"where it might have been brought\" may carry more than one meaning. For example, under Rule 3 of the Federal Rules of Civil Procedure, civil actions are \"commenced\" by filing a complaint with the court. As a matter of English there is no reason why \"commenced\" so used should not be thought to be synonymous with \"brought\" as used in § 1404 (a), so that an action \"might have been brought\" in any district where a complaint might have been filed, or perhaps only in districts with jurisdiction over the subject matter of the litigation. As a matter of English alone, the phrase might just as well be thought to refer either to those places where the defendant \"might have been\" served with process, or to those places where the action \"might have been brought\" in light of the applicable venue provision, for those provisions speak generally of where actions \"may be brought.\" Or the phrase may be thought as a matter of English alone to refer to those places where the action \"might have been brought\" in light of the applicable statute of limitations, or other provisions preventing a court from reaching the merits of the litigation. On the face of its words alone, the phrase may refer to any one of these considerations, i. e., venue, amenability to service, or period of limitations, to all of them or to none of them, or to others as well.[1] And to 353 the extent that these are matters which may or may not be raised at the defendant's election, the English of the phrase surely does not tell whether the defendant's actual or potential waiver or failure to raise such objections is to be taken into account in determining whether a district is one in which the action \"might have been brought,\" or whether the phrase refers only to those districts where the plaintiff \"might have brought\" the action even over a timely objection on the part of the defendant, that is, where he had \"a right\" to bring it.\nThe particular problem in the present case has been a relatively commonplace one in the application of § 1404 (a), and it demonstrates the failure of the words of the section, considered merely as words, to define with precision those places where an action \"might have been brought.\" The problem here is this. Action was brought by plaintiff in district A, a proper venue under the applicable venue statute. Defendant objected and moved for transfer to district B, submitting that in the interests of \"convenience\" and \"justice\" to all concerned the action should go forward there instead of in district A. District B, however, is one in which, had the complaint been 354 filed there, the plaintiff would have been unable without the defendant's consent to serve him with process. In addition, the defendant in District B, had the complaint been filed there, would have had an objection to the venue, under the applicable venue statute. In moving for transfer to B, the defendant stipulates to waiving all objections to venue there and to submitting his person to the jurisdiction of District Court B, should transfer be ordered. The District Court in A agrees that B, not A, is the appropriate place for trial and is disposed to transfer the action there, for in light of the defendant's stipulation there is no way in which the plaintiff can be prejudiced by the lack of venue in B or the impossibility, as an original matter, of serving defendant there. Is B a place where the action \"might have been brought\" so that the transfer can be effected? The Court finds it \"plain,\" from the words of the phrase themselves, that B is not such a place, and that, for it, is the end of the matter.\nWe would all agree that B would be a place where the action \"might have been brought\" if it were a place of statutory venue, if the defendant had always been amenable to process there, and if B had no other special characteristics whereby the defendant could prevent consideration there of the merits of the cause of action. Almost every statute has a core of indisputable application, and this statute plainly applies to permit transfer to a place where there could never have been any objection to the maintenance of the action. But is it clear, as the Court would have it, that, as a mere matter of English, because potential objections peculiar to the forum would have been present in B, it is not to be deemed a place where the action \"might have been brought,\" although defendant not only might but is prepared to waive, as he effectively may, such objections?\n355 I submit that it is not clear from the words themselves, and the experience in the lower courts gives compelling proof of it. At least 28 District Courts, located in all parts of the Nation, have had to give concrete meaning to the set of words in controversy. These are the judges who are, to use a familiar but appropriate phrase, on the firing line, who are in much more intimate, continuous touch with the needs for the effective functioning of the federal judicial system at the trial level than is this Court. They have not found the last phrase of § 1404 (a) unambiguous. There has been anything but the substantial uniformity of views to be expected in the application of a clear and unambiguous direction. There have been severe differences with regard to whether § 1404 (a) is ever available as a remedy to a plaintiff forced into an inconvenient forum, and if so under what conditions.[2] With regard to defendants' motions to transfer, it has been held that \"brought\" in § 1404 (a) is synonymous with \"commenced\" in Rule 3 so that transfer may be made to virtually any district dictated by \"convenience\" and \"justice.\"[3] It has been held that the phrase is to be applied as if it read \"where it might have been brought now,\" thus giving full effect to a waiver of objections by defendant 356 in moving for transfer.[4] It has been said, on the other hand, that \"[s]ection 1404 (a) . . . contemplates statutory venue and not consent venue.\"[5]\nWith regard to the particular problem in this case, which has arisen most often, a majority of the District Courts which have considered the problem have ruled against the Court's \"plain\" meaning of the statute. At least seven District Courts have ruled that, because of the defendant's consent to have the action go forward there, a district is one where the action \"might have been brought,\" even though it is a place where the defendant might either have objected to the venue, or avoided process, or both had the action been brought there originally.[6] At least three District Courts have held or implied to the contrary, that the defendant's consent is not relevant, and that such a district cannot be one where the action \"might have been brought.\"[7] Two others have simply denied motions by the defendant on the ground that the transferee court was not one where the action \"might have been brought,\" without discussing whether 357 in moving for transfer the defendant had consented to go forward in the transferee court, or what the effect of that consent would be.[8] Two District Courts have granted the defendants' motion to transfer, making the matter turn on the presence of a number of defendants and the fact that some of them were suable as of right in the transferee court.[9] Two others have found the amenability of the defendant to service of process in the place to which transfer is proposed to be wholly irrelevant to whether the action \"might have been brought\" there, and have ordered transfer to such a place on the plaintiff's motion even though the defendant did not consent.[10] It simply cannot be said in the face of this experience that the words of the statute are so compellingly precise, so unambiguous, that § 1404 (a) as a matter of \"plain words\" does not apply in the present case.\nThe experience in the Courts of Appeals is also revealing. Of the six cases where defendants have moved for transfer, in only two has it been held that the defendant's consent to the transfer is not relevant in determining whether the place to which transfer is proposed is a place where the action \"might have been brought,\" and these are the two decisions of the Seventh Circuit now before us. Blaski v. Hoffman, 260 F.2d 317 (C. A. 7th Cir. 1958); Behimer v. Sullivan, 261 F.2d 467 (C. A. 7th Cir. 1958). 358 The Third Circuit has ruled in favor of transfer on the defendant's motion to a place where the defendant might have objected to the venue, Paramount Pictures v. Rodney, 186 F.2d 111 (C. A. 3d Cir. 1951). The First and Second Circuits have ruled in favor of transfer on defendant's motion to a place where the defendant could not have been served with process, Torres v. Walsh, 221 F.2d 319 (C. A. 2d Cir. 1955); In re Josephson, 218 F.2d 174 (C. A. 1st Cir. 1954). And the Second and Fifth Circuits have ruled in favor of transfer on defendant's motion to a place where there was neither statutory venue nor a chance to serve the defendant, Anthony v. Kaufman, 193 F.2d 85 (C. A. 2d Cir. 1951); Ex parte Blaski, 245 F.2d 737 (C. A. 5th Cir. 1957). All these courts have considered the meaning of the phrase in detail and have held that the place to which transfer was proposed was a place where the action \"might have been brought.\" Thus the Court's view of the meaning of § 1404 (a) is contrary to the rulings of every Court of Appeals but one which has considered the problem, and is contrary to the view of more than half the District Courts as well. Yet the Court maintains that the statute unambiguously means what its says it does.\nSurely, the Court creates its own verbal prison in holding that \"the plain words\" of § 1404 (a) dictate that transfer may not be made in this case although transfer concededly was in the interest of \"convenience\" and \"justice.\" Moreover, the Court, while finding the statutory words \"plain,\" decides the case by applying, not the statutory language, but a formula of words found nowhere in the statute, namely, whether plaintiffs had \"a right to bring these actions in the respective transferee districts.\" This is the Court's language, not that of Congress. Although it is of course a grammatically plausible interpretation of the phrase \"where it might have been brought,\" it has been, I submit, established that it is not 359 by any means the only plausible interpretation. In fact, the Court's rephrasing, as distinguished from Congress' phrasing, gives the narrowest possible scope to the operation of § 1404 (a). There can be expected to be very few, if any, alternative forums in a given case where the plaintiff has a \"right\" to sue, considering that that means places of unobjectionable venue where the defendant is amenable to service of process and where there are no other impediments such as a statute of limitations which the defendant can rely on to defeat the action.\nThis case, then, cannot be decided, and is not decided, by the short way of a mechanical application of Congress' words to the situation. Indeed, it would be extraordinary if a case which could be so decided were deemed worthy of this Court's attention twelve years after the applicable statute was enacted. To conclude, as the Court does, that the transferee court is inexorably designated by the inherent force of the words \"where it might have been brought\" is to state a conclusion that conceals the process by which the meaning is, as a matter of choice, extracted from the words.\nThe problem in this case is one of resolving an ambiguity by all the considerations relevant to resolving an ambiguity concerning the conduct of litigation, and more particularly the considerations that are relevant to resolving an ambiguous direction for the fair conduct of litigation in the federal judicial system. At the crux of the business, as I see it, is the realization that we are concerned here not with a question of a limitation upon the power of a federal court but with the place in which that court may exercise its power. We are dealing, that is, not with the jurisdiction of the federal courts, which is beyond the power of litigants to confer, but with the locality of a lawsuit, the rules regulating which are designed mainly for the convenience of the litigants. \"[T]he locality of a law suitthe place where judicial authority may be 360 exercisedthough defined by legislation relates to the convenience of litigants and as such is subject to their disposition. . . . [A venue statute] `merely accords to the defendant a personal privilege respecting the venue, or place of suit, which he may assert, or may waive, at his election.' Commercial Ins. Co. v. Stone Co., 278 U.S. 177, 179.\" Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 168. And in that case the Court was merely reiterating considerations already forcefully set out in General Investment Co. v. Lake Shore R. Co., 260 U.S. 261, and Lee v. Chesapeake & Ohio R. Co., 260 U.S. 653. This basic difference \"between the court's power and the litigant's convenience is historic in the federal courts.\" 308 U.S., at 168.\nApplying these considerations to a problem under a different statute but relevant to the present one, namely, whether removal from a state court to a federal court might be had upon the motion of the defendant when the federal court was one where the venue would have been subject to objection, had the action originally been brought there, this Court, speaking unanimously through Mr. Justice Van Devanter, discriminatingly reminded that \"[i]t therefore cannot be affirmed broadly that this suit could not have been brought . . . [in the federal court] but only that it could not have been brought and maintained in that court over a seasonable objection by the company to being sued there.\" This analysis has striking application to the present problem under § 1404 (a), and it is also relevant here that the Court sanctioned removal in that case to a federal court with no statutory venue, partly because \"there could be no purpose in extending to removals the personal privilege accorded to defendants by [the venue statutes] . . . since removals are had only at the instance of defendants.\" General Investment Co. v. Lake Shore R. Co., 260 U.S. 261, 273, 275. See also, to the same effect, Lee v. Chesapeake & Ohio R. Co., 260 361 U. S. 653, overruling Ex parte Wisner, 203 U.S. 449, and qualifying In re Moore, 209 U.S. 490. The rule that statutory venue rules governing the place of trial do not affect the power of a federal court to entertain an action, or of the plaintiff to bring it, but only afford the defendant a privilege to object to the place chosen, is now enacted as part of the Judicial Code. 28 U.S. C. § 1406 (b). And of course it needs no discussion that a defendant is always free voluntarily to submit his person to the jurisdiction of a federal court.\nIn light of the nature of rules governing the place of trial in the federal system, as thus expounded and codified, as distinguished from limitation upon the power of the federal courts to adjudicate, what are the competing considerations here? The transferee court in this case plainly had and has jurisdiction to adjudicate this action with the defendant's acquiescence. As the defendant, whose privilege it is to object to the place of trial, has moved for transfer, and has acquiesced to going forward with the litigation in the transferee court, it would appear presumptively, unless there are strong considerations otherwise, that there is no impediment to effecting the transfer so long as \"convenience\" and \"justice\" dictate that it be made. It does not counsel otherwise that here the plaintiff is to be sent to a venue to which he objects, whereas ordinarily, when the defendant waives his privilege to object to the place of trial, it is to acquiesce in the plaintiff's choice of forum. This would be a powerful argument if, under § 1404 (a), a transfer were to be made whenever requested by the defendant. Such is not the case, and this bears emphasis. A transfer can be made under § 1404 (a) to a place where the action \"might have been brought\" only when \"convenience\" and \"justice\" so dictate, not whenever the defendant so moves. A legitimate objection by the plaintiff to proceeding in the transferee forum will presumably be reflected in a decision that 362 the interest of justice does not require the transfer, and so it becomes irrelevant that the proposed place of transfer is deemed one where the action \"might have been brought.\" If the plaintiff's objection to proceedings in the transferee court is not consonant with the interests of justice, a good reason is wanting why the transfer should not be made.\nOn the other hand, the Court's view restricts transfer, when concededly warranted in the interest of justice, to protect no legitimate interest on the part of the plaintiff. And by making transfer turn on whether the defendant could have been served with process in the transferee district on the day the action was brought, the Court's view may create difficult problems in ascertaining that fact, especially in the case of non-corporate defendants. These are problems which have no conceivable relation to the proper administration of a provision meant to assure the most convenient and just place for trial.\nNor is it necessary to reach the Court's result in order to preserve an appropriate meaning for the phrase \"where it might have been brought.\" I fully agree that the final words of § 1404 (a) are words of limitation upon the scope of the provision. But to hold as I would that a district is one where the action \"might have been brought\" when the defendant consents to going forward with the litigation there, does not remove the quality of those words as a limitation. The words compel the defendant in effect to waive any objections to going forward in the transferee district which he might have had if the action had been brought there, in order to obtain a transfer. The words therefore insure that transfer will not be a device for doing the plaintiff out of any forum in which to proceed, no matter how inconvenient. The words in any case, plainly limit the plaintiff's right to seek a transfer when the defendant does not consent to the change of venue. Moreover, the words may serve to prevent transfer to 363 courts with a lack of federal power to adjudicate the matter of the dispute which the defendant cannot confer with his consent.[11] In light of the fact that the venue statutes in Title 28, U. S. C., are phrased in terms of where the action \"may be brought,\" or in some cases where it \"shall\" or \"must\" be brought,[12] the most obvious limiting significance of the phrase \"where it might have been brought\" is that it refers to places where, under the venue provisions, the action, \"may,\" \"shall,\" or \"must\" be brought assuming the existence of federal jurisdiction.[13] In the meaning of federal venue provisions as expounded by this Court, and by Congress in § 1406 (b), these, as has been said, are not only places where, under the applicable provision, no objection to the venue is available to the defendant. They are also places where the defendant consents to be sued.\nThe relevant legislative history of § 1404 (a) is found in the statement in the Reviser's Notes, accompanying the 1948 Judicial Code, that § 1404 (a) \"was drafted in accordance with the doctrine of forum non conveniens.\"[14] Under that doctrine, the remedy for an inconvenient 364 forum was not to transfer the action, but to dismiss it. In Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 506-507, we held that \"[i]n all cases in which the doctrine of forum non conveniens comes into play, it presupposes at least two forums in which the defendant is amenable to process; the doctrine furnishes criteria for choice between them.\" It is entirely \"in accordance\" with this view of the doctrine of forum non conveniens to hold that transfer may be made at the instance of the defendant, regardless of the plaintiff's right as an original matter to sue him in the transferee court, so long as the defendant stipulates to going forward with the litigation there. Indeed, to hold otherwise as the Court does is to limit § 1404 (a) to a much narrower operation than the nonstatutory doctrine of forum non conveniens. Investigation has disclosed several forum non conveniens cases, one of them in this Court, where dismissal of the action on the defendant's motion was made upon the condition of the defendant's voluntary submission to the jurisdiction of another more convenient forum when that forum was not available to the plaintiff as of right over the defendant's objection. See Canada Malting Co. v. Paterson Steamships, Ltd., 49 F.2d 802, 804, affirmed, 285 U.S. 413, 424; Giatilis v. The Darnie, 171 F. Supp. 751, 754; Bulkley, Dunton Paper Co. v. The Rio Salado, 67 F. Supp. 115, 116; Libby, McNeill & Libby v. Bristol City Line of Steamships, 41 F. Supp. 386, 389; The City of Agra, 35 F. Supp. 351; Strassburger v. Singer Mfg. Co., 263 A.D. 518, 33 N. Y. Supp. 2d 424; Wendel v. Hoffman, 258 A.D. 1084, 18 N. Y. Supp. 2d 96. See also Cerro de Pasco Copper Corp. v. Knut Knutsen, 187 F.2d 990, and Swift & Co. v. Compania Caribe, 339 U.S. 684, 697-698: \"it was improper under the circumstances here shown to remit a United States citizen to the courts of a foreign country without assuring the citizen that respondents would appear in those courts and that security would be given 365 equal to what had been obtained by attachment in the District Court. The power of the District Court to give a libellant such assurance is shown by Canada Malting Co. v. Paterson Steamships, Ltd., 285 U.S. 413, 424 [supra].\" In view of the familiarity of this device of dismissing for forum non conveniens when as of right no other forum was available to plaintiff, upon the defendant's agreement to appear in the more convenient forum, it is almost necessary to suppose, in light of the Reviser's description of § 1404 (a) as \"in accordance with the doctrine of forum non conveniens,\" that transfer under § 1404 (a) may likewise be made where the defendant consents to going forward with the case in the transferee court.\nThe only consideration of the Court not resting on the \"plain meaning\" of § 1404 (a) is that it would constitute \"gross discrimination\" to permit transfer to be made with the defendant's consent and over the plaintiff's objection to a district to which the plaintiff could not similarly obtain transfer over the defendant's objection. To speak of such a situation as regards this statute as \"discrimination\" is a sterile use of the concept. Mutuality is not an empty or abstract doctrine; it summarizes the reality of fair dealing between litigants. Transfer cannot be made under this statute unless it is found to be in the interest of \"convenience\" and in the interest of \"justice.\" Whether a party is in any sense being \"discriminated\" against through a transfer is certainly relevant to whether the interest of justice is being served. If the interest of justice is being served, as it must be for a transfer to be made, how can it be said that there is \"discrimination\" in any meaningful sense? Moreover, the transfer provision cannot be viewed in isolation in finding \"discrimination.\" It, after all, operates to temper only to a slight degree the enormous \"discrimination\" inherent in our system of litigation, whereby the sole choice of forum, from among those where service is possible and venue unobjectionable, 366 is placed with the plaintiff. The plaintiff may choose from among these forums at will; under § 1404 (a) the defendant must satisfy a very substantial burden of demonstrating where \"justice\" and \"convenience\" lie, in order to have his objection to a forum of hardship, in the particular situation, respected.\nIn summary, then, the \"plain meaning\" of § 1404 (a) does not conclude the present case against the transfer, for the statute, as applied in this case, is not \"plain\" in meaning one way or another, but contains ambiguities which must be resolved by considerations relevant to the problem with which the statute deals. Moreover, the most obvious significance for the set of words here in question, considered as self-contained words, is that they have regard for the limitations contained in the regular statutory rules of venue. Those rules, it is beyond dispute, take into account the consent of the defendant to proceed in the forum, even if it is not a forum designated by statute. And the doctrine of forum non conveniens \"in accordance with\" which § 1404 (a) was drafted, also took into account the defendant's consent to proceed in another forum to which he was not obligated to submit. Nor can a decision against transfer be rested upon notions of \"discrimination\" or of unfairness to the plaintiff in wrenching him out of the forum of his choice to go forward in a place to which he objects. In the proper administration of § 1404 (a), such consequences cannot survive the necessity to find transfer to be in the interests of \"convenience\" and \"justice,\" before it can be made. On the other hand, to restrict transfer as the Court does to those very few places where the defendant was originally amenable to process and could have had no objection to the venue is drastically to restrict the number of situations in which § 1404 (a) may serve the interests of justice by relieving the parties from a vexatious forum. And it is to restrict the operation of the section capriciously, for 367 such a drastic limitation is not counseled by any legitimate interest of the plaintiff, or by any interest of the federal courts in their jurisdiction. The defendant's interest of course is not involved because he is the movant for transfer.\nThe essence of this case is to give fair scope to the role of § 1404 (a) in our system of venue regulations, that is, a system whereby litigation may be brought in only a limited number of federal districts, which are chosen generally upon the basis of presumed convenience. Two extremes are possible in the administration of such a system, duly mindful of the fact that in our jurisprudence venue does not touch the power of the court. (1) All venue may be determined solely by rigid rules, which the defendant may invoke and which work for convenience in the generality of cases. In such an extreme situation there would be no means of responding to the special circumstances of particular cases when the rigid venue rules are inappropriate. (2) At the other extreme there may be no rigid venue provisions, but all venue may be determined, upon the defendant's objection to the plaintiff's choice of forum, by a finding of fact in each case of what is the most convenient forum from the point of view of the parties and the court. The element of undesirability in the second extreme is that it involves too much preliminary litigation; it is desirable in that it makes venue responsive to actual convenience. The first extreme is undesirable for according too little, in fact nothing, to actual convenience when the case is a special one; it is desirable in that it does away with preliminary litigation.\nIf anything is plain, from its history and from its words, it is that § 1404 (a) means to afford a balance, a compromise, between these two extremes. It is in this spirit that its provisions must be read. In the ordinary course the regular venue rules are to prevail, with no preliminary litigation to determine the actual convenience. But the 368 statute means to allow for cases where the ordinary rules are found to work a great hardship; there, actual convenience is to prevail. We should therefore not, as the Court has done, impose limitations upon the operation of § 1404 (a) which have no relation to ordinary considerations governing the place of trial in the federal system and which arbitrarily prevent actual convenience from determining the place of trial. The limitations upon the section should only be those which recognize legitimate countervailing considerations to the free reign of actual convenience, namely limitations regarding the power of the federal courts to adjudicate, and limitation recognizing the historic privilege of the defendant, should he choose to exercise it, to object to the place of trial unless it is affirmatively designated by the venue statute.\nIt may be urged in answer to this analysis that if transfer is available as a matter of \"convenience\" and \"justice\" in every case in which the defendant consents to going forward in the transferee court, § 1404 (a) will entail burdensome preliminary litigation and may, if improperly administered, prove vexatious to plaintiffs. Thus, even arbitrary limitations, such as the Court imposes, may be said to be warranted. In effect this argument against transfer in situations like the present implies distrust in the ability and character of district judges to hold the balance even, that is, to dispose quickly of frivolous contentions and to prevent transfer from proving unduly prejudicial to plaintiffs while according it its proper scope to deal with cases of real inconvenience. \"Such apprehension implies a lack of discipline and of disinterestedness on the part of the lower courts, hardly a worthy or wise basis for fashioning rules of procedure. It reflects an attitude against which we were warned by Mr. Justice Holmes, speaking for the whole Court, likewise in regard to a question of procedure: `Universal distrust creates universal incompetence.' 369 Graham v. United States, 231 U.S. 474, 480.\" Kerotest Mfg. Co. v. C-O-Two Co., 342 U.S. 180, 185. As in that case, doubts here should be resolved in favor of the competence of the District Courts wisely to administer § 1404 (a). Whatever salutary effect that section is to have must in any event depend upon due appreciation by district judges of the relevant considerations involved in ordering a transfer. Nothing is to be gained by parceling out the areas of their discretion mechanically, making distinctions which have no relevance to the manner in which venue provisions are ordinarily administered in the federal courts. I would therefore permit considerations of \"convenience\" and \"justice\" to be operative whenever the defendant consents to going forward in the transferee court on the same terms on which he was sued in the original forum. Against a rare abuse, there will always be available the corrective supervisory power of the Courts of Appeals, and ultimately of this Court.\nNOTES\n[] Together with No. 26, Sullivan, Chief Judge, U. S. District Court, v. Behimer et al., argued April 20, 1960, also on certiorari to the same Court.\n[1] See the Reviser's Notes following 28 U.S. C. § 1404.\n[2] The asserted basis of the motion was that trial of the action in the Illinois District Court would be more convenient to the parties and witnesses and in the interest of justice because several actions involving the validity of these patents were then pending in that court, and that pretrial and discovery steps taken in those actions had developed a substantial amount of evidence that would be relevant and useful in this action.\n\nDefendants also stated in the motion that, if and when the case be so transferred, they would waive all objections to the venue of the Illinois District Court over the action and would enter their appearance in the action in that court.\n[3] See 28 U.S. C. § 1400 (b), quoted in note 10, infra.\n[4] See Rule 4 (f) of the Fed. Rules Civ. Proc., quoted in note 11, infra.\n[5] The motion asserted, and the court found, that trial of the action in the district of Utah would be more convenient to the parties and witnesses for the reasons, among others, that all of the officers and directors, and a majority of the minority stockholders, of the Utah corporation reside in that district; that the books and records of the corporation are located in that district; that the substantive law of Utah governs the action, and that the calendar of the Utah court was less congested than the Illinois one.\n\nAs part of their motion, defendants stated that, in the event of the transfer of the action as requested, they would waive all objections to the venue of the Utah court and enter appearances in the action in that court.\n[6] See 28 U.S. C. § 1391 (c), quoted in note 10, infra.\n[7] See Rule 4 (f) of the Fed. Rules Civ. Proc., quoted in note 11, infra.\n[8] The decisions of the circuits are in great conflict and confusion. The Second Circuit has held one way on a plaintiff's motion and the other on a defendant's motion. Compare Foster-Milburn Co. v. Knight, 181 F.2d 949, 952-953, with Anthony v. Kaufman, 193 F.2d 85, and Torres v. Walsh, 221 F.2d 319. The Fifth Circuit, too, has held both ways. Compare Blackmar v. Guerre, 190 F.2d 427, 429, with Ex parte Blaski, 245 F.2d 737. The Ninth Circuit has held a District Court to be without power to transfer an action, on plaintiff's motion, to a district in which plaintiff did not have a legal right to bring it originally. Shapiro v. Bonanza Hotel Co., 185 F.2d 777, 780. The Third Circuit has held, two of the five judges dissenting, that a District Court has power to transfer an action, on defendant's motion, to a district in which the plaintiff did not have a legal right to bring it. Paramount Pictures, Inc., v. Rodney, 186 F.2d 111. The First Circuit has upheld transfer, on defendant's motion, to a district in which venue existed but where process could not be served on defendants (but defendants had been served in the transferor district). In re Josephson, 218 F.2d 174.\n[9] That order did not purport to determine the jurisdiction of the transferee court and therefore did not preclude Judge Hoffman of power to determine his own jurisdiction, nor did it preclude the power of the Seventh Circuit to review his action. Fettig Canning Co. v. Steckler, 188 F.2d 715 (C. A. 7th Cir.); Wilson v. Kansas City Southern R. Co., 101 F. Supp. 56 (D. C. W. D. Mo.); United States v. Reid, 104 F. Supp. 260, 266 (D. C. E. D. Ark.). Several reasons why principles of res judicata do not apply may be stated in a few sentences. The orders of the Texas and Illinois District Courts on the respective motions to transfer and to remand, like the orders of the Fifth and Seventh Circuits on the respective petitions for mandamus, were (1) interlocutory, (2) not upon the merits, and (3) were entered in the same case by courts of coordinate jurisdiction. Here the sole basis of the right of the Fifth Circuit to entertain the petition for a writ of mandamus was to protect its appellate jurisdiction, 28 U.S. C. § 1651 (a); Magnetic Engineering & Mfg. Co. v. Dings Mfg. Co., 178 F.2d 866, 869-870 (C. A. 2d Cir.); Foster-Milburn Co. v. Knight, 181 F.2d 949, 951 (C. A. 2d Cir.); In re Josephson, 218 F.2d 174, 177 (C. A. 1st Cir.); Torres v. Walsh, 221 F.2d 319, 321 (C. A. 2d Cir.) and, by denying leave to file the petition, it forsook such right, but it did not thereby determine that the Illinois District Court had jurisdiction of the action. The question of that court's jurisdiction still remained subject to attack as of right on appeal to the Seventh Circuit from any final judgment in the action. When, therefore, jurisdiction of the District Court was assailed in the Seventh Circuit, by the petition for mandamus, that court surely had power to determine whether it would hold, on such an appeal, that the Illinois District Court did or did not have jurisdiction of the action and, if not, to say so and thus avoid the delays and expense of a futile trial.\n[10] Venue over patent infringement actions is prescribed by 28 U.S. C. § 1400 (b), which provides:\n\n\"(b) Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.\"\nSee Stonite Prod. Co. v. Melvin Lloyd Co., 315 U.S. 561; Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222.\nGeneral venue over actions against corporations is prescribed by 28 U.S. C. § 1391 (c), which provides:\n\"(c) A corporation may be sued in any judicial district in which it is incorporated or licensed to do business or is doing business, and such judicial district shall be regarded as the residence of such corporation for venue purposes.\"\n[11] General provisions respecting service of the process of federal courts are prescribed by Rule 4 (f) of the Fed. Rules Civ. Proc., which provides:\n\n\"(f) Territorial limits of effective service.\n\"All process other than a subpoena may be served anywhere within the territorial limits of the state in which the district court is held and, when a statute of the United States so provides, beyond the territorial limits of that state. A subpoena may be served within the territorial limits provided in Rule 45.\"\n[12] A similar view was expressed in Paramount Pictures, Inc., v. Rodney, 186 F.2d 111 (C. A. 3d Cir.). The court there thought that the § 1404 (a) phrase \"might have been brought\" means \"could now be brought.\" Id., at 114.\n[] [This opinion applies only to No. 25, Hoffman v. Blaski. For opinion of MR. JUSTICE FRANKFURTER, joined by MR. JUSTICE HARLAN and MR. JUSTICE BRENNAN, in No. 26, Sullivan v. Behimer, see post, p. 351.]\n[] [This opinion applies only to No. 26, Sullivan v. Behimer. For opinion of MR. JUSTICE FRANKFURTER, joined by MR. JUSTICE HARLAN and MR. JUSTICE BRENNAN, in No. 25, Hoffman v. Blaski, see ante, p. 345.]\n[1] See, e. g., Felchlin v. American Smelting & Refining Co., 136 F. Supp. 577 (D. C. S. D. Calif. 1955) (transfer denied on defendant's motion because plaintiff was an executor not qualified in transferee court); Masterpiece Products, Inc., v. United Artists Corp., 90 F. Supp. 750 (D. C. E. D. Pa. 1950) (transfer denied on defendant's motion because, had the action originally been brought in the transferee court, the alignment of parties would have been different, there being one involuntary party, thereby destroying complete diversity of citizenship); Lucas v. New York Central R. Co., 88 F. Supp. 536 (D. C. S. D. N. Y. 1950) (transfer denied on defendant's motion because defendant's corporate status would have destroyed diversity of citizenship had the action been brought in the transferee court). In all of these cases transfer was denied because the transferee court was deemed not to be one where the action \"might have been brought.\" See also Arvidson v. Reynolds Metals Co., 107 F. Supp. 51 (D. C. W. D. Wash. 1952) (denying the defendant's motion for transfer in part because the action was a local one, and state courts in the transferee district would not have taken jurisdiction over it).\n[2] See, e. g., Dufek v. Roux Distrib. Co., 125 F. Supp. 716 (D. C. S. D. N. Y. 1954); Barnhart v. Rogers Producing Co., 86 F. Supp. 595 (D. C. N. D. Ohio 1949); Troy v. Poorvu, 132 F. Supp. 864 (D. C. Mass. 1955); United States v. Reid, 104 F. Supp. 260 (D. C. E. D. Ark. 1952); Otto v. Hirl, 89 F. Supp. 72 (D. C. S. D. Iowa 1952); McGee v. Southern Pacific Co., 151 F. Supp. 338 (D. C. S. D. N. Y. 1957); Rogers v. Halford, 107 F. Supp. 295 (D. C. E. D. Wisc. 1952); Herzog v. Central Steel Tube Co., 98 F. Supp. 607 (D. C. S. D. Iowa 1951); Mitchell v. Gundlach, 136 F. Supp. 169 (D. C. Md. 1955); McCarley v. Foster-Milburn Co., 89 F. Supp. 643 (D. C. W. D. N. Y. 1950).\n[3] Otto v. Hirl, 89 F. Supp. 72, 74 (D. C. S. D. Iowa 1952).\n[4] Cain v. Bowater's Newfoundland Pulp & Paper Mills, Ltd., 127 F. Supp. 949, 950 (D. C. E. D. Pa. 1954).\n[5] Johnson v. Harris, 112 F. Supp. 338, 341 (D. C. E. D. Tenn. 1953).\n[6] Hill v. Upper Mississippi Towing Corp., 141 F. Supp. 692 (D. C. Minn. 1956); McGee v. Southern Pacific Co., 151 F. Supp. 338 (D. C. S. D. N. Y. 1957); Welch v. Esso Shipping Co., 112 F. Supp. 611 (D. C. S. D. N. Y. 1953); Mire v. Esso Shipping Co., 112 F. Supp. 612 (D. C. S. D. N. Y. 1953); Cain v. Bowater's Newfoundland Pulp & Paper Mills, Ltd., 127 F. Supp. 949 (D. C. E. D. Pa. 1954); Anthony v. RKO Radio Pictures, 103 F. Supp. 56 (D. C. S. D. N. Y. 1951); Blaski v. Howell (D. C. N. D. Ill., March 14, 1958).\n[7] General Electric Co. v. Central Transit Warehouse Co., 127 F. Supp. 817 (D. C. W. D. Mo. 1955); Tivoli Realty v. Paramount Pictures, 89 F. Supp. 278 (D. C. Del. 1950); Felchlin v. American Smelting & Refining Co., 136 F. Supp. 577 (D. C. S. D. Calif. 1955). See also Johnson v. Harris, 112 F. Supp. 338 (D. C. E. D. Tenn. 1953) (dictum).\n[8] Silbert v. Nu-Car Carriers, 111 F. Supp. 357 (D. C. S. D. N. Y. 1953); Hampton Theaters, Inc., v. Paramount Film Distributing Corp., 90 F. Supp. 645 (D. C. D. C. 1950). See also Arvidson v. Reynolds Metals Co., 107 F. Supp. 51 (D. C. W. D. Wash. 1952) (denying the defendants' motion to transfer in part because the plaintiff would not have been amenable to process in the transferee court).\n[9] Ferguson v. Ford Motor Co., 89 F. Supp. 45 (D. C. S. D. N. Y. 1950); Glasfloss Corp. v. Owens-Corning Fiberglas Corp., 90 F. Supp. 967 (D. C. S. D. N. Y. 1950).\n[10] McCarley v. Foster-Milburn Co., 89 F. Supp. 643 (D. C. W. D. N. Y. 1950); Troy v. Poorvu, 132 F. Supp. 864 (D. C. Mass. 1955).\n[11] See cases cited in note 1, supra.\n[12] See 28 U.S. C. §§ 1391, 1392 (a) and (b), 1393 (a) and (b), 1396-1399, 1400 (b), 1401 and 1403.\n[13] See Chief Judge Magruder's opinion for the Court of Appeals for the First Circuit in In re Josephson, 218 F.2d 174, 184.\n[14] The whole of the statement in the Reviser's Note dealing with subsection (a) of § 1404 is as follows:\n\n\"Subsection (a) was drafted in accordance with the doctrine of forum non conveniens, permitting transfer to a more convenient forum, even though the venue is proper. As an example of the need of such a provision, see Baltimore & Ohio R. Co. v. Kepner, . . . 314 U.S. 44, . . . which was prosecuted under the Federal Employer's Liability Act in New York, although the accident occurred and the employee resided in Ohio. The new subsection requires the court to determine that the transfer is necessary for convenience of the parties and witnesses, and further, that it is in the interest of justice to do so.\"\n\n", "ocr": false, "opinion_id": 106073 }, { "author_str": "Frankfurter", "per_curiam": false, "type": "040dissent", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n351Mr. Justice Frankfurter,\nwhom Mr. Justice Harlan and Mr. Justice Brennan join, dissenting.\nThe problem in this ease is of important concern to the effective administration of justice in the federal courts. At issue is the scope of 28 U. S. C. § 1404 (a), providing for the transfer of litigation from one Federal District Court to another. The main federal venue statutes necessarily deal with classes of cases, • without regard to the occasional situation in which a normally appropriate venue may operate vexatiously. Section 1404 (a) was devised to avoid needless hardship and even miscarriage of justice by empowering district judges to recognize special circumstances calling for special relief. It provides that an action, although begun in a place falling within the normally applicable venue rubric may be sent by the District Court to go forward in another district much more appropriate when judged by the criteria of judicial justice.\nThe terms of § 1404 (a) are as follows:\n“For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.”\nThe part of § 1404 (a) the meaning of which is at issue here is its last phrase, “any other district or division where it [the action] might have been brought.” The significance of this phrase is this: even though a place be found to be an overwhelmingly more appropriate forum from the standpoint of “convenience” and “justice,” the litigation may not be sent to go forward there unless it is a 352place where the action “might have been brought.” Upon the scope to be given this phrase thus depends almost entirely the effectiveness of § 1404 (a) to insure an appropriate place of trial, when the action is begun in an oppressive forum.\nOne would have to be singularly unmindful of the treachery and versatility of our language to deny that as a mere matter of English the words '“where it might have been brought” may carry more than one meaning. For example, under Rule 3 of the Federal Rules of Civil Procedure, civil actions are “commenced” by filing a complaint with the court. As a matter of English there is no reason why “commenced” so used should not be thought to be synonymous with “brought” as used in § 1404 (a), so that an action “might have been brought” in any district where a complaint might have been filed, or perhaps only in districts with jurisdiction over the subject matter of the litigation. As a matter of English alone, the phrase might just as well be thought to refer either to those places where the defendant “might have been” served with process, or to those places where the action “might have been brought” in light of the applicable venue provision, for those provisions speak generally of where actions “may be brought.” Or the phrase may be thought as a matter of English alone to refer to those places where the action “might have been brought” in light of the applicable statute of limitations, or other provisions preventing a court from reaching the merits of the litigation. On the face of its words alone, the phrase may refer to any one of these considerations, i. e., venue, amenability to service, or period of limitations, to all of them or to none of them, or to others as well.1 And to 353the extent that these are matters which may or may not be raised at the defendant’s election, the English of the phrase surely does not tell whether the defendant’s actual or- potential waiver or failure to raise such objections is to be taken into account in determining whether a district is one in which the action “might have been brought,” or whether the phrase refers only to those districts where the plaintiff “might have brought” the action even over a timely objection on the part of the defendant, that is, where he had “a right” to bring it.\nThe particular problem in the present case has been a relatively commonplace one in the application of § 1404 (a), and it demonstrates the failure of the words of the section, considered merely as words, to define with precision those places where an action “might have been brought.” The problem here is this. Action was brought by plaintiff in district A, a proper venue under the applicable venue statute. Defendant objected and moved for transfer to district B, submitting that in the interests of “convenience” and “justice” to all concerned the action should go forward there instead of in district A. District B, however, is one in which, had the complaint been 354filed there, the plaintiff would have been unable without the defendant’s consent to serve him with process. In addition, the defendant in District B, had the complaint been filed there, would have had an objection to the venue, under the applicable venue statute. In moving for transfer to B, the defendant stipulates to waiving ■all objections to venue there and to submitting his person to the jurisdiction of District Court B, should transfer be ordered. The District Court in A agrees that B, not A, is the appropriate place for trial and is disposed to transfer the action there, for in light of the defendant’s stipulation there is no way in which the plaintiff can be prejudiced by the lack of venue in B or the impossibility, as an original matter, of serving defendant there. Is B a place where the action “might have been brought\" so that the transfer can be effected? The Court finds it “plain,” from the words of the phrase themselves, that B is not such a place, and that, for it, is the end of the matter.\nWe would all agree that B would be a place where the action “might have been brought\" if it were a place of statutory venue, if the defendant had always been amenable to process there, and if B had no other special characteristics whereby the defendant could prevent consideration there of the merits of the cause of action. Almost every statute has a core of indisputable application, and this statute plainly applies to permit transfer to a place where there could never have been any objection to the maintenance of the action. But is it clear, as the Court would have it, that, as a mere matter of English, because potential objections peculiar to the forum would have been present in B, it is not to be deemed a place where the action “might have been brought,” although defendant not only might but is prepared to waive, as he effectively may, such objections?\n3551 submit that it is not clear from the words themselves, and the experience in the lower courts gives compelling proof of it. At least 28 District Courts, located in all parts of the Nation, have had to give concrete meaning to the set of words in controversy. These are the judges who are, to use a familiar but appropriate phrase, on the firing line, who are in much more intimate, continuous touch with the needs for the effective functioning of the federal judicial system at the trial level than is this Court. They have not found the last phrase of § 1404 (a) unambiguous. There has been anything but the substantial uniformity of views to be expected in the application of a clear and unambiguous direction. There have been severe differences with regard to whether § 1404 (a) is ever available as a remedy to a plaintiff forced into an inconvenient forum, and if so under what conditions.2 With regard to defendants' motions to transfer, it has been held that “brought” in § 1404 (a) is synonymous with “commenced” in Rule 3 so that transfer may be made to virtually any district dictated by “convenience” and “justice.” 3 It has been held that the phrase is to be applied as if it read “where it might have been brought new,” thus giving full effect to a waiver of objections by (defendant 356in moving for transfer.4 It has been said, on the other hand, that “[sjection 1404 (a) . . . contemplates statutory venue and not consent venue.” 5\nWith regard to the particular problem in this case, which has arisen most often, a majority of the District Courts which have considered the problem have ruled against the Court’s “plain” meaning of the statute. At least seven District Courts have ruled that, because of the defendant’s consent to have the action go forward there, a district is one where the action “might have been brought,” even though it is a place where the defendant might either have objected to the venue, or avoided process, or both had the action been brought there originally.6 At least three District Courts have held or implied to the contrary, that the defendant’s consent is not relevant, and that such a district cannot be one where the action “might have been brought.” 7 Two others have simply denied motions by the defendant on the ground that the transferee court was not one where the action “might have been brought,” without discussing whether 357in moving for transfer the defendant had consented to go forward in the transferee court, or what the effect of that consent would be.8 Two District Courts have granted the defendants’ motion to transfer, making the matter turn on the presence of a number of defendants and the fact that some of them were suable as of right in the transferee court.9 Two others have found the amenability of the defendant to service of process in the place to which transfer is proposed to be wholly irrelevant to whether the action “might have been brought” there, and have ordered transfer to such a place on the plaintiff’s motion even though the defendant did not consent.10 It simply cannot be said in the face of this experience that the words of the statute are so compellingly precise, so unambiguous, that § 1404 (a) as a matter of “plain words” does not apply in the present case.\nThe experience in the Courts of Appeals is also revealing. Of the six cases where defendants have moved for transfer, in only two has it been held that the defendant’s consent to the transfer is not relevant in determining whether the place to which transfer is proposed is a place where the action “might have been brought,” and these are the two decisions of the Seventh Circuit now before us. Blaski v. Hoffman, 260 F. 2d 317 (C. A. 7th Cir. 1958); Behimer v. Sullivan, 261 F. 2d 467 (C. A. 7th Cir. 1958). 358The Third Circuit has ruled in favor of transfer on the defendant's motion to a place where the.defendant might have objected to the venue, Paramount Pictures v. Rodney, 186 F. 2d 111 (C. A. 3d Cir. 1951). The First and Second Circuits have ruled in favor of transfer on defendant’s motion to a place where the defendant could not have been served with process, Torres v. Walsh, 221 F. 2d 319 (C. A. 2d Cir. 1955); In re Josephson, 218 F. 2d 174 (C. A. 1st Cir. 1954). And the Second and Fifth Circuits have ruled in favor of transfer on defendant’s motion to a place where there was neither statutory venue nor a chance to serve the defendant, Anthony v. Kaufman, 193 F. 2d 85 (C. A. 2d Cir. 1951); Ex parte Blaski, 245 F. 2d 737 (C. A. 5th Cir. 1957). All these courts have considered the meaning of the phrase in detail and have held that the place to which transfer was proposed was a place where the action “might have been brought.” Thus the Court’s view of the meaning of § 1404 (a) is contrary to the rulings of every Court of Appeals but one which has considered the problem, and is contrary to the view of more than half the District Courts as well. Yet the Court maintains that the statute unambiguously means what its says it does.\nSurely, the Court creates its own verbal prison in holding that “the plain words” of § 1404 (a) dictate that transfer may not be made in this case although transfer concededly was in the interest of “convenience” and “justice.” Moreover, the Court, while finding the statutory words “plain,” decides the case by applying, not the statutory language, but a formula of words found nowhere in the statute, namely, whether plaintiffs had “a right to bring these actions in the respective transferee districts.” This is the Court’s language, not that of Congress. Although it is of course a grammatically plausible interpretation of the phrase “where it might have been brought,” it has been, I submit, established that it is not 359by any means the only plausible interpretation. In fact, the Court’s- rephrasing, as distinguished from Congress’ phrasing, gives the narrowest possible scope to the operation of § 1404 (a). There can be expected to be very few, if any, alternative forums in a given case where the plaintiff has a “right” to sue, considering that that means places of unobjectionable venue where the defendant is amenable to service of process and where there are no other impediments such as a statute of limitations which the defendant can rely on to defeat the action.\nThis case, then, cannot be decided, and is not decided, by the short way of a mechanical application of Congress’ words to the situation. Indeed, it would be extraordinary if a case which could be so decided were deemed worthy of this Court’s attention twelve years after the applicable statute was enacted. To conclude, as the Court does, that the transferee court is inexorably designated by the inherent force of the words “where it might have been brought” is to state a conclusion that conceals the process by which the meaning is, as a matter of choice, extracted from the words.\nThe problem in this case is one of resolving an ambiguity by all the considerations relevant to resolving an ambiguity concerning the conduct of litigation, and more particularly the considerations that are relevant to resolving an ambiguous direction for the fair conduct of litigation in the federal judicial system At the crux of the business, as I see it, is the realization that we are concerned here not with a question of a limitation upon the power of a federal court but with the place in which that court may exercise its power. We are dealing, that is, not with the jurisdiction of the federal courts, which is beyond the power of litigants to confer, but with the locality of a lawsuit, the rules regulating which are designed mainly for the convenience of the litigants. “[T]he locality of-a law suit — the place where judicial authority may be 360exercised — though defined by legislation relates to the convenience of litigants and as such is subject to their disposition. ... [A venue statute] ‘merely accords to the defendant a personal privilege respecting the venue, or place of suit, which he may assert, or may waive, at his election/ Commercial Ins. Co. v. Stone Co., 278 U. S. 177, 179.” Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U. S. 165, 168. And in that case the Court was merely reiterating considerations already forcefully set out in General Investment Co. v. Lake Shore R. Co., 260 U. S. 261, and Lee v. Chesapeake & Ohio R. Co., 260 U. S. 653. This basic difference “between the court’s power and the litigant’s convenience is historic in the federal courts.” 308 U. S., at 168.\nApplying these considerations to a problem under a different statute but relevant to the present one, namely, whether removal from a state court to a federal court might be had upon the motion of the defendant when the federal court was one where the venue would have been subject to objection, had the action originally been brought there, this Court, speaking unanimously through Mr. Justice Van Devanter, discriminatingly reminded that “[i]t therefore cannot be affirmed broadly that this suit could not have been brought... [in the federal court] but only that it could not have been brought and maintained in that court over a seasonable objection by the company to being sued there.” This analysis has striking application to the present problem under § 1404 (a), and it is also relevant here that the Court sanctioned removal in that case to a federal court with no statutory venue, partly because “there could be no purpose in extending to removals the personal privilege accorded to defendants by [the venue statutes] . . . since removals are had only at the instance of defendants.” General Investment Co. v. Lake Shore R. Co., 260 U. S. 261, 273, 275. See also, to the same effect, Lee v. Chesapeake & Ohio R. Co., 260 361U. S. 653, overruling Ex parte Wisner, 203 U. S. 449, and qualifying In re Moore, 209 U. S. 490. The rule that statutory venue rules governing the place of trial do not affect the power of a federal court to entertain an action, or of the plaintiff to bring it, but only afford the defendant a privilege to object to the place chosen, is now enacted as part of the Judicial Code. 28 U. S. C. § 1406 (b). And of course it needs no discussion that a defendant is always free voluntarily to submit his person to the jurisdiction of a federal court.\nIn light of the nature of rules governing the place of trial in the federal system, as thus expounded and codified, as distinguished from limitation upon the power of the federal courts to adjudicate, what are the competing considerations here? The transferee court in this case plainly had and has jurisdiction to adjudicate this action with the defendant’s acquiescence. As the defendant, whose privilege it is to object to the place of trial, has moved for transfer, and has acquiesced to going forward with the litigation in the transferee court, it would appear presumptively, unless there are strong considerations otherwise, that there is no impediment to effecting the transfer so long as “convenience” and “justice” dictate that it be made. It does not counsel otherwise that here the plaintiff is to be sent to a venue to which he objects, whereas ordinarily, when the defendant waives his privilege to object to the place of trial, it is to acquiesce in the plaintiff’s choice of forum. This would be a powerful argument if, under § 1404 (a), a transfer were to be made whenever requested by the defendant. Such is not the case, and this bears emphasis. A transfer can be made under § 1404 (a) to a place where the action “might have been brought” only when “convenience” and “justice” so dicate, not whenever the defendant so moves. A legitimate objection by the plaintiff to proceeding in the transferee forum will presumably be reflected in a decision that 362the interest of justice does not require the transfer, and so it becomes irrelevant that the proposed place of transfer is deemed one where the action “might have been brought.” If the plaintiff’s objection to proceedings in the transferee court is not consonant with the interests of justice, a good reason is wanting why the transfer should not be made.\nOn the other hand, the Court’s view restricts transfer, when concededly warranted in the interest of justice, to protect no legitimate interest on the part of the plaintiff. And by making transfer turn on whether the defendant could have been served with process in the transferee district on the day the action was brought, the Court’s view may create difficult problems in ascertaining that fact, especially in the case of non-corporate defendants. These are problems which have no conceivable relation to the proper administration of a provision meant to assure the most convenient and just place for trial.\nNor is it necessary to reach the Court’s result in order to preserve an appropriate meaning for the phrase “where it might have been brought.” I fully agree that the final words of § 1404 (a) are words of limitation upon the scope of the provision. But to hold as I would that a district is one where the action “might have been brought” when the defendant consents to going forward with the litigation there, does not remove the quality of those words as a limitation. The words compel the defendant in effect to waive any objections to going forward in the transferee district which he might have had if the action had been brought there, in order to obtain a transfer. The words therefore insure that transfer will not be a device for doing the plaintiff out of any forum in which to proceed, no matter how inconvenient. The words in any case, plainly limit the plaintiff’s right to seek a transfer when the defendant does not consent to the change of venue. Moreover, the words may serve to prevent transfer to 363courts with a lack of federal power to adjudicate the matter of the dispute which the defendant cannot confer with his consent.11 In light of the fact that the venue statutes in Title 28, U. S. C., are phrased in terms of where the action “may be brought,” or in some cases where it “shall” or “must” be brought,12 the most obvious limiting significance of the phrase “where it might have been brought” is that it refers to places where, under the venue provisions, the action, “may,” “shall,” or “must” be brought assuming the existence of federal jurisdiction.18 In the meaning of federal venue provisions as expounded by this Court, and by Congress in § 1406 (b), these, as has been said, are not only places where, under the applicable provision, no objection to the venue is available to the defendant. They are also places where the defendant consents to be sued.\nThe relevant legislative history of § 1404 (a) is found in the statement in the Reviser’s Notes, accompanying the 1948 Judicial Code, that § 1404 (a) “was drafted in accordance with the doctrine of forum non conveniens.”14 Under that doctrine, the remedy for an inconvenient 364forum was not to transfer the action, but to dismiss it. In Gulf Oil Corp. v. Gilbert, 330 U. S. 501, 506-507, we held that “[i]n all cases in which the doctrine of forum non conveniens comes into play, it presupposes at least two forums in which the defendant is amenable to process; the doctrine furnishes criteria for choice between them.” It is entirely “in accordance” with this view of the doctrine of forum non conveniens to hold that transfer may be made at the instance of the defendant, regardless of the plaintiff’s right as an original matter to sue him in the transferee court, so long as the defendant stipulates to going forward with the litigation there. Indeed, to hold otherwise as the Court does is to limit § 1404 (a) to a much narrower operation than the nonstatutory doctrine of forum non conveniens. Investigation has disclosed several forum non conveniens cases, one of them in this Court, where dismissal of the action on the defendant’s motion was made upon the condition of the defendant’s voluntary submission to the jurisdiction of another more convenient forum when that forum was not available to the plaintiff as of right over the defendant’s objection. See Canada Malting Co. v. Paterson Steamships, Ltd., 49 F. 2d 802, 804, affirmed, 285 U. S. 413, 424; Giatilis v. The Darnie, 171 F. Supp. 751, 754; Bulkley, Dunton Paper Co. v. The Rio Salado, 67 F. Supp. 115, 116; Libby, McNeill & Libby v. Bristol City Line of Steamships, 41 F. Supp. 386, 389; The City of Agra, 35 F. Supp. 351; Strassburger v. Singer Mfg. Co., 263 App. Div. 518, 33 N. Y. Supp. 2d 424; Wendel v. Hoffman, 258 App. Div. 1084, 18 N. Y. Supp. 2d 96. See also Cerro de Pasco Copper Corp. v. Knut Knutsen, 187 F. 2d 990, and Swift & Co. v. Compania Caribe, 339 U. S. 684, 697-698: “it was improper under the circumstances here shown to remit a United States citizen to the courts of a foreign country without assuring the citizen that respondents would appear in those courts and that security would be given 365equal to what had been obtained by attachment in the District Court. The power of the District Court to give a libellant such assurance is shown by Canada Malting Co. v. Paterson Steamships, Ltd., 285 U. S. 413, 424 [supra].” In view of the familiarity of this device of dismissing for jorum non conveniens when as of right no other forum was available to plaintiff, upon the defendant’s agreement to appear in the more convenient forum, it is almost necessary to suppose, in light of the Reviser’s description of § 1404 (a) as “in accordance with the doctrine of forum non conveniens,” that transfer under § 1404 (a) may likewise be made where the defendant consents to going forward with the ease in the transferee court.\nThe only consideration of the Court not resting on the “plain meaning” of § 1404 (a) is that it would constitute “gross discrimination” to permit transfer to be made with the defendant’s consent and over the plaintiff’s objection to a district to which the plaintiff could not similarly obtain transfer over the defendant’s objection. To speak of such a situation as regards this statute as “discrimination” is a sterile use of the concept. Mutuality is not an empty or abstract doctrine; it summarizes the reality of fair dealing between litigants. Transfer cannot be made under this statute unless it is found to be in the interest of “convenience” and in the interest of “justice.” Whether a party -is in any sense being “discriminated” against through a transfer is certainly relevant to whether the interest of justice is being served. If the interest of justice is being served, as it must be for a transfer to be made, how can it be said that there is “discrimination” in any meaningful sense? Moreover, the transfer provision cannot be viewed in isolation in finding “discrimination.” It, after all, operates to temper only to a slight degree the enormous “discrimination” inherent in our system of litigation, whereby the sole choice of forum, from among those where service is possible and venue unobjectionable, 366is placed with the plaintiff. The plaintiff may choose from among these forums at will; under § 1404 (a) the defendant must satisfy a very substantial burden of demonstrating where “justice” and “convenience” lie, in order to have his objection to a forum of hardship, in the particular situation, respected.\nIn summary, then, the “plain meaning” of § 1404 (a) does not conclude the present case against the transfer, for the statute, as applied in this case, is not “plain” in meaning one way or another, but contains ambiguities which must be resolved by considerations relevant to the problem with which the statute deals. Moreover, the most obvious significance for the set of words here in question, considered as self-contained words, is that they have regard for the limitations contained in the regular statutory rules of venue. Those rules, it is beyond dispute, take into account the consent of the defendant to proceed in the forum, even if it is not a forum designated by statute. And the doctrine of forum non conveniens “in accordance with” which § 1404 (a) was drafted, also took into account the defendant’s consent to proceed in another forum to which he was not obligated to submit. Nor can a decision against transfer be rested upon notions of “discrimination” or of unfairness to the plaintiff in wrenching him out of the forum of his choice to go- forward in a place to which he objects. In the proper administration of § 1404 (a), such consequences cannot survive the necessity to find transfer to be in the interests of “convenience” and “justice,” before it can be made. On the other hand, to restrict transfer as the Court does to those very few places where the defendant was originally amenable to process and could have had no objection to the venue is drastically to restrict the number of situations in which § 1404 (a) may serve the interests of justice by relieving the parties from a vexatious forum. And it is to restrict the operation of the section capriciously, for 367such a drastic limitation is not counseled by any legitimate interest of the plaintiff, or by any interest of the federal courts in their jurisdiction. The defendant’s interest of course is not involved because he is the movant for transfer.\nThe essence of this case is to give fair scope to the role of § 1404 (a) in our system of venue regulations, that is, a system whereby litigation may be brought in only a limited number of federal districts, which are chosen generally upon the basis of presumed convenience. Two extremes are possible in the administration of such a system, duly mindful of the fact that in our jurisprudence venue does not touch the power of the court. (1) All venue may be determined solely by rigid rules, which the defendant may invoke and which work for convenience in the generality of cases. In such an extreme situation there would be no means of responding to the special circumstances of particular cases when the rigid venue rules are inappropriate. (2) At the other extreme there may be no rigid venue provisions, but all venue may be determined, upon the defendant’s objection to the plaintiff’s choice of forum, by a finding of fact in each case of what is the most convenient forum from the point of view of the parties and the court. The element of undesirability in the second extreme is that it involves too much preliminary litigation; it is desirable in that it makes venue responsive to actual convenience. The first extreme is undesirable for according too little, in fact nothing, to actual convenience when the case is a special one; it is desirable in that it does away with preliminary litigation.\nIf anything is plain, from its history and from its words, it is that § 1404 (a) means to afford a balance, a compromise, between these two extremes. It is in this spirit that its provisions must be read. In the ordinary course the regular venue rules are to prevail, with no preliminary litigation to determine the actual convenience. But the 368statute means to allow for cases where the ordinary rules are found to work a great hardship; there, actual convenience is to prevail. We should therefore not, as the Court has done, impose limitations upon the operation of § 1404 (a) which have no relation to ordinary considerations governing the place of trial in the federal system and which arbitrarily prevent actual convenience from determining the place of trial. The limitations upon the section should only be those which recognize legitimate countervailing considerations to the free reign of actual convenience, namely limitations regarding the power of the federal courts to adjudicate, and limitation recognizing the historic privilege of the defendant, should he choose to exercise it, to object to the place of trial unless it is affirmatively designated by the venue statute.\nIt may be urged in answer to this analysis that if transfer is available as a matter of “convenience” and “justice” in every case in which the defendant consents’ to going forward in the transferee court, § 1404 (a) will entail burdensome preliminary litigation and may, if improperly administered, prove vexatious to plaintiffs. Thus, even arbitrary limitations, such as the Court imposes, may be said to be warranted. In effect this argument against transfer in situations like the present implies distrust in the ability and character of district judges to hold the balance even, that is, to dispose quickly of frivolous contentions and to prevent transfer from proving unduly prejudicial to plaintiffs while according it its proper scope to deal with cases of real inconvenience. “Such apprehension implies a lack of discipline and of disinterestedness on the part of the lower courts, hardly a worthy or wise basis for fashioning rules of procedure. It reflects an attitude against which we were warned by Mr, Justice Holmes, speaking for the whole Court, likewise in regard to a question of procedure: 'Universal distrust creates universal incompe369tence.’ Graham v. United States, 231 U. S. 474, 480.” Kerotest Mfg. Co. v. C-O-Two Co., 342 U. S. 180, 185. As in that case, doubts here should be resolved in favor of the competence of the District Courts wisely to administer § 1404 (a). Whatever salutary effect that section is to have must in any event depend upon due appreciation by district judges of the relevant considerations involved in ordering a transfer. Nothing is to be gained by parceling out the areas of their discretion mechanically, making distinctions which have no relevance to the manner in which venue provisions are ordinarily administered in the federal courts. I would therefore permit considerations of “convenience” and “justice” to be operative whenever the defendant consents to going forward in the transferee court on the same terms on which he was sued in the original forum. Against a rare abuse, there will always be available the corrective supervisory power of the Courts of Appeals, and ultimately of this Court.\n\n[This opinion applies on'ly to No. 26, Sullivan v. Behimer. For opinion of Mr. Justice Frankfurter, joined by Mr. Justice Harlan and Mr. Justice Brennan, in No. 25, Hoffman v. Blaski, see ante, p. 345.]\n\n\n See, e. g., Felchlin v. American Smelting & Refining Co., 136 F. Supp. 577 (D. C. S. D. Calif. 1955) (transfer denied on defendant’s motion because plaintiff was an executor not qualified in transferee 353court); Masterpiece Products, Inc., v. United Artists Corp., 90 F. Supp. 750 (D. C. E. D. Pa. 1950) (transfer denied on defendant’s motion because, had the action originally been brought in the transferee court, the alignment of parties would have been different, there being one involuntary party, thereby destroying complete diversity of citizenship); Lucas v. New York Central R. Co., 88 F. Supp. 536 (D. C. S. D. N. Y. 1950) (transfer denied on defendant’s motion because defendant’s corporate status would have destroyed diversity of citizenship had the action been brought in the transferee c&urt). In all of these cases transfer was denied because the transferee court was deemed not to be one where the action “might have been brought.” See also Arvidson v. Reynolds Metals Co., 107 F. Supp. 51 (D. C. W. D. Wash. 1952) (denying the defendant’s motion for transfer in part because the action was a local one, and state courts in the transferee district would not have taken jurisdiction over it).\n\n\n See, e. g., Dufek v. Roux Distrib. Co., 125 F. Supp. 716 (D. C. S. D. N. Y. 1954); Barnhart v. Rogers Producing Co., 86 F. Supp. 595 (D. C. N. D. Ohio 1949); Troy v. Poorvu, 132 F. Supp. 864 (D. C. Mass. 1955); United States v. Reid, 104 F. Supp. 260 (D. C. E. D. Ark. 1952); Otto v. Hirl, 89 F. Supp. 72 (D. C. S. D. Iowa 1952); McGee v. Southern Pacific Co., 151 F. Supp. 338 (D. C. S. D. N. Y. 1957); Rogers v. Halford, 107 F. Supp. 295 (D. C. E. D. Wisc. 1952); Herzog v. Central Steel Tube Co., 98 F. Supp. 607 (D. C. S. D. Iowa 1951); Mitchell v. Gundlach, 136 F. Supp. 169 (D. C. Md. 1955); McCarley v. Foster-Milburn Co., 89 F. Supp. 643 (D. C. W. D. N. Y. 1950).\n\n\n Otto v. Hirl, 89 F. Supp. 72, 74 (D. C. S. D. Iowa 1952).\n\n\n Cain v. Bowater’s Newfoundland Pulp & Paper Mills, Ltd., 127 F. Supp. 949, 950 (D. C. E. D. Pa. 1954).\n\n\n Johnson v. Harris, 112 F. Supp. 338, 341 (D. C. E. D. Term. 1953).\n\n\n Hill v. Upper Mississippi Towing Corp., 141 F. Supp. 692 (D. C. Minn. 1956); McGee v. Southern Pacific Co., 151 F. Supp. 338 (D. C. S. D. N. Y. 1957); Welch v. Esso Shipping Co., 112 F. Supp. 611 (D. C. S. D. N. Y. 1953); Mire v. Esso Shipping Co., 112 F. Supp. 612 (D. C. S. D. N. Y. 1953); Cain v. Bowater’s Newfoundland Pulp & Paper Mills, Ltd., 127 F. Supp. 949 (D. C. E. D. Pa. 1954); Anthony v. RKO Radio Pictures, 103 F. Supp. 56 (D. C. S. D. N. Y. 1951); Blaski v. Howell (D. C. N. D. Ill., March 14, 1958).\n\n\n General Electric Co. v. Central Transit Warehouse Co., 127 F. Supp. 817 (D. C. W. D. Mo. 1955); Tivoli Realty v. Paramount Pictures, 89 F. Supp. 278 (D. C. Del. 1950); Felchlin v. American Smelting & Refining Co., 136 F. Supp. 577 (D. C. S. D. Calif. 1955). See also Johnson v. Harris, 112 F. Supp. 338 (D. C. E. D. Tenn. 1953) (dictum).\n\n\n Silbert v. Nu-Car Carriers, 111 F. Supp. 357 (D. C. S. D. N. Y. 1953); Hampton Theaters, Inc., v. Paramount Film Distributing Corp., 90 F. Supp. 645 (D. C. D. C. 1950). See also Arvidson v. Reynolds Metals Co., 107 F. Supp. 51 (D. C. W. D. Wash. 1952) (denying the defendants’ motion to transfer in part because the plaintiff would not have been amenable to process in the transferee court).\n\n\n Ferguson v. Ford Motor Co., 89 F. Supp. 45 (D. C. S. D. N. Y. 1950); Glasfloss Corp. v. Owens-Corning Fiberglas Corp., 90 F. Supp. 967 (D. C. S. D. N. Y. 1950).\n\n\n McCarley v. Foster-Milburn Co., 89 F. Supp. 643 (D. C. W. D. N. Y. 1950); Troy v. Poorvu, 132 F. Supp. 864 (D. C. Mass. 1955).\n\n\n See cases cited in note 1, supra.\n\n\n See 28 U. S. C. §§ 1391, 1392 (a) and (b), 1393 (a) and (b), 1396-1399, 1400 (b), 1401 and 1403.\n\n\n See Chief Judge Magruder’s opinion for the Court of Appeals for the First Circuit in In re Josephson, 218 F. 2d 174, 184.\n\n\n The whole of the statement in the Reviser’s Note dealing with subsection (a) of § 1404 is as follows:\n“Subsection (a) was drafted in accordance with the doctrine of forum non conveniens, permitting transfer to a more convenient forum, even though the venue is proper. As an example of the need of such a provision, see Baltimore & Ohio B. Co. v. Kepner, . . . 314 U. S. 44, . . . which was prosecuted under the Federal Employer’s Liability Act in New York, although the accident occurred and the employee resided in Ohio. The new subsection requires the court to determine that the transfer is necessary for convenience of the parties and witnesses, and further, that it is in the interest of justice to do so.”\n\n", "ocr": false, "opinion_id": 9422015 }, { "author_str": "Whittaker", "per_curiam": false, "type": "020lead", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\nMr. Justice Whittaker\ndelivered the opinion of the Court.\nTo relieve against what was apparently thought to be the harshness of dismissal, under the doctrine of jorum 336non conveniens, of an action brought in an inconvenient one of two or more legally available forums, Gulf Oil Corp. v. Gilbert, 330 U. S. 501, and concerned by the reach of Baltimore & Ohio R. Co. v. Kepner, 314 U. S. 44,1 Congress, in 1948, enacted 28 U. S. C. § 1404 (a), which provides:\n“§ 1404. Change of venue.\n“(a) For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.”\nThe instant cases present the question whether a District Court, in which a civil action has been properly brought, is empowered by § 1404 (a) to transfer the action, on the motion of the defendant, to a district in which the plaintiff did not have a right to bring it.\nNo. 25, Blaski. — Respondents, Blaski and others, residents of Illinois, brought this patent infringement action in the United States District Court for the Northern District of Texas against one Howell and a Texas corporation controlled by him, alleging that the defendants are residents of, and maintain their only place of business in, the City of Dallas, in the Northern District of Texas, where they are infringing respondents’ patents. After being served with process and filing their answer, the defendants moved, under § 1404 (a), to transfer the action to the United States District Court for the Northern District' of Illinois.2 Respondents objected to the 337transfer on the ground that, inasmuch as the defendants did not reside, maintain a place of business, or infringe the patents in, and could not have been served with process in, the Illinois district, the courts of that district lacked venue over the action 3 and ability to command jurisdiction over the defendants;4 that therefore that district was not a forum in which the respondents had a right to bring the action, and, hence, the court was without power to transfer it to that district. Without mentioning that objection or the question it raised, the District Court found that “the motion should be granted for the convenience of the parties and witnesses in the interest of justice,” and ordered the case transferred to the Illinois district. Thereupon, respondents moved in the Fifth Circuit for leave to file a petition for a writ of mandamus directing the vacation of that order. That court, holding that “[t]he purposes for which § 1404 (a) was enacted would be unduly circumscribed if a transfer could not be made ‘in the interest of justice’ to a district where the defendants not only waive venue but to which they seek the transfer,” denied the motion. Ex parte Blaski, 245 F. 2d 737, 738.\nUpon receipt of a certified copy of the pleadings and record, the Illinois District Court assigned the action to Judge Hoffman’s calendar. Respondents promptly moved for an order remanding the action on the ground that the Texas District Court did not have power to make the transfer order and, hence, the Illinois District Court was not thereby vested with jurisdiction of the action. 338After expressing his view that the “weight of reason and logic” favored “retransfer of this case to Texas,” Judge Hoffman, with misgivings, denied the motion. Respondents then filed in the Seventh Circuit a petition for a writ of mandamus directing Judge Hoffman to reverse his order. After hearing and rehearing, the Seventh Circuit, holding that “[w]hen Congress provided [in § 1404 (a)] for transfer [of a civil action] to a district 'where it might have been brought,’ it is hardly open to doubt but that it referred to a district where the plaintiff . . . had a right to bring the case,” and that respondents did not have a right to bring this action in the Illinois district, granted the writ, one judge dissenting. 260 F. 2d 317.\nNo. 26, Behimer. — Diversity of citizenship then existing, respondents, Behimer and Roberts, residents of Illinois and New York, respectively, brought this stockholders’ derivative action, as minority stockholders of Utah Oil Refining Corporation, a Utah corporation, on behalf of themselves and others similarly situated, in the United States District Court for the Northern District of Illinois against Standard Oil Company and Standard Oil Foundation, Inc., Indiana corporations but licensed to do and doing business in the Northern District of Illinois, for damages claimed to have been sustained through the alleged illegal acquisition by defendants of the assets of the Utah corporation at an inadequate price.\nAfter being served with process and filing their answer, the defendants moved, under § 1404 (a), to transfer the action to the United States District Court for the District of Utah.5 Respondents objected to the transfer on the 339ground that, inasmuch as the defendants were not incorporated in or licensed to do or doing business in, and could not be served with process in. the district of Utah, the courts of that district lacked venue over the action6 and ability to command jurisdiction over the defendants;7 that therefore that district was not a forum in which the respondents had a right to bring the action, and, hence, the court was without power to transfer it to that district. Without mentioning the question raised by that objection, the court found that the proposed transfer would be “for the convenience of the parties and witnesses and in the interest of justice,” and ordered the case transferred to the district of Utah.\nRespondents then filed in the Seventh Circuit a petition for a writ of mandamus directing the District Court to reverse its order. After hearing, the Seventh Circuit, following its decision in Blaski v. Hoffman, supra, granted the writ. 261 F. 2d 467.\nTo settle the conflict that has arisen among the circuits respecting the proper interpretation and application of § 1404 (a),8 we granted certiorari. 359 U. S. 904; 361 U. S. 809.\n340Without sacrifice or slight of any tenable position, the parties have in this Court commendably narrowed their contentions to the. scope of the only relevant inquiry. The points of contention may be sharpened by first observing what is not in contest. Discretion of the district judges concerned is not involved. Propriety of the remedy of mandamus is not assailed. No claim is made here that the order of the Fifth Circuit denying the motion of respondents in the Blaski case for leave to file a petition for writ of mandamus, 245 F. 2d 737, precluded Judge Hoffman or the Seventh Circuit from remanding that case.9 Petitioners concede that these actions were 341properly brought in the respective transferor forums; that statutory venue did not exist over either of these actions in the respective transferee districts,10 and that the respective defendants were not within the reach of the process of the respective transferee courts.11 They concede, too, 342that § 1404 (a), being “not unlimited,” “may be utilized only to direct an action to any other district or division 'where it might have been brought,’ ” and that, like the superseded doctrine of jorum non conveniens, Gulf Oil Corp. v. Gilbert, 330 U. S. 501, 507, the statute requires “an alternative forum in which plaintiff might proceed.”\nPetitioners’ “thesis” and sole claim is that § 1404 (a), being remedial, Ex parte Collett, 337 U. S. 55, 71, should be broadly construed, and, when so construed, the phrase “where it might have been brought” should be held to relate not only to the time of the bringing of the action, but also to the time of the transfer; and that “if at such time the transferee forum has the power to adjudicate the issues of the action, it is a forum in which the action might then have been brought.” 12 (Emphasis added.) They argue that in the interim between the bringing of the action and the filing of a motion to transfer it, the defendants may move their residence to, or, if corporations, may begin the transaction of business in, some other district, and, if such is done, the phrase “where it might have been brought” should be construed to empower the District Court to transfer the action, on motion of the defendants, to such other district; and that, similarly, if, as here, the defendants move to transfer the action to some other district and consent to submit, to the jurisdiction of such other district, the latter district should be held one “in which the action might then have been brought.” (Emphasis added.)\nWe do not agree. We do not think the § 1404 (a) phrase “where it might have been brought” can be interpreted to mean, as petitioners’ theory would require, 343“where it may now be rebrought, with defendants’ consent.” This Court has said, in a different context, that § 1404 (a) is “unambiguous, direct [and] clear,” Ex parte Collett, 337 U. S., at 58, and that “the unequivocal words of § 1404 (a) and the legislative history . . . [establish] that Congress indeed meant what it said.” United States v. National City Lines, Inc., 337 U. S. 78, 84. Like the Seventh Circuit, 260 F. 2d, at 322, we think the dissenting opinion of Judges Hastie and McLaughlin in Paramount Pictures, Inc., v. Rodney, 186 F. 2d 111 (C. A. 3d Cir.), correctly answered this contention:\n“But we do not see how the conduct of a defendant after suit has been instituted can add to the forums where 'it might have been brought.’ In the normal meaning of words this language of Section 1404 (a) directs the attention of the judge who is considering a transfer to the situation which existed when suit was instituted.”\nIt is not to be doubted that the transferee courts, like every District Court, had jurisdiction to entertain actions of the character involved, but it is obvious that they did not acquire jurisdiction over these particular actions when they were brought in the transferor courts. The transferee courts could have acquired jurisdiction over these actions only if properly brought in those courts, or if validly transferred thereto under § 1404 (a). Of course, venue, like jurisdiction over the person, may be waived. A defendant, properly served with process by a court having subject matter jurisdiction, waives venue by failing seasonably to assert it, or even simply by making default. Commercial Ins. Co. v. Stone Co., 278 U. S. 177, 179—180; Neirbo Co. v. Bethlehem Shipbuilding Corp., Ltd., 308 U. S. 165. But the power of a District Court under § 1404 (a) to transfer an action to another district is made to depend not upon the wish or waiver of the defendant but, rather, upon whether the transferee district was one 344in which the action “might have been brought” by the plaintiff.\nThe thesis urged by petitioners would not only do violence to the plain words of § 1404 (a), but would also inject gross discrimination. That thesis, if adopted, would empower a District Court, upon a finding of convenience, to transfer an action to any district desired by the defendants and in which they were willing to waive their statutory defenses as to venue and jurisdiction over their persons, regardless of the fact that such transferee district was not one in which the action “might have been brought” by the plaintiff. Conversely, that thesis would not permit the court, upon motion of the plaintiffs and a like showing of convenience, to transfer the action to the same district, without the consent and waiver of venue and personal jurisdiction defenses by the defendants. Nothing in § 1404 (a), or in its legislative history, suggests such a unilateral objective and we should not, under the guise of interpretation, ascribe to Congress any such discriminatory purpose.\nWe agree with the Seventh Circuit that:\n“If when a suit is commenced, plaintiff has a right to sue in that district, independently of the wishes of defendant, it is a district 'where [the action] might have been brought.’ If he does not have that right, independently of the wishes of defendant, it is not a district 'where it might have been brought,’ and it is immaterial that the defendant subsequently [makes himself subject, by consent, waiver of venue and personal jurisdiction defenses or otherwise, to the jurisdiction of some other forum].” 260 F. 2d, at 321 and 261 E. 2d, at 469.\nInasmuch as the respondents (plaintiffs) did not have a right to bring these actions in the respective transferee districts, it follows that the judgments of the Court of Appeals were correct and must be\n, , Affirmed.\n\n See the Reviser’s Notes following 28 U. S. C. § 1404.\n\n\n The asserted basis of the motion was that trial of the action in the Illinois District Court would be more convenient to the parties and witnesses and in the interest of justice because several actions involving the validity of these patents were then pending in that court, and that pretrial and discovery steps taken in those actions had developed a substantial amount of evidence that would be relevant and useful in this action.\n337Defendants also stated in the motion that, if and when the case be so transferred, they would waive all objections to the venue of the Illinois District Court over the action and would enter their appearance in the action in that court.\n\n\n See 28 U. S. C. § 1400 (b), quoted in note 10, infra.\n\n\n See Rule 4 (f) of the Fed. Rules Civ. Proc., quoted in note 11, infra.\n\n\n The motion asserted, and the court found, that trial of the action in the district of Utah would be more convenient to the parties and witnesses for the reason's, among others, that all of the officers and directors, and a majority of the minority stockholders, of the Utah corporation reside in that district; that the books and records of the corporation are located in that district; that the substantive law 339of Utah governs the action, and that the calendar of the Utah court was less congested than the Illinois one.\nAs part of their motion, defendants stated that, in the event of the transfer of the action as requested, they would waive all objections to the venue of the Utah court and enter appearances in the action in that court.\n\n\n See 28 U. S. C. § 1391 (c), quoted in note 10, infra.\n\n\n See Rule 4 (f) of the Fed. Rules Civ. Proc., quoted in note 11, infra.\n\n\n The decisions of the circuits are in great conflict and confusion. The Second Circuit has held one way on a plaintiff’s motion and the other on a defendant’s motion. Compare Foster-Milburn Co. v. Knight, 181 F. 2d 949, 952-953, with Anthony v. Kaufman, 193 F. 2d 85, and Torres v. Walsh, 221 F. 2d 319. The Fifth Circuit, too, has held both ways. Compare Blackmar v. Guerre, 190 F. 2d 340427, 429, with Ex parte Blaski, 245 F. 2d 737. The Ninth Circuit has held a District Court to be without power to transfer an action, on plaintiff’s motion, to a district in which plaintiff did not have a legal right to bring it originally. Shapiro v. Bonanza Hotel Co., 185 F. 2d 777, 780. The Third Circuit has held, two of the five judges dissenting, that a District Court has power to transfer an action, on defendant’s motion, to a district in which the plaintiff did not have a legal right to bring it. Paramount Pictures, Inc., v. Rodney, 186 F. 2d 111. The First Circuit has upheld transfer, on defendant’s motion, to a district in which venue existed but where process could not be served on defendants (but defendants had been served in the transferor district). In re Josephson, 218 F. 2d 174.\n\n\n That order did not purport to determine the jurisdiction of the transferee court and therefore did not preclude Judge Hoffman of power to determine his own jurisdiction, nor did it preclude the power of the Seventh Circuit to review his action. Fettig Canning Co. v. Steckler, 188 F. 2d 715 (C. A. 7th Cir.); Wilson v. Kansas City Southern R. Co., 101 F. Supp. 56 (D. C. W. D. Mo.); United States v. Reid, 104 F. Supp. 260, 266 (D. C. E. D. Ark.). Several reasons why principles of res judicata do not apply may be stated in a few sentences. The orders of the Texas and Illinois District Courts on the respective motions to transfer and to remand, like the orders of the Fifth and Seventh Circuits on the respective petitions for mandamus, were (1) interlocutory, (2) not upon the merits, and (3) were entered in the same case by courts of coordinate jurisdiction. Here the sole basis of the right of the Fifth Circuit to entertain the petition for a writ of mandamus was to protect its appellate jurisdiction, 34128 U. S. C. § 1651 (a); Magnetic Engineering & Mfg. Co. v. Dings Mfg. Co., 178 F. 2d 866, 869-870 (C. A. 2d Cir.); Foster-Milburn Co. v. Knight, 181 F. 2d 949, 951 (C. A. 2d Cir.); In re Josephson, 218 F. 2d 174, 177 (C. A. 1st Cir.); Torres v. Walsh, 221 F. 2d 319, 321 (C. A. 2d Cir.) and, by denying leave to file the petition, it forsook such right, but it did not thereby determine that the Illinois District Court had jurisdiction of the action. The question of that court’s jurisdiction still remained subject to attack as of right on appeal to the Seventh Circuit from any final judgment in the action. When, therefore, jurisdiction of the District Court was assailed in the Seventh Circuit, by the petition for mandamus, that court surely had power to determine whether it would hold, on such an appeal, that the Illinois District Court did or did not have jurisdiction of the action and, if not, to say so and thus avoid the delays and expense of a futile trial.\n\n\n Venue over patent infringement actions is prescribed by 28 U. S. C. § 1400 (b), which provides:\n“(b) Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.”\nSee Stonite Prod. Co. v. Melvin Lloyd Co., 315 U. S. 561; Fourco Glass Co. v. Transmirra Products Corp., 353 U. S. 222.\nGeneral venue over actions against corporations is prescribed by 28 U. S. C. § 1391 (c), which provides:\n“(c) A corporation may be sued in any judicial district in which it is incorporated or licensed to do business or is doing business, and such judicial district shall be regarded as the residence of such corporation for venue purposes.”\n\n\n General provisions respecting service of the process of federal courts are prescribed by Rule 4 (f) of the Fed. Rules Civ. Proc., which provides:\n“(f) Territorial limits of effective service.\n“All process other than a subpoena may be served anywhere within the territorial limits of the state in which the district court is held and, when a statute of the United States so provides, beyond 342the territorial limits of that state. A subpoena may be served within the territorial limits provided in Rule 45.”\n\n\n A similar view was expressed in Paramount Pictures, Inc., v. Rodney, 186 F. 2d 111 (C. A. 3d Cir.). The court there thought that the § 1404 (a) phrase “might have been brought” means “could now be brought.” Id., at 114.\n\n", "ocr": false, "opinion_id": 9422012 }, { "author_str": "Stewart", "per_curiam": false, "type": "030concurrence", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n345Mr. Justice Stewart,\nconcurring in No. 25.\nTwo Courts of Appeals disagreed about the meaning of a federal law, as conscientious federal courts sometimes do. From the point of view of efficient judicial administration the resulting history of this litigation is no subject for applause. But, as the Court points out, no claim was made here that the decision of the Fifth Circuit precluded Judge Hoffman or the Seventh Circuit from remanding the case, and on the merits of that question I agree with the Court that principles of res judicata were inapplicable. In any event, the conflict between the Circuits is now resolved, and what happened here will not happen again.\n", "ocr": false, "opinion_id": 9422013 }, { "author_str": "Frankfurter", "per_curiam": false, "type": "040dissent", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\nMr. Justice Frankfurter,\nwhom Mr. Justice Harlan and Mr. Justice Brennan join,\ndissenting.\nMy special disagreement with the Court in this case concerns a matter of judicial administration arising out of the fact that after the question on the merits had been considered by the Court of Appeals for the Fifth Circuit, the same question between the same parties was later independently again adjudicated by the Court of Appeals for the Seventh Circuit. I cannot join the Court’s approval of the right of the Seventh Circuit to make such a re-examination. It is true that in its opinion in this case and No. 26, Sullivan v. Behimer, decided today, the Court settles the question over which the two Courts of Appeals disagreed, so that it should not recur. This is not, however, an isolated case. A general principle of judicial administration in the federal courts is at stake. In addition, while the Court today settles one problem arising in the application of § 1404 (a), other questions involving that section may readily give rise to conflicting 346views among the eleven Courts of Appeals. Under the Court's opinion, for example, transfer always depends upon the meaning of the federal venue statutes, and upon the jurisdiction of the transferee court over the person of the defendant, which may be a problem of constitutional dimensions, and there is obviously a substantial opportunity for conflict between the Courts of Appeals over those matters. We ought to forestall in other situations of potential controversy the kind of judicial unseemliness which this case discloses.\nPlaintiffs brought this action for patent infringement in the United States District Court for the Northern District of Texas. Defendants moved pursuant to 28 U. S. C. § 1404 (a) to have it transferred to the Northern District of Illinois. Finding transfer to be “for the convenience of parties and witnesses, in the interest of justice,” the Texas District Court granted the motion and transferred the action to Illinois. Plaintiffs sought a writ of mandamus in the Court of Appeals for the Fifth Circuit to require the Texas District Court to set aside the transfer. In plaintiffs' view the Northern District of Illinois was not a place where the action “might have been brought,” and thus the Texas District Court had no power to transfer the action there under § 1404 (a). The Fifth Circuit fully examined the merits of this claim and rejected it, holding that in the circumstances before the court the Northern District of Illinois was a jurisdiction where the action “might have been brought.” Leave to file a mandamus petition was therefore denied, and the action was duly transferred. 245 F. 2d 737.\nUpon the assignment of the action to the calendar of the United States District Court for the Northern District of Illinois, plaintiffs moved that court to disregard the explicit decision of another District Court in the same case, sustained by the appropriate Court of 347Appeals, and to send the ease back to Texas. Plaintiffs advanced precisely the claim already rejected by the Fifth Circuit, namely, that the Northern District of Illinois was not a place where the action “might have been brought” within the proper meaning of § 1404 (a). Transfer had, in their view, erroneously been ordered by the Texas District Court and the power to transfer erroneously approved by the Fifth Circuit. Plaintiffs’ application was denied by the Illinois District Court. Still not accepting the decision against them, plaintiffs again sought an appellate remedy by way of mandamus, this time in the Court of Appeals 'for the Seventh Circuit. Initially, mandamus was denied. On rehearing, however, the Seventh Circuit held that the prior decision of the Fifth Circuit was wrong. It held that § 1404 (a) did not authorize transfer to Illinois, and it ordered the action “remanded” to the Texas District Court within the Fifth Circuit, from whence it had come, to go forward there. 260 F. 2d 317. That “remand” is the order which is here on certiorari. 359 U. S. 904.\nThe Court of Appeals for the Seventh Circuit has thus refused to permit an Illinois District Court to entertain an action transferred to it with the approval, after full consideration of the problem involved, of the Court of Appeals for the Fifth Circuit. The Seventh Circuit considered no evidence not before the Fifth Circuit in so deciding. It considered precisely the same issue and reached a contrary legal conclusion. This was after explicit prior adjudication of the question at the same level of the federal system in the same case and between the same parties. Because the question involved is the transferability of the action, the consequence of the Seventh Circuit’s disregard of the Fifth Circuit’s prior decision is not only that a question once decided has been reopened, with all the wasted motion, delay and 348expense which that normally entails. Unless and until this Court acts, the litigants have no forum in which trial may go forward. Each Court of Appeals involved has refused to have the District Court in its Circuit hear the case and has sent it to a District Court in the other.\nThis is the judicial conduct the Court now approves. The Court does not suggest that the Court of Appeals for the Fifth Circuit was powerless, was without jurisdiction, to review, as it did, the question of the applicability of § 1404 (a) to this case. The occasion for the Fifth Circuit's review by way of mandamus may have been, as the Court suggests, “to protect its appellate jurisdiction,” but there can be no question that the Fifth Circuit undertook to and did resolve on its merits the controversy between the parties regarding the meaning of § 1404 (a). Yet the Court decides that the review in the Fifth Circuit was so much wasted motion, properly ignored by the Court of Appeals for the Seventh Circuit in arriving at a contrary result. The case is treated just as if the Fifth Circuit had never considered the questions involved in it. I am at a loss to appreciate why all the considerations bearing on the good administration of justice which underlie the' technical doctrine of res judicata did not apply here to require the Court of Appeals for the Seventh Circuit to defer to the previous decision. “Public policy dictates that there be an end of litigation; that those who have contested an issue shall be bound by the result of the contest, and that matters once tried shall be considered forever settled as between the parties. We see no reason why this doctrine should not apply in every case where one voluntarily appears, presents his case and is fully heard, and why he should not, in the absence of fraud, be thereafter concluded by the judgment of the tribunal to which he has submitted his cause.” Baldwin v. Traveling Men’s Assn., 283 U. S. 522, 525-526. One would suppose that these considerations would be 349especially important in enforcing comity among federal courts of equal authority.\nThe fact that the issue involved is the propriety of a transfer of the action only makes the case for deference to the previous decision of a coordinate court in the same litigation that much stronger. The course of judicial action now approved by the Court allows transfer over a persisting objection only when concurred in by two sets of courts: those in the place where the case begins, and those in the place to which transfer is ordered. Not only does the place of trial thus remain unsettled for an unnecessarily long time to accommodate double judicial consideration, but, as this case shows, the result of a disagreement between the courts involved is that the litigation cannot go forward at all unless this Court resolves the matter. Surely a seemly system of judicial remedies, especially appellate judicial remedies, regarding controverted transfer provisions of the United States Code should encourage, not discourage, quick settlement of questions of transfer and should preclude two Courts of Appeals from creating, through their disagreement in the same case, an impasse to the litigation which only this Court can remove. Section 1404 (a) was meant to serve the ends of “convenience” and “justice” in the trial of actions. It perverts those ends to permit a question arising under § 1404 (a), as here, to be litigated, in turn, before a District Court and Court of Appeals in one Circuit, and a District Court and Court of Appeals in another Circuit, one thousand miles distant, thereby delaying trial for a year and a half, only to have the result of all that preliminary litigation be that trial may not go forward at all until this Court shall settle the question of where it shall go forward, after at least another year’s delay.\nWe are not vouchsafed claims of reason or of the due administration of justice that require the duplication of 350appellate remedies approved by the Court in this case. Why is not a single judicial appellate remedy in a Court of Appeals entirely adequate for one aggrieved by a transfer? Once the Court of Appeals for the Fifth Circuit had decided, after due consideration, that the proper meaning of § 1404 (a) included Illinois as a place where the action “might have been brought,” this should have ended the matter, except of course for this Court’s power of review of that decision through the writ of certiorari, a power which we declined to exercise in this case. Nor does such a view of right and wise judicial administration depend upon the nature of the procedural or even jurisdictional issue in controversy. Technically, res judioata controls even a decision on a matter of true jurisdiction. “We see no reason why a court, in the absence of an allegation of fraud in obtaining the judgment, should examine again the question whether the court making the earlier determination on an actual contest over jurisdiction between the parties, did have jurisdiction of the subject matter of the litigation.” Stoll v. Gottlieb, 305 U. S. 165, at 172. See also Baldwin v. Traveling Men’s Assn., supra, 283 U. S. 522. Surely, a prior decision of a federal court on the unfunda-mental issue of venue ought to receive similar respect from a coordinate federal court when the parties and the facts are the same. The question is of the appropriate scheme of judicial remedies for enforcing rights under a federal remedial statute aimed at enhancing the fair administration of justice in the federal courts. It is not consonant with reason to permit a duplicate appellate procedure for questions under this statute, thereby forestalling final decision on a pre-trial matter which ought to be decided as expeditiously as possible, causing wasteful delay and expense, and thus depriving the statutory motion to transfer of effectiveness in achieving the ends of “convenience” and “justice” for which it was created.\n\n[This opinion applies only to No. 25, Hoffman v. Blaski. For opinion of Mr. Justice Frankfurter, joined by Mr. Justice Harlan and Mr. Justice Brennan, in No. 26, Sullivan v. Behimer, see post, p. 351.]\n\n", "ocr": false, "opinion_id": 9422014 } ]	Supreme Court	Supreme Court of the United States	F	USA, Federal
362,575	null	1979-01-19	false	jones-v-shields	Jones	Jones v. Shields	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "590 F.2d 330" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/590/590.F2d.330.78-6535.html", "author_id": null, "opinion_text": "590 F.2d 330\n Jonesv.Shields\n No. 78-6535\n United States Court of Appeals, Fourth Circuit\n 1/19/79\n \n 1\n W.D.Va.\n \n AFFIRMED\n ", "ocr": false, "opinion_id": 362575 } ]	Fourth Circuit	Court of Appeals for the Fourth Circuit	F	USA, Federal
518,146	Cummings, Manion, Posner	1989-02-06	false	united-states-v-armando-manso-portes-and-carlos-picon	null	United States v. Armando Manso-Portes and Carlos Picon	UNITED STATES of America, Plaintiff-Appellee, v. Armando MANSO-PORTES and Carlos Picon, Defendants-Appellants	Stephen M. Komie, Joshua Sachs, Chicago, Ill., for defendants-appellants., Laurie N. Feldman, Asst. U.S. Atty., Chicago, Ill., for plaintiff-appellee.	null	null	null	null	null	null	null	Argued Sept. 16, 1988.	null	null	8	Published	null	<parties id="b520-9"> UNITED STATES of America, Plaintiff-Appellee, v. Armando MANSO-PORTES and Carlos Picon, Defendants-Appellants. </parties><br><docketnumber id="b520-12"> Nos. 88-1481, 88-1517. </docketnumber><br><court id="b520-13"> United States Court of Appeals, Seventh Circuit. </court><br><otherdate id="b520-14"> Argued Sept. 16, 1988. </otherdate><br><decisiondate id="b520-15"> Decided Feb. 6, 1989. </decisiondate><br><attorneys id="b521-13"> <span citation-index="1" class="star-pagination" label="423"> *423 </span> Stephen M. Komie, Joshua Sachs, Chicago, Ill., for defendants-appellants. </attorneys><br><attorneys id="b521-14"> Laurie N. Feldman, Asst. U.S. Atty., Chicago, Ill., for plaintiff-appellee. </attorneys><br><judges id="b521-15"> Before CUMMINGS, POSNER, and MANION, Circuit Judges. </judges>	[ "867 F.2d 422" ]	[ { "author_str": "Manion", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/867/867.F2d.422.88-1517.88-1481.html", "author_id": null, "opinion_text": "867 F.2d 422\n 27 Fed. R. Serv. 956\n UNITED STATES of America, Plaintiff-Appellee,v.Armando MANSO-PORTES and Carlos Picon, Defendants-Appellants.\n Nos. 88-1481, 88-1517.\n United States Court of Appeals,Seventh Circuit.\n Argued Sept. 16, 1988.Decided Feb. 6, 1989.\n \n Stephen M. Komie, Joshua Sachs, Chicago, Ill., for defendants-appellants.\n Laurie N. Feldman, Asst. U.S. Atty., Chicago, Ill., for plaintiff-appellee.\n Before CUMMINGS, POSNER, and MANION, Circuit Judges.\n MANION, Circuit Judge.\n \n \n 1\n Defendants appeal from convictions for conspiracy to distribute cocaine, aiding and abetting in distribution of cocaine, and use of a telephone to facilitate the conspiracy. We affirm the convictions.\n \n I.\n \n 2\n On November 18, 1986, Dario Espinosa-Alvarez, a prisoner at the Metropolitan Correction Center in Chicago, told government informant Frank White that a \"married couple\" would deliver cocaine to White. A week later, White received a call from Nancy Perez, who identified herself as the wife of Dario's friend. A few days after that, Nancy Perez called White to report that she and \"Pedro\" would come to Chicago on November 29, but they never arrived.\n \n \n 3\n However, that same night White did receive a call from a man whose voice government agents later attributed to Armando Manso-Portes. Manso-Portes turned the phone over to a second man, later identified as Carlos Picon. It is undisputed that White pressed Picon to promptly advise White of developments. Minutes later, Nancy Perez called White to say that she and Pedro were about to register at the Westin Hotel.\n \n \n 4\n The next day, White and DEA Agent Frank Tucci met Nancy and Pedro Perez at the Westin Hotel. The Perezes, White, and Tucci then drove to the parking lot of the Ohio House Motel where Nancy Perez recognized an Oldsmobile that had arrived from Florida. The Perezes went into the hotel and returned some minutes later with Manso-Portes. The Perezes, driving the Oldsmobile, followed Tucci and White to a commercial parking garage in Rosemont, Illinois.\n \n \n 5\n While in the garage, Pedro began removing the rear bumper from the Oldsmobile. This consumed approximately an hour. During the removal, Tucci praised how the cocaine was well hidden. Nancy commented that previously the police stopped the car in Louisiana but did not find the hidden drugs. She added that there had been a second police stop in Louisiana during a drive in the opposite direction when the car was carrying money, but the police didn't find that either.\n \n \n 6\n After removing the bumper, Pedro Perez removed four kilograms of cocaine hidden in a compartment behind it. Nancy and Pedro Perez were then arrested. Manso-Portes and Picon were later arrested at the Ohio House Motel.\n \n \n 7\n DEA agents had watched the Oldsmobile and defendants Manso-Portes and Picon since the morning of November 30. In Manso-Portes's billfold agents found a paper listing Tucci's and Pedro's telephone numbers. Agents also took Picon's address book which contained the telephone numbers of Armando and Ignacio Manso-Portes (Armando's brother). Both defendants denied having met anyone in Chicago, and denied having entered the Oldsmobile. Although they claimed they travelled to Chicago from Miami by bus instead of in the Oldsmobile, neither Picon nor Manso-Portes could identify the bus company.\n \n \n 8\n At trial, the government supplemented Tucci's testimony regarding Nancy Lopez's reference to the two Louisiana police stops. The government introduced the testimony of Louisiana state troopers who had twice in October 1986 stopped an Oldsmobile containing both Ignacio and Armando Manso-Portes. The stops had been for speeding and for tailgating respectively. Trooper Douglas Robertson, who stopped the car on October 2, 1986, identified Armando Manso-Portes and recognized a photo of the Oldsmobile. While Robertson searched the car, he noticed that Armando was visibly shaking and sweating despite 50-degree weather.\n \n \n 9\n Sergeant Robert D. Fogelman and Trooper Richy LaSalle testified that on October 9, 1986, they searched the same vehicle in which both Armando and Ignacio Manso-Portes were riding. Armando again was fidgeting and shaking.\n \n \n 10\n Before trial, Picon had argued that this \"Louisiana stop\" evidence should be admitted because it would show that he had not been there. He wanted his trial severed from that of Manso-Portes if the stop evidence were kept out. He later changed his trial strategy and objected to the evidence.\n \n \n 11\n Over the objection of both defendants, the district court at the conclusion of the evidence instructed the jury:\n \n \n 12\n You have heard evidence of acts of the defendant Armando Manso-Portes other than those charged in the indictment. You may consider this evidence only on the question of the knowledge and intent of both of the defendants. You have heard evidence of statements of the defendant Armando Manso-Portes to the Louisiana troopers. You may consider this evidence only on the question of the knowledge and intent of the defendant Armando Manso-Portes. This evidence is to be considered by you only for these limited purposes.\n \n \n 13\n The trial court instructed the jury that it was defendant Armando Manso-Portes's theory of the case that he was not a member of a conspiracy to deliver cocaine, and not guilty of the charges alleged. The trial court further instructed that it was defendant Picon's theory with respect to conspiracy that Picon had not conspired to violate federal narcotics law, but was merely with Manso-Portes on vacation. The trial court likewise charged that it was Picon's theory of the case that he did not knowingly, intentionally, or willfully participate in aiding, abetting, counseling or commanding the sale of cocaine, nor did he knowingly or intentionally use a telephone in a conspiracy to distribute cocaine, or knowingly aid or abet in cocaine distribution.\n \n \n 14\n The jury returned verdicts of guilty upon all counts charged against each defendant, including conspiracy to distribute cocaine in violation of 21 U.S.C. Sec. 846, aiding and abetting in the distribution of cocaine in violation of 21 U.S.C. Sec. 841(a)(1), and use of a telephone to facilitate their conspiracy in violation of 21 U.S.C. Sec. 843(b).\n \n \n 15\n On appeal, Manso-Portes claims that the district court violated Fed.R.Evid. 404(b) by admitting evidence of the Louisiana stops because the government did not prove by clear and convincing evidence that these similar acts actually had been committed. He also claims that the court should have ruled on information in the presentence report which indicated he occupied a managerial position in the conspiracy. The gist of the latter claim is that the district court should have ruled whether this characterization of him by the probation officer was supported by any evidence before the court, because it is a declaration of fact detrimental to him.\n \n \n 16\n Picon, on the other hand, complains that the district court should not have admitted evidence of the Louisiana stops since Picon had not been present, and that the jury should not have been instructed that those stops could be considered in assessing his knowledge and intent.\n \n II.\n A.\n \n 17\n Manso-Portes argues that the district court erred in denying his motion in limine concerning the stops of the auto in Louisiana, in permitting the government to introduce the stop evidence and argue consequent inferences, and in giving over objection the related government instruction regarding knowledge and intent. Fed.R.Evid. 404(b) provides:\n \n \n 18\n Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.\n \n \n 19\n Under United States v. Shackleford, 738 F.2d 776 (7th Cir.1984), evidence of other crimes, wrongs, or acts must, given Fed.R.Evid. 404(b), have been clear and convincing. However, the May 2, 1988, opinion of the Supreme Court in Huddleston v. United States, --- U.S. ----, 108 S. Ct. 1496, 99 L. Ed. 2d 771 (1988), has virtually superseded all of the authorities originally cited concerning this issue. The appellants concede this and have necessarily abandoned the Shackleford defense.\n \n \n 20\n In Shackleford this court held that under Fed.R.Evid. 404(b), evidence of extrinsic conduct was admissible if directed toward something other than propensity--e.g., motive, opportunity, preparation, knowledge, intent, absence of mistake or accident, or identity. 738 F.2d at 779. This court then read Fed.R.Evid. 404(b) in tandem with Fed.R.Evid. 403, declaring that even if evidence fell within one of the Fed.R.Evid. 404(b) areas of proof, Fed.R.Evid. 403 would compel its exclusion if its probative value were substantially outweighed by risk of unfair prejudice. Admission of evidence of prior or subsequent acts could be approved under Shackleford if: (1) the evidence were directed toward establishing a matter at issue other than defendant's propensity to commit a charged crime; (2) the evidence demonstrated that the other act is sufficiently similar and sufficiently close in time to be relevant to the matter at issue; (3) such evidence were clear and convincing; and (4) the evidence's probative value were not substantially outweighed by risk of unfair prejudice. Id. (Emphasis added.)\n \n \n 21\n In Huddleston the Supreme Court unanimously resolved a conflict among the courts of appeals as to whether the trial court must make a preliminary finding before \"similar act\" and other Rule 404(b) evidence is submitted to the jury, expressly noting that this circuit had required the government to prove to the court by clear and convincing evidence that the defendant had committed the similar act. 108 S. Ct. at 1499 n. 2. Huddleston holds that a district court need not itself make a preliminary finding that the government has proved the \"other act\" even by a preponderance of the evidence (much less by clear and convincing evidence) before submitting the evidence to the jury. Id. at 1501. This removed the third admissibility test of Shackleford. United States v. Rollins, 862 F.2d 1282, 1294 (7th Cir.1988). The emphasis in Huddleston is on admissibility.\n \n \n 22\n While Fed.R.Evid. 404(b) does not permit evidence of prior similar acts to prove character, it does permit it for other purposes. It does not bar such evidence even if not offered for any of the nine purposes listed in 404(b). Congress amended its draft of this rule to emphasize admissibility. 10 Moore & Lucas, Moore's Federal Practice Secs. 404.01, 404.21 at pp. 90, 114 (2d ed. 1988).\n \n \n 23\n Under Fed.R.Evid. 401 and 402,1 relevant evidence (i.e., that making the existence of any fact in controversy more or less likely) is admissible unless otherwise provided in the Rules themselves. Admissibility under Rule 404(b) is assessed under the usual rules for admissibility: Does the danger of undue prejudice outweigh the probative value of the evidence given the context? 108 S. Ct. at 1500. Defendants like Manso-Portes remain shielded from a recitation before the jury of \"a litany of potentially prejudicial similar acts\" connected to a defendant only by unsubstantiated innuendo. Id. at 1501. They are protected because relevancy means the relationship between the item of evidence and the matter properly provable in this case. Id.\n \n \n 24\n Applying this principle, the jurors needed only to reasonably believe that the two Louisiana stops actually had occurred and that cocaine or money had been hidden in the stopped car. Because such conclusion was reasonable from the Louisiana-related evidence, this evidence was admissible concerning the \"other act\" under Fed.R.Evid. 404(b). The district court here did not err concerning Fed.R.Evid. 404(b).\n \n \n 25\n Similar act evidence is relevant when and only when jurors reasonably can decide that the \"other act\" occurred and that the defendant was the actor. 108 S. Ct. at 1501. In the cause before us, the evidence was indicative that Manso-Portes was moving cocaine or money through Louisiana. It was relevant under the prosecution's theory because jurors reasonably could find that this related to the criminal conspiracy in cocaine trafficking.\n \n B.\n \n 26\n The pertinent Shackleford defense having been literally overridden by Huddleston, the defendants, especially Manso-Portes, seek refuge in the balancing test of Fed.R.Evid. 403, which provides:\n \n \n 27\n Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.\n \n \n 28\n But neither defendant raised this 403 defense in the trial court. To preserve an issue for appellate review, a party must properly object so as to alert the district court and the opposing party to the objecting party's specific grounds for objection. The specific premise for reversing upon appeal an evidentiary ruling must be the same premise as that declared properly in the objection during trial. U.S. v. Wynn, 845 F.2d 1439, 1442 (7th Cir.1988). The \"similar act\" issue of Fed.R.Evid. 404(b) is distinct from the \"unfair prejudice\" issue of Fed.R.Evid. 403. On its face, the Fed.R.Evid. 403 issue cannot have been preserved by an objection to the evidence premised upon Fed.R.Evid. 404(b) grounds.\n \n \n 29\n Manso-Portes did not argue the admissibility of the evidence under Fed.R.Evid. 403 in the first place. He now argues that it was at least implicitly included in the Shackleford test. He asserts that the balancing test of Fed.R.Evid. 403 was \"virtually\" subsumed in the Fed.R.Evid. 404(b) test. He consequently proposes remand to the district court for the separate evaluation of prejudice and probative value under Fed.R.Evid. 403. However, Huddleston rejected the suggestion that in performing the balancing prescribed by Fed.R.Evid. 403, a trial court must find that the prejudicial potential of similar acts evidence substantially outweighs its probative value unless the court concludes by a preponderance of the evidence that the defendant had committed the similar act. 108 S. Ct. at 1501 n. 6.\n \n \n 30\n We do not believe that the balancing test of Fed.R.Evid. 403 has been subsumed into any Fed.R.Evid. 404(b) test so as to require us to hold that the Fed.R.Evid. 403 principle need not have been argued and preserved for appeal. Manso-Portes could have made a Fed.R.Evid. 403 argument at the appropriate time, but he did not. Nor was there plain error here under Fed.R.Crim.P. 52(b).2 Since this unique argument is made for the first time on appeal, it is waived.\n \n III.\n A.\n \n 31\n Appellant Picon complains that the district court erred in instructing the jury that related acts (the Louisiana stops) attributed only to Manso-Portes could also be considered against Picon on the issues of knowledge and intent. He contends that Louisiana stop evidence was inadmissible as to him under Fed.R.Evid. 402, because it had no relevancy or probative value in his case. It is undisputed that Picon was not present when police twice stopped the car in Louisiana.\n \n Fed.R.Evid. 402 provides:\n \n 32\n All relevant evidence is admissible, except as otherwise provided by the Constitution of the United States, by Act of Congress, by these rules, or by other rules prescribed by the Supreme Court pursuant to statutory authority. Evidence which is not relevant is not admissible.\n \n \n 33\n On the record before us we hold that the district court acted within its sound discretion in admitting the Louisiana stop evidence against Picon. This was evidence of conspiracy involving Perez and Manso-Portes, with whom Picon was found in Chicago. Alternatively, jurors could have determined that Picon's absence during the Louisiana stops demonstrated Picon's lack of scienter or participation in the conspiracy. The evidence in either eventuality is relevant to Picon's mens rea.\n \n \n 34\n Indeed, our review of the record below confirms that before the trial began Manso-Portes moved in limine for exclusion of evidence relating to the Louisiana stops. At that juncture counsel for Picon offered: \"In the event that the Court were not to allow the testimony of the trooper, that puts me in the position of having to ask for a severance because of the use of the word 'day' in the descriptions by Nancy of the prior event down in Louisiana. Because the trooper, if called to testify, would testify that Mr. Picon was not there at that occasion and was never observed in the course of the stop.\"\n \n \n 35\n While the district court may never have ruled on Picon's original position (since the evidence was ultimately admitted), the logic originally advanced by counsel for Picon remains valid. The jury could have found the testimony favorable to Picon but convicted him on other evidence. We are persuaded that the Louisiana evidence was admissible under Fed.R.Evid. 402 notwithstanding the later change of trial strategy taken by Picon.\n \n B.\n \n 36\n Although Picon made no reference to it, this court is aware of the statement in Huddleston, 108 S. Ct. at 1501, that \"In the Rule 404(b) context, similar act evidence is relevant only if the jury can reasonably conclude that the act occurred and the defendant was the actor.\" Cf. United States v. Beechum, 582 F.2d 898, 912, 913 (5th Cir.1978) (en banc). Manso-Portes may have been an \"actor\" in Louisiana, but Picon definitely was not.\n \n \n 37\n Fed.R.Crim.P. 52(a) provides: \"Any defect, irregularity or variance which does not affect substantial rights shall be disregarded.\" Even disregarding the Louisiana testimony, there remains evidence of conspiracy encompassing Perez and Manso-Portes, with whom Picon was discovered in Chicago. Picon was seen in or near the car containing the narcotics.\n \n \n 38\n Significantly, the Louisiana stop testimony actually may have reinforced Picon's defense; it remains undemonstrated that it hurt him. Once more, the logic originally advanced by counsel for Picon remains valid. Assuming arguendo the relevance of this passage from Huddleston to Picon's situation, and assuming Fed.R.Evid. 404(b) error, the error obviously was harmless.3\n \n IV.\n \n 39\n Prior to the imposition of sentence counsel for defendant Manso-Portes challenged the pre-sentence report of Probation Officer Lucero in characterizing Manso-Portes as having a \"managerial position\" in the crime. The district court responded:\n \n \n 40\n It is my opinion and position that the matter under parole guideline data, which is under the paragraph called \"Evaluation\" is exactly that. It is the evaluation of Mr. Lucero in this particular case, the Probation Officer. It is not a matter of factual material such as is called for under the rule, so that no particular finding is necessary on my part. It is not binding either on me or on the Parole Commission except to the extent that they wish to take the Probation Officer's assessment into account in whatever action that I may wish to take or that the Parole Board may wish to take. So that is a matter that, as you point out, you can address in your comments concerning the appropriate disposition.\n \n \n 41\n Manso-Portes now asserts that the district court erred in its refusal to rule upon whether the \"managerial position\" characterization was supported by evidence before the court. He contends such a ruling was called for because he supposes the characterization to be one of fact, and working to his detriment.\n \n \n 42\n On Counts I and II of the indictment (conspiracy to distribute cocaine, and aiding and abetting in the distribution of cocaine) the trial court sentenced Manso-Portes to five years each, to be served concurrently. The government reminds us that the district court imposed the minimum mandatory incarceration term prescribed by 21 U.S.C. Sec. 841(b)(1)(B). Appellant Manso-Portes acknowledges that he received the minimum sentence, but observes that his salient factor score will be affected by this \"conclusion,\" and that his evaluation for parole release will be affected adversely.\n \n Fed.R.Crim.P. 32(c)(3)(D) provides:\n \n 43\n If the comments of the defendant and the defendant's counsel or testimony or other information introduced by them allege any factual inaccuracy in the pre-sentence investigation report or the summary of the report or parts thereof, the court shall as to each matter controverted, make (i) a finding as to the allegation, or (ii) a determination that no such finding is necessary because the matter controverted will not be taken into account in sentencing.\n \n \n 44\n But here the district court noted that the matter under parole guideline data appeared beneath a paragraph styled \"Evaluation\" and he concluded that what Lucero had done was \"exactly that.\" The trial court was aware the language at issue was merely the assessment of Lucero and not a matter requiring any factual \"finding\" (in appellant's terminology, \"ruling\"). He declared it nonbinding either upon himself as judge or upon the Parole Commission.\n \n The decision of the district court is\n \n 45\n AFFIRMED.\n \n \n \n 1\n Fed.R.Evid. 401 provides:\n \"Relevant evidence\" means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.\n Fed.R.Evid. 402 is quoted later in the text of the opinion.\n \n \n 2\n Fed.R.Crim.P. 52(b) provides:\n Plain errors or defects affecting substantial rights may be noticed although they were not brought to the attention of the court.\n \n \n 3\n Whatever relevance this passage in Huddleston v. U.S., --- U.S. ----, 108 S. Ct. 1496, 1501, 99 L. Ed. 2d 771 (1988) might otherwise have had, we observe that at no juncture did Picon rely upon or even cite the pertinent language. Picon's reply brief, which followed release of the Huddleston opinion by the Supreme Court, is silent on exactly this point. Although not at issue in this case, our decision regarding the Louisiana stops and Picon turns upon harmless error rather than waiver grounds\n \n \n ", "ocr": false, "opinion_id": 518146 } ]	Seventh Circuit	Court of Appeals for the Seventh Circuit	F	USA, Federal
454,842	Brown, Contie, Merritt	1985-07-15	false	united-states-v-thomas-b-marshall-jr	null	United States v. Thomas B. Marshall, Jr.	UNITED STATES of America, Plaintiff-Appellee, v. Thomas B. MARSHALL, Jr., Defendant-Appellant	James F. Schaeffer, Sr. (argued), Schaeffer and Schaeffer, Memphis, Tenn., for defendant-appellant., W. Hickman Ewing,-Jr., U.S. Atty., Timothy R. DiScenza (argued), Memphis, Tenn., for plaintiff-appellee.	null	null	null	null	null	null	null	Argued June 11, 1985.	null	null	1	Published	null	<parties data-order="0" data-type="parties" id="b417-14"> UNITED STATES of America, Plaintiff-Appellee, v. Thomas B. MARSHALL, Jr., Defendant-Appellant. </parties><br><docketnumber data-order="1" data-type="docketnumber" id="b417-16"> No. 84-5849. </docketnumber><br><court data-order="2" data-type="court" id="b417-17"> United States Court of Appeals, Sixth Circuit. </court><br><otherdate data-order="3" data-type="otherdate" id="b417-19"> Argued June 11, 1985. </otherdate><br><decisiondate data-order="4" data-type="decisiondate" id="b417-20"> Decided July 15, 1985. </decisiondate><br><attorneys data-order="5" data-type="attorneys" id="b418-9"> <span citation-index="1" class="star-pagination" label="294"> *294 </span> James F. Schaeffer, Sr. (argued), Schaeffer and Schaeffer, Memphis, Tenn., for defendant-appellant. </attorneys><br><attorneys data-order="6" data-type="attorneys" id="b418-10"> W. Hickman Ewing,-Jr., U.S. Atty., Timothy R. DiScenza (argued), Memphis, Tenn., for plaintiff-appellee. </attorneys><br><p data-order="7" data-type="judges" id="b418-11"> Before MERRITT and CONTIE, Circuit Judges, and BROWN, Senior Circuit Judge. </p>	[ "767 F.2d 293" ]	[ { "author_str": "Merritt", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/767/767.F2d.293.84-5849.html", "author_id": null, "opinion_text": "767 F.2d 293\n 18 Fed. R. Evid. Serv. 995\n UNITED STATES of America, Plaintiff-Appellee,v.Thomas B. MARSHALL, Jr., Defendant-Appellant.\n No. 84-5849.\n United States Court of Appeals,Sixth Circuit.\n Argued June 11, 1985.Decided July 15, 1985.\n \n James F. Schaeffer, Sr. (argued), Schaeffer and Schaeffer, Memphis, Tenn., for defendant-appellant.\n W. Hickman Ewing, Jr., U.S. Atty., Timothy R. DiScenza (argued), Memphis, Tenn., for plaintiff-appellee.\n Before MERRITT and CONTIE, Circuit Judges, and BROWN, Senior Circuit Judge.\n MERRITT, Circuit Judge.\n \n \n 1\n Defendant, a former Memphis police officer, appeals his jury conviction for conspiracy to influence testimony of a witness before a federal grand jury, 18 U.S.C. Sec. 371, obstruction of justice, 18 U.S.C. Sec. 1503, and extortion under color of official right of a duly commissioned officer, 18 U.S.C. Sec. 1951. Defendant argues on appeal that the District Court should have declared a mistrial because of an unauthorized telephone conversation between a juror and a relative of one of the government's witnesses. He also argues that the District Court erred in refusing to grant a mistrial based on a remark made by the Court to the effect that defendant's answer to a question seemed \"rehearsed.\" On the issue of juror contact, defendant maintains that Budoff v. Holiday Inns, Inc., 732 F.2d 1523 (6th Cir.1984), requires that we reverse the District Court's denial of the motion for mistrial. We hold that the Budoff decision is limited to its narrow facts, and does not control the present case. We affirm defendant's jury conviction.\n \n I.\n \n 2\n Defendant was a police officer assigned to the Organized Crime Unit of the Memphis Police Department. In this capacity, he and Detective Chism participated in an investigation of theft and interstate transportation of cereal products. During the course of this investigation, the officers found a quantity of stolen cereal at a local grocery store; the officers informed the store owner that a federal grand jury investigation would ensue.\n \n \n 3\n The activities for which defendant was convicted arose out of his subsequent contacts with the store owner and Detective Chism. The government presented evidence to the federal grand jury showing that defendant had extorted money from the store owner for the purpose of attempting to bribe Detective Chism. On October 21, 1984, the Federal Grand Jury for the Western District of Tennessee indicted defendant for conspiracy to influence the testimony of Detective Chism, extortion, and obstruction of justice. The jury trial commenced on May 29, 1984; the jury returned a verdict against the defendant on all three counts on June 6, 1984.II.\n \n \n 4\n Defendant's first ground for appeal arises from an unauthorized telephone conversation between one juror and the brother of a government witness. Relying on Budoff v. Holiday Inns, Inc., 732 F.2d 1523 (6th Cir.1984), defendant argues that the contact places this case within the \"class of cases where some irregularities so taint the trial that the appearance of impropriety compels a new trial as a prophylactic rather than remedial measure.\" Id. at 1525-26. The Budoff decision, properly construed, should be limited to the narrow facts presented in that case, and is not controlling here.\n \n \n 5\n In the present case, juror Sowell was contacted by his work supervisor the day before the close of defendant's highly publicized trial. Although Sowell did not realize it at the beginning of trial, his supervisor was the brother of police officer Hollie, a key government witness who was scheduled to testify against Marshall. The supervisor was trying to ascertain when the juror would return to work. The juror refused to discuss the case or answer any questions about the progress of the trial. The supervisor then asked, \"Did my brother testify yet?\". The juror refused to respond to the question, and concluded the conversation.\n \n \n 6\n Immediately the next day, the juror notified the Court of the contact. The Court had admonished the jurors at the start of trial each day that they were not to read about the case or discuss it with anyone. The Court conducted a hearing in which Sowell conveyed that, although he did not realize the identity of the government's witness at the beginning of trial, the phone call made him realize that the witness was a member of a family that he greatly respected. Sowell expressed some concern that the disposition of this case could adversely affect his relationship with his supervisor. The Court then decided to replace the juror with an alternate, and denied defendant's motion for a mistrial.\n \n \n 7\n Defendant's argument that this contact comes within the reach of Budoff fails for several reasons. First, Budoff presented an extremely close case on the merits. The issue of proximate causation in the wrongful death action in Budoff was deemed so close that the potential for actual prejudice was substantial. 732 F.2d at 1527.\n \n \n 8\n The present case does not offer similar closeness of proof. The transcript of the six day trial yields convincing proof of defendant's guilt. Both testimonial and documentary proof offered by the government showed strong evidence of defendant's illegal activities. The potential for prejudice in this case is therefore much less than in Budoff.\n \n \n 9\n Second, in Budoff the proscribed contact was made by the daughter of plaintiff's counsel, who contacted the son of one of the jurors. In addition to her familial connection to the trial, she also had a professional connection; she worked as a paralegal for her father's law firm and had been present in the courtroom from the start of the trial.1 Budoff affirmed the strong principle that \"a new trial should be ordered when contact with a juror is purposely made by counsel or his employee ...\" id. at 1527, and stressed that \"when contact is initiated by counsel or an immediate subordinate of counsel ... the evenhandedness of the federal scales of justice has been called into question....\" Id. at 1526.\n \n \n 10\n In the present case, contact was made by a lay person completely unrelated to counsel for either side or to the parties. The particular concerns for maintaining both the fact and the appearance of propriety that were implicated in Budoff are simply not present when, as here, a lay person unrelated to the trial process makes the contact. In this regard, the present case is much closer to the facts in United States v. Pennell, 737 F.2d 521 (6th Cir.1984), in which phone calls were made to jurors by an anonymous caller.\n \n \n 11\n Third, in Budoff the charge of jury taint was made because the juror there remained on the jury; he participated in the deliberations as the elected foreman. The possibility that the contact would in some manner affect the jury deliberations and verdict was therefore quite distinct.\n \n \n 12\n Here, the District Court immediately replaced the juror with an alternate. The juror who had been contacted took no part in any deliberations. The District Court essentially erected a wall between the potential for taint and the remaining jurors.\n \n \n 13\n The foregoing analysis illustrates that the District Court did not err when it refused to declare a mistrial on the basis of the unauthorized juror contact. The present case does not fall within that narrow class of cases in which, regardless of whether prejudice is proven, a court should grant a mistrial as a preventive rather than a remedial measure.\n \n III.\n \n 14\n Defendant's second ground for appeal is a remark made by the District Court in response to a narrative, non-responsive answer offered by defendant on direct examination. The Court responded to the government's objection to defendant's answer by stating: \"Mr. Shaeffer, just ask him to answer the questions. This is a narration of something previously rehearsed apparently.\" Tr. 387.\n \n \n 15\n The next day, defense counsel made an objection to the Court's use of the word \"rehearsed;\" the Court thereupon made a curative instruction to the jury, explaining that they should attach no significance to the word \"rehearsed,\" and that it was solely within their province to assess each witness' credibility.\n \n \n 16\n Defendant urges that the remark was non-curable; that it implied that defendant was perjuring himself; that the Court had invaded the province of the jury and violated the high standard of cautious impartiality imposed on judges.\n \n \n 17\n One isolated remark, of a slightly ambiguous nature, which was later retracted, is not so potent as to deny defendant a fair trial. See Glasser v. United States, 315 U.S. 60, 83, 62 S.Ct. 457, 470, 86 L.Ed. 680 (1942) (\"The trial was long and the incidents relied on by petitioners few. We must guard against the magnification on appeal of instances which were of little importance in their setting.\")\n \n \n 18\n In conclusion, the jury conviction is affirmed.\n \n \n \n 1\n We should reiterate here that the contact in Budoff was not done to intentionally affect the outcome of the trial. See Budoff, 732 F.2d at 1525\n \n \n ", "ocr": false, "opinion_id": 454842 } ]	Sixth Circuit	Court of Appeals for the Sixth Circuit	F	USA, Federal
1,850,272	Heflin, Jones, Maddox, Merrill, Shores	1975-11-20	false	grimes-v-state	Grimes	Grimes v. State	In Re Ulay Black Grimes v. State. Ex Parte State of Alabama Ex Rel. Attorney General.	William J. Baxley, Atty. Gen., and Gary R. Maxwell, Asst. Atty. Gen., for the State, petitioner.	null	Certiorari to the Court of Criminal Appeals.	null	null	null	null	null	null	null	null	0	Published	null	<citation id="b423-7"> 322 So.2d 733 </citation><parties id="AyY"> In re Ulay Black GRIMES v. STATE. Ex parte STATE of Alabama ex rel. ATTORNEY GENERAL. </parties><br><docketnumber id="b423-12"> SC 1521. </docketnumber><br><court id="b423-13"> Supreme Court of Alabama. </court><br><decisiondate id="b423-14"> Nov. 20, 1975. </decisiondate><br><attorneys id="b423-16"> William J. Baxley, Atty. Gen., and Gary R. Maxwell, Asst. Atty. Gen., for the State, petitioner. </attorneys>	[ "322 So. 2d 733", "295 Ala. 403" ]	[ { "author_str": "Shores", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 3662, "opinion_text": "\n322 So.2d 733 (1975)\nIn re Ulay Black GRIMES\nv.\nSTATE.\nEx parte STATE of Alabama ex rel.\nATTORNEY GENERAL.\nSC 1521.\nSupreme Court of Alabama.\nNovember 20, 1975.\nWilliam J. Baxley, Atty.Gen., and Gary R. Maxwell, Asst. Atty. Gen., for the State, petitioner.\nSHORES, Justice.\nPetition of the State by its Attorney General for Certiorari to the Court of Criminal Appeals to review and revise the judgment and decision of that Court in Grimes v. State, 56 Ala.App. 439, 322 So.2d 729.\nWrit denied.\nHEFLIN, C. J., and MERRILL, MADDOX and JONES, JJ., concur.\n", "ocr": false, "opinion_id": 1850272 } ]	Supreme Court of Alabama	Supreme Court of Alabama	S	Alabama, AL
363,366	null	1979-01-25	false	conservation-council-of-north-carolina-v-froehlke	Froehlke	Conservation Council of North Carolina v. Froehlke	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "591 F.2d 1339" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/591/591.F2d.1339.77-2598.html", "author_id": null, "opinion_text": "591 F.2d 1339\n 9 Envtl. L. Rep. 20,105\n Conservation Council of North Carolinav.Froehlke\n No. 77-2598\n United States Court of Appeals, Fourth Circuit\n 1/25/79\n \n 1\n M.D.N.C.\n \n AFFIRMED\n ", "ocr": false, "opinion_id": 363366 } ]	Fourth Circuit	Court of Appeals for the Fourth Circuit	F	USA, Federal
1,403,749	Allen Sharp	1986-11-26	false	mauricio-v-bronnenberg	Mauricio	Mauricio v. Bronnenberg	Arnold MAURICIO, Jr., Plaintiff, v. Robert BRONNENBERG, Thomas Steepro, Defendants	Arnold Mauricio, Jr., pro se., James Hendrix, Legal Asst., Pendleton, Ind., for plaintiff., Robert B. Wente, Deputy Atty. Gen., Indianapolis, Ind., for defendants.	null	null	null	null	null	null	null	null	null	null	3	Published	null	<parties id="b1266-15"> Arnold MAURICIO, Jr., Plaintiff, v. Robert BRONNENBERG, Thomas Steepro, Defendants. </parties><br><docketnumber id="b1266-17"> No. S 84-24. </docketnumber><br><court id="b1266-18"> United States District Court, N.D. Indiana, South Bend Division. </court><br><decisiondate id="b1266-21"> Nov. 26, 1986. </decisiondate><br><attorneys id="b1267-5"> <span citation-index="1" class="star-pagination" label="1207"> *1207 </span> Arnold Mauricio, Jr., pro se. </attorneys><br><attorneys id="b1267-6"> James Hendrix, Legal Asst., Pendleton, Ind., for plaintiff. </attorneys><br><attorneys id="b1267-7"> Robert B. Wente, Deputy Atty. Gen., Indianapolis, Ind., for defendants. </attorneys>	[ "668 F. Supp. 1206" ]	[ { "author_str": "Sharp", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 2927, "opinion_text": "\n668 F. Supp. 1206 (1986)\nArnold MAURICIO, Jr., Plaintiff,\nv.\nRobert BRONNENBERG, Thomas Steepro, Defendants.\nNo. S 84-24.\nUnited States District Court, N.D. Indiana, South Bend Division.\nNovember 26, 1986.\n1207 Arnold Mauricio, Jr., pro se.\nJames Hendrix, Legal Asst., Pendleton, Ind., for plaintiff.\nRobert B. Wente, Deputy Atty. Gen., Indianapolis, Ind., for defendants.\n\nMEMORANDUM AND ORDER\nALLEN SHARP, Chief Judge.\nOn January 19, 1984, Arnold Mauricio, an inmate incarcerated at the Indiana State Prison (hereafter ISP), filed this complaint pursuant to 42 U.S.C. § 1983. Named as defendants are Robert Bronnenberg, Assistant Superintendent at the ISP, and Thomas Steepro, a Unit Team Manager at the ISP. Defendants have complied with the mandates of Lewis v. Faulkner, 689 F.2d 100 (7th Cir.1982).\nPlaintiff's sole claim is that under Indiana law, Indiana Department of Correction (hereafter IDOC), and ISP written policy, rule and regulation, and established practice have created an expectation that he will not be transferred from one housing assignment at the ISP to another, without the benefit of a due process hearing.\nSpecifically plaintiff cites as support:\n1. IC XX-XX-X-X et seq. pertaining to prisoner \"Classification\".\n2. IC XX-XX-X-X et seq. pertaining to \"Conduct and Discipline\" within IDOC penal institutions.\n3. IC XX-XX-X-X et seq. pertaining to \"Credit Time\".\n4. ISP Standard Operation Procedures establishing minimum requirements for assignment to certain housing facilities at the ISP.\nOn December 1, 1983 plaintiff appeared before a Unit Team Committee (hereafter UTC), to answer to charges that he violated the ISP Adult Authority Disciplinary Code. The UTC is an organization of administrators, counselors, and correctional officers, who are charged with the administration and supervision of all inmates housed in one particular area of the institution. The UTC is authorized to conduct disciplinary hearings concerning minor charges of disciplinary infractions that can not result in a prisoner's \"grievous loss\". All breaches of the disciplinary code which could result in grievous loss are heard by a duly constituted Conduct Adjustment Board (hereafter CAB), unless the inmate waives this option.\nOn December 1, 1983, plaintiff was assigned housing in F dormitory at the ISP, which is a dormitory setting as contrasted to a traditional cellblock. The case manager for F Dormitory was Thomas Steepro. The case manager is the administrator who is the head of a UTC. Therefore, Steepro presided over the UTC for F dormitory as it convened on December 1, 1983 to hear the disciplinary charges against plaintiff. During the hearing on December 1, 1983 Steepro was of the opinion that plaintiff had become insolent. Steepro therefore suspended the hearing until further date and issued plaintiff a conduct report for being insolent. Steepro additionally contacted assistant superintendent Robert J. Bronnenberg and requested that plaintiff be removed from his housing assignment at F Dormitory. In support of his request Steepro specified that because of the tensions between himself and plaintiff resulting from the UTC hearing, his ability to maintain the orderly supervision of the inmates housed at F Dormitory would be threatened by plaintiffs continued presence. On December 1, 1983 Bronnenberg reassigned plaintiff to B cellhouse. Plaintiff complains that this reassignment required the necessity of a prior due process hearing.\nThe Constitution of the United States does not require that transfers of prisoners be for cause or that there be any hearing or notice prior to transfer. See Meachum v. Fano, 427 U.S. 215, 96 S. Ct. 2532, 49 L. Ed. 2d 451 (1976). In Meachum and Montanye v. Haymes, 427 U.S. 236, 96 S. Ct. 2543, 49 L. Ed. 2d 466 (1976), the Supreme Court held that an inmate is entitled to a hearing under the due process clause only where state law or practice unambiguously 1208 has created a liberty interest by conditioning such transfers on proof of serious misconduct or occurrence of other events. Meachum, 427 U.S. at 225-230, 96 S. Ct. at 2538-41. This principle has been applied in many aspects of prison administration. See Greenholtz v. Inmates of Nebraska Penal and Correction Complex, 442 U.S. 1, 99 S. Ct. 2100, 60 L. Ed. 2d 668 (1979); Olim v. Wakinekona, 461 U.S. 238, 103 S. Ct. 1741, 75 L. Ed. 2d 813 (1983); Caldwell v. Miller, 790 F.2d 589 (7th Cir.1986); Higgins v. Isenbarger, 798 F.2d 203 (7th Cir. 1986). See also Corgain v. Miller, 708 F.2d 1241 (7th Cir.1983).\nIn Shango v. Jurich, 681 F.2d 1091 (7th Cir.1982), the Seventh Circuit stated:\nProceeding on \"the basis that Warden DeRobertis had a good faith belief that Shango posed a threat to the safety of Stateville,\" id. at 1202, the court held that administrative regulations of the Illinois Department of Corrections were not followed by prison officials with respect to Shango's transfer. The court interpreted these regulations to require a hearing prior to an inmate's interprison transfer, viewing the requirement as vesting a personal right to such a transfer. The court reasoned that the existence of the regulations created a justifiable expectation on the part of inmates that no transfer would occur without a hearing. This expectation, the court held, constitutes a liberty interest protected by the Fourteenth Amendment's due process clause. Because Shango was transferred without a hearing, the court concluded that he had been deprived of liberty without due process of law. Moreover, the court viewed the prison official's failure to provide him with a hearing as a per se violation of the Fourteenth Amendment's equal protection clause. (Footnote omitted)\n681 F.2d 1094-1095. The Seventh Circuit, while reversing the district court began their opinion in Shango by applying the Meachum analysis. The court held that an inmate has no liberty interest in remaining at any particular penal institution.\nThe court in Shango next analyzed the prisoner's claim in the context of a \"state created\" liberty interest. The court held that a state could create such a liberty interest by statute or in some cases by regulation. 681 F.2d at 1099-1100. However, the court found that the Illinois regulations placed no substantive restrictions upon the discretion of prison administrators in making transfer determinations and therefore no liberty interest was created.\nIn concluding that the state procedures do not create liberty interests the Court of Appeals held:\nA liberty interest is of course a substantive interest of an individual; it cannot be the right to demand needless formality.\n* * * * * \nConstitutionalizing every state procedural right would stand any due process analysis on its head. Instead of identifying the substantive interest at stake and then ascertaining what process is due to the individual before he can be deprived of that interest, the process is viewed as a substantive end in itself.\n * * * * \nIf a right to a hearing is a liberty interest, and if due process accords the right to a hearing, then one has interpreted the Fourteenth Amendment to mean that the state may not deprive a person of a hearing without providing him with a hearing.\n681 F.2d at 1100-01.\nThe recent decision of McChristion v. Duckworth, 610 F. Supp. 791 (N.D.Ind. 1985), is a comprehensive and dispositive exposition on \"state created liberties.\" At the center of McChristion was the Indiana statute concerning the opening of an inmate's legal mail by prison officials, IC XX-XX-X-X. The plaintiff, in his § 1983 complaint, argued that IC XX-XX-X-X created a liberty interest to the end that his legal mail would not be opened unless prison administrators could show that the correspondence contained contraband or prohibited property. Plaintiff reasoned that but for the existence of such a condition 1209 there was a bilateral expectation that his legal mail would not be opened. In fact the prison had instituted a policy whereby all legal mail was opened in the presence of the receiving inmate by prison officials.\nWhile citing Olim v. Wakinekona, supra, in McChristion, Judge Lee of this court turned to the court's previous decision in Smith v. Stoner, 594 F. Supp. 1091, 1105 (N.D.Ind.1984), in which it found that a state created procedural right is not an end to itself, but must be correspondent to a substantive right:\nA state may create a liberty interest by its statutes and by non-statutory sources. Meachum v. Fano, 427 U.S. 215, 96 S. Ct. 2532, 49 L. Ed. 2d 451 (1976) at 229, 96 S. Ct. at 2540; Harris v. McDonald, 737 F.2d 662 (7th Cir. 1984) at 664; Shango v. Jurich, 681 F.2d 1091 (7th Cir.1982) at 1099; Soto v. Cady, 566 F. Supp. 773, 777 (E.D. Wis.1983). However, \"a state created procedural right is not itself a liberty interest within the meaning of the Fourteenth Amendment.\" Shango, 681 F.2d at 1101. \"Process is not an end in itself. Its constitutional purpose is to protect a substantive interest to which the individual has a legitimate claim of entitlement.\" Olim v. Wakinekona, 461 U.S. 238, 108 S. Ct. 1741, 1748, 75 L. Ed. 2d 813 (1983) citing with approval Shango, 681 F.2d at 1100-1101. See Olim, 461 U.S. at 250 n. 12, 103 S. Ct. at 1748 n. 12 (\"[A]n expectation of receiving process is not, without more, a liberty interest protected by the Due Process Clause.\") Accord Hewitt v. Helms, 459 U.S. 460, 103 S. Ct. 864 [74 L. Ed. 2d 675] (1983), at 470, 103 S. Ct. at 871; Harris, [737 F.2d] at 665.\n\nSmith v. Stoner, 594 F. Supp. 1091, 1105 (N.D.Ind.1984). \"Property cannot be defined by the procedures provided for its deprivation any more than can life or liberty.\" Cleveland Bd. of Education v. Loudermill, 740 U.S. 582, 540-42, 105 S. Ct. 1487, 1492-1493, 84 L. Ed. 2d 494 (1985).\nMcChristion, 610 F.Supp. at 793-794.\nJudge Lee found that a liberty interest is created only if some real, measurable restriction is placed on a prison administrator's discretion:\n\nOlim sets forth the test for determining whether an underlying and supporting parent substantive right exists which begets \"yet other rights to procedures essential to the realization of the parent right,\" Connecticut Board of Pardons v. Dumschat, 452 U.S. 458, 463, 101 S. Ct. 2460, 2464, 69 L. Ed. 2d 158 (1981). \"[A] state creates a protected liberty interest by placing substantive limitations on official discretion.\" Olim, 461 U.S. at 249, 103 S. Ct. at 1747.\nMcChristion, 610 F.Supp. at 794. The court concluded that the Indiana procedures regarding the opening of prisoners' mail did not create any protected liberty interest. Neither have Jack R. Duckworth, or his subordinates, by practice or custom created a liberty interest or expectation.\nNeither inter or intra-institutional transfer cases state a claim unless substantive restraints and restrictions are placed upon the discretion of the decisionmakers. Caldwell v. Miller, supra; Corgain v. Miller, supra; Shango v. Jurich, supra. This court has consistently applied these standards to such prisoner claims of entitlement to visitation, assignment to trustee dormitories, precluding prison administrators from opening a prisoner's mail, the granting of clemency, temporary release, parole, and work release.\nAll of the relevant procedures, statutory, administrative, or otherwise, that in any way affect inter or intra-institutional reassignments, are now before this court. None of these establish any liberty interest or expectation among IDOC or ISP prisoners that they will be afforded a due process hearing at which prison administrators must show that the subject inmate is guilty of misconduct, prior to and prerequisite to ordering an intra-institutional transfer.\nThe Supreme Court has recently espoused a measure of conduct in two cases which must be shown before a constitutional infringement protected by 42 U.S.C. § 1983 is implicated. Second, and more 1210 importantly, the Court emphasized that only those rights directly derived from the Constitution, its Bill of Rights, and Amendments will be protected by 42 U.S.C. § 1983.\nIn Daniels v. Williams, 474 U.S. 327, 106 S. Ct. 662, 88 L. Ed. 2d 662 (1986), the Court reviewed the § 1983 complaint of an inmate who argued that his liberty interest of freedom from bodily injury \"without due process of law\" within the meaning of the Fourteenth Amendment had been abridged when the jail staff left a pillow case on the jail floor which the plaintiff slipped on resulting in physical injury. At 106 S. Ct. 664, the Court cited its prior holding in Parratt v. Taylor, 451 U.S. 527, 101 S. Ct. 1908, 68 L. Ed. 2d 420 (1981), wherein it held that all that need be shown in a § 1983 suit is that a constitutional deprivation occurred and that there is no requirement of a showing of the defendant's \"state of mind\". The Court concluded that the unintentional loss of a liberty, a right, property, or personal injury resulting from negligent action does not rise to a level which is protected by the Fourteenth Amendment:\nTo hold that injury caused by such conduct is a deprivation within the meaning of the Fourteenth Amendment would trivialalize the centuries old principle of due process of law.\n106 S.Ct. at 665.\nThe Court, at 106 S. Ct. 666, made it clear that only those rights which are traditionally derived from an uncluttered and pristine reading of the Constitution, its Bill of Rights and Amendments will trigger Fourteenth Amendment protection:\nOur Constitution deals with the large concerns of the governors and the governed, but its does not purport to supplant traditional tort law in laying down rules of conduct to regulate liability for injuries that attend living together in society. We have previously rejected reasoning that \"would make of the Fourteenth Amendment a font of tort law to be superimposed upon whatever systems may already be administered by the States,\" Paul v. Davis, 424 U.S. 693, 701, 96 S. Ct. 1155, 1160, 47 L. Ed. 2d 405 (1976), quoted in Parratt v. Taylor, 451 U.S., at 544, 101 S. Ct., at 1947.\nThe Court in Daniels concluded that the actions of the defendants of leaving a towel on a floor did not rise to the level of conduct which implicates the Due Process Clause of the Fourteenth Amendment.\nWhere a government official's act causing injury to life, liberty or property is merely negligent \"no procedure for compensation is constitutionally required.\" Parratt, 451 U.S. at 548, 101 S. Ct. at 1919 (POWELL, J., concurring in result) (footnote omitted).\n106 S.Ct. at 666.\nThe Court emphasized its narrow interpretation of those subject matters which legitimately can claim ancestry in the Constitution:\nThat injuries inflicted by governmental negligence are not addressed by the United States Constitution is not to say that they may not raise significant legal concerns and lead to the creation of protectable legal interests. The enactment of tort claim statutes, for example, reflect the view that injuries caused by such negligence should generally be redressed. It is no reflection on either the breadth of the United States Constitution or the importance of traditional tort law to say that they do not address the same concerns. (footnotes omitted).\n106 S.Ct. at 666.\nIn Davidson v. Cannon, 474 U.S. 344, 106 S. Ct. 668, 88 L. Ed. 2d 677 (1986), another prison case, the plaintiff, an inmate, filed a § 1983 action against prison administrators alleging that they had abridged his right not to be subjected to cruel and unusual punishment as proscribed by the Eighth Amendment, and his right not to be deprived of personal security without due process of law as protected by the Fourteenth Amendment. Factually, the plaintiff asserted that he had sent a written message to a prison administrator informing the administrator that he had been physically threatened by a fellow inmate and that he feared assault from the inmate whose name was specified. Prison administrators basically ignored the message. 1211 The plaintiff was soon thereafter assaulted by the specified inmate by use of a fork, resulting in wounds to plaintiff's face, neck, head and body, and a broken nose. While citing its decision in Daniels, supra, the Court again held that the defendants' inattention to the written message did not rise beyond a level of conduct which could be described as negligent. The Court held that even though serious injury resulted from defendants' conduct, the plaintiff was not protected by the Due Process Clause of the Fourteenth Amendment. Davidson, 106 S.Ct. at 670.\nThe plaintiff in Davidson attempted to distinguish and isolate the substantive claim (not to be deprived of personal security) from the procedural claim by arguing that his claim was \"purely procedural,\" thus circumventing the requirement that plaintiff must show conduct beyond negligence. The Court reaffirmed that such an argument must fail because the procedural aspect of the Fourteenth Amendment is only triggered if any underlying substantive right is at issue:\nIn an effort to limit the potentially broad sweep of his claim, petitioner emphasizes that he \"does not ask this Court to read the Constitution as an absolute guarantor of his liberty from assault by a fellow prisoner, even if that assault is caused by the negligence of his jailers.\" Brief for Petitioner 17. Describing his claim as one of \"procedural due process, pure and simple,\" Id., at 14, all he asks is that New Jersey provide him a remedy. But the Fourteenth Amendment does not require a remedy when there has been no \"deprivation\" of a protected interest.\nDavidson, 106 S.Ct. at 670. The Court in Davidson concluded that the complaint failed because \"the protections of the Due Process Clause, whether procedural or substantive, are just not triggered by lack of due care by prison officials.\" Davidson, 106 S.Ct. at 671.\nMost recently, at least one judge of our Court of Appeals has summarized: \"Negligence is not itself actionable. Daniels v. Williams, 474 U.S. 327, 106 S. Ct. 662, 88 L. Ed. 2d 662 (1986).\" Kirchoff v. Flynn, 786 F.2d 320 (7th Cir.1986). See also Bodine v. Elkhart County Election Board, 788 F.2d 1270, 1272 (7th Cir.1986).\nThere is simply no basis for any relief stated here and the defendants are entitled to judgment as a matter of law. Judgment shall so enter. SO ORDERED.\n", "ocr": false, "opinion_id": 1403749 } ]	N.D. Indiana	District Court, N.D. Indiana	FD	Indiana, IN
365,044	null	1979-03-27	false	forsythe-v-franconia-township-board-of-supervisors	Forsythe	Forsythe v. Franconia Township Board of Supervisors	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "595 F.2d 1212" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/595/595.F2d.1212.78-2253.html", "author_id": null, "opinion_text": "595 F.2d 1212\n Forsythev.Franconia Township Board of Supervisors\n No. 78-2253\n United States Court of Appeals, Third Circuit\n 3/27/79\n \n 1\n E.D.Pa.\n \n AFFIRMED\n ", "ocr": false, "opinion_id": 365044 } ]	Third Circuit	Court of Appeals for the Third Circuit	F	USA, Federal
138,582	null	2004-10-04	false	worley-v-united-states	Worley	Worley v. United States	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "543 U.S. 864" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/US/543/543.US.864.03-11031.html", "author_id": null, "opinion_text": "543 U.S. 864\n WORLEYv.UNITED STATES.\n No. 03-11031.\n Supreme Court of United States.\n October 4, 2004.\n \n 1\n C. A. 3d Cir. Certiorari denied. Reported below: 94 Fed. Appx. 44.\n \n ", "ocr": false, "opinion_id": 138582 } ]	Supreme Court	Supreme Court of the United States	F	USA, Federal
118,840	null	2002-03-18	false	young-v-dormire-superintendent-jefferson-city-correctional-center	Young	Young v. Dormire, Superintendent, Jefferson City Correctional Center	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "535 U.S. 939" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/US/535/535.US.939.01-7749.html", "author_id": null, "opinion_text": "535 U.S. 939\n YOUNGv.DORMIRE, SUPERINTENDENT, JEFFERSON CITY CORRECTIONAL CENTER.\n No. 01-7749.\n Supreme Court of the United States.\n March 18, 2002.\n \n 1\n C. A. 8th Cir. Certiorari denied.\n \n ", "ocr": false, "opinion_id": 118840 } ]	Supreme Court	Supreme Court of the United States	F	USA, Federal
1,705,840	null	2007-06-27	false	in-re-cv	In Re Cv	In Re Cv	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "737 N.W.2d 326" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n737 N.W.2d 326 (2007)\nIN RE C.V.\nNo. 07-0783.\nIowa Court of Appeals.\nJune 27, 2007.\nDecision without published opinion. Affirmed.\n", "ocr": false, "opinion_id": 1705840 } ]	Court of Appeals of Iowa	Court of Appeals of Iowa	SA	Iowa, IA
1,837,116	null	2003-05-02	false	state-v-perez	Perez	State v. Perez	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "842 So. 2d 1100" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n842 So.2d 1100 (2003)\nSTATE of Louisiana\nv.\nJose PEREZ.\nNo. 2003-K-0221.\nSupreme Court of Louisiana.\nMay 2, 2003.\nDenied.\n", "ocr": false, "opinion_id": 1837116 } ]	Supreme Court of Louisiana	Supreme Court of Louisiana	S	Louisiana, LA
263,532	Friendly, Kaufman, Moore	1964-02-17	false	united-states-v-martin-benjamin-bernard-howard-and-milton-z-mende	null	United States v. Martin Benjamin, Bernard Howard and Milton Z. Mende	UNITED STATES of America, Appellee, v. Martin BENJAMIN, Bernard Howard and Milton Z. Mende, Defendants-Appellants	Menahem Stim, New York City (Cur-ran, Mahoney, Felix & Stim, New York City) (Allen S. Stim, John F. Kelly, New York City, of Counsel), for appellant Bernard Howard., Arthur Addess (Bobick & Deutsch, New York City) for appellant Milton Z. Mende., Irwin L. Germaise, New York City, for appellant Martin Benjamin., Neal J. Hurwitz, New York City (Robert M. Morgenthau, U. S. Atty. for the Southern District of New York, John S.. Martin, Jr., Asst. U. S. Atty., of Counsel), for the United States of America..	null	null	null	null	null	null	null	Argued Dec. 4, 1963.	null	null	1	Published	null	<parties data-order="0" data-type="parties" id="b938-11"> UNITED STATES of America, Appellee, v. Martin BENJAMIN, Bernard Howard and Milton Z. Mende, Defendants-Appellants. </parties><br><docketnumber data-order="1" data-type="docketnumber" id="b938-13"> No. 192, Docket 28404. </docketnumber><br><court data-order="2" data-type="court" id="b938-14"> United States Court of Appeals Second Circuit. </court><br><otherdate data-order="3" data-type="otherdate" id="b938-15"> Argued Dec. 4, 1963. </otherdate><br><decisiondate data-order="4" data-type="decisiondate" id="b938-16"> Decided Feb. 17, 1964. </decisiondate><br><attorneys data-order="5" data-type="attorneys" id="b940-11"> <span citation-index="1" class="star-pagination" label="856"> *856 </span> Menahem Stim, New York City (Cur-ran, Mahoney, Felix & Stim, New York City) (Allen S. Stim, John F. Kelly, New York City, of Counsel), for appellant Bernard Howard. </attorneys><br><attorneys data-order="6" data-type="attorneys" id="b940-12"> Arthur Addess (Bobick & Deutsch, New York City) for appellant Milton Z. Mende. </attorneys><br><attorneys data-order="7" data-type="attorneys" id="b940-13"> Irwin L. Germaise, New York City, for appellant Martin Benjamin. </attorneys><br><attorneys data-order="8" data-type="attorneys" id="b940-14"> Neal J. Hurwitz, New York City (Robert M. Morgenthau, U. S. Atty. for the Southern District of New York, John S.. Martin, Jr., Asst. U. S. Atty., of Counsel), for the United States of America.. </attorneys><br><p data-order="9" data-type="judges" id="b940-16"> Before MOORE, FRIENDLY and’. KAUFMAN, Circuit Judges. </p>	[ "328 F.2d 854" ]	[ { "author_str": "Friendly", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/328/328.F2d.854.192.28404_1.html", "author_id": null, "opinion_text": "328 F.2d 854\n UNITED STATES of America, Appellee,v.Martin BENJAMIN, Bernard Howard and Milton Z. Mende, Defendants-Appellants.\n No. 192.\n Docket 28404.\n United States Court of Appeals Second Circuit.\n Argued December 4, 1963.\n Decided February 17, 1964.\n \n COPYRIGHT MATERIAL OMITTED Menahem Stim, New York City (Curran, Mahoney, Felix & Stim, New York City) (Allen S. Stim, John F. Kelly, New York City, of Counsel), for appellant Bernard Howard.\n Arthur Addess (Bobick & Deutsch, New York City) for appellant Milton Z. Mende.\n Irwin L. Germaise, New York City, for appellant Martin Benjamin.\n Neal J. Hurwitz, New York City (Robert M. Morgenthau, U. S. Atty. for the Southern District of New York, John S. Martin, Jr., Asst. U. S. Atty., of Counsel), for the United States of America.\n Before MOORE, FRIENDLY and KAUFMAN, Circuit Judges.\n FRIENDLY, Circuit Judge.\n \n \n 1\n This appeal concerns another of those sickening financial frauds which so sadly memorialize the rapacity of the perpetrators and the gullibility, and perhaps also the cupidity, of the victims. It is unusual in that the vehicle, American Equities Corporation, owned nothing at all — and, in a happier sense, in that the SEC was able to nip the fraud quite early in the bud. The appellants are Milton Mende, the principal promoter, Martin Benjamin, his lawyer, and Bernard Howard, a certified public accountant. After trial in the District Court for the Southern District of New York before Judge Palmieri without a jury, all three were convicted of conspiring willfully by use of interstate commerce to sell unregistered securities and to defraud in the sale of securities, in violation of the Securities Act of 1933, §§ 5 (a) and (c), and 17(a), 15 U.S.C. §§ 77e (a) and (c), and 77q(a), sections which are implemented criminally by § 24 of the Act, 15 U.S.C. § 77x. Mende and Benjamin were convicted also on three substantive counts for using the mails in furtherance of the fraudulent schemes in violation of 18 U.S.C. § 1341. As their sentences on the latter counts were the same as those on the conspiracy count and run concurrently with them, and as we are satisfied that their conspiracy conviction was proper, we need not concern ourselves with the mail fraud counts. Lawn v. United States, 355 U.S. 339, 362, 78 S. Ct. 311, 2 L. Ed. 2d 321 (1958).\n \n \n 2\n Since the principal claim of Howard and Benjamin relates to the sufficiency of the evidence against them, it is necessary to give some description of what went on. The scheme began in December, 1960, when Mende, then in Nevada, arranged to be put in touch with a Reno attorney, McDonald, who was reported to have some \"old corporations prior to 1933\" for sale. Mende's interest in corporations of such vintage was due to § 3(a) (1) of the Securities Act of 1933, 15 U.S.C. § 77c(a) (1), which confers an exemption from the need for registration on\n \n \n 3\n \"Any security which, prior to or within sixty days after May 27, 1933, has been sold or disposed of by the issuer or bona fide offered to the public, but this exemption shall not apply to any new offering of any such security by an issuer or underwriter subsequent to such sixty days.\"\n \n \n 4\n He was especially attracted by a 1919 shell, then bearing the rather appropriate name of Star Midas Mining Co., Inc. Authorized to issue 1,500,000 shares with a par value of 10¢ per share, Star Midas had approximately 964,000 shares outstanding, nearly all owned by a so-called \"Mahoney group.\" It had no assets. After arranging to purchase the Mahoney holdings for $5,000 plus a $1,500 fee, Mende instructed McDonald to change the corporate name to American Equities Corporation and to increase the authorized capital to $1,500,000 by raising the par value to $1 per share. Before closing the purchase, the funds for which were not yet available, Mende, with McDonald's cooperation, bought stock certificates and a seal reflecting these changes. The purchase was not completed until February 23, 1961, when McDonald, having previously caused appropriate resolutions to be adopted and new officers and directors of Mende's selection to be named, turned over to Reiss and Kovaleski, as Mende's representatives, the books and records of the corporation and stock certificates for the 890,000 shares owned by the selling group. At this time the name of the corporation was changed.\n \n \n 5\n Mende had not waited to acquire the American Equities shares before starting to sell them. In mid-January, 1961, he ordered an additional supply of stock certificates from a Los Angeles printer. By entering a bid to buy shares he arranged for American Equities to appear in the pink and white sheets of the National Quotation Service at a price of something over $5 per share. Robert Drattell, president of Lawrence Securities, Inc., which was inactive because of financial difficulties, testified that Benjamin then sought to interest him in selling shares of a corporation whose alleged assets corresponded with those later shown in statements of American Equities. Benjamin indicated that if Drattell would cooperate, he might be in a position to find some way to make capital available to Lawrence Securities. Later in January, Benjamin had Drattell come to a New York hotel to meet Mende, who told Drattell and Reiter, another broker, in Benjamin's presence, that American Equities \"was a holding corporation that had property, various types of property all over the United States, assets of about six and a half million dollars, liabilities of about three million dollars.\" Mende whetted Drattell's appetite, as Benjamin had already done, by indicating he would help to get Lawrence Securities back on its feet. Drattell said he \"would need letters of opinion\" and \"certified financial statements,\" and also would need to see the transfer records which, Mende told him, were kept by \"a certified public accountant out on the Coast.\"\n \n \n 6\n Benjamin speedily filled one of Drattell's demands by handing him a signed opinion, dated January 28, 1961, headed \"To Whom It May Concern: American Equities Corporation.\" It recited that the corporation was organized in May, 1919, \"and there was at that time issued to the public, 963,067 Shares.\" It went on to say that in Benjamin's opinion \"the aforesaid shares are presently free and tradeable pursuant to\" § 3(a) (1) of the Securities Act which it quoted, and reiterated:\n \n \n 7\n \"In view of the foregoing section, and further in view of the fact that the original issuance of the 963,067 Shares in May of 1919, falls directly within Section 3(1) of the Securities Act of 1933, and is therefore, in my opinion, free and tradeable.\" [sic]\n \n \n 8\n On January 28, Benjamin with Reiter and another broker, Parks, went to Los Angeles. Mende gave 4,000 shares of American Equities to Parks and 20,000 shares to Reiter, and also handed Reiter 5,000 shares to be given to Drattell. The latter used these to obtain from the Empire Trust Company a $12,500 loan, $3,500 of which went to bolstering Lawrence Securities' depleted capital account and the balance to Reiter, Mende and Mende's wife; Drattell sent a confirmation, dated January 31, 1961, of the \"purchase\" of these 5,000 shares for $9,000 to \"Martin Benjamin Trustee.\" Later, after Drattell had gone to California to view some of the supposed assets of American Equities, he and Benjamin visited the office of Reiss, the transfer agent, where Benjamin prepared two letters. One, signed by Reiss, advised as to the 5,000 shares given to Drattell \"that said certificates is free stock and is not investment stock\";1 the second, dated back to January 31, and signed by \"Martin Benjamin Trustee,\" purported to evidence the \"sale\" of the 5,000 shares for $9,000 and directed the distribution to Reiter and Mrs. Mende that had already been made.\n \n \n 9\n Reiter and Parks had also brought from California copies of a paper with a printed cover entitled \"American Equities Corporation.\" This contained an unidentified \"Pro Forma Balance Sheet\" as of November 30, 1960, in fact prepared by Reiss,2 and a sheet of descriptive material, a draft of which the judge could reasonably have found to have been written out by Benjamin. The first numbered paragraph of this recited that American Equities was \"a diversified investment company formed in the State of Nevada in 1919\" and that its holdings consisted of \"8 Apartment Houses, 2 Hotels, 2 Office Buildings (all located in Detroit area, Michigan)\" with a \"gross income from the properties\" of $1,061,406.51 and net income of $200,000. This was completely false; the company owned no real estate in Detroit or elsewhere. Three subsequent paragraphs gave facts and figures as to the Outpost Inn, in Arizona, Biesmeyer Boat & Plastic Co., also of Arizona, and Stanford Trailer and Marine Supply Co., of California; the description did not say just what was American Equities' interest in these companies and the only elucidation in the balance sheet was in a note indicating that the price of the Outpost Inn would be $71,000 in cash and a $79,000 note, the former being separately shown as a liability. In fact, no arrangements of any kind had been made as to the Outpost Inn, and the owner of Biesmeyer testified that in December, 1960, he had agreed to give Mende an option for a down payment of $10,000 which was never made; we are not informed as to Stanford Trailer and Marine. Finally the description stated that American Equities \"has acquired a working interest of 68% of the California Molded Products,\" whose 1961 sales were estimated at $2,000,000 with a gross profit margin \"in excess of 30.1% with a potential of 32% by April, 1961,\" and that American Equities was negotiating to acquire still other companies, one \"doing in excess of $20,000,000.00 annually.\" In fact, and to Benjamin's knowledge, American Equities had not acquired any interest in California Molded Products; all it had was a month's option, dated January 16, 1961, to acquire 68% of the stock for $145,000.\n \n \n 10\n In mid-January, Benjamin invited Howard, a certified public accountant who had served Benjamin and his clients, to do some work for American Equities. Howard testified he received the November 30, 1960, \"Pro Forma Balance Sheet,\" a yellow handwritten sheet of paper listing certain real estate holdings in Detroit, and balance sheets of corporations which Mende and Benjamin claimed were \"owned or controlled\" by American Equities. From these materials and without any examination of books and records, he prepared a paper dated February 10, 1961, and on the following day gave copies of this to Mende who handed one to Reiter. The latter testified that this was in Howard's presence.\n \n \n 11\n The paper has a cover, on the stationery of Howard as a Certified Public Accountant, which bears the legend:\n \n \n 12\n AMERICAN EQUITIES CORPORATION DECEMBER 31, 1960\n \n AUDITORS REPORT\n \n 13\n This is followed by a two-page letter in which Howard advises the company that \"After an examination of the books and records of the diversified holdings of your corporation for the period ended December 31, 1960,\" he is submitting a report of the company as at that date, consisting of \"Exhibit `A' — Pro-forma Balance Sheet as at December 31, 1960.\" Next comes a section entitled \"COMMENTS\" informing the company that it is \"a diversified investment corporation with the following holdings.\" These were substantially the same as in the description accompanying the November 30 statement, with the Outpost Inn, Biesmeyer, Stanford and also California Molded Products now clearly listed among them. The comment on California Molded Products anticipates 1961 sales of $2,000,000 with gross profit margin in excess of 30% and a net of better than 4%, but omits to limit the company's interest in these riches to 68%, the most that was claimed by the November 30 balance sheet. The comments say that \"The statement which is pro-forma includes the disposition of $500,000 which a group of stockholders propose to advance to the corporation as a long term loan\"; that $150,000 of this was to be advanced to subsidiaries for working capital and $71,000 \"to repay an officer for the purchase of the assets of the Outpost Inn, Inc.\"; that \"The assets are shown at actual cost and are calculated at the most conservative value,\" although \"A recent appraisal of the real estate in Detroit shows an increase of approximately $2,500,000.00 over book value, which has not been reflected in the statement\"; that \"The accounts receivable, loans receivable, loans payable, and mortgages payable were not verified by direct communication\" and inventories were taken as submitted by the management; and, finally, that \"The statement reflects an accurate and true picture of the corporation's net worth after taking into consideration the proposed loan by the officers.\" The \"Pro-Forma Balance Sheet as at December 31, 1960\" showed total assets of $7,769,657.11 and a net worth of $3,681,049.70 — this including $963,067.00 in the capital stock account. Howard received $200 for his two days of service in preparing the report.\n \n \n 14\n During February, Mende asked Howard to investigate a possible acquisition, on which Howard made a negative recommendation, and Howard discussed the statements of Plametron Corporation with its owner, Frankl, who had previously offered a half interest for $150,000 and was desirous of selling to Mende. In Howard's presence Mende gave Frankl a copy of Howard's December 31 Auditor's Report. There was evidence also that Drattell, whom Howard knew to be a broker interested in American Equities stock, telephoned him to discuss this report. Toward the end of February Mende asked Howard to come out to California; Mende's promise of a $200 advance remained unfulfilled despite Howard's repeated requests but Mende gave him a one-way air ticket. He stayed with Benjamin from February 27 to March 7 at the Beverly Hilton Hotel, which cut off food and telephone service for non-payment of bills and threatened to hold his baggage on departure. While in California, he made some examination of the books and records of California Molded Products, without investigating whether American Equities in fact owned 68% of the stock, and also of J. S. Lane & Co. which Mende said he was interested in buying for American Equities. Howard was given a copy of a statement, dated August 31, 1958, of Verdi Development Corporation; Kovaleski told him this was a dormant corporation which had been through a Chapter X proceeding and whose principal asset, a uranium mill, had been sold in foreclosure.\n \n \n 15\n Under date of March 6, 1961, after the cut-off of food and telephone service, Howard rendered a second \"Auditor's Report,\" which he left with Benjamin. This purportedly reflected \"an examination of the books and records of the diversified holdings of your corporation for the period ended January 31, 1961.\" Although generally similar to his previous \"Auditor's Report,\" it differed in some significant respects: Biesmeyer Boat and Plastic Co. and Stanford Trailer and Marine Supply Co. were no longer included; as Howard was later to tell the grand jury, the two boat companies \"went down the river.\" Nevertheless the list grew from five to six through three additions. Plametron Corporation was included, without any investigation of its acquisition on Howard's part despite the personal knowledge he had gained. So also was J. S. Lane & Co.; Mende and Benjamin had been negotiating for the purchase of this company for $1,100,000 as Howard well knew since only a few days previously he had examined its books \"to determine if the price they were offering was adequate * * .\" As seems generally to have been the case, Howard's pro-forma report apparently makes no provision as to the acquisition cost. The comments also note the inclusion in the balance sheet of \"Verdi Development Company * * a mining company with various mills and claims in California, Utah and Nevada\"; despite the age of Verdi's financial statement and what Kovaleski had told him, Howard reported as an asset \"Unrecovered Development Costs\" of $707,554.21, this being a major factor in the remarkable increase in American Equities' net worth from $3,681,049.70 to $4,609,560.07 in a single month. In addition to the $2,500,000 increment in the Detroit real estate from an appraisal previously reported, there is now an added $500,000 increase in the value of equipment. Nowhere was it suggested, unless by the naked word \"pro-forma,\" that American Equities' acquisition of the mentioned companies had not yet been accomplished. To the contrary, a new paragraph recited:\n \n \n 16\n \"A consolidated statement of income and profit and loss for the six months ended January 31, 1961 shows a net profit $399,623.94 on the basis of the last six months operations of the six corporations involved although they were all only recently acquired within the last few months. However, on the basis of a yearly projection of the six profits the corporation shows a net earnings of approximately 80¢ a share. With the contemplated expansion program under way, this should be increased.\"\n \n This was supported by an exhibit entitled\n \n 17\n AMERICAN EQUITIES CORPORATION CONSOLIDATED STATEMENT OF INCOME AND PROFIT AND LOSS FOR THE SIX MONTHS ENDED JANUARY 31, 1961.\n \n \n 18\n American Equities stock continued to be sold until March 22, 1961, when, as a result of the SEC's action, trading stopped.\n \n \n 19\n Howard's principal claim is that the evidence against him was insufficient to show the state of mind required for a criminal conviction. He says he was performing an accountant's duties innocently if inefficiently — and for a negligible compensation, that he sheltered himself with the label \"proforma,\" and that he did not know his reports were to help in stock peddling but thought they were to be used solely for management purposes. His own testimony belies the last claim; he admitted knowing that the promoters intended to use the stock as collateral for loans or as part of or collateral for the purchase price in various acquisitions and that his statements were shown to prospective lenders or sellers. Since his reports were little more than a regurgitation of material handed him by the \"management\" and related to properties that, as he had reason to know, were not owned, the judge could properly have regarded his claim that he thought them needed for \"management\" purposes as incredible in the last degree. But the evidence we have summarized shows directly that he knew his reports were being used with brokers who were selling the stock. Drattell, whom he knew to be a broker interested in American Equities, telephoned him in regard to his reports,3 and, on Reiter's testimony, he saw Mende hand a copy of his first report to Reiter whom he knew to be similarly interested.\n \n \n 20\n The argument that reports which depicted American Equities as owner of properties and companies it neither owned nor had any firm arrangements to acquire were not false because they were stated to be \"pro forma\" involves a complete misconception of the duties of an accountant in issuing a report thus entitled. Although pro forma statements \"purport to give effect to transactions actually consummated or expected to be consummated at a date subsequent to that of the date of the statements,\" \"auditors consider it proper to submit their report and opinion on such statements only when the nature of the transactions effected is clearly described in the statements, and when satisfactory evidence of their bona fides is available, such as actual subsequent consummation or signed firm contracts.\" Montgomery, Auditing Theory and Practice (6th ed. 1940), 62-63; see also Prentice-Hall Encyclopedic Dictionary of Business Finance (1960), 485. It would be insulting an honorable profession to suppose that a certified public accountant may take the representations of a corporation official as to companies it proposes to acquire, combine their balance sheets without any investigation as to the arrangements for their acquisition or suitable provision reflecting payment of the purchase price, and justify the meaningless result simply by an appliqué of two Latin words.\n \n \n 21\n It is true that the Government had not merely to show that the statements were false but to present evidence from which the judge could be convinced beyond reasonable doubt of Howard's culpable state of mind. But, as Judge Hough said for this court years ago, \"when that state of mind is a knowledge of false statements, while there is no allowable inference of knowledge from the mere fact of falsity, there are many cases where from the actor's special situation and continuity of conduct an inference that he did know the untruth of what he said or wrote may legitimately be drawn.\" Bentel v. United States, 13 F.2d 327, 329 (2 Cir.), cert. denied sub nom., Amos v. United States, 273 U.S. 713, 47 S. Ct. 109, 71 L. Ed. 854 (1926). Any accountant must know that his obligations in certifying \"pro forma\" statements are not satisfied by any such arithmetical exercise as Howard performed. But, as our description of the reports has indicated, there were further false assertions, some of them clearly known to Howard to be such; these constituted a basis for holding him that was independent of the falsity of the total report, as well as for discrediting his assertions of ignorance as to what was required of him. The Michigan real estate was represented to Howard not as properties to be acquired but as already owned; he claimed to have seen deeds for these properties but admitted that American Equities was not named as grantee. The statements that certain assets had not been \"verified by direct communication\" implied that with this qualification all assets had been verified by suitable means; they had not been. Howard made no examination of American Equities' books, which, indeed, were not available when he rendered his first report; even a most cursory inspection would have revealed that nothing had been paid when the capital stock account was written up ten-fold. His statement purported to reflect \"an accurate and true picture of the corporation's net worth after taking into consideration the proposed loan by the officers\"; at best it would have been accurate only if the corporation had had at least some contractual basis for the assertion of ownership, and even then only if proper provision had been made for the cost. The inclusion as an asset of over $700,000 of \"Unrecovered Development Costs\" of a dormant mining company known to have been through insolvency proceedings was wholly indefensible. Perhaps most damning of all was the making of a profit and loss statement including a positive assertion that the six companies were \"acquired within the last few months,\" when Howard knew that at least some of them had not been acquired at all.\n \n \n 22\n These and other items we could mention — and this in a setting where, at the very time that Howard was delivering his second report extolling the prospects of this $8,700,000 company, he had been unable to obtain a $200 advance and the hotel had turned off food and telephone service for nonpayment of bills — were quite sufficient to convince a trier of the facts beyond a reasonable doubt that Howard had actual knowledge of the falsity of his reports and deliberately conspired to defraud investors. As Judge Learned Hand said in a similar context, \"* * * the cumulation of instances, each explicable only by extreme credulity or professional inexpertness, may have a probative force immensely greater than any one of them alone.\" United States v. White, 124 F.2d 181, 185 (2 Cir. 1941).\n \n \n 23\n In fact, however, the Government was not required to go that far. \"Willful,\" the Supreme Court has told us, \"is a word of many meanings, its construction often being influenced by its context.\" Spies v. United States, 317 U.S. 492, 497, 63 S. Ct. 364, 367, 87 L. Ed. 418 (1943), citing United States v. Murdock, 290 U.S. 389, 394-396, 54 S. Ct. 223 78 L. Ed. 381 (1933). We think that in the context of § 24 of the Securities Act as applied to § 17(a), the Government can meet its burden by proving that a defendant deliberately closed his eyes to facts he had a duty to see, compare Spurr v. United States, 174 U.S. 728, 19 S. Ct. 812, 43 L. Ed. 1150 (1899) and American Law Institute, Model Penal Code, § 2.02(7), commentary in Tent. Draft No. 4, pages 129-30 (1955), or recklessly stated as facts things of which he was ignorant. Judge Hough so ruled in Bentel v. United States, supra; although that case and the similar ruling in Slakoff v. United States, 8 F.2d 9 (3 Cir. 1925), were under the mail fraud statute, § 215 of the then Criminal Code, 35 Stat. 1130 (1909), the ancestor of 18 U.S.C. § 1341, which does not use the term \"willfully,\" the Congress that passed the Securities Act scarcely meant to make life easier for defrauders. Other circuits have gone further and have held the willfulness requirement of the Securities Act to be satisfied in fraud cases by proof of representations which due diligence would have shown to be untrue. Stone v. United States, 113 F.2d 70, 75 (6 Cir. 1940); United States v. Schaefer, 299 F.2d 625, 629, 632 (7 Cir.), cert. denied, 370 U.S. 917, 82 S. Ct. 1553, 8 L. Ed. 2d 497 (1962). In our complex society the accountant's certificate and the lawyer's opinion can be instruments for inflicting pecuniary loss more potent than the chisel or the crowbar. Of course, Congress did not mean that any mistake of law or misstatement of fact should subject an attorney or an accountant to criminal liability simply because more skillful practitioners would not have made them. But Congress equally could not have intended that men holding themselves out as members of these ancient professions should be able to escape criminal liability on a plea of ignorance when they have shut their eyes to what was plainly to be seen or have represented a knowledge they knew they did not possess. Compare Brown v. Bullock, 294 F.2d 415, 420 (2 Cir. 1961), as to the meaning of willful conversion in § 37 of the Investment Company Act, 15 U.S.C. § 80a-36.\n \n \n 24\n Much of what we have said as to Howard is relevant also to Benjamin's claim of insufficiency of the evidence as to his culpable state of mind. Benjamin brought Howard into the scheme; he had written out the list of assets which Howard later used in his first report; as Howard testified, Benjamin had told him to take the statements of the various companies \"and just put them into a consolidated form\"; and his work in connection with several of the proposed \"acquisitions\" gave him actual knowledge of the falsity both of the November 30 statement and of Howard's reports. But there was much more than this. His opinion letter made a positive statement that he believed all the shares of American Equities were exempt from registration, although he must have known that control of the corporation, not yet even named \"American Equities Corporation,\" was being acquired by Mende and that the statute explicitly denied exemption to any new offerings by persons in control, a limitation of which his testimony before the SEC showed he was well aware. Yet there is abundant evidence that Benjamin knew Mende was putting American Equities shares on the market. Among the instances was the transaction outlined above with Drattell in late January wherein Benjamin received a confirmation of a purchase of 5,000 shares from \"Martin Benjamin Trustee\" for $9,000 — at a time when the pink sheets were quoting the stock at $5 per share or more — and the distribution of part of the proceeds to Mende and his wife; yet Benjamin prepared a letter whereby the transfer agent certified these shares to be \"free stock and * * not investment stock.\" In another transaction, not previously mentioned, wherein Mende had a nominee, Mrs. Tanner, sell American Equities shares to relatives and friends of Paul Reicher, her father, on a basis whereby she retained $2 per share for her pains, she received a letter signed by \"Martin Benjamin Trustee\" acknowledging the sale of 11,000 shares to her and the receipt of $4.75 per share. Benjamin's role was far more than that of an attorney. He told Drattell he was acting as a \"trustee\" for some of the principals and, when Drattell sought elucidation, explained that \"as a trustee and as an attorney * * * licensed in the State of New York, * * * he was not obligated to reveal any of the sources and it is enough for anyone to accept a legal document from a trustee who was an attorney and the trustee was not required to reveal the source of the legal document or who the principals were behind the legal document\" — surely a novel contribution to the law of trusts. His proffer of financial aid if Drattell would undertake some distribution of American Equities afforded further basis for inferring knowledge of the intended fraud, as did his efforts falsely to minimize Mende's role when he and others were examined by the SEC. This and other evidence made a case at least as strong as that held sufficient with respect to another lawyer in United States v. Crosby, 294 F.2d 928, 938 (2 Cir. 1961), cert. denied sub nom. Mittelman v. United States, 368 U.S. 984, 82 S. Ct. 599, 7 L. Ed. 2d 523 (1962).\n \n \n 25\n Howard and Benjamin make the complaint, standard in appeals of this sort and buttressed by the inevitable citation of Kotteakos v. United States, 328 U.S. 750, 66 S. Ct. 1239, 90 L. Ed. 1557 (1946), that although the indictment alleged a single conspiracy, the proof showed separate ones to sell unregistered securities and to defraud. The argument could not avail Benjamin in any event since the evidence clearly implicated him in both aspects of the scheme. See United States v. Agueci, 310 F.2d 817, 827-828 (2 Cir. 1962), cert. denied, 372 U.S. 959, 83 S. Ct. 1016, 10 L. Ed. 2d 12 (1963). But the point is wholly without merit. The fraudulent acts and the unlawful failure to register information which would uncover them were essential steps in a single scheme to dupe; the limited scope of Kotteakos was explained in Blumenthal v. United States, 332 U.S. 539, 558-559, 68 S. Ct. 248, 92 L. Ed. 154 (1947) and its inapplicability to an integrated financial fraud like this was affirmed by us in United States v. Crosby, supra, 294 F.2d at 944-945. It is thus immaterial that the evidence may not have shown awareness by Howard of the part of the scheme that involved the sale of unregistered shares, United States v. Agueci, supra, and cases there cited.\n \n \n 26\n Mende, as the central figure in the scheme, has not challenged the sufficiency of the evidence introduced against him. He raises several points on appeal; all seem so patently without substance as not to require discussion. We here mention only his claim that McDonald's testimony should have been excluded under the attorney-client privilege, and we do that solely to state its complete lack of merit. The relation between Mende and McDonald was not that of client and attorney but of buyer and seller; what Mende was seeking from McDonald was not legal advice but a pre-1933 corporate shell.\n \n \n 27\n Affirmed.\n \n \n \n Notes:\n \n \n 1\n By what Drattell assumed to have been a Freudian slip, the word \"not\" was originally typed \"hot.\"\n \n \n 2\n Reiss was also convicted of conspiracy but has not prosecuted an appeal\n \n \n 3\n Howard objected to the admission of this evidence on the ground that Drattell, who had not previously met him, could not identify his voice. It is true that the mere announcement of identityby a person who has placed a telephone call does not suffice to make it admissible against the person so identified. See 7 Wigmore, Evidence 617 (3d ed. 1940), and United States v. Ross, 321 F.2d 61, 69 (2 Cir.), cert. denied, 375 U.S. 894, 84 S. Ct. 170, 11 L. Ed. 2d 123 (1963). But Wigmore rightly differentiates the case \"of B's first calling up A and being answered by a person purporting to be A.\" In Van Riper v. United States, 13 F.2d 961, 968 (2 Cir.), cert. denied sub nom. Ackerson v. United States, 273 U.S. 702, 47 S. Ct. 102, 71 L. Ed. 848 (1926), Judge Learned Hand approved decisions \"that when a witness calls up at the proper number in a telephone book the person whose admissions are relevant, and gets an answer from one professing to be the person called, it is prima facie proof of identity.\" See also United States v. Rosenberg, 195 F.2d 583, 597 (2 Cir.), cert. denied, 344 U.S. 838, 73 S. Ct. 20, 97 L. Ed. 687, rehearing denied, 344 U.S. 889, 73 S. Ct. 134, 97 L. Ed. 652 (1952); United States v. Bucur, 194 F.2d 297, 303-304 (7 Cir. 1952). The evidence here went far beyond what Judge Hand thought should suffice as \"prima facie proof of identity.\" Drattell called the number given in Howard's December, 1960, report, was answered by a man identifying himself as \"Bernard Howard,\" discussed the report with the answering voice, was given another number which Howard admits to be his, called that number, was answered by the same voice which again discussed American Equities and was later called by the same voice for a further discussion. To say that all this did not establish Howard's identity sufficiently to make the conversation admissible would outrage common sense.\n \n \n ", "ocr": false, "opinion_id": 263532 } ]	Second Circuit	Court of Appeals for the Second Circuit	F	USA, Federal
1,510,836	Sidney O. Smith, Jr.	1966-08-19	false	morris-v-mutual-benefit-life-insurance-company	Morris	Morris v. Mutual Benefit Life Insurance Company	Perry B. MORRIS v. the MUTUAL BENEFIT LIFE INSURANCE COMPANY	Cohen, Kohler, Barnwell & Chambers, Atlanta, Ga., for plaintiff., Hansell, Post, Brandon & Dorsey, Atlanta, Ga., for defendant.	null	null	null	null	null	null	null	Amendment to Order Aug. 19, 1966.	null	null	6	Published	null	<parties id="b254-7"> Perry B. MORRIS v. The MUTUAL BENEFIT LIFE INSURANCE COMPANY. </parties><br><docketnumber id="b254-9"> Civ. No. 9878. </docketnumber><br><court id="b254-10"> United States District Court N. D. Georgia, Atlanta Division. </court><br><decisiondate id="b254-12"> July 29, 1966. </decisiondate><br><otherdate id="b254-13"> Amendment to Order Aug. 19, 1966. </otherdate><br><attorneys id="b255-16"> <span citation-index="1" class="star-pagination" label="187"> *187 </span> Cohen, Kohler, Barnwell & Chambers, Atlanta, Ga., for plaintiff. </attorneys><br><attorneys id="b255-17"> Hansell, Post, Brandon & Dorsey, Atlanta, Ga., for defendant. </attorneys>	[ "258 F. Supp. 186" ]	[ { "author_str": "Smith", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 3022, "opinion_text": "\n258 F. Supp. 186 (1966)\nPerry B. MORRIS\nv.\nThe MUTUAL BENEFIT LIFE INSURANCE COMPANY.\nCiv. No. 9878.\nUnited States District Court N. D. Georgia, Atlanta Division.\nJuly 29, 1966.\nAmendment to Order August 19, 1966.\n187 Cohen, Kohler, Barnwell & Chambers, Atlanta, Ga., for plaintiff.\nHansell, Post, Brandon & Dorsey, Atlanta, Ga., for defendant.\n\nORDER ON MOTIONS FOR SUMMARY JUDGMENT\nSIDNEY O. SMITH, Jr., District Judge.\nThis is a suit in which plaintiff as beneficiary seeks to recover $10,000.00, the amount of the proceeds of a group life insurance policy issued by the defendant insurance company, plus $2,500.00 penalty, and $3,000.00 attorney's fees. The plaintiff contends that the deceased, Hyman Morris, was covered under an employee group life insurance policy issued by defendant. Defendant contends the deceased was not within the coverage of the policy. Both sides have moved for summary judgment, and the relevant facts are not in dispute.\nThe insurance policy in question is a one year renewal term policy known as Employee Group Life Certificate Policy Number G 4513-1. This employee group policy pays $10,000.00 upon the death of each covered officer or assistant manager of Morris-Fallaize Insurance, Inc., and its associate agency, the Morris Insurance Agency. The relevant portions of the policy are as follows:\nSection A 1(a) of the policy states that all employees are the generally eligible group, and that the covered class within that group includes:\n\"b. Each active, full-time employee, except any such person employed on a temporary basis.\nFor the purposes of this policy, any person who works less than 30 hours per week shall not be considered a full-time employee.\"\nSection A 2 requires 30 days continuous service for persons becoming active, full-time employees after the effective date of the policy, but provides that \"no service requirement shall be applicable for any such person who is in an eligible class on the effective date of the policy.\"\nSection A 3 provides that the insurance coverage be effective on the effective 188 date of the policy, which was December 7, 1964.\nSection A 4 provided:\n\"The insurance for a member of the general group who otherwise fulfills all the requirements of this section will not take effect at the time described in Section A3 unless he is actively at work on a full-time basis at his usual place of business on that day. If he is not actively at work on a full-time basis at his usual place of business on that day, the insurance will become effective on the first day thereafter upon which he returns to active work on a full-time basis at his usual place of business.\"\nThe events leading up to the making of this policy show that Morris-Fallaize Insurance, Inc. applied for more group insurance on their employees. The company with which they had a policy was unable to insure them past their existing limits, and contacted the present defendant insurance company as a supplemental insurer. As a result, on December 7, 1964, a group insurance representative of the defendant was in the office of Perry B. Morris at Morris-Fallaize, for the purpose of working out the coverage of this policy on that day. The policy application was executed by the plaintiff Perry Morris for the policyholder, Morris-Fallaize, and was also executed by Perry Morris as agent for the defendant in connection with the application. The commission on the policy was paid to the company, Morris-Fallaize.\nThe policy was accepted by the defendant, and issued on January 18, 1965, effective as of December 7, 1964, the date of the application.\nThe deceased, Hyman B. Morris, was engaged in the insurance business for over 30 years. With his brother Perry, he operated a general insurance business, the Morris Insurance Agency, until September, 1961. He then organized and became president of Morris-Fallaize Insurance, Inc. He continued up to his death to operate Morris Insurance Agency with his brother and to act as President of Morris-Fallaize Insurance, Inc. His duties in these two capacities occupied on an average of 40 hours per week. They were primarily administrative in nature, but he also consulted with his business associates, James Fallaize and Perry Morris, and made calls on prospects and clients. He was an active member of the two insurance businesses, keeping regular office hours, consulting and meeting with business associates and clients, proposing and writing business memorandum and making calls. This schedule, with few exceptions, continued until Monday, November 24, 1964. At that time he entered Emory Hospital for tests to determine the cause of severe and recurring pains in his lower right chest, for which he had previously been examined by his physician on October 28 and November 17, 1964. At the time of his hospitalization, he was weak and had lost weight as the result of a loss of appetite. The physicians were unable to reach a definite conclusion as to the cause of Hyman's condition. However, after 10 days in the hospital, Hyman had regained strength and appetite, and had begun to carry on business activities from the hospital. He was released on Thursday, December 3, 1964, with permission from his physician to do anyhing he felt like doing and within hours of his discharge, he had returned to his office and his regular duties. He worked from 2:00 P.M. to 4:30 P.M. on the day of his discharge; from 9:00 A.M. to 4:00 P.M. on Friday, December 4, 1964; a regular half-day from 9:00 A.M. to 12:15 P.M. on Saturday, December 5, 1964; and from 9:00 A.M. to 4:00 P.M. on Monday, December 7, 1964, the effective date of the insurance policy. He worked from 9:00 A.M. until about 2:00 P.M. on Tuesday, December 8, 1964, at which time he was again stricken with an attack of severe pain while in a conference in the Bank of Georgia Building with a Mr. J. R. Efird. He was again admitted to Emory Hospital on December 9, 1964. After exploratory surgery on December 17, 1964, his condition was diagnosed as hepatoma or cancer of the liver. He was finally discharged from 189 the hospital on December 28, 1964, and died from hepatoma on April 3, 1965.\nThe plaintiff, Perry Morris, learned of Hyman's condition around December 17, 1964, and Hyman learned of his own condition around December 24, 1964.\nThere are three issues in this case. First, whether on Monday, December 7, 1964, Hyman P. Morris was an \"active, full-time employee\" within the meaning of the policy.\nSecond, if Hyman Morris was otherwise covered, whether the knowledge on the part of plaintiff beneficiary Perry Morris of the physical condition of Hyman prior to January 18, 1965, the date the policy was issued, is a legal bar to Perry's recovery in this suit.\nThird, whether the defendant insurance company's refusal to pay the claim was in bad faith under the provisions of Georgia Code Anno. § 56-1206, so as to make defendant liable for a $2,500.00 penalty and attorney's fees.\n(1) The first issue is whether Hyman P. Morris was an \"active, full-time employee\" within the meaning of the policy on Monday, December 7, 1964.\nUnder the policy provisions there are two conditions to be met before an employee qualified for coverage. First, he had to be an \"active, full-time employee\" (§ [A 1 (b) of the policy]) and second he had to be \"actively at work on a full time basis at his usual place of business\" on the effective date, Monday December 7, 1964 (§§ A 3 and A 4 of the policy).\nThere can be no dispute that the deceased was \"actively at work * * at his usual place of business\" on that day. This issue revolves around the phrase \"full-time\"whether, on the facts, Hyman Morris was a \"full-time employee\" and at work on a \"full-time basis\" on December 7, 1964, within the meaning of the policy.\nThe defendant relies on § A 1(b) of the policy, which states that \"For the purposes of this policy, any person who works less than 30 hours per week shall not be considered a full-time employee.\"\nDefendant points out that the deceased did not work over 30 hours in the week of his return to work, and according to the statement of Dr. Galambos, was totally disabled after November 25, 1964.\nThe plaintiff relies on § A 2 of the policy, which states that \"no service requirement shall be applicable for any such person who is in an eligible class on the effective date of this policy.\"\nPlaintiff contends that the deceased normally worked over 30 hours per week, and was therefore a full-time employee, and that to require that he have worked over 30 hours on the particular week he was stricken would be in effect to apply a service requirement under the guise of the temporary employee provision [§ A 1(b)].\nUnder Georgia law, a contract of insurance is construed to carry out the intent of the parties. Georgia Code Anno. § 20-702. However, where there are two inconsistent provisions, in a group insurance contract, the provision most favorable to the insured will be adopted, e. g. McLendon v. Carolina Life Insurance Co., 71 Ga.App. 557, 31 S.E.2d 429 (1944). Where provisions are ambiguous, are subject to doubt, or are reasonably susceptible of two meanings, the interpretation most favorable to coverage of the insured will prevail. American Indem. Co. v. Davis, 155 F. Supp. 47 (M.D.Ga.1957); Continental Casualty Co. v. Robertson, 245 F.2d 604 (5th Cir. 1957); Thornton v. Traveler's Ins. Co., 116 Ga. 121, 126, 42 S.E. 287 (1902). Thus, upon the undisputed facts, if this contract has two provisions in apparent conflict, or if a provision is susceptible of two reasonable interpretations, this issue must be decided in favor of the plaintiff.\nThe provision in § A 1(b) of the policy, defining an \"active, full-time employee\" in terms of 30 hours work per week is plainly intended to draw a line between the full-time and temporary employees mentioned in the previous section [Section A 1(a)]. As such, this 30 hour provision must be applied, not on a week by week basis, but on an average 190 basis to determine whether an employee is temporary or whether he normally and regularly worked over 30 hours per week. See Harlan v. Washington National Ins. Co., 388 Pa. 88, 130 A.2d 140. Certainly, it would be unreasonable to assume that the parties intended a contract whereby any regular employee would be excluded during any week in which he did not work 30 hours because of illness, vacation, etc.\nThe case of Augusta v. John Hancock Mutual Life Ins. Co., 11 Misc. 2d 111, 170 N.Y.S.2d 908, is informative. The policy in that case contained no requirement that the employee be at his \"usual place of business\" on the effective date of coverage. However, it held that an employee who performed his duties of making decisions and giving instructions as to current business problems from his hospital bed, was \"actively at work as a full time employee\", even though he died without ever returning to the place of business. See also Equitable Life Assur. Society of United States v. Wortham, 67 F.2d 721 (7th Cir. 1933). Compare, Chazen v. United States Life Insurance Co., 24 A.D.2d 741, 263 N.Y.S.2d 490.\nHere, there is no doubt that the deceased normally worked more than 40 hours a week in the course of his regular employment up to November 24, 1964. After a 10-day stay in the hospital, he returned to his normal duties at an undiminished pace, that would have averaged about 38 hours per week, had he not been stricken on December 8, 1964, in the middle of a business conference. There is no evidence of an intent on his part to become a temporary employee, such as retiring from his position as president. The fact that he was away from work for 10 days beginning November 24 does not change his status into that of a temporary employee any more than if it had occurred two or three months earlier.\nTo require the deceased to have been at work for 30 hours during the particular week of his attack would be in effect to add a condition on coverage not contained in the policy.\nThe fact that the attack occurred the day after the effective date of the policy is immaterial and cannot be a basis for denial of coverage, since there is no service requirement under Section A 2. As an active full-time employee on the date of the policy, the deceased was thereafter covered. The fact that he had an attack requiring him to cease work only one day after the effective date is, of course, no different than if the attack had occurred months later. Compare Elsey v. Prudential Ins. Co. of America, 262 F.2d 432 (10th Cir. 1958) where employee was not at work on effective date and became fatally ill the next day, and Aetna Life Ins. Co. v. Padgett, 49 Ga. App. 666, 176 S.E. 702.\nThe testimony of one physician at a later dateafter the diagnosis of cancer and his subsequent deaththat Hyman had been \"totally disabled\" as of October or November, 1964, does not change the fact that he continued to perform substantially all his customary duties until December 8, 1964, in spite of the recurring pain. See, Cato v. Aetna Life Ins. Co., 164 Ga. 392, 138 S.E. 787; Metropolitan Life Ins. Co. v. Johnson, 66 Ga.App. 520, 18 S.E.2d 35.\nTherefore, the deceased met both conditions for coverage. He was an \"active, full-time\" employee, [§ A 1(a) and (b)] and was at work as such on the effective date of the policy. [§ A 3]\n(2) As to the second issue, the defendant has argued that this policy of group insurance was not binding on it until the date of issuance, January 18, 1965, even though the effective date was set in the policy and policy application at December 7, 1964. As a result, the defendant argues, it could have cancelled coverage if it had known of the condition of the deceased and plaintiff's failure as its agent, to notify it of this fact bars his recovery.\nAlthough there is no existing rule as to this question, the better rule on the present facts is that the knowledge of the plaintiff-beneficiary of Hyman's physical condition prior to the date of issuance of the policy, but subsequent to the effective date of the policy coverage as provided in the application and the 191 policy is not a legal bar to recovery under a group insurance policy.\nOf primary importance is the fact that the physical condition of the employees was immaterial to the group coverage, except to the extent that they were required to be active-full-time employees at work at their regular place of business on December 7, 1964. If they met this condition, as did the deceased, they qualified, without the defendant company making inquiry into their physical condition or insurability as under an individual life insurance policy. Such a failure to inquire by requiring no evidence of insurability of any employee further supports the conclusion that the physical condition of the employee is not material to the coverage. See United States Fidelity & Guaranty Co. v. Newton, 37 Ga.App. 70, 139 S.E. 365; Guaranty Life Ins. Co. v. Johnson, 60 Ga.App. 292, 3 S.E.2d 773; Peninsular Life Ins. Co. v. Screen, 100 Ga.App. 670, 112 S.E.2d 174; Gilham v. National Life & Acc. Ins., 104 Ga.App. 459, 122 S.E.2d 164.\nTherefore, there can be no failure on the part of anyone to inform the defendant as to something into which it did not inquire and which is immaterial to the statistical insurance risk involved. The rates charged in this policy are based on the facts of \"active, full-time employment\" on a certain date and age. That one who did in fact meet these requirements unknowingly, was fatally ill at the time cannot be made the basis for later denial of a claim. To do so, would be to allow the imposition of a condition on coverage which is not contained in the policy as written or proposed.\nThe \"agency\" upon which the defendant relies in arguing that the plaintiff owed a duty to inform it of the condition of the deceased is not an agency in the usual legal sense. The plaintiff was not a regular agent of defendant. He did not get the commissions paid on this policy. Instead he was actually acting on behalf of Morris-Fallaize, and this company received the commissions. In group insurance cases, a question of agency is involved, but it involves the employer or officer of the corporate employer acting as the insurer's agent for the purpose of doing whatever acts are necessary to effectuate the coverage of the policy, for the benefit of the employees. See, e. g. Cason v. Aetna Life Insurance Co., 91 Ga. App. 323, 85 S.E.2d 568; Neider v. Continental Assur. Co., 213 La. 621, 35 So. 2d 237, 2 A.L.R. 2d 846. Here, an additional factor is involved since the agent-employer is also the beneficiary. However, as beneficiary he owes no more duty to the insurer than non-beneficiary-agent employers do in group insurance cases. An agent-employer would not be required to inform an insurer of a fact not relevant to normal group coverage whether he was also a beneficiary or not.\nIn any event, it is doubtful the defendant insurer could have cancelled the group coverage even if it had known of the insured's condition. It would appear that in such a group insurance policy as this, the defendant would not have been successful in denying liability. See Pilot Life Insurance Co. v. McCrary, 103 Ga. App. 549, 120 S.E.2d 134; Equitable Life Assur. Soc. v. Florence, 47 Ga.App. 711, 171 S.E. 317; United States Fidelity & Guaranty Co. v. Newton, 37 Ga.App. 70, 139 S.E. 365.\nThe intent of the parties as reflected in the policy terms and the nature of group insurance would form a firm basis for a like conclusion here.\nThe plaintiff has cited many cases involving regular life insurance, culminating with New York Life Ins. Co. v. Whitfield, 113 Ga.App. 266, 147 S.E.2d 829 (1966), for the proposition that acceptance of an application for insurance and premium payment binds the insurance company to coverage contained in the application. The defendant has cited a greater number of cases, also involving regular life insurance, culminating with Loveless v. Life & Casualty Insurance Co. of Tenn., 113 Ga.App. 315, 147 S.E.2d 835 (1966) for the proposition that acceptance of an application for insurance and payment of premium does not bind the insurance company to coverage contained in the policy prior to issue.\n192 Although the great difference in the risk involved between individual life and group insurance makes these cases informative at best, the important question in all these cases is the intent of the parties, as reflected in the terms of the policy application, as to the time the coverage should become effective. In the present case, it is apparent that December 7, 1964, was the date at which both parties intended the policy and the coverage to be effective. This is supported by the nature of group insurance in which the date of coverage or date certain at which employees qualify for coverage is of primary importance, as insurability is determined thereby. In this group policy, the intent of the parties was to bind the insurer to coverage as of that date December 7, 1964is evident throughout the policy. After having issued the policy and accepted premium payment, the defendant cannot now avoid liability on the basis of a physical condition which became known after the coverage date. Therefore, plaintiff's motion for summary judgment as to the $10,000.00 amount of value of the policy is granted.\n(3) As to the third issue of penalty, Georgia Code Anno. § 56-1206 provides: \"In the event of a loss which is covered by a policy of insurance and the refusal of the insurer to pay the same within 60 days after a demand has been made * and a finding has been made that such refusal was in bad faith, the insurer shall be liable to pay such holder, in addition to the loss, not more than 25 per cent of the liability of the insurer for the loss and all reasonable attorney's fees for the prosecution of the case against the insurer. * * *\"\nWhere any reasonable grounds exists for contesting a claim, there can be no award based on bad faith. Lanier v. American Casualty Co. of Reading, Pa., 226 F. Supp. 630 (N.D.Ga. 1964). Unless there is evidence of a frivolous and unfounded denial of liability, no recovery may be had under this provision. Pearl Assurance Co., Ltd. v. Nichols, 73 Ga. App. 452, 37 S.E.2d 227 (1946). The purpose of this provision was not to penalize an insurer for appealing to the courts where there are questions concerning an insurance contract which are sufficiently doubtful to justify adjudication. Security Ins. Co. v. Jackson, 54 Ga.App. 131, 187 S.E. 234 (1936).\nIn the present suit, there is no evidence that the defendant's denial of the claim was frivolous and unfounded or without reasonable grounds. Although the relevant facts in this case were not in dispute, the preceding opinion makes it plain that the legal consequences of these facts were sufficiently doubtful to allow the defendant to request an adjudication without being penalized. The affidavit of defendant's Group Claims Manager, Walter A. Sivek, further indicates that defendant's denial was not frivolous and unfounded.\nTherefore, defendant's motion for summary judgment dismissing plaintiff's claim for penalty and attorney's fees is granted.\nIt is so ordered.\n\nAMENDMENT TO ORDER\nThe order of this Court dated July 28, 1966, granting plaintiff's motion for summary judgment in the above case, is amended to grant plaintiff's prayer for the sum of $925.56, as interest at 7% per annum on the principal amount of $10,000.00 from April 3, 1965, to the date of judgment.\nIt is so ordered.\n", "ocr": false, "opinion_id": 1510836 } ]	N.D. Georgia	District Court, N.D. Georgia	FD	Georgia, GA
521,687	null	1989-04-04	false	lester-bryant-v-the-detroit-news	null	Lester Bryant v. The Detroit News	null	null	null	null	null	null	null	null	null	null	null	null	0	Unpublished	null	null	[ "872 F.2d 1024" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/872/872.F2d.1024.88-1745.html", "author_id": null, "opinion_text": "872 F.2d 1024\n Unpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Lester BRYANT, Plaintiff-Appellant,v.The DETROIT NEWS, Defendant-Appellee.\n No. 88-1745.\n United States Court of Appeals, Sixth Circuit.\n April 4, 1989.\n \n Before BOYCE F. MARTIN, Jr., KRUPANSKY and MILBURN, Circuit Judges.\n \n ORDER\n \n 1\n Plaintiff, Lester Bryant, proceeding pro se, appeals from the entry of summary judgment in favor of his former employer in this suit alleging a violation of Sec. 301 of the Labor Management Relations Act, 29 U.S.C. Sec. 185, and employment discrimination. This case has been referred to a panel of the court pursuant to Rule 9(a), Rules of the Sixth Circuit. Upon examination of the record and the briefs, this panel unanimously agrees that oral argument is not needed. Fed.R.App.P. 34(a).\n \n \n 2\n Mr. Bryant was employed by the defendant from November 20, 1978, until his discharge on March 10, 1986, based on charges of falsifying company records and accounting forms. He filed a grievance regarding his discharge, which was pursued by the Newspaper Drivers and Handlers' Union through arbitration, and resulted in a finding that the discharge was justified. In this suit for monetary damages, Bryant alleged that the arbitration decision was marred by perjured testimony by an employer's witness, and that his discharge was in fact in violation of the collective bargaining agreement and based on race discrimination. At the close of discovery, defendant moved for summary judgment, and plaintiff filed a response. After conducting a hearing, the district court granted defendant's motion and dismissed the case.\n \n \n 3\n Upon consideration, we affirm the district court's decision. Summary judgment is properly granted when the moving party establishes the absence of evidence to support the non-movant's case. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). In this case, plaintiff relied on Dogherra v. Safeway Stores, Inc., 679 F.2d 1293 (9th Cir.), cert. denied, 459 U.S. 990 (1982), in arguing that fraud by the employer invalidated the arbitration decision. However, we agree with the district court's finding that the arbitration award was not based on the challenged testimony, but rather on the documentary evidence. As the alleged fraud was not material to the decision, plaintiff is barred from challenging the finding that his discharge was justified. See Dogherra, 679 F.2d at 1297.\n \n \n 4\n Summary judgment was also proper on the discrimination claim because the arbitration award constituted evidence of a legitimate reason for plaintiff's discharge, see Becton v. Detroit Terminal of Consolidated Freightways, 687 F.2d 140, 142 (6th Cir.1982), cert. denied, 460 U.S. 1040 (1983), and plaintiff did not establish by a preponderance of the evidence that the proffered reason was a pretext for racial discrimination. Cf. Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 252 (1981).\n \n \n 5\n Accordingly, the district court's judgment is hereby affirmed. Rule 9(b)(5), Rules of the Sixth Circuit.\n \n ", "ocr": false, "opinion_id": 521687 } ]	Sixth Circuit	Court of Appeals for the Sixth Circuit	F	USA, Federal
266,808	null	1965-02-05	false	kate-ragan-kearns-katherine-kearns-cheek-and-amos-ragan-kearns-charles	null	null	Kate Ragan Kearns, Katherine Kearns Cheek, and Amos Ragan Kearns, Charles Leslie Kearns, and Katherine Kearns Cheek, Executors and Trustees Under the Will of Gurney H. Kearns, Deceased v. Gay Apparel Corporation, Kate Ragan Kearns, Katherine Kearns Cheek, and Amos Ragan Kearns, Charles Leslie Kearns, and Katherine Kearns Cheek, Executors and Trustees Under the Will of Gurney H. Kearns, Deceased v. Gay Apparel Corporation	null	null	null	null	null	null	null	null	null	null	null	1	Published	null	null	[ "341 F.2d 297" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/341/341.F2d.297.9681.9682.html", "author_id": null, "opinion_text": "341 F.2d 297\n Kate Ragan KEARNS, Katherine Kearns Cheek, and Amos Ragan Kearns, Charles Leslie Kearns, and Katherine Kearns Cheek, Executors and Trustees under the Will of Gurney H. Kearns, Deceased, Appellees,v.GAY APPAREL CORPORATION, Appellant.Kate Ragan KEARNS, Katherine Kearns Cheek, and Amos Ragan Kearns, Charles Leslie Kearns, and Katherine Kearns Cheek, Executors and Trustees under the Will of Gurney H. Kearns, Deceased, Appellants,v.GAY APPAREL CORPORATION, Appellee.\n No. 9681.\n No. 9682.\n United States Court of Appeals Fourth Circuit.\n Argued February 3, 1965.\n Decided February 5, 1965.\n \n Appeal from the United States District Court for the Middle District of North Carolina, at Greensboro; Johnson J. Hayes, Judge.\n Alexander H. Slaughter (W. Gibson Harris and Battle, Neal, Harris, Minor & Williams, Richmond, Va., on brief), for appellant in No. 9681 and appellee in No. 9682.\n Hubert Humphrey, Greensboro, N. C. (McLendon, Brim, Holderness & Brooks, Greensboro, N. C., on brief), for appellees in No. 9681 and appellant in No. 9682.\n Before BRYAN and BELL, Circuit Judges, and CHRISTIE, District Judge.\n PER CURIAM:\n \n \n 1\n Upon consideration of the record and the arguments of counsel, on brief and orally, we perceive no error in the judgment of the District Court, and accordingly it will be affirmed, D.C., 232 F. Supp. 475.\n \n \n 2\n Affirmed.\n \n ", "ocr": false, "opinion_id": 266808 } ]	Fourth Circuit	Court of Appeals for the Fourth Circuit	F	USA, Federal
1,262,047	Harshbarger	1978-07-11	false	state-v-alexander	Alexander	State v. Alexander	State of West Virginia v. James Alexander; And State of West Virginia v. Percy Johnson	Michael F. Gibson, Johnston, Holroyd & Gibson for Alexander., William J. Akers for Johnson., Chauncey H. Browning, Attorney General, David F. Greene, Assistant Attorney General, for State of W. Va.	null	null	null	null	null	null	null	null	null	null	17	Published	null	<parties id="b792-4"> State of West Virginia <em> v. </em> James Alexander <em> and </em> State of West Virginia <em> v. </em> Percy Johnson </parties><docketnumber id="AdK"> (No. 13831) </docketnumber><docketnumber id="ADqU"> (No. 13832) </docketnumber><br><decisiondate id="b792-11"> Decided July 11, 1978. </decisiondate><br><attorneys id="b792-18"> <em> Michael F. Gibson, Johnston, Holroyd & Gibson </em> for Alexander. </attorneys><br><attorneys id="b792-19"> <em> William J. Akers </em> for Johnson. </attorneys><br><attorneys id="b793-4"> <span citation-index="1" class="star-pagination" label="777"> *777 </span> <em> Chauncey H. Browning, </em> Attorney General, <em> David F. Greene, </em> Assistant Attorney General, for State of W. Va. </attorneys>	[ "245 S.E.2d 633", "161 W. Va. 776" ]	[ { "author_str": "Harshbarger", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 6024, "opinion_text": "\n245 S.E.2d 633 (1978)\nSTATE of West Virginia\nv.\nJames ALEXANDER.\nSTATE of West Virginia\nv.\nPercy JOHNSON.\nNos. 13831, 13832.\nSupreme Court of Appeals of West Virginia.\nJuly 11, 1978.\n635 Michael F. Gibson, Johnston, Holroyd & Gibson, Princeton, for Alexander.\nWilliam J. Akers, Princeton, for Johnson.\nChauncey H. Browning, Jr., Atty. Gen., David F. Greene, Paul T. Farrell, Asst. Attys. Gen., Charleston, for State of W.Va.\nHARSHBARGER, Justice:\nThe defendants, James Alexander and Percy Johnson, were jointly tried and both found guilty of armed robbery by a Mercer County Circuit Court jury, and each was sentenced to twenty years in the penitentiary.\nThe record indicates that defendants and a third person, James Moon, robbed the Phillips IGA Store in Bluefield, Mercer County, West Virginia in January of 1973. Alexander obtained money from one of the cashiers at the store by putting a knife to her throat while Johnson extracted funds from a second cashier. Approximately $1340 was taken during the robbery.\nWalter Toppins, the owner of a service station in Wayne County, some miles from Bluefield, testified that defendants and Moon drove an automobile into his service station in the early morning of the day next following the robbery. The car had a flat tire. The three men had difficulty getting into the trunk to repair the tire because they had no key to the trunk lock, and they bought gasoline but had to pry the locked gas cap off because they had no key to it either. He also noticed that the car had no keys in the ignition, which had been \"wired over.\"\nWhen the three had trouble getting the car started, Mr. Toppins, who was carrying a .357 magnum revolver as he always did when persons entered the premises of his gas station after hours, persuaded the trio to allow him to push them in their car, with his truck, to the local state police barracks. There Toppins left them. The police ran a check on the car, found that it had been stolen in Bluefield the previous day, and then searched the defendants and Moon. They found a knife on Alexander and approximately $1260 in a paper bag on the front seat of the car.\nThe three men were arrested and returned to Mercer County. At trial defendants Alexander and Johnson claimed they had been in Williamson, West Virginia at about the time the robbery took place in Bluefield.\nDefendants claim two errors were committed by the trial court: (1) It refused to grant defendants a trial in the same term of court in which they were indicted, and (2) It gave State's Instruction No. 5, an instruction that informed the jury that defendants had the burden of proving their alibi defense.\n\nI.\nDefendants allege generally that they were denied their constitutional right to a speedy trial as guaranteed by the United States Constitution and the West Virginia Constitution;[1] and, in particular, were denied the statutory right to a trial within the same term of court in which they were indicted.\nW.Va. Code, 62-3-1, provides in part:\nWhen an indictment is found in any county, against a person for a felony or misdemeanor, the accused, if in custody, or if he appear in discharge of his recognizance, or voluntarily, shall, unless good cause be shown for a continuance, be tried at the same term. (Emphasis added.)\n636 The question is whether there was \"good cause\" as contemplated by the statute for the continuance. The granting or denial of a motion for continuance by either party rests in the sound discretion of the trial court and refusal to grant such continuance constitutes reversible error only where the discretion is abused. State v. Milam, W.Va., 226 S.E.2d 433 (1976); State v. Chaffin, 156 W.Va. 264, 192 S.E.2d 728 (1972); State v. Simmons, 130 W.Va. 33, 42 S.E.2d 827 (1947); State v. Jones, 84 W.Va. 85, 99 S.E. 271 (1919); State v. Alie, 82 W.Va. 601, 96 S.E. 1011 (1918).\nWest Virginia follows the minority rule that the duty is upon the prosecution to provide a prompt trial rather than upon the accused to demand a speedy trial. State ex rel. Farley v. Kramer, 153 W.Va. 159, 169 S.E.2d 106 (1969). However, the right to a speedy trial is not violated by unavoidable delays nor by delays caused by defendants. State v. Hollars, 266 N.C. 45, 145 S.E.2d 309 (1965). See also, 22 A C.J.S. Criminal Law, § 467(4) and § 471.\nThe defendants contend that it was not their filing of motions that caused the delay in this case, but the \"prosecution's inexplicable and unjustifiable inability to proceed to trial after the adjudication of a motion to suppress in favor of the State.\"\nDefendants moved to suppress certain testimony of witnesses who were present at a lineup. The motion was made on April 20 and filed with the court on May 10, the date the suppression hearing commenced. At the hearing, defense counsel moved for a continuance until five defense witnesses who were not present could be located. Counsel testified that he had known of the May 10 hearing date for \"something like a week or ten days\" but had not issued the subpoenas until late afternoon on May 8, causing the subpoenas to go out on the morning of May 9. Defense counsel's reason for the delay is shown by the following testimony:\n\"Q And the subpoenas went out on Wednesday morning, that is yesterday.\nA That's correct.\nQ Do you think that is timely?\nA Yes, I do.\nQ You do. You have known this long and\nA Well, some of the witnesses in this case are generally always around, and I felt like this was timely.\nQ In other words, it was your error they didn't go out in time?\nA That's correct.\nQ Because you thought they would be here anyway.\nA Correct.\"\nThe State then proceeded to present its evidence and May 22 was set as the date to complete the hearing, allowing defendants time to get their witnesses. At the conclusion of the hearing on the twenty-second, the State indicated that it could not prepare its case for trial that term.\n......\n\"MR. KNIGHT: It is impossible for the state, since the lateness of these hearings, to be in a position to go to trial in this term, and we now request that this case be set for the 16th day of July and at that time set it for a trial date.\"\n......\nBecause of defense counsel's delay in issuing subpoenas, the suppression hearing had to be continued and because of the continuance, the State was not able to prepare its main case for trial before the court term ended. The trial court certainly did not abuse its discretion when it granted the continuance, nor improperly deprive defendants of a quick trial.[2]\n\nII.\nState's Instruction No. 5 was given, as follows:\n\n*637 The Court instructs the jury that where the state has established a prima facie case and the defendants rely upon the defense of alibi, the burden is upon them to prove it, not beyond a reasonable doubt, nor by a preponderance of the evidence, but by such evidence, and to such a degree of certainty, as will, when the whole evidence is considered, create and leave in the mind of the jury a reasonable doubt as to the guilt of the accused.\nPetitioners say that the instruction shifted an affirmative burden of proof to them. Alibi is an affirmative defense but does not relieve the prosecution of proving beyond a reasonable doubt the actual presence of the accused at the time and place of the commission of the crime when personal presence is essential thereto. State v. Peterson, 132 W.Va. 99, 51 S.E.2d 78 (1948); State v. Aliff, 122 W.Va. 16, 7 S.E.2d 27 (1940); State v. Friend, 100 W.Va. 180, 130 S.E. 102 (1925); State v. Winans, 100 W.Va. 418, 130 S.E. 607 (1925); State v. Lowry, 42 W.Va. 205, 24 S.E. 561 (1896).\nIn State v. Pendry, W.Va., 227 S.E.2d 210 (1976), we held that the alibi defense is not invalidated by Mullaney v. Wilbur, 421 U.S. 684, 95 S. Ct. 1881, 44 L. Ed. 2d 508 (1975)[3] so long as the State is not relieved of the ultimate burden of proving beyond a reasonable doubt every material element of the crime, including of course that defendants committed it, which, in an armed robbery case, nearly always involves defendants' presence at the scene when the event occurred. The Court said:\n. . . When . . . [a defendant]. . . elects to take advantage of any authorized defense under the law of this State, he may be required to carry a burden of going forward with the evidence and carrying a burden of persuasion to a degree not greater than by a preponderance of the evidence. The State is entitled to define the burden which he must carry if his particular defense is to be sustained, provided that this does not lessen the burden of the State to prove every material element of the crime beyond a reasonable doubt. 227 S.E.2d at 221.\nIf the state puts on proof that a defendant committed an act at X place, and defendant introduces evidence that he could not have done so because he was at Y place, then the court may properly instruct the jury, as was done here, that defendant had a burden to prove his defense sufficiently to create a reasonable doubt.\nFinding no error, we affirm.\nAffirmed.\nNOTES\n[1] The Sixth Amendment to the U.S. Constitution provides, \"In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial . . . .\"\n\nArt. 3, § 14 of the West Virginia Constitution states, \"Trials of crimes, and misdemeanors, unless herein otherwise provided, shall be by a jury of twelve men, public, without unreasonable delay . . . .\"\nSee, Klopfer v. North Carolina, 386 U.S. 213, 87 S. Ct. 988, 18 L. Ed. 2d 1 (1967), imposing the federal right upon the states.\n[2] The Attorney General's brief in the Johnson case states that there were 177 cases called on July 16 for the new term of court, including 85 felonies, and that the present case was the first felony heard during the new term. The date of the trial was August 7.\n[3] Mullaney involved the validity of a statute of the State of Maine which required a defendant charged with murder, which upon conviction carried a mandatory life sentence, to prove that he acted in the heat of passion, on sudden provocation, without express or implied malice aforethought, in order to reduce the homicide to manslaughter. The U.S. Supreme Court held that the \"Due Process Clause requires the prosecution to prove beyond a reasonable doubt the absence of the heat of passion on sudden provocation when the issue is properly presented in a homicide case.\" 421 U.S. at 704, 95 S.Ct. at 1892.\n\n", "ocr": false, "opinion_id": 1262047 } ]	West Virginia Supreme Court	West Virginia Supreme Court	S	West Virginia, WV
2,670,935	Judge D. Kelly Thomas, Jr.	2014-04-22	false	state-of-tennessee-v-danny-adams	null	State of Tennessee v. Danny Adams	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	null	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": 11, "download_url": "http://www.tsc.state.tn.us/sites/default/files/adamsdannyopn.pdf", "author_id": 8291, "opinion_text": " IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE\n AT KNOXVILLE\n Assigned on Briefs February 25, 2014\n\n STATE OF TENNESSEE v. DANNY ADAMS\n\n Appeal from the Criminal Court for Monroe County\n No. 09-445 Carroll L. Ross, Judge\n\n\n No. E2013-01236-CCA-R3-CD - Filed April 22, 2014\n\n\nThe Defendant, Danny Adams, was convicted by a jury of simple assault. On appeal, he\nchallenges the sufficiency of the evidence for that conviction, including an argument therein\nof inconsistent verdicts. We have thoroughly reviewed the record on appeal, and although\nthe evidence is sufficient, we must reverse the Defendant’s conviction because an incorrect\nmental state was included in the jury charge. Moreover, we cannot deem the error harmless\nbeyond a reasonable doubt. Accordingly, we reverse the judgment of the trial court and\nremand the case for further proceedings consistent with this opinion.\n\n Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Criminal Court\n Reversed and Remanded\n\nD. K ELLY T HOMAS, J R., J., delivered the opinion of the court, in which J OSEPH M. T IPTON,\nP.J., and J AMES C URWOOD W ITT, J R., J., joined.\n\nRichard Hughes, District Public Defender, and Jeanne L. Wiggins, Assistant Public\nDefender, for the appellant, Danny Adams.\n\nRobert E. Cooper, Jr., Attorney General and Reporter; Michelle L. Consiglio-Young,\nAssistant Attorney General; Steven Bebb, District Attorney General; and James H. Stutts,\nAssistant District Attorney General, for the appellee, State of Tennessee.\n\n OPINION\n FACTUAL BACKGROUND\n\n This case arises from a June 24, 2009 evening brawl at Hidden Lake Campground in\nMonroe County. The Defendant and his cohort, Vincent Cole, quarreled with Joshua\nAnderson that evening, ultimately leading to Joshua Anderson’s shooting of both the\nDefendant and Cole. Thereafter, the Defendant was charged with the criminally negligent\n\fhomicide of Cole and the aggravated assault of Anderson. See Tenn. Code Ann. §§ 39-13-\n102, -212. The Defendant proceeded to trial on August 30, 2012.\n\n The proof at trial revealed the following facts. Thirty-year-old Joshua Anderson\ntestified that he visited Hidden Lake Campground with his wife, Jamie Anderson, on the\nevening of July 24, 2009.1 According to Joshua, they arrived at the campground pavilion\naround 7:00 or 8:00 p.m. to meet with Joshua’s uncle, Mark Anderson, and a party with a\nkaraoke machine was in progress. Both Cole and the Defendant were present at the party\nwhen Joshua arrived. Joshua stated that he had met both men before, but he did not have a\npersonal relationship with them. He first encountered Cole, amongst a group of other people,\nas he walked up the ramp to the pavilion.\n\n Joshua stated that, at some point in the evening, he engaged in a conversation with\nCole. During that conversation, the Defendant walked over and asked, “Is there a problem\nhere, [Cole]? Have we got a problem?” referring to Joshua. According to Joshua, Cole\nresponded, “No, there ain’t no problem.” After talking a few minutes longer with Cole,\nJoshua sat down. Joshua then walked to his car to get a drink, returning through a group of\npeople on the ramp on his way back to the pavilion. This time, “it seemed a little more\ntense[,]” so he said to Jamie, “We need to get out of here.” Joshua described the group as\n“aggressive” and said that “nobody want[ed] to move to let [him] walk by[.]” He also\nobserved a “razor knife” on the Defendant’s side as he passed him. Joshua went to Cole,\nasking if there was problem because it was not “a comfortable scene.” Joshua then told\nJamie to walk down the back steps, pretending to go the bathroom, and they would meet at\nthe car and leave.\n\n As Joshua was making his way to the car, the Defendant ran up to him, yelling at him\nand asking if he had flipped “a bird” at the Defendant. Joshua replied, “No. . . . I’m\nleaving.” By this time, a crowd began to gather according to Joshua, “circl[ing] around\n[him,]” and Jamie had brought him his .22-caliber pistol because she was “scared” for him.\nJoshua continued to assert his desire to leave and turned to walk towards his car when the\nDefendant hit him from behind and knocked him down on the gravel parking area. As\nJoshua got up from the ground, the Defendant “kept coming towards” him, pursuing him up\nan incline. In an attempt to thwart the Defendant’s efforts, Joshua fired a warning shot into\nthe air and once again stated his desire to leave. According to Joshua, the warning shot\nstopped the Defendant “for a split second,” and Jamie got in between them at that time,\npleading with the Defendant to let them leave. The Defendant threatened Joshua with his\nknife, stating, “I’m going to cut your f--king guts out.” The Defendant’s then girlfriend,\n\n\n1\n For the sake of clarity, we will refer to the Andersons by their first names or full names. We intend no\ndisrespect.\n\n 2\n\fLynette Adams, “knocked [Jamie] out from in between” the two men. According to Joshua,\nthat was when the Defendant “tried to cut” him, so he shot the Defendant. Joshua stated that\nhe “was in fear for [his] life, or . . . real bad bodily harm.”\n\n Joshua saw that Cole’s wife, Sydne Cole, had now grabbed Jamie and placed a knife\nto her throat. Joshua testified that Cole came “running [at him] with a knife “ and was going\nto “stick [him] in the back,” so Joshua placed his pistol under his arm and shot Cole. Joshua\nbelieved he had no other option but to fire at the men. At this time, Cole’s wife let Jamie go,\nand the couple proceeded to leave the campground. The couple then drove to Joshua’s\ngrandfather’s house, which was nearby, and immediately telephoned 911. Joshua waited for\nthe police to arrive that evening to speak with him and turned his weapon over to the police\nonce they arrived. Joshua exercised his right to remain silent when questioned at the county\njail later that evening.\n\n On cross-examination, Joshua was asked about the operation of the .22-caliber\nhandgun. He stated that the weapon’s magazine held ten bullets. After Jamie brought him\nthe weapon at the campground that evening, he did look to see if a bullet was in the chamber,\nbut he did “take [his] hands to make the action to put a bullet into the chamber[.]” He\nconfirmed that the weapon did not misfire during the altercation and stated that “the cops\ndropped a round when they [were] unloading it” at his grandfather’s house.\n\n Mark Anderson, Joshua’s uncle, testified about his observations the evening of July\n24, 2009. Mark was responsible for inviting Joshua to the party at the campground pavilion\nthat evening. At the time of the party, Mark was “good friends” with Cole, but he did not\nknow the Defendant. According to Mark, when Cole’s “bunch pulled up, they [were] raising\nhell[,]” “[j]ust ornery[,]” and “[t]rying to pick a fight with anybody they could.” While\nsinging karaoke, Mark saw the Defendant “jump[] up” when Joshua was talking to a girl\nfrom high school and heard the Defendant say to Joshua, “You got anything to say to her, you\ncan say it to me.” At some point in the evening, Mark noticed that Joshua and Jamie were\ngone. Mark stated that he then “heard two firecrackers behind” him and turned to see his\nnephew standing in the road with a gun. Mark went to assist Joshua, walking swiftly up the\nhill to where Joshua was located, and there he met Cole, who “was in [his] face” when he\nturned around. Mark said to Cole, “You need to leave Josh alone,” and then, Mark was “hit\nin the crotch[,]” causing him to pass out.\n\n Cathy Lusby, who knew both Cole and the Defendant but not Joshua or Jamie\nAnderson prior to the party, shared with the jury her observations of the brawl that evening.\nAccording to Ms. Lusby, Cole and the Defendant arrived at the party about 8:00 p.m. That\nevening, she heard “a firecracker” and yelling. She looked to see “a whole crowd of people”\nwho were “coming up the hill.” She stated that Joshua and his wife were “backing up” the\n\n 3\n\fhill being pursued by the Defendant and Cole. According to Ms. Lusby, Jamie was “pulling\n[Joshua] like up the hill.” Ms. Lusby heard Cole telling the Defendant several times that\nJoshua had a gun and to “[g]et away” from him; however, she did not observe the Defendant\nor Cole actually back away from Joshua. Ms. Lusby described Joshua’s movements, “[H]e\nwould back up and then step forward. . . . Like he, he wanted to maybe go away, but then\nhe wasn’t done either[.]” Everyone was starting to get loud at that point, and Ms. Lusby\nheard shots fired and saw “the women . . . trying to pull the guys off of each other.” Cole\nwas shot first, followed by the Defendant, according to Ms. Lusby. Although she saw the\ngun, she did not see whether Cole had a knife in his hand. After the shooting, the crowd\nscattered, and the Andersons got into their car and left. Ms. Lusby also did not observe\nanyone get into a physical altercation with Jamie Anderson that evening. The entire episode\nlast ten to fifteen minutes according to Ms. Lusby.\n\n Cole died from his gunshot wound to his arm pit area, and the Defendant required\nsurgery for his wound to the abdomen. During Cole’s autopsy, his blood alcohol level was\ndetermined to be .12 percent at the time of his death. Other than the gunshot wound, Cole\nexhibited “a few fairly minor abrasions of his legs and ankles[.]”\n\n Investigator Douglas Brannon with the Monroe County Sheriff’s Department collected\nevidence at the scene. According to Inv. Brannon, there were approximately ten officers,\nfour Emergency Management Services personnel, and ten bystanders present when he arrived\nat the campground pavilion. During his search, Inv. Brannon discovered two shell casings,\nalong with one unfired round, scattered around the area. Eyeglasses, a hoop earring, a ball\ncap, and a large “clump of hair” were also recovered. A matching hoop earring was later\nretrieved from Jamie Anderson.\n\n Inv. Brannon stated that, when he retrieved the weapon from Joshua after the\nshooting, there were six rounds in the chamber. The officers were unable to account for one\nround of the ten-round chamber, and Inv. Brannon opined that another spent round should\nhave been present at the scene because the gun had been fired three times according to\nwitnesses. Inv. Brannon discussed how Joshua’s weapon operated, “It’s . . . a .22 caliber,\nsemi-automatic pistol, meaning that it self-loads. Once it’s loaded to begin with, each time\nyou pull the trigger, it loads itself, ejects the old one and puts a new one in.”\n\n Joshua was later photographed at the jail and exhibited “some injuries” in those\nphotographs. Also, some sand and gravel were seen “in the backside of [Joshua’s] britches”\naccording to Inv. Brannon. The morning following the shooting, after the investigation had\nbeen concluded, the police received a call that a lock-blade knife had been found at the scene.\nThe knife, which was covered by a chair, was retrieved. Blood was present on the knife, and\na partial DNA profile of that blood matched the Defendant.\n\n 4\n\f The Defendant testified in his own defense and provided a different version of the\nevents. The Defendant claimed that, as Joshua was coming down the ramp from the pavilion,\nJoshua ran into him and knocked him against the railing. The Defendant said, “Excuse you,\nbuddy,” but Joshua kept walking and did not respond. Shortly thereafter, Cole approached\nthe Defendant inquiring about Joshua, “What’s that guy’s problem?” The Defendant said,\n“I don’t know. . . . I don’t know him.” According to the Defendant, Cole sat down beside\nJamie Anderson, and Joshua told Cole “to get out of his f--king seat[.]” Cole told Joshua that\nthe seat did not belong to him, but he would get out of it anyway. The Defendant stated that\neverything settled down at that point.\n\n During this period of reprieve, Jamie went to her vehicle and returned with something\nin a brown paper bag for Joshua. Joshua pulled the item out of the bag and stuck it in his\npants according to the Defendant.\n\n Five minutes or so later, Joshua approached Cole again and “started talking smack[.]”\nA verbal altercation ensued, but the parties eventually calmed down, appearing to have\nmended their grievances with one another.\n\n The Defendant said he went to use the bathroom fifteen minutes after that where he\nencountered Joshua pointing a gun at Cole. The Defendant admitted that he then hit Joshua,\nwho fired at him but missed. The Defendant was yelling at Cole to get the gun when Mark\nAnderson got in between them and pushed Cole off Joshua. When Cole kicked Mark, Joshua\nfired at them. The Defendant claimed that Cole was backing away at the time he was shot\nand that neither of them produced a knife during the altercation. According to the Defendant,\nSydne Cole grabbed Jamie after the shooting and threatened to cut Jamie’s throat, but the\nDefendant still never saw a knife.\n\n On cross-examination, the Defendant acknowledged that he had three convictions for\npassing fraudulent checks, seven for credit card fraud, and one for possessing cocaine for the\npurpose of delivery. On redirect, the Defendant testified that both he and Cole had a knife\nlike the one found at the scene. However, he claimed that he still had his in his possession\nat the time of trial.\n\n The Defendant’s estranged wife, Lynette Adams, testified for the defense and\nprovided a similar recount of the events as the Defendant. However, she provided one\ndifferent, important detail from other witnesses; she testified that the Defendant was shot\nfirst, before Cole.\n\n Following the conclusion of the proof, the Defendant was acquitted of the criminally\nnegligent homicide of Cole and found guilty of the lesser-included offense of the simple\n\n 5\n\fassault of Joshua Anderson, a Class A misdemeanor. See Tenn. Code Ann. § 39-13-101.\nThereafter, the trial court sentenced the Defendant to eleven months and twenty-nine days,\nto be served on unsupervised probation if the Defendant paid his court costs within two\nweeks. This appeal followed.\n\n\n ANALYSIS\n\n On appeal, the Defendant argues that the evidence is insufficient to sustain his\nconviction for simple assault. Specifically, he asserts that,\n\n for the jury to acquit [the Defendant] of both aggravated assault and criminally\n negligent homicide, the jury must necessarily have rejected the State’s theory\n in this case. If the jury rejected the State’s theory that [the Defendant]\n committed an aggravated assault with a deadly weapon or caused Josh\n Anderson to shoot and kill Vince Cole, they could not have rationally viewed\n [the Defendant’s] conduct as in furtherance of criminal activity but in defense\n of himself and Mr. Cole.\n\nThe Defendant then engages in a lengthy recount of the trial testimony in an attempt to\nsupport his allegation of insufficient evidence, discussing the credibility of the witnesses, the\nevidence admitted, and the perceived deficiencies in the crime scene investigation. He\nconcludes that “[t]he jury’s verdict is simply inconsistent with their other findings and\nfurther, unsupported by the proof presented at trial.” The State disagrees, stating,\n\n because the proof permitted a reasonable jury to find that Josh Anderson was\n in reasonable fear of imminent bodily injury when the [D]efendant hit him and\n displayed a knife and that the [D]efendant acted either intentionally,\n knowingly, or recklessly, the jury could find that the elements of assault had\n been proven.\n\nThe State notes that the jury chose to accredit Joshua Anderson’s testimony and that\ninconsistent verdicts will not be disturbed if the evidence is sufficient to sustain the\nconviction.\n\n An appellate court’s standard of review when a defendant questions the sufficiency\nof the evidence on appeal is “whether, after viewing the evidence in the light most favorable\nto the prosecution, any rational trier of fact could have found the essential elements of the\ncrime beyond a reasonable doubt.” Jackson v. Virginia, 443 U.S. 307, 319 (1979). This\ncourt does not reweigh the evidence; rather, it presumes that the jury has resolved all\n\n 6\n\fconflicts in the testimony and drawn all reasonable inferences from the evidence in favor of\nthe State. See State v. Sheffield, 676 S.W.2d 542, 547 (Tenn. 1984); State v. Cabbage, 571\nS.W.2d 832, 835 (Tenn. 1978). Questions regarding witness credibility, conflicts in\ntestimony, and the weight and value to be given to evidence were resolved by the jury. See\nState v. Bland, 958 S.W.2d 651, 659 (Tenn. 1997).\n\n A guilty verdict “removes the presumption of innocence and replaces it with a\npresumption of guilt, and [on appeal] the defendant has the burden of illustrating why the\nevidence is insufficient to support the jury’s verdict.” Id.; State v. Tuggle, 639 S.W.2d 913,\n914 (Tenn. 1982). “This [standard] applies to findings of guilt based upon direct evidence,\ncircumstantial evidence, or a combination of [both] direct and circumstantial evidence.”\nState v. Pendergrass, 13 S.W.3d 389, 392-93 (Tenn. Crim. App. 1999). The standard of\nproof is the same, whether the evidence is direct or circumstantial. State v. Dorantes, 331\nS.W.3d 370, 379 (Tenn. 2011). Likewise, appellate review of the convicting evidence “is\nthe same whether the conviction is based upon direct or circumstantial evidence.” Id.\n(quoting State v. Hanson, 279 S.W.3d 265, 275 (Tenn. 2009)). The duty of this court “on\nappeal of a conviction is not to contemplate all plausible inferences in the [d]efendant’s\nfavor, but to draw all reasonable inferences from the evidence in favor of the State.” State\nv. Sisk, 343 S.W.3d 60, 67 (Tenn. 2011).\n\n Because the Defendant’s sufficiency issue also includes an inconsistent verdict\nargument, we will recap the charges as they were initially presented to the jurors for their\nconsideration. The Defendant was charged with the criminally negligent homicide of Cole\nand the aggravated assault of Joshua Anderson. Criminally negligent homicide is defined\nas “[c]riminally negligent conduct which results in death.” Tenn. Code Ann. § 39-13-212(a).\n\n “Criminal negligence” refers to a person who acts with criminal negligence\n with respect to the circumstances surrounding that person’s conduct or the\n result of that conduct when the person ought to be aware of a substantial and\n unjustifiable risk that the circumstances exist or the result will occur. The risk\n must be of such a nature and degree that the failure to perceive it constitutes\n a gross deviation from the standard of care that an ordinary person would\n exercise under all the circumstances as viewed from the accused person’s\n standpoint.\n\nTenn. Code Ann. § 39-11-106(a)(4). The aggravated assault charge, of which the Defendant\nwas acquitted, required the State to prove that the Defendant “[i]ntentionally or knowingly\ncommit[ed] an assault as defined in § 39-13-101” and that the Defendant used or displayed\na deadly weapon. See Tenn. Code Ann. § 39-13-102. In accordance with Tennessee Code\nAnnotated section 39-13-101(a)(2), a person commits the offense of simple assault, the\n\n 7\n\foffense for which the Defendant stands convicted, when he “intentionally or knowingly\ncauses another to reasonably fear imminent bodily injury[.]” 2\n\n The Defendant’s sufficiency argument is two-fold. First, he challenges the credibility\nof the witnesses, the evidence, and the crime scene investigation. As previously noted, the\nDefendant gives a detailed review of specific aspects of the testimony and evidence at trial,\nnoting Joshua Anderson’s testimony that his wife brought him the gun after she saw an\naltercation ensuing, the location of the unfired round, the testimony about how the .22-caliber\npistol operated, the chaotic crime scene following the shooting, the insignificance of the\nDNA evidence found on the knife, the lack of injury to Joshua Anderson, the State’s\ninadequate investigation following the shooting, and Ms. Lusby’s “rather distant but\ninteresting view of events.” He further notes that “there was only one witness[, Joshua\nAnderson,] who testified that [the Defendant] had a knife and that witness also testified that\nVince Cole tried to stab him from behind[,]” leaving this testimony unsubstantiated. The\nDefendant testified that he and Cole were attacked by Joshua Anderson; however, the jury\nwas free to reject this testimony. Juries are tasked with assessing the credibility of trial\nwitnesses and are generally free to reject, in whole or in part, the testimony of any witnesses.\nAs often stated, it is the province of the jury to assess the credibility of the witnesses, weigh\nthe evidence, and resolve disputed issues of fact. State v. Leach, 148 S.W.3d 42, 53 (Tenn.\n2004). In the case at bar, the jury listened to multiple witnesses testify that the Defendant\nand Cole pursued the Andersons up an incline while the men engaged in a quarrel. There\nwas sufficient evidence to support a conviction that the Defendant intentionally or knowingly\ncaused Joshua Anderson to reasonably fear imminent bodily injury.\n\n Although not stated as a separate issue, the Defendant contends that the jury\nnecessarily rejected the State’s theory of the case based upon their verdicts, i.e., the jury’s\nverdicts were inconsistent. However, the Defendant was charged with separate counts\ndealing with separate victims. When the jury determined that the Defendant lacked the\nrequisite intent that caused Cole’s death, i.e., that the Defendant did not act with criminal\nnegligence, the jury could still have properly concluded that the Defendant was guilty of the\nassault of Joshua Anderson. Moreover, as noted by the State, even if they were inconsistent,\ninconsistent verdicts have long been upheld in this State. See Wiggins v. State, 498 S.W.2d\n92, 93-94 (Tenn. 1973) (holding that “[c]onsistency in verdicts for multiple count\nindictments is unnecessary as each count is a separate indictment” and must be individually\nsupported by the evidence).\n\n\n\n\n2\n The Defendant was not charged with assault by “[i]ntentionally, knowingly or recklessly caus[ing] bodily\ninjury to another[.]” See Tenn. Code Ann. 39-13-101(a)(1).\n\n 8\n\f However, we deem it necessary to note a separate error that requires reversal of this\ncase. See Tenn. R. App. P. 36(b) (stating that “[w]hen necessary to do substantial justice,\n[this] court may consider an error that has affected the substantial rights of a party at any\ntime, even though the error was not raised in the motion for a new trial or assigned as error\non appeal”). In order for this court to find plain error, we consider the following five factors:\n\n (a) the record must clearly establish what occurred in the trial court;\n (b) a clear and unequivocal rule of law must have been breached;\n (c) a substantial right of the accused must have been adversely affected;\n (d) the accused did not waive the issue for tactical reasons; and\n (e) consideration of the error is “necessary to do substantial justice.”\n\nState v. Smith, 24 S.W.3d 274, 282 (Tenn. 2000) (quoting State v. Adkisson, 899 S.W.2d\n626, 641-42 (Tenn. Crim. App. 1994). Plain error cannot be found unless the record\nestablishes all of the elements of the Adkisson standard. Id. at 283.\n\n A defendant has a “constitutional right to a correct and complete charge of the law.”\nState v. Litton, 161 S.W.3d 447, 458 (Tenn. Crim. App. 2004) (quoting State v. Teel, 793\nS.W.2d 236, 249 (Tenn. 1990), superseded by statute on other grounds as stated in State v.\nReid, 91 S.W.3d 247, 291 (Tenn. 2002)). “A charge should be considered prejudicially\nerroneous if it fails to fairly submit the legal issues or if it misleads the jury as to the\napplicable law.” State v. Hodges, 944 S.W.2d 346, 352 (Tenn. 1997) (citing State v. Forbes,\n918 S.W.2d 431, 447 (Tenn. Crim. App. 1995); Graham v. State, 547 S.W.2d 531 (Tenn.\n1977)).\n\n Here, the trial court gave the following instruction on the lesser-included offense of\nsimple assault3 :\n\n For you to find the [D]efendant guilty of this offense, the State must\n have proven beyond a reasonable doubt the existence of the following essential\n elements: the State must have proven (1) that the [D]efendant caused another\n to be in reasonable fear of imminent bodily injury; and (2) that the [D]efendant\n acted either intentionally, knowingly or recklessly.\n\nThe State notes in its appellate brief that the jury was instructed that they could convict the\nDefendant based upon a mens rea of recklessness but does not address the issue any further.\nHowever, one can only commit reckless assault where there is bodily injury, which was not\nalleged here. See Tenn. Code Ann. 39-13-101(a)(1) (“A person commits assault who\n\n3\n The record clearly establishes what occurred in the trial court.\n\n 9\n\f[i]ntentionally, knowingly or recklessly causes bodily injury to another[.]”); see also State\nv. Goodwin, 143 S.W.3d 771, 776 (Tenn. 2004) (holding that reckless aggravated assault\ncannot be a lesser-included offense of aggravated assault based upon fearing imminent bodily\ninjury because reckless aggravated assault requires actual bodily injury). Additionally, the\ncomments to section 39-13-101 provide, “Both fear of bodily injury and physical contact\nmust be done intentionally or knowingly to constitute assault; recklessness is not sufficient.”\nThus, the instruction given was clearly in error. We conclude that a clear and unequivocal\nrule of law has been breached.\n\n Jury instruction errors of this type are subjected to constitutional harmless error\nanalysis because “[o]nly when the jury is properly instructed can appellate review of the\nsufficiency of the convicting evidence satisfy the due process safeguard.” State v. Cecil, 409\nS.W.3d 599, 609 (Tenn. 2013). This requires the appellate court to determine whether a\nfailure to instruct the jury was harmless beyond a reasonable doubt, that is, “whether it\nappears beyond a reasonable doubt that the error complained of did not contribute to the\nverdict obtained.” State v. Rodriguez, 254 S.W.3d 361, 371 (Tenn. 2008) (citation omitted);\nsee also Chapman v. California, 386 U.S. 18, 24 (1967) (“[B]efore a federal constitutional\nerror can be held harmless, the court must be able to declare a belief that it was harmless\nbeyond a reasonable doubt.”). When considering this category of error, a reviewing court\n“should ask whether the flaw in the instructions ‘had substantial and injurious effect or\ninfluence in determining the jury’s verdict.’” Hedgpeth v. Pulido, 555 U.S. 57, 58 (2008)\n(citing Brecht v. Abrahamson, 507 U.S. 619, 623 (1993) (internal quotation marks omitted\nin original)). As the United States Supreme Court explained,\n\n Consistent with the jury-trial guarantee, the question it instructs the reviewing\n court to consider is not what effect the constitutional error might generally be\n expected to have upon a reasonable jury, but rather what effect it had upon the\n guilty verdict in the case at hand. Harmless-error review looks, we have said,\n to the basis on which “the jury actually rested its verdict.” The inquiry, in\n other words, is not whether, in a trial that occurred without the error, a guilty\n verdict would surely have been rendered, but whether the guilty verdict\n actually rendered in this trial was surely unattributable to the error.\n\nSullivan v. Louisiana, 508 U.S. 275, 279 (1993) (citations omitted).\n\n At the Defendant’s trial, the prosecution argued that the Defendant and his cohort,\nCole, perpetrated an assault on Joshua Anderson, requiring Joshua to first fire a warning shot,\nand then to shoot both men in self-defense when they produced knives. By contrast, the\nDefendant testified that he went to Cole’s aid when Joshua pulled a gun on Cole and that\n\n\n\n 10\n\fJoshua shot them both.4 Given the competing theories presented to the jury, we cannot, in\nour view, say that the error is harmless beyond a reasonable doubt, i.e., that the guilty verdict\nactually rendered in this trial was surely unattributable to the error. Although the offense of\naggravated assault contains the additional element of use or display of deadly weapon, the\njury was instructed, properly so, with only the mental states of intent or knowing for that\noffense and declined to find the Defendant guilty. The instruction for simple assault added\nthe additional mental state of reckless. As such, we are unable to conclude that “the guilty\nverdict actually rendered in this trial was surely unattributable to the error”; thus, we cannot\nconclude that the instructional error was harmless beyond a reasonable doubt.5 Accordingly,\nplain error requires us to reverse the Defendant’s conviction and remand the case for a new\ntrial on the charge of assault, to be accompanied by proper instructions.\n\n CONCLUSION\n\n In accordance with the foregoing, we reverse the Defendant’s conviction for simple\nassault and remand for a new trial consistent with this opinion.\n\n\n\n\n ________________________________\n D. KELLY THOMAS, JR., JUDGE\n\n\n\n\n4\n We can think of no incentive for the Defendant to waive the issue for tactical reasons.\n5\n A substantial right of the accused has been adversely affected, and consideration of the error is “necessary\nto do substantial justice.”\n\n 11\n\f", "ocr": false, "opinion_id": 2670935 } ]	Court of Criminal Appeals of Tennessee	Court of Criminal Appeals of Tennessee	SA	Tennessee, TN
1,711,448	Per Curiam	2005-01-14	false	sm-v-department-of-children-and-families	SM	SM v. Department of Children and Families	null	null	null	null	null	null	null	null	null	null	null	null	2	Published	null	null	[ "890 So. 2d 552" ]	[ { "author_str": null, "per_curiam": true, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n890 So. 2d 552 (2005)\nS.M., Mother of M.M. a Child, Petitioner,\nv.\nDEPARTMENT OF CHILDREN AND FAMILIES, Respondent.\nNo. 5D04-3440.\nDistrict Court of Appeal of Florida, Fifth District.\nJanuary 14, 2005.\nTimothy A. Straus of Moyer, Straus & Patel, P.A., Altamonte Springs, for Petitioner.\nCharles D. Peters, Orlando, for Respondent.\nPER CURIAM.\nS.M. seeks this court to require the lower court to vacate an order entered in a dependency proceeding under which S.M.'s child was placed in emergency, temporary shelter. The sole issue is whether the lower court erred in denying S.M.'s request to present testimonial evidence from a witness who was neither a parent nor legal custodian of the child. We treat the petition as an appeal pursuant to Florida Rule of Appellate Procedure 9.146 and reverse. Fla. R.App. P. 9.040(c). In doing so, we adopt the holding and analysis of the Second District in G.P. v. Family Continuity Program, 875 So. 2d 715 (Fla. 2d DCA 2004).\nREVERSED.\nSAWAYA, C.J., PLEUS and TORPY, JJ., concur.\n", "ocr": false, "opinion_id": 1711448 } ]	District Court of Appeal of Florida	District Court of Appeal of Florida	SA	Florida, FL
396,394	null	1981-11-04	false	bell-v-south-central-bell-telephone-co	null	Bell v. South Central Bell Telephone Co	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "663 F.2d 101" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/663/663.F2d.101.79-2510.html", "author_id": null, "opinion_text": "663 F.2d 101\n Bellv.South Central Bell Telephone Co.\n 79-2510\n UNITED STATES COURT OF APPEALS Fifth Circuit\n 11/4/81\n W.D.La., 659 F.2d 1074\n ", "ocr": false, "opinion_id": 396394 } ]	Fifth Circuit	Court of Appeals for the Fifth Circuit	F	USA, Federal
524,075	Jones, Kennedy, Siler	1989-05-25	false	university-of-cincinnati-dba-university-hospital-v-otis-bowen-md	null	University of Cincinnati, D/B/A University Hospital v. Otis Bowen, M.D., Secretary of Health and Human Services	UNIVERSITY OF CINCINNATI, D/B/A University Hospital, Plaintiff-Appellant, v. Otis BOWEN, M.D., Secretary of Health and Human Services, Defendant-Appellee	Peter L. Cassady (argued), Cincinnati, Ohio, for plaintiff-appellant., Donette D. Wiethe, Asst. U.S. Atty., Office of the U.S. Atty., Cincinnati, Ohio, Thomas Lewis Nelson, Office of the Gen. Counsel, Dept, of HHS, Stuart Silverman (argued), Washington, D.C., for defendant-appellee.	null	null	null	null	null	null	null	Argued Feb. 16, 1989.	null	null	10	Published	null	<parties id="b1287-5"> UNIVERSITY OF CINCINNATI, d/b/a University Hospital, Plaintiff-Appellant, v. Otis BOWEN, M.D., Secretary of Health and Human Services, Defendant-Appellee. </parties><br><docketnumber id="b1287-8"> No. 88-3487. </docketnumber><br><court id="b1287-9"> United States Court of Appeals, Sixth Circuit. </court><br><otherdate id="b1287-11"> Argued Feb. 16, 1989. </otherdate><br><decisiondate id="b1287-12"> Decided May 25, 1989. </decisiondate><br><attorneys id="b1287-21"> Peter L. Cassady (argued), Cincinnati, Ohio, for plaintiff-appellant. </attorneys><br><attorneys id="b1287-22"> Donette D. Wiethe, Asst. U.S. Atty., Office of the U.S. Atty., Cincinnati, Ohio, Thomas Lewis Nelson, Office of the Gen. Counsel, Dept, of HHS, Stuart Silverman (argued), Washington, D.C., for defendant-appellee. </attorneys><br><judges id="b1287-23"> Before KENNEDY and JONES, Circuit Judges; and SILER, Chief District Judge. <a class="footnote" href="#fn" id="fn_ref"> * </a> </judges><div class="footnotes"><div class="footnote" id="fn" label=""> <a class="footnote" href="#fn_ref"> </a> <p id="b1287-18"> The Honorable Eugene E. Siler, Jr., Chief United States District Judge for the Eastern District of Kentucky and United States District Judge for the Western District of Kentucky, sitting by designation. </p> </div></div>	[ "875 F.2d 1207" ]	[ { "author_str": "Kennedy", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/875/875.F2d.1207.88-3487.html", "author_id": null, "opinion_text": "875 F.2d 1207\n 54 Ed. Law Rep. 112, 26 Soc.Sec.Rep.Ser. 18,Medicare&Medicaid Gu 37,873\n UNIVERSITY OF CINCINNATI, d/b/a University Hospital,Plaintiff-Appellant,v.Otis BOWEN, M.D., Secretary of Health and Human Services,Defendant-Appellee.\n No. 88-3487.\n United States Court of Appeals,Sixth Circuit.\n Argued Feb. 16, 1989.Decided May 25, 1989.\n \n Peter L. Cassady (argued), Cincinnati, Ohio, for plaintiff-appellant.\n Donette D. Wiethe, Asst. U.S. Atty., Office of the U.S. Atty., Cincinnati, Ohio, Thomas Lewis Nelson, Office of the Gen. Counsel, Dept. of HHS, Stuart Silverman (argued), Washington, D.C., for defendant-appellee.\n Before KENNEDY and JONES, Circuit Judges; and SILER, Chief District Judge.\n KENNEDY, Circuit Judge.\n \n \n 1\n Plaintiff-appellant University Hospital (Hospital) appeals the District Court's grant of summary judgment to the Secretary of Health and Human Services (Secretary) in this Medicare reimbursement action. The Secretary disallowed the Hospital's costs for the payment of stipends and related overhead for the time residents spent working at two of its outpatient clinics as a required part of their approved residency programs. Plaintiff argues that the Secretary's interpretation of the applicable Medicare regulations is inconsistent with the regulations' plain language. Under plaintiff's view, its clinic costs are educational activities that need only \"contribute to the quality of patient care within an institution,\" 42 C.F.R. Sec. 405.421(c) (1982). The Secretary relies on the broader provision of 42 C.F.R. Sec. 405.451 (1982), which requires the cost of services to be \"related to\" the care of beneficiaries.\n \n \n 2\n Because the Secretary's interpretation ignores the fact that section 405.451 is explicitly made subject to section 405.421, we find that it is \"arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.\" 5 U.S.C. Sec. 706(2)(A). An agency's interpretation of its regulations is not entitled to deference if that interpretation is inconsistent with the regulations' plain language. Accordingly, we reverse.\n \n I. Background\n \n 3\n The University Hospital is operated by the University of Cincinnati, and is a provider of Medicare services under the Federal Health Insurance for the Aged and Disabled Act, 42 U.S.C. Secs. 1395 et seq. As a provider, the Hospital is entitled to recover its reasonable costs of services provided to Medicare beneficiaries. See 42 U.S.C. Sec. 1395x(v)(1)(A); University of Cincinnati v. Heckler, 733 F.2d 1171, 1172 (6th Cir.1984). The costs of approved educational activities, such as stipends paid to residents and related overhead, are ordinarily included as reasonable costs. See 42 C.F.R. Sec. 405.421 (1982).\n \n \n 4\n In October 1982 and 1983, the Hospital submitted cost reports to a fiscal intermediary, to which the Secretary has delegated making the initial determination on reimbursement. See 42 U.S.C. Sec. 1395h(a); Bethesda Hospital Ass'n v. Bowen, 485 U.S. 399, 108 S. Ct. 1255, 1257, 99 L. Ed. 2d 460 (1988). The Hospital requested reimbursement for the costs of resident stipends and related overhead which it incurred during fiscal years 1982 and 1983 in which the residents trained at two of its outpatient clinics--the Family Practice Center (FPC) and the Central Psychiatric Clinic (CPC). Training at such outpatient clinics was a required part of an approved residency program in addition to the work at the Hospital.\n \n \n 5\n The fiscal intermediary disallowed reimbursement for the costs of the stipends and related overhead because the costs were not \"related to\" the care of Hospital patients; clinic patients were not Hospital patients, and the clinics were not an administrative part (although they were a physical part) of the Hospital. The total amount disallowed for the two years was $355,850. The basis for the disallowance was 42 C.F.R. Sec. 405.451, which requires that the costs be \"related to the care of beneficiaries.\" In November 1986, the Provider Reimbursement Review Board (PRRB) upheld the intermediary's denial of reimbursement, and the Secretary adopted the PRRB's decision. This decision was in turn upheld by the District Court.\n \n \n 6\n The facts of this case are not in dispute, and are cogently stated by the District Court:\n \n \n 7\n The FPC and CPC are two clinics at which outpatients are treated and residents in the family practice and psychiatric residency programs obtain outpatient care education, which practice is recognized and acknowleged by the accrediting agencies. At the clinics the residents are engaged in both their own training and outpatient care. All of the residents at both clinics are Hospital residents as well and are paid stipends by the Hospital, and are trained and supervised by physicians and other health care professionals who are both faculty members at the University's College of Medicine and staff members at the Hospital. The clinics are jointly operated by the medical college and the Hospital in order to provide suitable outpatient setting for the Hospital's accredited educational programs in family practice and psychiatry. Furthermore, during [fiscal 1982 and 1983] both clinics were operated in buildings belonging to and also operated by the Hospital. However, during this period both clinics handled their own billing and the CPC had its own Medicaid number. The FPC did its own cost reporting unlike other clinics operated by the Hospital. Moreover, both of these clinics had separate registration procedures and medical records. During this same period, the costs of all other clinics in the Hospital were charged to the Hospital directly unlike the procedure of the two clinics involved.\n \n \n 8\n Joint Appendix (JA) 98. In addition to the above facts, we would add that the clinic patients were charged only for the supervising physician's services, and not for resident stipends or overhead.\n \n II. Analysis\n \n 9\n The Medicare statute sets only broad definitional parameters requiring the Secretary to reimburse providers for the reasonable cost of providing services to Medicare beneficiaries. See 42 U.S.C. Sec. 1395x(v)(1)(A); Sun Towers, Inc. v. Heckler, 725 F.2d 315, 325 (5th Cir.), cert. denied, 469 U.S. 823, 105 S. Ct. 100, 83 L. Ed. 2d 45 (1984). The validity of the Secretary's regulations to determine reasonable costs under the statute are not in question. Rather, this case turns on whether the Secretary's interpretation of two of its regulations, 42 C.F.R. Sec. 405.451 (1982) and Sec. 405.421 (1982), is inconsistent with the terms of those regulations.\n \n A. Standard of Review\n \n 10\n The standard of review is governed by 42 U.S.C. Sec. 1395oo (f), which provides that actions by the Secretary and its PRRB are to be evaluated under the Administrative Procedure Act (APA), 5 U.S.C. Sec. 706(2)(A). See, e.g., University of Cincinnati v. Heckler, 733 F.2d at 1173. Under the APA, we must determine whether the Secretary's action was \"arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law....\" Id.\n \n \n 11\n The law is well-settled that in cases involving conflicting interpretations of administrative regulations, we will give considerable deference to the admistrative agency's interpretation. See, e.g., Navistar Int'l Transp. Corp. v. EPA, 858 F.2d 282, 286 (6th Cir.1988); Fluor Constructors, Inc. v. Occupational Safety & Health Review Comm'n, 861 F.2d 936, 939 (6th Cir.1988); Udall v. Tallman, 380 U.S. 1, 16, 85 S. Ct. 792, 801, 13 L. Ed. 2d 616 (1965). This rule is not absolute, however. \"[A]n administrative agency's interpretation of its own regulation is accorded considerable deference on judicial review unless it is inconsistent with the terms of the regulation....\" University of Cincinnati v. Heckler, 733 F.2d at 1173-74 (emphasis added); Navistar, 855 F.2d at 286 (citing University of Cincinnati ). See Fluor Constructors, 861 F.2d at 939 (\"An agency's interpretation of a regulation is valid, however, only if that interpretation complies with the actual language of the regulation.\"); Mullins Coal Co. v. Director, OWCP, 484 U.S. 135, 108 S. Ct. 427, 440, 98 L. Ed. 2d 450 (1987) (substantial deference unless agency action is inconsistent with the regulation). See also Deukmejian v. Nuclear Regulatory Comm'n, 751 F.2d 1287, 1310-11 (D.C.Cir.1984) (deference is appropriate only if the agency's interpretation \"does no violence to the plain meaning of the provision\").\n \n \n 12\n The key \" 'question for this court ... is not whose interpretation of the statute we prefer,' but whether we are persuaded that the Secretary's interpretation is reasonable and consistent with the regulation's language.\" Davis v. Secretary of Health & Human Servs., 867 F.2d 336, 339 (6th Cir.1989) (quoting Whiteside v. Secretary of Health & Human Servs., 834 F.2d 1289, 1292 (6th Cir.1987)). To answer this question, we must examine the language of the applicable regulations.\n \n B. Medicare Regulations\n \n 13\n The two Medicare regulations applicable to this case read as follows:\n \n \n 14\n Sec. 405.451 Cost related to patient care.\n \n \n 15\n (a) Principle. All payments to providers of services must be based on the reasonable cost of services covered under title XVIII of the Act and related to the care of beneficiaries. Reasonable cost includes all necessary and proper costs incurred in rendering the services, subject to principles relating to specific items of revenue and cost. (Emphasis added.)\n \n \n 16\n Sec. 405.421 Cost of educational activities.\n \n \n 17\n (a) A provider's allowable cost may include its net cost of approved educational activities,....\n \n \n 18\n (b) Definition--Approved educational activities. Approved educational activities means formally organized or planned programs of study usually engaged in by providers in order to enhance the quality of patient care in an institution. These activities must be licensed where required by State law. Where licensing is not required, the institution must receive approval from the recognized national professional organization for the particular activity.\n \n \n 19\n (c) Educational activities. Many providers engage in educational activities including training programs for nurses, medical students, interns and residents, and various paramedical specialties. These programs contribute to the quality of patient care within an institution and are necessary to meet the community's needs for medical and paramedical personnel. It is recognized that the costs of such educational activities should be borne by the community. However, many communities have not assumed responsibility for financing these programs and it is necessary that support be provided by those purchasing health care. Until communities undertake to bear these costs, the program will participate appropriately in the support of these activities. Although the intent of the program is to share in the support of educational activities customarily or traditionally carried on by providers in conjunction with their operations, it is not intended that this program should participate in increased costs resulting from redistribution of costs from educational institutions or units to patient care institutions or units.\n \n \n 20\n ....\n \n \n 21\n (e) Approved Programs. [The regulation refers to approved residency programs under Sec. 405.116(f), which includes teaching programs approved by the Council on Medical Education].\n \n \n 22\n In sum, to be reimbursable under the plain language of the Medicare regulations, educational activities must (1) be approved programs; (2) contribute to the quality of patient care within an institution; and (3) not redistribute costs from educational to patient care institutions. We find that the Hospital has satisfied these criteria.\n \n \n 23\n C. Satisfaction of Education Cost Criteria for Reimbursement\n \n 1. Approved Programs\n \n 24\n The satisfaction of the first criterion, approval, is not in dispute. Both the FPC and CPC are part of accredited residency programs by the Accreditation Council for Graduate Medical Education. See 42 C.F.R. Sec. 405.116(f). Accreditation of the Hospital's programs requires clinical experience to supplement inpatient care and training. The clinics are part of planned, integrated programs of study in which hospital residents spend part of their time at the clinic with outpatients, and spend the remaining time rotating through several areas of the Hospital working with inpatients. Their clinic instructors hold joint positions in both the Medical College and as Hospital staff members.\n \n \n 25\n 2. Contribute to the Quality of Patient Care within the Institution\n \n \n 26\n The second criterion is the central point of contention between the Secretary and the Hospital. The Secretary denied reimbursement because the outpatient clinic patients were not Hospital patients, and therefore clinic costs, including resident stipends and overhead, did not \"relate to\" patient care for the Hospital's medicare patients. Both the PRRB and the District Court accepted the line of reasoning that, under section 405.421, the education programs must \"relate to '... patient care within an institution.' \" PRRB decision at JA 91; District Court decision at JA 99. The District Court accorded deference to the Secretary's interpretation of its regulations, found the interpretation to be reasonable, and likewise found that the Hospital's interpretation was \"strained.\"\n \n \n 27\n We cannot accept the District Court's conclusions; it is the Secretary's interpretation which is strained. The Secretary juxtaposes the \"related to\" language of section 405.451 and the \"patient care within an institution\" language of section 405.421(c) in a way that destroys the regulations' plain meaning. It is not reasonable to focus on the general requirement in section 405.451(a) that the costs of services be \"related to the care of beneficiaries,\" while essentially ignoring the proviso of that section that it is \"subject to principles relating to specific items of revenue and cost.\" One of the \"costs\" that section 405.451 is \"subject to\" is the \"cost of educational activities\" in section 405.421.\n \n \n 28\n The plain meaning of the regulations does not require residents to directly perform services for Hospital patients to the exclusion of clinic patients as part of their educational activities. Section 405.421(c) states, \"Many providers engage in educational activities including training programs for [residents]. These programs contribute to the quality of patient care within an institution ....\" (Emphasis added.) Section 405.421 requires only that the educational programs contribute to the quality of care of the Hospital's medicare patients. Given that the outpatient clinic programs are accredited programs required as a part of the residents' training, they ipso facto contribute to the quality of care received by the Hospital's Medicare patients. The skills and training received by the residents in the clinics are transferred back to the Medicare patients during the residents' rotation within the Hospital.\n \n \n 29\n The Secretary argues that its interpretation of the regulations is buttressed by the \"clarification\" provided in its Part B Carriers Manual Sec. 2020.8, Secretary's Brief at Addendum I. The manual refers to reimbursement for services rendered which are a \"part of\" the provider. This \"clarification\" is of no help, however, given that the plain language of section 405.421 does not restrict educational activities to a provider's patients, nor does it require that such activities are reimbursable only for services rendered in a facility which is physically and/or administratively a part of a provider. The Secretary's argument fails for the simple reason that section 405.421(c) only requires educational \"activities\" that ultimately enhance the quality of Medicare patient care, not direct \"services\" to those patients. The regulations are therefore satisfied as long as the residents return to the provider from their clinical training to render enhanced services to its Medicare patients.\n \n \n 30\n The Secretary makes a second argument in support of its interpretation requiring that, during fiscal 1982 and 1983, care be provided by a \"part of\" the Hospital through reference to the legislative history of subsequent amendments to the Act. The Omnibus Budget Reconciliation Act of 1986 (OBRA) amended 42 U.S.C. Sec. 1395ww(h)(4) to require that, effective July 1, 1987, the time spent by a resident in outpatient settings pursuant to an approved training program would be counted \"without regard to the setting in which the activities are performed, if the hospital incurs all, or substantially all, of the costs for the training program in that setting.\" The Secretary points out that the Conference Report states that under the then-present law, \"Time spent by residents out of the inpatient setting is counted for this purposes [sic] only if the setting is part of the hospital.\" H.R.Rep. No. 1012, 99th Cong., 2d Sess. 311, reprinted in 1986 U.S.Code Cong. & Admin.News 3868, 3956. Because the amendment is itself an amendment to the Consolidated Omnibus Budget Reconciliation Act of 1985, Pub.L. No. 99-272, Sec. 9202 (COBRA) (adding 42 U.S.C. Sec. 1395ww(h)), and COBRA did not address \"patient settings,\" the Secretary concludes that the 1986 OBRA must be referring to law existing during 1982 and 1983.\n \n \n 31\n We cannot accept the Secretary's legislative history argument. Neither the Secretary nor the Conference Report have identified any statutory or regulatory language during the relevant time period (1982-1983) specifying the \"part of\" requirement. In fact, there was no statutory language specifically addressing reimbursement for graduate medical education until the 1985 COBRA. Thus, the only relevant language regarding educational program reimbursement for 1982-1983 is found in the Secretary's own regulations, which clearly have no \"part of\" requirement. Furthermore, Congress itself indicated that there was some confusion over the \"part of\" requirement, discussing the fact that reimbursement should be without regard to the setting of the program in OBRA's legislative history under the heading, \"Clarifying counting of time spent in outpatient settings.\" 1986 U.S.Code Cong. & Admin.News at 3956-57. (Emphasis added.) In sum, the 1985-1986 amendments and legislative history do not support the Secretary's position that the \"part of\" requirement was established law during 1982-1983.\n \n \n 32\n Because the plain language of the regulations does not require that the educational activities provide direct services to Medicare beneficiaries within the institution, there are additional issues which we need not address. First, we need not reach the issue of whether substantial evidence supports the Secretary's factual findings as to whether Medicare beneficiaries received the residents' services during their clinical training, or whether the clinics are a \"part of\" the Hospital, such findings are not determinative. See District Court opinion, JA 97 (substantial evidence review of Secretary's findings of fact). Second, it is not necessary to distinguish the cases cited below in support of the Secretary's position which focus on whether certain education programs enhance the quality of patient care at the hospital through the provision of direct services to Medicare beneficiaries. Those cases are not helpful in deciding whether educational activities not so limited are entitled to Medicare reimbursement under the regulations. See St. John's Hickey Memorial Hospital, Inc. v. Califano, 599 F.2d 803 (7th Cir.1979); Washington Adventist Hospital, Inc. v. Califano, 512 F. Supp. 932 (D.Md.1981).\n \n 3. No Impermissible Cost Shifting\n \n 33\n The third criterion, preventing the improper shifting of costs from educational to patient care institutions, is also met. By reimbursing the Hospital for the portion of clinic training which the residents receive and pass on to their Hospital Medicare patients in terms of enhanced quality of service, costs are properly shifted to the patient care institution and its Medicare beneficiaries. This comports with the underlying statute, 42 U.S.C. Sec. 1395x(v)(1)(A), which prohibits shifting necessary direct or indirect costs of providing services from Medicare beneficiaries to non-Medicare beneficiaries. Therefore, by allocating a proper amount of the clinic costs to the Medicare Program, it has not \"participate[d] in increased costs resulting from redistribution of costs from educational institutions to patient care institutions.\" 42 C.F.R. Sec. 405.421(c) (1982). The Hospital seeks only reimbursement for the allocable share of costs, i.e., the costs equal to the proportion of Medicare patients at the Hospital relative to the Hospital population. See 42 C.F.R. Sec. 405.402(a) (1982).\n \n III. Conclusion\n \n 34\n Because the Secretary's interpretation is inconsistent with the plain meaning of its Medicare regulations, it is not entitled to deference. We therefore hold that the Secretary's decision is \"arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.\" 5 U.S.C. Sec. 706(2)(A). Accordingly, the District Court's grant of summary judgment to the Secretary is REVERSED. The case is REMANDED to the Secretary to determine the appropriate apportionment of the clinic costs for Medicare reimbursement.\n \n \n \n \n The Honorable Eugene E. Siler, Jr., Chief United States District Judge for the Eastern District of Kentucky and United States District Judge for the Western District of Kentucky, sitting by designation\n \n \n ", "ocr": false, "opinion_id": 524075 } ]	Sixth Circuit	Court of Appeals for the Sixth Circuit	F	USA, Federal
1,283,804	Nichols	1975-07-01	false	williams-v-ricketts	Ricketts	Williams v. Ricketts	Williams v. Ricketts	James C. Bonner, Jr., for appellant., Arthur K. Bolton, Attorney General, Julius C. Daugherty, Jr., Staff Assistant Attorney General, for appellee.	null	null	null	null	null	null	null	Submitted June 11, 1975	null	null	5	Published	null	<docketnumber id="b742-10"> 30031. </docketnumber><parties id="Alj"> WILLIAMS v. RICKETTS. </parties>	[ "217 S.E.2d 292", "234 Ga. 716" ]	[ { "author_str": "Nichols", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 4095, "opinion_text": "\n234 Ga. 716 (1975)\n217 S.E.2d 292\nWILLIAMS\nv.\nRICKETTS.\n30031.\nSupreme Court of Georgia.\nSubmitted June 11, 1975.\nDecided July 1, 1975.\nJames C. Bonner, Jr., for appellant.\nArthur K. Bolton, Attorney General, Julius C. Daugherty, Jr., Staff Assistant Attorney General, for appellee.\nNICHOLS, Chief Justice.\nThe appellant filed a writ of habeas corpus in the Superior Court of Butts County contesting the imposition of a ten year sentence for motor vehicle theft upon a guilty plea. The habeas court found that the applicant had been sentenced to a harsher penalty than provided by law and directed the trial court to vacate the original sentence and resentence the appellant. The judgment also provided that the resentencing could be done in absentia and made no provision for the appellant to be served with a copy of the new sentence.\nThe sole enumeration of error complains of that part of the judgment directing that the appellant could be resentenced in absentia.\nThis would seem to be a new and novel point in Georgia. All the cases cited by either side involve resentencing in absentia where there was only one possible sentence that could be entered, i.e. death to life *717 (Sullivan v. State, 229 Ga. 731 (194 SE2d 410)); consecutive to concurrent (Wade v. State, 231 Ga. 131 (200 SE2d 271)); resetting of a date for execution (Fowler v. Grimes, 198 Ga. 84 (31 SE2d 174)). Each such case involves only a ministerial function.\nIn the case sub judice the prisoner could receive a sentence of from three to seven years to be served either concurrently with or consecutively to a sentence now being served. Since the prisoner would have substantial rights, he should be allowed to be present in the trial court for resentencing. Constitution of 1945, Art. I, Sec. I, Par. IV (Code Ann. § 2-104).\nThe part of the judgment of the habeas corpus court which permits the resentencing of the prisoner in absentia without his consent is reversed with direction that the habeas court enter an order allowing the prisoner to be present at the resentencing hearing.\nJudgment reversed with direction. All the Justices concur.\n", "ocr": false, "opinion_id": 1283804 } ]	Supreme Court of Georgia	Supreme Court of Georgia	S	Georgia, GA
2,592,276	Cooke and Judges Gabrielli and Wachtler Concur With Judge Fuchsberg Judge Meyer Dissents and Votes to Reverse in a Separate Opinion in Which Judge Jasen Concurs Judge Jones Taking No Part	1982-02-18	false	country-wide-insurance-v-rodriguez	COUNTRY-WIDE	Country-Wide Insurance v. Rodriguez	Country-Wide Insurance Company, Appellant, v. Nieves Rodriguez, an Infant by Rosa Rodriguez, Her Mother and Natural Guardian, Et Al., Respondents	POINTS OF COUNSEL, Bernard Samuels and Eric M. Alderman for appellant., Seymour Berkowitz and Richard Godosky for respondents.	null	null	null	null	null	null	null	Argued January 5, 1982;	null	null	3	Published	<attorneys data-order="3" data-type="attorneys" id="b205-8">POINTS OF COUNSEL</attorneys> <attorneys data-order="4" data-type="attorneys" id="b205-9"><em>Bernard Samuels </em>and <em>Eric M. Alderman </em>for appellant.</attorneys> <p data-order="5" data-type="legal" id="Av">I. North Carolina had no provision for minimum liability coverage of $15,000/$30,000 for a properly registered and insured New York automobile in compliance with New York Motor Vehicle and Traffic Law and, therefore, subdivision 5 of section 672 of the Insurance Law was not applicable to this case. II. Should this court agree with appellant’s position in point I that North Carolina law provided no basis for reformation of plaintiff’s New York insurance policy to any higher amount than was specified therein as being required pursuant to subdivision 5 of <page-number citation-index="1" label="164">*164</page-number>section 672 of the Insurance Law, it should nevertheless proceed to interpret that statute as an exception to the doctrine of mootness. In such event the statute should be construed as imputing and continuing the words “when applicable in accordance with New York law as opposed to those of another State”. <em>(Matter of Hearst Corp. v Clyne, </em>50 NY2d 707; <em>Central Hanover Bank & Trust Co. v Commissioner of Internal Revenue, </em>159 F2d 167; <em>Auten v Auten, </em>308 NY 155; <em>Neumeier v Kuehner, </em>31 NY2d 121; <em>Farber v Smolack, </em>20 NY2d 198; <em>Miller v Miller, </em>22 NY2d 12; <em>Wierbinski v State Farm Mut. Auto. Ins. Co., 477 </em>F Supp 659; <em>Mindell v Travelers Ind. Co., </em>46 AD2d 263.) III. Assuming <em>arguendo </em>that the coverage provisions of North Carolina law apply, the pertinent insurance contract provision is nothing more than a guarantee by the insurer of financial responsibility of its insured with a concomitant indemnity agreement running from the insured to the insurer. <em>(MacArthur Bros. Co. v Kerr, </em>213 NY 360; <em>Reitz v Mealey, </em>314 US 33; <em>Kesler v Department of Public Safety, </em>369 US 153; <em>Perez v Campbell, </em>402 US 637; <em>Standard Acc. Ins. Co. of Detroit v Solomon, </em>195 Misc 48; <em>Travelers Ins. Co. v Russo, </em>155 Misc 589; <em>Stuyvesant Ins. Co. v Renaldo, </em>41 Misc 2d 285; <em>Bakker v Aetna Life Ins. Co., </em>148 Misc 162, 240 App Div 880, 264 NY 150.)</p> <attorneys data-order="6" data-type="attorneys" id="b206-5"><em>Seymour Berkowitz </em>and <em>Richard Godosky </em>for respondents.</attorneys> <p data-order="7" data-type="legal" id="An_">Subdivision 5 of section 672 of the New York State Insurance Law and the purpose and intent of the Legislature in enacting the aforesaid legislation should be the determining factor in interpreting the legislation and dis-positive of the issue of the amount of the insurance coverage afforded under the policy issued by plaintiff-appellant. <em>(Mindell v Travelers Ind. Co., </em>46 AD2d 263, 38 NY2d 815; <em>Wierbinski v State Farm Mut. Auto. Ins. Co., 477 </em>F Supp 659.)</p>	<parties data-order="0" data-type="parties" id="b204-4"> Country-Wide Insurance Company, Appellant, v Nieves Rodriguez, an Infant by Rosa Rodriguez, Her Mother and Natural Guardian, et al., Respondents. </parties><br><otherdate data-order="1" data-type="otherdate" id="b204-5"> Argued January 5, 1982; </otherdate><decisiondate data-order="2" data-type="decisiondate" id="AH"> decided February 18, 1982 </decisiondate><br><attorneys data-order="3" data-type="attorneys" id="b205-8"> <span citation-index="1" class="star-pagination" label="163"> 163 </span> POINTS OF COUNSEL </attorneys><br><attorneys data-order="4" data-type="attorneys" id="b205-9"> <em> Bernard Samuels </em> and <em> Eric M. Alderman </em> for appellant. </attorneys><p data-order="5" data-type="legal" id="Av"> I. North Carolina had no provision for minimum liability coverage of $15,000/$30,000 for a properly registered and insured New York automobile in compliance with New York Motor Vehicle and Traffic Law and, therefore, subdivision 5 of section 672 of the Insurance Law was not applicable to this case. II. Should this court agree with appellant’s position in point I that North Carolina law provided no basis for reformation of plaintiff’s New York insurance policy to any higher amount than was specified therein as being required pursuant to subdivision 5 of <span citation-index="1" class="star-pagination" label="164"> 164 </span> section 672 of the Insurance Law, it should nevertheless proceed to interpret that statute as an exception to the doctrine of mootness. In such event the statute should be construed as imputing and continuing the words “when applicable in accordance with New York law as opposed to those of another State”. <em> (Matter of Hearst Corp. v Clyne, </em> 50 NY2d 707; <em> Central Hanover Bank & Trust Co. v Commissioner of Internal Revenue, </em> 159 F2d 167; <em> Auten v Auten, </em> 308 NY 155; <em> Neumeier v Kuehner, </em> 31 NY2d 121; <em> Farber v Smolack, </em> 20 NY2d 198; <em> Miller v Miller, </em> 22 NY2d 12; <em> Wierbinski v State Farm Mut. Auto. Ins. Co., 477 </em> F Supp 659; <em> Mindell v Travelers Ind. Co., </em> 46 AD2d 263.) III. Assuming <em> arguendo </em> that the coverage provisions of North Carolina law apply, the pertinent insurance contract provision is nothing more than a guarantee by the insurer of financial responsibility of its insured with a concomitant indemnity agreement running from the insured to the insurer. <em> (MacArthur Bros. Co. v Kerr, </em> 213 NY 360; <em> Reitz v Mealey, </em> 314 US 33; <em> Kesler v Department of Public Safety, </em> 369 US 153; <em> Perez v Campbell, </em> 402 US 637; <em> Standard Acc. Ins. Co. of Detroit v Solomon, </em> 195 Misc 48; <em> Travelers Ins. Co. v Russo, </em> 155 Misc 589; <em> Stuyvesant Ins. Co. v Renaldo, </em> 41 Misc 2d 285; <em> Bakker v Aetna Life Ins. Co., </em> 148 Misc 162, 240 App Div 880, 264 NY 150.) </p><br><attorneys data-order="6" data-type="attorneys" id="b206-5"> <em> Seymour Berkowitz </em> and <em> Richard Godosky </em> for respondents. </attorneys><p data-order="7" data-type="legal" id="An_"> Subdivision 5 of section 672 of the New York State Insurance Law and the purpose and intent of the Legislature in enacting the aforesaid legislation should be the determining factor in interpreting the legislation and dis-positive of the issue of the amount of the insurance coverage afforded under the policy issued by plaintiff-appellant. <em> (Mindell v Travelers Ind. Co., </em> 46 AD2d 263, 38 NY2d 815; <em> Wierbinski v State Farm Mut. Auto. Ins. Co., 477 </em> F Supp 659.) </p>	[ "55 N.Y.2d 162" ]	[ { "author_str": "Fuchsberg", "per_curiam": false, "type": "020lead", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\nOPINION OF THE COURT\nFuchsberg, J.\nThis appeal calls upon us to construe subdivision 5 of section 672 of our Insurance Law, which mandates that the compulsory liability coverage required of the owner of every New York automobile include “insurance coverage 165for such motor vehicle at least in the minimum amount required for such vehicle by the laws of [any] other state or Canadian province” when the vehicle is “used or operated” in such foreign jurisdiction; in substance, Insurance Department regulations have implemented this provision by reading it into every owner’s policy (11 NYCRR 60.1 [e]). In applying subdivision 5 to the present case, of necessity we also must examine the pertinent laws of North Carolina, the State in which the events which led to this controversy arose.\nThe plaintiff, Country-Wide Insurance Company, is the liability carrier under a policy issued to defendant Louis Padilla on a passenger car registered to him in New York. The liability limits, broadly stated, are $10,000 for injuries to any one person and $20,000 for all persons injured in a single accident, the minima required by subdivision 2-a of section 167 of the Insurance Law. While the policy was in force, Padilla was driving his automobile in North Carolina when he was involved in a collision in which one of his passengers, Nieves Rodriguez, an infant, was injured. There followed a suit in Supreme Court, Bronx County, by young Rodriguez and her mother against Padilla and, as called for by the policy, defended by Country-Wide. It eventuated in the entry of a $100,000 judgment for the child.\nIn the present action, Country-Wide, joining the child, the mother and Padilla as defendants, seeks a declaration that the limit of its obligation is to pay $10,000 towards the satisfaction of the judgment and not $15,000, the minimum insurance limit generally provided for injury to one person under North Carolina’s compulsory statutory scheme (see NC Gen Stats, §§ 20-309, 20-279.1, subd [11]). By way of alternative relief, Country-Wide asks that, in the event of an unfavorable determination, Padilla indemnify it for the $5,000 differential.\nOn cross motions for summary judgment, Special Term granted defendants Rodriguez’ motion, dismissed CountryWide’s complaint, inclusive of its quest for indemnity, and declared that the policy afforded the $15,000 coverage (103 Misc 2d 906). The Appellate Division, one Justice dissenting, has since affirmed, essentially on the simple proposi166tion that our statute “has chosen to adopt the North Carolina minimum” (80 AD2d 130, 133).\nOn Country-Wide’s further appeal, taken pursuant to CPLR 5601 (subd [a], par [i]), it presses its arguments, inter alia, that North Carolina exempts nonresident vehicles, i.e., those not registered in North Carolina, from its compulsory insurance requirements;1 that subdivision 5 of section 672 is concerned with financial security and not liability coverage; that, since the passengers and their host were all New York residents, whose relationships and expectations were determined in New York, and since their presence in North Carolina as they were passing through that State at . the time of the accident was fortuitous, the need to apply subdivision 5 of section 672 was obviated; that, in any event, since there was no proof that any sanctions, whether by way of the imposition of security or suspension of driving privileges or otherwise, were ever levied on Padilla by North Carolina as a consequence of the accident, that State’s minimum limits, assuming they were within the scope of subdivision 5 of section 672, never came into play; and that, though its assured, under the policy’s surety clause, would have to reimburse Country-Wide for any obligation it might undertake by using its New York minimum policy as proof of nonresidential financial responsibility, its obligation to make it available in the first instance constituted compliance with North Carolina law. For the reasons which follow, we nevertheless conclude that the result reached by the Appellate Division should be upheld.\nOur analysis first focuses on subdivision 5 of section 672 of the Insurance Law, which was part of the complex of statutes which came into existence with the enactment of the New York “No-Fault Law” (L 1973, ch 13, § 1). These statutes, as did others of the same ilk which have proliferated in almost every State since the 1960’s, reflected a felt need to provide a more adequate and efficient system of 167financial responsibility for compensating victims of automobile accidents (see Montgomery v Daniels, 38 NY2d 41, 50). It therefore would be unthinkable to assume that our legislators were not conscious of and concerned with the hazards the owners and other occupants of New York automobiles would face when they ventured into States (or Canadian provinces) whose laws specified different, and perhaps higher, minimum liability levels (see, generally, Conrad, Morgan, Pratt, Jr., Voltz and Bombaugh, Automobile Accident Costs and Payments [Univ of Mich Press]).\nTurning to the North Carolina statutes, we immediately observe that, as a prerequisite for registration of a motor vehicle, an owner must certify to financial responsibility (NC Gen Stats, “Vehicle Financial Responsibility Act of 1957”, § 20-309, subd [a]). Such certification requires proof either of a liability insurance policy or a qualitatively equivalent security deposit or self-insured status, each designed to meet the quantitative minimum liability limits of $15,000/$30,000 (NC Gen Stats, § 20-309, subd [b]; § 20-279.1, subd [11]).\nTrue, New Yorkers driving through North Carolina do not have to meet the State’s registration requirements (see n 1, supra). But this is the beginning and not the end of possible penalties, sanctions and forfeitures to which other provisions of the North Carolina statutes expose them. For, in the event of an accident, a series of alternatives which can be most onerous for the nonresident owner or operator are set in motion. In such circumstances, article 9A of the Motor Vehicle Law of North Carolina, entitled “The Motor Vehicle Safety and Financial Responsibility Act of 1953”, mandates that the operating privileges of the nonresident owner or operator involved be suspended (NC Gen Stats, § 20-279.5, subd [b]; see, generally, Faizan v Grain Dealers Mut. Ins. Co., 254 NC 47). Unless the Commissioner of Motor Vehicles receives satisfactory evidence within 20 days after receipt of an accident report that a formal release, settlement or adjudication of nonliability has been obtained (no doubt a rare accomplishment in so short a time span), avoidance of suspension hinges on the ability of a driver to deposit such sum, up to $15,000 for one person’s injury or death or $30,000 for any one accident, as the 168commissioner finds sufficient to secure payment of judgments for any damages (see NC Gen Stats, § 20-279.5, subd [a]; and § 20-279.9).\nMost significantly, possession of a liability policy circumvents all this license suspending and security posting, only “provided, however, every such policy or bond is subject, if the accident has resulted in bodily injury or death, to a limit, exclusive of interest and cost, of not less than fifteen thousand dollars ($15,000) because of bodily injury to or death of one person in any one accident and, subject to said limit for one person, to a limit of not less than thirty thousand dollars ($30,000) because of bodily injury to or death of two or more persons in any one accident” (NC Gen Stats, § 20-279.5, subd [c] [emphasis added]), such coverage, of course, being, to track our subdivision 5 of section 672, “the minimum amount required for such vehicle by xthe laws of [North Carolina]”. (See, also, NC Gen Stats, § 20-279.20, subd [a], par [2], which mandates that the nonresident’s certificate of financial responsibility provided by a carrier state that the policy “shall be deemed to conform with the laws of this State relating to the terms of motor vehicle liability policies issued herein”.)\nAs a practical matter then, the “exemption” of nonresident vehicles by North Carolina, while technically possible, is hardly short of illusory. For, the net result is that, although North Carolina, strictly speaking, does not require nonresidents to carry insurance in the limits prescribed by it ab initio, in the end the nature of its over-all plan is such that any State concerned with shielding its motorists, as New York obviously was when it adopted subdivision 5 of section 672, could hardly have failed to insist on the ultimate security of the North Carolina insurance limits within the out-of-State protection it mandated. It therefore would be unrealistic in the extreme to suppose, as the appellant here would have us do, that our Legislature intended instead to subject the hundreds of thousands of its motor vehicle owners who drive across State lines each year to the other burdens.\nAlso, in light of the overriding purpose of subdivision 5 of section 672, whether the potential liabilities óf the appellant stem from the financial security or compulsory insur169anee sections of North Carolina law or from a combination of both, is, at best, a consideration of form rather than substance. And, as to the appellant’s surety clause contention, it seems especially inconsistent with the language of subdivision 5 of section 672 to suggest that our Legislature ever intended to impose ultimate personal liability on New York drivers for the differential between our minimum limits and those of foreign jurisdictions, be it $5,000 or even more.2\nNor are we moved to any different determination in this case because, for unexplained reasons, be they intentional or inadvertent in character, the North Carolina Commissioner of Motor Vehicles here did not exercise the right to suspend or fix the amount of security. The obvious answer to this contention is that the risks contemplated by subdivision 5 of section 672 were those envisioned in prospect, not in retrospect.\nAccordingly, the order of the Appellate Division should be affirmed, with costs.\n\n. This point is based at least in part on the reciprocity inherent in the interplay of section 20-4.8 of the North Carolina General Statutes and subdivision 1 of section 250 of the New York Vehicle and Traffic Law. The North Carolina statute exempts from its registration requirements vehicles properly registered in another jurisdiction so long as the foreign jurisdiction grants like exemptions to vehicles registered in North Carolina. The New York statute does so provide.\n\n\n. As to the dissenter’s hypothetical query as to whether subdivision 5 of section 672 would reduce the coverage to a limit below that fixed by subdivision 2-a of section 167 of the Insurance Law when a New York automobile enters a State with lower limits, suffice it to say that subdivision 5 of section 672 does not so provide. Rather, since it specifies that the coverage shall be “at least in the minimum amount required [by the] other state”, the New York limits in any event would remain applicable.\n\n", "ocr": false, "opinion_id": 9788143 }, { "author_str": "Meyer", "per_curiam": false, "type": "040dissent", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\nMeyer, J.\n(dissenting). Because the majority’s holding misconstrues both the New York and the North Carolina statutes, I respectfully dissent.\nSubdivision 5 of section 672 of the Insurance Law requires that “Every owner’s policy of liability insurance issued in satisfaction of articles six or eight of the vehicle and traffic law shall also provide, when a motor vehicle covered by such policy is used or operated in any other state or in any Canadian province, insurance coverage for such motor vehicle at least in the minimum amount required for such vehicle by the laws of such other state or Canadian province.” In total disregard of the words “for such * * vehicle” in that subdivision the Appellate Division majority stated that “North Carolina at the time of this accident required residents and nonresidents to be insured for an amount not less than $15,000” (80 AD2d 170130, 131; italics supplied) and concluded that North Carolina’s law “imposes a requirement on the nonresident of conforming to the minimum amount of insurance coverage mandated by the laws of North Carolina” (80 AD2d 130, 134; italics supplied). Not only was that an incorrect application of the New York law but also it misinterprets the North Carolina statutes. The majority in this court, recognizing in part the Appellate Division’s error, admits that (p 168) “North Carolina, strictly speaking, does not require nonresidents to carry insurance in the limits prescribed by it ah initio,” but concludes that “the nature of [the] over-all plan is such that * * New York * * * could hardly have failed to insist on the ultimate security of the North Carolina insurance limits”. Thus, though correctly conceiving what the North Carolina statute does, the majority nevertheless sustains the Appellate Division’s result, ignoring not only the phrase “for the vehicle” in our statute, but the word “required” (which relates not to what New York might have required but what North Carolina law required) in that statute as well.\nThe simple facts are that our statute does not say “in the minimum amount that would be required for such vehicle if it were registered in such other state,” and that North Carolina has not one but two financial responsibility acts, one (the 1957 act) relating to registration of vehicles and requiring a liability policy with a minimum of $15,000 (NC Gen Stats, § 20-309), and the other (the 1953 act) relating to the license of the operator or owner of a motor vehicle involved in “a motor vehicle accident within this State which has resulted in bodily injury or death or damage to the property of any one person in excess of two hundred dollars”, but which does not require the filing of security or other proof of financial responsibility until after such an accident (NC Gen Stats, § 20-279.5).\nAs the majority’s footnote 1 acknowledges, a passenger vehicle registered in New York is not required to be registered in North Carolina (NC Gen Stats, §§ 20-4.8, 20-51, subd [1]), unless its owner takes up permanent or 171temporary residence in that State extending beyond 30 days (NC Gen Stats, § 20-4.6; see § 20-313). The Padilla vehicle was, however, simply in transit through North Carolina on the way to Florida. Therefore, the $15,000 minimum provided for in the 1957 statute was not “required for such [Padilla’s] vehicle by the laws of” North Carolina within the meaning of subdivision 5 of section 672 of the Insurance Law.\nThe 1953 statute, on the other hand, while it does not require insurance coverage for any vehicle, does provide for the suspension of a nonresident’s privilege of operating a motor vehicle in North Carolina. Suspension can only occur, however, after the nonresident operator has had an accident and has failed to present to the commissioner evidence of a release from liability, a final adjudication of nonliability, or a written agreement for the payment of an agreed amount, or to deposit the amount of security the commissioner deems sufficient to satisfy any and all judgments for damages resulting from the accident (NC Gen Stats, § 20-279.5, subds [a], [b]; see, also, §§ 20-21, 20-22). The suspension provisions of the 1953 act do not apply, however, under the conditions stated in subdivision (c) of section 20-279.5 and section 20-279.6. One such condition is the existence of a liability policy or bond covering the vehicle or its owner or operator “to a limit, exclusive of interest and cost [sic], of no less than fifteen thousand dollars” (NC Gen Stats, § 20-279.5, subd [c]). Clearly, therefore, the 1953 act does not, either before or after an accident, require that a nonresident operator driving a vehicle registered in his State of residence, who has not resided in North Carolina for more than 30 days, be insured in any amount. All that it does is excuse such a nonresident driver from the suspension after an accident of his nonresident’s privilege of operating a vehicle in North Carolina on a number of bases, one of which is that at the time of the accident he had insurance with a $15,000 minimum. To be noted, furthermore, is the fact that suspension is in any event not immediate or automatic; section 20-279.5 does not authorize suspension until the expiration of 20 days after receipt of a report of the accident or permit a notice of suspension to become effective until not less than 10 days after it is sent to the operator or owner.\n172That the interpretation of the two acts above set forth is that accorded them by the North Carolina Supreme Court is made clear beyond dispute by Faizan v Grain Dealers Mut. Ins. Co. (254 NC 47), cited by the majority. The opinion in that case describes the two acts as follows (254 NC 47, 52-54):\n“(a). The 1953 Act.\n“This Act applies to those persons whose driver’s licenses have been suspended by reason of violations of motor vehicle statutes, failure to pay and discharge judgments for damages resulting from ownership or operation of motor vehicles, or failure to prove financial responsibility where damages have been occasioned by the ownership or operation of motor vehicles. It is provided that such persons, where they are otherwise entitled to restoration of driver’s licenses, must prove financial responsibility before such licenses may be restored. The financial responsibility must then be maintained for two years. One method of proving and maintaining financial responsibility is to obtain automobile liability insurance as defined by, and in compliance with, G.S. 20-279.21.\n * \n“(b). The 1957 Act.\n“This Act requires proof of financial responsibility by all motor vehicle owners who apply to the Department for North Carolina registration certificates and plates. Financial responsibility may be shown by procurement of automobile liability insurance. Before a motor vehicle may be registered and registration plates obtained, a certificate of insurance coverage (FS-1) must be delivered by an insurer to the Commissioner.\n * \n“The 1953 Act applies to a limited class of motorists — those whose driver’s licenses have been suspended. These motorists must show financial responsibility as a condition precedent to restoration of their driver’s licenses. The 1957 Act applies to an unlimited class — all motor vehicle owners. Before obtaining periodic registration certificates and plates for vehicles, they must prove financial responsibility. One Act relates to restoration of driver’s license, the other to motor vehicle registration.”\n173Not only is the majority’s conclusion inconsistent with the statutes in both States, but also its policy rationale is difficult to understand. North Carolina can, if it sees fit to do so, impose upon the owners or drivers of vehicles registered in other States the obligation of carrying insurance in a stated and reasonable amount as a condition of the use of its highways in order to protect its residents (and itself if they be impecunious) against the expenses and other results of an accident within its borders (see Hess v Pawloski, 274 US 352; Leighton v Roper, 300 NY 434). It has not done so. New York’s interests in providing coverage under a policy issued in New York for an accident occurring in another State are (1) to protect the New York owner or New York operator from the criminal responsibility that may result from driving the vehicle in the other State without coverage in the amount required by the laws of that State and (2) as a matter of reciprocity, to protect the State where the accident occurred and the persons injured in that State against expenses and damages resulting from the injury to the same extent that the laws of that State require. A possible secondary purpose may be through the operation of reciprocity to obtain for New York residents injured by an out-of-State vehicle operated in New York the higher limit of coverage required by the other State, although that hardly seems probable because it would be most unusual for a policy issued in a higher limit State to provide that if the vehicle is operated in a lower limit State the coverage of the policy as to an accident there occurring would be reduced to the lower limit. In any event, none of those purposes has any bearing on the facts of this case, at least until an order of suspension of Padilla’s nonresident operating privilege has been issued by North Carolina, for until that time Padilla is not required by North Carolina law to have any insurance and cannot be subjected to any criminal responsibility. Neither New York nor North Carolina requires $15,000 coverage for a New York registered vehicle when operated in North Carolina for less than 30 days. Nor is it reasonable to interpret New York’s law, which requires only $10,000 coverage for the protection of a New York resident injured in a New York registered vehicle in an accident occurring in New York, as intended 174to require .$15,000 coverage for a New York resident’s injuries, simply because the injury to the New York resident in a New York registered vehicle occurred in a State which requires of its own registered vehicle owners but not of out-of-State vehicle owners, coverage of $15,000.\nI would reverse and direct the entry of judgment declaring that the limit of Country-Wide’s obligation under the Padilla policy to Nieves Rodriguez is $10,000.\nChief Judge Cooke and Judges Gabrielli and Wachtler concur with Judge Fuchsberg; Judge Meyer dissents and votes to reverse in a separate opinion in which Judge Jasen concurs; Judge Jones taking no part.\nOrder affirmed.\n\n Thus, the 1957 act describes the 1953 act as “relating to proof of financial responsibility required of each operator and each owner of a motor vehicle involved in an accident, and relating to nonpayment of a judgment” (NC Gen Stats, § 20-314 [italics supplied]).\n\n", "ocr": false, "opinion_id": 9788144 }, { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n55 N.Y.2d 162 (1982)\nCountry-Wide Insurance Company, Appellant,\nv.\nNieves Rodriguez, an Infant by Rosa Rodriguez, Her Mother and Natural Guardian, et al., Respondents.\nCourt of Appeals of the State of New York.\nArgued January 5, 1982.\nDecided February 18, 1982.\nBernard Samuels and Eric M. Alderman for appellant.\nSeymour Berkowitz and Richard Godosky for respondents.\nChief Judge COOKE and Judges GABRIELLI and WACHTLER concur with Judge FUCHSBERG; Judge MEYER dissents and votes to reverse in a separate opinion in which Judge JASEN concurs; Judge JONES taking no part.\n164FUCHSBERG, J.\nThis appeal calls upon us to construe subdivision 5 of section 672 of our Insurance Law, which mandates that the compulsory liability coverage required of the owner of every New York automobile include \"insurance coverage 165 for such motor vehicle at least in the minimum amount required for such vehicle by the laws of [any] other state or Canadian province\" when the vehicle is \"used or operated\" in such foreign jurisdiction; in substance, Insurance Department regulations have implemented this provision by reading it into every owner's policy (11 NYCRR 60.1 [e]). In applying subdivision 5 to the present case, of necessity we also must examine the pertinent laws of North Carolina, the State in which the events which led to this controversy arose.\nThe plaintiff, Country-Wide Insurance Company, is the liability carrier under a policy issued to defendant Louis Padilla on a passenger car registered to him in New York. The liability limits, broadly stated, are $10,000 for injuries to any one person and $20,000 for all persons injured in a single accident, the minima required by subdivision 2-a of section 167 of the Insurance Law. While the policy was in force, Padilla was driving his automobile in North Carolina when he was involved in a collision in which one of his passengers, Nieves Rodriguez, an infant, was injured. There followed a suit in Supreme Court, Bronx County, by young Rodriguez and her mother against Padilla and, as called for by the policy, defended by Country-Wide. It eventuated in the entry of a $100,000 judgment for the child.\nIn the present action, Country-Wide, joining the child, the mother and Padilla as defendants, seeks a declaration that the limit of its obligation is to pay $10,000 towards the satisfaction of the judgment and not $15,000, the minimum insurance limit generally provided for injury to one person under North Carolina's compulsory statutory scheme (see NC Gen Stats, §§ 20-309, 20-279.1, subd [11]). By way of alternative relief, Country-Wide asks that, in the event of an unfavorable determination, Padilla indemnify it for the $5,000 differential.\nOn cross motions for summary judgment, Special Term granted defendants Rodriguez' motion, dismissed Country-Wide's complaint, inclusive of its quest for indemnity, and declared that the policy afforded the $15,000 coverage (103 Misc 2d 906). The Appellate Division, one Justice dissenting, has since affirmed, essentially on the simple proposition 166 that our statute \"has chosen to adopt the North Carolina minimum\" (80 AD2d 130, 133).\nOn Country-Wide's further appeal, taken pursuant to CPLR 5601 (subd [a], par [i]), it presses its arguments, inter alia, that North Carolina exempts nonresident vehicles, i.e., those not registered in North Carolina, from its compulsory insurance requirements;[1] that subdivision 5 of section 672 is concerned with financial security and not liability coverage; that, since the passengers and their host were all New York residents, whose relationships and expectations were determined in New York, and since their presence in North Carolina as they were passing through that State at the time of the accident was fortuitous, the need to apply subdivision 5 of section 672 was obviated; that, in any event, since there was no proof that any sanctions, whether by way of the imposition of security or suspension of driving privileges or otherwise, were ever levied on Padilla by North Carolina as a consequence of the accident, that State's minimum limits, assuming they were within the scope of subdivision 5 of section 672, never came into play; and that, though its assured, under the policy's surety clause, would have to reimburse Country-Wide for any obligation it might undertake by using its New York minimum policy as proof of nonresidential financial responsibility, its obligation to make it available in the first instance constituted compliance with North Carolina law. For the reasons which follow, we nevertheless conclude that the result reached by the Appellate Division should be upheld.\nOur analysis first focuses on subdivision 5 of section 672 of the Insurance Law, which was part of the complex of statutes which came into existence with the enactment of the New York \"No-Fault Law\" (L 1973, ch 13, § 1). These statutes, as did others of the same ilk which have proliferated in almost every State since the 1960's, reflected a felt need to provide a more adequate and efficient system of 167 financial responsibility for compensating victims of automobile accidents (see Montgomery v Daniels, 38 N.Y.2d 41, 50). It therefore would be unthinkable to assume that our legislators were not conscious of and concerned with the hazards the owners and other occupants of New York automobiles would face when they ventured into States (or Canadian provinces) whose laws specified different, and perhaps higher, minimum liability levels (see, generally, Conrad, Morgan, Pratt, Jr., Voltz and Bombaugh, Automobile Accident Costs and Payments [Univ of Mich Press]).\nTurning to the North Carolina statutes, we immediately observe that, as a prerequisite for registration of a motor vehicle, an owner must certify to financial responsibility (NC Gen Stats, \"Vehicle Financial Responsibility Act of 1957\", § 20-309, subd [a]). Such certification requires proof either of a liability insurance policy or a qualitatively equivalent security deposit or self-insured status, each designed to meet the quantitative minimum liability limits of $15,000/$30,000 (NC Gen Stats, § 20-309, subd [b]; § 20-279.1, subd [11]).\nTrue, New Yorkers driving through North Carolina do not have to meet the State's registration requirements (see n 1, supra). But this is the beginning and not the end of possible penalties, sanctions and forfeitures to which other provisions of the North Carolina statutes expose them. For, in the event of an accident, a series of alternatives which can be most onerous for the nonresident owner or operator are set in motion. In such circumstances, article 9A of the Motor Vehicle Law of North Carolina, entitled \"The Motor Vehicle Safety and Financial Responsibility Act of 1953\", mandates that the operating privileges of the nonresident owner or operator involved be suspended (NC Gen Stats, § 20-279.5, subd [b]; see, generally, Faizan v Grain Dealers Mut. Ins. Co., 254 NC 47). Unless the Commissioner of Motor Vehicles receives satisfactory evidence within 20 days after receipt of an accident report that a formal release, settlement or adjudication of nonliability has been obtained (no doubt a rare accomplishment in so short a time span), avoidance of suspension hinges on the ability of a driver to deposit such sum, up to $15,000 for one person's injury or death or $30,000 for any one accident, as the 168 commissioner finds sufficient to secure payment of judgments for any damages (see NC Gen Stats, § 20-279.5, subd [a]; and § 20-279.9).\nMost significantly, possession of a liability policy circumvents all this license suspending and security posting, only \"provided, however, every such policy or bond is subject, if the accident has resulted in bodily injury or death, to a limit, exclusive of interest and cost, of not less than fifteen thousand dollars ($15,000) because of bodily injury to or death of one person in any one accident and, subject to said limit for one person, to a limit of not less than thirty thousand dollars ($30,000) because of bodily injury to or death of two or more persons in any one accident\" (NC Gen Stats, § 20-279.5, subd [c] [emphasis added]), such coverage, of course, being, to track our subdivision 5 of section 672, \"the minimum amount required for such vehicle by the laws of [North Carolina]\". (See, also, NC Gen Stats, § 20-279.20, subd [a], par [2], which mandates that the nonresident's certificate of financial responsibility provided by a carrier state that the policy \"shall be deemed to conform with the laws of this State relating to the terms of motor vehicle liability policies issued herein\".)\nAs a practical matter then, the \"exemption\" of nonresident vehicles by North Carolina, while technically possible, is hardly short of illusory. For, the net result is that, although North Carolina, strictly speaking, does not require nonresidents to carry insurance in the limits prescribed by it ab initio, in the end the nature of its over-all plan is such that any State concerned with shielding its motorists, as New York obviously was when it adopted subdivision 5 of section 672, could hardly have failed to insist on the ultimate security of the North Carolina insurance limits within the out-of-State protection it mandated. It therefore would be unrealistic in the extreme to suppose, as the appellant here would have us do, that our Legislature intended instead to subject the hundreds of thousands of its motor vehicle owners who drive across State lines each year to the other burdens.\nAlso, in light of the overriding purpose of subdivision 5 of section 672, whether the potential liabilities of the appellant stem from the financial security or compulsory insurance 169 sections of North Carolina law or from a combination of both, is, at best, a consideration of form rather than substance. And, as to the appellant's surety clause contention, it seems especially inconsistent with the language of subdivision 5 of section 672 to suggest that our Legislature ever intended to impose ultimate personal liability on New York drivers for the differential between our minimum limits and those of foreign jurisdictions, be it $5,000 or even more.[2]\nNor are we moved to any different determination in this case because, for unexplained reasons, be they intentional or inadvertent in character, the North Carolina Commissioner of Motor Vehicles here did not exercise the right to suspend or fix the amount of security. The obvious answer to this contention is that the risks contemplated by subdivision 5 of section 672 were those envisioned in prospect, not in retrospect.\nAccordingly, the order of the Appellate Division should be affirmed, with costs.\nMEYER, J. (dissenting).\nBecause the majority's holding misconstrues both the New York and the North Carolina statutes, I respectfully dissent.\nSubdivision 5 of section 672 of the Insurance Law requires that \"Every owner's policy of liability insurance issued in satisfaction of articles six or eight of the vehicle and traffic law shall also provide, when a motor vehicle covered by such policy is used or operated in any other state or in any Canadian province, insurance coverage for such motor vehicle at least in the minimum amount required for such vehicle by the laws of such other state or Canadian province.\" In total disregard of the words \"for such * * vehicle\" in that subdivision the Appellate Division majority stated that \"North Carolina at the time of this accident required residents and nonresidents to be insured for an amount not less than $15,000\" (80 AD2d 130, 131; 170 italics supplied) and concluded that North Carolina's law \"imposes a requirement on the nonresident of conforming to the minimum amount of insurance coverage mandated by the laws of North Carolina\" (80 AD2d 130, 134; italics supplied). Not only was that an incorrect application of the New York law but also it misinterprets the North Carolina statutes. The majority in this court, recognizing in part the Appellate Division's error, admits that (p 168) \"North Carolina, strictly speaking, does not require nonresidents to carry insurance in the limits prescribed by it ab initio,\" but concludes that \"the nature of [the] over-all plan is such that * * New York * * * could hardly have failed to insist on the ultimate security of the North Carolina insurance limits\". Thus, though correctly conceiving what the North Carolina statute does, the majority nevertheless sustains the Appellate Division's result, ignoring not only the phrase \"for the vehicle\" in our statute, but the word \"required\" (which relates not to what New York might have required but what North Carolina law required) in that statute as well.\nThe simple facts are that our statute does not say \"in the minimum amount that would be required for such vehicle if it were registered in such other state,\" and that North Carolina has not one but two financial responsibility acts, one (the 1957 act) relating to registration of vehicles and requiring a liability policy with a minimum of $15,000 (NC Gen Stats, § 20-309), and the other (the 1953 act) relating to the license of the operator or owner of a motor vehicle involved in \"a motor vehicle accident within this State which has resulted in bodily injury or death or damage to the property of any one person in excess of two hundred dollars\", but which does not require the filing of security or other proof of financial responsibility until after such an accident (NC Gen Stats, § 20-279.5).[]\nAs the majority's footnote 1 acknowledges, a passenger vehicle registered in New York is not required to be registered in North Carolina (NC Gen Stats, §§ 20-4.8, 20-51, subd [1]), unless its owner takes up permanent or 171 temporary residence in that State extending beyond 30 days (NC Gen Stats, § 20-4.6; see § 20-313). The Padilla vehicle was, however, simply in transit through North Carolina on the way to Florida. Therefore, the $15,000 minimum provided for in the 1957 statute was not \"required for such [Padilla's] vehicle by the laws of\" North Carolina within the meaning of subdivision 5 of section 672 of the Insurance Law.\nThe 1953 statute, on the other hand, while it does not require insurance coverage for any vehicle, does provide for the suspension of a nonresident's privilege of operating a motor vehicle in North Carolina. Suspension can only occur, however, after the nonresident operator has had an accident and has failed to present to the commissioner evidence of a release from liability, a final adjudication of nonliability, or a written agreement for the payment of an agreed amount, or to deposit the amount of security the commissioner deems sufficient to satisfy any and all judgments for damages resulting from the accident (NC Gen Stats, § 20-279.5, subds [a], [b]; see, also, §§ 20-21, 20-22). The suspension provisions of the 1953 act do not apply, however, under the conditions stated in subdivision (c) of section 20-279.5 and section 20-279.6. One such condition is the existence of a liability policy or bond covering the vehicle or its owner or operator \"to a limit, exclusive of interest and cost [sic], of no less than fifteen thousand dollars\" (NC Gen Stats, § 20-279.5, subd [c]). Clearly, therefore, the 1953 act does not, either before or after an accident, require that a nonresident operator driving a vehicle registered in his State of residence, who has not resided in North Carolina for more than 30 days, be insured in any amount. All that it does is excuse such a nonresident driver from the suspension after an accident of his nonresident's privilege of operating a vehicle in North Carolina on a number of bases, one of which is that at the time of the accident he had insurance with a $15,000 minimum. To be noted, furthermore, is the fact that suspension is in any event not immediate or automatic; section 20-279.5 does not authorize suspension until the expiration of 20 days after receipt of a report of the accident or permit a notice of suspension to become effective until not less than 10 days after it is sent to the operator or owner.\n172That the interpretation of the two acts above set forth is that accorded them by the North Carolina Supreme Court is made clear beyond dispute by Faizan v Grain Dealers Mut. Ins. Co. (254 NC 47), cited by the majority. The opinion in that case describes the two acts as follows (254 NC 47, 52-54):\n\"(a). The 1953 Act.\n\"This Act applies to those persons whose driver's licenses have been suspended by reason of violations of motor vehicle statutes, failure to pay and discharge judgments for damages resulting from ownership or operation of motor vehicles, or failure to prove financial responsibility where damages have been occasioned by the ownership or operation of motor vehicles. It is provided that such persons, where they are otherwise entitled to restoration of driver's licenses, must prove financial responsibility before such licenses may be restored. The financial responsibility must then be maintained for two years. One method of proving and maintaining financial responsibility is to obtain automobile liability insurance as defined by, and in compliance with, G.S. 20-279.21.\n * \n\"(b). The 1957 Act.\n\"This Act requires proof of financial responsibility by all motor vehicle owners who apply to the Department for North Carolina registration certificates and plates. Financial responsibility may be shown by procurement of automobile liability insurance. Before a motor vehicle may be registered and registration plates obtained, a certificate of insurance coverage (FS-1) must be delivered by an insurer to the Commissioner.\n * \n\"The 1953 Act applies to a limited class of motorists those whose driver's licenses have been suspended. These motorists must show financial responsibility as a condition precedent to restoration of their driver's licenses. The 1957 Act applies to an unlimited class all motor vehicle owners. Before obtaining periodic registration certificates and plates for vehicles, they must prove financial responsibility. One Act relates to restoration of driver's license, the other to motor vehicle registration.\"\n173Not only is the majority's conclusion inconsistent with the statutes in both States, but also its policy rationale is difficult to understand. North Carolina can, if it sees fit to do so, impose upon the owners or drivers of vehicles registered in other States the obligation of carrying insurance in a stated and reasonable amount as a condition of the use of its highways in order to protect its residents (and itself if they be impecunious) against the expenses and other results of an accident within its borders (see Hess v Pawloski, 274 US 352; Leighton v Roper, 300 N.Y. 434). It has not done so. New York's interests in providing coverage under a policy issued in New York for an accident occurring in another State are (1) to protect the New York owner or New York operator from the criminal responsibility that may result from driving the vehicle in the other State without coverage in the amount required by the laws of that State and (2) as a matter of reciprocity, to protect the State where the accident occurred and the persons injured in that State against expenses and damages resulting from the injury to the same extent that the laws of that State require. A possible secondary purpose may be through the operation of reciprocity to obtain for New York residents injured by an out-of-State vehicle operated in New York the higher limit of coverage required by the other State, although that hardly seems probable because it would be most unusual for a policy issued in a higher limit State to provide that if the vehicle is operated in a lower limit State the coverage of the policy as to an accident there occurring would be reduced to the lower limit. In any event, none of those purposes has any bearing on the facts of this case, at least until an order of suspension of Padilla's nonresident operating privilege has been issued by North Carolina, for until that time Padilla is not required by North Carolina law to have any insurance and cannot be subjected to any criminal responsibility. Neither New York nor North Carolina requires $15,000 coverage for a New York registered vehicle when operated in North Carolina for less than 30 days. Nor is it reasonable to interpret New York's law, which requires only $10,000 coverage for the protection of a New York resident injured in a New York registered vehicle in an accident occurring in New York, as intended 174 to require $15,000 coverage for a New York resident's injuries, simply because the injury to the New York resident in a New York registered vehicle occurred in a State which requires of its own registered vehicle owners but not of out-of-State vehicle owners, coverage of $15,000.\nI would reverse and direct the entry of judgment declaring that the limit of Country-Wide's obligation under the Padilla policy to Nieves Rodriguez is $10,000.\nOrder affirmed.\nNOTES\n[1] This point is based at least in part on the reciprocity inherent in the interplay of section 20-4.8 of the North Carolina General Statutes and subdivision 1 of section 250 of the New York Vehicle and Traffic Law. The North Carolina statute exempts from its registration requirements vehicles properly registered in another jurisdiction so long as the foreign jurisdiction grants like exemptions to vehicles registered in North Carolina. The New York statute does so provide.\n[2] As to the dissenter's hypothetical query as to whether subdivision 5 of section 672 would reduce the coverage to a limit below that fixed by subdivision 2-a of section 167 of the Insurance Law when a New York automobile enters a State with lower limits, suffice it to say that subdivision 5 of section 672 does not so provide. Rather, since it specifies that the coverage shall be \"at least in the minimum amount required [by the] other state\", the New York limits in any event would remain applicable.\n[] Thus, the 1957 act describes the 1953 act as \"relating to proof of financial responsibility required of each operator and each owner of a motor vehicle involved in an accident, and relating to nonpayment of a judgment\" (NC Gen Stats, § 20-314 [italics supplied]).\n\n", "ocr": false, "opinion_id": 2592276 } ]	New York Court of Appeals	New York Court of Appeals	S	New York, NY
1,080,010	null	2000-05-19	false	state-of-tennessee-v-larry-allen-hicks	null	State of Tennessee v. Larry Allen Hicks	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	null	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": 4, "download_url": "http://www.tsc.state.tn.us/sites/default/files/OPINIONS/tcca/PDF/002/HickslaD.pdf", "author_id": null, "opinion_text": " IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE\n AT KNOXVILLE\n\n STATE OF TENNESSEE v. LARRY ALLEN HICKS\n\n Direct Appeal from the Criminal Court for Hamilton County\n No. 221717 Douglas A. Meyer, Judge\n\n\n\n\n No. E199-00957-CCA-R3-CD - Decided\n May 19, 2000\n\n\n\n\nJUDGE TIPTON dissenting.\n\n\n I respectfully dissent from the majority opinion=s holding that the roadblock was lawful\nas it related to the defendant. Because I believe Tennessee limits the authority to conduct driver\nlicense roadblocks to Tennessee Highway Patrol (THP) officers, I would hold that the actions of\nthe municipal police officers by which the defendant was stopped and approached were unlawful\nand that the evidence obtained as a result of the stop should be suppressed.\n\n I agree generally with the majority opinion=s proposition that driver license checkpoints\nare of value to the state. See Cox v. State, 181 S.W.2d 338, 339 (Tenn. 1944); Robertson v.\nState, 198 S.W.2d 633, 635 (Tenn. 1947) (noting that the authority of THP officers to check for\ndriver licenses is due to the fact that their primary duty is to enforce traffic laws and promote the\nsafety of the traveling public). Thus, the constitutional limitations provided in Delaware v.\nProuse, 440 U.S. 648, 99 S. Ct. 1391 (1979) and State v. Downey, 945 S.W.2d 102 (Tenn. 1997)\ncould logically apply to such roadblocks.\n\n However, I believe that our legislature has expressly shown a limited interest in such\nchecks by providing that it is unlawful for any law enforcement officer other than a THP officer\nto demand that a motorist show his or her license in the absence of a violation of the law. The\nstatute upon which the defendant bases his argument that the roadblock was unlawful as applied\nto him is Tenn. Code Ann. ' 55-50-351, which provides, in pertinent part, as follows:\n License to be carried and exhibited on demand B Arrest and penalty for violations.\n B (a) Every licensee shall have such licensee=s operator=s or chauffeur=s license in\n immediate possession at all times when operating a motor vehicle and shall\n display the same, upon demand of a court of general sessions, a peace officer, or a\n field deputy or inspector of the department; provided, that it is unlawful for any\n law enforcement officer of this state, except a state patrol officer or officer of the\n department to demand the exhibition of such licenses, unless the operator of the\n\f motor vehicle is then engaged in, or immediately prior to such demand has been\n engaged in, a violation of any municipal ordinance or statute law of this state.\n Any peace officer, field deputy, or inspector of the department, or any other law\n enforcement officer of this state or municipality thereof, has the right to demand\n the exhibition of the license of any operator of a motor-driven cycle as described\n in ' 55-8-101, and effect the arrest of any persons so found to be in violation of\n this section.\n\n(Emphasis added). The defendant contends that because ' -351 makes it unlawful for any officer\nother than a highway patrol officer to demand a driver license absent a violation, the roadblock\nin the present case was unlawful because he was stopped and his license was demanded by a\nmember of the Red Bank Police Department.\n\n The majority opinion rejects the defendant=s argument, referring to Tenn. Code Ann. '\n55-50-804, which provides as follows:\n\n License or receipt to be in immediate possession and displayed upon demand. B\n The licensee shall have the licensee=s license in immediate possession at all times\n when driving a motor vehicle and shall display it on demand of any officer or\n agent of the department or any police officer of the state, county, or municipality,\n except that where the licensee has previously deposited the license with the\n officer or court demanding bail, and has received a receipt from the officer or the\n court, the same is to serve as a substitute for the license until the specified date for\n court appearance of the licensee or the license is otherwise returned to the\n licensee by the officer or court.\n\nRelying upon State v. James Herbie Hinkle, No. 80-89-III, Davidson County (Tenn. Crim. App.\nDec. 9, 1980), the majority concludes that ' -804 controls to the extent that the two statutes\nconflict. However, by using rules of statutory construction, I believe that the statutes do not\nconflict.\n\n In construing statutes, Awe must presume that the General Assembly knows of its prior\nenactments and knows of the existing state of the law at the time it passes legislation.@ Owens v.\nState, 908 S.W.2d 923, 926 (Tenn. 1995). Accordingly, courts must avoid a construction that\nplaces one statute in conflict with another and Ashould resolve any possible conflict between\nstatutes in favor of each other, whenever possible, so as to provide a harmonious operation of the\nlaws.@ State ex rel. Boone v. Sundquist, 884 S.W.2d 438, 444 (Tenn. 1994).\n The legislature enacted the statutory precursor to ' -351 in 1937. The statute was\namended in 1989 regarding its punishment provision to comply with the Criminal Sentencing\nReform Act of 1989. The statute is located in the Driver Licenses chapter under Part 3, which is\nentitled AApplication, Examination, and Issuance.@ The legislature enacted the statutory\nprecursor to ' -804 in 1971. The statute is located in the Driver Licenses chapter under Part 8\n\n -2-\n\fwhich is entitled ADeposit of License in Lieu of Bail.@ In context, I believe that the legislature\nenacted ' -804 with the understanding that it deals with drivers who have already been stopped\nfor a violation of the law. Applied in such a way, both statutes can be given full effect\nharmoniously and without conflict. In this respect, I believe the legislature has intended for ' -\n351 to remain fully functional.\n\n The majority opinion also relies upon Hinkle for the proposition that local law\nenforcement agencies may assist with roadblocks and act as agents of the THP officers under\ntheir supervision. However, ' -351 unequivocally states that it is unlawful for anyone other than\na THP officer to make such demand when there has been no violation, such as at a roadblock.\nGiven this specific prohibition, I do not believe that the legislature intended for the Tennessee\nHighway Patrol to be able to delegate its authority and thereby expand all police officers=\nauthority that has been so expressly limited. In essence, the majority opinion holds that the\nTennessee Highway Patrol, or even an officer thereof, has the power to make that which is\nunlawful lawful through delegation. I do not believe such authority exists. Moreover, as the\nmajority opinion notes, the Tennessee Highway Patrol has not authorized its officers to delegate\nsuch authority under General Order 410.\n\n In the present case, the record reflects that Red Bank police officers and Chattanooga\npolice officers would stop cars and check driver licenses when the THP officers were otherwise\nengaged with other stopped drivers or other matters. Local police officers stopped and\napproached the defendant. The THP officers did not personally participate in the defendant=s\nstop and subsequent arrest. Under these circumstances, I believe that the stop of the defendant=s\ncar and the demand for his driver license were unlawful.\n\n Although the officers= conduct is made unlawful by statute, suppression of the resulting\nevidence is proper. Statutes relating to or in aid of constitutional provisions, such as the right\nagainst unreasonable searches and seizures, often carry the remedy of suppression of evidence if\nthey are violated. See, e.g., State v. Walker, 12 S.W.3d 460, 467-68 (Tenn. 2000) (holding that\nan arrest in violation of citation statute constitutes a violation of the right against an\nunreasonable search and seizure). Other jurisdictions have similarly held that a violation of a\nstatutory right resulted in the exclusion of the evidence. See United States v. Soto-Soto, 598\nF.2d 545, 550 (9th Cir. 1979) (holding that evidence seized from a search conducted at the border\npatrol by an FBI agent in violation of 19 U.S.C. ' 482, which authorized warrantless border\nsearches only by customs or immigration officers, should be suppressed); State v. Toevs, 964\nP.2d 1007, 1015 (Or. 1998) (holding that evidence obtained in violation of a statute limiting\nofficers= authority to respond to traffic violations should be suppressed); Commonwealth v.\nMeans, 614 A.2d 220, 223 (Penn. 1992) (holding that a search conducted in violation of\nstatutory Aknock and announce@ procedures warranted suppression of the evidence because the\nstatutory procedures implicated the fundamental constitutional concern of the prohibition against\nunreasonable searches and seizures); State v. Rutherford, 707 So. 2d 1129, 1132 (Fla. Dist. Ct.\nApp. 1997) (holding that suppression is proper in cases involving a violation of a statute\n\n -3-\n\fimplementing or expanding a constitutional right); see also 3 W. LaFave, Search and Seizure '\n1.5(b), at 133-34 (3d ed. 1996) (stating that Athe need for the remedy of exclusion can best be\ndetermined by taking into account the significance of the right involved and the degree of\ninfringement. And in assessing the significance of the right, it is certainly appropriate to\nconsider the relationship between the requirement of the relevant rule or statute and the\nprotections of the Fourth Amendment.@).\n\n In considering the foregoing, I would hold that the statutory violation in the\npresent case warrants suppression. Tennessee=s narrow statute authorizing license checks only\nby highway patrol officers in the absence of a violation of the law and declaring any other law\nenforcement officers= stops solely for driver license checks to be unlawful reflects a legislative\nintent that a license check in contravention of the statute is unreasonable in the search and\nseizure context. Therefore, I would affirm the trial court=s suppression of any evidence obtained\nas a result of the stop of the defendant.\n\n\n\n\n -4-\n\f", "ocr": false, "opinion_id": 1080010 } ]	Court of Criminal Appeals of Tennessee	Court of Criminal Appeals of Tennessee	SA	Tennessee, TN
1,105,782	Casanueva	1998-09-16	false	state-v-jm	JM	State v. JM	null	null	null	null	null	null	null	null	null	null	null	null	1	Published	null	null	[ "718 So. 2d 316" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 6847, "opinion_text": "\n718 So. 2d 316 (1998)\nSTATE of Florida, Appellant,\nv.\nJ. M., a child, Appellee.\nNos. 98-00382, 98-00393.\nDistrict Court of Appeal of Florida, Second District.\nSeptember 16, 1998.\n317 Robert A. Butterworth, Attorney General, Tallahassee, and William I. Munsey, Jr., Assistant Attorney General, Tampa, for Appellant.\nJames Marion Moorman, Public Defender, Bartow, and Megan Olson, Assistant Public Defender, Clearwater, for Appellee.\nCASANUEVA, Judge.\nThe State appeals the trial court's dismissal of two petitions alleging J.M. committed delinquent acts. In case number 98-00393, the State alleged J.M. sold a counterfeit drug; in case number 98-00382, the State alleged J.M. committed a battery. Because J.M. was already committed by court order to a level 8 program with the Department of Juvenile Justice, the trial court concluded that further prosecution of J.M. was futile. Accordingly, the trial court dismissed each pre-trial petition. The State contends the trial court exceeded its authority in so doing. We agree and reverse.\nArticle II, section 3, of the Florida Constitution provides that a person belonging to one branch of government shall not \"exercise any powers appertaining to either of the other branches unless expressly provided herein.\" The decision whether to charge and prosecute is an executive branch responsibility. See Burk v. Washington, 713 So. 2d 988, 23 Fla. L. Weekly S314 (Fla. June 12, 1998). The state attorney possesses complete discretion in determining whether to prosecute, which includes the authority to continue to prosecute. See State v. Bloom, 497 So. 2d 2, 3 (Fla.1986). This discretionary authority to prosecute applies equally to juvenile cases. See State v. A.R.S., 684 So. 2d 1383 (Fla. 1st DCA 1996). A judicial limit to this discretion arises where constitutional constraints are implicated. See Wayte v. United States, 470 U.S. 598, 608, 105 S. Ct. 1524, 84 L. Ed. 2d 547 (1985). Here, as no constitutional rights are implicated, the trial court improperly interfered with prosecutorial discretion.\nThe trial court found it had authority to dismiss the petitions under the facts of this case based on section 985.231(1)(f), Florida Statutes (1997). We hold that in this situation it does not.\nThe legislature expressly granted to the court certain powers of disposition in delinquency cases in section 985.231. Subsection (1)(f) of this statute provides the trial court with the dispositional authority to terminate the court's jurisdiction over a child at any time. By clear legislative directive, this authority does not arise until the court is considering \"disposition\" alternatives, in other words, sentencing alternatives. In neither of J. M.'s cases had the trial court yet determined that the child had committed an act of delinquency. Therefore, the trial court's exercise of this power was premature. We do not believe that the legislature sought, by 318 enacting this section, to enable the judiciary to intrude upon the executive branch authority in violation of article II, section 3 of the Florida Constitution.\nWe reverse the dismissal of each petition and remand with instructions to reinstate them.\nBLUE, A.C.J., and FULMER, J., concur.\n", "ocr": false, "opinion_id": 1105782 } ]	District Court of Appeal of Florida	District Court of Appeal of Florida	SA	Florida, FL
341,746	MacKINNON, Robinson, Tamm	1976-11-24	false	major-william-r-perry-v-commanding-officer-headquarters	null	Major William R. Perry v. Commanding Officer, Headquarters	Major William R. PERRY, Appellant, v. COMMANDING OFFICER, HEADQUARTERS Et Al.	David A. Jones, Washington, D.C., was on the brief for appellant., Richard A. Graham, Asst. U. S. Atty., with whom Earl J. Silbert, U. S. Atty., John A. Terry, Michael A. Katz, Royce C. Lam-berth, and David R. Addis, Asst. U. S. Attys., Washington, D.C., were on the brief for appellees.	null	null	null	null	null	null	null	Argued Sept. 4, 1975., As Amended Nov. 24, 1976.	null	null	1	Published	null	<parties id="b742-3"> Major William R. PERRY, Appellant, v. COMMANDING OFFICER, HEADQUARTERS et al. </parties><br><docketnumber id="b742-6"> No. 74-1287. <a class="footnote" href="#fn" id="fn_ref"> * </a> </docketnumber><br><court id="b742-7"> United States Court of Appeals, District of Columbia Circuit. </court><br><otherdate id="b742-9"> Argued Sept. 4, 1975. </otherdate><br><decisiondate id="b742-10"> Decided Oct. 26, 1976. </decisiondate><br><otherdate id="b742-11"> As Amended Nov. 24, 1976. </otherdate><br><attorneys id="b743-10"> <span citation-index="1" class="star-pagination" label="663"> 663 </span> David A. Jones, Washington, D.C., was on the brief for appellant. </attorneys><br><attorneys id="b743-11"> Richard A. Graham, Asst. U. S. Atty., with whom Earl J. Silbert, U. S. Atty., John A. Terry, Michael A. Katz, Royce C. Lam-berth, and David R. Addis, Asst. U. S. Attys., Washington, D.C., were on the brief for appellees. </attorneys><br><judges id="b743-14"> Before TAMM, ROBINSON and MacKINNON, Circuit Judges. </judges><br><judges id="b743-15"> Opinion for the court filed by MacKINNON, Circuit Judge. </judges><div class="footnotes"><div class="footnote" id="fn" label=""> <a class="footnote" href="#fn_ref"> * </a> <p id="b742-13"> Although 73-2136, <em> Fairbank v. Schlesinger </em> and 74-1287, <em> Perry v. Commanding Officer </em> were argued together only 74-1287 is being decided in this opinion since 73-2136 was decided on December 30, 1975. 174 U.S.App.D.C. 359, 533 F.2d 586. </p> </div></div>	[ "547 F.2d 662", "178 U.S. App. D.C. 365" ]	[ { "author_str": "MacKINNON", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/547/547.F2d.662.74-1287.html", "author_id": null, "opinion_text": "547 F.2d 662\n 178 U.S.App.D.C. 365\n Major William R. PERRY, Appellant,v.COMMANDING OFFICER, HEADQUARTERS et al.\n No. 74-1287.\n United States Court of Appeals,District of Columbia Circuit.\n Argued Sept. 4, 1975.Decided Oct. 26, 1976.As Amended Nov. 24, 1976.\n \n David A. Jones, Washington, D.C., was on the brief for appellant.\n Richard A. Graham, Asst. U. S. Atty., with whom Earl J. Silbert, U. S. Atty., John A. Terry, Michael A. Katz, Royce C. Lamberth, and David R. Addis, Asst. U. S. Attys., Washington, D.C., were on the brief for appellees.\n Before TAMM, ROBINSON and Mac- KINNON, Circuit Judges.\n Opinion for the court filed by MacKINNON, Circuit Judge.\n MacKINNON, Circuit Judge:\n \n \n 1\n The appeal of Perry, now a permanent Captain in the Regular Army of the United States, raises questions concerning the reenlistment rights under 10 U.S.C. § 3258 (1970)1 of a former enlisted man in the Regular Army who, in June 1959, was discharged as an enlisted man in order to accept a temporary commission as an officer in the Army Reserve. We decide that Perry's right to reenlist lapsed six months after his Reserve Commission was terminated by his acceptance of a permanent commission in the Regular Army and that he never acquired any similar reenlistment rights stemming from his present status in the Regular Army or from his status in the concurrent temporary grade in the Army of the United States that he has held since he was commissioned in 1959.\n \n I.\n \n 2\n Appellant Perry enlisted in the Regular Army on October 27, 1953, and served in that status until his separation from active duty and transfer to enlisted Reserve status on August 24, 1955. At that time, under the Universal Military Training and Service Act (65 Stat. 75), he was obligated to serve in the United States Army Reserve in an inactive status until the expiration of an eight-year statutory service obligation.\n \n \n 3\n Almost three years after his separation from active duty, on August 4, 1958, appellant reenlisted in the Regular Army for a three-year term. Shortly thereafter he completed Officer Candidate School, and on June 23, 1959, he was discharged from his Regular Army enlisted status2 and commissioned as a Second Lieutenant in the Reserve component of the Army (Appellee App. 14). On June 24, 1959, he began a two-year obligated tour of duty as a Reserve Officer on active duty (Appellee Br. 3).\n \n \n 4\n Concurrently with his appointment as a officer in the Army Reserve appellant was appointed a Second Lieutenant in the Army of the United States (hereafter AUS), without component, (Appellee App. 26). On December 24, 1960, appellant was promoted and appointed to the rank of First Lieutenant (AUS); and on March 4, 1961, he applied for indefinite retention on active duty as an officer in the Army Reserve (id. at 15). This latter request was approved on March 22, 1961.3\n \n \n 5\n On March 22, 1961, appellant applied for appointment as an officer in the Regular Army (Appellee App. 18-24). His application was accepted and on August 15, 1961, he was appointed a Second Lieutenant in the Regular Army (hereafter RA). The order approving his appointment of August 15, 1961, stated:\n \n \n 6\n If you are presently serving on active duty in an Army of the United States status you will continue to so serve without interruption of such appointment unless appointed to a higher grade in the Regular Army.4\n \n \n 7\n (Appellant App. 17) (emphasis added). As to appellant's status after he was commissioned in the Regular Army, the brief for the Army states at p. 4:\n \n \n 8\n He accepted the appointment on September 12, but continued to serve in his \"temporary,\" or Army of the United States (AUS), grade of First Lieutenant as reflected by Item 12 on appellant's Form 66 (App. B at 11). Appellant has served continuously since that time and has risen to the \"temporary,\" or \"AUS,\" grade of major and the \"permanent,\" or \"RA,\" grade of captain.\n \n \n 9\n (Emphasis added). Appellant is thus presently serving as a Captain on a permanent Commission in the Regular Army. Appellant has now twice been passed over for promotion to Major in the Regular Army. Following the second pass over appellant was notified that he would be discharged pursuant to Army Regulation 635-120 (Appellant Br. 9, Appellee Br. 4) within six months after the second pass over, i. e., on or about November 1, 1973.\n \n \n 10\n Appellant promptly applied to reenlist in the Regular Army under the provisions of 10 U.S.C. § 3258 (1970). On August 14, 1973, appellant was notified by order of the Secretary of the Army that:\n \n \n 11\n 1. In order to maintain a balanced career force within the current and future Army structure, and to preclude involuntary separation and promotion inequities within the enlisted grades, it has become necessary to implement more stringent enlistment and grade determination criteria.\n \n \n 12\n 2. Based on the foregoing and an overall evaluation of the applicant's qualifications as related to the current needs of the Army, his enlistment is not favorably considered.\n \n \n 13\n (Appellant App. 16) (emphasis added).\n \n \n 14\n Thereafter appellant exhausted his military administrative review remedies and failing therein, on October 26, 1973, filed the instant suit to compel the Army to accept his enlistment.\n \n \n 15\n As of November 1, 1973, plaintiff had credit for approximately seventeen years active duty service. Under ordinary circumstances he would be qualified for full retirement benefits after twenty years of service, and, had he served eighteen years, he could not be retired involuntarily. 10 U.S.C. § 3913(b) (1970).\n \n \n 16\n On cross-motions for summary judgment, the district court held against the contentions advanced by plaintiff-appellant and stated in an oral opinion:\n \n \n 17\n In making that choice and accepting the benefits of matured tenure and the obvious status that attaches to a Regular Army officer, he took himself out of the statute (§ 3258).\n \n \n 18\n (Appellant App. 22). The stay pending appeal which the district court ordered provides that, while the case is on appeal, plaintiff may continue serving in his present position as a Major in the Regular Army, but that time served beyond November 1973 (the effective date of termination of his active duty under his Regular Army Commission) shall not be considered to be qualifying time for retirement.5 That is, unless plaintiff's contentions are upheld here with respect to section 3258.\n \n \n 19\n Since Perry on June 23, 1959, was discharged from his enlisted status in the Regular Army to accept a temporary Reserve Commission, the reenlistment right to which he claims he is entitled cannot be diminished below that provided in the statute enacted on August 8, 1958 (10 U.S.C. § 3258 (1970), supra note 1).\n \n \n 20\n Some of the significant legislative history of this act, and its prior and subsequent modifications to date, is discussed in our opinion in Fairbank v. Schlesinger, 174 U.S.App.D.C. 359, 364-69, 533 F.2d 586, 591-96 (1975). It need not, therefore, be repeated here in its entirety. However, because appellant relies heavily upon the House Committee report on the 1956 amendments to the Act codifying the Armed Forces Laws as indicating a congressional intent to \"restate existing law, not to make new law,\"6 we set out the Act of July 14, 1939. The 1939 Act provided:\n \n \n 21\n That hereafter any warrant officer or enlisted man of the Regular Army who shall serve on active duty as a Reserve officer of the Army of the United States or who shall be discharged to accept a commission in the Army of the United States and whose active service as a commissioned officer shall terminate honorably, shall be entitled, without regard to any physical disqualification incurred, or having its inception, while on active duty in line of duty, to reappointment as warrant officer or to reenlistment in the grade held prior to such commissioned service, without loss of service or seniority and without regard to whether a vacancy exists in the grade of warrant officer or in the appropriate enlisted grade: Provided, That application for reappointment or reenlistment shall be made within six months after the termination of such commissioned service in each case: Provided further, That warrant officers and enlisted men of the Regular Army shall be entitled to count active commissioned service in the Army of the United States as warrant or enlisted service for all purposes.\n \n \n 22\n Sec. 2. The Act approved March 30, 1918 (40 Stat. 501), is hereby repealed.\n \n \n 23\n (53 Stat. 1001). Relying on this statute, appellant argues that the substantive provisions of the 1939 Act must be included within section 3258.\n \n \n 24\n Appellant claims that he satisfies the requirements of section 3258 by virtue of being a former enlisted member of the Regular Army (1) who has served on active duty as a Reserve Officer of the Army, and (2) who was discharged as an enlisted member to accept a temporary appointment as an officer of the Army of the United States (AUS).\n \n II.\n \n 25\n We are immediately confronted with a question of statutory interpretation: whether Perry has a reenlistment right under the first entitlement clause of the statute. The answer depends upon the interpretation to be given the following provisions of the statute:\n \n \n 26\n Any former enlisted member of the Regular Army who has served on active duty as a Reserve officer of the Army . . . is entitled to be reenlisted in the Regular Army in the enlisted grade that he held before his service as an officer . . . if (1) his service as an officer is terminated by an honorable discharge or he is relieved from active duty for a (proper) purpose . . . and (2) he applies for reenlistment within six months . . . after termination of that service.\n \n \n 27\n 10 U.S.C. § 3258 (1970) (emphasis added). In Fairbank, supra, we held that the intent of this statute required those claiming to be entitled to its benefits to apply for reenlistment within six months after the honorable termination of service under a reserve commission. We were there concerned with whether a Reserve officer was required to exercise his reenlistment right within six months of his first release from active duty. We held that he was not. We thus held that Fairbank had a right to reenlist as an enlisted man following his second tour of duty as a Reserve Officer if he enlisted within six months after his active service was terminated by an honorable discharge or by his being relieved from active duty. Since Fairbank's entire service as an officer was under a commission in the Army Reserve we were not faced with the problem created by Perry's acceptance on September 12, 1961, of a permanent commission as a Second Lieutenant7 in the Regular Army.8\n \n \n 28\n It is not questioned that Perry is a former enlisted man of the Regular Army who served on active duty as a Reserve officer of the Army, and that he generally satisfies the other eligibility provisions of the statute, except possibly the provision which requires him to apply for reenlistment \"within six months . . . after (the) termination of that service.\" (Emphasis added).\n \n \n 29\n What limitations does the phrase \"that service\" impose on Perry's claim to a reenlistment right? In Fairbank we held that the phrase, when its prior wording is considered, \"referred to commissioned status and could not have referred to active duty.\"9 Thus, Perry could qualify if he applied for reenlistment within six months after his service as a commissioned officer in the reserve component is terminated by an honorable discharge or if he applied within a like period after \"he is relieved from active duty\" under such commission. From the entire context of the statute and its legislative history we interpret this provision to require formal application for reenlistment to be within six months after he is honorably discharged, or after he is relieved from active duty, from his service as a reserve officer. The entire thrust of the portion of the statute we are now interpreting is to grant reenlistment rights to former enlisted men who serve as officers on active duty in Reserve components. It is the termination of such service as a Reserve officer that triggers the running of the six month period and such termination may occur through an \"honorable discharge\" or by the officer being \"relieved from active duty\" in the Reserve component.\n \n \n 30\n Perry argues that he has never received a formal discharge of any kind from his reserve commission and the record does not indicate that he has been formally ordered \"relieved from active duty\" service in his Regular Army and AUS commissions.10 From this factual premise he further contends that the six month period within which he is required to apply for reenlistment never began to run because his service as a reserve officer was not terminated by an honorable discharge or in fact by any discharge. An honorable discharge, however, is not the only means of terminating a reserve officer's service so as to trigger the statutory six month period. Equally operative to accomplish this objective under the present wording of the statute is relief from active duty for a proper reason. Here Perry was, to all intents and purposes, relieved from active duty service under his Reserve commission on the date his permanent Regular Army commission became effective, i.e., on September 12, 1961. (See note 2, supra ).\n \n \n 31\n To argue, as Perry does, that his Reserve commission continues to this date, notwithstanding his acceptance of a permanent Regular Army commission, is to ignore the realities of his status. Service in a reserve component as a temporary officer and simultaneous service as a permanent officer in a Regular Army component at the same time are inconsistent. Even if one could retain a commission in the Army Reserve while also serving on active duty in a Regular Army component under a Regular Army commission he would not be serving on active duty under his Reserve commission at the same time he was serving on active duty under his Regular commission.\n \n \n 32\n Thus, to argue that an honorable discharge certificate from his Reserve commission may still be issued at some far later date and thus give a much belated start to a reenlistment period is to contend for a construction of the statute that would be contrary to the intent of the Act. When Perry began serving on active duty as a Regular Army officer in a Regular Army component for all practical purposes his service as a Reserve officer in a Reserve component was terminated and the issuance of an honorable discharge certificate was not necessary to confirm that fact. When his status changed from a Reserve officer on temporary active duty, who was to be \"retained on active duty until further notice,\"11 to that of a permanent Regular Army officer, he no longer was serving on temporary duty, nor was he a temporary officer.12 In any event he was on the date of his Regular Army commission, September 12, 1961, effectively \"relieved from active duty\" as an officer in his Reserve component and that likewise triggered the running of the six month application period.\n \n \n 33\n For these reasons, Perry is not entitled presently to exercise any reenlistment rights based on the termination of his service as a Reserve officer, because the ensuing statutory six month period within which he was required to apply for reenlistment has long since expired.\n \n III.\n \n 34\n Appellant's second point is that \"the statute must be construed to include the substantive provisions of previous legislation, including the acts of March 30, 1918, and July 14, 1939.\" Appellant Br. 21.\n \n The 1918 act provided:\n \n 35\n That any enlisted man of the Army of the United States who has heretofore been, or shall hereafter be, discharged to accept a commission in any component part of the Army of the United States, and who shall tender himself for enlistment within three months after the termination of his commissioned service, shall, subject to such examination for enlistment as is provided by law or regulation, be accepted and be restored to the grade held by him before being discharged to accept such commission; and in computing service for retirement and continuous-service pay he shall be credited with all time served with the forces of the United States, and his service shall be deemed continuous, notwithstanding the interruption thereof by the changes of status provided for herein.\n \n \n 36\n Act of March 30, 1918, ch. 37, 40 Stat. 501. (emphasis added).\n \n \n 37\n However, arguing against the proposition that the existing statute must be construed to include all the substantive provisions of this 1918 act is the fact that the earlier statute was expressly repealed by the 1939 act. Act of July 14, 1939, ch. 267, § 2, 53 Stat. 1001. The specific language which repealed the 1918 act stated \"The act approved March 30, 1918 (40 Stat. 501), is hereby repealed.\" Act of July 14, 1939, ch. 267, 53 Stat. 1001.\n \n \n 38\n This removed the possibility that appellant could base any reenlistment right upon the specific provisions of the act of 1918. Congress, however, did replace the former act with a statute designed to accomplish the same general objective and in many respects carried forward the same general intent. The new statute provided:\n \n \n 39\n That hereafter any . . . enlisted man of the Regular Army who shall serve on active duty as a Reserve Officer of the Army of the United States . . . and whose active service as a commissioned officer shall terminate honorably shall be entitled . . . to reenlistment in the grade held prior to such commissioned service, without loss of service or seniority and without regard to whether a vacancy exists in the grade of warrant officer or in the appropriate enlisted grade: Provided, That application for . . . reenlistment shall be made within six months after the termination of such commissioned service. . . .\"\n \n \n 40\n (53 Stat. 1001) (emphasis added).\n \n \n 41\n Assuming, in line with Perry's contention, however, that the 1918 statute is still applicable, we find that appellant does not comply therewith because he cannot satisfy the requirement that he \"tender himself for reenlistment within three (now six) months after the termination of his commissioned service.\" The \"commissioned service\" there referred to is that which came into existence when he was \"discharged to accept a commission,\" i.e., his service in a Reserve component under his commission in the Army Reserve. Clearly Perry cannot apply for reenlistment within three months after the termination of that commissioned service since that period began to run on September 12, 1961. For the same reason, he is unable to comply with the present statute and make \"application for reenlistment . . . within six months after the termination of (his) . . . commissioned service . . . .\" The termination of his commissioned service \"on active duty as a Reserve Officer of the Army of the United States\" occurred no later than September 12, 1961 when his appointment as a Second Lieutenant in the Regular Army became effective and he began serving on active duty in a Regular Army component.\n \n IV.\n \n 42\n In addition to the foregoing claims, appellant points out that when he was discharged as an enlisted man in order to be commissioned as a Second Lieutenant in the Reserve he also received a temporary grade as a Second Lieutenant in the Army of the United States (AUS) and that to this very date he has continued to serve in temporary AUS grades up to his present rank of Major. From these facts he contends that when his service terminates with his Regular Army component, and he is discharged as a Regular Army officer, his service as a temporary officer with the rank of Major \"in the Army of the United States\" will also terminate and he will then be entitled under the statute to apply for reenlistment under section 3258. The controlling language of the 1939 Act, upon which Perry bases this contention, provided:\n \n \n 43\n That hereafter any . . . enlisted man of the Regular Army . . . who shall be discharged to accept a commission in the Army of the United States . . . shall be entitled . . . to reenlistment in grade held prior to such commissioned service . . . Provided, That application for . . . reenlistment shall be made within six months after the termination of such commissioned service . . ..13\n \n \n 44\n (53 Stat. 1001). Perry's rights under this contention are to be gleaned from the specific statutory provisions, the entire legislative history of section 3258, the various changes that have been made in its provisions, and from the statements in committee reports and by Congressmen sponsoring the legislation.\n \n \n 45\n As early as the Act of March 30, 1918, it was made clear that the Act was intended to benefit those former enlisted men who subsequently served under a \"temporary commission\"14 and who had been \"discharged to accept a commission in any component part of the Army of the United States . . ..\"15 While subsequent amendments have removed the word \"component\" from its provisions, the idea that is embodied thereby has remained central to the true intent of the Act. Of course, since September 12, 1961, Perry has been serving under a permanent commission in a Regular Army component and not under a \"temporary commission.\" Even assuming that the reference to the \"commission in any component part of the Army of the United States\" applied to AUS commissions, Perry's temporary AUS grade is not \"a commission in (a) component part of the Army of the United States.\" The Department of Army Military Administrative Law Handbook, No. 27-21 (October 1973) states:\n \n \n 46\n In time of war or national emergency declared by the President, a Regular officer or Reserve warrant officer may be appointed to a higher temporary grade (§ 3.5(b)(2)).16\n \n \n 47\n Members of the Regular Army or Reserve may be members of the Army of the United States without component at the same time (§ 3.5(a)) (emphasis added).17\n \n \n 48\n Temporary appointments of commissioned and warrant officers are made only in the Army of the United States without component (§ 3.5(b)).18\n \n \n 49\n What happened to Perry here is that when he was discharged to accept his Reserve commission he was appointed to serve in the Reserve component of the Army, and the simultaneous AUS grade that he received was a (t)emporary appointment() . . . in the Army of the United States\" without component.19 Thus, not only was Perry not discharged to accept a commission in the Army of the United States (AUS) but his AUS grade was never \"in any component part of the Army of the United States.\" In short, Perry's various AUS grades, as with other Reserve and Regular Army officers, were mere auxiliary devices that were used as the vehicle to promote those serving on active duty in Reserve components or Regular Army components. As such, Perry's various AUS grades, down to the present time, do not meet the standard of a \"commission in (a) component part of the Army of the United States.\"\n \n \n 50\n It therefore follows that the future termination of Perry's AUS grade, concurrently with his honorable discharge from his service as an officer in the Regular Army component, will not qualify him to reenlist in his prior enlisted grade. This distinction between temporary appointments without component and permanent appointments in the Army with component was spelled out in a committee report of the House of Representatives in 1941 when the Congress was considering such matters:\n \n \n 51\n The War Department, in submitting this measure for the consideration of Congress, pointed out that existing provisions of law authorize temporary appointments in the Army of the United States as distinguished from appointments in the components of such Army in time of war and that the enactment of this joint resolution would merely extend such authority to include the present emergency. It appears that this authority is necessary to enable the War Department to carry out sound personnel policies which dictate that the officer personnel of the Regular Army, the National Guard, and the Officers' Reserve Corps be considered at all times as separate continuing bodies of officers; that each be maintained at a permanent strength limited to the Army's needs and normal capacity to adequately train during normal times of peace; that during a time of war or national emergency the officers of these separate groups be merged into one group comprising the Officers' Corps of the Army of the United States; that this corps be then reinforced by the temporary appointment of certain specialists whose service, though highly desired in connection with particular projects during a time of war or emergency do not possess the military knowledge and general qualifications which would justify their retention in a component of the Army of the United States after the emergency has terminated, and that this composite group also be expanded by the temporary appointment of officers in the Army of the United States so as to provide the great number of officers necessary for an expanded Army without overextending the normally organized Officers' Corps of the Regular Army, the National Guard, or the Officers' Reserve Corps.\n \n \n 52\n H.R.Rep.No.954, 77th Cong., 1st Sess. 1-2 (1941) (emphasis added). From the foregoing, it is plain that an officer in the Regular Army serving on active duty, who also has a temporary grade in the Army of the United States (AUS), is not a temporary officer. He is a permanent officer who has a permanent grade and a temporary (AUS) grade.20\n \n \n 53\n The concept of \"temporary grade\" in the Army of the United States is an artificial vehicle created as part of an accelerated promotion system. Although the system uses the Army of the United States or \"AUS\" grade as the vehicle for effecting the promotions, one holding a temporary grade in the Army of the United States is not thereby a temporary officer whose appointment is authorized by 10 U.S.C. § 3445 (1970). He is a permanent Regular or Reserve officer with a temporary grade higher than his permanent regular grade.\n \n \n 54\n Perry is, thus, not a temporary officer and will not be entitled to any reenlistment rights when his temporary AUS grade is terminated concurrently with the termination of his service as an officer in the Regular Army.\n \n V.\n \n 55\n Perry also contends that he will satisfy the honorable discharge requirements of the statute when he receives his honorable discharge from his Regular Army commission pursuant to AR 635-120(11-1) (1968) (Appellant App. at 15).21 However, AR 635-120 applies only to \"Regular Army officer(s)\" and the honorable discharge of Perry from his permanent Regular Army commission issued pursuant to this regulation would not constitute an honorable discharge that will trigger a reenlistment right under section 3258. What that statute envisions is an honorable discharge from his Reserve commission or his relief from temporary active duty in a Reserve component. See text supra at p. 667.\n \n \n 56\n All the reenlistment rights guaranteed by section 3258 refer to temporary reserve officers and their service on temporary active duty status with Reserve components and not to officers of the Regular Army with permanent commissions whose active duty service is with Regular Army components. Perry was effectively relieved from all vestiges of active duty as a Reserve officer on temporary active duty with a Reserve component when his Regular Army commission became permanent if not three years prior thereto when he first began serving as a Regular Army officer on active duty with a Regular Army component. Therefore, Perry's honorable discharge from his service on active duty under his permanent commission in the Regular Army will not constitute the \"termination of . . . service\" or the \"honorable discharge\" contemplated by the statute to trigger the beginning of the reenlistment period.\n \n VI.\n \n 57\n For the foregoing reasons we find that Perry does not qualify for reenlistment under the language of the statute. The statute grants reenlistment rights to former enlisted men on the termination of their service as officers on temporary active duty with Reserve components but denies the same reenlistment rights to former enlisted men who accept Reserve commissions and subsequently are commissioned as officers in the Regular Army even though the latter may be the better qualified men. In doing so, the statute distinguishes between temporary service with Reserve components and permanent service with Regular Army components.\n \n \n 58\n As the facts of this case illustrate, however, the actual distinction insofar as temporary service is concerned is very small between a former enlisted man serving as a Reserve officer on temporary active duty and a former enlisted man serving on active duty during a wartime emergency as a Regular Army officer, subject to being passed over when the emergency abates. That it was the cessation of the extreme emergency in Vietnam that caused the Army to refuse to accept Perry's reenlistment application is apparent from the wording of the Order of August 14, 1973, that he received from the Secretary of the Army. See text at p. 665 supra. This Order admitted that the Army changed to \"more stringent enlistment and grade determination criteria\" than it had previously applied. Former enlisted men who had been commissioned as Regular Army officers bore the brunt of this change in policy. One could hardly blame a former enlisted man who had been commissioned as an officer in the Regular Army, had faced enemy fire, and had been decorated for valor,22 for believing that the Army would continue its former \"enlistment and grade determination criteria\" and act as favorably on his application for enlistment as it had formerly and as it did under the statute for Reserve officers. However, unless the Army changes its present policy, congressional action is necessary if Perry and the others in the same situation are to be permitted to complete the short service necessary to qualify for the twenty-year retirement rights they seek. This could be accomplished in Perry's case by giving him credit for the time that he has served beyond November 1973 under the stays issued by the courts.\n \n \n 59\n The order of the District Court is affirmed.\n \n \n 60\n Judgment accordingly.\n \n \n \n \n Although 73-2136, Fairbank v. Schlesinger and 74-1287, Perry v. Commanding Officer were argued together only 74-1287 is being decided in this opinion since 73-2136 was decided on December 30, 1975. 174 U.S.App.D.C. 359, 533 F.2d 586\n \n \n 1\n 10 U.S.C. § 3258 (1970) provides:\n Any former enlisted member of the Regular Army who has served on active duty as a Reserve officer of the Army, or who was discharged as an enlisted member to accept a temporary appointment as an officer of the Army, is entitled to be reenlisted in the Regular Army in the enlisted grade that he held before his service as an officer, without loss of seniority or credit for service, regardless of the existence of a vacancy in his grade or of a physical disability incurred or having its inception in line of duty, if (1) his service as an officer is terminated by an honorable discharge or he is relieved from active duty for a purpose other than to await appellate review of a sentence that includes dismissal or dishonorable discharge, and (2) he applies for reenlistment within six months (or such other period as the Secretary of the Army prescribes for exceptional circumstances) after termination of that service. However, if his service as an officer terminated by a general discharge, he may, under regulations to be prescribed by the Secretary of the Army, be so reenlisted. Aug. 10, 1956, ch. 1041, 70A Stat. 179; Aug. 8, 1958, Pub.L. 85-603, § 1(1), 72 Stat. 526.\n \n \n 2\n History of Perry's Army service:\n \n \n 12\n \n APPOINTMENTS DATE OF\n-----------------------------------------------------------\n Grade Type Appointment Eligibility Rank\n-----------------------------------------------------------\n 2LT USAR 24 Jun 59 24 Jun 59\n 2LT AUS 24 Jun 59 24 Jun 59\n 1LT AUS 24 Dec 60 24 Dec 60\n 2LT RA 12 Sep 61 12 Sep 61\n 1LT RA 24 Jun 62 24 Jun 62\n CPT AUS 24 Jun 63 24 Jun 63\n CPT RA 24 Jun 66 24 Jun 66\n MAJ AUS 26 Jul 67 26 Jul 67\n-----------------------------------------------------------\n(Appellant App. 11).\n USAR AUS Regular Army\n ---- --- ------------\nEnlisted Oct. 27, 1953\nReleased from\nactive duty a Aug. 24, 1955\nReenlisted b\nCodification\nAug. 10, 1956 Aug. 4, 1958\nDischarged to\naccept Reserve\nCommission June 23, 1959\nCommissioned as\n2nd Lt. c June 24, 1959 June 24, 1959 Sept. 12, 1961 d\nPromoted to\n1st Lt. Dec. 24, 1960 June 24, 1962\nPromoted to\nCaptain June 24, 1963 June 24, 1966\nPromoted to\nMajor July 26, 1967 (e)\na And transferred to Reserve Status until expiration of eight-year\n obligation (65 Stat. 75) (Appellee App. 6).\nb For a three-year term (Appellee App. 7-8).\nc For two-year obligated tour of duty as a Reserve Officer (Appellee App.\n 12, 15).\nd The appointment was dated 15 August 1961 (Appellant App. 17). Prior to\n this appointment Perry on 4 March 1961 had applied for retention for an\n indefinite period (Appellee App. 15)--accepted 22 March 1961 (Appellee App.\n 17). Both the application and the acceptance specifically referred to the\n lack of permanence in active service.\ne Perry was passed over two times for promotion to Major, Regular Army. It\n was the second pass over that triggered his notification of his impending\n discharge under AR 635-120 (1968) (Appellant Br. 9, Appellee Br. 4).\n \n \n 3\n 1. Your request for retention on active duty under the provisions of AR 135-215 is approved effective 24 June 1961. You will be retained on active duty until further notice\n \n \n 2\n You are advised that, under current regulations, you may be released from active duty for any one of the following reasons:\n a. Voluntary request in accordance with applicable regulations.\n b. Forced reduction in Army strength (accomplished by Department of the Army board action only).\n c. Promotion passover as prescribed in applicable regulations.\n d. Failure to meet acceptable standards of efficiency or conduct or failure to meet standards prescribed for probationary officers.\n e. Completion of the maximum Reserve commissioned service or attainment of the maximum age, whichever occurs first, as prescribed in Sections V and VI, AR 135-173.\n f. Attainment of eligibility for retirement under the provisions of paragraph 6a(1), AR 635-130 (completion of 20 years active Federal service, 10 of which was commissioned). Reasons for retention beyond attainment of retirement eligibility will be governed by the provisions of AR 135-215.\n (Appellee App. 17).\n \n \n 4\n 10 U.S.C. § 3442(c) (1970) provides:\n (c) Subject to subsections (a) and (b), a regular commissioned officer, or a reserve commissioned officer who is serving on active duty, may be appointed in a temporary grade that is equal to or higher than his regular or reserve grade, without vacating any other grade held by him. Under regulations to be prescribed by the Secretary, appointments made under this subsection shall be made on a fair and equitable basis. Selections shall be based upon ability and efficiency with regard being given to seniority and age. Aug. 10, 1956, ch. 1041, 70A Stat. 195.\n The Order also stated:\n The three year probationary period prescribed by title 10, United States Code, section 3814, commences with the consummation of this appointment. You should therefore familiarize yourself with the provisions of AR 635-105A, at your earliest convenience.\n 10 U.S.C. § 3814 (1970) provides:\n The Secretary of the Army may discharge a regular commissioned officer who has less than three years of continuous service as a commissioned officer therein. However, such an officer may not be discharged because of his marriage, unless the marriage occurred within one year after the date of his original appointment. Aug. 10, 1956, ch. 1041, 70A Stat. 200.\n \n \n 5\n FURTHER ORDERED that defendants shall retain the plaintiff on active duty as an officer of the United States Army for (a) a period of thirty (30) days from the date hereof, or (b) until such time as plaintiff shall file a notice of appeal of the judgment of this Court as aforesaid and move for a further stay in the Court of Appeals, whichever shall first occur\n Order of January 15, 1974 (Appellant App. 26).\n A similar stay was issued by the Court of Appeals on March 8, 1974, to continue until further order of the Court.\n \n \n 6\n The object of the new titles has been to restate existing law, not to make new law. Consistently with the general plan of the United States Code, the pertinent provisions of law have been freely recorded and rearranged, subject to every precaution against disturbing existing rights, privileges, duties, or functions\n H.R.Rep.No.970, 84th Cong., 1st Sess. 8 (1955) (emphasis added).\n \n \n 7\n Note 2 indicates Perry subsequently was promoted to 1st Lieutenant on June 24, 1962 and to Captain on June 24, 1966. See note 2 supra\n \n \n 8\n While the permanency of this commission might be challenged when it was issued on September 12, 1961, because it was subject to the three year probationary period prescribed by 10 U.S.C. § 3814, supra note 4, that period was successfully served and Perry's commission in the Regular Army for all purposes became as permanent as any other Regular Army commission on September 12, 1964\n \n \n 9\n Fairbank v. Schlesinger, supra, 174 U.S.App.D.C. at 373, 533 F.2d at 600\n \n \n 10\n As a practical matter, on September 12, 1964, when Perry successfully completed his three year probationary period under his Regular Army commission all vestiges of service under his Reserve commission were terminated, if not three years earlier. If we assume that his Reserve commission retained some vitality for section 3258 purposes until September 12, 1964, it was then that the six month period began within which he was required to reenlist or forfeit such right; or he was eligible to apply for reenlistment on September 12, 1961, at the earliest\n \n \n 11\n See note 3 supra\n \n \n 12\n The Senate Report on 10 U.S.C. § 3075 states:\n The statutory nature of a Regular commission is significant. After an officer has been placed on the Regular list, existing law provides no means for removing that officer except for cause, promotion passover, or retirement.\n S.Rep.No.2420, 84th Cong., 2d Sess. 3 (1956).\n \n \n 13\n We use the phraseology from the Act of July 14, 1939, as that language is the most favorable to Perry's contention\n \n \n 14\n Mr. Speaker, at the last session of Congress a bill was passed which provided that an enlisted man in the Regular Army who accepted a commission in the National Guard could be reenlisted or restored to his position as an enlisted man after his temporary commission expired. This bill is intended to extend the provisions of that act so as to include any enlisted man who may take a commission in the National Army. There are men who have served for many years in the Army and have noncommissioned positions now such as sergeants and corporals. They do not wish to take a commission in any branch of the service if their length of service as an enlisted man in the Army should be impaired thereby\n \n \n 56\n Cong.Rec. 2874 (1918) (Remarks of Representative S. Hubert Dent, Jr., Chairman of the House Committee on Military Affairs) (emphasis added)\n \n \n 15\n Act of March 30, 1918, ch. 37, 40 Stat. 501\n \n \n 16\n (a) In time of emergency declared by Congress or the President, and in time of war, the President may appoint any qualified person, including a person who is not a Regular or Reserve, in any temporary commissioned grade\n 10 U.S.C. § 3444(a) (1970).\n \n \n 17\n (c) Subject to subsections (a) and (b), a regular commissioned officer, or a reserve commissioned officer who is serving on active duty, may be appointed in a temporary grade that is equal to or higher than his regular or reserve grade, without vacating any other grade held by him\n 10 U.S.C. § 3442(c) (1970).\n \n \n 18\n Temporary appointments may be made only in the Army without specification of component. (Aug. 10, 1956, c. 1041, § 1, 70A Stat. 195)\n 10 U.S.C. § 3441 (1970) (emphasis added).\n \n \n 19\n 10 U.S.C. § 3441 (1970)\n \n \n 20\n His AUS grade generally exceeds his Regular Army grade\n \n \n 21\n AR-635-120 (1968) provides:\n 11-1. General. a. A Regular Army officer who has twice failed to be selected for promotion to the Regular Army grade of captain, major, or lieutenant colonel or, in the case of a warrant officer, to the next higher permanent warrant officer grade, will be honorably discharged, with severance pay, if he is not eligible for retirement or is not within 2 years of qualifying for retirement on the date his discharge is required by paragraph 11-2.\n (Appellant App. 15).\n \n \n 22\n Bronze Star with \"V\" device, earned in Vietnam. (Appellant App. 12)\n \n \n ", "ocr": false, "opinion_id": 341746 } ]	D.C. Circuit	Court of Appeals for the D.C. Circuit	F	USA, Federal
2,599,008	Adams, Bell, Buettner	2009-08-13	false	pales-v-cherokee-nation-enterprises	Pales	Pales v. Cherokee Nation Enterprises	Frankie R. PALES, Petitioner, v. CHEROKEE NATION ENTERPRISES, Hudson Insurance Company, and the Oklahoma Workers’ Compensation Court, Respondents	J. Stephen McClellan, Tulsa, OK, for Petitioner., Jay L. Jones, Walls, Walker, Harris & Wolfe, PLLC, Oklahoma City, OK, for Respondents Cherokee Nation Enterprises and Hudson Insurance Company.	null	null	null	null	null	null	null	null	null	null	3	Published	null	<citation id="b335-10"> 2009 OK CIV APP 65 </citation><parties id="A4-"> Frankie R. PALES, Petitioner, v. CHEROKEE NATION ENTERPRISES, Hudson Insurance Company, and The Oklahoma Workers’ Compensation Court, Respondents. </parties><br><docketnumber id="b335-13"> No. 106608. </docketnumber><br><court id="b335-15"> Court of Civil Appeals of Oklahoma, Division No. 1. </court><br><decisiondate id="b335-16"> July 1, 2009. </decisiondate><br><attorneys id="b335-29"> J. Stephen McClellan, Tulsa, OK, for Petitioner. </attorneys><br><attorneys id="b335-30"> Jay L. Jones, Walls, Walker, Harris & Wolfe, PLLC, Oklahoma City, OK, for Respondents Cherokee Nation Enterprises and Hudson Insurance Company. </attorneys>	[ "2009 OK CIV APP 65", "216 P.3d 309" ]	[ { "author_str": "Buettner", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n2009 OK CIV APP 65\nFRANKIE R. PALES, Petitioner,\nv.\nCHEROKEE NATION ENTERPRISES, HUDSON INSURANCE COMPANY, and THE OKLAHOMA WORKERS' COMPENSATION COURT, Respondents.\nCase Number: 106608\nCourt of Civil Appeals of Oklahoma, Division 1\nDecided: July 1, 2009\nMandate Issued: August 13, 2009\nJ. Stephen McClellan, Tulsa, Oklahoma, for Petitioner,\nJay L. Jones, WALLS, WALKER, HARRIS & WOLFE, PLLC, Oklahoma City, Oklahoma, for Respondents Cherokee Nation Enterprises and Hudson Insurance Company.\nKenneth L. Buettner, Judge:\n¶ 1 Petitioner Frankie R. Pales seeks review of an order of the Workers' Compensation Court which dismissed Pales's claim for compensation based on lack of jurisdiction. The trial court held that Respondent Cherokee Nation Enterprises (Employer) is an entity of the sovereign Cherokee Nation which has enacted its own workers' compensation laws, and that Respondent Hudson Insurance Company had issued a policy of workers' compensation insurance pursuant to tribal law. The trial court found Employer was entitled to immunity as a sovereign tribe with its own workers' compensation protections and therefore dismissed Pales's claim. We sustain.\n¶ 2 Pales filed her Form 3 June 5, 2008, in which she sought compensation for an injury occurring April 12, 2008. Employer filed its Form 10 June 12, 2008, in which it denied Pales was covered by the Oklahoma Workers' Compensation Act and asserted tribal sovereign immunity. Respondent filed a Form 13 Motion to Dismiss the same day.\n¶ 3 Hearing on Employer's Motion to Dismiss was held November 12, 2008, and the trial court entered its Order Dismissing Claim November 19, 2008. In dismissing the claim, the court found: 1) the Cherokee Nation is a federally-recognized tribe; 2) Employer is a wholly-owned entity of the Cherokee Nation; 3) the Cherokee Nation had enacted its own workers' compensation laws; 4) the Cherokee Nation had not expressly waived its sovereign immunity in workers' compensation matters; 5) nor had the U.S. Congress waived the Cherokee Nation's immunity in such cases; and 6) Employer's workers' compensation insurance policy was issued pursuant to Cherokee Nation tribal law and not pursuant to the Oklahoma Workers' Compensation Act, and therefore the estoppel provisions of the Act were not applicable.\n¶ 4 Pales contends the trial court erred in finding Employer was entitled to tribal sovereign immunity and was not estopped from denying coverage. The existence of subject matter jurisdiction is a question of law and we therefore review the trial court's order de novo. Hall v. Cherokee Nation, 2007 OK CIV APP 49, ¶10, 162 P.3d 979.\n¶ 5 The first five of the trial court's findings were made by stipulation of the parties. The parties stipulated that Employer had not waived its tribal sovereign immunity; nevertheless, Pales notes that in some cases a tribal employer may be subject to the jurisdiction of the Workers' Compensation Court pursuant to the estoppel provisions of the Oklahoma Workers' Compensation Act.[1]Wahpepah v. Kickapoo Tribe of Oklahoma, 1997 OK 63, ¶5, 939 P.2d 1151. The issue therefore is whether Employer's insurance policy caused Employer to be subject to the Act in this case.\n¶ 6 Initially, we must determine whether the insurance policy at issue provides for the payment of compensation pursuant to the Oklahoma Workers' Compensation Act. Hall, supra, at ¶15. If so, then Pales has the burden of proving three elements to come within the estoppel provisions of the Act: (1) she sustained an injury while Employer maintained a compensation liability policy; (2) Employer made premium payments based on Pales's salary; and (3) Pales's injury arose out of and in the course of her employment. Id., citing Dominic v. Creek Nation, State Ins. Fund, 1997 OK 41, ¶ 9, 936 P.2d 935, 938.\n¶ 7 Employer contended at the hearing that its policy did not subject it to the Workers' Compensation Act, relying on Hall, supra. Pales countered that certain language in the policy referred to state workers' compensation benefits and therefore subjected Employer to the court's jurisdiction under the reasoning of Squirrel v. Bordertown Bingo, 2005 OK CIV APP 95, 125 P.3d 680. In Squirrel, this court explained that whether a workers' compensation policy was issued \"for the purpose of insuring an employer against liability under the (Oklahoma) Worker's Compensation Act\" depends on the provisions of the contract. Id. at ¶10. In Squirrel, the appellate court relied on the facts that the policy defined \"workers' compensation\" as \"the workers' . . . compensation benefits of the state . . . named . . .,\" and specifically referred to Oklahoma's statutory benefits to find that the policy indicated it was issued to insure the employer under Oklahoma's state worker's compensation law, as well as the tribe's. Id. at ¶¶11-14. In Hall, the appellate court reached the opposite result, based on policy language which deliberately avoided any reference to Oklahoma workers' compensation law. 162 P.3d at 983. The court held that the policy language was unambiguous and did not indicate it was issued to cover the employer under Oklahoma law. Id. The policy provision which Pales cited to support her argument at trial is similar to the language in Hall.[2] We find the policy language in this case also shows expressly and unambiguously that it was not issued to cover Employer under Oklahoma law. We disagree with Pales's contention that the reference to \"a state\" in the quoted provision is sufficient to create an ambiguity such that the estoppel provision applies.\n¶ 8 Even if we were to find an ambiguity and use the reasonable expectation test used in Squirrel, it is clear that the insured's reasonable expectation of this policy was that it was not issued under the Oklahoma Workers' Compensation Act specifically to insure the application of the sovereign immunity defense.\n¶ 9 The parties also stipulated that Pales is not a tribal member. Pales argues that this case should be remanded to the trial court for reconsideration in light of the recent Oklahoma Supreme Court decision in Cossey v. Cherokee Nation Enterprises, LLC, 2009 OK 6, __ P.3d __.[3]Cossey involved a tort claim by an injured tribal casino patron. The non-tribal member patron sued the tribe in state court under the Oklahoma Indian Gaming Compact. The Oklahoma Supreme Court held that the state court was a court of competent jurisdiction for tort claims under the Compact. Cossey addresses the waiver of sovereign immunity under a specific provision of the gaming compact, which does not reference workers' compensation law. We are not persuaded that the analysis in Cossey changes Oklahoma precedent on sovereign immunity for workers' compensation cases.\n¶ 10 On de novo review, we find that the policy in this case does not show it was issued to cover Employer under the Oklahoma Workers' Compensation Act. And, the tribe has not waived its sovereign immunity for workers' compensation matters. Accordingly, the trial court's order dismissing Pales's claim is SUSTAINED.\nBELL, P.J., concurs in result, and ADAMS, J., concurs.\nNOTES\n[1] The Workers' Compensation Act provides that an employer is estopped from denying coverage for employees for whom the employer has paid workers' compensation insurance premiums. 85 O.S.2001 §65.2. That section provides:\n\n§ 65.2. Estoppel of employer and insurance carrier\nEvery employer and every insurance carrier who schedules any employee as a person employed by the employer for the purpose of paying or collecting insurance premiums on a Workmen's Compensation insurance policy or who pays, receives or collects any premiums upon any insurance policy covering the liability of such employer under the Workmen's Compensation Law by reason of or upon the basis of the employment of any such employee shall be estopped to deny that such employee was employed by the employer in a hazardous employment subject to and covered by the Workmen's Compensation Law if such person receives an accidental personal injury arising out of and in the course of his employment, during the period for which such premium was so received, regardless of the type of business in which the employer was engaged or the type of employment in which the employee was engaged at the time of such injury.\n[2] The policy provision on which Pales relies provides:\n\nGeneral Section\n* * *\nC. Sovereign Nation Workers' Compensation\nSovereign Nation Workers' Compensation means the workers' or workmen's compensation benefits as established by you. It does not include any state, federal worker or workmen's compensation law, and federal occupational disease law or the provisions of any law that provide non-occupational disability benefits.\nRecognizing the tribe as a sovereign nation, with its corresponding civil jurisdiction, the actual benefits provided by this policy are subject to the tribal ordinance related to workers' compensation benefits, in effect as of the effective date of this policy.\nIn the absence of a tribal ordinance you may or may not elect to utilize a state's workers' compensation benefit levels as a guideline for the benefits payable under this policy. However, in no event shall benefits payable exceed such state level benefits. The mere use of a state's benefit levels as a guide for payments, however, does not constitute an adoption of such state's benefit levels and shall not be construed as a waiver of your sovereign immunity.\n(Emphasis added).\n[3] The Oklahoma Supreme Court's website indicates Cossey has not yet been released for publication in the permanent law reports. However, the docket indicates that mandate issued June 11, 2009.\n\n", "ocr": false, "opinion_id": 2599008 } ]	Court of Civil Appeals of Oklahoma	Court of Civil Appeals of Oklahoma	SA	Oklahoma, OK
149,223	Procter Hug, Jr., Andrew J. Kleinfeld, and W. Fletcher, Circuit Judges	2010-06-23	false	equal-employment-opportunity-commission-v-peabody-western-coal-co	null	Equal Employment Opportunity Commission v. Peabody Western Coal Co.	EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, v. PEABODY WESTERN COAL COMPANY; Navajo Nation, Rule 19 Defendant, Defendants-Appellees	Susan R. Oxford, EEOC Appellate Section, Washington, D.C., Katherine Kruse, EEOC, Phoenix, AZ, for the appellant., Mary E. Bruno, John F. Lomax, Jr., Lawrence J. Rosenfeld, Greenberg Traurig LLP, Phoenix, AZ, Louis Denetsosie, Navajo Nation Department of Justice, Window Rock, AZ, Lisa M. Enfield, Paul E. Frye, Frye Law Firm, Albuquerque, NM, for the appellees.	null	null	null	null	null	null	null	Argued and Submitted Sept. 22, 2008.	null	null	17	Published	null	<parties id="b1096-7"> EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant, v. PEABODY WESTERN COAL COMPANY; Navajo Nation, Rule 19 defendant, Defendants-Appellees. </parties><br><docketnumber id="b1096-10"> No. 06-17261. </docketnumber><br><court id="b1096-11"> United States Court of Appeals, Ninth Circuit. </court><br><otherdate id="b1096-12"> Argued and Submitted Sept. 22, 2008. </otherdate><decisiondate id="AOD"> Filed June 23, 2010. </decisiondate><br><attorneys id="b1099-23"> <span citation-index="1" class="star-pagination" label="1073"> 1073 </span> Susan R. Oxford, EEOC Appellate Section, Washington, D.C., Katherine Kruse, EEOC, Phoenix, AZ, for the appellant. </attorneys><br><attorneys id="b1100-3"> <span citation-index="1" class="star-pagination" label="1074"> 1074 </span> Mary E. Bruno, John F. Lomax, Jr., Lawrence J. Rosenfeld, Greenberg Traurig LLP, Phoenix, AZ, Louis Denetsosie, Navajo Nation Department of Justice, Window Rock, AZ, Lisa M. Enfield, Paul E. Frye, Frye Law Firm, Albuquerque, NM, for the appellees. </attorneys><br><judges id="b1100-5"> Before: PROCTER HUG, JR., ANDREW J. KLEINFELD, and W. FLETCHER, Circuit Judges. </judges>	[ "610 F.3d 1070" ]	[ { "author_str": "Fletcher", "per_curiam": false, "type": "010combined", "page_count": 28, "download_url": "http://www.ca9.uscourts.gov/datastore/opinions/2010/06/23/06-17261.pdf", "author_id": null, "opinion_text": "\n610 F.3d 1070 (2010)\nEQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff-Appellant,\nv.\nPEABODY WESTERN COAL COMPANY; Navajo Nation, Rule 19 defendant, Defendants-Appellees.\nNo. 06-17261.\nUnited States Court of Appeals, Ninth Circuit.\nArgued and Submitted September 22, 2008.\nFiled June 23, 2010.\n1073 Susan R. Oxford, EEOC Appellate Section, Washington, D.C., Katherine Kruse, EEOC, Phoenix, AZ, for the appellant.\n1074 Mary E. Bruno, John F. Lomax, Jr., Lawrence J. Rosenfeld, Greenberg Traurig LLP, Phoenix, AZ, Louis Denetsosie, Navajo Nation Department of Justice, Window Rock, AZ, Lisa M. Enfield, Paul E. Frye, Frye Law Firm, Albuquerque, NM, for the appellees.\nBefore: PROCTER HUG, JR., ANDREW J. KLEINFELD, and W. FLETCHER, Circuit Judges.\nWILLIAM A. FLETCHER, Circuit Judge:\nThe Equal Employment Opportunity Commission (\"EEOC\") appeals various rulings of the district court in its suit against Peabody Western Coal Company (\"Peabody\"). Peabody leases mines from the Navajo Nation (\"the Nation\"), and maintains a preference for employing Navajo workers at these mines. EEOC alleges that in maintaining its employment preference Peabody discriminates against non-Navajo Indians, including two members of the Hopi Nation and one member of the Otoe tribe, in violation of Title VII, 42 U.S.C. § 2000e-2(a)(1). The district court first dismissed EEOC's suit in 2002. EEOC v. Peabody Coal Co. (\"Peabody I\"), 214 F.R.D. 549 (D.Ariz.2002). We heard EEOC's appeal from that dismissal in EEOC v. Peabody Western Coal Co. (\"Peabody II\"), 400 F.3d 774 (9th Cir.2005). We reversed, holding that it was feasible to join the Nation under Federal Rule of Civil Procedure 19 and that the suit did not present a nonjusticiable political question. On remand, the district court granted summary judgment to Peabody. EEOC appeals.\nIn this appeal, we address questions arising out of the joinder of two different parties. We first address the joinder of the Nation. We hold that the amended complaint filed by EEOC after our remand does not render it infeasible to join the Nation. We next address the joinder of the Secretary of the Interior (\"the Secretary\"). We hold that the Secretary is a required party under Rule 19(a), and that joining him is not feasible. We hold further that Peabody and the Nation may not bring a third-party damages claim against the Secretary under Federal Rule of Civil Procedure 14(a), and that EEOC's claim against Peabody for damages must therefore be dismissed under Rule 19(b). However, we hold that Peabody and the Nation may bring a third-party claim against the Secretary for prospective relief under Rule 14(a), and that EEOC's injunctive claim against Peabody should therefore be allowed to proceed.\nWe vacate the remainder of the district court's rulings and remand for further proceedings consistent with this opinion.\n\nI. Background\n\nA. Factual Background\nPeabody mines coal at the Black Mesa Complex and Kayenta Mine on the Navajo and Hopi reservations in northeastern Arizona. Peabody does so pursuant to leases with the Navajo and Hopi tribes inherited from its predecessor-in-interest, Sentry Royalty Company (\"Sentry\"). This case involves two leases Sentry entered into with the Nation: a 1964 lease permitting it to mine on the Navajo reservation (lease no. 8580) and a 1966 lease permitting it to mine on the Navajo portion of land jointly used by the Navajo and Hopi nations (lease no. 9910).\nBoth leases require that Peabody provide an employment preference to Navajo job applicants. The 1964 lease provides 1075 that Peabody \"agrees to employ Navajo Indians when available in all positions for which, in the judgment of[Peabody], they are qualified,\" and that Peabody \"shall make a special effort to work Navajo Indians into skilled, technical and other higher jobs in connection with [Peabody's] operations under this Lease.\" The 1966 lease provides similarly, but also states that Peabody may \"at its option extend the benefits of this Article [containing the Navajo employment preference] to Hopi Indians.\" We will refer to these provisions as \"Navajo employment preference provisions.\" Many business leases on the Navajo reservation contain similar employment preferences for Navajo job applicants.\nAs we noted in Peabody II, the Department of the Interior (\"DOI\") approved both mining leases, as well as subsequent amendments and extensions, under the Indian Mineral Leasing Act of 1938 (\"IMLA\"). Peabody II, 400 F.3d at 776; see 25 U.S.C. §§ 396a, 396e; see also United States v. Navajo Nation (\"Navajo Nation I\"), 537 U.S. 488, 493, 123 S.Ct. 1079, 155 L.Ed.2d 60 (2003) (explaining that DOI's approval is necessary before leases on reservation land become effective). Former Secretary of the Interior Stewart Udall, who served as Secretary during the period the leases were drafted and approved, stated in a declaration submitted to the district court that DOI drafted the leases and required the inclusion of the Navajo employment preferences. This statement is undisputed. The leases provide that, if their terms are violated, both the Nation and the Secretary retain the power to cancel them after a notice and cure period. Amendments to the leases must be approved by the Secretary.\n\nB. Procedural Background\nThis is the latest in a series of cases involving Navajo employment preferences. See Dawavendewa v. Salt River Project Agric. Improvement & Power Dist. (\"Dawavendewa II\"), 276 F.3d 1150, 1163 (9th Cir.2002); Dawavendewa v. Salt River Agric. Improvement & Power Dist. (\"Dawavendewa I\"), 154 F.3d 1117, 1124 (9th Cir.1998). We discussed the history of Navajo employment preferences in detail in the first appeal in this case. See Peabody II, 400 F.3d at 777.\nEEOC filed this suit against Peabody in June 2001, alleging that Peabody was unlawfully discriminating on the basis of national origin by implementing the Navajo employment preferences contained in the leases. EEOC's complaint charged that Peabody had refused to hire non-Navajo Indians including two members of the Hopi and one now-deceased member of the Otoe tribe, as well as unspecified other non-Navajo Indians, for positions for which they were otherwise qualified. EEOC alleged that such conduct violated Title VII, 42 U.S.C. § 2000e-2(a)(1), which prohibits employers from refusing to hire applicants because of their national origin. EEOC's position throughout this litigation has been that the Indian preference exception of Title VII, § 2000e-2(i), permits discrimination in favor of Indians living on or near a particular tribe's reservation, but does not permit discrimination against Indians who live on or near that reservation but are members of another tribe. Peabody II, 400 F.3d at 777-78. EEOC alleged further that Peabody had violated the recordkeeping requirements of § 2000e-8(c). EEOC requested three forms of relief: (1) an injunction prohibiting Peabody from continuing to discriminate on the basis of national origin and requiring Peabody to provide equal employment opportunities for non-Navajo Indians living on or near the Navajo reservation; (2) damages, including back pay with interest, compensatory damages, and punitive damages; and 1076 (3) an order requiring Peabody to make and preserve records in compliance with Title VII.\nPeabody moved for summary judgment and for dismissal of the action. Peabody argued, first, that Rule 19 required dismissal because the Nation was a necessary and indispensable party to the action and, second, that the action presented a nonjusticiable political question between EEOC and DOI because DOI had approved the mining leases. The district court agreed and granted Peabody's motion to dismiss on both grounds. Peabody I, 214 F.R.D. at 559-63. The district court also dismissed EEOC's recordkeeping claim, even though Peabody had not sought dismissal of this claim. Id. at 563.\nWe reversed in Peabody II. First, we held that the Nation was a necessary party under Rule 19, but that EEOC's suit need not be dismissed because joinder of the Nation was feasible. Peabody II, 400 F.3d at 780-81. Because EEOC is an agency of the United States, the Nation could not assert sovereign immunity as a defense to joinder. Although EEOC lacked statutory authority to state a cause of action against the Nation, joinder of the Nation for the purposes of res judicata was still possible and would be effective in providing \"complete relief between the parties.\" Id. at 781. Second, we held that EEOC's claim did not present a nonjusticiable political question. Id. at 784-85. Third, we held that the district court erred in dismissing EEOC's recordkeeping claim. Id. at 785. We remanded for further proceedings with the Nation joined under Rule 19. Id. at 785.\nOn remand, EEOC filed an amended complaint that included the same claims and prayer for relief as its initial complaint. The newly joined Nation moved to dismiss under Rule 19, arguing, inter alia, that EEOC's amended complaint impermissibly seeks affirmative relief against the Nation, and that the Secretary of the Interior is a necessary and indispensable party. Peabody filed its own motion to dismiss. Inter alia, it agreed with the Nation's argument that the Secretary was a necessary and indispensable party. This was the first time in this litigation that anyone had argued that the Secretary was a necessary and indispensable party.\nThe district court converted the motions to dismiss into motions for summary judgment. The district court granted summary judgment against EEOC, holding, in the alternative, that (1) EEOC was seeking affirmative relief against the Nation in its amended complaint, and that the Nation therefore could not be joined under Rule 19; (2) the Secretary was a necessary and indispensable party for whom joinder was not feasible; and (3) the Rehabilitation Act of 1950, 25 U.S.C. § 631-638, authorized the tribe-specific preferences challenged by EEOC. The district court also granted the Nation's motions to strike two EEOC exhibits and to strike an EEOC footnote reference. Finally, the court denied EEOC's motion to strike two forms upon which Peabody relied. EEOC timely appealed all of the district court's rulings.\nWe reach only holdings (1) and (2), as to which we reverse the district court. We vacate the rest of the court's decision and remand for further proceedings.\n\nII. Standard of Review\nWe review a district court's decision on joinder for abuse of discretion, and we review the legal conclusions underlying that decision de novo. Peabody II, 400 F.3d at 778.\n\nIII. Discussion\nThis case continues to present somewhat complex compulsory party joinder issues. 1077 As we explained in Peabody II, Federal Rule of Civil Procedure 19 governs compulsory party joinder in federal district courts. In its recently amended form, Rule 19 provides, in relevant part:\n(a) Persons Required to Be Joined if Feasible.\n(1) Required Party.\nA person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party if:\n(A) in that person's absence, the court cannot accord complete relief among existing parties; or\n(B) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may:\n(i) as a practical matter impair or impede the person's ability to protect the interest; or\n(ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.\n(2) Joinder by Court Order.\nIf a person has not been joined as required, the court must order that the person be made a party. A person who refuses to join as a plaintiff may be made either a defendant or, in a proper case, an involuntary plaintiff.\n. . .\n(b) When Joinder Is Not Feasible.\nIf a person who is required to be joined if feasible cannot be joined, the court must determine whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed. The factors for the court to consider include:\n(1) the extent to which a judgment rendered in the person's absence might prejudice that person or the existing parties;\n(2) the extent to which any prejudice could be lessened or avoided by:\n(A) protective provisions in the judgment;\n(B) shaping the relief; or\n(C) other measures;\n(3) whether a judgment rendered in the person's absence would be adequate; and\n(4) whether the plaintiff would have an adequate remedy if the action were dismissed for nonjoinder....\nFed.R.Civ.P. 19. Although the wording of Rule 19 has changed since the district court dismissed this case, its meaning remains the same.[1] When dealing with the 1078 amended rule in this opinion, we will use the new language.\nA Rule 19 motion poses \"three successive inquiries.\" Peabody II, 400 F.3d at 779. \"First, the court must determine whether a nonparty should be joined under Rule 19(a).\" Id. That nonparty (or \"absentee\") is now referred to as a \"person required to be joined if feasible.\" If an absentee meets the requirements of Rule 19(a), \"the second stage is for the court to determine whether it is feasible to order that the absentee be joined.\" Id. \"Finally, if joinder is not feasible, the court must determine at the third stage whether the case can proceed without the absentee\" or whether the action must be dismissed. Id. A nonparty in whose absence an action must be dismissed is one who \"not only [has] an interest in the controversy, but [has] an interest of such a nature that a final decree cannot be made without either affecting that interest, or leaving the controversy in such a condition that its final termination may be wholly inconsistent with equity and good conscience.\" Shields v. Barrow, 58 U.S. 130, 139, 17 How. 130, 15 L.Ed. 158 (1855). With these principles in mind, we consider the Rule 19 joinder of both the Navajo Nation and the Secretary of the Interior.\n\nA. Joinder of the Navajo Nation under Rule 19\nIn Peabody II, we held that the Navajo Nation was a necessary party for whom joinder was feasible. Peabody II, 400 F.3d at 778. It is undisputed that the Nation was a necessary party, and is now, under the amended rule, a person required to be joined if feasible. As we explained in Peabody II, the Nation is a party to the leases whose employment preference is challenged in this lawsuit.\nIf the EEOC is victorious in this suit but the Nation has not been joined, the Nation could possibly initiate further action to enforce the employment preference against Peabody, even though that preference would have been held illegal in this litigation. Peabody would then be, like the defendant in Dawavendewa II, 276 F.3d at 1156, \"between the proverbial rock and a hard placecomply with the injunction prohibiting the hiring preference policy or comply with the lease requiring it.\" By similar logic, we have elsewhere found that tribes are necessary parties to actions that might have the result of directly undermining authority they would otherwise exercise.\nId. at 780. We held that it was feasible to join the Nation even though under Title VII no affirmative relief was available to EEOC against the Nation.\nAfter our remand, EEOC amended its complaint to add the Nation as a defendant. The district court held that EEOC sought affirmative relief against the Nation in its amended complaint even though we had specifically held in Peabody II that such relief was not available. Under its reading of EEOC's amended complaint, the district court dismissed EEOC's suit on the ground that the Nation could not, after all, be joined. For the reasons that follow, we hold that the district court should not have dismissed EEOC's amended complaint on this ground.\nIn Peabody II, Peabody made two arguments why joinder of the Nation was not feasible. We disagreed with both of them. First, Peabody argued that the Nation could not be joined because of sovereign immunity. Id. at 780. We held that the Nation's sovereign immunity did not shield it from a suit brought by EEOC and therefore did not bar its joinder. Id. at 781. We explained, \"Tribal sovereign immunity does not `act as a shield against the United States,' even when Congress has not specifically abrogated tribal immunity.\" Id. 1079 (quoting United States v. Yakima Tribal Ct., 806 F.2d 853, 861 (9th Cir.1986)).\nSecond, Peabody argued that because Title VII exempts the Nation from the definition of employer, 42 U.S.C. § 2000e(b), EEOC could not state a claim against the Nation. Peabody II, 400 F.3d at 781. Therefore, Peabody argued, the Nation could not be joined in a suit brought by EEOC. But \"a plaintiff's inability to state a direct cause of action against an absentee does not prevent the absentee's joinder under Rule 19.\" Id. An absentee can be joined under Rule 19 in order to subject it, under principles of res judicata, to the \"minor and ancillary\" effects of a judgment. Gen. Bldg. Contractors Ass'n, Inc. v. Pennsylvania, 458 U.S. 375, 399, 102 S.Ct. 3141, 73 L.Ed.2d 835 (1982). We wrote that\nEEOC has no claim against the party it seeks to join and is not seeking any affirmative relief directly from that party. Joinder is necessary for the \"sole purpose\" of effecting complete relief between the parties ... by ensuring that both Peabody and the Nation are bound to any judgment upholding or striking down the challenged lease provision.\nPeabody II, 400 F.3d at 783.\nOn remand, the district court concluded that EEOC's amended complaint sought affirmative relief against the Nation. The district court found that \"with the benefit of the filing of the Amended Complaint and limited discovery, it is apparent to this Court that the EEOC is not merely seeking relief against Peabody Coal, but all parties acting in concert with it, which includes the Navajo Nation.\" In so holding, the district court relied on the language in the amended complaint seeking \"a permanent injunction enjoining Peabody... and all persons in active concert or participation with it, from engaging in discrimination on the basis of national origin.\" The court found that\nthere can be no doubt that the Navajo Nation falls within the scope of affirmative relief sought by the EEOC.... Should the EEOC prevail in this suit and obtain the broad relief sought, the Navajo Nation would then be enjoined from implementing and requiring such lease provisions in the future as it would already be subject to injunctive relief from this Court based upon the determination that such provisions are contrary to Title VII. As such, there can be little doubt that the EEOC seeks affirmative relief not only against Peabody Coal but the Navajo Nation as well.\nThe language added to the amended complaint provides, in its entirety:\nDefendant Navajo Nation is a party to a lease agreement with the Defendant employer, Peabody Coal Company, and is therefore named as a party pursuant to Rule 19(a) of the Federal Rules of Civil Procedure, in that, in its absence, complete relief cannot be accorded among those already parties, and it has an interest in the subject of this action.\nThis added language says nothing about any kind of relief against the Nation.\nThe original complaint was before us when we decided Peabody II. The language in the amended complaint upon which the district court relied to conclude that EEOC was seeking affirmative relief is word-for-word the same as in the original complaint. It is, in its entirety:\nWherefore, the Commission respectfully requests that this Court:\nA. Grant a permanent injunction enjoining Peabody, its officers, successors, assigns, and all persons in active concert or participation with it, from engaging in discrimination on the basis of national origin.\n1080 Some of this added language is standard boilerplate drawn from Rule 65(d)(2)(C), describing the \"persons bound\" by \"every injunction\" as including \"other persons who are in active concert or participation\" with the party or parties served with an injunction.\nThere are two possible readings of the amended complaint. Under one reading, EEOC is not seeking any injunctive relief against the Nation. The Nation is \"bound\" by the injunction only in the sense that it is res judicata as to the Nation, not in the sense that the injunction affirmatively requires the Nation to do something. In our view, this is the better reading of the boilerplate language in the complaint, given that the explicit premise of our holding in Peabody II was that EEOC has no cause of action against the Nation under Title VII and that, as a necessary corollary, EEOC can obtain no injunctive relief against the Nation. However, the district court did not adopt this reading.\nUnder the reading adopted by the district court, EEOC sought injunctive relief against the Nation in its amended complaint. Even if this is the correct reading, the district court nonetheless erred in dismissing EEOC's suit. Because we had held in Peabody II that joinder of the Nation was feasible despite the unavailability of injunctive relief against it, the proper response of the district court would have been simply to deny EEOC's request for injunctive relief. As we held in Peabody II, joinder of the Nation is feasible, and dismissal under Rule 19 is not required even though injunctive relief is unavailable.\nThe district court therefore erred in dismissing EEOC's complaint on the ground that it sought injunctive relief against the Nation.\n\nB. Joinder of the Secretary of the Interior under Rule 19\nOn remand from Peabody II, Peabody and the newly joined Nation argued under Rule 19 that the suit could not proceed without joinder of the Secretary. Even though Peabody had been a defendant in the suit from the outset, this was the first time it made this argument. Because the Nation had just been joined, this was its first opportunity to make the argument. We agree with Peabody and the Nation that the Secretary is a person to be joined if feasible under Rule 19. But we do not agree that the entirety of EEOC's suit must be dismissed.\nThe central problem is that Peabody is caught in the middle of a dispute not of its own making. EEOC contends that the Navajo employment preference provision contained in the leases violates Title VII. The Secretary required that this provision be included in the leases. EEOC seeks damages and an injunction against Peabody, which has complied with the lease terms upon which the Secretary insisted.\nIf the district court were to hold that the Navajo employment preference provision violates Title VII and to award damages against Peabody, it would be profoundly unfair if Peabody could not seek indemnification from the Secretary. It would be similarly unfair if the district court were to grant an injunction requiring Peabody to disregard the preference provision, but leaving the Secretary free, despite the court's holding, to insist that Peabody comply with it.\nThe same is true, though to a lesser extent, for the Nation. As we held in Peabody II, EEOC can obtain neither damages nor injunctive relief against the Nation. But if the district court holds that the employment preference provision violates Title VII, the Nation will be bound to that result by res judicata. If the Secretary 1081 is not made a party to the suit, he may ignore the court's judgment and place conflicting demands upon the Nation who will be required by res judicata to honor the judgment.\n\n1. The Secretary as a Required Party under Rule 19(a)\nA person is required to be joined if feasible under Rule 19(a)(1)(A) if, \"in that person's absence, the court cannot accord complete relief among the existing parties\" or under Rule 19(a)(1)(B) if \"that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may: (i) as a practical matter impair or impede the person's ability to protect the interest; or (ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest.\" \"There is no precise formula for determining whether a particular nonparty should be joined under Rule 19(a).... The determination is heavily influenced by the facts and circumstances of each case.\" N. Alaska Envtl. Ctr. v. Hodel, 803 F.2d 466, 468 (9th Cir. 1986) (quoting Bakia v. County of Los Angeles, 687 F.2d 299, 301 (9th Cir.1982) (per curiam)) (alterations in original). The Secretary meets the standards of both Rule 19(a)(1)(A) and Rule 19(a)(1)(B).\nFirst, under Rule 19(a)(1)(A), in the absence of the Secretary, the district court cannot accord complete relief among the existing parties. The record makes clear that the Secretary insisted that the disputed employment preference provision be included in the leases between Peabody and the Nation, and that the Secretary is ultimately responsible for its continued inclusion in the leases. If EEOC prevails in its interpretation of Title VII, it may recover damages from Peabody based on Peabody's compliance with the employment preference provision. In that event, Peabody will be obliged to pay damages for having engaged in conduct that was mandated by the Secretary. If the Secretary is not made a party, Peabody will not be able to seek indemnification from the Secretary.\nFurther, if EEOC prevails it may obtain an injunction ordering Peabody to disregard the employment preference provision. The Secretary has the power, if the lease terms are violated, to cancel the leases after a notice and cure period, and Peabody is unable to modify the terms of the leases without the approval of the Secretary. If the Secretary is not made a party, Peabody may be obliged by the court to disregard the preference provision, while the Secretary would remain free to insist that Peabody honor it, upon pain of losing the leases. See, e.g., Associated Dry Goods Corp. v. Towers Fin. Corp., 920 F.2d 1121, 1124 (2d Cir.1990) (holding that landlord was required party in suit brought by tenant against subtenant, as subtenant would not be able to obtain complete relief in counterclaims against tenant for increased electrical capacity without approval of landlord); Wymbs v. Republican State Executive Comm., 719 F.2d 1072, 1080 (11th Cir.1983) (holding that national political party committee was required party in suit on the constitutionality of a local political party's delegate selection rule when the local rule was derived from the national rule and the national party still had the ability to determine which delegates would be seated).\nSecond, under Rule 19(a)(1)(B), the Secretary has an interest in the subject matter of this action. Resolving this action in the Secretary's absence may both impair the Secretary's ability to protect that interest and leave Peabody and the Nation subject to a substantial risk of incurring inconsistent obligations. If the 1082 Secretary is not joined, he will be unable to defend his interest in the legality of the lease provisions. We have repeatedly held that \"[n]o procedural principle is more deeply imbedded in the common law than that, in an action to set aside a lease or a contract, all parties who may be affected by the determination of the action are indispensable.\" Lomayaktewa v. Hathaway, 520 F.2d 1324, 1325(9th Cir.1975); see also Dawavendewa II, 276 F.3d at 1156.\nAlthough Lomayaktewa and Dawavendewa II involved parties who were signatories to a contract, which the Secretary is not, the underlying principle applies here. The Secretary mandated the provisions and continues to exercise oversight over the leases. A public entity has an interest in a lawsuit that could result in the invalidation or modification of one of its ordinances, rules, regulations, or practices. See, e.g., Davis v. United States, 192 F.3d 951, 959 (10th Cir.1999) (holding that Seminole Nation of Oklahoma was necessary party as a ruling on the merits would modify the Nation's ordinances); Ricci v. State Bd. of Law Exam'rs, 569 F.2d 782, 784 (3d Cir.1978) (holding that Pennsylvania Supreme Court was indispensable party to an action that would, if it succeeded, invalidate one of the Court's rules of admission). The Secretary thus has an interest in an action that would require him to modify the terms of leases he approves for entities conducting business on the Navajo reservation. The Secretary therefore qualifies as a person to be joined under Rule 19(a)(1)(B)(i).\nIf the Secretary is not made a party and if EEOC prevails, the Secretary may choose to cancel the leases or to modify them to eliminate the Navajo employment preference. Alternatively, the Secretary may choose to continue the leases in their current form, ignoring the judgment in the case to which he has not been made a party. If the Secretary chooses to do this, he will put both Peabody and the Nation \"between the proverbial rock and a hard place,\" Peabody II, 400 F.3d at 780 (quoting Dawavendewa II, 276 F.3d at 1156), forcing them to choose between complying with the injunction or risking cancellation of the leases for violating terms mandated by the Secretary. The Secretary therefore qualifies as a person to be joined under Rule 19(a)(1)(B)(ii).\nEEOC argues that the Secretary is not a person required to be joined under Rule 19(a), citing to the Navajo Nation line of cases decided by the Supreme Court. In these cases, the Court held that the DOI did not owe a fiduciary duty to the Navajo Nation in managing, negotiating, or approving leases under the statutes at issue in this litigation, and that the Nation therefore could not state a cause of action against DOI for breach of fiduciary duty. United States v. Navajo Nation (\"Navajo Nation II\"), ___ U.S. ___, ___, 129 S.Ct. 1547, 1558, 173 L.Ed.2d 429 (2009) (holding that the Navajo-Hopi Rehabilitation Act of 1950 and Surface Mining Control and Reclamation Act of 1977 do not provide a cause of action to the Navajo Nation against the United States for breach of trust in its approval of coal mining leases); Navajo Nation I, 537 U.S. at 506, 123 S.Ct. 1079 (holding the same for the IMLA). These cases indicate the limits of DOI's fiduciary duty to the Nation with respect to the leases, but they say nothing about whether DOI possesses a cognizable interest in the outcome of litigation challenging lease terms mandated by the Secretary.\nWe therefore hold that the Secretary is a person required to be joined if feasible under Rule 19(a)(1)(A) and Rule 19(a)(1)(B).\n\n\n1083 2. Feasibility of Joining the Secretary\nRule 19(a) contemplates that a required party be joined as either a plaintiff or defendant. In the posture of this suit, the Secretary would be joined as a defendant rather than a plaintiff. However, we conclude that EEOC cannot join the Secretary as a defendant.\nEEOC is prevented by 42 U.S.C. § 2000e-5(f)(1) from filing suit against the Secretary on its own authority. Section 2000e-5(f)(1) provides that if EEOC is not able to obtain a conciliation agreement with a governmental agency, it cannot itself bring suit against that agency. Instead, § 2000e-5(f)(1) provides that if EEOC is unable to obtain an agreement, it \"shall take no further action and shall refer the case to the Attorney General who may bring a civil action against such respondent in the appropriate United States district court.\" We were told at oral argument by EEOC's attorney that EEOC has no expectation that the Attorney General will file suit against the Secretary. While there is no evidence in the record of a formal referral to and refusal by the Attorney General, we assume for purposes of our decision that the Attorney General either has refused or will refuse to file suit against the Secretary.\n\n3. Dismissal \"In Equity and Good Conscience\"\nIf a required party under Rule 19(a) cannot be joined as a plaintiff or defendant, we look to the factors provided in Rule 19(b) to determine whether, \"in equity and good conscience, the action should proceed among the existing parties or should be dismissed.\" Fed.R.Civ.P. 19(b). Rule 19(b) provides four factors that we must consider in making this determination: (1) the extent to which a judgment rendered in the person's absence might prejudice that person or the existing parties; (2) the extent to which any prejudice could be lessened or avoided by shaping the judgment or the relief; (3) whether a judgment rendered in the person's absence would be adequate; and (4) whether the plaintiff would have an adequate remedy if the action were dismissed. Id. The heart of this inquiry is the question of \"equity and good conscience.\" See Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 125, 88 S.Ct. 733, 19 L.Ed.2d 936 (1968); Dawavendewa II, 276 F.3d at 1161. \"The inquiry is a practical one and fact specific ... and is designed to avoid the harsh results of rigid application.\" Makah Indian Tribe v. Verity, 910 F.2d 555, 558(9th Cir.1990) (internal citations omitted).\nFor the reasons that follow, we conclude that EEOC's claim for damages against Peabody must be dismissed under Rule 19(b), but that its claim for an injunction against Peabody should be permitted to proceed.\n\na. EEOC's Claim for Damages\nIf EEOC's suit against Peabody were allowed to proceed, the district court would almost certainly award damages against Peabody if it concludes that the Navajo employment preference provision violates Title VII. In that event, Peabody would quite reasonably look to the Secretary for indemnification, given that the preference provision was included in the leases at the insistence of the Secretary. Rule 14(a) would permit Peabody to file a third-party complaint against the Secretary for indemnification. But because Peabody's indemnification suit would seek damages, it would be barred by the government's sovereign immunity unless that immunity is waived by statute. We can find no waiver of sovereign immunity to such a suit.\n1084 The Tucker Act, 28 U.S.C. § 1346(a)(2), waives the government's sovereign immunity in damage suits based on contract, as well as for some claims arising under the Constitution and statutes of the United States. Under the Tucker Act, a party's claims must either rest upon a contract, \"seek the return of money paid by them to the Government,\" or establish an entitlement to money damages under a federal statute that \"`can fairly be interpreted as mandating compensation by the Federal Government for the damage sustained.'\" United States v. Testan, 424 U.S. 392, 400, 96 S.Ct. 948, 47 L.Ed.2d 114 (1976) (quoting Eastport S.S. Corp. v. United States, 178 Ct.Cl. 599, 372 F.2d 1002, 1009 (1967)); see also Lake Mohave Boat Owners Ass'n v. Nat'l Park Serv., 78 F.3d 1360, 1365 (9th Cir.1995). The Federal Tort Claims Act, 28 U.S.C. § 1346(b), waives the sovereign immunity of the United States for suits in tort. See FDIC v. Meyer, 510 U.S. 471, 477, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994). However, neither the Tucker Act nor the Federal Tort Claims Act waives the government's sovereign immunity in the circumstances of this case.\nTitle VII also waives the government's sovereign immunity to some extent. Based on that waiver, a federal employee may sue the government for damages under Title VII, provided that administrative remedies with EEOC have been exhausted. 42 U.S.C. § 2000e-16(c); see Library of Cong. v. Shaw, 478 U.S. 310, 319, 106 S.Ct. 2957, 92 L.Ed.2d 250(\"Congress waived the Government's immunity under Title VII as a defendant, affording federal employees a right of action against the Government for its discriminatory acts as an employer.\"); cf. Fitzpatrick v. Bitzer, 427 U.S. 445, 96 S.Ct. 2666, 49 L.Ed.2d 614 (1976) (Title VII abrogates the states' sovereign immunity). But we can find nothing in Title VII that waives the government's sovereign immunity to a damages suit brought by a private employer that has itself violated Title VII.\nPeabody's only sin, if indeed it was a sin, was to comply with an employment preference provision inserted in its lease at the insistence of the Secretary. It would be profoundly unfair for a court to award damages against Peabody while allowing Peabody no redress against the government. We are unable to see any way to mitigate this unfairness by, for example, \"protective provisions in the judgment;... shaping relief; or ... other measures.\" Fed.R.Civ.P. 19(b)(2)(A-C). We therefore conclude that \"in equity and good conscience\" EEOC's damages claim against Peabody must be dismissed under Rule 19(b).\n\nb. EEOC's Claim for an Injunction\nIf EEOC's suit is allowed to proceed and if the district court were to hold that the Navajo employment preference provision violates Title VII, the district court would almost certainly grant an injunction requiring Peabody to ignore the provision in making its employment decisions. This injunction would not only require Peabody to take certain actions; it would also operate as res judicata against the Nation. In the event such an injunction were issued, Peabody and the Nation would quite reasonably want to seek prospective relief preventing the Secretary from enforcing the provision. Rule 14(a) would permit Peabody and the Nation to file a third-party complaint seeking such relief against the Secretary. Sovereign immunity does not bar prospective injunctive relief against the Secretary. We conclude that the availability of prospective relief through a third-party complaint under Rule 14(a) means that \"in equity and 1085 good conscience\" EEOC's suit against Peabody should be permitted to proceed.\n\ni. Sovereign Immunity\nA claim to which sovereign immunity is not a defense may be entertained even if another claim in the suit is dismissed because of sovereign immunity. See, e.g., United States v. Georgia, 546 U.S. 151, 159, 126 S.Ct. 877, 163 L.Ed.2d 650 (2006) (finding sovereign immunity of state was not a bar to some of the plaintiffs' claims and remanding to the district court to allow suit to proceed for any claims that were not shielded by sovereign immunity). Therefore, the district court may entertain Peabody and the Nation's third-party claim for prospective relief if it is not barred by the United States' sovereign immunity, even if a Peabody claim for damages would have to be dismissed.\nProspective relief requiring, or having the effect of requiring, governmental officials to obey the law has long been available. Sovereign immunity does not bar such relief. The case often cited for this proposition is Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), which permitted an injunction against the Attorney General of Minnesota despite the Eleventh Amendment. The Ex parte Young fiction remains the basis for prospective relief against state officers. For example, in Verizon Maryland, Inc. v. Public Service Commission, 535 U.S. 635, 122 S.Ct. 1753, 152 L.Ed.2d 871 (2002), the Supreme Court allowed injunctive and declaratory relief against individual state officials despite the Eleventh Amendment.\nFor a number of years, prospective relief against federal officials was available under the fiction of Ex parte Young. For example, in Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 69 S.Ct. 1457, 93 L.Ed. 1628 (1949), the Supreme Court allowed prospective relief against a federal official despite an asserted defense of sovereign immunity. The Court wrote:\nThere may be, of course, suits for specific relief against officers of the sovereign which are not suits against the sovereign. If the officer purports to act as an individual and not as an official, a suit directed against that action is not a suit against the sovereign.... [W]here the officer's powers are limited by statute, his actions beyond those limitations are considered individual and not sovereign actions. The officer is not doing the business which the sovereign has empowered him to do or he is doing it in a way which the sovereign has forbidden. His actions are ultra vires his authority and therefore may be made the object of specific relief.\nId. at 689, 69 S.Ct. 1457. We explicitly followed the \"legal fiction\" described in Larson in Washington v. Udall, 417 F.2d 1310, 1314 (9th Cir.1969), and did so again in Rockbridge v. Lincoln, 449 F.2d 567, 572-73 (9th Cir.1971).\nHowever, since 1976 federal courts have looked to § 702 of the Administrative Procedure Act (\"APA\"), 5 U.S.C. § 702, to serve the purposes of the Ex parte Young fiction in suits against federal officers. In Presbyterian Church (U.S.A.) v. United States, 870 F.2d 518 (9th Cir.1989), we explained that after § 702 was amended in 1976, it replaced the Ex parte Young fiction as the doctrinal basis for a claim for prospective relief. We wrote:\nIt is particularly significant that [in enacting § 702 of the APA] Congress referred disapprovingly to the Ex parte Young fiction, which permitted a plaintiff to name a government official as the defendant in equitable actions to redress government misconduct, on the pretense that the suit was not actually against the government. By invoking the Young fiction plaintiffs could, even before Congress 1086 amended § 702 in 1976, maintain an action for equitable relief against unconstitutional government conduct, whether or not such conduct constituted \"agency action\" in the APA sense. See, e.g., Larson v. Domestic & Foreign Commerce Corp. ... Congress' plain intent in amending § 702 was to waive sovereign immunity for all such suits, thereby eliminating the need to invoke the Young fiction.\n\nId. at 525-26 (citations omitted) (emphasis added).\nIn Presbyterian Church we wrote, \"On its face, the 1976 amendment [to § 702] is an unqualified waiver of sovereign immunity in actions seeking nonmonetary relief against legal wrongs for which governmental agencies are accountable.\" 870 F.2d at 525. We explained that the waiver is not limited to judicial review in suits challenging \"agency action\" as defined in the APA, but instead covers \"all actions seeking relief from official misconduct except for money damages.\" Id. In Gallo Cattle Co. v. United States Department of Agriculture, 159 F.3d 1194 (9th Cir.1998), we stated that \"the APA's waiver of sovereign immunity contains several limitations,\" including the \"final agency action\" requirement that we had considered irrelevant in Presbyterian Church. Id. at 1198. We held that, because the plaintiffs failed to challenge \"final agency action,\" the waiver of sovereign immunity did not apply. Id. In Gros Ventre Tribe v. United States, 469 F.3d 801 (9th Cir.2006), we discussed but declined to resolve the tension between the two cases, observing that there is \"no way to distinguish The Presbyterian Church from Gallo Cattle.\" Id. at 809.\nWe similarly need not resolve this tension here. Unlike in Gallo Cattle, there is final agency action in this case, because the Secretary has mandated the disputed lease terms. \"Agency action\" under the APA is defined as \"the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act.\" 5 U.S.C. § 551(13). \"Persons\" entitled to judicial review under the APA include \"an individual, partnership, corporation, association, or public or private organization other than an agency.\" 5 U.S.C. § 701(b)(2)(providing that, for purposes of provisions on judicial review, definition of \"person\" in 5 U.S.C. § 551 applies); id. § 551(providing definition of \"person\"). Both Peabody and the Navajo Nation come within this definition of \"person.\" Peabody is a corporation, and the Nation is a \"public organization.\" Id. Therefore, under § 702 of the APA, as would be the case under the Ex parte Young fiction, either Peabody or the Nation may assert a claim against the Secretary requesting injunctive or declaratory relief. We therefore conclude that neither Peabody nor the Nation is barred by sovereign immunity from bringing a thirdparty complaint seeking prospective relief against the Secretary under Rule 14(a).\n\nii. Third-party Complaints under Rule 14(a)\nIf a required party under Rule 19(a) cannot be joined as a plaintiff or defendant, the court must determine whether under Rule 19(b) the action must be dismissed \"in equity and good conscience.\" Among the factors to be considered in making that determination is whether, under Rule 19(b)(2)(C), \"measures\" may be taken that would lessen or avoid any prejudice. To the degree that Peabody and the Nation may be prejudiced by the absence of the Secretary as a plaintiff or defendant, that prejudice may be eliminated by a third-party complaint against the Secretary under Rule 14(a).\nThe courts of appeals that have addressed the question are unanimous in *1087 holding that if an absentee can be brought into an action by impleader under Rule 14(a), a dismissal under Rule 19(b) is inappropriate. In Pasco International (London) Ltd. v. Stenograph Corp., 637 F.2d 496 (2d Cir.1980), the Second Circuit repeatedly indicated that prejudice to existing parties could be eliminated by impleader under Rule 14(a). The court wrote, \"Stenograph can always protect itself from the possibility of inconsistent verdicts by impleading Croxford under Rule 14[.] ... [T]he existence of the Rule 14 provisions demonstrates that parties such as Croxford who may be impleaded under Rule 14 are not indispensable parties within Rule 19(b).\" Id. at 503. It summarized, \"[A]ll persons subject to impleader by the defendant are not indispensable parties. This is... merely an extension of the settled doctrine that Rule 19(b) was not intended to require the joinder of persons subject to impleader under Rule 14 such as potential indemnitors.\" Id. at 505 n. 20. The other circuits that have addressed the question have come to the same conclusion. See, e.g., Boone v. General Motors Acceptance Corp., 682 F.2d 552, 553 (5th Cir.1982) (defendants \"could protect their interests by joining the dealer as a third party should they care to do so\"); Challenge Homes, Inc. v. Greater Naples Care Ctr., Inc., 669 F.2d 667, 671 (11th Cir.1982) (defendant \"may protect itself against [prejudice] by impleading [the absent person] under Rule 14\").\n\nc. Summary\nWe conclude that prospective relief in the form of an injunction or declaratory judgment is available in a Rule 14(a) impleader against the Secretary. Such prospective relief against the Secretary is enough to protect Peabody and the Nation, both with respect to EEOC's request for injunctive relief against Peabody and with respect to any res judicata effect against the Nation. Such relief would also protect the Secretary because, once brought in as a third-party defendant, he will be able to defend his position on the legality of the leases. We therefore conclude, \"in equity and good conscience,\" that EEOC's claim against Peabody for injunctive relief should be allowed to proceed.\n\nC. Remaining Issues\nEEOC has appealed the district court's various other rulings, including its holding that the Navajo employment preference does not violate Title VII. We vacate all of these rulings to allow reconsideration once the Secretary has been brought into the suit as a third-party defendant. This will allow the court to consider the arguments of the Secretary on the legality of the employment preferences before issuing a final ruling. We note, further, that the presentation of the Secretary's views in the district court, and the district court's considered ruling taking those views into account, will be useful to us in the event of a further appeal.\n\nConclusion\nWe again hold that joinder of the Navajo Nation under Rule 19 is feasible. We hold that the Secretary of the Interior is a party required to be joined if feasible under Rule 19(a), but that joinder of the Secretary as a defendant is not feasible. We hold that EEOC's damages claim against Peabody must be dismissed under Rule 19(b). Finally, we hold that EEOC's injunctive claim against Peabody should be allowed to proceed. We vacate the other rulings of the district court and remand for further proceedings consistent with this opinion.\nREVERSED in part and VACATED in part. Each party to bear its own costs.\nNOTES\n[1] As of December 1, 2007, Rule 19 no longer refers to \"necessary\" or \"indispensable\" parties. Instead, it refers to \"persons required to be joined if feasible\" and persons in whose absence, if they cannot be joined, the action should not proceed.\n\nThe advisory committee notes indicate that the 2007 amendments to the civil rules were merely stylistic. With respect to Rule 19, they state:\nThe language of Rule 19 has been amended as part of the general restyling of the Civil Rules to make them more easily understood and to make style and terminology consistent throughout the rules. These changes are intended to be stylistic only.\nFormer Rule 19(b) described the conclusion that an action should be dismissed for inability to join a Rule 19(a) party by carrying forward traditional terminology: \"the absent person being thus regarded as indispensable.\" \"Indispensable\" was used only to express a conclusion reached by applying the tests of Rule 19(b). It has been discarded as redundant.\nFed.R.Civ.P. 19 advisory committee's note (2007).\n\n", "ocr": false, "opinion_id": 149223 } ]	Ninth Circuit	Court of Appeals for the Ninth Circuit	F	USA, Federal
2,599,080	Marquez, Ney, Nieto	2001-05-10	false	lutfi-v-brighton-community-hospital-assn	Lutfi	Lutfi v. Brighton Community Hospital Ass'n	Bashar LUTFI, M.D., Plaintiff-Appellant, v. BRIGHTON COMMUNITY HOSPITAL ASSOCIATION, D/B/A Platte Valley Medical Center, Inc.; And John Hicks, Individually, as Chief Executive Officer of Platte Valley Medical Center, and as a Member of the Board of Platte Valley Medical Center, Defendants-Appellees	Leavenworth & Tester P.C., Sander N. Karp, Julie C. Berquist, Glenwood Springs, CO; Antonio Bates Bernard, P.C., Brian E. Bates, Denver, CO, for Plaintiff-Appellant., Grund & Breslau, P.C., John W. Grund, Denver CO; Kutak Rock, LLP, Melvin B. Sabey, Denver, CO, for Defendants-Appel-lees.	null	null	null	null	null	null	null	Rehearing Denied July 26, 2001., Certiorari Denied Feb. 4, 2002.	null	null	10	Published	null	<parties id="b87-7"> Bashar LUTFI, M.D., Plaintiff-Appellant, v. BRIGHTON COMMUNITY HOSPITAL ASSOCIATION, d/b/a Platte Valley Medical Center, Inc.; and John Hicks, individually, as Chief Executive Officer of Platte Valley Medical Center, and as a member of the Board of Platte Valley Medical Center, Defendants-Appellees. </parties><br><docketnumber id="b87-9"> No. 00CA0245. </docketnumber><br><court id="b87-10"> Colorado Court of Appeals, Div. III. </court><br><decisiondate id="b87-11"> May 10, 2001. </decisiondate><otherdate id="AJY"> Rehearing Denied July 26, 2001. </otherdate><otherdate id="AUy"> Certiorari Denied Feb. 4, 2002. </otherdate><br><attorneys id="b89-19"> <span citation-index="1" class="star-pagination" label="53"> 53 </span> Leavenworth & Tester P.C., Sander N. Karp, Julie C. Berquist, Glenwood Springs, CO; Antonio Bates Bernard, P.C., Brian E. Bates, Denver, CO, for Plaintiff-Appellant. </attorneys><br><attorneys id="b89-20"> Grund & Breslau, P.C., John W. Grund, Denver CO; Kutak Rock, LLP, Melvin B. <span citation-index="1" class="star-pagination" label="54"> 54 </span> Sabey, Denver, CO, for Defendants-Appel-lees. </attorneys>	[ "40 P.3d 51" ]	[ { "author_str": "Marquez", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 6681, "opinion_text": "\n40 P.3d 51 (2001)\nBashar LUTFI, M.D., Plaintiff-Appellant,\nv.\nBRIGHTON COMMUNITY HOSPITAL ASSOCIATION, d/b/a Platte Valley Medical Center, Inc.; and John Hicks, individually, as Chief Executive Officer of Platte Valley Medical Center, and as a member of the Board of Platte Valley Medical Center, Defendants-Appellees.\nNo. 00CA0245.\nColorado Court of Appeals, Div. III.\nMay 10, 2001.\nRehearing Denied July 26, 2001.\nCertiorari Denied February 4, 2002.\n53 Leavenworth & Tester P.C., Sander N. Karp, Julie C. Berquist, Glenwood Springs, CO; Antonio Bates Bernard, P.C., Brian E. Bates, Denver, CO, for Plaintiff-Appellant.\nGrund & Breslau, P.C., John W. Grund, Denver CO; Kutak Rock, LLP, Melvin B. 54 Sabey, Denver, CO, for Defendants-Appellees.\nOpinion by Judge MARQUEZ.\nIn this dispute involving his removal from a schedule of physicians providing services in a hospital emergency medical service department (ER), plaintiff, Bashar Lutfi, M.D., appeals the summary judgment in favor of defendants, Platte Valley Medical Center, Inc. (the hospital), and John Hicks, the hospital's chief executive officer. We affirm.\nThe hospital contracted with Platte Valley Emergency Physicians, Inc. (PVEP), to provide physicians to cover the hospital's ER. That contract contained a provision stating that the hospital could require PVEP to remove a physician from the ER. Plaintiff entered into an arrangement as an independent contractor with PVEP under which PVEP scheduled plaintiff to work in the ER.\nWhile plaintiff was working in the ER, a patient with lacerated fingers came in. Although plaintiff denies it occurred, the patient claimed that plaintiff made him wait an inordinate amount of time for treatment, was rude to him, and finally refused him treatment. Subsequently, Hicks contacted PVEP and required, pursuant to the contract between the hospital and PVEP, that plaintiff be removed from the ER rotation.\nAsserting racial and national origin discrimination, plaintiff brought this action alleging claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e (1994 & 1998 Supp.), and also under § 42 U.S.C. § 1981 (1994 & 1998 Supp.). He also asserted claims for tortious interference with his employment agreement with PVEP, breach of agreement contained in the hospital's bylaws, breach of duty of good faith and fair dealing, breach of employment contract, and promissory estoppel. Only the tortious interference and bylaws claims were asserted against Hicks. The trial court granted defendants' motion for summary judgment as to all of plaintiff's claims for relief. This appeal followed.\nSummary judgment is appropriate only when the pleadings and supporting documents demonstrate that no genuine issue exists as to any material fact and that the moving party is entitled to judgment as a matter of law. Our review of an order granting or denying a motion for summary judgment is de novo. Aspen Wilderness Workshop, Inc. v. Colorado Water Conservation Board, 901 P.2d 1251 (Colo.1995). We conclude that the summary judgment was appropriate here.\n\nI. Title VII\nPlaintiff first contends that the trial court erred in dismissing his national origin discrimination claim under Title VII on grounds that he was an independent contractor. He asserts that he need not establish a direct employer-employee relationship with the hospital to establish liability under Title VII, and that he is an employee for Title VII purposes. We are not persuaded.\n\nA. Title VII Does Not Apply to Independent Contractors\nTitle VII provides, in pertinent part, that \"[i]t shall be an unlawful employment practice for an employer (1) to fail or refuse to hire or to discharge any individual ... because of such individual's race, color, religion, sex, or national origin.\" 42 U.S.C. § 2000e-2(a).\nThere must, however, be some connection with an employment relationship for Title VII protections to apply. Thus, Title VII protects employees, but does not protect independent contractors. Adcock v. Chrysler Corp., 166 F.3d 1290 (9th Cir.1999). Under Title VII, \"employee\" is defined as \"an individual employed by an employer.\" 42 U.S.C. § 2000e(f).\nPlaintiff relies upon Sibley Memorial Hospital v. Wilson, 488 F.2d 1338 (D.C.Cir.1973), and other cases for the proposition that a nonemployee independent contractor may bring a claim under Title VII.\nIn recent years, however, federal courts have almost uniformly ruled that a person who is an independent contractor cannot bring a Title VII claim. We find the reasoning of those decisions persuasive. See Schwieger v. Farm Bureau Insurance Co., 207 F.3d 480 (8th Cir.2000); Adcock v. 55 Chrysler Corp., supra; Zinn v. McKune, 143 F.3d 1353 (10th Cir.1998); Cilecek v. Inova Health System Services, 115 F.3d 256 (4th Cir.1997)(physician under contract to provide emergency medical services was an independent contractor rather than an employee and thus could not sustain a Title VII action); Alexander v. Rush N. Shore Medical Center, 101 F.3d 487 (7th Cir.1996)(physician could not bring a Title VII claim alleging the hospital's revocation of his staff privileges constituted unlawful discrimination absent proof of an employment relationship, which did not exist because physician was independent contractor); Diggs v. Harris Hospital-Methodist, Inc., 847 F.2d 270 (5th Cir.1988)(no Title VII claim was proper because independent contractor physician failed to prove existence of an employment relationship with which hospital allegedly interfered); Cobb v. Sun Papers, Inc., 673 F.2d 337 (11th Cir.1982); Spirides v. Reinhardt, 613 F.2d 826 (D.C.Cir. 1979); Peck v. Democrat & Chronicle/Gannett Newspapers, 113 F. Supp. 2d 434 (W.D.N.Y.2000); Hannon v. Avis Rent A Car System, Inc., 107 F. Supp. 2d 1256 (D.Mont.2000). See also 1 A. Larson & L. Larson, Employment Discrimination § 5.22 (1991).\nSome state courts also have recognized that Title VII applies to employees and not to independent contractors. See, e.g., Ostrander v. Farm Bureau Mutual Insurance Co., 123 Idaho 650, 851 P.2d 946 (1993); Marquis v. City of Spokane, 130 Wash.2d 97, 922 P.2d 43 (1996).\nFurther, the cases relied upon by plaintiff are distinguishable. In Sibley Memorial Hospital v. Wilson, supra, the court recognized that in a sex discrimination claim, even in the absence of an employment relationship, a hospital had brought itself within the strictures of Title VII by determining that a female patient should not have a male nurse and thus blocking access of a male private duty nurse to work for a female patient. In Christopher v. Stouder Memorial Hospital, 936 F.2d 870 (6th Cir.1991), a hospital refused to grant a nurse privileges to work in its facility as a private scrub nurse. Because the hospital had allegedly interfered with her access to employment, the nurse stated a claim under Title VII, even though she was not an employee. The court noted she was not an independent contractor with respect to the hospital. In Zaklama v. Mt. Sinai Medical Center, 842 F.2d 291 (11th Cir.1988), an anesthesiologist from Egypt was dismissed from a residency program based on adverse evaluations from a director of a training program and the hospital's decision to bar him from the hospital. The hospital's actions affected the plaintiff's employment with an employer other than the defendant, and the plaintiff stated a claim under Title VII. In Pardazi v. Cullman Medical Center, 838 F.2d 1155 (11th Cir.1988), an Iran-educated medical practitioner was employed by a professional corporation, conditioned upon his becoming a member, with staff privileges, of the hospital. Although he was appointed to the hospital staff, his observation period was extended from four months to one year. Accepting that the plaintiff was not an employee, the court nonetheless concluded that the hospital could be held liable under Title VII if it interfered with the plaintiff's employment opportunities with the professional corporation.\nHowever, there is no indication in those cases of an agreement of the type between the hospital and PVEP requiring removal upon the hospital's request. Here, the hospital acted in accordance with its contract with PVEP. Further, as discussed more fully below, the hospital's action did not affect plaintiff's employment status with PVEP, because plaintiff here was an independent contractor with respect to PVEP, not a PVEP employee. Additionally, those cases do not contradict the proposition that Title VII does not protect independent contractors. See, e.g., Spirides v. Reinhardt, supra (decision from the same circuit as Sibley Memorial Hospital v. Wilson, supra). Each of those cases is also distinguishable in that they involved defendants who were in a position to influence significantly the plaintiffs' respective employment opportunities. Here, by contrast, there is no evidence that the hospital interfered with plaintiff's employment opportunities with other parties.\n56 We thus conclude that to prevail under Title VII, plaintiff must establish that he was not an independent contractor.\n\nB. Plaintiff Was an Independent Contractor\nTo determine whether a person is an employee, the Tenth Circuit Court of Appeals has concluded that the skeletal definitions of \"employer\" and \"employee\" provided in 42 U.S.C. §§ 2000e(b) and 2000e(f) should be fleshed out by applying common law agency principles to the facts and circumstances surrounding the working relationship of the parties. Although the main focus of this inquiry is whether and to what extent a putative employer has the right to control the means and manner of the worker's performance, other factors inform the analysis, including:\n(1) the kind of occupation at issue, with reference to whether the work usually is done under the direction of a supervisor or is done by a specialist without supervision; (2) the skill required in the particular occupation; (3) whether the employer or the employee furnishes the equipment used and the place of work; (4) the length of time the individual has worked; (5) the method of payment, whether by time or by job; (6) the manner in which the work relationship is terminated; (7) whether annual leave is afforded; (8) whether the work is an integral part of the business of the employer; (9) whether the worker accumulates retirement benefits; (10) whether the employer pays social security taxes; and (11) the intention of the parties.\nZinn v. McKune, supra, 143 F.3d at 1357 (quoting Lambertsen v. Utah Department of Corrections, 79 F.3d 1024, 1028 (10th Cir. 1996)).\nThe inquiry requires us to look to the totality of circumstances surrounding the working relationship between the parties; no single factor is determinative. Zinn v. McKune, supra.\nHere, the contract between the hospital and PVEP expressly provides that \"nothing in this Agreement is intended nor shall be construed to create between Hospital and Contractor an employer/employee relationship... or to allow Hospital to exercise control or direction over the manner or method by which the Physicians provide professional medical services at Hospital.\" This leaves no question as to the intent of the parties that no employee-employer relationship would be formed and that the hospital would have no control over the \"means and manner\" of plaintiff's ER work.\nPlaintiff was also an independent contractor in relation to PVEP. This is shown in an agreement with PVEP, which plaintiff signed, that stated that all \"physicians are independent contractors.\"\nIn addition, plaintiff had signed an agreement regarding his medical staff privileges with the hospital in which he \"expressly acknowledged... that [he] is an `independent contractor' with respect to Hospital and nothing in this Agreement ... shall be construed to create ... an employer/employee relationship.\"\nAccording to the evidence submitted by defendants, PVEP provided plaintiff, a licensed professional physician, with his work assignments and scheduling at the hospital. In contrast, the hospital did not directly hire plaintiff for ER assignments and could not fire plaintiff from PVEP. If the hospital was not satisfied with a PVEP employee, its only option was to contact PVEP and require that that person be removed from the ER. Further, according to PVEP's agreement with the hospital, the hospital paid PVEP for plaintiff's services, and PVEP paid plaintiff for services rendered in the ER.\nThe physician who incorporated PVEP and executed its agreement with the hospital stated in his deposition that the memorandum executed by plaintiff was intended \"to remind [the physicians] that they were independent contractors.\" Plaintiff's own expert witness also stated that \"[plaintiff] was not an employee of the hospital.\"\nIn response, plaintiff emphasized portions of the agreement between PVEP and the hospital, arguing that these provisions established the hospital's control over ER physicians and that the hospital agreed to provide office space, furniture, and equipment. However, read in context, those provisions do not 57 support an employment relationship. We thus conclude as a matter of law that plaintiff was an independent contractor.\nOur conclusion is consistent with the \"corporate practice of medicine\" doctrine articulated by the supreme court in the context of respondeat superior. Under that doctrine, a corporation such as a hospital cannot be licensed to practice medicine and thus cannot command or forbid any act by a doctor in the practice of medicine. Its relationship with a doctor providing medical services is necessarily that of an independent contractor. Moon v. Mercy Hospital, 150 Colo. 430, 373 P.2d 944 (1962); Nieto v. State, 952 P.2d 834 (Colo.App.1997), rev'd on other grounds, 993 P.2d 493 (Colo.2000).\nThe one exception to the doctrine, which applies to physician-formed professional services corporations, is not relevant here because the hospital is not such a corporation. See generally § 12-36-134, C.R.S.2000; Russell v. Pediatric Neurosurgery, P.C., 15 P.3d 288 (Colo.App.2000)(cert. granted December 18, 2000).\nAccordingly, the trial court correctly granted summary judgment on plaintiff's Title VII claim.\n\nII. Section 1981\nPlaintiff next contends that 42 U.S.C. § 1981 does not require proof that he was an \"employee,\" as defined in Title VII, and that the trial court erred in failing to consider the implications of the hospital bylaws, which plaintiff alleges constituted a contract between plaintiff and the hospital, giving grounds for a § 1981 claim. We disagree.\nUnder 42 U.S.C. § 1981(a), \"[a]ll persons within the jurisdiction of the United States shall have the same right in every State ... to make and enforce contracts,\" which includes the \"making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.\" 42 U.S.C. § 1981(b).\nWhen § 1981 and Title VII claims arise from identical facts, the elements of each claim are construed in the same way. Gwin v. Chesrown Chevrolet, Inc., 931 P.2d 466 (Colo.App.1996) (citing Skinner v. Total Petroleum, Inc., 859 F.2d 1439 (10th Cir. 1988)).\nTherefore, because plaintiff's Title VII claim fails due to his independent contractor status, his § 1981 claim fails as well. See O'Neal v. Ferguson Construction Co., 237 F.3d 1248 (10th Cir.2001)(both Title VII and § 1981 require a plaintiff to establish the same prima facie elements); Rice-Lamar v. City of Fort Lauderdale, 232 F.3d 836 (11th Cir.2000)(elements of a claim of race discrimination under § 1981 are the same as those for a Title VII disparate treatment claim in the employment context); Johnson v. University of Cincinnati, 215 F.3d 561 (6th Cir.2000)(elements are the same for employment cases stemming from § 1981 and Title VII); Vakharia v. Swedish Covenant Hospital, 190 F.3d 799 (7th Cir.1999).\nPlaintiff, however, contends that he has a contractual relationship with the hospital based upon its bylaws. He claims this is sufficient to give rise to a § 1981 claim independent of an employee-employer relationship. We disagree.\nSection 1981 prohibits discriminatory conduct that occurs both before and after the establishment of the contractual relationship. See Perry v. Woodward, 199 F.3d 1126 (10th Cir.1999)(§ 1981 centers on the protection of contractual rights; any claim brought pursuant to § 1981 must be supported by an underlying right of the employee to make and enforce contracts).\nAn employer's distribution to an employee of documents that contain specific procedures for termination of employment, when relied upon by an employee and supported by the consideration of continued employment, may result in the employer becoming contractually bound to comply with those procedures. See Continental Air Lines, Inc. v. Keenan, 731 P.2d 708 (Colo.1987); Ferrera v. Nielsen, 799 P.2d 458 (Colo.App.1990).\nHere, the hospital's bylaws, under the capitalized heading \"PURPOSE AND USE OF MEDICAL STAFF BYLAWS,\" contain the following disclaimer:\n\n58 These Medical Staff Bylaws and the Rules and Regulations do not constitute a contract of any kind whatsoever and any Practitioner who intends that these Bylaws and the Rules and Regulations should constitute a contract must first notify the Hospital and obtain the written consent of the Board. These Bylaws and the Rules and Regulations shall be interpreted, applied and enforced within the sole discretion of the Hospital. (emphasis added)\nPlaintiff presented no evidence that he attempted to notify the hospital of his intent to rely upon the bylaws as a contract. Nor is there evidence that he obtained the requisite consent of the board to do so. Thus, the bylaws did not create a contractual relationship between plaintiff and the hospital.\nTherefore, plaintiff's § 1981 claim also fails under his theory that the bylaws created such a relationship.\n\nIII. Tortious Interference\nPlaintiff next contends that Hicks, in directing PVEP to remove plaintiff from the ER rotation, tortiously interfered with his contract with PVEP. We are not persuaded.\nTo establish tortious interference with a contract requires that: (1) the plaintiff had a contract with another party; (2) the defendant knew or should have known of such contract's existence; (3) the defendant intentionally induced the other party to the contract not to perform the contract with the plaintiff; and (4) the defendant's actions caused the plaintiff to incur damages. Telluride Real Estate Co. v. Penthouse Affiliates, LLC, 996 P.2d 151 (Colo.App.1999).\nRegarding the third element, the interference with a prospective business relationship must be both intentional and improper. Amoco Oil Co. v. Ervin, 908 P.2d 493 (Colo.1995).\nHere, even if plaintiff established the first and second elements of his claim, he provided no evidentiary support for the third element, intentional and improper action by Hicks.\nThe record reveals that Hicks directed PVEP to remove plaintiff from the emergency room rotation. However, the agreement between the hospital and PVEP states, in pertinent part, that the \"Hospital may at any time, require Contractor [PVEP] to remove any of the individual Physicians from the Department coverage schedule.\" Thus, the hospital, through Hicks, acted properly in exercising its rights under the agreement.\nFurther, nothing in plaintiff's agreement with PVEP specifically precluded his removal from the ER rotation. His contract addressed only compensation, holidays, weekends, vacations, and time off.\nTherefore, because plaintiff presented no evidence to establish improper action by Hicks, we conclude that the trial court properly entered summary judgment on this claim as well.\n\nIV. Breach of Contract\nWe also reject plaintiff's contention that the hospital breached its contract with him by failing to afford him the benefits and protections of its bylaws.\nAs noted above, the bylaws did not create a contractual relationship between plaintiff and the hospital. However, even if the bylaws were contractually binding upon the hospital, the protective provisions of the bylaws upon which plaintiff relies do not apply here. The procedural rights in the bylaws, which relate to physicians whose right to practice medicine the hospital denies, removes, or restricts, were not implicated by defendants' actions. Plaintiff's removal from the ER had \"no effect on [plaintiff's] appointment status or clinical privileges\" at the hospital.\nThe procedural rights contained in the bylaws apply only to an adverse recommendation, after investigation by the Medical Executive Committee (MEC), rather than to an action taken by the hospital's chief executive officer pursuant to an outside contract. Hicks' actions in the present case were exclusively controlled by the terms of the contract between the hospital and PVEP, not hospital bylaws.\n\n\n*59 V. Good Faith and Fair Dealing\nPlaintiff further contends that the district court erred in dismissing his claim for breach of the covenant of good faith and fair dealing. We are not persuaded.\nEvery contract contains an implied duty of good faith and fair dealing. However, this implied duty may be relied upon only when the manner of performance under a specific contract term allows for discretion on the part of either party; it may not contradict terms or conditions for which the parties have bargained. Amoco Oil Co. v. Ervin, supra.\nIf a claim based on the violation of an express covenant of good faith is to be recognized, such a claim is a contractual one. Hoyt v. Target Stores, 981 P.2d 188 (Colo. App.1998).\nHere, there was no contract, express or implied, between plaintiff and the hospital concerning his work in the ER. Therefore, no claim for breach of the covenant of good faith and fair dealing may stand. See Hoyt v. Target Stores, supra.\nFurther, plaintiff's relationship with the hospital as an ER physician was based solely on the agreement between the hospital and PVEP. As discussed above, that document expressly sets forth the hospital's right to require PVEP to remove a physician from the ER schedule. Consequently, plaintiff cannot rely on the implied duty of good faith and fair dealing to circumvent terms for which PVEP and the hospital expressly bargained. See generally Grossman v. Columbine Medical Group, 12 P.3d 269 (Colo.App.1999)(covenant of good faith and fair dealing cannot limit an independent practice association's right to discharge an independent contractor, where terms for which independent contractor and association bargained allowed such removal).\nTherefore, we conclude that summary judgment for the defendants was proper on this claim.\n\nVI. Promissory Estoppel\nFinally, we are not persuaded by plaintiff's contention that the trial court erred in dismissing his claim for promissory estoppel based upon his reliance on the hospital's bylaws.\nUnder Colorado law, the elements of a promissory estoppel claim are: (1) the promisor made a promise to the promisee; (2) the promisor should reasonably have expected that the promise would induce action or forbearance by the promisee; (3) the promisee reasonably relied on the promise to the promisee's detriment; and (4) the promise must be enforced to prevent injustice. Berg v. State Board of Agriculture, 919 P.2d 254 (Colo.1996).\nHere, plaintiff claims on appeal that he agreed to close his internal medicine practice based on his understanding that the hospital bylaws would protect him from indiscriminate termination from the ER. While plaintiff cites portions of the record in support of his claim, he points to nothing in the record that indicates his reliance upon the hospital's bylaws. The record indicates that it was not until after he lost his ER position that he looked to the bylaws to see if they contained provisions on physician removal that might strengthen his claim against the hospital. See Brighton School District 27J v. Transamerica Premier Insurance Co., 923 P.2d 328 (Colo.App.1996)(it is not the duty of the reviewing court to search the record for evidence to support bald assertions).\nFurther, if an employee seeks to rely upon a written policy of the employer as the basis for a promissory estoppel claim, that employee must accept the whole of that policy. The employee may not reject those portions of the policy that may be considered unfavorable. Floyd v. Coors Brewing Co., 952 P.2d 797 (Colo.App.1997), rev'd on other grounds, 978 P.2d 663 (Colo.1999).\nHere, even if plaintiff had relied upon the bylaws, as noted above, they offer protection only under certain circumstances not present in plaintiff's situation, i.e., \"an adverse recommendation\" by the MEC.\nAccordingly, the judgment is affirmed.\nNEY and NIETO, JJ., concur.\n", "ocr": false, "opinion_id": 2599080 } ]	Colorado Court of Appeals	Colorado Court of Appeals	SA	Colorado, CO
141,286	null	2005-01-10	false	thompson-v-brownlee-acting-secretary-of-the-army	Thompson	Thompson v. Brownlee, Acting Secretary of the Army	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "543 U.S. 1076" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/US/543/543.US.1076.04-7425.html", "author_id": null, "opinion_text": "543 U.S. 1076\n THOMPSONv.BROWNLEE, ACTING SECRETARY OF THE ARMY.\n No. 04-7425.\n Supreme Court of United States.\n January 10, 2005.\n \n 1\n C. A. 10th Cir. Certiorari denied. Reported below: 109 Fed. Appx. 250.\n \n ", "ocr": false, "opinion_id": 141286 } ]	Supreme Court	Supreme Court of the United States	F	USA, Federal
526,746	Miner, Newman, Ward	1989-07-27	false	dial-a-mattress-franchise-corporation-v-anthony-page-dba-easy-associates	null	Dial-A-Mattress Franchise Corporation v. Anthony Page, Dba Easy Associates, Page Industries, and Easy Bed, and Easy Bed, Incorporated	DIAL-A-MATTRESS FRANCHISE CORPORATION, Plaintiff-Appellee, v. Anthony PAGE, Dba Easy Associates, Page Industries, and Easy Bed, and Easy Bed, Incorporated, Defendants-Appellants	Anthony Page, Deer Park, N.Y., pro se., Arthur L. Plevy, Edison, N.J., for plaintiff-appellee.	null	null	null	null	null	null	null	Argued June 2, 1989.	null	null	24	Published	null	<parties id="b753-11"> DIAL-A-MATTRESS FRANCHISE CORPORATION, Plaintiff-Appellee, v. Anthony PAGE, dba Easy Associates, Page Industries, and Easy Bed, and Easy Bed, Incorporated, Defendants-Appellants. </parties><br><docketnumber id="b753-14"> No. 1263, Dockets 89-7050(L), 89-7082. </docketnumber><br><court id="b753-15"> United States Court of Appeals, Second Circuit. </court><br><otherdate id="b753-16"> Argued June 2, 1989. </otherdate><br><decisiondate id="b753-17"> Decided July 27, 1989. </decisiondate><br><attorneys id="b754-9"> <span citation-index="1" class="star-pagination" label="676"> 676 </span> Anthony Page, Deer Park, N.Y., pro se. </attorneys><br><attorneys id="b754-10"> Arthur L. Plevy, Edison, N.J., for plaintiff-appellee. </attorneys><br><judges id="b754-11"> Before NEWMAN and MINER, Circuit Judges, and WARD, District Judge. <a class="footnote" href="#fn" id="fn_ref"> </a> </judges><div class="footnotes"><div class="footnote" id="fn" label=""> <a class="footnote" href="#fn_ref"> </a> <p id="b754-15"> The Honorable Robert J. Ward of the United States District Court for the Southern District of New York, sitting by designation. </p> </div></div>	[ "880 F.2d 675" ]	[ { "author_str": "Newman", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/880/880.F2d.675.89-7082.89-7050.1263.html", "author_id": null, "opinion_text": "880 F.2d 675\n 11 U.S.P.Q.2d 1644\n DIAL-A-MATTRESS FRANCHISE CORPORATION, Plaintiff-Appellee,v.Anthony PAGE, dba Easy Associates, Page Industries, and EasyBed, and Easy Bed, Incorporated, Defendants-Appellants.\n No. 1263, Dockets 89-7050(L), 89-7082.\n United States Court of Appeals,Second Circuit.\n Argued June 2, 1989.Decided July 27, 1989.\n \n Anthony Page, Deer Park, N.Y., pro se.\n Arthur L. Plevy, Edison, N.J., for plaintiff-appellee.\n Before NEWMAN and MINER, Circuit Judges, and WARD, District Judge.\n JON O. NEWMAN, Circuit Judge:\n \n \n 1\n An increasingly popular marketing technique of some businesses involves the use of telephone numbers whose digits correspond to letters on the telephone dial that spell out an easily remembered word or name. The business then invites telephone customers to dial the word or name. The technique is used extensively as a convenient way to remember the seven digits that follow the \"1-800\" prefix of toll-free long-distance numbers. Some examples are 1-800-MARINES and 1-800-FLOWERS. The technique is also used for numbers within a local dialing area. As so often happens with new business practices, this one has spawned a new issue for litigation in the field of unfair competition.\n \n \n 2\n This appeal raises the somewhat novel issue of whether it is unfair competition for a business to acquire a telephone number identified by the spelling of a generic term that a competitor is using (with a spelling modification) to identify its telephone number. The issue arises on an appeal from the District Court for the Eastern District of New York (Jack B. Weinstein, Judge), preliminarily enjoining appellant Anthony Page from using the \"number\" 1-800-MATTRESS within the New York metropolitan area. Page's competitor identifies its local area telephone number by inviting customers to dial the \"number\" MATTRES. For the reasons stated below, we affirm.\n \n Background\n \n 3\n Plaintiff-appellee Dial-A-Mattress Franchise Corp., as its name implies, is a retail mattress dealer that takes orders from customers primarily over the telephone, rather than in person at a retail outlet. Since 1976, Dial-A-Mattress's local phone number in the various area codes of the New York metropolitan area has been 628-8737. These digits correspond to the letters MATTRES on the telephone dial. Dial-A-Mattress has advertised its services and its phone number extensively, using the slogan \"DIAL-A-MATTRESS and drop the last 'S' for savings.\"\n \n \n 4\n In 1981, Dial-A-Mattress sought to obtain the number 1-800-628-8737 from the American Telephone and Telegraph Company so that its customers could make toll-free long-distance calls to the company using the number 1-800-MATTRES. AT & T told Dial-A-Mattress that this 800 number was then unavailable, but that it would be available in January 1989.\n \n \n 5\n Defendant-appellant Anthony Page started in business in 1983 selling an invention of his father's called the EASY BED, a type of sofa bed that opens up vertically into a bunk-bed. Page obtained the phone number 1-800-327-9233, which spells 1-800-EASY-BED, a number he advertised on radio and television. Page then decided to expand into the mattress business. Although aware that Dial-A-Mattress had the local telephone number that spelled \"MATTRES\" (628-8737) for all the area codes in the New York metropolitan area, Page sought to obtain the same number as a \"1-800\" number.\n \n \n 6\n Like Dial-A-Mattress, Page was told by AT & T that the number was unavailable. But Page sought to obtain the number more inventively than did Dial-A-Mattress. Page called every number beginning 1-800-MAT until he found the number of a company that had gone out of business. He then bought that number and exchanged the last four digits so that it became 1-800-628-8737, or 1-800-MATTRES.\n \n \n 7\n Page promoted his number as 1-800-MATTRESS. Although the word \"mattress\" has one letter more than the telephone number, dialing the extra letter does not affect completion of the call.\n \n \n 8\n Dial-A-Mattress filed a complaint in the Eastern District against the Easy Bed Mattress Company, the name under which Page was doing business. The complaint sought an injunction, an accounting, and damages on claims of trademark infringement, unfair competition, and unjust enrichment under federal and New York law. Judge Weinstein issued a temporary restraining order and referred the case to Magistrate A. Simon Chrein for an evidentiary hearing.\n \n \n 9\n The Magistrate recommended that Page be permitted to use the number 1-800-MATTRES(S), but that he be required to answer each telephone call received with the following greeting: \"Easy Bed. We are not connected with Dial-A-Mattress which advertises on radio and television.\" The Magistrate also recommended that Page be required to include a disclaimer of any connection to Dial-A-Mattress in his advertisements.\n \n \n 10\n Judge Weinstein adopted the Magistrate's recommendation that a preliminary injunction should issue but altered the terms of the injunction. The District Judge ordered Page to notify the telephone company not to connect to Page's telephone any call placed to the number 1-800-MATTRES(S) that originated from area codes 201, 212, 516, 203, and 718, and to pay any charges required for that purpose. This appeal followed.\n \n Discussion\n 1. Appellant's Pro Se Status\n \n 11\n As a preliminary matter, we note that Page has brought his appeal pro se. Under the rules of this Circuit, a corporation may not appear pro se. Papers submitted on behalf of a corporation for whom no counsel has entered an appearance may not be filed. 2d Cir.R. 46(d)(2). Page informed the Court at oral argument that he incorporated his business the week before the argument. Ordinarily, this would preclude Page, who is not an attorney, from pursuing this appeal on behalf of Easy Bed. We note, however, that the District Court's injunction is targeted at Page personally. Because Page has a right to appear on his own behalf to appeal an injunction that orders him personally to take specific action, see 28 U.S.C. Sec. 1654 (1982), we permit his appeal.\n \n 2. Merits\n \n 12\n The issue pressed most vigorously on appeal by Page is whether Dial-A-Mattress can obtain judicial protection for the call letters of a telephone number that spell what Dial-A-Mattress concedes is a generic term--\"mattress.\" It is clear that Dial-A-Mattress could not claim trademark rights in the word \"mattress\" used solely to identify its company or its product. Nor would protection be available if the word was used for these purposes with a spelling variation, such as \"MATTRES\", that did not change the generic significance for the buyer. See Miller Brewing Co. v. Heileman Brewing Co., 561 F.2d 75 (7th Cir.1977) (LITE used for light beer), cert. denied, 434 U.S. 1025, 98 S.Ct. 751, 54 L.Ed.2d 772 (1978); American Druggists' Syndicate v. United States Industrial Alcohol Co., 2 F.2d 942 (D.C.Cir.1924) (AL-KOL used for rubbing alcohol); 1 J. McCarthy, Trademarks and Unfair Competition Sec. 12:12(B) (2d. ed. 1984). It is equally clear that a second comer, though entitled to use a generic term already used by its competitor, may be enjoined from passing itself or its product off as the first user or that user's product and may be required to take steps to distinguish itself or its product from the first user or that user's product. See Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 59 S.Ct. 109, 83 L.Ed. 73 (1938) (shredded wheat).\n \n \n 13\n These general principles concerning generic terms evidently prompted the Magistrate to recommend that Page be allowed to continue using 1-800-MATTRES(S) provided he answered calls with a disclaimer distinguishing his company from Dial-A-Mattress. But this case cannot be decided solely upon the principles applicable to generic terms. Dial-A-Mattress is not seeking protection against a competitor's use of the word \"mattress\" solely to identify the competitor's name or product. What the plaintiff seeks is protection against a competitor's use of a confusingly similar telephone number and a confusingly similar means of identifying that number.\n \n \n 14\n Telephone numbers may be protected as trademarks, and a competitor's use of a confusingly similar telephone number may be enjoined as both trademark infringement and unfair competition. See Chicago World's Fair-1992 Corp. v. The 1992 Chicago World's Fair Comm'n, Civ. No. 83 C 3424 (N.D.Ill. Aug. 16, 1983) (LEXIS, Genfed library, Dist file) (protecting use of telephone number 444-1992 against use of telephone number 434-1992 in context where \"1992\" had special significance); see also SODIMA v. Int'l Yogurt Co., 662 F.Supp. 839, 852-54 (D.Or.1987) (common law trademark rights recognized in telephone \"number\" 800-YO CREAM); American Airlines, Inc. v. A 1-800-A-M-E-R-I-C-A-N Corp., 622 F.Supp. 673 (N.D.Ill.1985) (granting American Airlines injunction against travel agency's use of telephone number 1-800-263-7422, which defendant promoted as 1-800-AMERICAN). Companies doing significant business through telephone orders frequently promote their telephone numbers as a key identification of the source of their products.\n \n \n 15\n In this case, the District Court was clearly entitled to conclude that defendant's use of the telephone number 1-800-628-8737 was confusingly similar to plaintiff's telephone number 628-8737 in those area code regions in which plaintiff solicited telephone orders, especially in view of defendant's identification of its number as 1-800-MATTRESS after plaintiff had promoted identification of its number as (area code)-MATTRES. Plaintiff does not lose the right to protection against defendant's use of a confusingly similar number and a confusingly similar set of letters that correlate with that number on the telephone dial just because the letters spell a generic term. The principles limiting protection for the use of generic terms serve to prevent a marketer from appropriating for its exclusive use words that must remain available to competitors to inform their customers as to the nature of the competitor's business or product. These principles do not require that a competitor remain free to confuse the public with a telephone number or the letters identifying that number that are deceptively similar to those of a first user.\n \n \n 16\n Appellant's remaining contentions are without merit and require no discussion.\n \n \n 17\n The preliminary injunction is affirmed.\n \n \n \n \n The Honorable Robert J. Ward of the United States District Court for the Southern District of New York, sitting by designation\n \n \n ", "ocr": false, "opinion_id": 526746 } ]	Second Circuit	Court of Appeals for the Second Circuit	F	USA, Federal
26,445	null	2002-01-25	false	morris-v-dillard-dept-stores	Morris	Morris v. Dillard Dept Stores	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	null	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": 27, "download_url": "http://www.ca5.uscourts.gov/opinions\\pub\\00/00-30710.cv0.wpd.pdf", "author_id": null, "opinion_text": " Revised January 24, 2002\n\n IN THE UNITED STATES COURT OF APPEALS\n\n FOR THE FIFTH CIRCUIT\n\n _____________________\n\n No. 00-30710\n _____________________\n\n\n\n\n DEBORAH MORRIS\n\n Plaintiff - Appellant\n\n v.\n\n\n DILLARD DEPARTMENT STORES, INC; ET AL\n Defendants\n DILLARD DEPARTMENT STORES, INC;\n LIBERTY MUTUAL INSURANCE CO;\n R.W. BROWN; CITY OF BOSSIER CITY\n Defendants - Appellees\n\n_________________________________________________________________\n\n Appeal from the United States District Court\n for the Western District of Louisiana\n_________________________________________________________________\n\n December 26, 2001\n\nBefore KING, Chief Judge, and REAVLEY and JONES, Circuit Judges.\n\nKING, Chief Judge:\n\n On claims asserting discrimination, unlawful search and\n\nseizure, malicious prosecution, false arrest, false imprisonment,\n\nand intentional infliction of emotional distress, arising from\n\nthe detention, arrest and search of the plaintiff on suspicion of\n\nshoplifting, the district court granted summary judgment in favor\n\fof all defendants on all claims. For the following reasons, we\n\nAFFIRM.\n\n I. FACTUAL AND PROCEDURAL HISTORY\n\n Plaintiff-Appellant Deborah Morris, an African-American,\n\nappeals from the district court’s grant of summary judgment in\n\nfavor of Defendants-Appellees Dillard Department Stores,\n\nIncorporated (“Dillard’s”), Dillard’s insurer, Liberty Mutual\n\nInsurance Company (“Liberty”), and police officer R.W. Brown on\n\nall constitutional and state law claims brought by Morris. On\n\nMarch 13, 1998, Morris and a friend, Maxine Crawley, were in\n\nDillard’s. Officer Brown was off-duty that day from his job as a\n\nmunicipal police officer for City of Bossier City (“the City”)\n\nand working as a private security guard for Dillard’s. Brown\n\nwore his police uniform while working as a private guard, as\n\nrequired by the City. An employee of Dillard’s, Meshell Maxey,\n\nreported to Dillard’s security that she observed a suspected\n\nshoplifter. When Brown responded to Maxey’s report, he obtained\n\nMaxey’s description of what she observed and Maxey’s\n\nidentification of Morris as the suspect. Maxey’s account\n\nincluded that Maxey saw Morris conceal a shirt under her jacket\n\nand then replace the merchandise during the time Maxey called for\n\nsecurity. Officer Brown subsequently followed Morris and Crawley\n\nthrough the store for some time and then out to the parking lot.\n\nIn the parking lot, as Morris and Crawley sat in their car, Brown\n\n\n\n 2\n\fcopied down the car’s license plate number and returned to the\n\nstore. At no point before Brown returned to the store, did he\n\nattempt to confront, question, detain, search, or arrest Morris\n\nor Crawley. Morris and Crawley subsequently returned to the\n\nstore and confronted Brown. Brown then arrested Morris,\n\nhandcuffed her, and led her through the store to the security\n\noffice where she was held and subsequently searched by a female\n\npolice officer called to the scene. Morris was transported to\n\nthe police station and “booked.” Officer Brown filled out a\n\nmunicipal police “Incident Report” detailing the eyewitness\n\naccount Brown had obtained from Maxey, as well as his following\n\nand observing Morris, his notation of the license plate, and the\n\nsubsequent arrest.\n\n Morris filed suit in state court against Dillard’s, Liberty,\n\nand Officer Brown. The suit was subsequently removed to federal\n\ncourt. Against Dillard’s and Liberty, Morris brought claims\n\npursuant to 42 U.S.C. § 1983 (1994), alleging false arrest and\n\nunlawful search and seizure in violation of the Constitution.\n\nShe also alleged a violation of 42 U.S.C. § 1981 (1994), on the\n\nbasis of her race, of her right to make and enforce contracts,\n\nand various state law claims for false arrest, false\n\nimprisonment, malicious prosecution, and intentional infliction\n\nof emotional distress. Morris also sued Brown in his individual\n\ncapacity under 42 U.S.C. § 1983 alleging false arrest and\n\nunlawful search and seizure. On May 3, 2000, the district court\n\n 3\n\fgranted summary judgment to all defendants on all claims.1\n\nMorris now timely appeals the district court’s summary judgment\n\nin favor of Dillard’s and Liberty on the § 1983, § 1981, and\n\nstate law claims, as well as the court’s summary judgment in\n\nfavor of Brown on the § 1983 claim.\n\n II. STANDARD OF REVIEW\n\n This court reviews a grant of summary judgment de novo,\n\napplying the same standards as the district court. See Horton v.\n\nCity of Houston, 179 F.3d 188, 191 (5th Cir. 1999) (citing\n\nCelotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986)). Summary\n\njudgment is only proper where no material issue of fact exists as\n\nto any element of the claim. FED.R.CIV.P. 56(c). Where the non-\n\nmovant fails to show specific material facts in dispute, summary\n\njudgment is appropriate. Celotex, 477 U.S. at 324.\n\n III. § 1983 CLAIM AGAINST DILLARD’S AND LIBERTY MUTUAL\n\n The district court granted summary judgment in favor of\n\nDillard’s and Liberty on Morris’s § 1983 claim alleging false\n\narrest and unlawful search and seizure in violation of the Fourth\n\n\n 1\n An additional state tort claim of invasion of privacy,\nas well as claims brought against another Dillard’s security\nguard, Officer Greg Hart, were dismissed at Morris’s request and\nthus are not before this court.\n A state law claim of defamation against Dillard’s based on\nMaxey’s report to Brown of her concealment of the shirt was first\nraised in Morris’s brief in opposition to defendants’ summary\njudgment motion. There is no evidence of malice on the part of\nMaxey, and the district court properly granted summary judgment\nin favor of Dillard’s.\n\n\n 4\n\fAmendment because the court found that Dillard’s was not a state\n\nactor as a matter of law. As a threshold matter, for a plaintiff\n\nto state a viable claim under § 1983 against any private\n\ndefendant, such as Dillard’s or Liberty, the conduct of the\n\nprivate defendant that forms the basis of the claimed\n\nconstitutional deprivation must constitute state action under\n\ncolor of law. Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922,\n\n924, 928-32 (1982). The Supreme Court has recently reiterated\n\nthat the focus of the inquiry into whether a private actor can be\n\nsubjected to constitutional liability is whether “such a close\n\nnexus between the State and the challenged action” exists “that\n\nseemingly private behavior may be fairly treated as that of the\n\nState itself.” Brentwood Acad. v. Tennessee Secondary Sch.\n\nAthletic Assoc., 531 U.S. 288, 295 (2001) (internal quotation\n\nomitted).2 Our sister circuits have noted that the state action\n\ndoctrine is oft characterized by courts and commentators as “one\n\nof the more slippery and troublesome areas of civil rights\n\nlitigation,” one which presents a “paragon of unclarity,”\n\nGallagher v. “Neil Young Freedom Concert”, 49 F.3d 1442, 1447\n\n 2\n The “state action” and “under color of law” requirements\nare technically distinct yet related requirements, and the\ndifference between them is implicated in a claim of joint action\nby the state and a private defendant. See Lugar, 457 U.S. at\n928-39. Nonetheless, this court has collapsed the separate\nrequirements into a single inquiry in determining when a private\nmerchant may be subject to § 1983 liability as a state actor\nbased on the detention, arrest, or search of one of its\ncustomers. See, e.g., Smith v. Brookshire Bros., Inc., 519 F.2d\n93, 94 (5th Cir. 1975) (per curiam).\n\n 5\n\f(10th Cir. 1995) (internal quotations and citations omitted), and\n\nthat this is “particularly true in the area of off-duty police\n\nofficers acting as security guards” for a private defendant, such\n\nas Dillard’s. Chapman v. Higbee Co., 256 F.3d 416, 426 (6th Cir.\n\n2001), reh’g granted, No. 99-3970, 2001 WL 1301202, at 1 (6th\n\nCir. Oct. 17, 2001). The Supreme Court has likewise recognized\n\nthat the inquiry into whether private conduct bears sufficiently\n\nclose nexus to the state is highly circumstantial and far from\n\nprecise. Brentwood Acad., 531 U.S. at 295-96 (stating that\n\n“[w]hat is fairly attributable is a matter of normative judgment,\n\nand the criteria lack rigid simplicity” and that “[f]rom the\n\nrange of circumstances that could point toward the State behind\n\nan individual face, no one fact can function as a necessary\n\ncondition across the board for finding state action”) (citations\n\nomitted).\n\n This court has never before confronted the precise\n\ncircumstance of this case in the context of a § 1983 claim\n\nbrought against a private employer defendant, namely, one in\n\nwhich an off-duty police officer is employed as a private\n\nsecurity guard and detains, searches or arrests the customer of\n\nhis private employer subsequent to a report of suspicion made by\n\nanother employee. However, in five decisions, this court has\n\nconfronted analogous circumstances where either a merchant\n\nemployee, or on-duty police officers called to the merchant’s\n\npremises, have detained, searched or arrested a customer, and the\n\n 6\n\fcustomer has filed a § 1983 claim against the merchant. In those\n\ndecisions, this court has developed a consistent doctrine\n\napplying a nexus-type test to determine when a private enterprise\n\nsuch as Dillard’s may be subject to constitutional liability.\n\nSee Bartholomew v. Lee, 889 F.2d 62, 63 (5th Cir. 1989);\n\nHernandez v. Schwegmann Bros. Giant Supermarkets, Inc., 673 F.2d\n\n771, 772 (5th Cir. 1982) (per curiam); White v. Scrivner Corp.,\n\n594 F.2d 140, 141 (5th Cir. 1979); Duriso v. K-Mart No. 4195 Div.\n\nof S.S. Kresge Co., 559 F.2d 1274, 1277 (5th Cir. 1977) (per\n\ncuriam); Smith v. Brookshire Bros., Inc., 519 F.2d 93, 94 (5th\n\nCir. 1975) (per curiam). We first developed the test in\n\nBrookshire, in which customers brought a § 1983 claim against a\n\nmerchant after a manager reported suspicion of shoplifting to\n\npolice, and the police then detained, fingerprinted, and “booked”\n\nthe customers. Brookshire, 519 F.2d at 94. We held that in\n\norder to subject the merchant to liability, plaintiffs had to\n\nshow that the police and the store managers were acting “in\n\nconcert; that [the private merchant] and the police had a\n\ncustomary plan whose result was the detention in the present\n\ncase.” Id. We found the requisite nexus in that case and\n\nsubjected the merchant to liability where we found that the\n\npolice and merchant maintained a pre-conceived policy by which\n\nshoplifters would be arrested based solely on the complaint of\n\nthe merchant. See id. at 94-95.\n\n\n\n 7\n\f We have refined application of the doctrine since Brookshire\n\nin three subsequent decisions, White, Hernandez, and Bartholomew,\n\nin which we established that a merchant is not a state actor\n\nunless the conduct on the part of a guard or officer giving rise\n\nto the claimed deprivation occurred based solely on designation\n\nof suspicion by the merchant and was not accompanied by any\n\nindependent investigation by the officer. See Bartholomew, 889\n\nF.2d at 63 (declining to find state action on the part of a\n\ndefendant shopping mall where arresting officers made the arrest\n\nof customers causing a disturbance based not only on the request\n\nof mall security, but also on independent observation);\n\nHernandez, 673 F.2d at 771-72 (upholding a bench verdict in favor\n\nof a merchant on a § 1983 claim where the plaintiff was detained\n\nin a store on suspicion of shoplifting, a police officer was\n\ncalled to the scene, the officer performed an independent\n\ninvestigation and arrested the plaintiff); White, 549 F.2d at\n\n142-44 (upholding a bench verdict in favor of a merchant on a\n\n§ 1983 claim because unlike the police in Brookshire, the police\n\nin White had a policy of conducting independent investigations to\n\nmake determinations to arrest and “did not customarily rely\n\nsolely on the merchants’ accusation”). In our two most recent\n\ndecisions, Hernandez and Bartholomew, we clarified that the\n\n“vice” exposed by this court in our two earliest cases,\n\nBrookshire and Duriso, in which we found merchants to be state\n\n\n\n 8\n\factors, “was that the police, pursuant to a ‘preconceived plan,’\n\nwould arrest any person merely because he was designated for\n\narrest by the store [employee].” Hernandez, 673 F.2d at 772\n\n(citations omitted). See also Bartholomew, 889 F.2d at 63\n\n(explaining that the “crucial” focus of the inquiry is whether an\n\nofficer “acted according to a preconceived plan and on the say-so\n\nof the private actor, not on the basis of [the officer’s] own\n\ninvestigation”).\n\n We further clarified in Bartholomew and Hernandez that an\n\nofficer’s partial reliance on a report of suspicion made by a\n\nmerchant employee will not create state action where the officer\n\nadditionally performs an independent investigation of the alleged\n\ncrime. See Bartholomew, 889 F.2d at 63 (finding that merchant\n\nwas not state actor because, although the officers’ determination\n\nto arrest was not made “wholly based on any independent\n\nobservations of the officers,” the arresting officer testified\n\nthat she formed her determination to arrest on the independent\n\nbasis of “what she observed” regarding the alleged disturbance\n\nafter she arrived at the mall) (internal quotation omitted). See\n\nalso Hernandez, 673 F.2d at 771-72. Moreover, we established\n\nthat interviewing the employee to obtain an eyewitness account\n\ncan constitute sufficient independent investigation where the\n\nofficer was not an eyewitness to any conduct constituting an\n\nalleged crime. See id. (holding that “[u]nless he were an eye-\n\nwitness, a police officer could not make any arrest if he could\n\n 9\n\fnot rely on information provided by citizens who witnessed the\n\nevents” and that “[s]uch reliance does not convert the informing\n\nparty into a state actor”). In Hernandez, we noted evidence\n\ndemonstrating that, although the merchant’s “employees called the\n\npolice,” the “officer made his own investigation of the incident:\n\nthe officer interviewed defendant’s employees and plaintiff,\n\nwrote out his own report, and made his own determination\n\nconcerning arrest.” Id. at 772. We thus held that the merchant\n\nwas not a state actor. Id. Reading all five of this court’s\n\ndecisions beginning with Brookshire together indicates that we\n\nwill not subject a merchant to § 1983 liability unless an officer\n\nhas failed to perform independent investigation, and that\n\nevidence of a proper investigation may include such indicators as\n\nan officer’s interview of an employee, independent observation of\n\na suspect, and the officer writing his own report.\n\n Morris relies on Brookshire and Duriso to argue that the\n\ndistrict court erred in granting summary judgment to Dillard’s.\n\nThis reliance is misplaced. Uncontroverted evidence indicates\n\nthat Officer Brown interviewed Maxey and obtained her eyewitness\n\naccount of observing Morris concealing a shirt and then returning\n\nit. Morris’s own deposition testimony indicates that Brown then\n\nfollowed Morris and Crawley through the store, independently\n\nobserving them for some time subsequent to Maxey’s designation of\n\nMorris as a suspect. It is also uncontroverted that at the time\n\nhe arrested Morris, Brown filled out his own police incident\n\n 10\n\freport detailing his interview of Maxey, detailing his following\n\nand observing Morris subsequent to that interview, as well as his\n\ncopying of the license, the confrontation, and the arrest.3\n\nBrown further admits that he had made no determination to arrest\n\nMorris directly subsequent to Maxey’s designation to him of\n\nMorris as a suspect, nor after Morris exited the store, but that\n\nhe waited until after Morris confronted him to arrest her. That\n\ntestimony underscores that it was not Maxey’s designation that\n\nformed the sole basis of the arrest. The total evidence fails to\n\nevince the “vice” of either Brookshire or Duriso, but rather\n\nindicates that Officer Brown performed an independent\n\ninvestigation of the alleged crime that included obtaining\n\nMaxey’s eyewitness report, independent observation of Morris, and\n\nthe completion of Brown’s own incident report.4 Under White,\n\nHernandez, and Bartholomew, therefore, Dillard’s is not a state\n\nactor for the purposes of § 1983 liability.\n\n 3\n There is further testimony in the record by Maxey that\nshe told Brown not to arrest Morris. However, because this\nevidence is controverted by Brown’s testimony that he has no\nknowledge of Maxey telling him not to arrest Morris, this\nevidence cannot be considered in our review of summary judgment.\nRegardless, such evidence is immaterial to our conclusion that\nBrown made an independent investigation.\n 4\n We note further evidence in the record indicating that\nthe City police department may have maintained a policy by which\nofficers were permitted to arrest shoplifters based on no more\nthan the report of suspicion by merchant employees. However,\nunder Bartholomew, any such policy fails to raise a material fact\nissue where there is uncontroverted evidence that Brown made an\nindependent determination to arrest. See Bartholomew, 889 F.2d\nat 63.\n\n 11\n\f Morris further argues that the fact that Brown’s conduct\n\ncomplied with the Louisiana shoplifting statute, LA CODE CRIM.\n\nPROC. ANN. art 215 (West 1991), creates a material issue of fact\n\nas to whether Dillard’s was a state actor. That statute permits\n\nmerchants to detain suspected shoplifters and permits “peace\n\nofficers” to arrest suspected shoplifters based solely on a\n\nmerchant’s “complaint.” LA CODE CRIM. PROC. ANN. art 215.5 The\n\nSupreme Court has held that a private party’s invocation of state\n\nlegal procedures does not constitute state action where the\n\nprocedure is permissive and not mandatory. See Lugar, 457 U.S.\n\nat 939 n.21; Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 164-65\n\n(1978). Moreover, in both White and Hernandez, this court relied\n\non the reasoning of Flagg Bros. and expressly rejected a\n\nplaintiff’s contention that a merchant’s compliance with the\n\nLouisiana shoplifting statute creates state action on the part of\n\nthe merchant because article 215 permits merchant action, but\n\ndoes not compel such action. White, 594 F.2d at 142-43; see also\n\n 5\n The text of article 215 reads in relevant part:\n\n A.(1) A peace officer, merchant, or a specifically\n authorized employee or agent of a merchant, may use\n reasonable force to detain a person for questioning on\n the merchant’s premises ... when he has reasonable\n cause to believe that the person has committed a theft\n of goods .... (2) A peace officer may, without a\n warrant, arrest a person when he has reasonable grounds\n to believe the person has committed a theft of goods\n held for sale by a merchant .... A complaint made to a\n peace officer by a merchant or a merchant’s employee or\n agent shall constitute reasonable cause for the officer\n making the arrest.\n\n 12\n\fHernandez, 673 F.2d at 771-72. Consequently, Morris fails to\n\nraise any material issue of fact as to whether Dillard’s was a\n\nstate actor based on the merchant’s compliance with article 215.6\n\nThe district court did not err, therefore, in granting summary\n\njudgment in favor of Dillard’s and Liberty on the § 1983 claim.\n\n\n\n IV. § 1981 CLAIM AGAINST DILLARD’S AND LIBERTY\n\n The district court granted summary judgment in favor of\n\nDillard’s and Liberty on Morris’s § 1981 claim, alleging that\n\nDillard’s interfered with Morris’s right to make or enforce a\n\ncontract with the merchant because of her race. Morris’s claim\n\nis based on the uncontroverted fact that Dillard’s banned Morris\n\nfrom the store for a period subsequent to her arrest. The court\n\nfound that Morris failed to show the loss of an actual contract\n\n\n 6\n Morris further argues that the Eighth Circuit’s decision\nin Murray v. Wal-Mart, Inc., 874 F.2d 555, 558-59 (8th Cir.\n1989), in which that court found a merchant to be a state actor,\ncounsels this court to find that Dillard’s was a state actor.\nThe court in Murray, however, based its determination in part on\nthat court’s finding that arresting officers had failed to\nperform sufficient “independent investigation” prior to arrest\nand full prosecution of the suspect. See Murray, 874 F.2d at\n559. Although this court might disagree with the determination\nof the Murray court as to whether an independent investigation\nadequate to preclude § 1983 liability occurred, the holding of\nthe case is consistent with our doctrine that, absent an\nindependent investigation by an officer, a merchant may under\nsome circumstances be subject to § 1983 liability. Moreover, the\nMurray court relied additionally on an Arkansas state law\npermitting merchant detention of shoplifters as a factor creating\nthe required nexus between the state and a merchant, see id., an\napproach we specifically rejected in White and Hernandez. We\nfind Morris’s reliance on Murray unpersuasive.\n\n 13\n\finterest and failed to offer any evidence that Dillard’s took any\n\naction against her based on her race.7 To sustain a § 1981\n\nclaim, Morris must establish three elements: (1) that she is a\n\nmember of a racial minority; (2) that Dillard’s had intent to\n\ndiscriminate on the basis of race; and (3) that the\n\ndiscrimination concerned one or more of the activities enumerated\n\nin the statute, in this instance, the making and enforcing of a\n\ncontract. Bellows v. Amoco Oil Co., 118 F.3d 268, 274 (5th Cir.\n\n1997). Moreover, a plaintiff must establish the loss of an\n\nactual, not speculative or prospective, contract interest. See,\n\ne.g., id. at 275 (denying recovery under § 1981 to a plaintiff\n\nwho “failed to present any evidence that [the defendant] did in\n\nfact interfere with the contract”); Phelps v. Wichita Eagle-\n\nBeacon, 886 F.2d 1262, 1267 (10th Cir. 1989) (affirming dismissal\n\nof a § 1981 claim where a plaintiff alleged merely “possible loss\n\nof future opportunities”). Morris contends that the fact that\n\nshe was banned from Dillard’s following her arrest constitutes\n\nthe requisite loss of actual contract interest. We agree with\n\nthe district court, however, that such a ban is insufficient to\n\nconstitute the loss of an actual contract interest.\n\n 7\n Morris contends that the district court erred in\nfinding that Morris failed to offer any evidence of racial\ndiscrimination because the court failed to properly consider her\nmotion to compel discovery on the issue of whether Dillard’s\nengaged in a pattern of discrimination. Because we find that the\ndistrict court did not err in finding that Morris failed to show\nevidence of the loss of any actual contract interest, we need not\naddress this argument.\n\n 14\n\f This court has never confronted a § 1981 claim brought\n\nagainst a merchant in the retail context. Other courts that have\n\nconsidered such claims have consistently rejected them as too\n\nspeculative where a plaintiff makes allegations of the mere\n\npossibility that a retail merchant would interfere with a\n\ncustomer’s attempt to contract in the future. See Morris v.\n\nOffice Max, Inc., 89 F.3d 411, 414-15 (7th Cir. 1996) (rejecting\n\na plaintiff’s § 1981 claim asserting that a merchant interfered\n\nwith his “prospective contractual relations” where the plaintiff\n\nhad completed a purchase prior to being detained, despite the\n\nfact that the plaintiff was examining additional goods with\n\nintent to purchase at the time he was detained) (internal\n\nquotation omitted); Youngblood v. Hy-Vee Food Stores, Inc., 266\n\nF.3d 851, 853-55 (8th Cir. 2001) (holding that where a plaintiff\n\npurchased some beef jerky and was arrested for concealing other\n\ngoods, the merchant “cannot be said to have deprived [the\n\nplaintiff] of any benefit of any contractual relationship, as no\n\nsuch relationship existed” at the time of the arrest because\n\n“nothing that happened after the sale created any further\n\ncontractual duty on [the merchant’s] part”); Hickerson v. Macy’s\n\nDep’t Store at Esplanade Mall, No. CIV. A. 98-3170, 1999 WL\n\n144461, at 2 (E.D. La. Mar. 16, 1999) (holding that a plaintiff\n\nwas not “prevented from making a particular purchase, or from\n\nreturning [goods] he had previously bought” and thus granting\n\nsummary judgment in favor of a merchant because “[t]here is no\n\n 15\n\fgeneralized right under section 1981 to have access to\n\nopportunities to make prospective contracts”). In contrasting\n\ncircumstances, where a customer has engaged in an actual attempt\n\nto contract that was thwarted by the merchant, courts have been\n\nwilling to recognize a § 1981 claim. See Christian v. Wal-Mart\n\nStores, Inc., 252 F.3d 862, 874 (6th Cir. 2001) (“[W]e have no\n\ntrouble concluding that [plaintiff] made herself available to\n\nenter into a contractual relationship for services ordinarily\n\nprovided by Wal-Mart: the record reflects that she had selected\n\nmerchandise to purchase ... and would, in fact, have completed\n\nher purchase had she not been asked to leave the store.”);\n\nHenderson v. Jewel Food Stores, Inc., No. 96 C 3666, 1996 WL\n\n617165, at *3-4 (N.D. Ill. Oct. 23, 1996) (holding that “a § 1981\n\nclaim must allege that the plaintiff was actually prevented, and\n\nnot merely deterred, from making a purchase or receiving service\n\nafter attempting to do so,” and finding a plaintiff’s allegation\n\nsufficient to sustain a § 1981 claim where the “plaintiff was\n\nmidstream in the process of making a contract for [a] goods\n\npurchase” at a cashier at the time an officer arrested him).\n\nConsequently, to raise a material issue of fact as to her § 1981\n\nclaim, Morris must offer evidence of some tangible attempt to\n\ncontract with Dillard’s during the course of the ban, which could\n\ngive rise to a contractual duty between her and the merchant, and\n\nwhich was in some way thwarted.\n\n\n\n 16\n\f Morris fails to offer any such evidence. It is\n\nuncontroverted that Morris left Dillard’s of her own accord\n\nwithout attempting to make any purchase, or to engage in any\n\nother transaction with Dillard’s prior to, during, or subsequent\n\nto her detention and arrest by Officer Brown. It is likewise\n\nuncontroverted that Dillard’s banned Morris from the premises\n\nafter her arrest and that the ban was subsequently lifted.\n\nMorris points to no evidence in the record indicating that she\n\nmade any tangible attempt to purchase, or to return, specified\n\ngoods at the store, or to enter any other contractual agreement\n\nwith Dillard’s, at any time during the course of the ban. We\n\nagree with the district court, therefore, that Morris’s\n\nallegations based on the ban alone are too speculative to\n\nestablish loss of any actual contractual interest owed to her by\n\nDillard’s. Thus, the district court did not err in granting\n\nsummary judgment in favor of Dillard’s and Liberty on the § 1981\n\nclaim.\n\n V. § 1983 CLAIM AGAINST OFFICER BROWN\n\n The district court granted summary judgment to Officer Brown\n\non Morris’s § 1983 claim against him individually, which alleged\n\nfalse arrest and unlawful search and seizure. The court found\n\nthat Brown is entitled to qualified immunity from suit based on\n\nhis reliance on article 215, a Louisiana statute that authorizes\n\narrest of a shoplifter where an officer has probable cause for\n\n\n\n 17\n\fthe arrest. See LA CODE CRIM. PROC. ANN. art 215.8 That statute\n\nfurther permits an officer to form probable cause for the arrest\n\nbased on the “complaint” of suspicion of “theft” made by a\n\nmerchant’s employee. Id. The court held that Brown could not\n\nhave known he was violating Morris’s established constitutional\n\nright to be free from arrest and search without probable cause.\n\n Police officers, like other public officials acting within\n\nthe scope of their official duties, are shielded from claims of\n\ncivil liability, including § 1983 claims, by qualified immunity.9\n\nSee Harlow v. Fitzgerald, 457 U.S. 800, 815-19 (1982). This\n\ncourt applies a two-step analysis to determine whether an officer\n\nis entitled to qualified immunity from federal suit. First, we\n\ndetermine whether a plaintiff has alleged a violation of a\n\nclearly established constitutional right, and second, whether the\n\nofficer’s conduct was “objectively reasonable in light of clearly\n\nestablished law at the time of the alleged violation.” Chiu v.\n\n\n 8\n The statute uses the phrase “reasonable cause” not\nprobable cause. However, Louisiana courts have recognized that,\nin the case of a merchant detaining a suspect, article 215\nrequires something less than probable cause, but an officer is\nnot relieved of the duty to form “probable cause” when making an\narrest. See, e.g., Townsend v. Sears, Roebuck & Co., 466 So.2d\n675, 677 (La. Ct. App. 1985) (“‘Reasonable cause’ under article\n215 is not synonymous with probable cause, when a detention [by a\nmerchant], rather than an arrest [by a peace officer] is\ninvolved.”).\n 9\n The parties do not dispute that when Officer Brown\narrested Morris, his conduct constituted state action under color\nof law for the purposes of the § 1983 claim brought against him\nin his individual capacity.\n\n 18\n\fPlano Indep. Sch. Dist., 260 F.3d 330, 343 (5th Cir. 2001)\n\n(internal quotations and citations omitted). This court has\n\ndivided the first prong of this inquiry into three\n\ndeterminations: 1) whether the plaintiff alleges a deprivation\n\nof a constitutional right; 2) whether the right was clearly\n\nestablished at the time of the alleged violation; and 3) whether\n\nthe defendant actually violated that right. See id. The parties\n\ndo not dispute that Morris has alleged deprivation of her clearly\n\nestablished right to be free from arrest and search without\n\nprobable cause, or that the right was clearly established at the\n\ntime of her arrest. The parties only dispute whether Brown had\n\nprobable cause.\n\n An officer’s entitlement to qualified immunity based on\n\nprobable cause is difficult for a plaintiff to disturb. See\n\nBrown v. Lyford, 243 F.3d 185, 190, n.7 (5th Cir. 2001) (holding\n\nthat “[a] plaintiff must clear a significant hurdle to defeat\n\nqualified immunity” and that there “must not even arguably be\n\nprobable cause for the search and arrest for immunity to be\n\nlost”) (internal quotation omitted). Thus “if officers of\n\nreasonable competence could disagree on whether or not there was\n\nprobable cause to arrest a defendant, immunity should be\n\nrecognized.” Gibson v. Rich, 44 F.3d 274, 277 (5th Cir. 1995)\n\n(citation omitted). It is established law within this circuit\n\nand others that an officer not present at the time of an alleged\n\ncrime may form probable cause sufficient to entitle that officer\n\n 19\n\fto qualified immunity where the officer interviews an eyewitness\n\nto the alleged crime. See United States v. Burbridge, 252 F.3d\n\n775, 778 (5th Cir. 2001). In Burbridge, we held:\n\n An ordinary citizen’s eyewitness account of criminal\n activity and identification of a perpetrator is\n normally sufficient to supply probable cause ...\n “unless, at the time of the arrest, there is an\n apparent reason for the officer to believe that the\n eyewitness was lying, did not accurately describe what\n he had seen, or was in some fashion mistaken regarding\n his recollection of the confrontation.”\n\nId. (quoting Ahlers v. Schebil, 188 F.3d 365, 370 (6th Cir.\n\n1999)) (internal citations omitted). See also J.B. v. Washington\n\nCounty, 127 F.3d 919, 930 (10th Cir. 1997) (“[I]f it seems\n\nreasonable to the police to believe that the [ordinary citizen]\n\neyewitness was telling the truth, they need not take any\n\nadditional steps to corroborate the information regarding the\n\ncrime before taking action.”). Therefore, Brown was reasonably\n\nentitled to rely on Maxey’s eyewitness account of an alleged\n\ntheft and her identification of Morris as the suspect to form\n\nprobable cause to arrest, absent any alleged facts that could\n\nhave given him reason to question the account.\n\n Morris concedes on appeal that Officer Brown is protected\n\nfrom civil liability due to qualified immunity if an employee\n\nmade a complaint to him of “theft” of goods forming the basis of\n\nprobable cause. Additionally, Morris does not claim that Brown\n\nhad any reason to question the veracity of Maxey’s eyewitness\n\n\n\n\n 20\n\faccount or identification of Morris as a suspect.10 Morris\n\ncontends only that no report of theft was made that could have\n\nformed the basis of probable cause. This contention is contrary\n\nto Louisiana law.\n\n The Louisiana theft statute at issue reads in relevant part:\n\n\n A. Theft of goods is the misappropriation or taking of\n anything of value which is held for sale by a merchant,\n ... without consent of the merchant to the\n misappropriation or taking .... An intent to deprive\n the merchant permanently of whatever may be the subject\n of the misappropriation or taking is essential and may\n be inferred when a person: (1) Intentionally conceals,\n on his person or otherwise, goods held for sale.\n\n\nLA REV. STAT. ANN § 14:67.10 (West 1997).\n\nLouisiana appellate courts have, at least twice, interpreted this\n\nstatute to mean that a theft includes concealment of goods by a\n\nsuspect, regardless of whether the suspect may have subsequently\n\nreturned the goods to the merchant prior to exiting the premises.\n\nSee Brown v. Hartford Ins. Co., 370 So.2d 179, 180-82 (La. Ct.\n\nApp. 1979) (holding that a jury could have found that a store\n\n 10\n Morris does contest whether Maxey could have in fact\nobserved Morris conceal a shirt because Morris claims she never\nconcealed any goods on her person. This contention is\nimmaterial, however. Whether the crime actually occurred or\nwhether a suspect is eventually convicted is irrelevant to the\nprobable cause analysis. The inquiry focuses only on what the\nofficer could have reasonably believed at the time based on the\nrelevant law, as well as the facts supplied to him by the\neyewitness. See, e.g., Sorenson v. Ferrie, 134 F.3d 325, 328 n.3\n(5th Cir. 1998) (“The Constitution does not guarantee that only\nthe guilty will be arrested. If it did, § 1983 would provide a\ncause of action for every defendant acquitted--indeed, for every\nsuspect released.”) (internal quotation omitted).\n\n 21\n\femployee had reasonable cause to believe a theft occurred,\n\npursuant to section 14:67, where employees observed the suspect\n\nconceal a good in her purse then place the good on a chair\n\nbeneath her in an attempt to abandon the good prior to exiting\n\nthe store). The court in Hartford Insurance further held that\n\nthe theft occurred at the moment of the taking, and the fact that\n\n[the suspect] later ‘ditched’ the [good]” would not only be\n\n“irrelevant,” but also an “incriminating factor” indicating\n\nintent of theft. Id. Likewise, in State v. Ellis, 618 So.2d\n\n616, 617-18 (La. Ct. App. 1993), a Louisiana appellate court held\n\nthat, pursuant to section 14:67, “[o]ne who takes the property of\n\nanother, intending at the time of the taking to permanently\n\ndeprive the owner of that property, is nonetheless guilty of the\n\ncrime of theft though she later, becoming frightened or having a\n\nchange of heart, decides to return it and does so.”\n\nConsequently, under the interpretation of the theft statute\n\nadopted by Louisiana appellate courts, it was reasonable for\n\nOfficer Brown to believe that the conduct described to him by\n\nMaxey comprised an allegation of theft and thus, because he\n\nobtained an eyewitness report, that he had probable cause to\n\narrest.11\n\n 11\n Morris claims that four decisions by other courts\ncompel a finding that Brown lacked probable cause. However, all\nfour decisions involve circumstances distinguishable from those\nin the instant case where courts held that an officer lacked\nprobable cause because the officer ignored evidence, or failed to\npursue investigation to find easily obtainable evidence, which\n\n 22\n\f Morris further contends that evidence shows Brown harbored\n\n“angry” motives in making the arrest, which motives she contends\n\nvitiate Brown’s entitlement to qualified immunity. However,\n\nbecause the test for immunity is solely one of objective\n\nreasonableness, any “subjective intent, motive, or even outright\n\nanimus [is] irrelevant in a determination of qualified immunity\n\nbased on arguable probable cause to arrest, just as an officer’s\n\ngood intent is irrelevant when he contravenes settled law.”\n\nMendenhall v. Riser, 213 F.3d 226, 231 (5th Cir. 2000) (citation\n\nomitted). Thus, any subjective, even angry, motives on Brown’s\n\npart are immaterial to our determination that he had probable\n\ncause to arrest and was consequently entitled to qualified\n\n\n\n\nwould have exculpated the suspect. See Lusby v. T.G. & Y Stores,\nInc., 749 F.2d 1423, 1431-32 (10th Cir. 1984) (finding lack of\nprobable cause where an arresting officer could have easily\nascertained that sunglasses, which the suspect was alleged to\nhave stolen, had been paid for in a prior visit to the store);\nBaptiste v. J.C. Penney Co., Inc., 147 F.3d 1252, 1256-57 (10th\nCir. 1998) (finding a lack of probable cause where a merchant\nemployee alleged to officers that a suspect stole a ring, but a\nvideotape the officers viewed prior to conducting a search\nclearly indicated that the suspect had not stolen any\nmerchandise); McNeely v. National Tea Co., 94-CA-392 (La. App. 5\nCir. 3/28/95), 653 So.2d 1231, 1234-37 (finding an officer lacked\nreasonable cause to detain a shoplifter where an employee\nreported a theft of some batteries, but did not observe any\nconcealment); Murray, 874 F.2d at 559-60 (finding that store\nemployees lacked probable cause to arrest where a suspect\ndemonstrated she had no goods on her person and thus that she\nfailed to commit theft under applicable Arkansas statutes).\nEvidence shows that Brown did not ignore any facts that would\nexculpate Morris of theft under Louisiana law. Thus, Morris’s\nreliance on these four decisions is misplaced and unpersuasive.\n\n 23\n\fimmunity. The district court, therefore, did not err in granting\n\nsummary judgment in favor of Officer Brown on the § 1983 claim.\n\n VI. STATE LAW CLAIMS AGAINST DILLARD’S AND LIBERTY MUTUAL\n\n Although the district court granted summary judgment on all\n\nof the federal claims, the court nonetheless retained\n\njurisdiction over the pendent state law claims for false arrest,\n\nfalse imprisonment, malicious prosecution, and intentional\n\ninfliction of emotional distress, and likewise granted summary\n\njudgment on those claims in favor of Dillard’s and Liberty on the\n\nmerits.12 Morris’s claims for false arrest, false imprisonment,\n\nand malicious prosecution fail as a matter of law because Brown\n\nhad probable cause to arrest Morris.13 See Tabora v. City of\n\n 12\n Ordinarily, the fact that all federal claims have been\ndisposed of counsels in favor of the district court declining to\nretain jurisdiction over any pendent state law claims, Branson v.\nGreyhound Lines, Inc. Amalgamated Council Ret. & Disability Plan,\n126 F.3d 747, 758 n.9 (5th Cir. 1997) (citation omitted), but\ndismissal is not mandatory, and the district court has discretion\nto retain jurisdiction, a decision to which this court defers\nabsent abuse of that discretion. See McClelland v. Gronwaldt,\n155 F.3d 507, 520-21 (5th Cir. 1998). Since the instant state\nclaims present no novel issues of state law and are easily\ndispatched, we find that the district court did not abuse its\ndiscretion in deciding the claims on the merits and thus, in the\ninterest of judicial economy, we will decide them rather than\ndismissing them to be pursued in state court. Cf. Batiste v.\nIsland Records, Inc., 179 F.3d 217, 227-28 (5th Cir. 1999)\n(finding that a district court abused its discretion in not\nmaintaining jurisdiction over pendent state claims where such\nclaims presented no “complex,” “novel [,] or especially unusual\nquestions [of state law] which cannot be readily and routinely\nresolved by the court”).\n 13\n The district court held that at the time Brown detained\nand arrested Morris, he was acting in his official capacity, and\nnot as an employee of Dillard’s, and thus that his actions could\n\n 24\n\fKenner, 94-613 (La. App. 5 Cir. 1/18/95), 650 So.2d 319, 322-23\n\n(holding that an essential element of claims under Louisiana law\n\nof false arrest, false imprisonment, and malicious prosecution is\n\na lack of probable cause). Consequently, the district court did\n\nnot err in granting summary judgment in favor of Dillard’s and\n\nLiberty on the claims of false arrest, false imprisonment, and\n\nmalicious prosecution.\n\n Morris’s claim for intentional infliction of emotional\n\ndistress likewise fails as a matter of law because she fails to\n\npoint to evidence of the level of extreme and outrageous conduct\n\nrequired to sustain the claim. An emotional distress claim under\n\nLouisiana law requires that the plaintiff establish three\n\nelements: (1) that the conduct of the defendant was extreme and\n\noutrageous; (2) that the emotional distress suffered was severe;\n\nand (3) that the defendant desired to inflict severe emotional\n\ndistress or knew that such distress would be substantially\n\ncertain to result from the conduct. White v. Monsanto Co., 585\n\n\n\nnot be attributed to Dillard’s for the purposes of the false\narrest, false imprisonment, and malicious prosecution claims\nagainst Dillard’s. We find it unnecessary to make any\ndetermination regarding the issue of respondeat superior because\nMorris’s claims fail in any event because Brown had probable\ncause to arrest.\n Morris attempts to argue additionally on appeal that because\nthe report made by Dillard’s employee Maxey led to Morris’s\narrest, Dillard’s may be liable on a theory of respondeat\nsuperior for Maxey’s conduct. Because this argument based on\nMaxey’s conduct is raised for the first time on appeal, we\ndecline to address it. See, e.g., Rogers v. Hartford Life &\nAccident Ins. Co., 167 F.3d 933, 944 n.8 (5th Cir. 1999).\n\n 25\n\fSo.2d 1205, 1209 (La. 1991).14 Louisiana courts, like courts in\n\nother states, have set a very high threshold on conduct\n\nsufficient to sustain an emotional distress claim, and the\n\nLouisiana Supreme Court has noted that “courts require truly\n\noutrageous conduct before allowing a claim ... even to be\n\npresented to a jury.” See, e.g., Nicholas v. Allstate Ins. Co.,\n\n99-2522 (La. 8/3/00), 765 So.2d 1017, 1022, 1024-25 (adopting the\n\napproach of the RESTATEMENT (SECOND) OF TORTS § 46 cmt. d (1977)).\n\nThe conduct described in this record does not rise to the level\n\nof extreme and outrageous conduct required to support a claim.\n\nThe district court did not err, therefore, in granting summary\n\njudgment in favor of Dillard’s and Liberty on the emotional\n\ndistress claim.\n\n VII. CONCLUSION\n\n For the foregoing reasons, the district court’s summary\n\njudgment in favor of Dillard’s and Liberty on Morris’s claims\n\nagainst them brought pursuant to 42 U.S.C. § 1983 and § 1981, as\n\nwell as on her state law claims of false arrest, false\n\nimprisonment, malicious prosecution, and intentional infliction\n\n 14\n Morris contends that the district court erred in\ngranting summary judgment on her emotional distress claim because\nthe court ignored evidence she submitted, in the form of medical\nrecords from a treating psychiatrist, indicating that Morris\nsuffers Post Traumatic Stress Disorder as a direct result of her\narrest. Assuming, arguendo, that the district court erred in\nimproperly considering evidence regarding the severe distress\nelement, Morris’s claim nonetheless fails because she fails to\npoint to sufficient evidence establishing the element of extreme\nand outrageous conduct.\n\n 26\n\fof emotional distress, is AFFIRMED. The district court’s summary\n\njudgment in favor of Officer Brown on Morris’s claim against him\n\nbrought pursuant to 42 U.S.C. § 1983 is likewise AFFIRMED.\n\n\n\n\n 27\n\f", "ocr": false, "opinion_id": 26445 } ]	Fifth Circuit	Court of Appeals for the Fifth Circuit	F	USA, Federal
480,825	null	1986-12-10	false	united-states-v-hodges	Hodges	United States v. Hodges	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "808 F.2d 54" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/808/808.F2d.54.86-1203.html", "author_id": null, "opinion_text": "808 F.2d 54\n U.S.v.Hodges\n 86-1203\n United States Court of Appeals,Fifth Circuit.\n 12/10/86\n \n 1\n N.D.Tex.\n \n AFFIRMED\n \n 2\n ---------------\n \n \n \n Fed.R.App.P. 34(a); 5th Cir.R. 34.2.\n \n \n ", "ocr": false, "opinion_id": 480825 } ]	Fifth Circuit	Court of Appeals for the Fifth Circuit	F	USA, Federal
844,692	null	2006-11-13	false	rita-l-alton-v-larry-g-alton	null	Rita L Alton v. Larry G Alton	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	null	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": 1, "download_url": "http://publicdocs.courts.mi.gov:81/SCT/PUBLIC/ORDERS/20061113_S131663_50_131663_2006-11-13_or.pdf", "author_id": null, "opinion_text": "Order Michigan Supreme Court\n Lansing, Michigan\n\n November 13, 2006 Clifford W. Taylor,\n Chief Justice\n\n 131663 & (46) Michael F. Cavanagh\n Elizabeth A. Weaver\n Marilyn Kelly\n Maura D. Corrigan\n RITA L. ALTON, Robert P. Young, Jr.\n Plaintiff-Appellant, Stephen J. Markman,\n Justices\n\n v SC: 131663\n COA: 263743\n Genesee CC: 04-079690-NZ\n LARRY G. ALTON,\n Defendant-Appellee.\n\n _________________________________________/\n\n On order of the Court, the application for leave to appeal the June 15, 2006\n judgment of the Court of Appeals is considered, and it is DENIED, because we are not\n persuaded that the questions presented should be reviewed by this Court. The motion to\n strike is DENIED as moot.\n\n WEAVER, J., dissents and states as follows:\n\n I dissent from the order denying the application for leave to appeal. I would\n reverse that part of the judgment of the Court of Appeals that affirmed the circuit court’s\n grant of summary disposition on the basis of res judicata, for the reasons stated in the\n Court of Appeals dissenting opinion, and I would remand for the circuit court to consider\n what determinations of the circuit court in the parties’ divorce proceeding are to be\n accorded collateral estoppel effect.\n\n CAVANAGH and KELLY, JJ., join the statement of WEAVER, J.\n\n\n\n\n I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the\n foregoing is a true and complete copy of the order entered at the direction of the Court.\n November 13, 2006 _________________________________________\n s1107 Clerk\n\f", "ocr": false, "opinion_id": 844692 } ]	Michigan Supreme Court	Michigan Supreme Court	S	Michigan, MI
2,430,037	Stotler	2007-02-20	false	silk-v-metropolitan-life-insurance	Silk	Silk v. Metropolitan Life Insurance	John SILK Plaintiff, v. METROPOLITAN LIFE INSURANCE CO., Et Al. Defendants	Glenn R. Kantor, Lisa S. Kantor, Kantor & Kantor, Northridge, CA, for Plaintiff., Eric R. McDonough, Julie I. LaRoe, Seyfarth Shaw, Los Angeles, CA, for Defendants.	null	null	null	null	null	null	null	null	null	null	0	Published	null	<parties id="b1128-10"> John SILK Plaintiff, v. METROPOLITAN LIFE INSURANCE CO., et al. Defendants. </parties><br><docketnumber id="b1128-12"> No. CV04-9782 AHS(SHX). </docketnumber><br><court id="b1128-13"> United States District Court, C.D. California, Southern Division. </court><br><decisiondate id="b1128-16"> Feb. 20, 2007. </decisiondate><br><attorneys id="b1129-19"> <span citation-index="1" class="star-pagination" label="1089"> *1089 </span> Glenn R. Kantor, Lisa S. Kantor, Kantor & Kantor, Northridge, CA, for Plaintiff. </attorneys><br><attorneys id="b1129-20"> Eric R. McDonough, Julie I. LaRoe, Seyfarth Shaw, Los Angeles, CA, for Defendants. </attorneys>	[ "477 F. Supp. 2d 1088" ]	[ { "author_str": "Stotler", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 3121, "opinion_text": "\n477 F. Supp. 2d 1088 (2007)\nJohn SILK Plaintiff,\nv.\nMETROPOLITAN LIFE INSURANCE CO., et al. Defendants.\nNo. CV04-9782 AHS(SHX).\nUnited States District Court, C.D. California, Southern Division.\nFebruary 20, 2007.\n1089 Glenn R. Kantor, Lisa S. Kantor, Kantor & Kantor, Northridge, CA, for Plaintiff.\nEric R. McDonough, Julie I. LaRoe, Seyfarth Shaw, Los Angeles, CA, for Defendants.\nORDER: (1) GRANTING DEFENDANTS' MOTION TO DISMISS COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(6); AND (2) DENYING WITHOUT PREJUDICE PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT\nSTOTLER, Chief Judge.\n\nI.\n\nPROCEDURAL BACKGROUND\nOn August 8, 2006, defendants filed a Motion to Dismiss Complaint Pursuant to 1090 Federal Rule of Civil Procedure 12(b)(6) (\"Motion to Dismiss\"). On August 18, 2006, plaintiff filed a Motion for Summary Judgment: On August 28, 2006, plaintiff filed opposition to defendants' Motion to Dismiss, which incorporated by reference the papers filed in support of plaintiffs Motion for Summary Judgment. On August 29, 2006, defendants filed opposition to plaintiff's Motion for Summary Judgment. On September 1, 2006, plaintiff filed a reply in support of the Motion for Summary Judgment. On September 5, 2006, defendants filed a reply in support of the Motion to Dismiss which incorporated by reference the papers filed in opposition to plaintiff's Motion for Summary Judgment. The Court took the above-captioned matters under submission on October 23, 2006.\nHaving read and considered the arguments and authorities raised in the parties' papers, the Court grants defendants' Motion to Dismiss and denies without prejudice plaintiff's Motion for Summary Judgment.\n\nII.\n\nSUMMARY OF PARTIES' CONTENTIONS\nDefendants contend that plaintiffs claims are moot or\" premature and should therefore be dismissed. To the extent plaintiff seeks Long Term Disability (\"LTD\") benefits through February 22, 2006, the end of the \"own occupation\" period, plaintiff's claim for LTD benefits has been approved and paid with interest. To the extent plaintiff seeks LTD benefits from February 23, 2006 to the present, the \"any occupation\" period, plaintiff has failed to exhaust his administrative remedies. At this point, Metropolitan Life Insurance Company (\"MetLife\") has neither approved nor denied plaintiff's LTD \"any occupation\" benefits claim.\nPlaintiff argues defendants improperly failed to process his claim for LTD benefits, submitted an incomplete administrative record, and delayed payment under the \"own occupation\" LTD benefit period for over two years. Given defendants' inappropriate conduct, the Court should not allow defendants to consider plaintiffs benefits for the \"any occupation\" LTD benefit period. Plaintiff proceeds on the basis that the failure to make a decision on LTD benefits constitutes a denial. The Court should award plaintiff the past benefits due through the date of judgment, reinstate plaintiffs benefits and rights under the benefits plan, and allow plaintiff to file a motion for attorney's fees.\n\nIII.\n\nLEGAL STANDARD\nDefendants base their Motion to Dismiss on Federal Rule of Civil Procedure 12(b)(6). A Rule 12(b)(6) motion must be made before the responsive pleading. See Fed.R.Civ.P. 12(b)(6); Elvig v. Calvin Presbyterian Church, 375 F.3d 951, 954 (9th Cir.2004) (holding that the district court should have considered a motion to dismiss brought after an answer under Federal Rule of Civil Procedure 12(c) or 12(h)(2)). Defendant MetLife filed its Answer on February 4, 2005, and the remaining defendants filed their Answer on March 9, 2005. Therefore, because defendants brought their Motion to Dismiss after filing their Answers, the Court will treat the Motion to Dismiss as a motion for judgment on the pleadings, pursuant to Federal Rules of Civil Procedure 12(c) and 12(h)(2).\nDefendants ask the Court to consider several documents attached to the Motion to Dismiss, including: (1) the applicable insurance plan documents; (2) plaintiff s September 8, 2005 application for LTD benefits and supporting application forms; 1091 (3) MetLife's May 15, 2006 letter approving LTD benefits from February 23, 2004 through December 31, 2004; (4) MetLife's July 19, 2006 letter approving LTD benefits through February 22, 2006; and (5) MetLife's letters to plaintiff enclosing payment with interest on LTD benefits. (See \"Declaration of Eric R. McDonough in Support of Defendants' Motion to Dismiss Complaint Pursuant to FRCP 12(b)(6)\" (\"McDonough Decl.\"), ¶¶ 1-4, Exs. A-D.)\nWhere a defendant attaches extrinsic evidence to a motion for judgment on the pleadings, the court generally must convert that motion into one for summary judgment. See Fed.R.Civ.P. 12(c); Olsen v. Idaho State Board of Medicine, 363 F.3d 916, 922 (9th Cir.2004) (citing to Rule 12(c) for the proposition that when matters outside the pleadings are presented, the motion shall be treated as one for summary judgment in the context of a motion to dismiss); Mayer v. Wedgewood Neighborhood Coalition, 707 F.2d 1020, 1021 (9th Cir.1983). When the court converts a motion for judgment on the pleadings into a motion for summary judgment, \"all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.\" Fed.R.Civ.P. 12(c); see also Mayer, 707 F.2d at 1021.\nThe fact that defendants submitted documentary evidence would normally require the Court to provide the parties with additional time to respond before considering those materials, but, in this case, notice to the parties has already been provided. In the Motion to Dismiss, defendants alternatively ask the Court to convert the Motion to Dismiss into a motion for summary judgment, thereby putting plaintiff on notice of the possible conversion of the motion to dismiss into one of summary judgment. After defendants filed the Motion to Dismiss, plaintiff filed opposition, incorporating by reference his Motion for Summary Judgment, and either referenced or attached identical documentary evidence as exhibits. See Hotel St. George Associates v. Morgenstern, 819 F. Supp. 310, 317 (S.D.N.Y.1993) (stating that where plaintiff and defendants submitted materials outside the pleadings for the court's consideration, the facts put plaintiff on notice of conversion); see also Olsen, 363 F.3d at 922 (affirming decision to, treat motion to dismiss as motion for summary judgment where appellant included the extraneous material in her opposition to the appellees' motions to dismiss). These factors support the Court's conclusion that the parties have been afforded reasonable notice and will not be prejudiced by the conversion of the motion into one for summary judgment. Accordingly, the Court converts defendants' Motion to Dismiss into a motion for summary judgment.\nSummary judgment is proper when the \"pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact.\" Fed.R.Civ.P. 56(c). An issue is \"genuine\" only if there is a sufficient evidentiary basis on which a reasonable fact finder could find for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). A court is entitled to rely on the nonmoving party to identify with reasonable particularity the evidence that precludes summary judgment. Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir.1996).\n\nIV.\n\nDISCUSSION\nThe Employee Retirement Income Security Act (\"ERISA\") governs the administration of employer-provided benefit plans. See Metropolitan Life Ins. Co. v. Parker, 436 F.3d 1109, 1111 (9th Cir.2006). Under an ERISA plan, the plan administrator is charged with the duty to administer 1092 plan benefits \"`in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent [with ERISA].'\" Metropolitan Life Ins., 436 F.3d at 1113 (quoting 29 U.S.C. § 1104(a)(1)(D)).\nGenerally, an individual making a claim under ERISA must \"avail himself or herself of the plan's own internal review procedures before bringing suit in federal court.\" Diaz v. United Agricultural Employee Welfare Benefit plan and Trust, 50 F.3d 1478, 1483 (9th Cir.1995) (upholding summary judgment for defendant where plaintiff failed to exhaust internal plan administrative remedies). Federal courts \"`have the authority to enforce the exhaustion requirement in suits under ERISA, and [] as a matter of sound policy they usually do.'\" Id. (quoting Amato v. Bernard, 618 F.2d 559, 568 (9th Cir.1980)).\nThe Verizon Wireless Managed Disability Plan (the \"Plan\") provides for LTD benefits. (McDonough Decl., Ex. A, at MET000205, MET000218.) The Plan also provides administrative remedies for the denial of a LTD claim. (Id., Ex. A, at MET000180, MET000235.) In the event the claimant wishes to appeal an initial determination of benefits, the Plan requires that the claimant exhaust the Plan's appeal procedures before filing suit in federal court. (Id., Ex. A, at MET000180.)\nHere, plaintiff submitted his LTD claim on September 8, 2005, after he filed the Complaint. (Id., Ex. A, at MET000273-276.) MetLife approved plaintiffs LTD claim through February 22, 2006, the \"own occupation\" period. (Id., Ex. B.) MetLife advised plaintiff that it needed more information to determine plaintiffs LTD benefits beyond February 22, 2006, the \"any occupation\" period. (Id.) Plaintiff does not contest that MetLife has not yet approved or denied his claim for LTD benefits for the \"any occupation\" period. (Plaintiff's Motion for Summary Judgment, at 8.) To the extent MetLife's failure to decide the claim renders the claim effectively denied, plaintiff does not show that he exhausted the Plan's administrative remedies before instituting this litigation. See Diaz, 50 F.3d at 1483 (9th Cir.1995).\nIn light of defendants' approval of \"own occupation\" LTD benefits and submission of payment thereon, no triable issues of material fact remain as to plaintiffs causes of action based on \"own occupation\" LTD benefits. As defendants have made no final decision on plaintiffs eligibility for continued LTD benefits for the \"any occupation\" period, plaintiff fails to state cognizable claims against defendants for any purported denial of LTD benefits. To the extent MetLife's failure to decide the claim is effectively a denial of plaintiffs claim, plaintiff must first exhaust any administrative remedies available to him under the Plan.\nPlaintiff's contention that he has no obligation to submit medical records is not well taken. Defendants have requested medical information to aid in the determination of whether to approve or deny plaintiffs claim and it is plaintiffs responsibility to furnish such information. See Jordan v. Northrop Grumman Corp. Welfare, 63 F. Supp. 2d 1145, 1150 n. 2 (C.D.Cal.1999) (stating that the plan administrator does not have a duty to seek out evidence not before him). MetLife has requested additional medical information from plaintiff. Furthermore, as defendants contend, the cases cited by plaintiff involve a denial of claim benefits. Here, MetLife has not yet denied plaintiffs LTD claim for the \"any occupation\" benefits period.\nAs such, plaintiff fails to state a claim upon which relief can be granted and the Court grants defendants' Motion to Dismiss. The Court further denies without *1093 prejudice plaintiff's Motion for Summary Judgment.\n\nV.\n\nCONCLUSION\nFor the reasons stated above, the Court grants defendants' Motion to Dismiss and denies without prejudice plaintiff's Motion for Summary Judgment.\nIT IS SO ORDERED.\nIT IS FURTHER ORDERED that the Clerk shall serve a copy of this Order on counsel for all parties in this action.\n", "ocr": false, "opinion_id": 2430037 } ]	C.D. California	District Court, C.D. California	FD	California, CA
1,162,919	Brett, Jones, Powell	1950-01-11	false	langley-v-state	Langley	Langley v. State	Langley v. State	Jack Spivey and Wade Arends, Oklahoma City, A. L. Commons, Miami, for plaintiff in error., Mac Q. Williamson, Atty. Gen., and Sam H. Lattimore, Asst. Atty. Gen., for defendant in error.	null	null	null	null	null	null	null	null	null	null	15	Published	null	<parties id="b318-8"> LANGLEY v. STATE. </parties><br><docketnumber id="b318-9"> No. A-11037. </docketnumber><decisiondate id="Arx"> Jan. 11, 1950. </decisiondate><br><citation id="b318-10"> (213 P. 2d 886.) </citation><br><attorneys id="b320-4"> <span citation-index="1" class="star-pagination" label="312"> *312 </span> Jack Spivey and Wade Arends, Oklahoma City, A. L. Commons, Miami, for plaintiff in error. </attorneys><br><attorneys id="b320-5"> Mac Q. Williamson, Atty. Gen., and Sam H. Lattimore, Asst. Atty. Gen., for defendant in error. </attorneys>	[ "213 P.2d 886", "90 Okla. Crim. 310" ]	[ { "author_str": "Brett", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n90 Okla. Cr. 310 (1950)\n213 P.2d 886\nLANGLEY\nv.\nSTATE.\nNo. A-11037.\nCriminal Court of Appeals of Oklahoma.\nJanuary 11, 1950.\n311 Jack Spivey and Wade Arends, Oklahoma City, A.L. Commons, Miami, for plaintiff in error.\nMac Q. Williamson, Atty. Gen., and Sam H. Lattimore, Asst. Atty. Gen., for defendant in error.\n312 BRETT, J.\nThe defendant, John Langley, was charged by information with the crime of the murder of Fred Eby by shooting him with a .45 automatic pistol, in Quapaw, Ottawa county, Okla., on March 31, 1947. The information alleged that as a result of the shooting, Fred Eby suffered mortal wounds in the upper rear portion of his right shoulder and left side of his neck, from which wounds he lingered and died on April 21, 1947. The defendant was tried and convicted by a jury and his punishment fixed at 25 years in the penitentiary, and judgment and sentence pronounced accordingly.\nThe defendant's motion for new trial and petition in error sets up numerous assignments of error, but the record discloses all of them to be highly technical and without substance save those covered in defendant's proposition No. 2. Proposition No. 2 relates to his contention that the court erred in admitting in evidence state's demonstrative photographs Exhibits 3, 11, and 12. In State's Exhibit No. 3, Ben Eby, a brother of the deceased, appears pointing towards the ground at the southeast corner of the house where the record shows the deceased Fred Eby fell in his flight from the scene of the crime. Exhibits Nos. 11 and 12 are photographs in which the sheriff and the special prosecutor appear pointing toward certain bullet holes in the north wall of the kitchen, above 313 and to the right of the east door of the kitchen wherein the shooting took place. In these exhibits there is a steel poker pushed into the most westwardly hole in the wall. The sheriff and prosecutor, respectively, in Exhibit No. 11, appear, pointing toward the poker and to the hole protruding from the most westwardly hole, and to the eastwardly hole to the right and over the east door of the kitchen. In Exhibit No. 12 presumably the special prosecutor's arm can be seen pointing toward the eastwardly hole in the wall from which the poker is protruding. In each the object of the poker and the pointing was to demonstrate the state's theory as to how the holes got there. It being the state's purpose to show, from the angle in which they entered the wall, the position and place from which they were shot, that they were not shot therein at the time and place as testified to by the defendant, but at a time subsequent to the crime, for the purpose of defense at the time of trial. The defendant contends the admission of these exhibits was erroneous and highly prejudicial. In this connection he relies upon the case of Roberts v. State, 82 Okla. Cr. 75, 166 P.2d 111, hereinafter referred to.\nIn order to fully understand the issue herein raised, it is necessary we resort to a brief resume of the theory of the prosecution and the defense as revealed by the evidence of both. The state's theory was that the defendant suspected Ben Eby of having relations with his wife Willie Langley. The record discloses that he made accusations to Ben Eby concerning the same. Probably as an outgrowth of this feeling the defendant and his wife had been divorced only two or three days before the shooting. A few hours before the shooting the defendant came to Henry Eby's beer joint and there he saw his wife drinking with the Eby boys and other parties. 314 He observed Ben Eby throw his arms around Mrs. Langley in a caressing attitude. The record further shows that John Langley and his wife, Willie Langley, had been running a beer joint in the front part of their place and that they lived in the back rooms. When the divorce was granted it appears that Willie Langley moved the license from the place, and thus stopped the sale of beer by her former husband. John Langley took the residue of beer he had on hand and turned it over to a man by the name of White at another establishment. No doubt Langley was incensed by the action of his wife in taking away the beer license, as well as what he believed to be the relation between Ben Eby and her and concerning which he had talked to Ben Eby. The defendant, the day and night before the killing, had indulged in some drinking though the record does not disclose at the time of the crime he was drunk. It appears that the defendant was seen near the back door of Henry Eby's beer establishment with his .45 automatic pistol and that at that time he made a threat against the life of Ben Eby and his former wife, Willie Langley. The sheriff was called and after awhile the defendant left the establishment. Here, the scene changed and the defendant went to other places in his truck accompanied by other persons. Brooks Rogers was in the party, and they went to the beer establishment (or Green Place), formerly run by John and Willie Langley. When Willie moved out after the divorce her clothes were moved to one of the cabins behind this place. It was suggested, apparently by Rogers, that they throw through the window of the cabin some beer bottles they had. The state's evidence discloses this suggestion amplified the defendant's hitherto belligerent mood. The record shows the defendant drew his .45 gun on Rogers and threatened to kill him, stating he wanted to kill somebody any way, and he would 315 like to see his brains splattered out there. One of the men, Charley Wren, tried to leave when this occurred, and it appears that the defendant forced him at pistol point not to do so, but got in the truck and to drive until the truck stalled, and then Langley took the wheel. All this the defendant in substance denied. The evidence further shows that Henry Eby closed his beer establishment about 12 o'clock and Fred and Ben Eby went to Picher. About 3:30 a.m. on March 21, 1947, they returned to Quapaw, and went to the back door of the place where John Langley and Willie Langley had run the beer joint and made their home. The record shows they thought John Langley was at that time staying at his farm home. They did not expect him to be there. The record shows Fred Eby wanted to get a bottle of beer. He knocked on the back door and said \"Willie, it is Ben and Fred. Get up. We want a bottle of beer.\" The back door was pushed open and John Langley, who it appears from the state's case was lying in wait, opened fire on Ben and Fred Eby. Fred was shot and fell. Empty .45 shells were found on the ground outside the door. Ben Eby ran about 20 yards, stopped and heard the defendant calling trying to wake up two women, Janie Flippins and his former wife, Willie Langley. The record discloses that from the dying declaration of Fred Eby as to the affair, he fell and pulled himself up on some rocks near the side of the house. The next day blood was observed on these rocks at the southeast corner of the house. These are the rocks heretofore referred to and pictured in Exhibit No. 3. The state's case further tended to show the Ebys were not armed and that Ben Eby had never owned a pistol, but did have a .22 rifle. The sheriff came to the premises about 6 a.m., on the morning of the shooting, and found no bullet holes in the kitchen where the shooting occurred. He returned again about 9:30 a.m., 316 the same day, and he said he found none. About three weeks after, he returned and found two bullet holes, one in the north wall and one over the door in the east end of the kitchen, which he testified would have to have been fired from the position and angle he was standing and the prosecutor was standing, with the gun held in the manner they were pointing, as reflected in photographic Exhibits 11 and 12, taken on October 18, 1947. By this evidence the state sought to leave the impression that the defendant or someone else had shot the bullet holes in the wall at a later time than the shooting herein involved, as a predicate for the defendant's defense.\nThe defendant's evidence in effect was that he was in his home alone asleep. He testified he was awakened by the sound of someone at his screen window attempting to get in. He looked out of his unlighted room and saw two men. They went to the back door. One of them said \"knock the door open, and let's go in and kill the son of a bitch\". That was the door of the kitchen. The defendant said that he was standing in the middle door between the kitchen and the southeast bedroom. He said the men broke the door in. When the door was broken in, he hollered and fired two shots right up in the corner over the door. One of the men fell on the floor, and the other jumped in and there was a third shot and a blaze from what can only be presumed to have been a gun in the hands of the one who jumped in. (No bullet hole was found to support the firing of a pistol in the hands of the Ebys.) Langley said he fired back, making in all according to him four shots. The next thing he knew Fred Eby said he was shot. He dressed and went out and Fred Eby was getting in a car across the street. The defendant does not question the sufficiency of the evidence to sustain the conviction.\n317 The sole and only question of merit presented to the court and urged in the defendant's brief relates to Exhibits 3, 11 and 12. While technically it was error to permit Exhibit No. 3 to be introduced in evidence, it can be reconciled within the rule as laid down in Roberts v. State, supra, and other authorities on the subject. It is not denied that save and except for the presence of Ben Eby in the picture pointing to the rocks at the southeast corner of the house, that it was a faithful reproduction of the location of the southeast corner of the house, and the rocks on which the record discloses blood was found the day following the shooting. It establishes the location of the rocks and the place where the decedent, according to the record, fell, and pulled himself up on his feet, after falling. The presence of Ben Eby in this picture pointing was not demonstrative of a theory or hypothetical situation but of a factual situation otherwise established by the evidence and not disputed. It was not an attempt to re-enact the accident but was an attempt to point out admitted things and a place, to wit, the rocks at the southeast corner of the house. As was said in Hudman v. State, 89 Okla. Cr. 160, 205 P.2d 1175:\n\"Photographs are admissible in evidence to illustrate or clarify some issue of the case where such photograph is shown to be a faithful reproduction of whatever it purports to reproduce.\"\nThe appropriate way to have presented this fact would have been to have pictured the southeast corner of the house minus Ben Eby pointing to the rocks, and then had the witness locate the place and the rocks in the picture. Nevertheless, the pointing in this picture by Ben Eby was an appropriate aid to the jury in applying the evidence. Had the location of the rocks in this case not been pointed out in some manner, because of the overgrowth 318 of grass, the photograph would have been meaningless to the jury. Of course, the proper way to have done this would have been as we have hereinbefore indicated. We believe this to be in keeping with the rule announced in the first syllabus quoted from Roberts v. State, supra, citing to the same effect Cooper v. State, 61 Okla. Cr. 318, 67 P.2d 981, 982. This conclusion finds support in the rule laid down in Hall v. State, 78 Fla. 420, 83 So. 513, 8 A.L.R. 1034, in substance, holding that photographs are admissible where such photographs do not themselves constitute a picture version or interpretation of the character of the actual occurrence of the crime. On no basis can Exhibit 3 be construed in any other way than as a purely factual representation. By no means does it constitute an interpretation or picture version of the actual occurrence, or character of the crime. Exhibit No. 3, while on the borderline, was not of such a nature as to be prejudicial to the defendant's rights, and its admission was therefore harmless.\nIn relation to the claimed error in the admission of Exhibits 11 and 12, this case presents a more difficult but not irreconcilable situation. Before discussing the issue in relation thereto, it is well that we analyze the evidence as to the admitted and conclusive facts. The defendant admitted that he had accused Ben Eby of having relations with Willie Langley, the defendant's wife, and had talked to him about it. It is also admitted by the defendant that he had engaged in a round of drinking the night of the killing. It is further admitted by the defendant that he saw Ben Eby caress his wife in Henry Eby's beer parlor. It conclusively appears that undoubtedly the attentions of Ben Eby to Willie Langley was one of the causes of the divorce between the defendant and his former wife, Willie Langley. Moreover it conclusively 319 appears that because of it he made threats against Ben Eby and his wife, Willie Langley, during the night preceding the shooting. The evidence to support his ill will towards Ben Eby is clear and convincing. The evidence to support the defendant's anti-social and ill temper toward everybody in general, even his friends who were with him the early morning of the shooting, is likewise conclusive. It is admitted by defendant Langley that he shot Fred Eby and from the wounds thereby inflicted he died. From what appears in this record it may be likewise concluded that the shot he fired was actuallly directed towards Ben Eby. In this connection it conclusively appears that the Ebys were not armed. The record further shows that the Ebys did not fire a gun in the direction of the defendant, for if they had done so, as he said they did, evidence of the shot would have been found in the west wall of the kitchen where the shooting occurred. No such evidence was discovered, not even by the defendant himself. It is admitted by the defendant that he fired 3 shots, 2 of which formed the basis for the controversy in relation to Exhibits Nos. 11 and 12. These shots the defendant contends were fired by him on the night and the occasion he shot Fred Eby and he says to scare his assailants away. These admissions and conclusive facts bring us to a consideration of Exhibits 11 and 12. At the outset of this consideration it must be recognized that the Attorney General concedes that exhibits 11 and 12 fall within the purview of Roberts v. State, supra, and were therefore technically inadmissible. He further says that \"this is exactly what the court held in the Roberts case was improper\". With this conclusion we cannot agree. We are of the opinion that the Roberts case is clearly distinguishable from the situation in the case at bar. The rule announced in the Roberts case was in relation to photographic evidence 320 designed to portray or depict the state's theory of the actual occurrence of the alleged crime, while the photographic exhibits Nos. 11 and 12 herein involved were not offered as proof of the state's theory as to how the crime was committed. Proof of the crime was established by clear and convincing evidence, exclusive of exhibits 11 and 12. Exhibits 11 and 12 were not offered to prove the facts of the crime or to establish the state's theory, but instead were offered to establish the occurrence of what the state contends happened subsequent to the crime, as a means of portraying what the state believed to be a fabricated defense. The state's position is not without strong support in this contention. Officers of the law are presumed to do their duty. These presumptions are rebuttable. 22 C.J.S., Criminal Law, § 589, p. 906, Notes 96 and 97, and p. 907, Note 11. We can only presume such in relation to the sheriff of Ottawa county. We must presume that the sheriff made a reasonably thorough inspection of the premises at 6 a.m., and that he returned again at 9:30 and made another reasonably thorough inspection of the premises. He found no bullet holes in the kitchen wall either time. But the defendant offers Mr. Burks, who says he inspected the premises at 3 o'clock the same day and the bullet holes were in the northeast corner wall. The record does not purport to account for what may have transpired between 9:30 a.m., and 3 p.m. Regardless of whether the defendant fired the bullet holes as he claimed, or whether someone else fired them at a subsequent time, this presented a disputed question of fact. This issue of fact was one for the jury to determine. The jury decided it in favor of the state and against the defendant. It was not error to submit this issue to the jury. In Hudman v. State, supra, it was said:\n\"We have had occasion many times to discuss the admissibility of photographs and have held that the question 321 of the admissibility of such photographs in evidence is a matter addressed to the discretion of the trial court. Jackson v. State, 67 Okla. Cr. 422, 94 P.2d 851.\"\nMoreover, it has been said that the competency of photographs as evidence is a matter for the court's determination, the weight to be given to the photographs is for the jury. 2 Wharton Evidence 774, Note 2; State v. Witzel, 175 Wash. 146, 26 P.2d 1049. In this connection, the rule has also been announced that evidence of subsequent circumstances is admissible if it throws light on the transaction, or tends to expose a fabricated defense or false testimony on behalf of the defendant. 30 C.J. p. 205, Note 90; 40 C.J.S. Homicide, § 247, p. 1187, Note 44; Maxwell v. State, 146 Ga. 10, 90 S.E. 279; Bates v. Commonwealth, 189 Ky. 727, 225 S.W. 1085; Hughes v. State, 97 Tex. Cr. R. 607, 262 S.W. 745, wherein Judge Lattimore said:\n\"We think it provable against the accused that he had attempted to manufacture false testimony in his own behalf and that no error was committed in the admission of this testimony.\"\nSuch, basically, is the situation in relation to the ultimate facts sought to be established by state's Exhibits Nos. 11 and 12. It clearly appears, as we have hereinbefore indicated, they were not offered to prove circumstances of the shooting resulting in the death of Fred Eby but were offered to prove a fabricated case of self-defense in relation to things which the state's evidence tended to show occurred subsequent to the crime. For this purpose, in proper form and with proper explanation from the sheriff, they would not have been objectionable. What the law seeks is the goal of truth, it should never shackle itself with technicalities lest it be outrun in the race of justice, by its strongest competitor, falsehood. 322 The only objection to state's Exhibits Nos. 11 and 12 that can be rightly made is not as to the ultimate facts sought to be established by them, but is as to the manner of proof. In Roberts v. State, supra, we said [82 Okla. Cr. 75, 166 P.2d 113]:\n\"Posed photographs taken some time subsequent to the controversy with men in various assumed positions, and things in various assumed situations, intended only to illustrate hypothetical situations are incompetent and inadmissible as evidence.\"\nAnd therein, quoting from Colonial Refining Co. v. Lathrop, 64 Okla. 47, 166 P. 747, L.R.A. 1917F, 890:\n\"`The probative value of photographs depends upon their accuracy. They must be shown by extrinsic evidence to be faithful representations of the place or subject, as it existed at the time involved in the controversy. And photographs taken to show more than this, with men in various assumed positions, and things in various assumed situations, intended only to illustrate hypothetical situations, and to explain certain theories of the parties, are incompetent.'\"\nAnd quoting from Massey v. Ivester, 168 Okla. 464, 33 P.2d 765:\n\"`Photographs purporting to depict the conditions at the point of accident may be admitted in evidence, if it is proven or admitted that the objects surrounding the scene of the accident are in the same condition as they were at the time of the acts complained of, but may not be admitted as a \"stage setting\" for the purpose of re-enacting the accident.'\"\nThe foregoing rules of law clearly apply as to the facts of the crime itself, and had exhibits 11 and 12 been offered in relation thereto, we would be compelled to hold them reversible error in light of these cases. But since they were not offered in relation to the facts of 323 the crime itself, but as to subsequent occurrences, there are many cogent reasons why their introduction in the form herein submitted is harmless. First, because primary facts of the shooting are established by extrinsic, clear and conclusive evidence other than the photographs represented in Exhibits 11 and 12; second, had the photographs not been used at all, a conviction would most assuredly have been the result, because the evidence otherwise supports the same; third, the photographs are only incidental to the real issue, and should not be permitted to control the outcome of the case where as herein the evidence of guilt is clear and conclusive, as was said in Bates v. Commonwealth, supra [189 Ky. 727, 225 S.W. 1086]:\n\"It is not only the province but the duty of the court to determine, in the light of the entire record, whether errors therein are such as have affected the real rights of a party and prevented him from having a fair trial upon the real issue.\"\nSo far as the real issue is concerned herein, the defendant had a fair and impartial trial and that is the test as to whether he has been denied his substantial rights. Fourth, the photographs exclusive of the poses of the sheriff and special prosecutor and the use they made of the poker strongly support the defendant in his contention that he did fire the two shots in the northeast corner of the kitchen in an attempt to frighten the Ebys when he said they broke the door in. Finally, in light of the entire record, the error as to Exhibits Nos. 11 and 12 was not fundamental, and if the case was again submitted for a second trial to an intelligent and honest jury, we do not believe it could or would arrive at any verdict other than that of guilty. Janeway v. State, 62 Okla. Cr. 264, 71 P.2d 130, 131. Moreover where the record does not result in a miscarriage of justice and does 324 not constitute a substantial violation of the defendant's constitutional or statutory rights, the same will not warrant a reversal of the case. Jackson v. State, 84 Okla. Cr. 138, 179 P.2d 924. In light of the foregoing, we are of the opinion that Exhibits 11 and 12 did not constitute a miscarriage of justice and clearly fall within the provisions of Title 22, O.S. 1941 § 1068, reading in part as follows, to wit:\n\"No judgment shall be set aside or new trial granted by any appellate court of this State in any case, * * * on the ground of * * * improper admission or rejection of evidence, * * * unless, in the opinion of the court to which application is made, after an examination of the entire record, it appears that the error complained of has probably resulted in a miscarriage of justice, or constitutes a substantial violation of a constitutional or statutory right.\"\nFor all of the above and foregoing reasons, the judgment and sentence herein imposed is accordingly affirmed.\nJONES, P.J., and POWELL, J., concur.\nJONES, P.J.\nI think state's exhibits 3, 11, and 12 were posed photographs by the sheriff and special prosecutor, in which they attempt to reinforce the theory of the state as to how and when certain shots were fired causing bullet holes on the inside of the house, and as such posed photographs were clearly inadmissible under the law set forth in Roberts v. State, 82 Okla. Cr. 75, 166 P.2d 111.\nHowever, the guilt of the defendant was so clearly established that I do not believe the admission of these photographs in evidence was reversible error. The assessment of the punishment at 25 years when the evidence fully justified a conviction for murder shows the jury *325 was lenient towards the accused. For that reason, I concur in the conclusion that the judgment should be affirmed.\n", "ocr": false, "opinion_id": 1162919 } ]	Court of Criminal Appeals of Oklahoma	Court of Criminal Appeals of Oklahoma	SA	Oklahoma, OK
441,236	null	1984-08-20	false	smith-v-feamster	Feamster	Smith v. Feamster	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "742 F.2d 1449" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/742/742.F2d.1449.84-6317.html", "author_id": null, "opinion_text": "742 F.2d 1449\n Smithv.Feamster\n 84-6317\n United States Court of Appeals,Fourth Circuit.\n 8/20/84\n \n 1\n E.D.N.C.\n \n AFFIRMED\n ", "ocr": false, "opinion_id": 441236 } ]	Fourth Circuit	Court of Appeals for the Fourth Circuit	F	USA, Federal
454,658	null	1985-07-02	false	american-maritime-association-v-united-states-of-america-aeron-marine	null	null	American Maritime Association v. United States of America Aeron Marine Shipping Company, American Maritime Association Phoenix Bulkship I, Inc. v. United States of America American Maritime Association, Phoenix Bulkship I, Inc. v. United States of America	null	null	null	null	null	null	null	null	null	null	null	16	Published	null	null	[ "766 F.2d 545" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/766/766.F2d.545.84-5503.84-5502.84-5381.html", "author_id": null, "opinion_text": "766 F.2d 545\n 247 U.S.App.D.C. 55\n AMERICAN MARITIME ASSOCIATION, et al.v.UNITED STATES of America, et al.Aeron Marine Shipping Company, et al., Appellants.AMERICAN MARITIME ASSOCIATION Phoenix Bulkship I, Inc., etal., Appellants,v.UNITED STATES of America, et al.AMERICAN MARITIME ASSOCIATION, Appellant, Phoenix BulkshipI, Inc., et al.,v.UNITED STATES of America, et al.\n Nos. 84-5381, 84-5502 and 84-5503.\n United States Court of Appeals,District of Columbia Circuit.\n Argued March 19, 1985.Decided July 2, 1985.\n \n Appeals from the United States District Court for the District of Columbia (Civil Action No. 84-249).\n Michael Joseph, Washington, D.C., with whom Mark P. Schlefer, Thomas L. Mills and Timothy Trushel, Washington, D.C., were on the brief, for Aeron Marine Shipping Co., et al., appellants in No. 84-5381 and appellees in Nos. 84-5502 and 84-5503.\n Joseph A. Klausner, Washington, D.C., with whom Allan A. Tuttle and Ralph G. Steinhardt, III, Washington, D.C., were on the brief, for American Maritime Ass'n, appellee in Nos. 84-5381 and 84-5502 and appellant in No. 84-5503. Michael D. Esch, Washington, D.C., entered an appearance for American Maritime Ass'n in Nos. 84-5381, 84-5502 and 84-5503.\n Anne E. Mickey, Washington, D.C., with whom Jeffrey R. Masi, Washington, D.C., was on the brief, for Phoenix Bulkship I, Inc., et al., appellees in Nos. 84-5381 and 84-5503 and appellants in No. 84-5502.\n Michael J. Ryan, Asst. U.S. Atty., Washington, D.C., with whom Joseph E. diGenova, U.S. Atty., Royce C. Lamberth, Asst. U.S. Atty., and James F. Ford, Counsel, Dept. of Justice, Washington, D.C., were on the brief, for the United States of America, et al., appellees in Nos. 84-5381, 84-5502 and 84-5503.\n Before WALD, EDWARDS and BORK, Circuit Judges.\n Opinion for the Court filed by Circuit Judge WALD.\n WALD, Circuit Judge:\n \n \n 1\n The various appeals and cross-appeals in these consolidated cases constitute the latest round in the efforts of the Maritime Subsidy Board (the Board) and the Maritime Administration (MarAd) of the Department of Transportation to implement Congress' 1970 amendments to the Merchant Marine Act, 46 U.S.C. Secs. 1101-1295g (the Act). Those amendments provided direct subsidies to certain U.S.-flag bulk vessels and envisioned that such \"subsidized\" vessels would carry foreign bulk preference cargoes at low world rates as the existing service provided by \"unsubsidized\" shippers became inadequate.1 In 1978, the Board concluded that existing service in the preference trade was inadequate and determined that two of the seven subsidized bulk vessels operated by the Aeron Marine Shipping Company (Aeron) should be allowed to bid on preference cargo contracts. In Aeron Marine Shipping Co. v. United States, 695 F.2d 567 (D.C.Cir.1982), this court concluded that the Board must admit all of Aeron's subsidized vessels into the preference trade given its finding that existing service was inadequate by an amount greater than the capacity of all seven Aeron ships. We further directed the Board to reconsider the appropriate rate structure for those ships.\n \n \n 2\n While Aeron was under submission to this court, the American Maritime Association (AMA), which represents unsubsidized shippers in competition with Aeron for preference cargo contracts, and Phoenix Bulkship I, Inc. (Phoenix), an individual unsubsidized carrier, petitioned the Board to reconsider its 1978 inadequacy finding in light of intervening changes in the shipping industry. On remand from Aeron, the Board concluded that our decision precluded any reconsideration of its 1978 adequacy finding and, through several orders and a rulemaking, established a complex regulatory structure for Aeron's carriage of bulk preference cargo. Although the Board decided to allow Aeron to bid for preference cargoes at relatively high cost-based rates, it adopted a rule requiring government shipper agencies to account for Aeron's subsidies when evaluating its bids for such cargoes (the bid augmentation rule). The Board also determined that Aeron must forgo a portion of its government subsidy if it derives more than half of its annual gross revenues from preference cargo carriage (the subsidy abatement scheme).\n \n \n 3\n The AMA, Phoenix and Aeron each sought review in district court. While the district court upheld the rate decision and the subsidy abatement scheme, it concluded that the Board had erroneously read our mandate in Aeron to bar any further consideration of its 1978 adequacy finding. It therefore remanded to the Board for a determination of whether that adequacy proceeding should be reopened. Both Aeron and the unsubsidized shippers have appealed various aspects of the district court's order. We now affirm the district court's ruling that the Board must determine whether to reconsider the adequacy finding and its conclusion that the Board's rate decision constitutes a reasonable accommodation of the conflicting policies committed to the agency's care by statute. Although we also believe that a subsidy abatement scheme is authorized by the Act, we conclude that the Board failed to offer an adequate explanation for the particular abatement formula it adopted for bulk vessels. We therefore reverse the district court on this single issue and instruct the court to remand to the Board for further proceedings consistent with this opinion.\n \n I. THE BACKGROUND\n A. The Statutory and Regulatory Framework\n \n 4\n This dispute involves the interaction of several provisions of the Merchant Marine Act of 1936, ch. 858, 49 Stat. 1985 (codified as amended at 46 U.S.C. Secs. 1101-1295g), its 1970 amendments, Merchant Marine Act of 1970, Pub.L. No. 91-469, 84 Stat. 1018 (codified at scattered sections in 46 U.S.C.), and various acts which establish preferences for U.S.-flag ship carriage of certain cargo. See Aeron, 695 F.2d at 569-70; Aeron Marine Shipping Co. v. United States, 525 F. Supp. 527, 531-33 (D.D.C.1981). Congress enacted these statutes to create a strong domestic merchant marine capable of competing with foreign carriers in the world market, and each act recognizes that foreign subsidies and high domestic labor costs place American-built and American-operated ships at a competitive disadvantage with foreign vessels in the absence of government assistance. See, e.g., S.Rep. No. 1721, 74th Cong., 2d Sess. 4-5 (1936).\n \n \n 5\n The 1936 Act established an elaborate system of merchant marine subsidies, two aspects of which are relevant here. First, the Act provided for both operating differential subsidies (ODS) and construction differential subsidies (CDS) for U.S.-flag liner vessels in an attempt to offset the lower operating and construction costs enjoyed by foreign liner operators. See Merchant Marine Act of 1936, Secs. 601-606 (codified as amended at 46 U.S.C. Secs. 1171-76) (ODS); id. Secs. 501-511 (codified as amended at 46 U.S.C. Secs. 1151-1161) (CDS). The 1936 Act, however, did not establish a comparable direct subsidy program for bulk carriage vessels.2 Instead, Congress has from time to time extended indirect subsidies to U.S.-flag bulk vessels by reserving certain cargoes, called preference cargoes, for those ships and by allowing domestic bulk operators to bid for preference cargoes at rates well above world rates. In particular, the Cargo Preference Act of 1954, ch. 936, 68 Stat. 832 (codified at section 901 of the Act, 46 U.S.C. Sec. 1241), requires government agencies to contract with domestic ships to carry at least half of all government-sponsored cargoes destined for foreign ports as long as those vessels are \"available at fair and reasonable rates for United States-flag commercial vessels.\" 46 U.S.C. 1241(b)(1).3 Such rates, called premium rates, constitute the maximum allowable charges for a particular ship's carriage of preference cargo and allow unsubsidized bulk vessels to bid for contracts at rates equivalent to the actual costs incurred on a particular voyage plus a reasonable profit. See Payment of Subsidy for Carriage of Preference Cargoes, 13 Ship.Reg.Rep. (P & F) 44 (M.S.B.1972). In practice, premium rates can amount to more than twice the world rates charged by foreign-flag carriers in the worldwide commercial market. See H.R.Rep. No. 1073, 91st Cong., 2d Sess. 26 (1970), U.S.Code Cong. & Admin.News p. 4188 [hereinafter House Report]; Aeron, 695 F.2d at 569. The ability of unsubsidized bulk shippers to carry preference cargoes at premium rates thus provided those operators with a substantial and costly indirect government subsidy.\n \n \n 6\n This combination of direct subsidies for liner vessels and premium rates for otherwise unsubsidized bulk ships did not encourage the construction of a competitive U.S.-flag merchant marine. In 1936, liner vessels conducted most foreign shipping. By 1970, however, the majority of foreign commercial commerce was carried by bulk carriers, and efficient U.S.-flag bulk vessels, not liner vessels, were thus needed to compete in the world market. See House Report at 38; 116 Cong.Rec. 32,511 (1970) (statement of Sen. Griffin). At that time, Congress recognized that the premium rate structure had failed to induce the construction of U.S.-flag bulk vessels capable of competing in the world market, see House Report at 121, and that the existing, World War II vintage bulk ships could only turn a profit by carrying non-commercial preference cargoes at premium rates, see id. at 38; 116 Cong.Rec. 16,607 (1970) (statement of Rep.Dent). Faced with these disappointing results, Congress amended the Act in 1970 to extend direct subsidies--ODS and CDS--to domestic bulk vessels. See Merchant Marine Act of 1970, Pub.L. No. 91-469, Sec. 14, 84 Stat. 1018, 1023 (amending 46 U.S.C. Sec. 1171(a)).4\n \n \n 7\n Congress clearly intended the 1970 amendments both to encourage the construction of efficient domestic bulk vessels capable of competing with foreign commercial carriers in the world market and, gradually, to phase out the expensive and ineffective system of indirect subsidies paid to existing bulk shippers in the form of premium rates for preference cargo carriage. As Representative Dent stated in the debates over the 1970 amendments:\n \n \n 8\n The granting of direct operating subsidy to U.S.-flag bulk carriers as provided by the bill would have two principal advantages.\n \n \n 9\n First, the United States would have the potential of building a bulk carrier fleet in order to effectively compete with foreign vessels in carrying bulk commodities that constitute the predominant share of our foreign commerce. Such a fleet would insure that the commodities vital to our economy would be carried in times of emergency. Second, the United States would be substituting a direct subsidy for the indirect subsidy presently paid through preference rates for government sponsored cargoes.\n \n \n 10\n 116 Cong.Rec. 16,608 (1970); see also House Report at 38; Aeron, 695 F.2d at 570. Congress envisioned that the domestic bulk carriers constructed with the aid of CDS and operated with the aid of ODS could profitably operate at world rates and, therefore, would eventually carry preference cargo at world rates as the existing unsubsidized bulk ships were retired from service. See Aeron, 695 F.2d at 570.5 Congress also expected the substitution of direct for indirect subsidies to reduce substantially the government costs of preference cargo carriage.6\n \n \n 11\n At the same time, however, Congress sought to protect investment in existing unsubsidized vessels by allowing subsidized vessels to enter the preference trade only if the Secretary determines that existing unsubsidized service in that trade is inadequate, see 46 U.S.C. Sec. 1175(c), and by permitting the Secretary to give unsubsidized operators priority over subsidized carriers during a phase-in period of approximately five years, see Aeron, 695 F.2d at 570 & n. 9 (citing legislative history). Thus Congress did not expect that subsidized world-rate vessels would immediately displace unsubsidized premium-rate ships in the preference trade; instead, it forsaw a \"gradual phase-out of the premium rates now being paid for preference cargoes as a system of direct subsidies was being substituted.\" S.Rep. 1080, 91st Cong., 2d Sess. 58 (1970), U.S.Code Cong. & Admin.News pp. 4188, 4232 (emphasis added); see House Report at 38; 116 Cong.Rec. 16,593 (1970) (statement of Rep. Mailliard); House Hearings II at 201, 640. Congress did assume, however, that the useful life of existing unsubsidized vessels was rapidly expiring7 and that the availability of ODS and CDS for bulk ships would result in the immediate construction of new and efficient U.S.-flag bulk ships capable of competing at world rates in the worldwide commercial market. See generally Aeron Marine Shipping Co., 19 Ship.Reg.Rep. (P & F) 111, 118-20 (M.S.B.1979) (discussing legislative history). In sum, it envisioned a relatively short transitional period during which the existing unsubsidized vessels would be retired from service and after which subsidized vessels would carry preference cargoes at world rates. See, e.g., House Hearings II at 640.\n \n \n 12\n As a consequence, the 1970 amendments did not directly address the conditions under which subsidized vessels could bid against unsubsidized ships for preference cargoes. Instead, Congress left to MarAd and the Board the task of adjusting the preference cargo program in light of the 1970 amendments and the eventual goal of having subsidized ships carry preference cargoes at world rates. See Aeron, 19 Ship.Reg.Rep. at 120 (discussing legislative history). In particular, Congress amended section 901 of the Act, the cargo preference provision, to read as follows:\n \n \n 13\n Every department or agency having responsibility under this [cargo preference] subsection shall administer its programs with respect to this subsection under regulations issued by the Secretary of [Transportation]. The Secretary of [Transportation] shall review such administration and shall annually report to Congress with respect thereto.\n \n \n 14\n 84 Stat. at 1034 (codified at 46 U.S.C. 1241(b)(2)). Congress thus gave MarAd and the Board broad discretion to supervise the implementation of the 1970 amendments and, accordingly, to regulate the conditions under which subsidized shippers would be admitted to the preference trade. See S.Rep. No. 1080, 91st Cong., 2d Sess. 58-59 (1970); H.R.Rep. 1555, 91st Cong., 2d Sess. 6 (1970) (conference statement of House managers); Aeron, 525 F. Supp. at 542 n. 33.8\n \n \n 15\n Unfortunately, Congress' assumptions concerning the ease of transition from an indirect to a direct subsidy program for bulk ships proved incorrect: direct subsidies did not encourage the immediate construction of new U.S.-flag bulk carriers in substantial numbers, and the existing unsubsidized vessels have remained in service and continue to bid on preference cargoes at premium rates. See Aeron, 19 Ship.Reg.Rep. at 120. Moreover, the bulk vessels eventually constructed under the direct subsidy program were not, as it turned out, fully competitive with foreign vessels in the worldwide commercial market and could not operate profitably at world rates.9 The Secretary's attempt to implement the 1970 amendments in light of these essentially unforeseen events forms the basis of the present dispute.\n \n B. The Proceedings in This Case\n \n 16\n The pre-1982 history of the Board's attempt to specify the conditions under which subsidized carriers can carry preference cargoes is amply described in our earlier opinion, see Aeron, 695 F.2d at 570-73, and need not be repeated in detail here. Briefly, Aeron, which was the first shipping concern to take advantage of CDS and ODS assistance for bulk vessels, petitioned the Board in 1978 to admit its seven subsidized ships into the preference trade.10 After holding the adequacy hearing required by section 605(c) of the Act, the Board found that the bulk preference trade was inadequately served by existing unsubsidized shippers and that it could accommodate all seven Aeron vessels.11 See Atlas Marine Co., 18 Ship.Reg.Rep. (P & F) 987, 1002-1010 (M.S.B.1978). The Board nonetheless admitted only two of Aeron's seven ships and only under the condition that they operate in the preference trade at world rates with a one-way fuel differential allowance. See Aeron Marine Shipping Co., 19 Ship.Reg.Rep. (P & F) 491 (M.S.B.1979). Aeron sought review of both the partial admission and the rate decision in district court; that court ordered the admission of all seven Aeron ships to the preference trade and upheld the rate structure. See Aeron, 527 F. Supp. at 547.\n \n \n 17\n On appeal, we concluded that the Board's decision to admit only two of Aeron's ships was arbitrary in view of its inadequacy finding as to all seven vessels and therefore affirmed the order admitting the seven Aeron ships to the preference trade. See Aeron, 695 F.2d at 573-75. We also found that the Board had inadequately justified its rate decision given the evidence that Aeron could not profitably carry preference cargoes at world rates and thus would not be attracted to the preference trade under the Board's rate structure. We therefore directed the Board to reconsider its rate decision in light of the conflicting aims of the 1970 amendments.\n \n \n 18\n Congress intended subsidized ships to take over the preference trades; \"unsubsidized,\" premium-rate ships were to be phased out. However, the Subsidy Board cannot compel subsidized ships to carry preference cargos; it must rely on market incentives to make carrying these cargos attractive. If the rate set by the Board is too low, subsidized ships will not carry preference cargos. Such a rate would frustrate congressional policy. Instead of saving money by having efficient subsidized ships carry preference cargos, the government would continue to pay premium rates to unsubsidized ships and would also incur the extra cost of paying ODS to subsidized ships to carry non-preference cargos....\n \n \n 19\n Given the tension between Congress' dual objectives to have subsidized ships carry preference cargos and have subsidized ships carry those cargos at world rates, the Subsidy Board must strike a balance between the conflicting goals. It must seek to have subsidized ships carry preference cargos at rates that, so far as practicable, approach world rates. But it must also permit rates high enough to provide reasonable incentives for subsidized operators to carry those cargos.\n \n \n 20\n Id. at 578-79 (footnotes omitted). We also noted that \"it may well be that a rate resulting from [this] balancing process ... would be a rate 'directly influenced' by world rates.\" Id. at 579 n. 36.12\n \n \n 21\n Before this court decided Aeron, the AMA petitioned the Board to reconsider its initial determination that existing U.S.-flag service in the preference trade was inadequate within the meaning of section 605(c) of the Act. The AMA contended that intervening changes in the shipping industry had cured whatever inadequacy in U.S.-flag service had existed in 1978 and that all of Aeron's ships must therefore be excluded from the preference trade. After we issued Aeron, the Board denied the AMA's motion for reconsideration of the adequacy finding, eventually concluding that our opinion precluded any further section 605(c) proceedings by ordering the admission of all seven Aeron ships. See Aeron Marine Shipping Co., 22 Ship.Reg.Rep. (P & F) 319, 323 (M.S.B.1983) [hereinafter Tentative Order]; Aeron Marine Shipping Co., 22 Ship.Reg.Rep. (P & F) 599, 604-05 (M.S.B.1983) [hereinafter Final Order].\n \n \n 22\n The post-remand history of the rate issue was somewhat more complicated. In its Tentative Order on remand, the Board concluded that, pursuant to section 901 of the Act, the \"fair and reasonable\" rate ceiling for Aeron's preference cargo bids should be set at cost-based or premium rates adjusted downward for ODS. See Tentative Order, 22 Ship.Reg.Rep. at 324. Specifically, the Board proposed to permit a subsidized vessel to bid for preference cargo contracts at rates based on its actual costs, not including those costs covered by ODS, plus a reasonable profit. The Board reasoned that allowing Aeron to bid at cost-based rates but adjusting those rates downward to reflect its receipt of ODS would both encourage Aeron to enter the preference trade and result in rates lower than the premium rates paid to unsubsidized ships. See id. In its comments on the Tentative Order, however, Phoenix argued that the proposed rate structure would, in some cases, allow relatively inefficient subsidized vessels to underbid unsubsidized ships unless government shipper agencies (which award individual preference cargo contracts) were required to take into account the amount of ODS Aeron would receive for the voyage at issue in evaluating Aeron's bid against those of unsubsidized operators. Phoenix also commented that the proposed rate structure would, in some instances, actually increase the total cost incurred by the government in preference cargo carriage by allowing Aeron to receive both the indirect subsidy of cost-based rates and the direct ODS subsidy.13 Both results, Phoenix argued, contradicted the clear congressional intent behind the 1970 amendments.\n \n \n 23\n The Administrator agreed and directed MarAd to prepare\n \n \n 24\n a rule to require shipper agencies to consider total government cost for the U.S. flag vessel selected to carry the preference bulk cargo, when the shipper agency directly pays or finances the ocean transportation freight charges.\n \n \n 25\n Final Order, 22 Ship.Reg.Rep. at 608. The resulting rule requires shipping agencies to \"augment\" bids for preference cargo contracts received from subsidized ships by an amount equal to the ODS which the vessel would receive for the voyage if awarded the contract. See Cargo Preference, 49 Fed.Reg. 2897, 2900 (Jan. 24, 1984) [hereinafter Interim Rulemaking].14 MarAd reasoned that this bid augmentation rule reasonably accommodated the conflicting goals of the 1970 amendments by preserving incentives for Aeron to enter the preference trade while both protecting unsubsidized shippers from inequitable and unintended underbidding by Aeron and minimizing the total \"subsidy\" costs to the government. See id. at 2899.\n \n \n 26\n The Board's post-remand orders also established a subsidy abatement scheme, initially unopposed by Aeron, which requires Aeron to forego a portion of its ODS if its subsidized vessels derive more than half of their total annual gross freight revenues from the preference trade. See Tentative Order, 22 Ship.Reg.Rep. at 325; Final Order, 22 Ship.Reg.Rep. at 608.15 The Board derived the abatement scheme from section 601(a)(1) of the Act, which permits the award of ODS to a ship only if \"the operation of such vessel ... is required to meet foreign-flag competition.\" 46 U.S.C. Sec. 1171(a)(1). In administering ODS contracts for liner vessels, the Board has interpreted this provision to require reduced ODS payments if those vessels derive more than half of their revenues from the carriage of preference cargoes at premium rates, which, of course, is never subject to foreign-flag competition. See generally States Marine Int'l, Inc. v. Peterson, 518 F.2d 1070 (D.C.Cir.1975) (upholding the abatement rule applied to liner vessels), cert. denied, 424 U.S. 912, 96 S. Ct. 1108, 47 L. Ed. 2d 316 (1976). The Board applied its liner subsidy abatement rule to subsidized bulk vessels on the same theory. See Tentative Order, 22 Ship.Reg.Rep. at 323-24; see also Aeron, 695 F.2d at 579 n. 36 (noting that the Board had applied section 601(a)(1) to subsidized bulk vessels in its initial Aeron proceedings).16\n \n \n 27\n The flurry of orders and rulemakings issued in response to our Aeron decision thus created the following conditions for Aeron's carriage of preference cargoes. All of Aeron's subsidized ships are permitted to bid for bulk preference cargo contracts. Upon the receipt of a bid by a subsidized vessel, the relevant government agency must request from MarAd the amount of ODS that the vessel will receive for the voyage at issue and derive an \"augmented\" bid by adding the ODS figure to the ship's bid. The agency must then determine the low bidder for the contract by comparing the bids of the unsubsidized shippers with the augmented bids of the subsidized operators. The agency will award the contract to the low bidder if its bid is at or below the \"fair and reasonable,\" i.e., cost-based rate guideline for that vessel's carriage under the contract as determined by MarAd. The \"fair and reasonable\" rate guideline for a subsidized ship is based on its costs, net of ODS, plus a reasonable profit.17 Finally, subsidized operators must repay a portion of their ODS if they receive more than half of their gross revenues from preference cargo contracts.\n \n \n 28\n Phoenix, the AMA and Aeron each sought review of the Board's and MarAd's decisions in district court. Phoenix and the AMA argued that the Board had erroneously concluded that our opinion in Aeron prevented it from reopening its 1978 adequacy determination. The unsubsidized shippers also complained that the Board failed to consider a ruling requiring Aeron to carry preference cargoes at world rates or rates \"directly influenced\" by world rates. Aeron, in turn, argued that the bid augmentation rule forces it to bid at unreasonably low rates, that the subsidy abatement scheme is inconsistent with the 1970 amendments, and that the Board arbitrarily applied its liner subsidy reduction formula to bulk vessels without accounting for the relevant differences between the liner and bulk carriage industries.\n \n \n 29\n On motions for summary disposition from all sides, the district court concluded that the Board had discretion to reconsider its earlier adequacy finding notwithstanding our opinion in Aeron and therefore directed the Board to determine whether it should do so. See American Maritime Ass'n v. United States, Civ. No. 84-249, mem. op. at 9-11 (D.D.C. Aug. 20, 1984).18 The district court also ruled that the combination of cost-based rates and the bid augmentation rule constituted a reasonable interpretation of the 1970 amendments and our Aeron mandate, see id. at 12-14, and it upheld the subsidy abatement scheme without discussion. On appeal, both Aeron and the unsubsidized shippers press their challenges to the Board's rate decision, and Aeron again challenges the subsidy abatement scheme. The government has not appealed the district court's ruling that the Board retains discretion to reconsider its 1978 adequacy finding; only Aeron argues that the Board cannot under any circumstances reopen that proceeding.\n \n \n 30\n II. THE BOARD'S REFUSAL TO RECONSIDER ITS ADEQUACY FINDING\n \n \n 31\n Section 605(c) of the Act prohibits ODS ships from participating in shipping trades already served by U.S.-flag vessels unless the Secretary determines that \"the service provided by vessels of the United States registry is inadequate and that in the accomplishment of the purposes and policy of [the Act] additional vessels should be operated thereon.\" 46 U.S.C. Sec. 1175(c). As a general matter, existing U.S.-flag service is considered \"adequate\" under this provision if domestic vessels can carry 50 percent or more of all dry bulk preference cargoes. See Sea-Land Service, Inc. v. Kreps, 566 F.2d 763, 767 (D.C.Cir.1977); Atlas Marine, 18 Ship.Reg.Rep. at 997. Section 605(c) is clearly designed to prevent \"overtonnage\" in a particular trade and thus to protect existing U.S.-flag carriers from the undue competitive harm that would result from excess capacity. See Aeron, 695 F.2d at 574.\n \n \n 32\n In its petition to reopen the Board's 1978 adequacy determination, the AMA pointed to a 1981 MarAd staff study which concluded that the addition of Aeron's seven ships to the preference cargo trade would severely over-tonnage the trade. See Staff Review of Subsidized Vessel Participation in the Cargo Preference Trades 10-16 (1981) (summarized at 46 Fed.Reg. 29,300 (May 31, 1981)). The AMA and Phoenix also argued that intervening changes in the shipping industry had rendered existing U.S.-flag service in the preference trade adequate. See Final Order, 22 Ship.Reg.Rep. at 604. The Board apparently took two positions on the motion for reconsideration. In its Tentative Order on remand, the Board reasoned that the unsubsidized shippers' new evidence did not warrant a reconsideration of the 1978 adequacy finding. In particular, the Board concluded that the staff study was based on faulty premises, that the extra-record evidence cited by the AMA was not suitable for agency notice, and that the record must close at some point. See Tentative Order, 22 Ship.Reg.Rep. at 322-23. This initial assessment was arguably within the Board's discretion. See, e.g., Bowman Transp., Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 294-96, 95 S. Ct. 438, 446-47, 42 L. Ed. 2d 447 (1974) (agency refusal to reopen record only reversible for abuse of discretion); Eastern Carolinas Broadcasting Co. v. FCC, 762 F.2d 95, 103 (D.C.Cir.1985) (same)\n \n \n 33\n In its Final Order, however, the Board clearly repudiated this position and concluded instead that our decision in Aeron stripped it of any discretion to reconsider the 1978 finding with respect to Aeron's application for entrance into the preference trade.\n \n \n 34\n The chief problem with intervenors' contentions is that the courts' remand allowed the Board no discretion in admitting the [Aeron] vessels into the subsidized preference trades. It is not possible to reopen the Board's 605(c) finding that the relevant preference trades are and will be inadequately served by U.S.-flag vessels without allowing the possibility that if there is adequate service, some or all of the [Aeron] vessels could not be permitted in the subsidized preference trades. The courts unequivocally ordered the Board to admit the [Aeron] vessels into the preference trades....\n \n \n 35\n The Board does not reach whether trade conditions have materially changed since the 1978 decision. The Board simply does not have the authority to refuse to comply with the district court order to admit the [Aeron] vessels into the preference trades.\n \n \n 36\n Final Order, 22 Ship.Reg.Rep. at 604 (emphasis added) (footnote omitted).\n \n \n 37\n We agree with the district court that our Aeron opinion should not be read to bar the Board from considering whether the 1978 adequacy proceedings should be reopened. In Aeron, we concluded that the Board could not rationally admit only two of Aeron's ships once it had determined that existing U.S.-flag service was inadequate within the meaning of section 605(c) and that the admission of all seven Aeron ships would not result in undue competitive harm to existing U.S.-flag vessels. See Aeron, 695 F.2d at 575. We held only that\n \n \n 38\n [i]t was arbitrary and capricious for the Maritime Subsidy Board, after finding inadequate service in the bulk preference trades, to nonetheless admit only two of the seven Aeron ships.... The decision of the district court is affirmed on admitting all Aeron ships.\n \n \n 39\n Id. at 582 (emphasis added).19 Our conclusion that the Board must admit all seven Aeron ships to the preference trade was thus solely premised on the Board's failure to relate rationally its adequacy findings to its admission decision. See id. at 575. We did not review the adequacy finding itself, cf. id. at 572 n. 16, and nothing in our opinion suggested that the Board was not free, to whatever extent agencies normally are, to reconsider that factual determination in light of changed circumstances.20\n \n \n 40\n In its original section 605(c) opinion in this case, moreover, the Board explicitly reserved the option of revising its adequacy determination to reflect possible changes in the tonnage needs of the bulk preference trade. \"The 605(c) findings on these applications,\" the Board noted, \"survive until they become 'stale,' i.e., are overcome by changes in the market or subsequent events. Obviously, that length of time cannot be predicted.\" Aeron, 19 Ship.Reg.Rep. at 496 (footnotes omitted). The Board thus clearly left open the possibility of further adequacy proceedings in light of, say, massive economic changes, and neither this court nor the district court questioned that ruling in Aeron. Cf. Aeron, 525 F. Supp. at 545 n. 37 (explicitly recognizing that the Board might \"abandon\" its section 605(c) opinion in light of Aeron's experience in the preference trade). Unquestionably, then, our Aeron opinion did not deprive the Board of discretion to reopen the 1978 adequacy proceeding if circumstances so warranted. See generally 46 C.F.R. Sec. 201.173 (1984) (establishing procedures for reopening Board proceedings in light of changed circumstances.)\n \n \n 41\n Aeron also contends that, regardless of our Aeron mandate, the Board cannot reopen the 1978 proceeding because the Act contemplates a single, final \"inadequacy\" finding and because Aeron has justifiably relied on the Board's 1978 determination.21 The district court did not rule on either argument and instead directed the Board to consider these issues on remand before it determines whether intervening charges in the bulk shipping industry warrant reopening the record. The Board is currently doing so.22 While Aeron's arguments are not insubstantial, we agree with the district court that the agency should be given an opportunity to develop facts concerning Aeron's reliance on the 1978 decision and to express a view as to whether Congress intended section 605(c) findings to be final. The Board's consideration of those issues will, of course, be subject to judicial review at the appropriate time.\n \n \n 42\n We therefore affirm both the district court's ruling that our opinion in Aeron does not prevent the Board from reopening the adequacy findings and its order directing the Board to consider whether it should do so in light of Aeron's reliance on the 1978 decision, the purposes of section 605(c), and the alleged changed circumstances.\n \n III. THE RATE DECISION\n \n 43\n In Aeron, we directed the Board to balance Congress' dual intent to have subsidized ships carry preference cargoes and to have them do so at world rates. We therefore instructed the Board to consider a rate approaching world rates (i.e., one lower than premium rates) but high enough to provide reasonable incentives for subsidized vessels to enter the preference trade. See Aeron, 695 F.2d at 579; supra pp. 551-553. We did not, however, conclude that the Board must guarantee Aeron a profit in the preference trade notwithstanding the goals of the Act.\n \n \n 44\n [B]ecause Aeron can continue to operate its ships in the nonpreference trades, an unprofitable rate for preference cargo would not raise any fifth amendment concerns. Thus, the question is purely one of statutory construction: What did Congress intend (or if it had no specific intent, what would it have wanted) the term \"fair and reasonable rates for United States-flag commercial vessels\" to mean as applied to subsidized bulk ships?\n \n \n 45\n We do not decide that question today. On remand, the Subsidy Board should consider whether the rate it selects will allow Aeron to earn a reasonable profit. If not, it should explain why the language and legislative history of the Merchant Marine Act justify the chosen rate.\n \n \n 46\n Aeron, 695 F.2d at 582. We thus directed the Board to consider a rate scheme that would effectuate Congress' desire to have subsidized vessels carry preference cargoes but to do so at relatively low rates and therefore reduce the overall cost of preference cargo carriage. See id. at 578-79.\n \n \n 47\n On remand, the Board determined that subsidized vessels would not be attracted to the preference trade at world rates and that some form of cost-based or premium rate structure was therefore necessary to effectuate Congress' intent to have subsidized vessels carry preference cargo. See Tentative Order, 22 Ship.Reg.Rep. at 324. Accordingly, the Board and MarAd fashioned a rate structure for subsidized preference cargo carriage that allows Aeron to bid for preference cargo at cost-based rates, net of ODS, and requires government shipper agencies to augment an Aeron vessel's bid by an amount equal to the ship's expected ODS before comparing its bid to that of an unsubsidized shipper.\n \n \n 48\n As MarAd explained, this scheme is intended to balance the competing goals of the 1970 amendments by both attracting Aeron to the preference trade and insuring that government preference cargo costs will be reduced if Aeron secures preference cargo contracts.\n \n \n 49\n MarAd believes that this rule will produce a fair rate for subsidized operators, eliminate the potential economic advantage that subsidized vessels might have over unsubsidized carriers, and ensure use of the vessel with the lowest cost to the government. MarAd believes that the rule will promote competition by rewarding vessel operators who cut operating costs and reduce profits, instead of incidentally rewarding an operator because of its receipt of subsidy. This should mean somewhat lower costs to the agencies over the long-run.\n \n \n 50\n Interim Rulemaking, 49 Fed.Reg. at 2899. MarAd thus reasoned that the rule furthered Congress' aim to reduce the overall government cost of the preference cargo program by accounting for both direct (ODS) and indirect (premium rate) subsidies. The rule ensures, in other words, that subsidized bulk carriers carry preference cargoes at a lower overall cost to the government than the premium rate charged by the unsubsidized operator. See id.; infra note 23. MarAd also stressed that, consistent with Congress' expectations, the rule protects unsubsidized shippers from virtual displacement in the preference trade during the transition to a direct subsidy program for bulk vessels by preventing a subsidized operator from winning a contract by bidding slightly below the premium rate while receiving the full amount of its bid plus ODS. See Interim Rulemaking at 2898-99. At the same time, the rule retains an incentive for subsidized carriers to carry preference cargoes by permitting them to charge a rate that includes a reasonable profit. See Tentative Order, 22 Ship.Reg.Rep. at 324.\n \n \n 51\n Although the Board's rate structure allows Aeron to bid for preference cargoes at cost-based or premium rates, then, both the bid augmentation rule and the exclusion of ODS-covered costs from a subsidized vessels' cost base ensure that the actual preference cargo rates paid to Aeron will be substantially lower than the premium rates paid to unsubsidized operators. The bid augmentation rule, for example, clearly operates to drive Aeron's bids substantially in the direction of world rates. Because its bids are augmented by an amount equal to its ODS, Aeron must bid at an amount substantially below an unsubsidized operator's \"unaugmented\" bid in order to win any particular preference cargo contract. Cf. Final Rulemaking, 49 Fed.Reg. at 39,849.23 Similarly, because ODS costs are excluded from its cost base, a subsidized vessel will have a lower \"fair and reasonable\" rate ceiling than an unsubsidized vessel with comparable costs. See Tentative Order, 22 Ship.Reg.Rep. at 324.24 Thus MarAd and the Board designed a rate structure that drives Aeron's rates in the direction of world rates but retains sufficient incentives for Aeron to enter the preference trade. Cf. id. (\"Although this action will not eliminate premium rates [for subsidized ships], it will lower those rates thus conforming in part with the intentions of Congress at the time of the passage of the 1970 Act.\").\n \n \n 52\n We must, of course, accord substantial deference to an interpretation of a statute forged by the officers or agency charged with its administration. See, e.g., Udall v. Tallman, 380 U.S. 1, 16, 85 S. Ct. 792, 801, 13 L. Ed. 2d 616 (1965); Aeron, 695 F.2d at 575. Where, as here, Congress has conferred broad discretion on an agency to implement possibly conflicting legislative goals, see Aeron, 695 F.2d at 575-77; supra pp. 10-11, we must accept the agency's interpretation unless manifestly unreasonable. See, e.g., Aeron, 695 F.2d at 575. In this case, we believe that MarAd's augmentation rule reasonably accomplishes Congress' aim to lower the overall government costs of the preference cargo program and that the overall rate structure strikes a permissible balance between the competing interests of unsubsidized and subsidized shippers and between Congress' dual intent to have subsidized ships carry preference cargoes but to do so at world rates. Given the limited scope of our review, we therefore conclude that MarAd's attempt to implement the 1970 amendments \"represents a reasonable accommodation of the conflicting policies that were committed to the agency's care by the statute.\" Chevron, U.S.A. v. Natural Resources Defense Council, --- U.S. ----, 104 S. Ct. 2778, 2783, 81 L. Ed. 2d 694 (1984) (quoting United States v. Shimer, 367 U.S. 374, 383, 81 S. Ct. 1554, 1560, 6 L. Ed. 2d 908 (1961)).\n \n \n 53\n Both Aeron and the unsubsidized shippers nonetheless argue that the rate decision is inconsistent with one or another of the conflicting congressional goals behind the 1970 amendments. In effect, Aeron complains that the Board's rate structure is unreasonably low given Congress' expectation that subsidized vessels would take over the preference trades. Both the AMA and Phoenix counter that Aeron's rates are impermissibly high in light of Congress' intent to have subsidized vessels carry preference cargoes at world rates or a close approximation thereof. We discuss, and reject, each challenge in turn.\n \n A. Aeron's Challenge\n \n 54\n Aeron first argues that MarAd cannot, as it does in the bid augmentation rule, treat ODS as a \"cost\" incurred by the government to finance preference cargo carriage because ODS is awarded to subsidized operators whether they carry preference cargoes or other cargoes. Accordingly, Aeron argues, the bid augmentation rule irrationally assumes that the government will \"save\" ODS if Aeron's preference cargo bids are unsuccessful and Aeron continues to carry commercial (i.e., nonpreference) cargoes. As MarAd pointed out, however, the rule makes no such assumption. Instead, the rule attempts to account for the total government-wide costs that are reasonably related to the carriage of individual preference cargoes. Aeron's argument, by contrast, assumes that the only relevant preference cargo costs are the indirect subsidies paid by shipper agencies in the form of premium rates, not the ODS subsidies independently paid to bulk vessels by MarAd. Congress clearly thought otherwise: it believed that the \"costs\" of subsidized preference cargo carriage (i.e., direct ODS costs) would be lower than the costs of the premium rate system. See, e.g., House Report at 38. In light of Congress' appreciation that ODS would constitute a subsidy for preference cargo carriage, Aeron cannot seriously argue that the government does not incur a preference cargo \"cost\" when it pays subsidized vessels ODS for, among other things, transporting preference cargoes. It was therefore indubitably rational of MarAd to treat the ODS received by subsidized vessels as a cost of preference cargo carriage.\n \n \n 55\n The gist of Aeron's claim, however, is that, regardless of whether it lowers government costs, the bid augmentation rule thwarts Congress' intent to have subsidized vessels carry preference cargoes with the full advantage of ODS. Because Congress determined that subsidized vessels should carry all preference cargoes once existing U.S.-flag service became inadequate, Aeron reasons, any rate structure that discourages them from doing so to the fullest extent possible is unlawful.25 If the 1970 amendments were only designed to displace immediately the unsubsidized carriage of preference cargoes, Aeron would have a strong argument: MarAd's rate structure clearly prevents subsidized operators from underbidding unsubsidized suppliers at relatively high rates in all circumstances. Yet Congress' desire to have subsidized vessels take over the preference trade was tempered by several competing goals, each of which is served in part by the bid augmentation rule. First, Congress quite specifically envisioned that subsidized vessels would eventually carry preference cargoes at world rates, not premium rates, and the bid augmentation rule clearly operates to drive Aeron's rates in the direction of world rates. See supra pp. 559-560. Likewise, Congress clearly intended the 1970 amendments to reduce the government cost of preference cargo carriage; that goal will only be achieved if subsidized operators carry preference cargoes, as they must under MarAd's rate scheme, at rates substantially below the premium rates paid to unsubsidized carriers. See id. Congress also sought to protect existing unsubsidized carriers during the transition to the direct subsidy program, see supra, pp. 550-551, and the bid augmentation rule accomplishes that purpose by preventing subsidized vessels from consistently winning preference cargo contracts by bidding a few dollars below premium rate. See supra p. 559. Finally, Aeron's challenge also ignores the central purpose of the 1970 amendments--to encourage the construction of U.S.-flag bulk vessels capable of competing with foreign-flag carriers in the worldwide commercial market. See supra pp. 549-550. Allowing Aeron to bid for preference cargoes at high premium rates without adjustment for ODS might well encourage Aeron to abandon the commercial market in search of higher profits in the preference trade. Congress certainly did not intend the 1970 amendments to displace U.S.-flag unsubsidized bulk service in the preference trade at the cost of further weakening the competitive status of U.S.-flag bulk vessels in the world market.26\n \n \n 56\n On balance, then, we cannot say that MarAd's attempt to balance the competing goals of the 1970 amendments resulted in an unreasonably low rate for the subsidized carriage of preference cargoes.\n \n B. The Unsubsidized Shippers' Challenges\n \n 57\n In Aeron, we left open the possibility that a reasonable accommodation of the conflicting goals embodied in the 1970 amendments could result in world rates, despite our concern that an unprofitable rate would prevent the subsidized carriage of preference cargoes. See Aeron, 695 F.2d at 582 (\"[If the Board chooses an unprofitable rate,] it should explain why the language and the legislative history of the Merchant Marine Act justify the chosen rate.\"). Phoenix now argues that the entire rate decision must be remanded because the Board mistakenly read our Aeron mandate to bar world rates and therefore failed to give serious consideration to a world rate structure. In support of this contention, Phoenix points to language in the Board's first (and tentative) order on remand suggesting that the Board thought itself precluded from adopting world rates after Aeron. See, e.g., Tentative Order, 22 Ship.Reg.Rep. at 324 (\"In light of the appeals court decision, the only possible alternative by the Board is to allow the carriage of preference cargo with ODS at premium rates.\")27\n \n \n 58\n We believe that Phoenix has mischaracterized the Board's overall treatment of the world rate issue. In their comments on the Tentative Order, both Phoenix and the AMA vigorously urged the Board to adopt a world rate structure for Aeron's carriage of preference cargoes. See Final Order, 22 Ship.Reg.Rep. at 607 (discussing those comments). The Board clearly considered the unsubsidized shippers' comments and just as clearly determined that a cost-based rate structure was the \"best practical means\" of accommodating Congress' conflicting goals as discussed in Aeron. See id. In its attempt to balance those goals, the Board specifically found, for example, that world rates have failed to encourage the subsidized carriage of preference cargoes and have thus thwarted Congress' expectation that subsidized vessels would carry preference cargoes once existing service became inadequate. See id. (\"Experience of more than four years has shown that [Aeron] has not been sufficiently attracted to the preference trades at world rates.\") Accordingly, the Board explicitly determined that Congress' intent to have subsidized vessels carry preference cargoes at world rates could best be met by a cost-based rate structure that drives Aeron's rates in the direction of world rates. See Tentative Order, 22 Ship.Reg.Rep. at 324; see also Interim Rulemaking, 49 Fed.Reg. at 2898-99.28 Our decision in Aeron did not place on the Board any special burden of explaining why world rates were not appropriate for the subsidized carriage of preference cargoes. Instead, we directed the Board to consider whether its chosen rate will allow Aeron a profit and, if not, to justify the rate in light of the Act and its legislative history. See Aeron, 695 F.2d at 582. Given this mandate, we are confident the Board exercised its full discretion in selecting the rate structure that, in its view, struck the most reasonable balance between the conflicting goals committed to the agency's care by statute.\n \n \n 59\n The AMA's challenge to the rate decision is somewhat more technical, though no more persuasive. The AMA contends that Congress has allowed only two options for the carriage of preference cargoes: subsidized carriage at rates approximating world rates or unsubsidized carriage at premium rates. Under this view, the Board must require subsidized vessels to charge world rates or a close approximation if they are to be allowed to carry preference cargoes. While it recognizes that the bid augmentation rule forces subsidized vessels to bid substantially below premium rates, and therefore constitutes a step in the direction of world rates, the AMA argues that the rate structure does not go far enough. Specifically, the AMA reasons that a bid augmentation rule could only approximate a world rate structure if Aeron's bids are adjusted to account for all government subsidies--CDS as well as ODS. The AMA contends, in other words, that CDS must be considered a direct cost of preference cargo carriage and that premium rates are only permissible under the Act if a subsidized shipper's bid is augmented by the amount of both its ODS for the relevant contract and a proportional share of its CDS.\n \n \n 60\n As we noted, in Aeron, however, Congress did not place the agency in any such regulatory straightjacket. Instead, Congress accorded MarAd and the Board broad authority to establish the rate for preference cargo carriage in light of the 1970 amendments. See Aeron, 695 F.2d at 575-77. Given that discretion, we believe that MarAd could reasonably respond to the AMA's complaint by noting that CDS, unlike ODS, is normally treated as a one-time subsidy to shipyards and shipbuilders to encourage American-built vessels rather than as an ongoing payment to ship operators to offset the cost of preference cargo carriage. In States Marine International v. Peterson, 518 F.2d 1070 (D.C.Cir.1975), cert. denied, 412 U.S. 912, 96 S. Ct. 1108, 47 L. Ed. 2d 316 (1976), for example, this court expressly recognized that CDS and ODS serve distinct purposes under the Act and that MarAd can rationally distinguish between the two for the purposes of administering subsidy programs.\n \n \n 61\n The Report of the House Committee on the 1970 amendment made it clear that CDS has an entirely different purpose than ODS: \"[T]he construction subsidies are subsidies to the shipyards, not to the shipowners.\"\n \n \n 62\n The purpose of the CDS program is to subsidize shipyards of this country to enable them to compete effectively with foreign shipyards.... The only restrictions on payment of CDS listed in [the Act] are that the ship receiving subsidy be registered in the United States and be engaged in foreign commerce. Congress made no distinction between domestic purchasers who could or could not avail themselves of CDS. Instead, the section provides that all ship purchasers who qualify may buy ships which are eligible for CDS payments. The Act does not distinguish between those carrying preference cargo and those not carrying such cargo.\n \n \n 63\n Id. at 1083 (quoting House Report at 30) (emphasis added); cf. American Maritime Ass'n v. Stans, 329 F. Supp. 1179, 1185-86 (D.D.C.1971), aff'd, 485 F.2d 765 (1973). We think the reasoning of the States Marine court fully applicable here. Because Congress designed ODS and CDS subsidies to serve substantially different purposes, MarAd could reasonably decline to regard CDS as a direct cost of preference cargo carriage. Although augmenting a subsidized vessel's bid by a CDS factor might further drive its rates in the direction of world rates, we do not believe that MarAd was required to do so under the statutory scheme.29\n \n \n 64\n We therefore reject both Phoenix's suggestion that we remand for further consideration of whether world rates are appropriate and the AMA's argument that MarAd is required to adjust Aeron's bid to account for its receipt of CDS as well as ODS.\n \n C. The Reasonableness of the Rate Structure\n \n 65\n At bottom, then, we find that MarAd and the Board acted within their discretion in concluding that a cost-based rate structure plus the bid augmentation rule would strike a reasonable balance between \"Congress' dual objectives to have subsidized ships carry preference cargos and have subsidized ships carry those cargos at world rates.\" Aeron, 695 F.2d at 579. Both Aeron's and the unsubsidized shippers' challenges to the rate decision seize on a single aspect of those competing objectives. Aeron emphasizes Congress' expectation that subsidized vessels would take over the preference trade, while Phoenix and the AMA focus on Congress' assumption that they would do so at world rates. Given the present realities of the bulk shipping market, however, neither goal can be attained without sacrificing the other. The Board and MarAd accordingly developed a compromise position: Aeron can carry preference cargoes at cost-based rates that allow for a reasonable profit, but it must bid substantially below the premium rates charged by unsubsidized shippers in order to secure preference cargo contracts. This result fairly meets our call in Aeron for rates that, \"so far as practicable, approach world rates ... [but are] high enough to provide reasonable incentives for subsidized operators to carry [preference] cargos.\" Id. In light of the Board's discretion, we cannot say that the compromise rate structure is unreasonable.\n \n IV. THE SUBSIDY ABATEMENT SCHEME\n \n 66\n In its Tentative Order on remand, the Board determined that a subsidized vessel should be required to abate an escalating portion of its ODS if it derives more than half of its annual gross revenues from the carriage of preference cargoes. See supra note 15. The Board noted that this abatement scheme, which it applies to ODS liner vessels, would ensure that ODS was employed to meet foreign-flag competition as provided in section 601 of the Act. See supra pp. 554-555. That section provides, in relevant part, that:\n \n \n 67\n No ... application [for ODS] shall be approved by the Secretary of Transportation unless he determines that (1) the operation of such vessel or vessels in an essential service is required to meet foreign-flag competition and to promote the foreign commerce of the United States ... [and] (4) the granting of the aid applied for is necessary to place the proposed operations of the vessel or vessels on a parity with those of foreign competitors, and is reasonably calculated to carry out effectively the purposes and policy of this chapter.\n \n \n 68\n 46 U.S.C. Sec. 1171(a) (emphasis added); see also id. Secs. 1173-74 (also indicating that ODS is designed to meet foreign competition).\n \n \n 69\n In interpreting this provision with respect to the award of ODS to liner vessels, the Board determined that the ODS paid to liner vessels is not being used to meet foreign competition if subsidized vessels derive more than half of their gross revenues from cargoes, such as preference cargoes, that are not carried at world rates and are not subject to foreign competition. See 46 C.F.R. Sec. 280.4 (1984). In the course of considering Aeron's initial application to serve the preference trade, the Board extended its interpretation of section 601 to cover bulk vessels as well. See Atlas Marine, 19 Ship.Reg.Rep. at 493-95. At that time, the Board had no reason to believe that Aeron would abandon the commercial market in search of higher profits in the preference trade and it therefore did not adopt any subsidy abatement rule. See Aeron, 695 F.2d at 579 n. 36. When the Board decided to allow subsidized bulk vessels to charge cost-based rates on remand from Aeron, however, it created the possibility that those vessels would concentrate on the preference trade instead of the world-wide commercial market. The Board accordingly decided to apply its liner subsidy reduction formula to subsidized bulk vessels in order to ensure that ODS is primarily employed to meet foreign competition. See Tentative Order, 22 Ship.Reg.Rep. at 323-24.\n \n \n 70\n In States Marine, this court concluded a subsidy abatement rule designed to prevent subsidized liner vessels from abandoning the commercial trades constituted a reasonable interpretation of section 601's requirement that subsidized ships compete in the world market.\n \n \n 71\n The Act consistently speaks of awarding subsidies only to vessels \"meeting foreign competition.\" ... The Board's rule reducing subsidy when a vessel is not in \"substantial competition\" appears to strike a sound balance between the intention of Congress and the competitive needs of the industry. Additionally, the Board's decision that subsidies should be based upon the amount of competition cargo carried during the year rather than upon other formulae suggested by the parties finds support in the language of the Act, which speaks of \"service\" instead of cargo or voyages.\n \n \n 72\n States Marine, 518 F.2d at 1082. We therefore upheld the particular subsidy reduction scheme the Board adopted for liner vessels in light of the Board's extensive proceedings concerning the relationship of the rule to the needs of the liner carriage industry. See id. (noting the extensive evidence compiled before the Board). In Aeron, we also recognized that the Board could condition Aeron's receipt of ODS on a reduction of subsidy under section 601 if it adopted a cost-based structure that would attract subsidized vessels to the preference trade. See Aeron, 695 F.2d at 579 n. 36.\n \n \n 73\n Despite this general judicial approval, Aeron presses two challenges to the Board's subsidy abatement rule.30 First, Aeron contends that any subsidy reduction rule conflicts with the purposes of the 1970 amendments because it discourages subsidized vessels from taking over the preference trade, with the full advantage of ODS, to the greatest extent possible. Again, however, Aeron's challenge ignores the competing goals embodied in those amendments. Indeed, Congress' central purpose in extending ODS to bulk vessels was to make \"a substantial inroad in the commercial [i.e., non-preference] bulk trade which we have now virtually forfeited to foreign carriers.\" House Report at 38 (emphasis added); see id. at 25; see also Aeron, 695 F.2d at 570. As we found in States Marine, a subsidy abatement rule permissibly encourages subsidized vessels to compete with foreign carriers in accordance with that congressional goal. We therefore conclude that, in principle at least, a rule reducing ODS if a subsidized vessel derives substantial revenue from preference cargo carriage under present market conditions reasonably responds to Congress' expectation that ODS bulk vessels would compete with foreign ships in the world market.31\n \n \n 74\n Aeron also argues, however, that the Board failed to consider whether its specific liner abatement formula was ill-suited to the bulk carriage industry and instead arbitrarily assumed that its liner formula would result in the appropriate degree of participation by subsidized vessels in the preference trade. In particular, Aeron contends that the practical differences between bulk and liner carriage make the liner abatement formula unworkable and inappropriate when applied to bulk vessels. Liner vessels, Aeron suggests, can maintain significant preference cargo service without triggering subsidy reduction because only a small portion of an outbound liner voyage consists of preference cargo and because liners carry commercial cargo on the inbound leg. Aeron also points out that liners often operate at so-called conference rates which are not considered premium rates and therefore are not counted as preference cargo carriage for the purposes of subsidy reduction. See 46 C.F.R. Sec. 280.5 (1984). As a result of these particular shipping characteristics, no liner has ever been required to abate subsidy. See Aeron's Brief at 24. By contrast, Aeron argues, bulk shippers have far fewer opportunities to carry preference cargo without triggering subsidy reduction. Bulk shippers carry large, ship-size cargo on extended chartered voyages, they do not operate at conference rates, and they typically do not carry inbound cargo. Thus a single carriage of preference cargo could occupy a bulk vessel for four months and account for nearly half of that vessel's annual revenues. See id. at 22-30. Consequently, Aeron contends, the Board's reflexive application of the liner abatement formula to bulk carriers may in practice discourage subsidized bulk vessels from carrying more than a single preference cargo per year.\n \n \n 75\n We cannot say that Aeron's challenge is frivolous. The Board's rate structure is expressly designed to encourage subsidized vessels to carry preference cargoes in accordance with the goals of the 1970 amendments. If Aeron's assessment of the effects of the subsidy abatement scheme on bulk carriers is correct, however, the Board's particular abatement formula could undercut that rationale by discouraging subsidized vessels from carrying any substantial number of preference cargoes each year. In the orders under review, the Board did not consider whether possible fact-specific differences between liner and bulk carriage required it to adjust its liner abatement formula before applying that formula to subsidized bulk carriers, and it did not consider the overall effects of the rule on Aeron's ability to carry preference cargoes. Instead, the Board apparently assumed that applying its liner rule to bulk vessels would result in an appropriate level of subsidized preference cargo carriage--that it would discourage Aeron from abandoning the commercial trade but nonetheless allow it to carry a reasonable number of preference cargoes. The federal appellees have not responded to Aeron's challenge to the Board's particular abatement formula. The AMA even states that applying the liner reduction formula to bulk shippers presents a number of conceptual and practical difficulties. See AMA's Brief at 31-33.\n \n \n 76\n While the general principle of subsidy reduction finds support in the statutory scheme, then, the Board has failed to offer an adequate explanation of whether its particular abatement formula reasonably responds to the practicalities of the bulk carriage industry given the purposes and policies of the Act. In the absence of such an explanation, we cannot uphold the Board's subsidy abatement scheme and must therefore remand the abatement formula to the Board for further consideration.32 On remand, the Board should consider whether its abatement formula should be adjusted or redesigned in light of both the arguable differences between liner and bulk carriage and Aeron's argument that it thwarts the goals of the 1970 amendments by unreasonably preventing subsidized vessels from serving the preference trade. We do not in any way decide that question today. On remand, the Board is free to reject Aeron's account of the differences between liner and bulk carriage if it finds that account unpersuasive, to adjust its subsidy reduction rule in light of those differences, or to retain its current formula despite those differences or any evidence concerning the needs of bulk carriers provided that it explains why the Act's language and legislative history justify the chosen rule. Cf. Aeron, 695 F.2d at 582. We hold only that the Board must give due consideration to the nature of the bulk carriage industry in designing any particular subsidy reduction scheme aimed at both encouraging substantial subsidized preference cargo carriage and discouraging subsidized bulk vessels from abandoning the worldwide commercial market.\n \n V. CONCLUSION\n \n 77\n We affirm the district court's ruling that our decision in Aeron did not preclude the Board from reopening its 1978 adequacy finding in light of intervening changes in the shipping industry and its order directing the Board to consider whether it should do so. We also agree with the district court that the combination of cost-based rates and the bid augmentation rule constitutes a permissible interpretation of the conflicting goals embodied in Congress' 1970 amendments to the Act. While we believe that a subsidy reduction rule is authorized by the Act, however, we conclude that the Board has failed to give sufficient consideration to whether its particular subsidy reduction formula reasonably furthers the goals of the 1970 amendments in light of the possible differences between liner and bulk carriage. We therefore reverse and remand the district court's judgment insofar as it upheld the subsidy abatement rule and direct the district court to set aside this single aspect of the orders under review and to remand to the Board for an adequate justification of its specific subsidy abatement formula.\n \n \n 78\n So Ordered.\n \n \n \n 1\n The term \"subsidized\" carriers refers to those shippers who receive direct government subsidies. The term \"unsubsidized\" carriers is technically a misnomer: it refers to shippers who receive indirect government subsidies. See infra pp. 548-549\n \n \n 2\n Bulk vessels are chartered for specific voyages and carry large (usually shipload size) shipments under contract. Liner vessels, by contrast, operate as common carriers, travel on a regular schedule along designated trade routes, and typically carry an assortment of small shipments. See Aeron, 695 F.2d at 569-70 n. 3\n \n \n 3\n Section 901 is the primary preference cargo provision and the only preference legislation involved in this case. Similarly, only foreign preference cargoes--cargoes carried from a domestic to a foreign port--are at issue here. Certain domestic cargoes--cargoes carried between two domestic ports--are also reserved for U.S.-flag vessels, see 46 U.S.C. Sec. 883, but those cargoes cannot be carried by CDS-subsidized ships. See 46 U.S.C. Sec. 1156; cf. Independent U.S. Tanker Owners Comm. v. Lewis, 690 F.2d 908, 911-12 (D.C.Cir.1982)\n \n \n 4\n Although CDS was theoretically available for bulk vessels before 1970, MarAd had for the most part reserved the limited CDS funds for subsidized liner vessels. See Aeron, 695 F.2d at 570 n. 4. Congress clearly expected MarAd to extend CDS as well as ODS to qualified bulk carriers under the 1970 amendments. See President's Maritime Program, Part 2: Hearings Before the Subcomm. on Merchant Marine of the House Comm. on Merchant Marine and Fisheries, 91st Cong., 2d Sess. 166-67 (1970) (statement of Maritime Administrator Andrew Gibson) [hereinafter House Hearings II ]\n \n \n 5\n Another factor prompting the Administration to extend operating subsidy to U.S.-flag bulk carriers is the desire to phase out premium rates now paid for government sponsored cargoes carried on American-flag ships. The amounts covered by these premium rates are paid from several different appropriations and constitute, in effect, indirect subsidies. The aim of the Administration's program and the bill is to enable American bulk carriers, eventually at least, to carry government cargoes at world rates\n House Report at 38 (emphasis added).\n \n \n 6\n As the Maritime Administrator explained:\n The Department of Agriculture has spent $630 million over world market rates during the past 10 years for the transportation of preference cargo.... A system of direct subsidization of these ships, instead of the premium rate system, will result in savings totaling $480 million by 1982. In addition to these savings, modern productive bulk carriers will have been constructed.\n President's Maritime Program, Part 1: Hearings Before the Subcomm. on Merchant Marine of the House Comm. on Merchant Marine and Fisheries, 91st Cong., 1st Sess. 20-21 (1969) (quoted in Aeron, 695 F.2d at 570 n. 7); see also President's Message Transmitting Recommendation for New Shipbuilding Program, H.R. Doc. No. 183, 91st Cong., 1st Sess. 3-4 (1969). See generally Aeron Marine Shipping Co., 19 Ship.Reg. (P & F) 111, 113-120 (M.S.B.1979) (discussing the legislative history of the 1970 Amendments).\n \n \n 7\n By 1970, only three percent of the existing unsubsidized U.S.-flag bulk fleet was less than 20 years old, and ninety percent was of World War II vintage. See House Report at 120. Congress and the administration thus contemplated that only a few unsubsidized bulk vessels would continue to bid for preference cargoes within several years of the 1970 amendments. See id.; 116 Cong.Rec. 32,510-11 (1970) (statement of Sen. Griffin); Aeron, 19 Ship.Reg.Rep. at 118-120\n \n \n 8\n As we found in Aeron, Congress also conferred broad discretion on the Board with respect to the ODS program as a whole in section 603(a) of the Act which provides that the Board\n may enter into a contract with the applicant for the payment of [ODS] ... subject to such reasonable terms and conditions, consistent with this [Act], as the Secretary of Transportation shall require to effectuate purposes and policy of this [Act].\n 46 U.S.C. Sec. 1173(a); see Aeron, 695 F.2d at 575-77 (holding that the Board has authority to set preference cargo rates for subsidized bulk vessels under this section); see also House Report at 38-39 (noting the rate-setting discretion conferred on the Board); cf. S.Rep. No. 1080, 91st Cong., 2nd Sess. 58-59 (1970), U.S.Code & Admin.News p. 4188.\n \n \n 9\n As the Board has noted:\n Two events after 1970 occurred in worldwide shipping that were not anticipated or fully appreciated during the consideration of the 1970 Act. The first was the spectacular rise in the price of fuel oil, begun in 1973/1974 and continuing. Because nearly all U.S.-flag bulk vessels are steam-driven whereas the principal foreign flag bulk vessels are diesel-driven, the U.S.-flag bulk operator incurs a substantial disadvantage in fuel cost beyond other operating cost differentials.... The disadvantage is particularly acute in spot markets, such as the preference trades. Second, a surprising number of bulk operators of World War II vintage tankers were able to survive until the Alaskan pipeline began flowing in 1977, thus prolonging the removal of such vessels from service. The Alaskan oil trade also had the effect of stimulating a limited amount of unsubsidized (non-CDS) tanker construction.\n Aeron, 19 Ship.Reg.Rep. at 120 (footnote omitted); see also Aeron, 695 F.2d at 571 (noting that, as a result of the dramatic fuel increases between 1973 and 1974, ODS does not make U.S.-flag bulk carriers fully competitive with foreign operators).\n \n \n 10\n Ownership of the seven vessels is divided among six commonly controlled corporations and partnerships, all of which are parties to this case. We use \"Aeron\" to refer collectively to all six entities\n \n \n 11\n Section 605(c) proceedings are conducted on a ship by ship basis. When a subsidized vessel seeks to compete for preference cargo contracts, it petitions the Board for a finding that existing service is inadequate with respect to that ship, i.e., that total preference cargo demand exceeds existing service by an amount greater than the capacity of the petitioner's subsidized vessel. See Aeron, 527 F. Supp. at 536-37. In the prior proceedings in this case, then, the Board specifically found that existing U.S.-flag service in the preference trade was inadequate with respect to Aeron's seven ships. See Atlas Marine Co., 18 Ship.Reg.Rep. (P & F) 987, 1002-08 (M.S.B.1978)\n \n \n 12\n We also indicated that, if the Board decided to impose an unprofitable rate on remand, it was obliged to explain why the language and the legislative history of the Act justified the chosen rate. See Aeron, 695 F.2d at 582; see also infra pp. 558-559\n \n \n 13\n MarAd offered the following example to illustrate Phoenix's challenge to the rate structure established in the Tentative Order. The example compares the bids of a subsidized and an unsubsidized vessel and assumes that the subsidized ship has higher actual costs. The agency evaluating the preference cargo bids is assumed to be the Department of Agriculture (USDA), which pays an operator the difference between U.S.-flag premium rates and word rates when it awards a preference cargo contract\n Cost Per Ton Subsidized Unsubsidized\n of Cargo Vessel Vessel\n--------------------------------------------------\nPremium rate guideline $60 $65\nForeign flag rate 25 25\nCost to USDA 35 40\nODS 20 --\nTotal cost to government 55 40\n The premium rate guideline is calculated according to each ship's actual costs plus a reasonable profit and is the maximum allowable bid for each vessel. That guideline rate will be lower for the subsidized vessel, despite its higher actual costs, because the costs covered by ODS cannot be included in its cost base.\n As the example indicates, if the USDA does not take ODS into account in comparing the bids, it would award the contract to the (relatively inefficient) subsidized vessel even through the total subsidy cost to the government is $55 per ton ($20 per ton ODS and $35 per ton premium) for subsidized carriage and only $40 per ton (all in premium) for unsubsidized carriage. See Cargo Preference, 49 Fed.Reg. 2897, 2899 (Jan. 24, 1984); also Final Order, 22 Ship.Reg.Rep. at 607 (noting a similar example offered by Phoenix). Phoenix argued that this result contradicted Congress' expectation that the 1970 amendments would lower the cost of preference cargo carriage.\n \n \n 14\n MarAd initially issued this regulation in the form of an \"Interim Final Rulemaking and Request for Comments\" in order to allow Aeron to begin bidding on preference cargoes at cost-based rates in accordance with the bid augmentation rule. See Interim Rulemaking, 49 Fed.Reg. at 2899-900. The AMA immediately sought review of this interim rulemaking in district court. See Union of Concerned Scientists v. Nuclear Regulatory Comm., 711 F.2d 370, 379 (D.C.Cir.1983) (allowing review of a similar interim rulemaking). MarAd issued a so-called \"Final Rule\" in October of 1984--after the district court had upheld the portion of the interim rule governing bid augmentation. See Cargo Preference, 49 Fed.Reg. 39,847 (Oct. 11, 1984) [hereinafter Final Rulemaking ]. We take judicial notice of the fact that the final rule reaffirms the findings discussed in the interim rulemaking and basically adopts the interim rule's bid augmentation regulation. See id. at 39,847-50. Although aspects of this litigation could also be resolved in a petition to review the final rule, MarAd's issuance of that rule does not moot Aeron's and the unsubsidized shipper's challenges, which are equally applicable to the final rule and the interim rule. See Concerned Scientists, 711 F.2d at 377-79\n In the district court, the AMA argued that MarAd's interim rulemaking violated the notice and comment provision of the Administrative Procedure Act, see 5 U.S.C. Sec. 553, because it was made effective upon issuance. The AMA does not press this argument on appeal. In any event, we agree with the district court that MarAd found for \"good cause\" that pre-effectiveness public comment was impractical and unnecessary under the circumstances of this case, see id. Sec. 553(b)(3)(B), in light of the pressing need to establish some procedure for evaluating Aeron's preference cargo bids. See Interim Rulemaking, 49 Fed.Reg. at 2899-900.\n \n \n 15\n If a subsidized vessel derives more than half of its total annual gross revenues from the carriage of preference cargo, the subsidy abatement rule requires its ODS to be reduced by the follwoing formula:\n Percent of annual gross\n freight revenue from Percent\ncarriage of competitive of ODS\n cargo per vessel reduction\n----------------------------------\n 40 to 49.9 20\n 30 to 39.9 40\n 20 to 29.9 60\n 10 to 19.9 80\n 0 to 9.9 100\n Tentative Order, 22 Ship.Reg.Rep. at 325; see also 46 C.F.R. Sec. 280.4(b)(3) (1984).\n \n \n 16\n As initially adopted, the interim bid augmentation rule failed to consider whether a subsidized vessel's ODS would eventually be repaid under the subsidy abatement scheme. In other words, the bid augmentation procedure required shipper agencies to augment a subsidized shipper's bid by the full amount of ODS available to that shipper even though the carrier would have to repay a portion of its total annual ODS at the end of the year if it derives more than half of its gross annual revenues from the preference trade. We note that the final rule adjusts for this possibility by requiring MarAd to lower proportionally the amount of ODS used to augment bids if a subsidized shipper was forced to abate a portion of its ODS in the previous year. See Final Rulemaking, 49 Fed.Reg. at 39,849\n \n \n 17\n The relevant portion of MarAd's interim rate regulation reads as follows:\n When a subsidized bulk cargo vessel operator is the apparent low U.S.-flag bidder for a dry bulk preference cargo, the responsible department or agency shall evaluate the subsidized operator's bid by (1) requesting from MarAd an amount for the operating differential subsidy (ODS) applicable to the carriage of cargo as a cost per ton for performing the voyage by the apparent low bidder and any other bidders that are subsidized; (2) deriving \"augmented bids\" for the subsidized operators by adding the ODS amount to each subsidized operator's bid; (3) comparing the augmented bids of the subsidized operators and the bids of unsubsidized operators to determine the apparent low bidder; (4) requesting from MarAd a fair and reasonable guideline rate (which shall be based on the operator's anticipated costs for the voyage plus a reasonable amount for profit) for the apparent low bidder; and (5) comparing the guideline rate to the subsidized operator's augmented bid or the unsubsidized operator's bid.\n Interim Rulemaking, 49 Fed.Reg. at 2900. The preference cargo contract is awarded to the low responsive bidder provided that its bid is at or below the guideline rate. See id. at 2899. In its Final Rulemaking, MarAd offered a slightly different description of step \"5\" under the interim rule. See Final Rulemaking, 49 Fed.Reg. at 39,847 (\"Under the interim rule, ... the agency requests from MarAd a 'fair and reasonable' guideline rate for the low bidder, and compares the rate to the un augmented bid of the subsidized carrier or the bid of the unsubsidized carrier, as the case may be.\") (emphasis added). The final rule adopts this version without noting any change. See id. at 39, 851 (to be codified at 46 U.S.C. 381.8(b) (1985)). The parties in this case have ignored the difference, see AMA's Brief at vii (stating that final rule essentially adopts the interim rule framework); Phoenix's Brief at 15 (same); Aeron's Reply Brief at 26-27 (same); Government's Brief at 11 (same); no party has specifically faulted the interim rule for comparing augmented rather than unaugmented bids to the guideline rate. In any event, we uphold the interim rule's bid augmentation scheme under either formulation for the general reasons stated below. See infra pp. 559-561.\n \n \n 18\n The district court expressly declined, however, the AMA's request that it order the Board to reopen the 1978 adequacy proceedings\n \n \n 19\n We also left open the possibility that the Board might, under special circumstances not present in 1978, find that existing service was inadequate but that the purposes and policy of the Act favored only the partial admission of subsidized vessels. See Aeron, 695 F.2d at 574-75. We noted, however, that the Act generally favors new entry once the Board determines that existing U.S.-flag service in the preference trade is inadequate. See id\n \n \n 20\n Aeron is undoubtedly correct that the Board did not have authority to disregard the district court's original order, affirmed by this court, directing the admission of all seven ships to the preference trade in 1982. The Board, however, plainly complied with that order. See Letter to Apex Marine Corporation from Georgia Stamas (Aug. 5, 1982), R. Item 16, Ex. 2 (admitting the remaining five Aeron vessels in accordance with the district court's order); Final Order, 22 Ship.Reg.Rep. at 602. It was after the admission of all seven Aeron vessels that the AMA petitioned, pursuant to Board regulations, for a new proceeding to reconsider the 1978 adequacy finding itself. See Petition of American Maritime Association to Reopen for Reconsideration and to Vacate, Docket No. A-132, at 4-7 (Aug. 18, 1982), R. Item No. 16, Ex. 3; see generally 46 C.F.R. Sec. 201.173 (1984) (\"Upon a petition and showing of compelling cause, ... the Administration may at any time reopen any proceeding ... for ... reconsideration ... [in light of] changed circumstances.\") At that point, the Board had fully complied with the admission order, and that order did not prevent the Board from reconsidering the 1978 section 605(c) finding to whatever extent it is permitted to do so under the Act. See, e.g., United Gas Improvement Co. v. Continental Oil Co., 381 U.S. 392, 404-06, 85 S. Ct. 1517, 1524-25, 14 L. Ed. 2d 466 (1965); Greater Boston Television Corp. v. FCC, 463 F.2d 268, 286-87 (D.C.Cir.1971), cert. denied, 406 U.S. 950, 92 S. Ct. 2042, 32 L. Ed. 2d 338 (1972). Although reopened proceedings might eventuate in the exclusion of Aeron's vessels, nothing in the district court's original order or either Aeron opinion bound the Board to disregard agency practice with respect to future adequacy proceedings. Cf. State Marine Int'l, Inc. v. Peterson, 518 F.2d 1070, 1080 (D.C.Cir.1975) (noting that ODS contracts are expressly conditioned on any prospective MarAd ruling implementing a reasonable interpretation of the Act), cert. denied, 424 U.S. 912, 96 S. Ct. 1108, 47 L. Ed. 2d 316 (1976)\n \n \n 21\n The Board awards 20-year ODS contracts to subsidized vessels; those contracts embody, among other things, the statutory prohibition on participating in the preference trade unless the Secretary determines that existing U.S.-flag service is inadequate. Aeron's ships entered the preference trade after its 20-year ODS contracts were amended to remove any restriction on carrying preference cargo in light of the Board's 1978 section 605(c) determination. Aeron now argues that the 1978 inadequacy finding cannot be reopened both because it has a contractual right to bid for preference cargo for the duration of its 20-year contract and because it adjusted its operations in reliance on the ability to carry preference cargo given the Board's inadequacy determination. Phoenix suggests that Aeron has not in fact acted in reliance on the 1978 order and that, in any event, any reliance was unjustifiable in light of the Board's statement that it would reconsider the 1978 finding in light of changed circumstances. See supra p. 558\n \n \n 22\n Shortly after the district court's order in this case, the Board requested briefing on the following issues:\n 1) Whether Congress intended that a finding under Section 605(c) of the Merchant Marine Act of 1936, as amended is final, or contemplated modification.\n 2) Whether a binding contractual relationship presently exists between the Board and Aeron et al. providing for the carriage of preference cargo with subsidy.\n 3) Whether the Board is precluded from reconsidering entry of Aeron et al. into the preference trade by Aeron's reliance on a continued period of access.\n 4) Whether the original Section 605(c) decision in Docket No. S-605 is stale and should be reviewed.\n 5) Whether U.S.-flag service in the preference cargo trade is presently and for the future will be adequate.\n 6) Whether in the accomplishment of the purposes and policy of the Act, additional vessels should be operated in the preference trade.\n Letter from Georgia Stamas to Aeron, Phoenix and the AMA 2 (Oct. 11, 1984), reprinted in Phoenix's Brief at Addendum C.\n \n \n 23\n If, for example, an unsubsidized vessel could bid at $65 per ton for a particular preference cargo contract and a subsidized vessel would receive $20 per ton ODS for the contract, Aeron must bid below $45 per ton in order to win the contract since the relevant shipper agency will augment Aeron's bid by $20 per ton before comparing it to those of the unsubsidized shippers. See supra note 13. Thus, the bid augmentation rule will force subsidized vessels to bid substantially below the premium rates paid to unsubsidized shippers in order to secure a preference cargo contract. The rule also ensures that subsidized vessels carry preference cargoes at a lower overall government cost than unsubsidized vessels. Assuming that the world rate for this contract is $25 per ton, see id., an Aeron bid below $45 per ton results in a government cost of below $40 per ton ($20 ODS plus $20 premium)--i.e., less than the $40 per ton premium that would be paid to the unsubsidized vessel\n \n \n 24\n Suppose, for example, a subsidized and an unsubsidized vessel both have actual costs of $60 per ton for a particular preference cargo contract and the subsidized vessel would receive $20 per ton ODS. Under the Board's rate structure, the subsidized vessel's section 901 or \"fair and reasonable\" guideline--the maximum it could bid on the contract--would be calculated by adding a reasonable profit to $40 per ton (cost net of ODS), while the unsubsidized vessel could bid at a cost-plus rate based on $60 per ton. Even in the absence of competitive bidding, then, the subsidized shipper's rates would be substantially lower than the rates paid to unsubsidized operators. As the AMA points out, the guideline rate in many instances has little practical effect because the bid augmentation rule already forces a subsidized vessel's bid below the fair and reasonable rate ceiling\n \n \n 25\n Aeron also suggests that the bid augmentation rule impermissibly conflicts with certain Department of Agriculture regulations concerning the evaluation of preference cargo bids. Even if that were so, a shipper agency's rules concerning preference cargoes must conform to MarAd regulations in light of section 901(b)(2) of the Act, which provides that all government agencies involved in preference cargo carriage \"shall administer its programs ... under regulations issued by the Secretary of Transportation.\" 46 U.S.C. Sec. 1241(b)(2). Congress clearly intended MarAd to control the subsidized carriage of preference cargoes and that shipper agencies would adjust their preference cargo procedures to conform with MarAd's. See S.Rep. No. 1080, 91st Cong., 2d Sess. 58-59 (1970); H.R.Rep. No. 1555, 91st Cong., 2d Sess. 6 (1970) (conference statement of House managers); 116 Cong.Rec. 32, 511 (1970) (statement of Sen. Griffin)\n \n \n 26\n We also note that Aeron has not pointed to any evidence disputing the Board's and MarAd's finding that the rate decision will encourage subsidized vessels to enter the preference trade by allowing them to earn a reasonable profit on preference cargo contracts. Compare, e.g., Aeron, 695 F.2d at 578-81 (discussing indications that the Board's original rate structure prevented Aeron from serving the preference trade). Even under the bid augmentation rule, after all, Aeron can carry preference cargoes at an overall price (i.e., its bid plus its ODS) above the world rates it currently receives in the commercial market. Instead, Aeron stakes its claim on the view that Congress intended to allow subsidized vessels to take over immediately the preference trade, to the greatest extent possible and with the full advantage of ODS, once the Secretary determined that existing U.S.-flag service was inadequate\n \n \n 27\n The district court did read our Aeron decision erroneously to preclude the possibility of world rates\n To induce the subsidized ships to bid for preference cargo, the Court of Appeals has prohibited the Board from limiting the subsidized carriers to world rates, and required that the rate provide a potential for profit.\n See American Maritime Ass'n, No. 84-249, mem. op. at 3. It therefore did not consider whether the Board had exercised its full discretion in determining that cost-based rates plus the bid augmentation rule would best accommodate the conflicting goals of the 1970 amendments.\n \n \n 28\n Both Phoenix and the AMA concede that the bid augmentation rule will drive Aeron's rates substantially in the direction of world rates. See AMA's Brief at 22-24; Phoenix's Brief at 38\n \n \n 29\n The AMA also points to section 614 of the Act, 46 U.S.C. Sec. 1184, in support of its theory that MarAd must augment Aeron's bids by a proportional amount of its CDS as well as its ODS. That section of the Act was amended in 1981 to allow \"any operator receiving operating differential subsidy funds [to] elect ... to suspend its operating differential subsidy funds [to] elect ... to suspend its operating differential subsidy contract with all attendant statutory and contractual restrictions, [with exceptions not relevant here], if ... the owner agrees to pay the Secretary ... [a proportional amount of] the construction differential subsidy.\" Omnibus Budget Reconciliation Act of 1981, Pub.L. No. 97-35, Sec. 1603, 95 Stat. 357, 751 (codified at 46 U.S.C. Sec. 1184(a)(4)) (the Snyder amendment); see Maritime Appropriation Authorization Act for Fiscal Year 1980, Pub.L. No. 96-112, Sec. 2(2)(B), 93 Stat. 847, 847 (originally enacting the Snyder amendment)\n The AMA reads this amendment as evidence that Congress intends to treat CDS as a direct cost of preference cargo carriage and thus requires the Board to adjust Aeron's bids by a CDS factor if Aeron is allowed to charge cost-based rates. We reject this view of the Snyder amendment. Although section 614 allows subsidized vessels to operate as unsubsidized ships by repaying both CDS and ODS, its legislative history makes quite clear that the provision is not intended to \"supplant any other authority that the Maritime Administrator now has ... to allow subsidized vessels to carry preference cargoes without repayment of construction-differential subsidy.\" H.R.Rep. No. 556, 96th Cong., 1st Sess. 5 (1979) (conference report). Congress did not intend the Snyder Amendment to be the exclusive means by which a subsidized operator could enter the preference trade and it did not intend to require such carriers to do so as a condition of preference cargo carriage. See Final Order, 22 Ship.Reg.Rep. at 606-607; see also Hearings Before the Subcomm. on Merchant Marine of the House Comm. on Merchant Marine and Fisheries, 96 Cong., 1st Sess. 321-22, 329 (1979) (statement of Rep. Snyder).\n \n \n 30\n Both the unsubsidized shippers and the federal appellees suggest that Aeron cannot challenge the subsidy abatement scheme before this court because it failed to do so before the agency. It is true that Aeron did not object to ODS abatement when first proposed by the Board in the Tentative Order. See Tentative Order, 22 Ship.Reg.Rep. at 324; Final Order, 22 Ship.Reg.Rep. at 608. At that point in the rate proceeding, however, the Board had only established that Aeron would be allowed to bid for preference cargoes at cost-based rates, net of ODS. When the Board announced in the Final Order that it would also condition Aeron's ability to participate in the preference trade on a bid augmentation rule, Aeron objected to the subsidy abatement rule at the next available opportunity, namely during MarAd's consideration of the interim rule. See Final Rulemaking, 49 Fed.Reg. at 39,849 (noting Aeron's comments). Aeron clearly raised its challenges to the subsidy abatement rule before the district court and on appeal\n Under these circumstances, we are not prepared to say that Aeron's failure to challenge the subsidy abatement scheme before MarAd adopted its interim rule precludes judicial consideration of that challenge. In many instances, claims not presented to an agency cannot be made for the first time to a reviewing court. See, e.g., Foundation on Economic Trends v. Heckler, 756 F.2d 143, 156 (D.C.Cir.1985). That rule is at its strongest, however, when a specific statutory provision requires all objections to be raised at the agency level, see, e.g., Washington Ass'n for Television & Children v. FCC, 712 F.2d 677, 680 (D.C.Cir.1983), and no such provision is operative here. At least in the absence of an explicit statutory directive, the general rule is ultimately a matter of judicial discretion and will not be applied to perpetuate unfairness to the parties. See Foundation on Economic Trends, 756 F.2d at 156. In the proceedings under review, the Board first concluded that Aeron could bid for preference cargoes at cost-based rates subject to the subsidy abatement rule. Aeron was apparently willing to accept that regulatory structure. Once the agency supplemented its Final Order with the bid augmentation rule, Aeron determined that it could not accept the combination of a bid augmentation rule and a subsidy reduction rule. At that point, however, Aeron did not have the opportunity to object to the subsidy abatement rule in order to preserve its objection for judicial review of the Final Order and the interim rule. We do not believe that Aeron reasonably could have been expected to challenge the subsidy abatement at some point before the Board and MarAd adopted its complete regulatory structure for the subsidized carriage of preference cargo. Applying the general rule to bar Aeron's challenge now would, if anything, deprive Aeron of a reasonable opportunity to object to significant agency action.\n In a rulemaking such as this one, moreover, an agency must justify the assumptions essential to its actions, notwithstanding a party's failure to challenge those assumptions before the agency, as part of its affirmative duty to engage in rational decisionmaking. See Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 634-35 (D.C.Cir.1983); National Lime Ass'n v. EPA, 627 F.2d 416, 433 (D.C.Cir.1980). In light of Aeron's challenge before the district court and this court, we believe that Board's somewhat reflexive application of its liner abatement scheme to bulk vessels must be considered such a vital assumption and should not escape judicial review. Cf. id.\n \n \n 31\n Our approval of the subsidy reduction principle in light of the current status of subsidized bulk vessels in the commercial market and the preference trade should not be taken to foreclose future reconsideration or adjustment of that principle, if warranted, as market conditions change over time. Cf. Aeron, 695 F.2d at 579 n. 37\n \n \n 32\n We order this limited remand with some reluctance. For several years, the Board and MarAd have conscientiously attempted to develop a regulatory structure for the subsidized carriage of preference cargoes in accordance with the aims of the 1970 amendments. For just as long, subsidized shippers have been trying to gain access to the preference trade. We intend this decision to hasten and not delay the parties' efforts to arrive at a reasonable implementation of the 1970 amendments. We uphold today MarAd's bid augmentation rule and the Board's fair and reasonable rate structure. Although we remand the portion of the Board's Final Order adopting the subsidy abatement rule, we do so only because the Board has not offered any explanation for why it chose its particular abatement formula. We are confident that the Board can promptly iron out this sole remaining kink by either providing such an explanation or by adjusting its abatement formula; that action, we trust, will establish a viable regulatory structure for the subsidized carriage of preference cargoes\n We further note that, in its final rulemaking, MarAd adjusted the bid augmentation rule to account for the effects of subsidy abatement on ODS payments. See supra note 16. This adjustment ensures that a subsidized vessel's ODS will not \"count against\" it twice--once in subsidy abatement and once in bid augmentation. See Final Rulemaking, 49 Fed.Reg. at 39,84 9. The Board may, of course, take this adjustment into account in explaining the rationality of its specific abatement formula on remand.\n \n \n ", "ocr": false, "opinion_id": 454658 } ]	D.C. Circuit	Court of Appeals for the D.C. Circuit	F	USA, Federal
397,265	Bright, Heaney, Ross	1981-12-08	false	united-states-v-crystal-marie-unger	null	United States v. Crystal Marie Unger	UNITED STATES of America, Appellee, v. Crystal Marie UNGER, Appellant	John H. Ehrhart (argued), Fisher, Martin, Ehrhart & McCright, Cedar Rapids, Iowa, for Crystal Marie Unger, appellant., James H. Reynolds, U. S. Atty., N. D. Iowa, Cedar Rapids, Iowa, for appellee., Crystal Marie Unger, pro se.	null	null	null	null	null	null	null	Submitted Aug. 12, 1981.	null	null	21	Published	null	<parties data-order="0" data-type="parties" id="b353-9"> UNITED STATES of America, Appellee, v. Crystal Marie UNGER, Appellant. </parties><br><docketnumber data-order="1" data-type="docketnumber" id="b353-11"> No. 81-1005. </docketnumber><br><court data-order="2" data-type="court" id="b353-12"> United States Court of Appeals, Eighth Circuit. </court><br><otherdate data-order="3" data-type="otherdate" id="b353-13"> Submitted Aug. 12, 1981. </otherdate><br><decisiondate data-order="4" data-type="decisiondate" id="b353-14"> Decided Dec. 8, 1981. </decisiondate><br><attorneys data-order="5" data-type="attorneys" id="b354-11"> <span citation-index="1" class="star-pagination" label="252"> *252 </span> John H. Ehrhart (argued), Fisher, Martin, Ehrhart & McCright, Cedar Rapids, Iowa, for Crystal Marie Unger, appellant. </attorneys><br><attorneys data-order="6" data-type="attorneys" id="b354-12"> James H. Reynolds, U. S. Atty., N. D. Iowa, Cedar Rapids, Iowa, for appellee. </attorneys><br><attorneys data-order="7" data-type="attorneys" id="b354-13"> Crystal Marie Unger, pro se. </attorneys><br><p data-order="8" data-type="judges" id="b354-14"> Before HEANEY, BRIGHT and ROSS, Circuit Judges. </p>	[ "665 F.2d 251" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/665/665.F2d.251.81-1005.html", "author_id": null, "opinion_text": "665 F.2d 251\n UNITED STATES of America, Appellee,v.Crystal Marie UNGER, Appellant.\n No. 81-1005.\n United States Court of Appeals,Eighth Circuit.\n Submitted Aug. 12, 1981.Decided Dec. 8, 1981.\n \n John H. Ehrhart (argued), Fisher, Martin, Ehrhart & McCright, Cedar Rapids, Iowa, for Crystal Marie Unger, appellant.\n James H. Reynolds, U. S. Atty., N. D. Iowa, Cedar Rapids, Iowa, for appellee.\n Crystal Marie Unger, pro se.\n Before HEANEY, BRIGHT and ROSS, Circuit Judges.\n HEANEY, Circuit Judge.\n \n \n 1\n Crystal Marie Unger appeals from the district court's denial of her motion to vacate sentence pursuant to 28 U.S.C. § 2255. We reverse and remand for an evidentiary hearing on plaintiff's claims.\n \n \n 2\n Crystal Marie Unger and Robert Ellis Unger were charged in a four-count indictment filed on February 24, 1977, alleging that the Ungers had kidnapped an infant, transported two stolen vehicles in interstate commerce and had conspired to commit the substantive offenses. The indictment was based on a series of events beginning on December 11, 1976, in Waterloo, Iowa. On that date, the Ungers visited Vicky Howard, a friend of Crystal. Ms. Howard planned to go out that evening, so it was agreed that Crystal would babysit Howard's two-month-old son, Ricky Joe, at the Ungers' hotel. Howard gave Crystal clothes, diapers, food, bottles and a car bed for the child. The state claims that the Ungers were to return the child at 1:00 p. m. the next day; the Ungers deny that such an understanding was reached. The child was not returned the next day, and Howard called the police.\n \n \n 3\n Four days later, the Ungers left for California with the Howard baby in tow. They traveled in a stolen rental car, which they subsequently traded for a used car. They abandoned the used car and stole another vehicle from a rental agency. On January 2, 1977, the Ungers, under assumed names, sought medical treatment for the Howard baby at a Salt Lake City, Utah, hospital. The infant's scrotum had been torn open; one of the testicles was exposed and the other badly bruised. Surgery was performed, and the infant was discharged three days later.\n \n \n 4\n The Ungers returned to Waterloo on January 10. They placed the infant and his belongings into a cab, and gave the driver instructions to take the child to Vicky at 218 Elm Street. They attached a note to the child stating that he had had an accident, that his genitalia should be kept clean and provided the name of the hospital and treating physician in Salt Lake City. The Ungers left Waterloo and traveled in the east for a month before returning to Iowa. They were arrested in Mason City, Iowa, on February 7, 1977.\n \n \n 5\n The court appointed Donald Gottschalk to represent both defendants. On July 20, 1977, after a jury was sworn and testimony was about to commence, the Ungers were offered a plea bargain. They agreed to jointly plead guilty to the kidnapping charge, and Robert Unger further agreed to plead guilty to one count of transporting a stolen vehicle in interstate commerce. The remaining counts of the indictment were subsequently dropped.\n \n \n 6\n The district court conducted a sentencing hearing on August 25, 1977. Counsel Gottschalk alternatively spoke on behalf of each of the defendants, urging leniency for both. They were each sentenced to a fifty-year term on the kidnapping charge, and Robert received a five-year concurrent term on the auto theft charge. Crystal, who was twenty-three years old at the time of sentencing, is scheduled to be released from prison in the year 2010.\n \n \n 7\n A spate of motions were subsequently filed by Robert, usually on behalf of himself and his wife. The last such motion, filed on February 4, 1980, was denied by the district court on May 1, 1980. The court treated the motion as one requesting relief for Robert only. We affirmed. United States v. Unger, 635 F.2d 688 (8th Cir. 1980). None of the motions filed by Robert raised the precise issues before us on appeal.\n \n \n 8\n Crystal filed a motion to vacate on her own behalf on January 11, 1978, which was dismissed without a hearing by the district court on May 22, 1978. The issues before us on appeal were not raised in that motion. The motion presently appealed from was filed by Crystal pro se on June 2, 1980. The court denied relief on September 12, 1980. No post-conviction evidentiary hearings have been held for either Crystal or her codefendant.\n \n \n 9\n Crystal argues on appeal that her sentence was unconstitutionally imposed and must be vacated on two grounds: her plea was involuntary, and her counsel's conflict of interest denied her effective assistance of counsel. Alternatively, she asks that we remand to the district court for an evidentiary hearing on her claims. We agree that the petitioner is entitled to an evidentiary hearing, and remand to the district court for that purpose.\n \n \n 10\n I. Voluntariness of the Plea.\n \n \n 11\n Crystal Unger contends that her guilty plea was not the product of her free and willing choice but, rather, was induced by misrepresentations made by her attorney at the time she agreed to the plea bargain. In an affidavit filed with this Court, Crystal contends that at the time the plea bargain was offered to her and her husband, their attorney told her that she would be given probation if she pled guilty. She further alleges that when she responded negatively to the plea offer, her attorney told her that she would probably get the death penalty if she went to trial. She thereupon agreed to the guilty plea.\n \n \n 12\n In United States v. Goodman, 590 F.2d 705 (8th Cir.), cert. denied, 440 U.S. 985, 99 S. Ct. 1801, 60 L. Ed. 2d 248 (1979), this Court established that if a defendant can show that his or her guilty plea was entered in reliance on false assurances as to the sentence that would be imposed, the guilty plea may be set aside as involuntary. Goodman filed suit under section 2255, alleging that a deputy U. S. Marshal and a U. S. Probation Officer told him that he would receive a maximum of ten years imprisonment if he pled guilty to bank robbery charges pending against him. Goodman, in fact, received a twenty-five year sentence. This Court held that if Goodman could prove that these assurances were given and that he relied on them in making his decision to plead guilty, he would then be entitled to relief under section 2255. Id. at 711-712. The court remanded for further fact-finding proceedings.\n \n \n 13\n This appeal is clearly governed by the Goodman rule. Here, as in Goodman, the movant has \"indicated exactly what statements were allegedly made to (her) and when, where and by whom the statements were made.\" Id. at 712. The allegations are neither conclusory nor \"wholly incredible\" in the face of the record. See Blackledge v. Allison, 431 U.S. 63, 74, 97 S. Ct. 1621, 1629, 52 L. Ed. 2d 136 (1977). The movant has not alleged merely that her counsel erroneously predicted the favorable consequences of a guilty plea; that, of course, would not entitle her to relief. See id. at 70, 97 S.Ct. at 1627; United States v. Degand, 614 F.2d 176, 178 (8th Cir. 1980); Knight v. United States, 611 F.2d 918, 922 (1st Cir. 1979); United States v. Marzgliano, 588 F.2d 395, 398 n.6 (3d Cir. 1978); Bonner v. Wyrick, 563 F.2d 1293, 1298 (8th Cir. 1977), cert. denied, 439 U.S. 913, 99 S. Ct. 286, 58 L. Ed. 2d 260 (1978); Wellnitz v. Page, 420 F.2d 935, 936 (10th Cir. 1970). Rather, she argues that her plea was involuntary because it was induced by counsel's misrepresentations as to what her sentence in fact would be. See United States v. Marzgliano, supra, 588 F.2d at 397-398; Wellnitz v. Page, supra, 420 F.2d at 936.\n \n \n 14\n Because \"the motion and the files and records of the case (do not) conclusively show that the prisoner is entitled to no relief,\" plaintiff must be given an opportunity to substantiate her claim at an evidentiary hearing. 28 U.S.C. § 2255. See Lindhorst v. United States, 585 F.2d 361, 364-365 (8th Cir. 1978). The Supreme Court has stated that an evidentiary hearing should be held where, as here, \"(t)he factual allegations contained in the petitioner's motion and affidavit * * * relat(e) primarily to purported occurrences outside the courtroom and upon which the record could, therefore, cast no real light\" and where \"the circumstances alleged (are not) of a kind that the District Judge could completely resolve by drawing upon his own personal knowledge or recollection.\" Machibroda v. United States, 368 U.S. 487, 494-495, 82 S. Ct. 510, 513-14, 7 L. Ed. 2d 473 (1962).\n \n \n 15\n The government argues that Crystal is barred from challenging the voluntariness of her plea because the district court, in accepting the plea, generally complied with Rule 11. At the change of plea hearing, the Ungers responded negatively to the court's inquiries as to whether their pleas were the result of promises by anybody other than the plea bargain and whether there were conditions or provisions of the plea bargain not stated by counsel.\n \n \n 16\n We agree that the district court \"generally should be entitled to rely upon the defendant's answers to such inquiries,\" United States v. Goodman, supra, 590 F.2d at 711 n.9. Defendant's representations at a guilty plea hearing properly constitute an \"imposing\" barrier to collateral attack, Blackledge v. Allison, supra, 431 U.S. at 74, 97 S. Ct. at 1629, protecting the courts from a potential flood of prisoners recanting their Rule 11 statements. United States v. Marzgliano, supra, 588 F.2d at 399. Nevertheless, when faced with credible allegations that a defendant's plea was induced by misrepresentations as to the sentence that would be imposed, the courts have afforded defendants an opportunity to substantiate their allegations, even where the allegations are contrary to statements made on the Rule 11 record. See, e. g., United States v. Goodman, supra, 590 F.2d at 711-712; United States v. Marzgliano, supra, 588 F.2d at 399. As the Supreme Court has noted, the Rule 11 voluntariness hearing is an imperfect procedural mechanism which cannot be totally immune from collateral attack. See Blackledge v. Allison, supra, 431 U.S. at 73, 97 S. Ct. at 1628; Fontaine v. United States, 411 U.S. 213, 215, 93 S. Ct. 1461, 1462, 36 L. Ed. 2d 169 (1973).\n \n \n 17\n II. Conflict of Interest.\n \n \n 18\n Crystal Unger further contends that she was denied effective assistance of counsel because a conflict of interest arose from the representation of Crystal and her codefendant by one appointed attorney. We agree that a conflict of interest arose, and remand for a determination of whether Crystal Unger knowingly and intelligently waived her right to separate counsel.\n \n \n 19\n There is no indication in the record that Crystal Unger ever objected to the court's appointment of joint counsel for her and her husband in the proceedings below. In the absence of such an objection, she must show \"that an actual conflict of interest adversely affected (her) lawyer's performance.\" Cuyler v. Sullivan, 446 U.S. 335, 348, 100 S. Ct. 1708, 1718, 64 L. Ed. 2d 333 (1980).\n \n \n 20\n This Court has recognized that an actual conflict of interest occurs when counsel cannot use his or her best efforts to exonerate one defendant for fear of implicating the other. See Austin v. Erickson, 477 F.2d 620 (8th Cir. 1973). In Austin, the petitioner and her codefendant were charged with first degree manslaughter in the killing of petitioner's infant son. The codefendant, Goode, was accused of directly causing the death, while Austin was said to have aided and abetted the killing by failing to prevent it. The Court held that because Austin's attorney did not advance a plausible defense available to Austin but antagonistic to Goode-i. e., Austin's lack of responsibility-she was denied effective assistance of counsel.1 The Court refused to speculate on whether or not the defense could have been successfully asserted; the significant factor was that it was not developed because of counsel's divided loyalties. Id. at 624.\n \n \n 21\n The record in the instant case similarly \"luminates the cross-purposes under which (counsel) was laboring.\" Glasser v. United States, 315 U.S. 60, 73, 62 S. Ct. 457, 466, 86 L. Ed. 680 (1942).2 Our concern for the torn loyalties of Unger's counsel largely focuses on the injury to the Howard infant and the posture toward that injury taken by counsel. We can only infer that the severity of the sentence imposed on Crystal resulted from the harm incurred by the child. Crystal was twenty-three at the time of sentencing and had no prior criminal record. Custody of the child was obtained originally with the mother's permission. No threats were made to the mother or family, and no ransom demands were conveyed or apparently contemplated.\n \n \n 22\n Robert Unger has consistently maintained that he was totally responsible for the injury to the child and that, in fact, his wife was not present when it occurred. Crystal echoes this contention in an affidavit filed with this Court. Counsel made no effort, however, to distance Crystal from the aggravating circumstances of the case. There is no indication that the plea negotiations encompassed the possibility of Crystal testifying against her husband at the pending trial. Counsel spoke very briefly on Crystal's behalf at the sentencing hearing, urging leniency only on the grounds of her age and lack of a criminal record. He did not urge the court to consider potentially varying degrees of culpability in setting the sentence. When speaking on Robert's behalf, he offered Robert's rather incredible story that the injury was an accident, and emphasized the \"nonviolent, paper-crime\" nature of Robert's prior record. By contrast, a vigorous advocate appearing only on Crystal's behalf could have stressed the apparent noninvolvement of Crystal in the child's injury, and sought appropriately reduced punishment.\n \n \n 23\n We do not hold that a constitutional violation will be found in every case where two defendants of unequal culpability are represented by the same counsel. See United States v. Mandell, 525 F.2d 671, 678 (7th Cir. 1975), cert. denied, 423 U.S. 1049, 96 S. Ct. 774, 46 L. Ed. 2d 637 (1976). Nor have we ignored the Supreme Court's admonition that in the absence of objection at trial, the mere possibility that a conflict might have arisen is not sufficient to render counsel's assistance ineffective. See Cuyler v. Sullivan, supra, 446 U.S. at 348, 100 S. Ct. at 1718. Rather, we hold that on the basis of this record, \"the evidence of counsel's 'struggle to serve two masters (cannot) seriously be doubted.' \" Id. at 349, 100 S.Ct. at 1718, quoting Glasser v. United States, supra, 315 U.S. at 75, 62 S. Ct. at 467.\n \n \n 24\n A defendant may, of course, waive any potential or actual conflict of interest arising from joint representation if the waiver is made knowingly and intentionally. See Holloway v. Arkansas, 435 U.S. 475, 483, 98 S. Ct. 1173, 1178, 55 L. Ed. 2d 426 (1978); United States v. Cox, 580 F.2d 317, 320 (8th Cir. 1978), cert. denied, 439 U.S. 1075, 99 S. Ct. 851, 59 L. Ed. 2d 43 (1979); United States v. Lawriw, 568 F.2d 98, 104 (8th Cir. 1977), cert. denied, 435 U.S. 969, 98 S. Ct. 1607, 56 L. Ed. 2d 60 (1978). We cannot discern from this record, however, whether, in fact, such a waiver was made. We, therefore, direct the district court to consider this issue at the evidentiary hearing which we have held Crystal Unger is entitled to.\n \n \n 25\n We note that in disposing of the latest of Robert Unger's section 2255 motions, the district court stated the following:\n \n \n 26\n In passing, the court would note on its own motion that perhaps the most serious problem in this case centers around the fact that defendants were represented by the same counsel at all times. However, a review of the tapes of petitioners' initial appearances reveal that they were adequately advised of their right to independent counsel and knowingly and voluntarily waived separate counsel. Further, no conflict in representation is urged or apparent from the record.\n \n \n 27\n See United States v. Unger, supra, 635 F.2d at 690.\n \n \n 28\n We have carefully reviewed the record, particularly the transcript of the change of plea and sentencing hearings, and find no mention of the subject of joint representation. We certainly find nothing to support the trial court's finding of a waiver. The conflict of interest issue is now before the Court on Crystal Unger's own motion, and the question of whether a waiver occurred must be given full consideration.\n \n \n 29\n In United States v. Lawriw, supra, 568 F.2d at 105, this Court, exercising its supervisory authority, held that trial courts must specifically warn defendants of the potential dangers of joint representation and must afford them an opportunity to inquire of the court as to the nature and consequences of such representation. The Court has further stated that it will seldom, if ever, find a knowing and intelligent waiver of conflict of interest unless an adequate record has been made that the court conducted such an inquiry. See United States v. Cox, supra, 580 F.2d at 323. The Lawriw holding has received the express approval of the Supreme Court. See Cuyler v. Sullivan, supra, 446 U.S. at 346 n.10, 100 S. Ct. at 1717.\n \n \n 30\n The Ungers' change of plea and sentencing occurred one month before the Lawriw decision was rendered. The Lawriw decision has been given prospective application only, see United States v. Cox, supra, 580 F.2d at 321, and so it does not govern this case. We cite it merely to highlight this Court's great concern that \"knowing waivers\" of important constitutional rights are not to be lightly found.\n \n \n 31\n Reversed and remanded with directions to the district court to conduct an evidentiary hearing to determine whether Crystal Unger's plea was voluntary and whether she waived her right to separate counsel.\n \n \n 32\n ROSS, Circuit Judge, concurring.\n \n \n 33\n I concur in the result reached in the majority opinion for the reasons stated therein. On remand, in addition to determining whether Crystal Unger's plea was voluntary and whether she waived her right to separate counsel, I suggest the district court consider the propriety of accepting the guilty plea in light of the fact that at the plea change hearing both defendants appeared to maintain their innocence. Federal Rule of Criminal Procedure 11(f) requires the court to make such inquiry \"as shall satisfy it that there is a factual basis for the plea.\" See Santobello v. New York, 404 U.S. 257, 261, 92 S. Ct. 495, 498, 30 L. Ed. 2d 427 (1971).\n \n \n \n 1\n See Foxworth v. Wainwright, 516 F.2d 1072, 1076 (1st Cir. 1975): \"A conflict of interest is presently whenever one defendant stands to gain significantly by counsel adducing probative evidence or advancing plausible arguments that are damaging to the cause of a codefendant whom counsel is also representing.\"\n \n \n 2\n Although the Austin decision, and most of the other conflict of interest cases, arose from alleged conflicts at trial, we see no reason to distinguish between a defendant's right to effective representation at trial and in the plea bargaining and sentencing process\n \n \n ", "ocr": false, "opinion_id": 397265 }, { "author_str": "Heaney", "per_curiam": false, "type": "020lead", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\nHEANEY, Circuit Judge.\nCrystal Marie Unger appeals from the district court’s denial of her motion to vacate sentence pursuant to 28 U.S.C. § 2255. We reverse and remand for an evidentiary hearing on plaintiff’s claims.\nCrystal Marie Unger and Robert Ellis Unger were charged in a four-count indictment filed on February 24, 1977, alleging that the Ungers had kidnapped an infant, transported two stolen vehicles in interstate commerce and had conspired to commit the substantive offenses. The indictment was based on a series of events beginning on December 11, 1976, in Waterloo, Iowa. On that date, the Ungers visited Vicky Howard, a friend of Crystal. Ms. Howard planned to go out that evening, so it was agreed that Crystal would babysit Howard’s two-month-old son, Ricky Joe, at the Un-gers’ hotel. Howard gave Crystal clothes, diapers, food, bottles and a car bed for the child. The state claims that the Ungers were to return the child at 1:00 p. m. the next day; the Ungers deny that such an understanding was reached. The child was not returned the next day, and Howard called the police.\nFour days later, the Ungers left for California with the Howard baby in tow. They traveled in a stolen rental ear, which they subsequently traded for a used car. They abandoned the used car and stole another vehicle from a rental agency. On January 2, 1977, the Ungers, under assumed names, sought medical treatment for the Howard baby at a Salt Lake City, Utah, hospital. The infant’s scrotum had been torn open; one of the testicles was exposed and the other badly bruised. Surgery was performed, and the infant was discharged three days later.\nThe Ungers returned to Waterloo on January 10. They placed the infant and his belongings into a cab, and gave the driver instructions to take the child to Vicky at 218 Elm Street. They attached a note to the child stating that he had had an accident, that his genitalia should be kept clean and provided the name of the hospital and treating physician in Salt Lake City. The 253Ungers left Waterloo and traveled in the east for a month before returning to Iowa. They were arrested in Mason City, Iowa, on February 7, 1977.\nThe court appointed Donald Gottschalk to represent both defendants. On July 20, 1977, after a jury was sworn and testimony was about to commence, the Ungers were offered a plea bargain. They agreed to jointly plead guilty to the kidnapping charge, and Robert Unger further agreed to plead guilty to one count of transporting a stolen vehicle in interstate commerce. The remaining counts of the indictment were subsequently dropped.\nThe district court conducted a sentencing hearing on August 25, 1977. Counsel Gottschalk alternatively spoke on behalf of each of the defendants, urging leniency for both. They were each sentenced to a fifty-year term on the kidnapping charge, and Robert received a five-year concurrent term on the auto theft charge. Crystal, who was twenty-three years old at the time of sentencing, is scheduled to be released from prison in the year 2010.\nA spate of motions were subsequently filed by Robert, usually on behalf of himself and his wife. The last such motion, filed on February 4,1980, was denied by the district court on May 1, 1980. The court treated the motion as one requesting relief for Robert only. We affirmed. United States v. Unger, 635 F.2d 688 (8th Cir. 1980). None of the motions filed by Robert raised the precise issues before us on appeal.\nCrystal filed a motion to vacate on her own behalf on January 11, 1978, which was dismissed without a hearing by the district court on May 22,1978. The issues before us on appeal were not raised in that motion. The motion presently appealed from was filed by Crystal pro se on June 2,1980. The court denied relief on September 12, 1980. No post-conviction evidentiary hearings have been held for either Crystal or her codefendant.\nCrystal argues on appeal that her sentence was unconstitutionally imposed and must be vacated on two grounds: her plea was involuntary, and her counsel’s conflict of interest denied her effective assistance of counsel. Alternatively, she asks that we remand to the district court for an eviden-tiary hearing on her claims. We agree that the petitioner is entitled to an evidentiary hearing, and remand to the district court for that purpose.\nI. Voluntariness of the Plea.\nCrystal Unger contends that her guilty plea was not the product of her free and willing choice but, rather, was induced by misrepresentations made by her attorney at the time she agreed to the plea bargain. In an affidavit filed with this Court, Crystal contends that at the time the plea bargain was offered to her and her husband, their attorney told her that she would be given probation if she pled guilty. She further alleges that when she responded negatively to the plea offer, her attorney told her that she would probably get the death penalty if she went to trial. She thereupon agreed to the guilty plea.\nIn United States v. Goodman, 590 F.2d 705 (8th Cir.), cert. denied, 440 U.S. 985, 99 S.Ct. 1801, 60 L.Ed.2d 248 (1979), this Court established that if a defendant can show that his or her guilty plea was entered in reliance on false assurances as to the sentence that would be imposed, the guilty plea may be set aside as involuntary. Goodman filed suit under section 2255, alleging that a deputy U. S. Marshal and a U. S. Probation Officer told him that he would receive a maximum of ten years imprisonment if he pled guilty to bank robbery charges pending against him. Goodman, in fact, received a twenty-five year sentence. This Court held that if Goodman could prove that these assurances were given and that he relied on them in making his decision to plead guilty, he would then be entitled to relief under section 2255. Id. at 711-712. The court remanded for further fact-finding proceedings.\nThis appeal is clearly governed by the Goodman rule. Here, as in Goodman, the movant has “indicated exactly what statements were allegedly made to [her] 254and when, where and by whom the statements were made.” Id. at 712. The allegations are neither conclusory nor “wholly incredible” in the face of the record. See Blackledge v. Allison, 431 U.S. 63, 74, 97 S.Ct. 1621, 1629, 52 L.Ed.2d 136 (1977). The movant has not alleged merely that her counsel erroneously predicted the favorable consequences of a guilty plea; that, of course, would not entitle her to relief. See id. at 70, 97 S.Ct. at 1627; United States v. Degand, 614 F.2d 176, 178 (8th Cir. 1980); Knight v. United States, 611 F.2d 918, 922 (1st Cir. 1979); United States v. Marzgliano, 588 F.2d 395, 398 n.6 (3d Cir. 1978); Bonner v. Wyrick, 563 F.2d 1293, 1298 (8th Cir. 1977), cert. denied, 439 U.S. 913, 99 S.Ct. 286, 58 L.Ed.2d 260 (1978); Wellnitz v. Page, 420 F.2d 935, 936 (10th Cir. 1970). Rather, she argues that her plea was involuntary because it was induced by counsel’s misrepresentations as to what her sentence in fact would be. See United States v. Marzgliano, supra, 588 F.2d at 397-398; Wellnitz v. Page, supra, 420 F.2d at 936.\nBecause “the motion and the files and records of the case [do not] conclusively show that the' prisoner is entitled to no relief,” plaintiff must be given an opportunity to substantiate her claim at an eviden-tiary hearing. 28 U.S.C. § 2255. See Lin-dhorst v. United States, 585 F.2d 361, 364-365 (8th Cir. 1978). The Supreme Court has stated that an evidentiary hearing should be held where, as here, “[t]he factual allegations contained in the petitioner’s motion and affidavit * * * relat[e] primarily to purported occurrences outside the courtroom and upon which the record could, therefore, cast no real light” and where “the circumstances alleged [are not] of a kind that the District Judge could completely resolve by drawing upon his own personal knowledge or recollection.” Machibroda v. United States, 368 U.S. 487, 494-495, 82 S.Ct. 510, 513-14, 7 L.Ed.2d 473 (1962).\nThe government argues that Crystal is barred from challenging the voluntariness of her plea because the district court, in accepting the plea, generally complied with Rule 11. At the change of plea hearing, the Ungers responded negatively to the court’s inquiries as to whether their pleas were the result of promises by anybody other than the plea bargain and whether there were conditions or provisions of the plea bargain not stated by counsel.\nWe agree that the district court “generally should be entitled to rely upon the defendant’s answers to such inquiries,” United States v. Goodman, supra, 590 F.2d at 711 n.9. Defendant’s representations at a guilty plea hearing properly constitute an “imposing” barrier to collateral attack, Blackledge v. Allison, supra, 431 U.S. at 74, 97 S.Ct. at 1629, protecting the courts from a potential flood of prisoners recanting their Rule 11 statements. United States v. Marzgliano, supra, 588 F.2d at 399. Nevertheless, when faced with credible allegations that a defendant’s plea was induced by misrepresentations as to the sentence that would be imposed, the courts have afforded defendants an opportunity to substantiate their allegations, even where the allegations are contrary to statements made on the Rule 11 record. See, e. g., United States v. Goodman, supra, 590 F.2d at 711-712; United States v. Marzgliano, supra, 588 F.2d at 399. As the Supreme Court has noted, the Rule 11 voluntariness hearing is an imperfect procedural mechanism which cannot be totally immune from collateral attack. See Blackledge v. Allison, supra, 431 U.S. at 73, 97 S.Ct. at 1628; Fontaine v. United States, 411 U.S. 213, 215, 93 S.Ct. 1461, 1462, 36 L.Ed.2d 169 (1973).\nII. Conflict of Interest.\nCrystal Unger further contends that she was denied effective assistance of counsel because a conflict of interest arose from the representation of Crystal and her codefend-ant by one appointed attorney. We agree that a conflict of interest arose, and remand for a determination of whether Crystal Un-ger knowingly and intelligently waived her right to separate counsel.\nThere is no indication in the record that Crystal Unger ever objected to the court’s appointment of joint counsel for her and her husband in the proceedings below. 255In the absence of such an objection, she must show “that an actual conflict of interest adversely affected [her] lawyer’s performance.” Cuyler v. Sullivan, 446 U.S. 335, 348, 100 S.Ct. 1708, 1718, 64 L.Ed.2d 333 (1980).\nThis Court has recognized that an actual conflict of interest occurs when counsel cannot use his or her best efforts to exonerate one defendant for fear of implicating the other. See Austin v. Erickson, 477 F.2d 620 (8th Cir. 1973). In Austin, the petitioner and her codefendant were charged with first degree manslaughter in the killing of petitioner’s infant son. The codefendant, Goode, was accused of directly causing the death, while Austin was said to have aided and abetted the killing by failing to prevent it. The Court held that because Austin’s attorney did not advance a plausible defense available to Austin but antagonistic to Goode — i. e., Austin’s lack of responsibility — she was denied effective assistance of counsel.1 The Court refused to speculate on whether or not the defense could have been successfully asserted; the significant factor was that it was not developed because of counsel’s divided loyalties. Id. at 624.\nThe record in the instant case similarly “luminates the cross-purposes under which [counsel] was laboring.” Glasser v. United States, 315 U.S. 60, 73, 62 S.Ct. 457, 466, 86 L.Ed. 680 (1942).2 Our concern for the torn loyalties of Unger’s counsel largely focuses on the injury to the Howard infant and the posture toward that injury taken by counsel. We can only infer that the severity of the sentence imposed on Crystal resulted from the harm incurred by the child. Crystal was twenty-three at the time of sentencing and had no prior criminal record. Custody of the child was obtained originally with the mother’s permission. No threats were made to the mother or family, and no ransom demands were conveyed or apparently contemplated.\nRobert Unger has consistently maintained that he was totally responsible for the injury to the child and that, in fact, his wife was not present when it occurred. Crystal echoes this contention in an affidavit filed with this Court. Counsel made no effort, however, to distance Crystal from the aggravating circumstances of the case. There is no indication that the plea negotiations encompassed the possibility of Crystal testifying against her husband at the pending trial. Counsel spoke very briefly on Crystal’s behalf at the sentencing hearing, urging leniency only on the grounds of her age and lack of a criminal record. He did not urge the court to consider potentially varying degrees of culpability in setting the sentence. When speaking on Robert’s behalf, he offered Robert’s rather incredible story that the injury was an accident, and emphasized the “nonviolent, paper-crime” nature of Robert’s prior record. By contrast, a vigorous advocate appearing only on Crystal’s behalf could have stressed the apparent noninvolvement of Crystal in the child’s injury, and sought appropriately reduced punishment.\nWe do not hold that a constitutional violation will be found in every case where two defendants of unequal culpability are represented by the same counsel. See United States v. Mandell, 525 F.2d 671, 678 (7th Cir. 1975), cert. denied, 423 U.S. 1049, 96 S.Ct. 774, 46 L.Ed.2d 637 (1976). Nor have we ignored the Supreme Court’s admonition that in the absence of objection at trial, the mere possibility that a conflict might have arisen is not sufficient to render counsel’s assistance ineffective. See Cuyler v. Sullivan, supra, 446 U.S. at 348, 100 S.Ct. at 1718. Rather, we hold that on the basis of this record, “the evidence of counsel’s ‘struggle to serve two masters [cannot] seri256ously be doubted.’ ” Id. at 349, 100 S.Ct. at 1718, quoting Glasser v. United States, supra, 315 U.S. at 75, 62 S.Ct. at 467.\nA defendant may, of course, waive any potential or actual conflict of interest arising from joint representation if the waiver is made knowingly and intentionally. See Holloway v. Arkansas, 435 U.S. 475, 483, 98 S.Ct. 1173, 1178, 55 L.Ed.2d 426 (1978); United States v. Cox, 580 F.2d 317, 320 (8th Cir. 1978), cert. denied, 439 U.S. 1075, 99 S.Ct. 851, 59 L.Ed.2d 43 (1979); United States v. Lawriw, 568 F.2d 98, 104 (8th Cir. 1977), cert. denied, 435 U.S. 969, 98 S.Ct. 1607, 56 L.Ed.2d 60 (1978). We cannot discern from this record, however, whether, in fact, such a waiver was made. We, therefore, direct the district court to consider this issue at the evidentiary hearing which we have held Crystal Unger is entitled to.\nWe note that in disposing of the latest of Robert Unger’s section 2255 motions, the district court stated the following:\nIn passing, the court would note on its own motion that perhaps the most serious problem in this case centers around the fact that defendants were represented by the same counsel at all times. However, a review of the tapes of petitioners’ initial appearances reveal that they were adequately advised of their right to independent counsel and knowingly and voluntarily waived separate counsel. Further, no conflict in representation is urged or apparent from the record.\nSee United States v. Unger, supra, 635 F.2d at 690.\nWe have carefully reviewed the record, particularly the transcript of the change of plea and sentencing hearings, and find no mention of the subject of joint representation. We certainly find nothing to support the trial court’s finding of a waiver. The conflict of interest issue is now before the Court on Crystal Unger’s own motion, and the question of whether a waiver occurred must be given full consideration.\nIn United States v. Lawriw, supra, 568 F.2d at 105, this Court, exercising its supervisory authority, held that trial courts must specifically warn defendants of the potential dangers of joint representation and must afford them an opportunity to inquire of the court as to the nature and consequences of such representation. The Court has further stated that it will seldom, if ever, find a knowing and intelligent waiver of conflict of interest unless an adequate record has been made that the court conducted such an inquiry. See United States v. Cox, supra, 580 F.2d at 323. The Lawriw holding has received the express approval of the Supreme Court. See Cuyler v. Sullivan, supra, 446 U.S. at 346 n.10, 100 S.Ct. at 1717.\nThe Ungers’ change of plea and sentencing occurred one month before the Lawriw decision was rendered. The Lawriw decision has been given prospective application only, see United States v. Cox, supra, 580 F.2d at 321, and so it does not govern this case. We cite it merely to highlight this Court’s great concern that “knowing waivers” of important constitutional rights are not to be lightly found.\nReversed and remanded with directions to the district court to conduct an evidentia-ry hearing to determine whether Crystal Unger’s plea was voluntary and whether she waived her right to separate counsel.\n\n. See Foxworth v. Wainwright, 516 F.2d 1072, 1076 (1st Cir. 1975): “A conflict of interest is present whenever one defendant stands to gain significantly by counsel adducing probative evidence or advancing plausible arguments that are damaging to the cause of a codefend-ant whom counsel is also representing.”\n\n\n. Although the Austin decision, and most of the other conflict of interest cases, arose from alleged conflicts at trial, we see no reason to distinguish between a defendant’s right to effective representation at trial and in the plea bargaining and sentencing process.\n\n", "ocr": false, "opinion_id": 9468643 }, { "author_str": "Ross", "per_curiam": false, "type": "030concurrence", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\nROSS, Circuit Judge,\nconcurring.\nI concur in the result reached in the majority opinion for the reasons stated therein. On remand, in addition to determining whether Crystal Unger’s plea was voluntary and whether she waived her right to separate counsel, I suggest the district court consider the propriety of accepting the guilty plea in light of the fact that at the plea change hearing both defendants appeared to maintain their innocence. Federal Rule of Criminal Procedure 11(f) requires the court to make such inquiry “as shall satisfy it that there is a factual basis for the plea.” See Santobello v. New York, 404 U.S. 257, 261, 92 S.Ct. 495, 498, 30 L.Ed.2d 427 (1971).\n", "ocr": false, "opinion_id": 9468644 } ]	Eighth Circuit	Court of Appeals for the Eighth Circuit	F	USA, Federal
1,582,819	null	2008-04-11	false	ex-parte-hunter	null	Ex Parte Hunter	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "31 So. 3d 173" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n31 So.3d 173 (2008)\nEX PARTE JOHN HENRY HUNTER, JR.\nNo. 1070552 (CR-06-1951).\nSupreme Court of Alabama.\nApril 11, 2008.\nDecision of the Supreme Court of Alabama Without Opinion Cert. denied.\n", "ocr": false, "opinion_id": 1582819 } ]	Supreme Court of Alabama	Supreme Court of Alabama	S	Alabama, AL
531,074	Arnold, Magill, Ross	1989-10-20	false	in-re-resolution-trust-corporation-seth-ward-v-resolution-trust	null	In Re Resolution Trust Corporation, Seth Ward v. Resolution Trust Corporation	In Re RESOLUTION TRUST CORPORATION, Petitioner. Seth WARD, Appellee, v. RESOLUTION TRUST CORPORATION, Appellant	null	null	null	null	null	null	null	null	Submitted Oct. 6, 1989.	null	null	31	Published	null	<parties id="AbU"> In re RESOLUTION TRUST CORPORATION, <a class="footnote" href="#fn" id="fn_ref"> * </a> Petitioner. Seth WARD, Appellee, v. RESOLUTION TRUST CORPORATION, <a class="footnote" href="#fn" id="fn_ref"> * </a> Appellant. </parties><docketnumber id="A97"> Nos. 89-1961, 89-1980. </docketnumber><court id="AU1"> United States Court of Appeals, Eighth Circuit. </court><otherdate id="A75"> Submitted Oct. 6, 1989. </otherdate><decisiondate id="ADc"> Decided Oct. 20, 1989. </decisiondate><br><judges id="b184-4"> <span citation-index="1" class="star-pagination" label="58"> 58 </span> Before ARNOLD and MAGILL, Circuit Judges, and ROSS, Senior Circuit Judge. </judges><div class="footnotes"><div class="footnote" id="fn" label=""> <a class="footnote" href="#fn_ref"> * </a> <p id="Aqq"> On September 7, 1989, on motion of Resolution Trust Corporation, we entered an order substituting it as party petitioner and appellant, in place of the Federal Savings and Loan Insurance Corporation and the Federal Deposit Insurance Corporation, respectively. </p> </div></div>	[ "888 F.2d 57" ]	[ { "author_str": "Arnold", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/888/888.F2d.57.89-1980.89-1961.html", "author_id": null, "opinion_text": "888 F.2d 57\n 58 USLW 2287\n In re RESOLUTION TRUST CORPORATION,* Petitioner.Seth WARD, Appellee,v.RESOLUTION TRUST CORPORATION,* Appellant.\n Nos. 89-1961, 89-1980.\n United States Court of Appeals,Eighth Circuit.\n Submitted Oct. 6, 1989.Decided Oct. 20, 1989.\n \n Before ARNOLD and MAGILL, Circuit Judges, and ROSS, Senior Circuit judge.\n ARNOLD, Circuit Judge.\n \n \n 1\n Resolution Trust Corporation (RTC) asks us to review, either by appeal or mandamus, the District Court's order remanding to the Arkansas Court of Appeals a civil action that had earlier been removed by RTC's predecessor, the Federal Savings and Loan Insurance Corporation (FSLIC). On August 7, 1989, we filed our opinion holding that we had no jurisdiction to undertake any such review. In re Federal Savs. & Loan Ins. Corp., 881 F.2d 564. A judgment was entered dismissing both the appeal and the petition for mandamus for want of jurisdiction.\n \n \n 2\n We now have before us RTC's timely petition for rehearing and the other side's response. On August 9, 1989, the Financial Institutions Reform, Recovery, and Enforcement Act became law. Pub.L.No. 101-73, 103 Stat. 183. Section 501(l)(3) of this Act provides, among other things, that \"[t]he [Resolution Trust] Corporation may appeal any order of remand entered by a United States district court.\" RTC claims this new provision gives us jurisdiction of its appeal.\n \n \n 3\n We agree. In general, cases are to be decided in accordance with the law as it exists at the time of the decision. New statutes are usually interpreted not to apply retroactively, but the general rule is otherwise with respect to new enactments changing procedural or jurisdictional rules. If a case is still pending when the new statute is passed, new procedural or jurisdictional rules will usually be applied to it. See, e.g., Ex parte McCardle, 6 Wall. 318, 18 L.Ed. 816 (1867) (pending appeal must be dismissed after Congress passes new law repealing its jurisdictional basis). We had filed our opinion and entered judgment, but the time for rehearing had not run, nor had the mandate issued. The case was therefore still pending in this Court when the new Act became law. If the Act gives us jurisdiction, we must now exercise it, notwithstanding our former ruling that we lacked jurisdiction under preexisting law.\n \n \n 4\n The appellee does not dispute these general principles. He argues instead that Section 501(l )(3) applies only to cases removed by the RTC itself. It does not apply, the argument goes, to cases (like this one) that had been removed by FSLIC, RTC's predecessor, before the Act was passed. Appellee stresses that the appeal portion of Section 501(l )(3), unlike other parts of the Act dealing with cases removed by entities other than RTC, does not have its own separate heading and numbered paragraph. It must therefore be taken as limited to cases removed by RTC itself under the preceding parts of Section 501(l )(3).\n \n \n 5\n In order for the reader to appreciate the argument fully, we set out the full text of Section 501(l )(3), which governs removals by RTC:\n \n \n 6\n (3) Removal and Remand.--The Corporation [RTC] may, without bond or security, remove any such action, suit, or proceeding from a State court to the United States District Court for the District of Columbia, or if the action, suit, or proceeding arises out of the actions of the Corporation with respect to an institution for which a conservator or a receiver has been appointed, the United States district court for the district where the institution's principal business is located. The removal of any action, suit, or proceeding shall be instituted--\n \n \n 7\n (A) not later than 90 days after the date the Corporation is substituted as a party, or(B) not later than 30 days after the date suit is filed against the Corporation, if such suit is filed after the date of enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.\n \n \n 8\n The Corporation may appeal any order of remand entered by a United States district court.\n \n \n 9\n The last sentence of this paragraph (3), appellee argues, does not have its own enumeration and heading. It does not begin, for example, with something like \"(4)--Appeal of Remand.\" It is simply part of a larger provision captioned \"(3)--Removal and Remand.\" We are asked to find a significant contrast in Section 209(4)(b)(2) of the Act, which governs jurisdiction and removal of Federal Deposit Insurance Corporation cases, and does include a separately numbered and captioned subparagraph dealing with appeal of orders of remand. The Section with a separately numbered and captioned heading, we are told, confers a broader right of appeal than the Section whose appeal provision is not distinguished in this manner.\n \n \n 10\n The argument is ingenious and vigorously argued, but we do not find it persuasive. The statute says that the RTC may appeal \"any order of remand.\" (Emphasis ours.) Obviously \"any\" cannot extend to orders remanding cases removed by wholly unrelated parties. But RTC is FSLIC's corporate successor. We have substituted it as party appellant and petitioner in this case. It stands in FSLIC's shoes. The natural meaning of the statutory phrase is to allow it to appeal orders of remand in cases that were FSLIC's before the new law. Reading the statute in this way advances the general purpose of Congress, which was to expand federal power to defend the solvency of savings institutions. The editorial differences that appellee urges upon us are too weak a reed to bear the weight we are asked to give them.\n \n \n 11\n We hold that the Act gives us jurisdiction of this appeal. The petition for rehearing is granted. The opinion filed and the judgment entered by us on August 7, 1989, are vacated. This case is restored to the calendar for briefing and oral argument on the merits. The Clerk will set a briefing schedule, and the case will be set for argument in due course. The order dismissing the petition for mandamus will remain in effect. Since the order of remand is reviewable by appeal, there is no reason for a duplicative petition for an extraordinary writ.\n \n \n 12\n It is so ordered.\n \n \n \n *\n On September 7, 1989, on motion of Resolution Trust Corporation, we entered an order substituting it as party petitioner and appellant, in place of the Federal Savings and Loan Insurance Corporation and the Federal Deposit Insurance Corporation, respectively\n \n \n ", "ocr": false, "opinion_id": 531074 } ]	Eighth Circuit	Court of Appeals for the Eighth Circuit	F	USA, Federal
532,571	Guy, Jones, Wellford	1989-11-20	false	marathon-petroleum-co-v-guy-r-pendleton	null	Marathon Petroleum Co. v. Guy R. Pendleton	MARATHON PETROLEUM CO., Plaintiff-Appellee, v. Guy R. PENDLETON, Defendant-Appellant	Robert R. Weller (argued), Jones, Day, Reavis & Pogue, Cleveland, Ohio, Susan Z. Haller, Jones, Day, Reavis & Pogue, Washington, D.C., for plaintiff-appellee., James F. Burke, Jr. (argued), Burke & Rawlings, Akron, Ohio, for defendant-appellant.	null	null	null	null	null	null	null	Argued April 13, 1989.	null	null	27	Published	null	<parties id="AAoo"> MARATHON PETROLEUM CO., Plaintiff-Appellee, v. Guy R. PENDLETON, Defendant-Appellant. </parties><docketnumber id="A2qz"> No. 88-3799. </docketnumber><court id="AKQ"> United States Court of Appeals, Sixth Circuit. </court><otherdate id="AI3K"> Argued April 13, 1989. </otherdate><decisiondate id="AdOf"> Decided Nov. 20, 1989. </decisiondate><attorneys id="ARHZ"> Robert R. Weller (argued), Jones, Day, Reavis & Pogue, Cleveland, Ohio, Susan Z. Haller, Jones, Day, Reavis & Pogue, Washington, D.C., for plaintiff-appellee. </attorneys><attorneys id="A-7"> James F. Burke, Jr. (argued), Burke & Rawlings, Akron, Ohio, for defendant-appellant. </attorneys><judges id="ANhv"> Before JONES, WELLFORD and GUY, Circuit Judges. </judges>	[ "889 F.2d 1509" ]	[ { "author_str": "Jones", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/889/889.F2d.1509.88-3799.html", "author_id": null, "opinion_text": "889 F.2d 1509\n 58 USLW 2344\n MARATHON PETROLEUM CO., Plaintiff-Appellee,v.Guy R. PENDLETON, Defendant-Appellant.\n No. 88-3799.\n United States Court of Appeals,Sixth Circuit.\n Argued April 13, 1989.Decided Nov. 20, 1989.\n \n Robert R. Weller (argued), Jones, Day, Reavis & Pogue, Cleveland, Ohio, Susan Z. Haller, Jones, Day, Reavis & Pogue, Washington, D.C., for plaintiff-appellee.\n James F. Burke, Jr. (argued), Burke & Rawlings, Akron, Ohio, for defendant-appellant.\n Before JONES, WELLFORD and GUY, Circuit Judges.\n NATHANIEL R. JONES, Circuit Judge.\n \n \n 1\n Defendant-appellant, Guy R. Pendleton, appeals from the district court's ruling that plaintiff-appellee, Marathon Petroleum Company (Marathon), could terminate Pendleton's franchise. For the following reasons, we affirm the decision of the district court.I.\n \n \n 2\n Pendleton first obtained a franchise to a Marathon gas station in October 1983. The lease and franchise agreements became effective on December 30, 1983 and were scheduled to expire on November 30, 1986. J. App. at 57. Under the franchise agreement, Pendleton purchased gasoline and other service station products on credit from Marathon. Under the lease agreement, Pendleton was obligated to pay the sum of $1,333.00 per month. Id. Between December 1983 and January 1985, Pendleton developed an outstanding debt with Marathon, though the specific amount is disputed.\n \n \n 3\n In January 1985, Marathon and Pendleton agreed to a payment plan to reduce the debt, which provided that Pendleton pay Marathon an additional $250 for each new load of gasoline and make all payments for gasoline at the time of delivery. By May 1985, Pendleton had reduced his overall debt to Marathon to $15,830.72. On May 31, 1985, Pendleton and Marathon formalized the repayment schedule. Pendleton executed a promissory note (note), which provided for repayment of the outstanding debt, with interest at 13% per annum, at the rate of $250 per load of gasoline delivered, and with a maximum payment per month of $750. In consideration for Pendleton's execution of the note, Marathon cancelled the debt in the open account. From May 31, 1985 until March 27, 1986, Pendleton met his obligation to make payments under the note. No further payments were made on the note after March 27, 1986.\n \n \n 4\n In January 1986, Marathon assigned Pendleton a new marketing representative, William E. Cramer. Noting that Pendleton's statement reflected an overdue balance of $3,347.93, including January and February rent, Cramer met with Pendleton in February 1986. Cramer testified that they discussed the overdue rent and balance, and the note, though Cramer was unaware that Pendleton was current on the note at that time. Cramer also suggested that Pendleton consider selling his business along with a mutual cancellation of the franchise.\n \n \n 5\n During a meeting in March, Pendleton informed Cramer that he had two potential buyers for his station, Mr. Lapidakis and Mr. Weitzel. Since Marathon had the right to choose the franchisees and to refuse assignment of the lease, Pendleton asked Cramer to speak with the prospects and consider them for the station. After meeting with the two prospects, Cramer informed Pendleton that they would not be suitable. Despite encouraging Pendleton to sell his business, Cramer persistently recommended the termination of Pendleton's franchise because of Pendleton's continuing overdue balance, his \"blase attitude,\" and the deteriorating conditions of the station.\n \n \n 6\n On April 18, 1986, Marathon's district manager, Mr. Rissner, recommended to the manager of Marathon's Retail Marketing Division, Mr. Markel, that Pendleton be terminated as a dealer for failure to pay Marathon in a timely manner. Rissner's recommendation was based on: (1) delinquent rent; (2) delinquent fuel and accessories purchases; (3) missed payments on the note; (4) the operator's attitude; and (5) the possibility of bankruptcy. J.App. at 435. On April 24, 1986, Marathon sent a notice of termination to Pendleton giving him only 10 days notice. J.App. at 61. Markel testified that there were two primary reasons for giving Pendleton 10 days rather than 90 days notice. First, Markel believed, based on his conversation with Rissner, that Pendleton's pay habits and delinquency problems could not be resolved and that the business operation would continue to decline. Second, Markel was concerned with the condition of the business operation.\n \n \n 7\n On May 30, 1986, Marathon filed an action against Pendleton in the United States District Court for the Northern District of Ohio, Judge David D. Dowd presiding. Marathon requested the following: (1) a declaratory judgment that Pendleton's service station lease and franchise relationship was properly terminated under the Petroleum Marketing Practices Act, Pub.L. No. 95-297, 92 Stat. 322 (1978) (PMPA), codified at 15 U.S.C. Secs. 2801-2841 (1982); (2) an injunction returning possession of the service station to Marathon (which became moot on August 1, 1986, when Pendleton returned control of the station to Marathon); and (3) recovery of over $21,000 owed to Marathon on account, along with expenses and fees. On July 14, 1986, Pendleton filed a counterclaim alleging that Marathon intentionally interfered with Pendleton's business relationships by not granting a lease of the service station to a candidate of Pendleton's choice.\n \n \n 8\n On March 10, 1987, the district court granted partial summary judgment to Marathon, finding that Marathon acted reasonably in terminating the franchise arrangement. The court also denied Pendleton leave to file an amended counterclaim--alleging wrongful termination, breach of contract, and tortious breach--on the ground that such an amendment would be futile.1 On October 21, 1987, the district court held that because Pendleton's counterclaim concerning interference with business relationships required the seating of a jury, it would be tried at a future time. Marathon's complaint was tried on November 4 and 5, 1987. On May 16, 1988 the court decided that Marathon acted reasonably in terminating its franchise relationship with Pendleton on 10 days' notice, and awarded Marathon judgment in the amount of $19,582.44. The court also granted Pendleton's motion to amend his pleadings to conform to the evidence, in order to assert his counterclaim for wrongful termination, but the court found in favor of Marathon on this counterclaim because Marathon's termination complied with the PMPA. The district court did not hear or decide Pendleton's remaining counterclaim. On August 26, 1988, Pendleton appealed the decision to this court.\n \n II.\n \n 9\n Title I of the PMPA regulates the relationship between the franchisor and franchisee in the gasoline industry. Under the PMPA, a franchisor is precluded from terminating a franchisee unless it satisfies the requirements of section 2802:\n \n \n 10\n (b) ... (2) For the purposes of this subsection, the following are grounds for termination of a franchise....\n \n \n 11\n * * \n \n \n 12\n * \n \n \n 13\n (C) The occurrence of an event which is relevant to the franchise relationship and as a result of which termination of the franchise or nonrenewal of the franchise relationship is reasonable, if such event occurs during the period the franchise is in effect and the franchisor first acquired actual or constructive knowledge of such occurrence--\n \n \n 14\n * \n \n \n 15\n * \n \n \n 16\n (c) As used in subsection (b)(2)(C) of this section, the term \"an event which is relevant to the franchise relationship and as a result of which termination of the franchise or nonrenewal of the franchise relationship is reasonable\" includes such events as--\n \n \n 17\n * \n \n \n 18\n * *\n \n \n 19\n (8) failure by the franchisee to pay the franchisor in a timely manner when due all sums to which the franchisor is legally entitled.\n \n \n 20\n 15 U.S.C. Sec. 2802 (1982).\n \n \n 21\n The district court held that Pendleton's failure to make timely payments to Marathon \"was an event upon which Marathon reasonably could base its decision to terminate the franchise relationship with Pendleton\" because the PMPA \"defines late payment of sums due as a reasonable basis for termination of a franchise agreement.\" J. App. at 145. Consequently, the district court decided that it was not authorized to make an ad hoc examination of whether termination of a particular franchise relationship because of late payments was reasonable. Id.\n \n \n 22\n Pendleton contends that his payments were \"timely\" in view of the established course of dealings between the parties because Marathon consistently accepted late payments. Pendleton claims that the legislative history regarding section 2802(c)(8) clearly provides that the standard of \"timely\" payments permits evaluation of nonpayment or late payment in view of prevailing commercial or industry trade practices. Examining Marathon's prevailing commercial practice, Pendleton's affidavit indicates that many other Marathon franchisees paid their rent late. Pendleton also relies on the district court's findings concerning the course of dealing between the parties: \"Marathon engaged in the practice of allowing Pendleton to carry a month to month overdue account balance of approximately $3,000 to $6,000;\" and \"Marathon engaged in a practice or course of dealing with Pendleton wherein it permitted Pendleton to be at least one month in arrears in his rental payments.\" J. App. at 367-68.\n \n \n 23\n Marathon contends that this court is not required to look beyond the per se grounds for termination set forth under the Act to determine whether termination was reasonable. We do not find Marathon's argument for a per se termination rule persuasive. In Darling v. Motor Oil Corp., 864 F.2d 981, 990 (2d Cir.1989), the court stated that in termination cases, \"the PMPA creates rights separate and apart from the franchise agreement, which the courts must evaluate in order to determine whether the decision to terminate was reasonable.\" See also Slatky v. Amoco Oil Co., 830 F.2d 476, 481 (3rd Cir.1987) (\"Congress did not, however, preclude courts from scrutinizing the merits of termination or nonrenewal decisions that result from a franchisee's misconduct.\") Following Darling's objective standard, we must scrutinize the reasonableness of terminations even when an event enumerated in Sec. 2802(c) has occurred.\n \n \n 24\n The issue in the instant case is whether, under the PMPA, Marathon's past practices of accepting late payments precluded it from terminating the franchise on that basis. Assessing all the relevant facts in the record, it is apparent that Pendleton was chronically late in making his payments to Marathon. Although Marathon had permitted the defendant's delinquent payments to continue for some time (an overdue balance of $3,000 to $6,000 and at least one month in arrears in rental payments), the district court determined that Marathon's practice of accepting late payments did not amount to an amendment to the franchise agreement. Furthermore, Pendleton was on notice that his failure to catch up with rental payments would not be tolerated indefinitely. Thus, because Pendleton was late two months in his rent payments, and because he had been on notice that his past practices of late payments would not be condoned, we find that Marathon acted reasonably in terminating Pendleton's franchise agreement.\n \n III.\n \n 25\n Pendleton also contends that Marathon failed to satisfy the notice provisions of section 2804(a)(2), which requires a franchisor to give 90 days notice of termination to the franchisee. However, section 2804(b)(1) provides an exception in circumstances in which it would not be reasonable for the franchisor to furnish 90 days notice. In such cases, the franchisor shall give notice to the franchisee \"on the earliest date\" which is \"reasonably practicable.\" 15 U.S.C. Sec. 2804(b)(1)(A) (1982).\n \n \n 26\n This court must decide whether it was reasonable under the circumstances for Marathon to furnish less than 90 days notice under section 2804(b)(1). We will not disturb the factual finding of reasonableness by the district court unless it was clearly erroneous. Anderson v. City of Bessemer City, 470 U.S. 564, 573-76, 105 S.Ct. 1504, 1511-1513, 84 L.Ed.2d 518 (1985). In Wisser Co. v. Mobil Oil, 730 F.2d 54, 60 (2d Cir.1984), the court upheld an immediate termination of the franchise agreement without 90 days notice because the franchisee was misbranding the gasoline. After locating evidence in the legislative history indicating that Sec. 2804(b)(1)(A) was added to dispense with the lengthy notice requirement, the Second Circuit held that immediate termination was reasonable under the circumstances. See also Desfosses v. Wallach Energy Inc., 836 F.2d 22, 29 (1st Cir.1987) (the court held that the language of section 2804(b)(1)(A) does not restrict its application only to wrongful conduct and serious defaults of the franchise agreement, but also applies to failure to obtain financing pursuant to agreement between the parties.).\n \n \n 27\n In this case, the district court found that Marathon acted reasonably in providing Pendleton less than 90 days notice under section 2804(b)(1)(A). In particular, the court found that Pendleton's declining interest in operating the station and his failure to maintain adequate gasoline supplies was a sufficient reason for giving less than 90 days notice before terminating the franchise agreement.\n \n \n 28\n Finally, Pendleton argues that the contract provisions in the lease which require 90 days notice prior to termination should govern. Section 6(a)(iii) of the lease provides that 90 days notice shall be given when, among other things, the lessee fails to maintain the leased premises in a clean, safe, orderly, sanitary and good operating condition. J. App. at 58. However, we note that Marathon had another reason for termination besides the condition of the premises, because of the chronically late payments by Pendleton. Section 6(a)(ii)(C) of the lease allows termination with 10 days notice for failure to make timely rental payments. Id. Since Pendleton did not fulfill his payment obligations, we find that termination with 10 days notice was compatible with the requirements of the lease. Thus, we find that there is no basis for concluding that the district court's decision to permit less than 90 days notice was erroneous.\n \n IV.\n \n 29\n Accordingly, the judgment of the district court is AFFIRMED.\n \n \n \n 1\n Pendleton's claim that the district court erred by denying his motion for leave to amend his counterclaim is meritless because the district court's denial was not certified and therefore not a final judgment. Accordingly, no appeal lies from that ruling. Encoder Communications, Inc. v. Telegin, 654 F.2d 198, 202 (2d Cir.1981)\n \n \n ", "ocr": false, "opinion_id": 532571 } ]	Sixth Circuit	Court of Appeals for the Sixth Circuit	F	USA, Federal
1,588,104	Bryan, Moore, Pittman, Thomas, Thompson	2009-05-01	false	butler-v-maxistorage-inc	null	Butler v. MAXISTORAGE, INC.	J.L. BUTLER, Sr., and J.L. Butler, Jr. v. MAXISTORAGE, INC., Dewey Brazelton, and Brazelton Properties, Inc.	J.L. Butler, Sr., pro se; and J.L. Butler, Jr., pro se., Kevin D. Heard and Angela S. Ary of Heard & Associates, LLC, Huntsville, for appellees.	null	Appeal from the Circuit Court, No. CV-04-1492, Ned Michael Suttle, J. Page 1222	null	null	null	null	null	Rehearing Denied June 26, 2009., Certiorari Denied Oct. 9, 2009 Alabama Supreme Court 1081337.	null	null	0	Published	null	<parties id="b1269-10"> J.L. BUTLER, Sr., and J.L. Butler, Jr. v. MAXISTORAGE, INC., Dewey Brazelton, and Brazelton Properties, Inc. </parties><br><docketnumber id="b1269-12"> 2071154. </docketnumber><br><court id="b1269-13"> Court of Civil Appeals of Alabama. </court><decisiondate id="AIgk"> May 1, 2009. </decisiondate><br><otherdate id="b1269-14"> Rehearing Denied June 26, 2009. </otherdate><br><otherdate id="b1269-15"> Certiorari Denied Oct. 9, 2009 Alabama Supreme Court 1081337. </otherdate><br><attorneys id="b1270-13"> <span citation-index="1" class="star-pagination" label="1222"> *1222 </span> J.L. Butler, Sr., pro se; and J.L. Butler, Jr., pro se. </attorneys><br><attorneys id="b1270-14"> Kevin D. Heard and Angela S. Ary of Heard & Associates, LLC, Huntsville, for appellees. </attorneys>	[ "33 So. 3d 1221" ]	[ { "author_str": "Thompson", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 6131, "opinion_text": "\n33 So.3d 1221 (2010)\nJ.L. BUTLER, Sr., and J.L. Butler, Jr.\nv.\nMAXISTORAGE, INC., Dewey Brazelton, and Brazelton Properties, Inc.\n2071154.\nCourt of Civil Appeals of Alabama.\nMay 1, 2009.\nRehearing Denied June 26, 2009.\nCertiorari Denied October 9, 2009 Alabama Supreme Court 1081337.\n1222 J.L. Butler, Sr., pro se; and J.L. Butler, Jr., pro se.\nKevin D. Heard and Angela S. Ary of Heard & Associates, LLC, Huntsville, for appellees.\nTHOMPSON, Presiding Judge.\nJ.L. Butler, Sr. (\"Butler\"), and J.L. Butler, Jr. (\"Jamie\") (collectively, \"the Butlers\"), appeal from two summary judgments entered in favor of MaxiStorage, Inc. (\"MaxiStorage\"), Dewey Brazelton, and Brazelton Properties, Inc. (\"BP\"). In the judgments, entered at separate times as to separate claims,[1] the trial court found that BP was the owner of MaxiStorage and that MaxiStorage was the owner of certain property on Jordan Lane in Huntsville (\"the property\"), ejected the Butlers from the property, awarded MaxiStorage $72,500 for the Butlers' wrongful detention of the property, denied the Butlers' counterclaim of intentional interference with contractual or business relations, and dismissed all the remaining claims of the parties. The Butlers timely appealed to the Alabama Supreme Court, which transferred the appeal to this court pursuant to § 12-2-7(6), Ala.Code 1975.\nThe evidentiary submissions of the parties in support of their respective motions for a summary judgment and their oppositions thereto tend to show the following. Union Planters Bank (\"the bank\") held a promissory note for approximately $250,000 and a mortgage on a parcel of 1223 property on Jordan Lane in Huntsville.[2] The property was environmentally contaminated with oil and gas, and the bank, which did not want to foreclose on the property itself because of the contamination, was willing to sell its interest in the property for less than the amount of indebtedness represented by the promissory note. Jamie and William J. Gibbons, Jr., an attorney for the bank, discussed the possibility of the Butlers' purchasing the bank's interest in the property, i.e., the mortgage. In 2000, Jamie contacted Brazelton to determine if Brazelton would lend money to the Butlers to enable them to purchase the bank's interest in the property. No loan was made at that time.\nIn 2003, the bank still held the promissory note and mortgage on the property. In October 2003, Gibbons and Brazelton had a conversation during which Gibbons asked Brazelton whether he would be interested in purchasing the bank's interest in the property for $75,000 if the Butlers did not purchase it. The Butlers did not buy the bank's interest, and Brazelton, through BP, made the purchase. On October 20, 2003, the bank assigned the promissory note and the mortgage to BP. Gibbons told Jamie that Brazelton, through BP, had bought the bank's interest in the property.\nAfter the promissory note and mortgage had been assigned to BP, Jamie told Brazelton the Butlers were still interested in purchasing them. Brazelton and Jamie also discussed the possibility of establishing a \"shell corporation\"[3] to foreclose on the mortgage so as to avoid individual liability for the environmental contamination.[4] Butler had executed a durable power of attorney appointing Jamie as his attorney in fact, and the Butlers assert that, at all times during the events made the basis of this case, Jamie was acting as Butler's attorney in fact. Jamie offered Brazelton an existing shell corporation, MaxiStorage. Butler was the sole shareholder of MaxiStorage. Brazelton and Jamie appear to have reached an agreement for the Butlers to buy the interest in the property for $100,000, with $25,000 down and the remaining $75,000 plus ten percent interest due at the end of one year. In addition, the Butlers agreed to provide Brazelton with a \"shell corporation\" that would foreclose on the mortgage.\nPursuant to the agreement, on October 27, 2003, Jamie gave Brazelton a check for $25,000. On October 29, 2003, Jamie signed a \"Bill of Sale\" purporting to transfer all Butler's shares in MaxiStorage to BP. The bill of sale provided in pertinent part as follows:\n\"KNOW ALL MEN BY THESE PRESENTS: That J.L. Butler, SR, for and in the consideration of the sum of 1224 Ten and no/100 ($10.00) Dollars, and other good and valuable considerations, to me paid by BRAZELTON PROPERTIES, INC., the receipt whereof is hereby acknowledged, does hereby grant, sell transfer and deliver unto BRAZELTON PROPERTIES, INC., the following property, viz:\n\"100 Shares being 100% of Common Stock of MaxiStorage, Inc., an Alabama Corporation.\"\nMaxiStorage was intended to be the \"shell corporation\" that would purchase the property upon foreclosure of the mortgage. No stock certificates were delivered to BP. After the shares were transferred, BP, as the sole shareholder of MaxiStorage, held a meeting at which Butler was dismissed as director and officer of MaxiStorage and Brazelton was elected president. Also on October 29, BP assigned the promissory note and mortgage on the property to MaxiStorage.\nOn December 1, 2003, MaxiStorage foreclosed on the mortgage. MaxiStorage made the highest and best bid at the foreclosure sale and purchased the property for $76,011. Brazelton provided the money for the purchase. Jamie attempted to give a promissory note to Brazelton, but the note was signed on behalf of MaxiStorage. Brazelton said he refused to accept the promissory note because it was signed on behalf of a company he claimed he already owned. The Butlers contended that they owned MaxiStorage, and Jamie refused Brazelton's request to have Butler be personally liable on the note. Once the dispute over the promissory note arose, Brazelton attempted to return the $25,000 check Jamie had given to him as a down payment for the property, and he said he did not cash any subsequent checks the Butlers gave him toward payment of the money used to buy the property.\nJamie attempted to get a loan from a bank to repay Brazelton in full; however, he was unable to get a loan. He still attempted to pay Brazelton monthly payments; however, Brazelton would not accept them. Jamie went to the property and cut the lock on the gate and took possession of the property. Because Jamie did not have the consent or authorization of Brazelton or BP to take possession of the property, Brazelton issued a termination notice to the Butlers on March 1, 2004. When the Butlers did not vacate the property, Brazelton issued a \"notice to quit\" and sought delivery of the property. When the Butlers remained in possession of the property, MaxiStorage filed its action for ejectment.\nThe Butlers, acting pro se, contend that the trial court improperly entered summary judgments in favor of the plaintiffs because, they say, they presented substantial evidence creating genuine issues of material fact as to the ownership of MaxiStorage and of the property and because the defendants were not entitled to a judgment as a matter of law. We review a summary judgment de novo; we apply the same standard as was applied in the trial court. Kendrick v. Earl's Inc., 987 So.2d 589, 595 (Ala.Civ.App.2007). A motion for a summary judgment is to be granted when no genuine issue of material fact exists and the moving party is entitled to a judgment as a matter of law. Rule 56(c)(3), Ala. R. Civ. P. A party moving for a summary judgment must make a prima facie showing \"that there is no genuine issue as to any material fact and that [it] is entitled to a judgment as a matter of law.\" Rule 56(c)(3); see Lee v. City of Gadsden, 592 So.2d 1036, 1038 (Ala.1992). If the movant meets this burden, \"the burden then shifts to the nonmovant to rebut the movant's prima facie showing by `substantial evidence.'\" Lee, 592 So.2d at 1038 (footnote omitted). \"[S]ubstantial evidence 1225 is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.\" West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989); see § 12-21-12(d), Ala.Code 1975. Furthermore, when reviewing a summary judgment, the appellate court must view all the evidence in a light most favorable to the nonmovant and must entertain all reasonable inferences from the evidence that a jury would be entitled to draw. Nationwide Prop. & Cas. Ins. Co. v. DPF Architects, P.C., 792 So.2d 369, 372 (Ala.2000).\nThe Butlers assert that they presented substantial evidence indicating that they never intended to transfer actual ownership of MaxiStorage to BP, and that the parties understood that the stock \"transfer\" was simply to allow Brazelton and BP to have a shell corporation for purposes of foreclosing on the property. The Butlers contend that they had no \"donative intent\" when agreeing to the transfer of Butler's shares in MaxiStorage to BP; therefore, they say, the trial court erred in finding that BP was the owner of MaxiStorage. They also point out that no physical stock certificates were transferred from Butler to Brazelton or BP, and thus, they argue, there was no effective transfer of stock ownership. To support their contention, the Butlers rely on Article 8 of Alabama's version of the Uniform Commercial Code, § 7-8-101 et seq., Ala.Code 1975, which, they argue, requires a physical delivery of a certificate to complete a transfer of stock ownership.\nIn its judgment finding that BP owned MaxiStorage, the trial court held that the Butlers' argument must fail because \"prevailing case law holds that a transfer of ownership of stock can occur without delivery of the physical stock certificate.\" The trial court stated that, under Alabama law, the transfer of stock can be achieved without physical delivery of a stock certificate in three situations: by constructive delivery, by equitable assignment, or by gift. From the order, it appears that the trial court found that the transfer of stock from Butler to BP was an equitable assignment. The court found that the analyses in Andrews v. Troy Bank & Trust Co., 529 So.2d 987 (Ala.1988), and Johnson v. Johnson, 273 Ala. 688, 144 So.2d 12 (1962), upon which the Andrews court relied, were applicable to this case.\nIn Andrews, John Andress, who owned shares of common stock in Troy Bank and Trust Company (\"the Troy bank\"), wished to establish joint ownership in the stock with his wife, Lessie. Andress took the stock certificates to the Troy bank, which added \"Mr. or Mrs.\" to the original certificates issued to Andress. The Troy bank also changed its stockholders' register and dividend records to reflect that the stock was owned by Mr. or Mrs. Andress. When John Andress died, Lessie indorsed and surrendered the certificates to the Troy bank and had them reissued in her name. The Troy bank, believing that the certificates were \"joint survivorship\" certificates, did so. Andrews, 529 So.2d at 988-89.\nAndrews was the executor of John Andress's estate. He sued Lessie Andress and the Troy bank seeking a declaration of ownership of the stock. Our supreme court determined that the actions taken by John Andress in having Lessie Andress added as a co-owner of the stocks constituted an equitable assignment of an interest in the stock to Lessie \"even though he never actually indorsed the certificates and never physically delivered the certificates.\" Id. at 992 (footnote omitted). The supreme court specifically found that \"[t]he evidence clearly supports the trial court's 1226 finding that it was the intent of Mr. Andress to make Mrs. Andress a co-owner of the stock in question.\" Id.\nThe supreme court also held that there had been a constructive delivery of the stock to Lessie Andress, quoting favorably an Idaho Supreme Court case holding that,\n\"`[w]hile the requirement of physical delivery contained in [UCC] Article 8 may serve a valid evidentiary purpose in the case of a sole owner, where, as here, there is more than one listed owner, the requirement that the new owners personally receive physical possession of the stock certificates to constitute a valid transfer is not applicable because both joint tenants cannot enjoy possession simultaneously.... This result is especially appealing because possession by one co-owner is deemed possession by all.'\"\nAndrews, 529 So.2d at 991, quoting Ogilvie v. Idaho Bank & Trust Co., 99 Idaho 361, 365, 582 P.2d 215, 219 (1978).\nJohnson, the other case the trial court in this case relied upon in determining that delivery of the stock certificates to Brazelton or BP was not required, involved an action in equity by an alleged joint owner of corporate stock to compel the sale of the stock and the division of the proceeds among the alleged joint owners, all of whom were siblings attempting to determine the ownership interest of stock held by their deceased parents and their uncle. At issue was whether there had been a valid transfer of stock pursuant to the Uniform Stock Transfer Act (\"the USTA\"), which, at the time Johnson was decided, was codified at Title 10, § 48, Ala.Code 1940 (Recomp.1958).[5]\nThe Johnson court held that the transfer of corporate stock, in the strict or technical sense, was not involved in that case, and that the USTA was without controlling influence. The court concluded that, as a matter of law, the rule of equitable assignment of corporate stock was not abrogated by the adoption of the USTA. Accordingly, Alabama law continues to recognize the equitable principle that, as between the parties, there may be a transfer of ownership of stock in a corporation when the owner presently intends to make such a transfer even though there is some technical defect in the mode of transfer. See Johnson, supra; and Nashville Trust Co. v. Cleage, 246 Ala. 513, 21 So.2d 441 (1945).\nThe circumstances involving the stock transfer at issue here are distinguishable from those in Andrews and Johnson. BP and Butler were never co-owners of the stock at issue. Furthermore, the Butlers presented evidence indicating that the parties never intended that there be a transfer of ownership in MaxiStorage. Instead, 1227 they say, the intention of the parties was simply to provide Brazelton or BP with a shell corporation to foreclose on the mortgage on the property so the parties could avoid individual liability for the environmental contamination on the property. In Andrews, one of the cases the trial court relied upon, the supreme court acknowledged the distinction between the circumstances in Morris v. Kaiser, 292 Ala. 650, 299 So.2d 252 (1974), and those in Andrews, stating, \"[i]n the usual case, actual physical possession of the security by the purchaser is necessary to complete a transfer of ownership in the security. Morris, supra. However, in the present case, Mr. Andress did not attempt to bestow on his wife complete ownership of the stock but, rather, he sought to make her a co-owner of the stock.\" Andrews, 529 So.2d at 991. The circumstances in this care are more closely akin to those in Morris than to those in Andrews and Johnson.\nIn Morris, the appellant contended that he was a bona fide purchaser of bearer-bond securities, even though he had not physically taken delivery of them, because, he said, \"constructive or symbolic delivery occurred when [the appellee] executed and delivered a written bill of sale to him.\" Morris, 292 Ala. at 652, 299 So.2d at 253. The appellant also contended that his \"constructive possession\" of the securities, with his right to have actual delivery of them, equated to their physical delivery to him.\nUnder Article 8 of Alabama's version of the UCC, which governs investment securities such as stock certificates, § 7-8-102, Ala.Code 1975, a \"protected purchaser\" is a purchaser for value in good faith and without notice of any adverse claim who obtains control of the security. § 7-8-303, Ala.Code 1975. \"Delivery\" of securities occurs when the purchaser acquires possession of the security certificate, or someone designated by the purchaser acquires possession of a security, or when an identified security is still in the possession of a third person when that person acknowledges that he or she holds the security for the purchaser. § 7-8-301, Ala.Code 1975.\nThe Morris court held that securities were not like goods governed by Article 2 of the UCC and that it could not \"agree therefore that a bill of sale of the securities is sufficient to constitute delivery within the purview of the statute defining a bona fide purchaser of securities.\" Morris, 292 Ala. at 653, 299 So.2d at 254. The court continued:\n\"It is quite clear to us that the appellant never became a bona fide purchaser because he never took delivery of the securities by acquiring actual physical possession of them. They remained in the possession of the Bank, and the Bank did not at any time acknowledge that it held the securities for the purchaser. The appellant acquired possession of the purported bill of sale to the securities, but he did not acquire delivery and possession of the securities themselves. Delivery to a purchaser only occurs when he or a person designated by him acquires actual physical possession of a security.\"\nMorris, 292 Ala. at 653, 299 So.2d at 255.\nThe trial court's reliance on Andrews and Johnson was misplaced. The holdings in Andrews and Johnson lead us to conclude that the transferee still must obtain physical possession of securities such as shares of stock for the transfer to be valid, with two exceptions: (1) when the transferor attempts to transfer only partial ownership so that he or she becomes a co-owner with his or her transferee, and (2) when an identified security to be delivered is still in the possession of a third person when that third person acknowledges that he or she holds the security for the purchaser. *1228 Neither exception is present in this case; therefore, the law as stated in Morris, and acknowledged by the court in Andrews i.e., that an effective transfer of stock requires physical possession in the transferee controls.\nThe evidence is undisputed that neither Brazelton nor BP was given physical possession of stock certificates for MaxiStorage. Brazelton and BP's argument that no stock certificates had been created, so there was nothing physical to obtain, is not determinative. As in the cases cited above, in which the transferor arranged for new certificates to be issued in the co-owners' names, the Butlers could easily have had stock certificates issued in BP's name and given Brazelton or BP possession of the newly issued certificates. Furthermore, as Morris holds, the bill of sale was insufficient to constitute a transfer of shares from Butler to Brazelton or BP. Accordingly, Brazelton and BP failed to show that, as a matter of law, one or both were entitled to a judgment as a matter of law as to the ownership of MaxiStorage.\nEven if we were to hold that a physical transfer of stock certificates was not needed in this case, the Butlers' provided substantial evidenceincluding their testimonythat tended to show that the parties intended only to provide Brazelton or BP with a shell corporation for purposes of foreclosing on the property and that they did not intend an actual change in ownership of MaxiStorage. The Butlers' evidence creates a genuine issue of material fact; therefore, a summary judgment based on equitable assignment, which, as related in the holdings in the cases cited above, requires an intention to transfer ownership on the part of the transferors, was improper. In his deposition, Brazelton acknowledged that he did not provide consideration for the \"purchase\" of stock of MaxiStorage. Failure to provide any payment for MaxiStorage tends to support the Butlers' theory of the case that transfer of ownership of MaxiStorage was not actually contemplated by the parties. The Butlers' lack of effort to have stock certificates issued to Brazelton or BP and to have those certificates delivered also tends to support their contention that no actual transfer of ownership was intended by the parties.\nThe contested evidence as to the intention of the parties as to the ownership of MaxiStorage creates a genuine issue of material fact. Neither Brazelton nor BP had physical possession of the stock certificates of MaxiStorage, and the evidence was disputed as to whether the parties intended to vest ownership of MaxiStorage in Brazelton or BP. Therefore, a summary judgment in favor of Brazelton and BP regarding ownership of MaxiStorage was improper and must be reversed.\nBecause the ownership of MaxiStorage is not settled, the subsequent ownership of the property remains at issue. Thus, those portions of the trial court's summary judgments determining the ownership of the property and ejecting the Butlers from the property are also due to be reversed. Because the summary judgments are due to be reversed in their entirety, we also need not determine the other issues the Butlers raise on appeal.\nFor the reasons set forth above, the summary judgments entered in favor of MaxiStorage, Brazelton, and BP are due to be reversed in their entirety, and the cause is remanded for further proceedings consistent with this opinion.\nREVERSED AND REMANDED.\nPITTMAN, BRYAN, THOMAS, and MOORE, JJ., concur.\nNOTES\n[1] The Butlers initially appealed after the entry of the second summary judgment; however, one claim was still pending, and on December 12, 2007, this court, without opinion, dismissed the appeal because it was not from a final judgment. The final claim was dismissed on July 2, 2008, and on August 12, 2008, the Butlers filed a timely notice of appeal.\n[2] The record does not provide details regarding the underlying promissory note and mortgage, but the foreclosure deed indicates that the previous owners of the property had defaulted on the mortgage.\n[3] Presumably, by \"shell corporation\" the parties meant a corporation without assets.\n[4] The parties did not raise the legality of the \"shell corporation,\" which, the Butlers say, was intended to be used to shelter the parties from liability for environmental contamination of the property. This court does not condone sham corporations under any circumstances. However, illegality is an affirmative defense, Rule 8(c), Ala. R. Civ. P., and our supreme court has held that failure to plead illegality precludes appellate-court review of the matter. Kershaw v. Knox Kershaw, Inc., 523 So.2d 351 (Ala. 1988) (holding that the defendant's failure to plead the affirmative defense of the alleged illegality of a contract provision precluded consideration of that defense). Because the parties did not raise the issue of the legality of the shell corporation at trial or on appeal, this court cannot consider the issue.\n[5] That former Code section provided:\n\n\"Title to a certificate and to the shares represented thereby can be transferred only, by delivery of the certificate indorsed either in blank or to a specified person by the person appearing by the certificate to be the owner of the shares represented thereby, or by delivery of the certificate and a separate document containing a written assignment of the certificate or a power of attorney to sell, assign, or transfer the same or the shares represented thereby, signed by the person appearing by the certificate to be the owner of the shares represented thereby. Such assignment or power of attorney may be either in blank or to a specified person. The provisions of this section shall be applicable although the charter or articles of incorporation or code of regulations or by-laws of the corporation issuing the certificate and the certificate itself provide that the shares represented thereby shall be transferable only on the books of the corporation or shall be registered by a registrar or transferred by a transfer agent.\"\nCf. §§ 7-8-301, 7-8-307, 7-8-309, and 7-8-313, Ala.Code 1975.\n\n", "ocr": false, "opinion_id": 1588104 } ]	Court of Civil Appeals of Alabama	Court of Civil Appeals of Alabama	SA	Alabama, AL
895,590	Lettow	2013-06-07	false	liberty-ammunition-llc-v-united-states	null	Liberty Ammunition, Llc v. United States	LIBERTY AMMUNITION, LLC, Plaintiff, v. UNITED STATES, Defendant	Stephen B. Judlowe, McElroy, Deutsch, Mulvaney & Carpenter, LLP, New York, New York, for plaintiff. With him on the briefs were Joseph P. LaSalla, Michael Rato, and Riadh Quadir, Deutsch, Mulvaney & Carpenter, LLP, New York, NY, and Lawrence E. Bathgate II and Daniel F. Corrigan, Bathgate, Wegner & Wolf, P.C., Lakewood, New Jersey., Walter W. Brown, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for defendant. With him on the briefs were Stuart F. Delery, Principal Deputy Assistant Attorney General, and John Fargo, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C.	null	null	null	null	null	null	null	null	null	null	0	Published	null	<parties id="b375-5"> LIBERTY AMMUNITION, LLC, Plaintiff, v. UNITED STATES, Defendant. </parties><br><docketnumber id="b375-9"> No. 11-84C </docketnumber><br><court id="b375-10"> United States Court of Federal Claims. </court><br><decisiondate id="b375-11"> Filed: June 7, 2013 </decisiondate><br><attorneys id="b378-3"> <span citation-index="1" class="star-pagination" label="368"> *368 </span> Stephen B. Judlowe, McElroy, Deutsch, Mulvaney & Carpenter, LLP, New York, New York, for plaintiff. With him on the briefs were Joseph P. LaSalla, Michael Rato, and Riadh Quadir, Deutsch, Mulvaney & Carpenter, LLP, New York, NY, and Lawrence E. Bathgate II and Daniel F. Corrigan, Bathgate, Wegner & Wolf, P.C., Lakewood, New Jersey. </attorneys><br><attorneys id="b378-4"> Walter W. Brown, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for defendant. With him on the briefs were Stuart F. Delery, Principal Deputy Assistant Attorney General, and John Fargo, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C. </attorneys>	[ "111 Fed. Cl. 365" ]	[ { "author_str": "Lettow", "per_curiam": false, "type": "010combined", "page_count": 18, "download_url": "http://www.uscfc.uscourts.gov/sites/default/files/LETTOW.LIBERTY060713.pdf", "author_id": null, "opinion_text": " In the United States Court of Federal Claims\n No. 11-84C\n\n (Filed: June 7, 2013)\n\n********************************\n ) Patent case; claim construction for United\nLIBERTY AMMUNITION, LLC, ) States Patent No. 7,748,325\n )\n Plaintiff, )\n )\n v. )\n )\nUNITED STATES, )\n )\n Defendant. )\n )\n********************************\n\n\n Stephen B. Judlowe, McElroy, Deutsch, Mulvaney & Carpenter, LLP, New York, New\nYork, for plaintiff. With him on the briefs were Joseph P. LaSalla, Michael Rato, and Riadh\nQuadir, Deutsch, Mulvaney & Carpenter, LLP, New York, NY, and Lawrence E. Bathgate II and\nDaniel F. Corrigan, Bathgate, Wegner & Wolf, P.C., Lakewood, New Jersey.\n Walter W. Brown, Attorney, Commercial Litigation Branch, Civil Division, United\nStates Department of Justice, Washington, D.C., for defendant. With him on the briefs were\nStuart F. Delery, Principal Deputy Assistant Attorney General, and John Fargo, Director,\nCommercial Litigation Branch, Civil Division, United States Department of Justice, Washington,\nD.C.\n CLAIM CONSTRUCTION ORDER\n\nLETTOW, Judge.\n\n\n In this patent case, Liberty Ammunition, LLC (“Liberty”) alleges that the United States\n(“the government”) through the Department of Defense (“DOD”) has infringed upon its patent\nfor a firearms projectile, United States Patent No. 7,748,325 (the ‘325 patent), and thus is liable\nfor damages under 28 U.S.C. § 1498(a).1 This patent pertains to lead-free “green bullet”\ntechnology.\n 1\n Subsection 1498(a) of Title 28 provides in pertinent part:\n\n Whenever an invention described in and covered by a patent\n of the United States is used or manufactured by or for the United\n States without license of the owner thereof or lawful right to use\n 1\n\f The parties have submitted proposed constructions of the claim terms of the ‘325 patent.\nSee Joint Claim Construction Statement, Ex. A, ECF No. 34. Of the fifteen claim terms\nidentified by the parties as requiring construction, only two have an agreed interpretation. Id.\nFor those two terms, the court accepts the mutually agreed constructions proffered by the parties.\nThe proper constructions of the remaining thirteen terms were briefed by the parties and argued\nat a Markman hearing held on March 22, 2013.\n\n BACKGROUND\n\n The innovation at issue bears on a bullet recently put into broad use by the U.S. Army,\nwhich plaintiff claims is identical to that described in the ‘325 patent, namely, a projectile which\nretains the same lethal force of a lead-based bullet but is lead-free and does not carry the\nnegative environmental externalities associated with prior lead-based designs. See Liberty\nAmmunition, 101 Fed. Cl. at 583. The bullet consists of three components: a nose portion, a tail\nportion, and an “interface” portion connecting the nose and tail. See First Am. Compl., Ex. A\n(‘325 patent), at cols. 8-9.\n\n Prior to the advent of green-bullet technology, the standard-issue ammunition for the\nUnited States infantry was the M855 bullet. Pl.’s Opening Claim Construction Br. (“Pl.’s Br.”)\nat 1-2. The M855 projectile consisted of a steel penetrator, a lead slug, and a full metal copper\njacket. Id., Pl.’s App. 1-1.2 Due to concerns with low lethality and high environmental impact,\nthe Army sought to develop a lead-free alternative, beginning in 1993. Id. at 2-3. After failing\nto develop a satisfactory projectile on its own, the Army entertained submissions from civilian\ndevelopers. See id. at 3-1 to 2. Mr. PJ Marx was among those who responded to the Army,\ncoming forward with a design that Army officials found “very promising.” Id. at 11-1.\nMr. Marx and government representatives entered into three non-disclosure agreements\npertaining to this design, signed on February 17, 2005, June 23, 2005, and January 11, 2006,\nrespectively. See First Am. Compl., Exs. B, C, D.\n\n\n or manufacture the same, the owner’s remedy shall be by action\n against the United States in the United States Court of Federal\n Claims for the recovery of his reasonable and entire compensation\n for such use and manufacture.\n\n28 U.S.C. § 1498(a). Liberty also claims that the government breached a confidentiality\nagreement by disclosing confidential information and by purchasing products embodying this\ninformation without consent of Liberty. First Am. Compl. ¶¶ 13, 18; see also Liberty\nAmmunition, Inc. v. United States, 101 Fed. Cl. 581, 586-92 (2011) (upholding the court’s\nsubject matter jurisdiction over Liberty’s breach-of-contract claims but dismissing a pendent\nLanham Act claim on jurisdictional grounds).\n 2\n Liberty’s appendix has been subdivided into tabs. The first number in a citation to this\nappendix refers to a particular tab, and the number after the hyphen refers to the particular page\nnumber within that tab. The pages of the appendix are paginated sequentially within each tab.\nThus, “Pl.’s App. 2-1” would refer to the first page of Tab 2.\n\n\n 2\n\f On October 21, 2005, Mr. Marx applied for what became the ‘325 patent, which was later\nassigned to Liberty. First Am. Compl., Ex. A. On review by the assigned patent examiner, this\napplication was initially rejected for enablement on a ground relating to “rifling engaging\nannular grooves.” Def.’s Opening Br. Regarding Claim Construction (“Def.’s Br.”) at Def.’s\nApp. A83.3 The examiner also considered that certain of the claims were anticipated by two\nprior references, the Hotchkiss patent (U.S. Patent 29,272) and Strandli patent (U.S. Patent\n5,388,524). Id. at A84-85.4 Liberty amended the application to address the examiner’s\nobjections, Def.’s A98, but the examiner then noted that the application was directed to multiple\n“patentable distinct species” and required Mr. Marx to elect only a single species, id. at A122-23,\nA132-34. At that point, Mr. Marx elected to pursue those claims which were directed toward\nprojectiles as generically embodied in Figure 1 of the application, shown below. Id. at A148.\n\n\n\n\n 3\n The appendix accompanying the government’s brief is sequentially paginated and will\nbe cited by page without reference to numbered exhibits, i.e., “Def.’s App. A-__.”\n Initially, the examiner opined that “the specification, while being enabling for a\nprojectile that comprises annular grooves integrally formed in the exterior surface of the\ninterface component, does not reasonably provide enablement for an embodiment that does not\ncomprise such rifling engaging annular grooves.” Def.’s App. A83. Subsequently, however, the\napplicant and the examiner reached a different conclusion, viz., “[s]pecifically, the annular rings\nnoted by Office were only referenced by [a]pplicant in page 3, line 6 of the specification and\nnever disclosed to be essential. Furthermore, annular rings are well known in the prior art and\nthe absence thereof does not render [a]pplicant’s claimed invention inoperable.” Def.’s App.\nA162.\n 4\n The Hotchkiss patent, issued on July 24, 1860, consists of three claims. Hotchkiss\nprojectiles are comprised of a body, a metal belt, and a cap. See Def.’s App. A197-98. The\nimprovement upon prior art afforded by Hotchkiss projectiles was that the belt secured the\nportions of the projectile and “the whole would remain in one single projectile” during firing and\nflight. Id. at A199.\n The Strandli patent describes a projectile meant for use in target practice. Def.’s App.\nA201. These projectiles are formed from a hollow shell, a base, and rod or tube which connects\nthe two prior to firing and impact. Id. Such projectiles have no explosive or bursting charges\nand are meant to prevent dangerous ricocheting of projectile fragments after impact. Id. at A204.\n\n\n 3\n\f After an interview with the examiner, Mr. Marx further amended the claims to use\nspecific words and phrases to describe the elected species of projectile. See Def.’s App. A162-\n63.5\n\n The ‘325 patent was issued by the U.S. Patent and Trademark office on July 6, 2010.\nThe patent consists of two independent claims (Claims 1 and 32) and forty dependent claims.\nClaim 1 reads:\n\n A projectile structured to be discharged from a firearm, said projectile\n comprising:\n\n a body including a nose portion and a tail portion,\n\n said body further including an interface portion disposed in\n interconnecting relation to said nose and tail portions, said interface portion\n structured to provide controlled rupturing of said interface portion responsive to\n said projectile striking a predetermined target,\n\n said interface portion disposed and dimensioned to define a reduced area\n of contact of said body with the rifling of the firearm, said interface portion\n maintaining the nose portion and tail portion in synchronized rotation while being\n fixedly secured to one another by said interface portion whereby upon said\n projectile striking said predetermined target said interface portion ruptures\n thereby separating said nose and tail portions of said projectile.\n\n\n\n 5\n Among other things, at points in the patent application, Mr. Marx “amend[ed] ‘interface’\nto ‘interface portion’ to designate the limitation as structural and not relational.” Def.’s App.\nA162. Also, to address the prior art from Hotchkiss (U.S. Patent 29,272), the phrase “controlled\nrupturing” was used, reflecting agreement that “the ‘controlled rupturing’ of the interface as\nclaimed by [a]pplicant is not anticipated, suggested[,] or taught by Hotchkiss.” Def.’s App.\nA162. Respecting “the [examiner’s prior] anticipation rejection citing Strandli (U.S. Pat.\n5,388,524),” the claims were amended to “define a reduced area of contact with the rifling” and\nto refer to an interface that “provide[s] controlled rupturing responsive to impact.” Def.’s App.\nA162.\n\n Specifically:\n\n [t]he detaching portion of Strandli is not disposed and dimensioned\n to define a reduced area of contact with the rifling. The detaching\n or bursting portion of Strand[l]i is formed integral to the tail and\n does not interconnect nose and tail as claimed by [a]pplicant.\n Furthermore, the interface of Strandli does not provide controlled\n rupturing responsive to impact as now claimed by [a]pplicant.\n\nId.\n 4\n\f Claim 32, the second independent claim, describes:\n\n A projectile structured to be discharged from a firearm, said projectile\n comprising:\n\n a body including a nose portion and tail portion,\n\n said body further including an interface portion disposed intermediate\n opposite ends of said body in interconnecting relation to said nose and tail\n portions, said interface portion structured to provide controlled rupturing of said\n interface portion responsive to said projectile striking a predetermined target, said\n interface portion maintaining said nose portion and tail portion in synchronized\n rotation while being fixedly secured to one another by said interface portion\n whereby upon said projectile striking said predetermined target said interface\n portion ruptures thereby separating said nose and tail portions of the projectile;\n and\n\n said exterior surface of said interface portion disposed and structured to\n define a primary area of contact of said body with an interior barrel surface of\n said firearm.\n\n In 2010, the U.S. Army announced the development of its own bullet, the 5.56mm\nM855A1 Enhanced Performance Round.6 Liberty alleges that the M855A1 is a copy of its\npatented green bullet, and thus that its manufacture and use infringes the ‘325 patent. First Am.\nCompl. ¶ 8.\n\n PROCEDURAL HISTORY\n\n After Liberty filed suit in this court on February 8, 2011, the government moved for\ndismissal of the breach-of-contract count, at which point Liberty amended its complaint and the\nparties stipulated to denial of the government’s motion to dismiss. See Joint Stipulation\nRegarding Pl.’s First Am. Compl. (July 18, 2011), ECF No. 11. A second motion to dismiss\nwas filed by the government on July 28, 2011, pertaining to Liberty’s non-patent claims. After\nbriefing and a hearing, the court held that Liberty’s claims related to the non-disclosure\nagreements were properly before the court, but that claims arising under the Lanham Act and\nunder Florida unfair-competition law were not. See Liberty Ammunition, 101 Fed. Cl. at 586-92.\nThe parties then proceeded with discovery and claim construction.\n\n DISCUSSION\n\n A. Standards for Claim Construction\n\n\n\n\n 6\n On May 7, 2010, the Army submitted Patent Application No. 61332631 for its bullet, but\nthis application apparently has been abandoned. See Pl.’s Br. at 13.\n 5\n\f The scope and meaning of claims in a patent are questions of law to be addressed by the\ncourt. Markman v. Westview Instruments, Inc., 517 U.S. 370, 388-90 (1996). The most salient\nindicia of the construction of claim terms are found in the patent itself. See Vitronics Corp. v.\nConceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996) (“[I]ntrinsic evidence is the most\nsignificant source of the legally operative meaning of disputed claim language.”). As a result,\nthe court focuses on the patent’s claims and specifications, as well as prosecution history.\nMarkman v. Westview Instruments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995), aff’d, 517 U.S. 370.\nA court should construe claim terms according to the ordinary and customary meanings\nattributed by those of ordinary skill in the art at the date of the invention, which is the effective\nfiling date of the patent application. Phillips v. AWH Corp., 415 F.3d 1303, 1313 (Fed. Cir.\n2005) (en banc); Brookhill-Wilk 1, LLC v. Intuitive Surgical, Inc., 334 F.3d 1294, 1298 (Fed. Cir.\n2003) (considering those with ordinary skill in the art); Markman, 52 F.3d at 980 (“Th[e]\nconstruction of the patent is confirmed by the avowed understanding of the patentee, expressed\nby him, or on his [be]half, when his application for the original patent was pending.”) (quoting\nGoodyear Dental Vulcanite Co. v. Davis, 102 U.S. 222, 227 (1880)).\n\n A term with an “ordinary” meaning may require construction where the term might have\nmore than one ordinary meaning, where the specifications indicate a claim may have a different\nscope, or where the ordinary meaning does not resolve the parties’ dispute as to the proper claim\nscope. MarcTec, LLC v. Johnson & Johnson, 664 F.3d 907, 920 (Fed. Cir. 2012). Additionally,\na patentee may use ordinary words in an atypical fashion, identifying those unorthodox meanings\nin the patent specification or file history. See Hoechst Celanese Corp. v. BP Chems. Ltd., 78\nF.3d 1575, 1578 (Fed. Cir. 1996). Accordingly, “it is always necessary to review the\nspecifications to determine whether the inventor has used any terms in a manner inconsistent\nwith their ordinary meaning.” Vitronics, 90 F.3d at 1582; see also Markman, 52 F.3d at 979.\nProsecution history also may be important, both for the exclusion of such interpretations as were\ndisclaimed during prosecution of the patent and for any possible introduction of new terms that\nmay require interpretation. Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1576 (Fed.\nCir. 1995). Each term should be interpreted within the context of its use. Phillips, 415 F.3d at\n1314 (“[T]he context in which a term is used in the asserted claim can be highly instructive.”).\n\n Extrinsic evidence, such as expert testimony, inventor testimony, dictionaries, and\nscientific treatises, should be regarded as “less significant than the intrinsic record” when\nconstructing the claim terms. Phillips, 415 F.3d at 1317 (quoting C.R. Bard, Inc. v. United States\nSurgical Corp., 388 F.3d 858, 862 (Fed. Cir. 2004)). It may be relied upon by the court only if\nthe intrinsic evidence cannot resolve ambiguities in the disputed claim terms. See C.R. Bard,\n388 F.3d at 862 (“Our caselaw suggests that extrinsic evidence cannot alter any claim meaning\ndiscernible from intrinsic evidence.”).\n\n\n\n\n 6\n\fB. Specific Terms of the Claims Requiring Construction\n\n 1. “Interface” or “interface portion.”\n\nPlaintiff’s Proposed Claim Construction Government’s Proposed Claim Construction\nMeans an outer portion of the claimed Means an outer portion of the claimed\nprojectile that holds the nose and tail portions projectile that (1) holds the nose and tail\ntogether prior to striking a target. together prior to striking a target and (2) is not\n restricted in length, and thus can be extended\n to enclose one or both ends of the projectile.\n\n Term 1 appears throughout the patent claims and the specification. Both independent\nclaims (Claims 1 and 32) contain the term, as do dependent Claims 2-9, 11-12, 14, 20-28, 31,\nand 33-42. The court must adopt a construction of the term which encompasses all such uses.\nSee Phillips, 415 F.3d at 1314 (“Because claim terms are normally used consistently throughout\nthe patent, the usage of a term in one claim can often illuminate the meaning of the same term in\nother claims.”).\n\n Both Liberty and the government urge a construction inclusive of “an outer portion of the\nclaimed projectile that holds the nose and tail portions together prior to striking a target.” The\npoint of contention is whether the term must also include a stricture suggested by the\ngovernment: that the interface or interface portion “is not restricted in length, and thus can be\nextended to enclose one or both ends of the projectile.” Based on a plain reading of the patent as\na whole, the court cannot adopt this additional limitation in its construction of Term 1.\n\n The independent claims are silent as to the length of the interface, indicating no particular\nrestriction in length. Dependent Claim 20, however, expressly limits the length of the interface\nto 30 to 70 percent of the projectile length, and dependent Claim 21 limits the length of the\ninterface to be equal to or “less than 50% of the overall projectile length.” Construing Term 1 to\nprohibit length restrictions would result in an inconsistency between usage of the term in the\nindependent claims and the dependent claims. The term, as it is employed in this patent, may\ndesignate either an interface with a length restriction, or an interface without a length restriction.\nIn short, a reference to “interface” or “interface portion” does not itself encompass the presence\nor absence of a length restriction, and therefore the characteristic of “not restricted in length”\nshould not be read into the term. Phillips, 415 F.3d at 1315 (“[T]he presence of a dependent\nclaim that adds a particular limitation gives rise to a presumption that the limitation in question is\nnot present in the independent claim.”).\n\n Furthermore, certain claims dependent upon Claim 1 describe embodiments in which the\ninterface encloses at least one of the nose or tail. See Claims 8, 10. Yet, neither Claim 32 nor\nany of its dependent claims describe such an embodiment. Claim 32 references an interface\nportion “disposed intermediate opposite ends” of the body, indicating that an embodiment based\non Claim 32 would require the interface to be positioned between the tail and nose, but not\nnecessarily enclosing the tail or nose. The question of whether interfaces may be extended to\nenclose the nose, tail, or both, is addressed by several specific dependent claims in the patent,\n\n\n 7\n\fand that characteristic will not be read into the term as used in independent Claims 1 and 32 and\nin numerous other claims of the patent.\n\n For the reasons above, the court adopts plaintiff’s construction of Term 1, i.e., that the\ninterface or interface portion means an outer portion of the claimed projectile that holds the\nnose and tail portions together prior to striking a target.\n\n 2. “Structured to provide controlled rupturing.”\n\nPlaintiff’s Proposed Claim Construction Government’s Proposed Claim Construction\nMeans that the interface portion is structured to Means that the interface portion is structured\nrupture (i.e., break) upon striking a (or constructed) so that as the claimed\npredetermined target, separating two or more projectile penetrates a predetermined target,\nof the components of the projectile [the such as a soft material target, the projectile\nspecifics of which are described in each claim begins to tumble and this tumbling leads to the\nand their dependent claims]. interface rupturing, causing the nose and tail\n portions to separate.\n\n This term appears in both of the independent claims, i.e., Claims 1 and 32. The crux of\nthe parties’ disagreement over Term 2 appears to be whether the projectile is designed to be\nruptured through tumbling alone or whether it could be ruptured by various means, including but\nnot limited to tumbling, upon striking a target or object. Under the government’s view, the ‘325\npatent is limited to those projectiles which are ruptured through tumbling, which tumbling is the\ndirect cause of the separation of the nose and tail. The court cannot adopt such a limited\nconstruction of Term 2.\n\n The specification states that tumbling “typically result[s] in the interface rupturing.” ‘325\npatent at col. 3, lines 6-7. A few paragraphs later, the specification again describes a projectile\nrupturing after striking a soft target, “[d]ue at least in part to the forces exerted on the projectile\nbody and the structural features of the interface during such tumbling.” Id. at col. 5, lines 18-21.\nHowever, a predetermined target is not necessarily equivalent to a soft target. See id. at col. 5,\nlines 12-16 (“[S]eparation of the nose and tail portions from one another and possibly from the\ninterface is facilitated when the projectile body strikes at least one predetermined category of\ntargets such as, but not necessarily limited to, a soft target.” (emphasis added)).\n\n The ‘325 patented projectiles are designed to rupture, or to break into two or more\ncomponents, responsive to striking a target or object, which may or may not be a soft target.\nCertainly, tumbling is one such means by which the projectile is ruptured and breaks into pieces.\nIt is not the only means, however. See ‘325 patent at col. 5, lines 25-26 (“[T]he interface\nruptures upon striking the target and/or during the tumbling procedure.” (emphasis added)).\nLiberty recites in its brief a variety of factors which may affect whether a projectile experiences\ntumbling or some other species of rupture such as shearing, bursting, splitting, dislocating,\nbending, buckling, crunching, or fragmenting, including: “projectile yaw and the angle of attack\nbetween the velocity vector of the projectile and yaw angle, wind direction and speed, the target\nclass (hard, soft, other), [and] the projectile velocity.” Pl.’s Br. at 6. A cursory examination of\nthe various embodiments modeled in the specification provides ample basis for the inference that\n\n 8\n\fthe component parts of a ‘325 projectile may be ruptured or broken through bursting, dislocating,\nor other action, even in the absence of a tumbling motion. See, e.g., ‘325 patent, Figs. 1A, 1C,\nreproduced below:7\n\n\n\n\n 7\n Essentially, all separations are caused by a combination of bending and buckling forces.\nSee e.g., Hr’g Tr. 31:21 to 32:22 (Mar. 22, 2013). Among other things, the interface and tail are\nsofter and more malleable than the nose and thus more susceptible to distortion and dislocation.\nAs the nose portion encounters a target, its speed inevitably decreases while the tail continues at\nthe original rate of speed for an instant. The sudden disparity in rates of travel causes the tail to\nslam into the nose, either buckling or bending (or both) the tail and interface, and perhaps also\nthe nose, which become separated by the disparate forces being applied to the elements of the\nprojectile. Whether this separation takes the form of tumbling, bursting, splitting, or other action\ndepends on the specific force vectors applied at impact.\n 9\n\f Additionally, the specification refers separately to “controlled fragmentation” in context\nwith, but separable from, “tumbling.” ‘325 patent at col. 5, lines 26-30 (“[T]he structural and\noperational features of the projectile provide a controlled fragmentation when the projectile body\nstrikes at least a predetermined target, such as a soft material target including a human, animal,\netc.”); see also id. at col. 2, lines 56-57 (“controlled fragmentation of the projectile body”); id. at\ncol. 2, lines 62-63 (“controlled fragmentation of the projectile”).\n\n The government argues that tumbling must be inexorably linked to rupturing because\n“[e]very time the word rupture appears in the patent, the word tumble or tumbling appears in\nclose proximity.” Hr’g Tr. 68:10-12. Yet, not a single instance of the words “tumble” or\n“tumbling” appears in any of the forty-two enumerated claims, whether in relation to soft targets\nor otherwise. Contrastingly, “rupturing” or some variation thereof appears no fewer than six\ntimes. In attempting to import a limitation from the specification into the claims, the government\nwould have the court commit a “cardinal sin” of patent law. See SciMed Life Sys., Inc. v.\nAdvanced Cardiovascular Sys., Inc., 242 F.3d 1337, 1340 (Fed. Cir. 2001) (“[O]ne of the\ncardinal sins of patent law [is] reading a limitation from the written description into the\nclaims.”).\n\n In short, the government’s attempts to link all controlled rupturing to tumbling is contrary\nto the plain language of the claims and the specification of the ‘325 patent. Accordingly, the\ncourt adopts a modified form of plaintiff’s proffered construction of Term 2, that is, “structured\nto provide controlled rupturing” means that the interface portion is structured to rupture (i.e.,\nbreak) upon striking a target or object, separating two or more of the components of the\nprojectile.\n\n\n 3. “Reduced area of contact.”\n\nPlaintiff’s Proposed Claim Construction Government’s Proposed Claim Construction\nMeans that the outer surface of the interface Means that the area of contact between the\nhas one or more areas of circumference less projectile and the rifling of the firearm is less\nthan the maximum outer circumference of the than that of a traditional jacketed projectile,\ninterface. which includes the M855.\n\n This term appears in independent Claim 1. Both parties’ proffered constructions appear\nto be problematic. Liberty’s proposed construction is self-referential, defined by a comparison\nbetween the interface and part of the interface. While Claim 1 addresses an interface “disposed\nand dimensioned to define a reduced area of contact of said body with the rifling of the firearm,”\nit gives no clues within the claim itself as to what the area of contact has been reduced from.\nLiberty’s definition does nothing to alleviate the problem of this missing antecedent. The term\ndescribed by Liberty is not an area of contact which has been “reduced” from anything; possibly\nit more accurately describes an interface which is simply “smaller in some places than in others.”\nPortions of the interface which are “reduced” under Liberty’s definition could not possibly also\nbe “areas of contact,” since their comparative circumference would preclude contact with the\nrifling of a firearm. If Liberty means instead to say that “reduced area of contact” indicates that\n\n\n 10\n\fthere is less contact by the projectile with the rifling than there conceivably could have been, the\nterm is reduced to mere tautology.\n\n The government’s proposed construction is more coherent in that it provides a referent\nfor the claimed reduction: the area of contact is reduced compared to that of a “traditional\njacketed projectile, which includes the M855.” This comparison is somewhat consistent with the\npatent history set out in the specification, which notes that reduced contact area “compared to\nconventional projectiles” would improve upon prior art by “reducing heat buildup and improving\nbarrel performance during sustained fire of the firearms.” ‘325 patent at col. 1, lines 65-66 and\ncol. 2, lines 46-49. The “conventional projectiles” referred to in the specification must logically\nbe limited to those projectiles comparable to the ones enabled by the ‘325 patent, which is to say\n“all calibers generally ranging from .17 through [.]50 BMG.” Id. at col. 2, line 28.8 This is a\nmore precise description of the limitation than “traditional jacketed projectile[s], which includes\nthe M855” as offered by the government.\n\n The government’s definition also is partially deficient because it mischaracterizes the\nparticular surface described in the ‘325 patent. Rather than the projectile generally, as the\ngovernment indicates, it is the interface portion specifically which comprises the reduced area of\ncontact. See Claim 1 (“said interface portion disposed and dimensioned to define a reduced area\nof contact of said body with the rifling of the firearm”); see also ‘325 patent at col. 2, lines 58-61\n(“The disposition and structuring of the interface results in the positioning of an outer surface\nthereof so as to define the primary contact area between the body of the projectile and the rifling\nor interior surface of the barrel.”).9\n\n The court adopts a construction of Term 3, “reduced area of contact,” as meaning that the\narea of contact between the interface and the rifling of the firearm is less than that of a\ntraditional jacketed lead bullet of calibers .17 through .50 BMG.\n\n 4. “Synchronized rotation.”\n\n This term appears in independent Claim 1, and the parties agree that it means that the\nnose, tail, and interface portions rotate in the same direction and at the same rate. The\ncourt accepts and adopts this construction.\n\n\n\n\n 8\n “BMG” specifically refers to the Browning Machine Gun and thus “.50 BMG” refers to\nthe cartridge developed for that machine gun (used for some time with the military-standard M2\nheavy machine gun).\n 9\n The closely related Term 14 pertains to “primary area of contact.”\n 11\n\f5. “Fixedly secured.”\n\nPlaintiff’s Proposed Claim Construction Government’s Proposed Claim Construction\nMeans that the nose, tail, and interface portions Means that the nose, tail, and interface portions\nare connected, subject to being detached upon are connected to each other in a secured\nstriking an intended target. fashion (e.g., by employing a press-fitted\n frictional connection, and/or adding interior\n peripheral rims at the ends of the interface),\n such that the projectile assembly remains intact\n (and in synchronized rotation) during launch\n and flight from the firearm.\n\n This term appears in independent Claims 1 and 32. The parties concur that the crux of\nTerm 5 is that the three component parts of a ‘325 projectile are “secured” to each other,\nmeaning that they are connected prior to use in the firearm. The parties diverge over whether a\ndescription of the projectile’s condition during launch and flight is appropriate, as well as\nwhether methods of connection need be addressed in claim construction.\n\n The government’s inclusion of the projectile’s condition “during launch and flight” is an\nappropriate addition to Liberty’s construction of Term 5 because that condition is essential to the\nproper function of the interface. The term “fixedly secured” appears once in each of the\nindependent claims, both times in the context of describing the state of the projectile before\nimpact (“fixedly secured”) versus after impact (“ruptured”). The court thus finds it appropriate\nto incorporate the description of the condition of the projectile during launch and flight into its\nconstruction of Term 5. Contrastingly, the examples of methods employed to affix the\ncomponents to each other in the government’s proposed construction (“press-fitted frictional\nconnections and/or interior peripheral rims”) are extraneous, unnecessary, and not supported by\nthe text of the claims, and will not be imported by the court into its construction.\n\n For the above reasons, Term 5, “fixedly secured,” means that the nose, tail, and\ninterface are connected to each other in a securely fastened way such that they stay intact\nduring launch and flight, prior to striking the target.\n\n 6. “Removably connected to and separable.”\n\nPlaintiff’s Proposed Claim Construction Government’s Proposed Claim Construction\nPlain meaning. Means that at least one of the nose and tail\n portions are designed to separate from the\n interface (and thus separate from each other)\n upon striking a predetermined target.\n\n This term appears in dependent Claim 2. The plain meaning of Term 6 is not far afield\nfrom the elaborated definition offered by the government. However, the government would\ninsert “design” into the construction of Term 6 with reference to the nose or tail. That reference\nis not supported by the patent claims. Instead, the interface is an integral element of the design.\n\n\n 12\n\f The court adopts the following construction for Term 6: “removably connected to and\nseparable” means that the nose, tail and interface are joined together in a way susceptible to\nseparation upon striking a target or object.\n\n 7. “Separable from said interface.”\n\nPlaintiff’s Proposed Claim Construction Government’s Proposed Claim Construction\nMeans that at least one of the nose or tail Means that the nose and/or tail portions are\nportions can separate from the interface upon designed to separate from the interface after\nstriking a predetermined target. striking a target.\n\n Term 7 appears in dependent Claims 2, 3, 9, and 11. The term is similar to Term 6, and\nLiberty’s and the government’s constructions are closely akin to one another. Although Term 7\nappears in Claims 2, 3, 9 and 11, only in Claims 2 and 3 is the claim tied to striking a\n“predetermined target” or “target” as suggested by both parties. Nonetheless, the patent as a\nwhole indicates that separation of the nose and tail from the interface occurs as and when the\nprojectile strikes a target or object. And, as with Term 6, the government’s insertion of “design”\nis not well taken here.\n\n The court adopts the following construction for Term 7: “separable from said interface”\nmeans that at least one of the nose or tail portions can separate from the interface upon\nstriking a target or object.\n\n 8. “Cooperatively structured.”\n\nPlaintiff’s Proposed Claim Construction Government’s Proposed Claim Construction\nPlain meaning. Means that the nose, tail, and interface portions\n are designed and configured to facilitate\n separation of the nose and tail portions after\n striking a predetermined target.\n\n Term 8 appears in dependent Claim 5 of the ‘325 patent. Contrary to plaintiff’s assertion,\nTerm 8 requires more elaboration than plain meaning. The government’s proposed construction\nis a valuable starting point, although not ideal. The government again inserts a “design” element\nwhere none is indicated in the patent or its specification. Claim 5, where Term 8 makes its sole\nappearance in the patent claims, uses “cooperatively structured” to describe the interaction\nbetween the nose, tail, and interface portions of the projectile.10 The government’s construction\nfails to account for the presence of the interface at the moment of separation, though the interface\nmanifestly is one of the “cooperative components” of the projectile. See ‘325 patent, col. 7, lines\n39-47 (referring to the benefits and advantages accruing from “the cooperative components of\nthe nose portion, tail portion, and interface.”).\n\n\n 10\n Claim 5 covers “[a] projectile as recited in claim 1 wherein said nose and tail portions\nand said interface are cooperatively structured to separate said nose and tail portions from one\nanother upon said body striking a predetermined target.”\n 13\n\f Accordingly, the court adopts the following construction for Term 8: “cooperatively\nstructured” means formed and configured to enable the separation of the nose and/or tail\nportions from the interface in response to striking a target or object.\n\n 9. “Open ended construction.”\n\n This term appears in dependent Claim 7, and the parties agree that it means that the\ninterface is not enclosed on at least one end. The court accepts and adopts this construction.\n\n 10. “Dimensioned and configured to receive at least one of said nose or tail portions\n therein.”\n\nPlaintiff’s Proposed Claim Construction Government’s Proposed Claim Construction\nPlain meaning. Means that the hollow interior of the interface\n allows for insertion of (1) a portion of (or all\n of) the nose portion, or alternatively, (2) a\n portion of (or all of) the tail portion.\n\n This term appears in dependent Claim 8. The government’s proposed claim construction\nis directly at odds with the plain meaning of Term 10, and consequently cannot be accepted by\nthe court. The term in plain language describes an interface which may receive “at least one” of\nthe nose or the tail portion of the projectile.11 By saying “at least one,” the claim contemplates\nan embodiment where both the nose and the tail might be received by the interface. This\ncontemplation is confirmed in and by Claim 10, which is dependent on Claim 8, through its\ndescription of an embodiment where both the nose and tail are received within the hollow\ninterior of the interface.12 When the government states that Term 10 in Claim 8 describes an\ninterface which receives “the nose portion, or alternatively… the tail portion,” it precludes the\npossibility of an interface receiving both the nose and the tail. For that reason, government’s\nproffered construction renders Claim 8 too narrow to encompass its dependent Claim 10, and\ncannot be adopted by the court. See Dow Chem. Co. v. United States, 226 F.3d 1334, 1341-42\n(Fed. Cir. 2000) (holding that an independent claim or a claim upon which another claim\ndepends, must by definition have broader scope than a dependent claim). The government in its\nreply brief concedes that the phrase “or alternatively” should be revised to “and/or” to resolve\nthis issue. See Def.’s Reply Regarding Claim Construction at 15.\n\n Additionally, the government seeks with its construction to introduce a new limitation in\nthe term by altering the phrase “at least partially hollow interior,” which appears in Claim 8, to\n“hollow interior,” as stated in its proffered construction. Such a deviation is not warranted by\nany text of the patent or its specification.\n\n 11\n Claim 8 pertains to “[a] projectile as recited in claim 1 wherein said interface comprises\nan at least partially hollow interior dimensioned and configured to receive at least one of said\nnose or tail portions therein.”\n 12\n Claim 10 addresses “[a] projectile as recited in Claim 8 wherein said hollow interior is\ndimensioned and configured to receive both of said nose and tail portions therein.”\n 14\n\f Term 10 is already stated in a simple and direct way, and the plain meaning of the term\nwill suffice for its construction. As such, the court adopts the plain meaning of Term 10:\ndimensioned and configured to receive at least one of said nose or tail portions therein.\n\n 11. “Dimensioned and configured to receive both of said nose and tail portions therein.”\n\nPlaintiff’s Proposed Claim Construction Government’s Proposed Claim Construction\nPlain meaning. Means that the hollow interior of the interface\n allows for insertion of (1) a portion of (or all\n of) the nose portion and (2) a portion of (or all\n of) the tail portion.\n\n Term 11 appears in Claim 10, which, as previously explained, is dependent upon Claim 8\nand thus must correlate to the construction of Term 10 that appears in Claim 8. By describing\nTerm 11 as allowing for insertion of all or part of the nose and the tail portions of the projectile\ninto the interface, the government proffers a construction directly at odds with its rejected\nconstruction of Term 10, which permits insertion of all or part of one or the other, but not both.\nThe government cannot posit two entirely contrary constructions for terms so closely linked\nwithin the patent. The court’s capacity for cognitive dissonance falls short of that required for\nacceptance of the government’s construction.\n\n Aside from internal inconsistencies, the government’s proposed construction for Term 11\nlimits the claim in ways not indicated by the patent or its specifications, e.g., by stating that the\ninterface allows for insertion of “a portion of . . . or all of” the nose or tail portions. This\nelaboration would limit the plain language of Term 11, which states simply that the interface\nmay receive “both of said nose and tail portions.”\n\n The meaning of Term 11 is plain on its face. The court thus adopts the plain meaning of\nTerm 11: dimensioned and configured to receive both of said nose and tail portions therein.\n\n 12. “Confronting engagement.”\n\nPlaintiff’s Proposed Claim Construction Government’s Proposed Claim Construction\nMeans that the trailing end of the nose portion Means that the trailing end of the nose portion\nand the forward end of the tail portion are face and the forward end of the tail portion are in\nto face with one another. physical contact (and not spaced apart).\n\n This term appears in dependent Claim 22.13 Both parties agree that a “confronting\nengagement” describes a projectile in which the trailing end of the nose portion and the forward\nend of the tail portion face each other. The pertinent distinction between Liberty’s and the\ngovernment’s proposed constructions of Term 12 is whether the confronting ends of the tail and\n\n 13\n Claim 22 states that “[a] projectile as recited in Claim 1 wherein said nose and tail\nportions include correspondingly positioned ends disposed in confronting engagement with one\nanother or an interior of said interface.”\n\n\n 15\n\fnose portions must be in physical contact with one another. Not much can be gleaned in\nisolation from the context of the use of the pertinent term in Claim 22. The claim directly\nfollowing Claim 22, Claim 23, is illuminating in this respect, however. That claim recites an\notherwise similar embodiment, but one where the nose and tail are explicitly positioned with a\npredetermined space between each other, and the phrase “confronting engagement” is\nconspicuously absent.14 This context indicates that “confronting engagement” involves physical\ncontact. See Hockerson-Halberstadt, Inc. v. Converse Inc., 183 F.3d 1369, 1374 (Fed. Cir. 1999)\n(“Proper claim construction . . . demands interpretation of the entire claim in context.”).\n\n The distinction between a confronting engagement and one where the nose and tail are\nspaced apart is reinforced in the specification. The specification distinguishes figures 1A and 1C\nfrom Figures 1 and 1B, stating that Figues 1 and 1B are “disposed in confronting engagement . . .\nthereby eliminating the presence of the spacing as represented in F[igures] 1A and 1C.” ‘325\npatent, col. 6, lines 9-11. The court accordingly concludes that a confronting engagement\nrequires physical contact between the nose and tail portions of the projectile, as modeled in\nFigures 1 and 1B.\n For the reasons stated, the court adopts the following construction of Term 12:\n“confronting engagement” means that the trailing end of the nose portion and the forward\nend of the tail portion face, and are physically in contact with, each other.\n\n 13. “Intermediate opposite ends.”\n\nPlaintiff’s Proposed Claim Construction Government’s Proposed Claim Construction\nMeans between the forward end of the nose Means the interface is positioned between the\nportion and the trailing end of the tail portion. front end and the rear end of the projectile\n body (such that the interface does not extend\n all of the way to the front or to the end of the\n projectile).\n\n This term appears in independent Claim 32. As discussed with relation to Term 1,\n“intermediate opposite ends” indicates by its plain meaning an embodiment where the interface\nis positioned between the tail and nose, though not necessarily enclosing the tail or nose. The\ngovernment’s proposed construction urges the adoption of an additional limitation, that the\ninterface cannot extend to the front or to the end of the projectile. In pointing to the figures\nincluded with the patent application, the government correctly points out that no such extended\ninterfaces were depicted as examples. See Def.’s Br. at 17. However, the sampling of\nembodiments provided by the figures does not comprise the entirety of all embodiments enabled\nby the patent. Phillips, 415 F.3d at 1323 (“[W]e have repeatedly warned against confining the\nclaims to those embodiments . . . [and] expressly rejected the contention that if a patent describes\nonly a single embodiment, the claims of the patent must be construed as being limited to that\nembodiment.”). Consequently, the explicit limitation sought by the government is not warranted.\n\n 14\n Claim 23 pertains to “[a] projectile as recited in claim 1 wherein said nose and tail\nportions include correspondingly positioned ends disposed a predetermined spaced distance from\none another within said interface, said predetermined spaced distance being less than 0.060.”\nThis claim essentially correlates to Figures 1A and 1C reproduced supra.\n 16\n\f The court adopts the following construction of Term 13: “intermediate opposite ends”\nmeans that the interface is positioned between or in the middle of the opposite ends of the\nforward end of the nose portion and the trailing end of the tail portion.\n\n 14. “Primary area of contact.”\n\nPlaintiff’s Proposed Claim Construction Government’s Proposed Claim Construction\nPlain meaning. Means that the interface portion (1) defines the\n principal area of contact of the projectile with\n the barrel of a firearm and (2) is a reduced area\n of contact.\n\n Term 14 appears in independent Claim 32. The government attempts to import Term 3,\n“reduced area of contact,” which appears in independent Claim 1, into Term 14, thereby\nimposing the limitation of “is a reduced area of contact” upon all primary areas of contact. Such\nan imposition is not warranted by the plain language of the patent. In fact, “primary area of\ncontact” appears in Claim 32 at a place corresponding precisely with that of “reduced area of\ncontact” in Claim 1. The interface in a Claim 1 embodiment is a reduced area of contact, while\nan interface derived from Claim 32 must be a primary area of contact. Such a deliberate shift in\nterminology cautions against conflation of the two distinct terms. Though their meanings may\nbe similar, and may even be used to describe certain identical objects, the court cannot read into\na term what the author of a patent has pointedly declined to provide. The court rejects the\ngovernment’s construction for impermissibly limiting Term 14.\n\n Term 14 is best construed by the plain meaning of “primary area of contact,” namely that\nthe exterior of the interface serves as the primary area where the projectile contacts the\ninterior of a firearm barrel.\n\n 15. “Tapered portion.”\n\nPlaintiff’s Proposed Claim Construction Government’s Proposed Claim Construction\nPlain meaning. Means that the interface portion contains an\n area (or areas) adjacent to one or both ends that\n has a gradually reduced outer diameter.\n\n Term 15 appears in dependent Claims 39 and 40. Its plain meaning provides a helpful\nstarting point because the ordinary usages of “tapered” and “portion” are apt in the context of the\n‘325 patent. The court need not resort to anything more complicated than the common meanings\nof the words when their meaning is obvious and not contradicted by the claims or specifications.\nSee Phillips, 415 F.3d at 1314 (“In some cases, the ordinary meaning of claim language as\nunderstood by a person of skill in the art may be readily apparent even to lay judges, and claim\nconstruction in such cases involves little more than the application of the widely accepted\nmeaning of commonly understood words.”). Here, the phrase “tapered portion” plainly refers to\na portion of the interface which exhibits a decreasing circumference.\n\n\n 17\n\f CONCLUSION\n No extrinsic evidence is necessary for resolution of claim construction for the ‘325\npatent. For the reasons detailed above, the fifteen terms identified by the parties shall be\nconstrued as stated.\n\n It is so ORDERED.\n\n s/ Charles F. Lettow\n Charles F. Lettow\n Judge\n\n\n\n\n 18\n\f", "ocr": false, "opinion_id": 895590 } ]	Federal Claims	United States Court of Federal Claims	FS	USA, Federal
2,596,640	Kay	1996-05-08	false	ellison-v-northwest-airlines-inc	Ellison	Ellison v. Northwest Airlines, Inc.	Jeffrey M. ELLISON, Plaintiff, v. NORTHWEST AIRLINES, INC., and Wendell A. Nelson, Defendants	Jeffrey M. Ellison, Honolulu, HI, pro se., Dana S. Ishibashi, Honolulu, HI, for plaintiff., Clayton A. Kamida, Torkildson Katz Jossem Fonseca Jaffe Moore & Hetherington, Honolulu, HI, for defendants.	null	null	null	null	null	null	null	null	null	null	9	Published	null	<parties id="b1595-10"> Jeffrey M. ELLISON, Plaintiff, v. NORTHWEST AIRLINES, INC., and Wendell A. Nelson, Defendants. </parties><docketnumber id="Atp"> Civil No. 94-00891 ACK. </docketnumber><court id="AMY"> United States District Court, D. Hawaii. </court><decisiondate id="Aj6z"> May 8, 1996. </decisiondate><br><attorneys id="b1596-9"> <span citation-index="1" class="star-pagination" label="1504"> *1504 </span> Jeffrey M. Ellison, Honolulu, HI, pro se. </attorneys><br><attorneys id="b1596-10"> Dana S. Ishibashi, Honolulu, HI, for plaintiff. </attorneys><br><attorneys id="b1596-11"> Clayton A. Kamida, Torkildson Katz Jossem Fonseca Jaffe Moore & Hetherington, Honolulu, HI, for defendants. </attorneys>	[ "938 F. Supp. 1503" ]	[ { "author_str": "Kay", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 1714, "opinion_text": "\n938 F. Supp. 1503 (1996)\nJeffrey M. ELLISON, Plaintiff,\nv.\nNORTHWEST AIRLINES, INC., and Wendell A. Nelson, Defendants.\nCivil No. 94-00891 ACK.\nUnited States District Court, D. Hawaii.\nMay 8, 1996.\n1504 Jeffrey M. Ellison, Honolulu, HI, pro se.\nDana S. Ishibashi, Honolulu, HI, for plaintiff.\nClayton A. Kamida, Torkildson Katz Jossem Fonseca Jaffe Moore & Hetherington, Honolulu, HI, for defendants.\n\nORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT\nKAY, Chief Judge.\n\nBACKGROUND\nOn November 23, 1994, plaintiff Jeffrey M. Ellison, formerly an aircraft mechanic employed by defendant Northwest Airlines, Inc. (\"Northwest\"), filed a complaint against defendants Northwest and Wendell A. Nelson, his direct supervisor at Northwest (collectively, \"Defendants\"), alleging harassment, discrimination and wrongful termination.\nOn January 22, 1996, Defendants filed a motion for summary judgment. On April 18, 1996, Plaintiff filed an opposition. On May 6, 1996, the Court heard Defendants' motion. All parties appeared through counsel. Upon considering the papers filed by the parties, the arguments at the hearing, and the record, the Court hereby GRANTS Defendants' motion for summary judgment.\n\nFACTS\nIn 1981, plaintiff Ellison began working as an aircraft mechanic for defendant Northwest at its Minneapolis facility. In 1988, Plaintiff transferred to Northwest's Honolulu facility, where he worked on the flight line as an aircraft mechanic until July 17, 1992. On that day, according to the affidavit of Plaintiff's supervisor at that time Wendell Nelson, Nelson suspended Plaintiff and sent him home because of insubordinate conduct, use of abusive language towards Nelson and Plaintiff's crew chief Danny Marcom, and conduct that day which otherwise interfered with the performance of other employees.\nNelson scheduled an insubordination meeting with Plaintiff to take place July 20, 1992. Plaintiff however failed to appear for this meeting, allegedly because he was experiencing an emotional breakdown at the time and could not do so. Ellison Affid. at ¶ 11. Nelson then rescheduled the meeting for July 27, 1992 and sent Plaintiff a notice to this effect by certified mail.\nOn July 23, 1992, Plaintiff was taken to the emergency room at Queen's Medical Center and admitted for treatment in the psychiatric ward under the care of Dr. Mutsuoki Kai. Plaintiff stayed there for 8 days.\nOn July 27, 1992, Plaintiff failed to appear for the rescheduled meeting. Instead, union representative Danny Chong gave Nelson a letter dated July 24, 1992 from Dr. Harry Chingon, writing for Dr. Mutsuoki Kai, stating that Plaintiff was under the care of Dr. Kai and could not attend the meeting on July 27, 1992. See Plaintiff's Concise Stmt., Exh. 15 (letter dated July 24, 1992).\nAlso on July 27, 1992, Nelson sent Plaintiff (1) a notice entitled \"Level 2 Reminder Insubordination,\" reminding Plaintiff he already had an active level 1 reminder on file for insubordination and cautioning him to modify his behavior; and (2) a notice entitled \"Medical Statement\" informing Plaintiff that 1505 \"[i]n order to return to active employment with Northwest Airlines, your physician must sign a statement acknowledging you have fully recovered from your illness\" and that \"[u]ntil that time, ... you will be compensated for medical leave.\" Plaintiffs Concise Stmt., Exhs. 16 (level 2 reminder) and 17 (notice re medical statement).\nOn August 7, 1992, Nelson received a letter dated July 30, 1992 from Dr. Kai, stating in relevant part as follows:\n[Plaintiff] has been at Queen's Medical Center under my care from July 24 to this morning. Diagnosis is 1. Adjustment Disorder with mixed emotional disturbances due to stresses at his job, 2. Chronic Dyspepsia, 3. Hypothyroidism.\nYesterday he had an endoscopy by Gerald Hyatt, M.D., re: his so called stomach ulcer or a chronic dyspepsia.\nHe will be followed by George Seberg, M.D. his internist.\nHe will see a psychiatrist of his choice.\nHe will return to his job on Monday, August 3rd. The above statement is almost exactly identical with my hand-written letter addressed to you that I handed to him this morning.\nNow I would like to add that he had some predischarge anxiety after he finished talking with me. As he was anxious about his return to the job on Monday, I suggested him to consult his future psychiatrist quickly about it.\nDefendants' Concise Stmt., Exh. A.\nUpon his release from Queen's Medical Center, Plaintiff sought the assistance of Dr. Alvin Murphy, who, on July 31, 1992, issued a note stating: \"To Whom it May Concern ... [Plaintiff] is seen for the first time today. He is clearly disabled and unable to work. The period of disability is unclear at present.\" Defendants' Concise Stmt., Exh. C. According to his affidavit, Nelson did not receive a copy of this note or know of Plaintiff's diagnosis as \"disabled and unable to work\" until August 25, 1992, at the first step grievance hearing on Plaintiff's termination on August 12, 1992. Nelson Affid. at ¶ 7. Plaintiff does not claim he communicated the contents of the note to Defendants prior to August 25, 1992.\nBy \"Notice of Discharge\" dated August 12, 1992, Nelson advised Plaintiff that he was terminated as of 8:00 a.m. that day. Defendants' Concise Stmt., Exh. B. The Notice states that the discharge was based on (1) the July 17, 1992 incident of insubordination; (2) Plaintiffs failure to appear for the July 27, 1992 rescheduled meeting and to contact Nelson since;[1] and (3) Plaintiff's failure to report for his scheduled work shift since August 3, 1992. See id. Nelson states in his affidavit that he \"believed Ellison had no valid reason for not appearing for work, since Dr. Kai's letter [which was dated July 30, 1992 but allegedly not received by Nelson until August 7, 1992] stated that [Plaintiff] would be able to return to work on August 3, 1992.\" Nelson Affid. at ¶ 6.\nEllison's August 12, 1992 termination was grieved by his union, the International Association of Machinists and Aerospace Workers, under its collective bargaining agreement with Northwest. Plaintiff was represented during this grievance process by union representatives Nan Otto and Danny Marcom. See Defendants' Reply, Exh. A (Ellison Depo.) at 297-98. On or about March 30, 1993, Plaintiff wrote Timothy Mahoney, in house labor counsel for Northwest, stating that he \"would like to meet with [Mahoney] to discuss [his] termination and disability, and to be placed back on active status under the Americans With Disabilities Act.\" Defendants' Concise Stmt. at ¶ 9.\nOn or about April 8, 1993, Mahoney replied to Plaintiff, stating that because Plaintiffs termination from Northwest was \"not related to any disability,\" Northwest was under no obligation to reinstate his employment. Defendants' Concise Stmt. at 10.\nOn April 20-21, 1993 in Minneapolis, Minnesota, an arbitration hearing on Plaintiff's 1506 grievance was held before the System Board of Adjustment (\"SBA\").\nOn June 7, 1993, Plaintiff, proceeding pro se, filed a charge of discrimination against Northwest with the Hawaii Civil Rights Commission and the Honolulu office of the Equal Employment Opportunity Commission (\"EEOC\"), alleging discrimination on the basis of disability in violation of the Americans with Disabilities Act (\"ADA\"). Defendants' Concise Stmt., Exh. G. The charge does not name Wendell Nelson as a respondent. Id.\nOn October 3, 1993, the SBA rendered its Opinion and Award regarding Plaintiffs union grievance, finding that (1) the Level 2 Reminder dated July 27, 1992 was issued for just cause; but (2) Plaintiff's discharge was not for just cause. Plaintiff's Concise Stmt., Exh. 9 (opinion and award) at 23. The SBA ordered that Plaintiff be reinstated without backpay conditioned on a favorable fitness evaluation. Plaintiff's Concise Stmt., Exh. 9 (opinion and award) at 23. The SBA ordered that Plaintiff undergo a fitness for duty evaluation by a physician designated by Northwest. Id. Plaintiff could also designate his own physician to conduct an evaluation. If the physicians' evaluations disagreed, the parties were instructed to agree on a third physician, whose evaluation would be final and binding. Id. If Plaintiff finally was found unfit for service, he would be placed on unpaid medical leave for 90 days. If at the end of that period Plaintiff still had not been certified as fit for service, he would be terminated and such termination would be deemed for just cause. Id. at 24.\nAs a result of the SBA's decision, Nelson wrote Plaintiff on October 19, 1993 and informed him that evaluations with Dr. Charles Hipp and Dr. Hung had been scheduled for November 19, 1993. Plaintiff's Concise Stmt., Exh. 10. By letter dated December 9, 1993, Dr. Hipp wrote Timothy Caskey, manager of labor relations for Northwest, stating: \"Both Dr. Hung and I feel that Mr. Ellison is not capable of working as an aircraft mechanic due to his underlying medical problem and functional limitations. It is unlikely he will be able to return to work as an aircraft mechanic in the foreseeable future.\" Plaintiffs Concise Stmt., Exh. 11. On December 16, 1993, therefore, Timothy Mahoney, labor counsel for Northwest, wrote Nan Otto, general chairwoman of Plaintiff's union, and informed her that Plaintiff would be placed on 90-day medical leave to expire March 15, 1994, at which time he would be terminated and such termination would be deemed for just cause. Plaintiff's Concise Stmt., Exh. 12. At the expiration of this period, by letter dated March 18, 1994, Nelson informed Plaintiff that pursuant to the SBA decision, Plaintiff was terminated effective March 15, 1994. Plaintiff's Concise Stmt., Exh. 13.\nIn addition to pursuing his union grievance, Plaintiff was also pursuing a workers' compensation claim, in which he was represented by attorney Lowell Chun-Hoon. Defendants' Reply, Exh. A (Ellison Depo.) at 16:9-11. On November 30, 1993, Plaintiff received a favorable workers' compensation award against Northwest from the Hawaii Department of Labor and Industrial Relations. Plaintiff's Concise Stmt., Exh. 7 (award).\nAt around this time, Plaintiff was also pursuing medical negligence claims against Queen's Medical Center and Dr. Mutsuoki Kai, in which he was represented by attorney Robert Merce, who had been recommended to Plaintiff by Lowell-Chun Hoon. See Defendants' Reply at 4; Ellison Depo. at 61:14-62:19. According to Defendants, Plaintiff's original claims were filed by Merce on Plaintiff's behalf on October 14, 1993. See Defendants' Reply at 4. The case then proceeded to a hearing on December 21, 1993 before the Medical Claims Conciliation Panel (\"MCCP\"), which resulted in a decision from the MCCP dated December 29, 1993 finding no negligence on the part of Queen's Medical Center but negligence on the part of Dr. Kai. Defendants' Reply, Exh. A, Ellison Depo., Exh. 2 (MCCP decision). After some settlement negotiations, Plaintiff, with some help from Merce by way of a memorandum with instructions dated July 21, 1994, filed suit against Queen's Medical Center and Dr. Kai. See Defendants' Reply at 4; Ellison Depo. at 289:1-23; Ellison Depo., Exh. 1 (July 21, 1994 memorandum from Merce).\n1507 According to his affidavit, Plaintiff began receiving workers' compensation benefits in November 1993, at which time he started renting a room at 505 Kao'opulu Way in Hawaii Kai. Ellison Affid. at ¶ 24. Sometime later that month, Plaintiff moved from that address and obtained a new post office box address at P.O. Box 25852, Honolulu, HI 96825. Ellison Affid. at ¶ 25; Defendants' Concise Stmt., Exh. J at Interrogatory No. 2. Plaintiff alleges that sometime in November 1993, he called the EEOC Honolulu office and gave it his new telephone number and post office box address. Ellison Affid. at ¶ 25; see also Defendants' Concise Stmt., Exh. H (EEOC log with 11/9/93 entry stating \"CP [charging party] called to discuss NRTS [presumably notice of right to sue] & new phone no.\").\nBy letter dated December 13, 1993, Plaintiff wrote to the EEOC and requested a right to sue letter, stating \"I intend to file suit in Federal Court.\" Defendants' Concise Stmt., Exh. I. By letter dated December 14, 1993, the EEOC wrote Plaintiff, stating that it appeared its investigation was complete and that the investigation had uncovered no evidence Northwest knew Plaintiff had a disability or considered him as having a disability when it discharged him on August 12, 1992. The EEOC invited Plaintiff to submit within 10 days any further arguments or evidence he wished EEOC to consider before issuing its Letter of Determination. Plaintiff's Concise Stmt., Exh. 1. This December 14, 1993 letter was addressed to Plaintiff's new post office box address. Id.\nBy letter dated December 27, 1993, the EEOC issued its Determination, which found that \"the evidence obtained during the investigation does not establish a violation of the [ADA]\" and which informed Plaintiff he had to file suit within 90 days. Plaintiff's Concise Stmt., Exh. 2.\nThis December 27, 1993 Determination was mailed by EEOC not to Plaintiff's new post office box address, however, but to his former address at \"505 Kao'opulu Way, Honolulu, HI 96825.\" Plaintiff's Concise Stmt., Exh. 2. The Determination was then forwarded by the post office on either January 3 or 4, 1994 to Plaintiffs correct post office box address. See Defendant's Concise Stmt., Exh. J at Exh. A (certified, postmarked and forwarded envelope produced by Plaintiff). In response to Defendants' request for admissions, Plaintiff admits he received the December 27, 1993 Determination but states: \"I do not recall the exact date that I received such letter given my mental condition at that time.\" Defendants' Concise Stmt., Exh. J at Request for Admission No. 2.\nAccording to Plaintiff, sometime in August 1994, he called the EEOC office to inquire about the status of his complaint and was informed that a right to sue letter had been sent several months earlier. Ellison Affid. at ¶¶ 27-28. Plaintiff then requested that another right to sue letter be issued. Id. at ¶ 29. The EEOC mailed this second right to sue letter on August 26, 1994. See Plaintiff's Memo. in Opp. at 4. Plaintiff filed the instant suit on November 23, 1994, eighty-nine days after August 26, 1994.\nAt the present time, Plaintiff is still being treated by Dr. Alvin Murphy and is still receiving workers' compensation benefits. Ellison Affid. at ¶ 33.\n\nSUMMARY JUDGMENT STANDARD\nSummary judgment shall be granted where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). One of the principal purposes of the summary judgment procedure is to identify and dispose of factually unsupported claims and defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2552-53, 91 L. Ed. 2d 265 (1986).\nThe United States Supreme Court has declared that summary judgment must be granted against a party who fails to demonstrate facts to establish an element essential to his case where that party will bear the burden of proof of that essential element at trial. Celotex, 477 U.S. at 322, 106 S. Ct. at 2552. \"If the party moving for summary judgment meets its initial burden of identifying for the court the portions of the materials on file that it believes demonstrate the absence of any genuine issue of material fact [citations omitted], the nonmoving party may 1508 not rely on the mere allegations in the pleadings in order to preclude summary judgment.\" T.W. Elec. Serv. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir.1987).\nRather, Rule 56(e) requires that the nonmoving party set forth, by affidavit or as otherwise provided in Rule 56, specific facts showing that there is a genuine issue for trial. T.W. Elec. Serv., 809 F.2d at 630. At least some \"significant probative evidence tending to support the complaint\" must be produced. Id. Legal memoranda and oral argument are not evidence and do not create issues of fact capable of defeating an otherwise valid motion for summary judgment. British Airways Bd. v. Boeing Co., 585 F.2d 946, 952 (9th Cir.1978).\nThe standard for a grant of summary judgment reflects the standard governing the grant of a directed verdict. See Eisenberg v. Ins. Co. of North America, 815 F.2d 1285, 1289 (9th Cir.1987) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986)). Thus, the question is whether \"reasonable minds could differ as to the import of the evidence.\" Anderson, 477 U.S. at 250-51, 106 S. Ct. at 2511.\nThe Ninth Circuit has established that \"[n]o longer can it be argued that any disagreement about a material issue of fact precludes the use of summary judgment.\" California Architectural Bldg. Products, Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir.1987). Moreover, the United States Supreme Court has stated that \"[w]hen the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts.\" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538 (1986).\nIndeed, \"if the factual context makes the nonmoving party's claim implausible, that party must come forward with more persuasive evidence than would otherwise be necessary to show that there is a genuine issue for trial.\" Franciscan Ceramics, 818 F.2d at 1468 (emphasis in original) (citing Matsushita, 475 U.S. at 587, 106 S. Ct. at 1356). Of course, all evidence and inferences to be drawn therefrom must be construed in the light most favorable to the nonmoving party. T.W. Elec. Serv., 809 F.2d at 630-31.\n\nDISCUSSION\nAlthough not entirely clear, Plaintiff appears to make the following claims: (1) violation of the ADA, 42 U.S.C. §§ 12101 et seq., based on (a) Defendants' August 12, 1992 termination of Plaintiff allegedly with knowledge of his disability and (b) Defendants' refusal to meet with Plaintiff in response to his March 30, 1993 letter requesting a meeting to discuss possible reinstatement and \"reasonable accommodation;\" (2) wrongful termination of employment while on medical leave for occupational injury; (3) negligent and intentional infliction of emotional distress as a result of his harassment at work; and (4) retaliatory discharge based on Plaintiff's refusal to violate Federal Aviation Administration (\"FAA\") regulations regarding airplane maintenance and clearance procedures. See Defendants' Concise Stmt., Exh. J at Request for Admission No. 1 and Interrogatory No. 1; see also id., Exh. G (Plaintiff's EEOC charge); Mahoney Affid. at ¶¶ 2-3 (rejecting Plaintiff's March 30, 1993 request for meeting); Plaintiff's Opp. at 12-13 (violation of ADA based thereon).\n\nI. ADA\n\nDefendants argue that Plaintiff's ADA claim is barred because he failed to file suit within the applicable 90 day period and because he is not entitled to equitable tolling. The Court agrees.\n\nA. 90 Day Filing Requirement\n\nThe ADA incorporates the complaint filing procedures set forth in Title VII of the Civil Rights Act of 1964, as amended. 42 U.S.C. § 12117(a). Title VII provides that an action must be filed within 90 days of the \"giving of ... notice\" of the EEOC's dismissal of a claimant's charge. 42 U.S.C. § 2000e-5(f)(1). This 90 day filing requirement constitutes a statute of limitations. Scholar v. Pacific Bell, 963 F.2d 264, 267 (9th Cir.1992); Edwards 1509 v. Occidental Chem. Corp., 892 F.2d 1442, 1445 (9th Cir.1990).\nHere, the EEOC's Determination and right to sue letter dated December 27, 1993 was mailed on December 28, 1993 by certified mail to Plaintiff at his old address at \"505 Kao'opulu Way.\" Defendant's Concise Stmt., Exh. J at Exh. A (certified, postmarked and forwarded envelope containing December 27, 1993 Determination, produced by Plaintiff). The Determination was then forwarded on either January 3 or 4, 1994, to Plaintiffs new post office box address at \"P.O. Box 25852, Honolulu, HI XXXXX-XXXX.\" Id.\nPlaintiff admits receiving the forwarded Determination but claims he cannot recall when. See Defendants' Concise Stmt., Exh. J at Request for Admission No. 2. Plaintiff's complaint was filed November 23, 1994, over 10 months after the Determination was forwarded to Plaintiff's post office box address. The question presented is whether it should be presumed that Plaintiff received the Determination a certain number of days after forwarding.\nIn similar situations where the date of receipt of a right to sue letter has been uncertain, courts have applied a presumption of receipt within a certain number of days after mailing, including 3, 5 or 7 days. See, e.g., Baldwin County Welcome Ctr. v. Brown, 466 U.S. 147, 148 n. 1, 104 S. Ct. 1723, 1724 n. 1, 80 L. Ed. 2d 196 (1984) (presumed date of receipt of right to sue letter was 3 days after issuance, based on Fed.R.Civ.P. 6(e)); Pacheco v. Int'l Business Machines Corp., 1991 WL 87538, 3-4 (N.D.N.Y.1991) (same); Rich v. Bob Downes Chrysler Plymouth, Inc., 831 F. Supp. 733, 735 (E.D.Mo.1993) (same); Stambaugh v. Kansas Dept. of Corrections, 844 F. Supp. 1431, 1433 (D.Kan. 1994) (same, 3 day receipt presumption triggered by right to sue letter being mailed and by the fact that date of actual receipt \"is either unknown or in dispute\"); Hunter v. Stephenson Roofing, Inc., 790 F.2d 472, 475 (6th Cir.1986) (applying 5 day presumption where claimant failed to notify EEOC of change of address, citing 20 C.F.R. § 422.210(c) (1985) (presumption that social security claimant receives notice of right to sue 5 days after notice first enters mail)); Banks v. Rockwell Int'l North American Aircraft Operations, 666 F. Supp. 1053, 1059 (S.D.Ohio 1987) (same, citing Hunter), aff'd, 855 F.2d 324 (6th Cir.1988); Witt v. Roadway Express, 880 F. Supp. 1455, 1461 (D.Kan. 1995) (applying 5 day presumption); Roush v. Kartridge Pak Co., 838 F. Supp. 1328, 1335 (S.D.Iowa 1993) (applying 7 day presumption, suggested by defendants, as reasonable period of time); McNeill v. Atchison, Topeka & Santa Fe Ry. Co., 878 F. Supp. 986, 990 (S.D.Tex.1995) (applying 7 day presumption as reasonable, citing Roush).\nThe Court first finds that here, where the December 17, 1993 Determination was forwarded to Plaintiff's correct address and where Plaintiff admits having received the Determination, a presumption of receipt within some reasonable time properly applies. The Court need not decide however whether 3, 5 or 7 days is the appropriate period of time, although it finds that the appropriate period should be no greater than 7 days. Even applying a 7 day presumption to a forwarding date of January 4, 1994 yields at the latest a presumptive receipt date of January 11, 1994, which is much more than 90 days prior to the filing of Plaintiff's complaint on November 23, 1994. For purposes of this motion, therefore, the Court will apply a presumptive receipt date of January 11, 1994.\nThe Court further finds that the January 11, 1994 presumptive receipt date is unrebutted, whether by any evidence of nonreceipt (in fact, Plaintiff admits he received the Determination) or by any evidence of receipt on any other day within 90 days of initiation of the present action. See Roush v. Kartridge Pak Co., 838 F. Supp. 1328, 1335 (S.D.Iowa 1993) (granting summary judgment despite lack of any evidence as to whether plaintiff received EEOC right to sue letter on the basis she \"has failed to ... generate a material question of fact as to whether she received the [letter]\" and defendant is entitled to rely on presumption of receipt); Rich v. Bob Downes Chrysler Plymouth, Inc., 831 F. Supp. 733, 735 (E.D.Mo.1993) (\"Particularly when considering the presumption that Rich received the 1510 notice three days after its mailing, Rich has not shown that a genuine issue exists as to whether he received the notice within ninety days of initiating this action.\"); Witt v. Roadway Express, 880 F. Supp. 1455, 1461 (D.Kan. 1995) (invoking 5 day presumption of receipt where \"[p]laintiff has not presented any evidence to rebut the presumption or to establish the actual receipt date\"); see also Stambaugh v. Kansas Dept. of Corrections, 844 F. Supp. 1431, 1433 (D.Kan.1994) (\"plaintiff is in the best position to know and prove whether the right-to-sue letter was actually received\"); see also T.W. Elec. Serv. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir.1987) (plaintiff must produce at least some \"significant probative evidence tending to support the complaint\").\nThe Court accordingly finds that Plaintiff's complaint was filed outside the applicable 90 day period and therefore is barred as untimely unless equitable tolling applies.\n\nB. Equitable Tolling\n\nThe Ninth Circuit has held that the 90 day filing requirement is subject to equitable tolling, although the doctrine is available only in \"extreme cases\" and is to be applied \"sparingly.\" Scholar v. Pacific Bell, 963 F.2d 264, 267 (9th Cir.1992); see also Irwin v. Veterans Affairs, 498 U.S. 89, 95-96, 111 S. Ct. 453, 457-458, 112 L. Ed. 2d 435 (1990) (\"Federal courts have typically extended equitable relief only sparingly. We have allowed equitable tolling in situations where the claimant has actively pursued his judicial remedies by filing a defective pleading during the statutory period, or where the complainant has been induced or tricked by his adversary's misconduct into allowing the filing deadline to pass. We have generally been much less forgiving in receiving late filings where the claimant failed to exercise due diligence in preserving his legal rights.\") (footnotes omitted) (quoted in part in Scholar).\nPlaintiff argues that equitable tolling ought to apply here on account of his \"severe mental condition.\" Plaintiff's Opp. at 4. The Court does not concur. Preliminarily, the Court notes that Plaintiff does not present one of the situations set forth in Irwin: he neither filed a timely though defective pleading during the 90 day period nor was he tricked by Northwest into allowing the deadline to pass.\nIn addition, even assuming mental incapacity can toll the 90 day period, see, e.g., Scott v. United States, 847 F. Supp. 1499 (D.Haw. 1993), aff'd, 70 F.3d 120 (9th Cir.1995), the Court finds there is no genuine issue of equitable tolling by reason of mental incapacity here. First, it is clear, as Defendants point out in their reply, that during the period from August 12, 1992, the date of Plaintiff's complained of termination, to January 11, 1994, the presumptive receipt date of the EEOC's Determination and right to sue letter, Plaintiff was not mentally incapacitated with respect to being able to manage his legal affairs.\nSecond, according to the affidavit of Plaintiff's doctor, Dr. Alvin Murphy, Plaintiff's condition in fact generally improved after January 11, 1994. Moreover, although Dr. Murphy states repeatedly that Plaintiff is disabled and cannot work, at no time does he state that Plaintiff was mentally incapacitated to the point of being unable to deal with his legal affairs. Accordingly, at least during the 90 day period following January 11, 1994, the Court finds there is no genuine issue of equitable tolling by reason of mental incapacity.\n\n1. August 12, 1992 through January 11, 1994\n\nDuring the period from August 12, 1992 through January 11, 1994, Plaintiff clearly was not mentally incapacitated to the point of being unable to deal with his legal affairs. During this period, Plaintiff pursued his union grievance against Northwest with the help of union representatives Nan Otto and Danny Marcom. See Ellison Depo. at 297-98. Plaintiff also pursued his workers' compensation claims with the help of attorney Lowell Chun-Hoon. Defendants' Reply, Exh. A (Ellison Depo.) at 16:9-11. Plaintiff also pursued his medical negligence claims against Queen's Medical Center and Dr. Mutsuoki Kai with the help of attorney Robert Merce. See Defendants' Reply at 4; Ellison Depo. at 61:14-62:19. After attending 1511 a hearing on December 21, 1993 before the Medical Claims Conciliation Panel, Plaintiff subsequently filed suit against Queen's and Dr. Kai. Defendants' Reply, Exh. A, Ellison Depo., Exh. 2 (MCCP decision); Defendants' Reply at 4; Ellison Depo. at 289:1-23; Ellison Depo., Exh. 1 (July 21, 1994 memorandum from Merce). Finally, Plaintiff, proceeding pro se, filed a charge of discrimination on June 7, 1993 against Northwest with the Hawaii Civil Rights Commission and the EEOC and pursued this claim before the EEOC. Defendants' Concise Stmt., Exh. G.\nThere are more examples demonstrating that Plaintiff was not mentally incapacitated during this period. On or about March 30, 1993, Plaintiff wrote Defendants' in house counsel Timothy Mahoney and requested a meeting to discuss his termination, disability and possible reinstatement. Defendants' Concise Stmt. at ¶ 9. On April 20-21, 1993, Plaintiff attended an arbitration hearing on his union grievance in Minneapolis, Minnesota before the SBA. In November 1993, Plaintiff claims he called the EEOC office in Honolulu and notified it of his new telephone number and post office box address. Ellison Affid. at ¶ 25; see also Defendants' Concise Stmt., Exh. H (EEOC log with 11/9/93 entry stating \"CP [charging party] called to discuss NRTS [presumably notice of right to sue] & new phone no.\"). Finally, in December 1993, Plaintiff claims he called the EEOC regarding the status of his complaint and the issuance of a right to sue letter. Defendants' Concise Stmt., Exh. I; Ellison Affid. at ¶¶ 27-28.\n\n2. After January 11, 1994\n\nIn order to evaluate Plaintiff's mental condition subsequent to January 11, 1994, the Court considers the affidavit of Plaintiff's doctor, Dr. Alvin Murphy, which affidavit describes the progression of Plaintiff's condition in part as follows:\n2. ... [S]ince July 31, 1992, ... [Plaintiff] was clearly disabled and unable to work.\n\n3. Plaintiff had been hospitalized (7/24/92 to 7/31/92) and diagnosed as suffering from severe depression with accompanying anxiety due to work stresses.\n\n4. During early 1993, Plaintiff was dysphoric, agitated, chronically cried, and had sleep problems.\n\n5. On January 29, 1993, Plaintiff was again hospitalized with suicidal ideation[,] reduced sociability, increased irritability, and difficulties with maintaining his usual daily activities.\n\n. . . . .\n7. During late March 1993, Plaintiff attempted suicide by taking an overdose of Pamelor.\n8. On June 1, 1993, Plaintiff was re-admitted to The Queen's Medical Center because of persistent severe depression; [h]e was retarded, discouraged, and suicidal.\n\n. . . . .\n10. On June 19, 1993, Plaintiff again was re-admitted to [Queen's] with suicidal ideation.\n\n11. In July 1993, Plaintiff's diagnosis was Major Depression, Recurrent DSM 296.33....\n13. On August 13, 1993, Plaintiff's diagnosis was still Major Depression, Recurrent DSM 296.33.... He suffered sleep problems, dysphoria, anhedonia, appetite and weight changes, difficulties in energy, motivation, concentration....\n14. On November 5, 1993, I reported to Plaintiff's worker's compensation insurance carrier that although the patient does seem improved, he is far from being in condition to return to his job....\n15. Later on November 30, 1993, Plaintiff reportedly was upset for having to go on welfare; he was still polyarthralgia (neuralgic pain in more than one joint) noting he walked like a 60 year old; and though feeling better was fatigued.\n\n16. During 1994, I was still treating Plaintiff, who was still disabled and unable to work.\n\n17. Though doing relatively better in January 1994, Plaintiff was still dysfunctional and being medicated with Ritalin, 1512 Parnate, Tamazepam (Restoril), Ambien, Diazepam, and Trazedone (Desyrel).\n. . . . .\n19. In March of 1994, Plaintiff was still depressed about his condition, i.e., his inability to work, his depression was up and down but generally better....\n20. During April 1994, Plaintiff was still \"up and down\"; on April 15, was noted as chronic emergency; on April 19[,] appeared to be moderately depressed, but not tearful; the following week, however, April 22 and 26, Plaintiff seemed to improve, but by the 29th appeared more paranoid.\n\n. . . . .\n22. In June 1994, Plaintiff still up and down and was still having difficulty functioning in the most rudimentary ways and going through mood swings; [i]n addition to his other medications, Plaintiff was prescribed Valium.\n23. In July 1994, Plaintiff reported wondering why he was so reluctant to go out or be around people. At this time, Plaintiff appeared confused as to what his goals were, he related he would either do himself in or find a new career; he was still dysfunctional in the most rudimentary ways.\n24. During this period, Defendants' Expert George D. Bussey, M.D., evaluated Plaintiff and submitted to me his \"differential diagnosis ... as follows:\nAxis I Major depression, recurrent vs. dysthymic disorder....\nAxis II (Primary diagnosis) Mixed personality disorder with histrionic, dependent, narcissistic, paranoid, and antisocial traits....\nAxis IV Moderate to severe acute and chronic stressors. Mr. Ellison is unemployed, isolated from any social support networks, and living on the couch in someone else's home.\nAxis V Current and highest global assessment of functioning in the past year (as presented by Mr. Ellison), 40-50.\"\n25. In August 1994, Plaintiff was more depressed than recently, suicidal, and appeared to take a turn for the worse.\n\n26. By late August 1994, his friend and roommate related that Plaintiff no longer lay in bed all day, which was definitely an improvement and that he was able to concentrate when he wishes, but still forgets things, leaves doors unlocked, and still had difficulty prioritizing, tearful, difficulty making lists and getting things done, and setting goals.\n27. By September [1994], Plaintiff was still \"up and down\" between \"apparently suicidal\" tendencies and stability.\n\n28. It was difficult at this time to tell whether his behavior was due to long term dysfunctional habits or from the effects of depression or from the effects of medication.\nPlaintiff's Concise Stmt., Murphy Affid. at 1-5 (emphasis added).\nDr. Murphy's affidavit indicates that despite the fact that Plaintiff was \"clearly disabled and unable to work,\" \"retarded, discouraged, and suicidal,\" and was suffering from, inter alia, \"persistent severe depression,\" \"suicidal ideation,\" and \"difficulties in energy, motivation [and] concentration,\" he nevertheless was able, during the period from August 12, 1994 through January 11, 1994, to manage all of his legal affairs as described in the preceding section.\nDr. Murphy's affidavit also indicates that at least during the 90 day period following January 11, 1994, Plaintiff's condition \"seemed to improve\" and was \"generally better.\" In any event, there is no evidence Plaintiff's condition was worse after January 11, 1994. There is also no evidence Plaintiff ever was mentally incapacitated to the point of being unable to deal with his legal affairs. Even in August 1994, after he \"was more depressed than recently, suicidal, and appeared to take a turn for the worse,\" Plaintiff nevertheless still was able to request another right to sue letter from the EEOC.\nThe Court accordingly finds that at least during the 90 day period following January 11, 1994, there is no genuine triable issue of equitable tolling by reason of mental incapacity. Plaintiff's ADA claim therefore must be dismissed on this basis alone. Alternatively, the Court makes the same finding for the 1513 entire period from January 1994 through August 1994. In any event, Plaintiff's ADA claim is dismissed as untimely. See, e.g., Biester v. Midwest Health Serv., Inc., 77 F.3d 1264, 1268 (10th Cir.1996) (declining to toll 90 day period for mental incapacity due to \"major depression\" where no \"exceptional circumstances\" alleged plaintiff was not \"adjudged incompetent or institutionalized\" and \"the evidence demonstrates that, in spite of his mental condition, [plaintiff] `was capable of pursuing his own claim,'\" inasmuch as he \"wrote to the EEOC ... to request a right to sue notice\"); Miller v. Runyon, 77 F.3d 189, 191 (7th Cir.1996) (\"[M]ental illness tolls a statute of limitations only if the illness in fact prevents the sufferer from managing his affairs and thus from understanding his legal rights and acting upon them.... Most mental illnesses today are treatable by drugs that restore the patient to at least a reasonable approximation of normal mentation and behavior.\") (emphasis in original).\nFinally, and again alternatively, the Court dismisses Plaintiff's ADA claim because there is no evidence Defendants terminated him because of his mental illness. Nelson states in his affidavit that he did not receive or become aware of Dr. Murphy's note dated July 31, 1992 stating \"To Whom it May Concern ... [Plaintiff] is seen for the first time today. He is clearly disabled and unable to work. The period of disability is unclear at present.\" until August 25, 1992, after he already had terminated Plaintiff on August 12, 1992. Defendants' Concise Stmt., Exh. C; Nelson Affid. at ¶ 7. Plaintiff presents no evidence to oppose this. Moreover, although Dr. Kai's letter dated July 30, 1992 (which Nelson received on August 7, 1992) states that Plaintiff \"will see a psychiatrist of his choice,\" the letter also states that \"[Plaintiff] will return to his job on Monday, August 3rd.\" Defendants' Concise Stmt., Exh. A (emphasis added).\nAccordingly, even assuming Defendants had notice as a result of Dr. Kai's July 30, 1992 letter that Plaintiff was suffering from a mental illness, there is no evidence Defendants knew that Plaintiff was disabled as a result of that mental illness. In fact, Defendants were told by Plaintiff's doctor that Plaintiff would be coming back to work that coming Monday (July 30, 1992 was a Thursday). Consistent with this, Nelson states in his affidavit that he fired Plaintiff because Plaintiff \"was absent without leave on August 3-7, 1992 and August 10-12, 1992,\" based on \"Dr. Kai's letter stat[ing] that [Plaintiff] would be able to return to work on August 3, 1992.\" Nelson Affid. at ¶ 6.\nThe Court accordingly finds there is no genuine issue that Defendants did not fire Plaintiff because of his mental illness. See, e.g., Miller v. Runyon, 77 F.3d 189, 192 (7th Cir.1996) (\"[T]he Postal Service did not fire Miller because of his [mental] illness. It fired him because even though his psychiatrist had pronounced him able to return to work, he did not return. Miller's superiors had no reason to believe that he was prevented from returning by his mental illness.\") (emphasis added).[2]\n\n\n1514 II. WRONGFUL TERMINATION\n\nThe nature of Plaintiff's claim of \"wrongful termination while on medical leave due to occupational injury\" is somewhat obscure. In their moving papers, Defendants noted that Plaintiff seemed to be alleging a public policy wrongful discharge claim based on Parnar v. Americana Hotels, Inc., 65 Haw. 370, 652 P.2d 625 (1982) and H.R.S. § 378-32(2), which prohibits an employer from discharging an employee \"[s]olely because the employee has suffered a work injury which arose out of and in the course of the employee's employment.\" See Defendants' Mot. at 7-8. Defendants argued that if so, Plaintiff's claim is barred because H.R.S. Ch. 378 itself provides a sufficient remedy for its violation. Id.; see also Haw.Rev.Stat. § 378-33 (aggrieved employee may file a complaint with the Department of Labor and Industrial Relations); Ross v. Stouffer Hotel Co. (Hawaii) Ltd., Inc., 76 Hawai`i 454, 464, 879 P.2d 1037 (1994) (Parnar claim is barred \"where the policy sought to be vindicated is already embodied in a statute [in Ross as here, HRS Ch. 378] providing its own remedy for its violation. The fact that the relief available under Ross's HRS § 378-2 claim is limited to equitable relief ... does not change our conclusion.\"). The Court agrees.[3]\n\nIII. INFLICTION OF EMOTIONAL DISTRESS\n\nIn his opposition, Plaintiff states he \"is not alleging a public policy tort claim such as that found in [Parnar].\" Plaintiff's Opp. at 10.[4] Instead, Plaintiff claims he suffered \"severe emotional and mental distress\" as a result of Defendants' harassment, citing H.R.S. § 386-5. Id. Section 386-5 states in relevant part:\nThe rights and remedies herein granted to an employee ... on account of a work injury suffered by the employee shall exclude all other liability of the employer to the employee, ... at common law or otherwise, on account of the injury, except for sexual harassment or sexual assault and infliction of emotional distress or invasion of privacy related thereto, in which case a civil action may also be brought.\n\nId. (emphasis added) (second emphasized phrase added by 1992 amendments effective June 19, 1992).\nFirst, the Court finds that all of Plaintiff's emotional distress claims constitute a \"work injury\" arising from the conditions of his employment. See Plaintiff's Opp., Exh. 7 (decision of Department of Labor and Industrial Relations awarding Plaintiff workers' compensation for stress and depression caused by harassment at work); Ellison Affid. at 1-7 (listing incidents of harassment at work); see also Courtney v. Canyon Television & Appliance Rental, Inc., 899 F.2d 845, 851 (9th Cir.1990) (HRS § 386-5, bars emotional distress claims \"as long as there is a `causal connection between the injury and any incidents or conditions of employment ... regardless of where or when the injury' took place\") (quoting Chung v. Animal Clinic, Inc., 63 Haw. 642, 648-49, 636 P.2d 721 (1981)).\nHowever, no claim of work related infliction of emotional distress is viable outside the exclusivity bar of H.R.S. § 386-5 unless 1515 it is \"related to\" sexual harassment or sexual assault. Here, Plaintiff alleges no sexual harassment or sexual assault.\nAccordingly, H.R.S. § 386-5 bars all of Plaintiff's negligent or intentional infliction of emotional distress claims against Northwest and against Nelson for conduct within the scope of his employment. See, supra, Courtney, 899 F.2d at 851 (holding prior to 1992 amendments that HRS § 386-5 bars emotional distress claims \"as long as there is a `causal connection between the injury and any incidents or conditions of employment ... regardless of where or when the injury' took place\"); O'Connor v. Hilton Hawaiian Village, 763 F. Supp. 1544, 1549 (D.Haw.1990) (same); Marshall v. Univ. of Hawaii, 9 Haw. App. 21, 38, 821 P.2d 937 (1991) (adopting Ninth Circuit's holding in Courtney); see also Wangler v. Hawaiian Elec. Co., Inc., 742 F. Supp. 1465, 1468 (D.Haw.1990) (\"[A]lthough the exclusivity provision of Hawaii's workers compensation law extends immunity to co-employees acting within the scope of their employment, it does not relieve co-employees of liability to the extent that a fellow employee's personal injury is caused by their `wilful and wanton misconduct.'\") (citing HRS § 386-8 and Morishige v. Spencecliff Corp., 720 F. Supp. 829, 837 (D.Haw. 1989)).\nWith respect to Nelson individually, however, H.R.S. § 386-8 provides that \"[a]nother employee of the same employer shall not be relieved of his liability as a third party, if the personal injury is caused by his wilful and wanton misconduct.\" Hawaii courts have held that this provision preserves a plaintiff's right of action in common law or under another statute against a fellow employee individually and \"clearly allows an employee to sue a fellow employee for damages resulting from an injury caused by the fellow employee's willful and wanton misconduct.[5]\" Marshall v. Univ. of Hawaii, 9 Haw. App. 21, 36, 821 P.2d 937 (1991) (footnote in original); see also Hun v. Ctr. Properties, 63 Haw. 273, 277, 626 P.2d 182 (1981) (\"HRS § 386-8 does not establish an independent or new cause of action ... [but] preserv[es] the plaintiff's right of action in common law or under a statute.\"); Wangler v. Hawaiian Elec. Co., Inc., 742 F. Supp. 1465, 1468 (D.Haw.1990) (exclusivity provision of HRS § 386-5 \"does not relieve co-employees of liability to the extent that a fellow employee's personal injury is caused by their `wilful and wanton misconduct'\").\nHere, although H.R.S. § 386-8 may allow a claim against Nelson individually for intentional infliction of emotional distress, it does not allow one for simply negligent infliction of emotional distress. See Marshall v. Univ. of Hawaii, 9 Haw.App. 21, 36, 821 P.2d 937 (1991) (conduct must be \"wilful and wanton\").\nIn addition, any claim of intentional infliction of emotional distress (and for that matter any claim of negligent infliction of emotional distress) is subject to the two year statute of limitations in H.R.S. § 657-7, which states:\nActions for the recovery of compensation for damage or injury to persons or property shall be instituted within two years after the cause of action accrued, and not after, except as provided in section 657-13 [disability by reason of infancy, insanity or imprisonment].\nSee Linville v. State of Hawaii, 874 F. Supp. 1095, 1104 (D.Haw.1994) (two year period in HRS § 657-7 \"applies to ... personal injury claims of negligent and intentional infliction of emotional distress\").\nPlaintiff was sent home on July 17, 1992 and never returned to work. He did not file the instant suit until November 23, 1994. Moreover, in light of the discussion in Section I above, the Court finds there is no genuine issue of disability by reason of insanity or mental incapacity in general, and there certainly is none by reason of infancy or imprisonment. Accordingly, any claims against Nelson individually for negligent or 1516 intentional infliction of emotional distress are dismissed.[6]\n\nIV. RETALIATORY DISCHARGE\n\nPlaintiff's final claim is one for \"[r]etaliatory discharge based on [his] refusal to violate [FAA] rules regarding airplane maintenance and clearance procedures.\" Defendants' Concise Stmt., Exh. J at Interrogatory No. 1. Despite Plaintiff's earlier denial, this appears to be a public policy wrongful discharge claim based on Parnar v. Americana Hotels, Inc., 65 Haw. 370, 652 P.2d 625 (1982), and the Court will construe it as such.\nDefendants argue that Plaintiff's claim of retaliatory discharge is barred by the two year statute of limitations in H.R.S. § 657-7. See Linville v. State of Hawaii, 874 F. Supp. 1095, 1104 (D.Haw.1994) (Title IX wrongful discharge discrimination claim subject to two year statute of limitations under HRS § 657-7); cf. Pele Defense Fund v. Paty, 73 Haw. 578, 597, 837 P.2d 1247 (1992) (HRS § 657-7 is the \"general\" personal injury statute of limitations and applies to all \"actions for the recover of compensation for damage or injury to persons,\" including 42 U.S.C. § 1983 claims).\nPlaintiff does not dispute the applicability of the two year limitations period but contends it should be equitably tolled for mental incapacity. As discussed in Section I.B above, here the Court finds no genuine issue of equitable tolling on the basis of mental incapacity. Accordingly, Plaintiff's claim of retaliatory discharge is dismissed as untimely.[7]\n\nCONCLUSION\nFor the foregoing reasons, the Court GRANTS Defendants' motion for summary judgment. There are no remaining claims.\nIT IS SO ORDERED.\nNOTES\n[1] Although on August 7, 1992, Nelson did receive a letter from Dr. Kai regarding Plaintiff's medical treatment.\n[2] Defendants also argue in their reply at page 14 that because \"Plaintiff admits he is receiving total disability benefits from Workers' Compensation [and] has applied for long term disability benefits and Social Security disability benefits,\" he is estopped from claiming he is a \"qualified individual with a disability\" entitled to protection under the ADA since \"qualified\" means the individual \"can perform the essential functions of the employment position that such individual holds or desires.\" 42 U.S.C. § 12111(8); see Garcia-Paz v. Swift Textiles, Inc., 873 F. Supp. 547, 555 (D.Kan.1995) (plaintiff who represented in connection with applications for long term disability insurance benefits and Social Security disability benefits that she was totally disabled was estopped from claiming she was a \"qualified individual with a disability\" under ADA); McNeill v. Atchison, Topeka & Santa Fe Ry. Co., 878 F. Supp. 986, 990 (S.D.Tex.1995) (ADA claim brought 8 days after verdict in prior trial of FELA claim, in which trial plaintiff testified he was permanently disabled, \"is either blatantly fraudulent or utterly ridiculous\"); Reigel v. Kaiser Found. Health Plan of North Carolina, 859 F. Supp. 963, 969-70 (E.D.N.C.1994) (court stated that plaintiff who certified she was totally disabled in order to receive long term disability insurance benefits \"cannot speak out of both sides of her mouth with equal vigor and credibility before this court\" but also held there was no genuine issue for purposes of summary judgment); Harden v. Delta Air Lines, Inc., 900 F. Supp. 493, 496-97 (S.D.Ga.1995) (not allowing plaintiff to \"speak out of both sides of [his] mouth ... without offering any evidence whatsoever that his condition has changed,\" citing Reigel); Cheatwood v. Roanoke Indus., 891 F. Supp. 1528, 1538 (N.D.Ala.1995) (plaintiff's testimony at workers' compensation trial that he was unable to perform the essential functions of any job at defendant's plant estopped him from claiming he was \"qualified\" individual under ADA, citing Garcia-Paz); Cline v. Western Horseman, Inc., 922 F. Supp. 442, 447-449 (D.Colo.1996) (granting summary judgment based on estoppel and on the evidence in the record); but cf. Morton v. GTE North Inc., 922 F. Supp. 1169, (N.D.Tex. 1996) (expressing opinion that \"[t]he Garcia-Paz strict estoppel approach finds no support in the case law\" and that instead representations of disability are only evidence to be considered in determining whether there exists a genuine issue of standing).\n\nPlaintiff does not dispute Defendants' assertions regarding his representations of total disability. The Court accordingly finds in the alternative that Plaintiff lacks standing to pursue an ADA claim, both under a strict estoppel theory and because there is no genuine issue that Plaintiff is not a \"qualified\" individual under the statute.\n[3] The Court also finds in the alternative that there is no genuine issue that Defendants terminated Plaintiff not because of any occupational injury but because Plaintiff failed to appear for work even though his doctor stated he would. See, supra, Section I.B.2.\n[4] Any such claims accordingly are dismissed.\n[5] Black's Law Dictionary 1434 (5th ed. 1979), defines \"willful\" as:\n\nPremeditated; malicious; done with evil intent, or with a bad motive or purpose, or with indifference to the natural consequences; unlawful; without legal justification.\n[6] Alternatively, the Court finds that the allegations in Plaintiff's affidavit concerning his alleged \"harassment\" at work raise no genuine issue of \"outrageous\" conduct necessary to support a claim for intentional infliction of emotional distress. See Wong v. Panis, 7 Haw.App. 414, 421, 772 P.2d 695 (1989) (quoting Restatement (Second) of Torts § 46, cmt. d (1965)).\n[7] Defendants also argue that Plaintiff's Parnar-based claim of retaliatory discharge is preempted by the Airline Deregulation Act of 1978, codified and amended July 5, 1994, 49 U.S.C. § 41713(b)(1) (formerly 49 App.U.S.C. § 1305(a)(1)), which preempts any state law \"related to a price, route, or service of an air carrier.\" See Marlow v. AMR Serv., Corp., 870 F. Supp. 295, 299 (D.Haw.1994) (jetbridge maintenance company supervisor's claim he was terminated for raising safety concerns preempted by Act); Aloha Islandair, Inc. v. Tseu, 1995 WL 549319, 2 (D.Haw.1995) (disability discrimination and retaliation claims of monocular pilot applicant barred by Act); but see Ruggiero v. AMR Corp., 1995 WL 549010, 9 (N.D.Cal.1995) (declining to follow Marlow and relying instead on Anderson v. American Airlines, Inc., 2 F.3d 590, 597 (5th Cir.1993) (Act did not preempt a claim for money damages of retaliatory discharge for filing a workers' compensation claim) in finding no preemption). In light of its ruling, the Court need not decide this issue.\n\n", "ocr": false, "opinion_id": 2596640 } ]	D. Hawaii	District Court, D. Hawaii	FD	Hawaii, HI
2,596,660	Copenhaver	1989-12-28	false	west-virginia-coal-assn-v-reilly	Reilly	West Virginia Coal Ass'n v. Reilly	WEST VIRGINIA COAL ASSOCIATION; West Virginia Mining and Reclamation Association; American Electric Power Fuel Supply Corporation; Cannelton Industries, Inc.; Elk Run Coal Company, Inc.; Omar Mining Company; U.S. Steel Mining Company, Inc.; Westmoreland Coal Company, Inc.; And Wynchester Mining Company, Inc., Plaintiffs, v. William K. REILLY, Administrator, United States Environmental Protection Agency, Defendant	James R. Snyder, Jackson & Kelly, Charleston, W.Va., for plaintiffs., Stephen M. Horn, Asst. U.S. Atty., Charleston, W.Va., Bradley S. Bridgewater, Land & Natural Resources Div., Washington, D.C., for defendant.	null	null	null	null	null	null	null	null	null	null	8	Published	null	<parties id="b1338-8"> WEST VIRGINIA COAL ASSOCIATION; West Virginia Mining and Reclamation Association; American Electric Power Fuel Supply Corporation; Cannelton Industries, Inc.; Elk Run Coal Company, Inc.; Omar Mining Company; U.S. Steel Mining Company, Inc.; Westmoreland Coal Company, Inc.; and Wynchester Mining Company, Inc., Plaintiffs, v. William K. REILLY, Administrator, United States Environmental Protection Agency, Defendant. </parties><br><docketnumber id="b1338-12"> Civ. A. No. 2:87-0834. </docketnumber><br><court id="b1338-13"> United States District Court, S.D. West Virginia, at Charleston. </court><br><decisiondate id="b1338-15"> Dec. 28, 1989. </decisiondate><br><attorneys id="b1339-22"> <span citation-index="1" class="star-pagination" label="1277"> *1277 </span> James R. Snyder, Jackson & Kelly, Charleston, W.Va., for plaintiffs. </attorneys><br><attorneys id="b1339-23"> Stephen M. Horn, Asst. U.S. Atty., Charleston, W.Va., Bradley S. Bridgewater, Land & Natural Resources Div., Washington, D.C., for defendant. </attorneys>	[ "728 F. Supp. 1276" ]	[ { "author_str": "Copenhaver", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 725, "opinion_text": "\n728 F. Supp. 1276 (1989)\nWEST VIRGINIA COAL ASSOCIATION; West Virginia Mining and Reclamation Association; American Electric Power Fuel Supply Corporation; Cannelton Industries, Inc.; Elk Run Coal Company, Inc.; Omar Mining Company; U.S. Steel Mining Company, Inc.; Westmoreland Coal Company, Inc.; and Wynchester Mining Company, Inc., Plaintiffs,\nv.\nWilliam K. REILLY, Administrator, United States Environmental Protection Agency, Defendant.\nCiv. A. No. 2:87-0834.\nUnited States District Court, S.D. West Virginia, at Charleston.\nDecember 28, 1989.\n1277 James R. Snyder, Jackson & Kelly, Charleston, W.Va., for plaintiffs.\nStephen M. Horn, Asst. U.S. Atty., Charleston, W.Va., Bradley S. Bridgewater, Land & Natural Resources Div., Washington, D.C., for defendant.\n\nMEMORANDUM ORDER\nCOPENHAVER, District Judge.\nThis matter is before the court on the plaintiffs' motion for summary judgment. The question presented to the court is whether the United States Environmental Protection Agency (hereinafter, \"EPA\") has statutory authority under the Clean Water Act to adopt a policy which generally prohibits in-stream treatment ponds and fills and to object to draft National Pollutant Discharge Elimination System permits submitted to it by the West Virginia Department of Natural Resources on the basis that the draft permits authorize such ponds and fills.\n\n\n1278 I. Background\n\nIn its memorandum order of March 6, 1989, the court set forth a major portion of the facts and the statutory and regulatory framework; however, since that time supplemental materials have been submitted to the court. In light of the additional information, and in the interest of analytical clarity, a recount of the facts and law is now provided.\n\nA. Statutory Framework\nThe controversy arises from the Federal Water Pollution Control Act of 1948, ch. 758, 62 Stat. 1155, as amended by the Clean Water Act of 1977, Pub.L. 95-217, 91 Stat. 1567, 1575 (current version at 33 U.S.C. § 1251-1387 (1987)). (The entire statutory embodiment will hereinafter be referred to as the \"Clean Water Act\" or the \"Act.\") Congress' objective in enacting the Clean Water Act was \"to restore and maintain the chemical, physical, and biological integrity of the Nation's waters\" by, inter alia, the control and eventual elimination of discharges of pollutants into the waters of the United States. 33 U.S.C. § 1251.\nOn July 9, 1970, President Nixon signed and delivered to Congress The Reorganization Plan No. 3 of 1970, thereby establishing the Environmental Protection Agency (hereinafter, \"EPA\") as an independent agency within the Executive branch. Reorg. Plan No. 3 of 1970, 40 C.F.R. 1.1 (1970), reprinted in 5 U.S.C. app. at 99 (1989 Supp.) and in 84 Stat. 2086 (1970). In enacting the Clean Water Act, Congress charged the Administrator of the EPA (hereinafter, \"Administrator\") with largely exclusive administration of its provisions. 33 U.S.C. § 1251(d).\nSection 301(a) of the Clean Water Act, 33 U.S.C. § 1311(a) prohibits the discharge of any pollutant, except in compliance with specific enumerated sections of the Act, including section 402 and section 404, the sections at issue here.\nSection 402, 33 U.S.C. § 1342, establishes the National Pollution Discharge Elimination System (hereinafter \"NPDES\"). The NPDES is a permit program pursuant to which EPA is given authority to issue permits for the discharge of pollutants, notwithstanding the general prohibition contained in section 301. Issuance of permits is conditioned upon compliance by the permittees with all effluent elimination requirements established in the Act or with conditions imposed upon the permit deemed necessary by the Administrator to carry out the provisions of the Act. 33 U.S.C. § 1342(a)(1). Section 402(b) allows states desiring to implement their own NPDES program to submit to the Administrator a proposed NPDES program. 33 U.S.C. § 1342(b). Such delegation of administration of the NPDES program is consistent with Congress' intent to preserve in the states the primary responsibility and right to control pollution in their own waters. 33 U.S.C. § 1251(b). Once a state's program has been approved, section 402(c)(1) requires EPA to suspend its own issuance of NPDES permits for the waters covered by the state program. 33 U.S.C. § 1342(c)(1). To attain approved status, the state program must insure compliance with all applicable federal water quality standards. 33 U.S.C. § 1342(b)(1)(A).\nEPA retains oversight dominion over the state program primarily through two mechanisms. First, section 402(d)(1) requires states to provide the Administrator with copies of all NPDES permit applications. 33 U.S.C. § 1342(d)(1). Under section 402(d)(2), the Administrator retains the power to object to the state's issuance of a permit as being outside the guidelines and requirements of the Clean Water Act. If the state fails to submit a revised permit which satisfies the Administrator's objections, EPA may issue its own permit containing its own conditions. 33 U.S.C. § 1342(d)(4). The second, more drastic, mechanism available to the Administrator to insure compliance with the Clean Water Act is withdrawal of state NPDES program approval. 33 U.S.C. § 1342(c)(3).\nSection 404 of the Clean Water Act, 33 U.S.C. § 1344, empowers the Secretary of the Army to issue permits \"for the discharge of dredged or fill material into the navigable waters at specified disposal sites.\" 33 U.S.C. § 1344(a). Permits for 1279 the discharge of dredged or fill material issued pursuant to section 404 are expressly excepted from the application of the NPDES program, 33 U.S.C. § 1342(a), which provides \"Except as provided in sections 1328 and 1344 of this title, the Administrator may, ... issue a permit for the discharge of any pollutant.\" In order to minimize confusion as to the application of the NPDES and the dredge and fill permit programs, Congress commanded that the Secretary of the Army enter into an agreement with the Administrator in order to \"minimize, to the maximum extent practicable, duplication, needless paperwork, and delays in the issuance of permits.\" 33 U.S.C. § 1344(q). To that end, the Secretary of the Army and the Administrator entered into a memorandum of agreement on February 28, 1986, to address the applicability and overlap of the 402 and 404 permit programs. See 51 Fed.Reg. 8871 (1986).\n\nB. Facts\nOn May 20, 1982, EPA approved West Virginia's NPDES program. 47 Fed.Reg. 22,363 (1982). That approval was based on a \"determination by the EPA Administrator that the West Virginia program for the control of discharges into navigable waters within their jurisdiction satisfies the requirements of section 402(b)\" of the Clean Water Act. The state NPDES program is administered by the West Virginia Department of Natural Resources Division of Water Resources (hereinafter, \"DNR\"). W.Va.Code § 20-5A-4.\nSometime after 1982, EPA identified certain areas of concern with the West Virginia program and the State and EPA entered into an agreement, effective January 5, 1987, for the purpose of bringing the state program into full compliance with the mandates of the Clean Water Act. Agreement Regarding the National Pollutant Discharge Elimination System (NPDES) Permit Program Between the U.S. Environmental Protection Agency, Region III and the State of West Virginia, Jan. 5, 1987, Defendant's Memorandum in Support of Defendant's Motion to Dismiss, Exhibit 1. Particularly, EPA noted that it was \"concerned about the use of in-stream ponds for the treatment of coal mining wastewaters in West Virginia.\" Id. at 10. Pursuant to the agreement, West Virginia agreed to develop and propose to EPA an in-stream treatment pond policy setting forth restrictions on the use of such ponds and proposed guidelines for the implementation of such policy. Id. EPA concurrently pledged to develop and implement its own nationwide policy. Id.\nBy letter dated July 10, 1987, the Director of the Water Management Division of Region III of EPA, Alvin Morris, advised DNR that West Virginia's proposed in-stream treatment policy was unacceptable as it was inconsistent with the Clean Water Act and West Virginia Water Quality Standards. Complaint, Exhibit A. Accompanying the letter was a document entitled \"EPA Region III Policy for Instream Treatment of Mining Wastewaters,\" (hereinafter, \"1987 policy\"). Id. The policy announced that \"[t]he impoundment of waters of the United States for instream treatment of mining related wastewaters is prohibited.\" Id. at 1. The policy further provided that in instances where DNR determines that (1) there exists no feasible alternative to in-stream treatment and (2) that any lowering of water quality would comply with federal anti-degradation regulations, EPA would not object provided certain conditions were met.[1]\n1280 In November of 1988, EPA announced a new draft policy for in-stream treatment and filling (hereinafter, \"1988 policy\").[2] The new policy reflects a greater willingness on the part of EPA to accommodate the coal mining industry. For example, the express prohibition on location of ponds and fills in perennial streams has been removed. Compare 1987 Policy, ¶ 6, n. 1 with 1988 Policy, ¶ 4, n. 2. The new policy reflects a greater focus on the impact on preservation and replacement of existing aquatic life. For example, the state must assure EPA that no feasible alternative exists to in-stream location only in instances where aquatic life is impacted. The 1988 policy continues the 1987 policy's goal of obtaining biological survey data from permittees.\nWhile the plaintiffs address the 1988 policy only incidentally, presumably their argument that EPA has no authority to regulate in-stream fills and ponds extends to this policy as well as the 1987 policy. Accordingly, the court's analysis will be inclusive of both such policies.\nAt this point, it is necessary to digress long enough to describe the physical structures and processes that are at issue in this case. Federal and state surface mining laws require that after an area has been mined, the disturbed area be \"reclaimed\" and returned, to the extent possible, to its original contour and condition. See generally The Surface Mining Control and Reclamation Act of 1977, Pub.L. 95-87 (codified at 30 U.S.C. §§ 1201-1328), and the West Virginia Surface Coal Mining Reclamation 1281 Act, W.Va.Code §§ 22A-3-1 to 22A-3-40. Due to the \"swell factor\" associated with earth removal, not all the earth and rock that was removed during mining operations is needed to return the land to its original contour. The excess earth and rock, or \"overburden\" or \"spoil\" as it is sometimes called, must be disposed of in a manner consistent with federal and state law. 30 U.S.C. § 1265(b)(22) and W.Va.Code § 22A-3-12(b)(22).\n\"Valley fills\" are constructed from and used to dispose of the spoil or coal mine waste material generated during mining operations. The fills are constructed by filling a designated portion of a valley with spoil or waste material. Fills that are constructed at the beginning of a valley are called \"head-of-hollow\" fills. Diversion ditches and underdrains must be provided when spoil or waste is disposed of in a valley or head-of-hollow fill in order to insure that the fill remains stable and not subject to slippage. The water collected by these drainage systems is channelled away from the fill and eventually into a sedimentation pond.\nThe ponds at issue are located in existing streambeds downstream from the fills. A treatment pond will generally be constructed by filling the stream at a designated location with earth and rock to create an embankment or dam which causes the water to pond. The primary purpose of the pond is to allow sediments suspended in the runoff to \"settle out\" of the water. The water is then discharged from the pond back into the existing stream through an outlet. See Affidavit of Harry Douglas McKenzie, Affidavits Volume of Additional Submission of Plaintiffs in Support of Motion for Summary Judgment at 3-4. It is undisputed that an NPDES permit is required for the discharge from the pond into the stream at the outlet. Reply of Plaintiffs to EPA's Response to Additional Submissions of Plaintiffs at 9. The controversy lies in the portion of the stream above the embankment. That portion consists of the upper segment of the stream which is filled in. It consists also of the remainder of the stream used to transport runoff from the fill and the watershed area to the treatment pond. It consists as well of the pond itself which lies in the lower portion of the stream above the embankment.\nSince the announcement of its 1987 policy, EPA has objected to 41 draft permits of 700 submitted to it by DNR on the basis of its concerns about in-stream treatment. Defendant's Motion for Extension of Time or, In Alternative Response to Additional Submission of Plaintiffs in Support of Motion for Summary Judgment at Attachment A. The objection letter dated October 6, 1987, from Mr. Morris to DNR regarding the Marrowbone Development Company mine at Tom's Branch is typical of most of the objection letters submitted to the court and, therefore, its contents will be focused on for analysis. Affidavit of Harry Douglas McKenzie, Affidavits Volume of Plaintiffs Additional Submission at Exhibit A.\nThe draft permit submitted for the mine apparently contained a proposed in-stream treatment pond and two valley fills. The pond was to be 1,000 feet downstream from one of the fills. The objection letter stated that EPA objected to the permit on the basis of violation of the West Virginia Anti-degradation policy contained in the West Virginia Water Quality Standards, CSR § 46-1-4.1, because under that regulation waste assimilation and transport are not authorized uses of streams. EPA further stated that the project contained one or more \"point source\" discharges into the waters of the United States upstream from the pond which would go untreated, thereby violating the Clean Water Act by not meeting applicable effluent limitations. In the letter, EPA agreed to withdraw its objection provided information was submitted to EPA sufficient to demonstrate certain conditions, including a demonstration that no feasible alternative existed to locating the sediment pond in the stream. A biological study of aquatic life in the stream was requested and DNR was informed that all point sources into Tom's Branch where aquatic life existed would have to meet federal effluent limitations 1282 and state water quality standards.[3] The letter further stated that \"[t]he proposed project may also require an individual permit under Section 404 of the Clean Water Act due to the extensive stream filling necessary to construct the valley fills.\"\nOf the 41 draft permits objected to by EPA on the basis of in-stream treatment, only six remained unresolved as of March, 1989. Declaration of Daniel O. Sweeney at 2. In the instances where permits were allowed to issue, EPA either withdrew its objection in light of the additional information supplied to it, or approved subsequently modified permits. In any event, in all but the six instances, coal mining operations were allowed to proceed with the instream treatment and fills. Motion for Extension of Time at 5.\n\nC. Issues\nOn June 23, 1987, the plaintiffs, two coal mining associations and various mining companies, filed this suit requesting that the court declare the construction and operation of in-stream ponds and fills \"not unlawful,\" and further declare that EPA has no authority to object to the State's issuance of NPDES permits on the basis authorizing such ponds and fills. EPA responded by filing a motion to dismiss the complaint on two grounds. First, EPA contended that the suit did not present a ripe, justiciable controversy concerning final agency action. Second, if the court were to determine that EPA's actions constituted final agency action, subject matter jurisdiction would rest not with the district courts, but rather with the courts of appeal.\nIn response, plaintiffs argue that district courts have subject matter jurisdiction to entertain suits alleging that an agency has acted in excess of its statutory authority. Specifically, plaintiffs contend that, under the Clean Water Act, permitting authority over in-stream treatment facilities rests with the Secretary of the Army and not the EPA. Thus, plaintiffs urge that this court has jurisdiction to decide the narrow legal question of whether the EPA has statutory authority under the Clean Water Act to regulate in-stream treatment facilities through the NPDES permit program. The plaintiffs then filed a motion for summary judgment requesting that the court address that narrow issue.\nThe plaintiffs make various arguments to support their claim that EPA does not possess such authority. First, the plaintiffs contend that federal and state surface mining laws, which were approved by EPA, contemplate and provide for in-stream treatment ponds and fills. Second, the plaintiffs argue that any discharge above the point of outfall from the ponds are discharges of \"fill material\" and are exempted from EPA's control under section 402, 33 U.S.C. § 1342, and that, rather, such discharges are within the permitting authority of the Army Corps of Engineers under section 404. 33 U.S.C. § 1342. The plaintiffs' third contention is that the discharges are not \"discharges into the waters of the United States\" and are therefore not within EPA's jurisdiction. The plaintiffs make a similar argument that the fills and ponds do not violate West Virginia Water Quality Standards as EPA contends in its objection letters and, furthermore, the discharges therefrom are not \"discharges into the waters of the State.\" Lastly, the plaintiffs contend that even if EPA has the authority to adopt such a 1283 policy and implement it through objection to NPDES permits, such policy as adopted constitutes unlawful rulemaking for failure to comply with the rulemaking procedures set forth in the Administrative Procedures Act, 5 U.S.C. §§ 552-553.\nEPA meets the plaintiffs' contentions by stating that (a) the \"waters of the United States\" over which EPA has regulatory control cannot be removed from the purview of the Clean Water Act merely by impounding those waters; (b) such ponds and fills do not comply with state water quality standards as required by the Clean Water Act; (c) EPA's authority to regulate internal waste streams authorizes the instream treatment policy; and (d) because EPA may veto a permit issued by the Army pursuant to section 404(c), 33 U.S.C. § 1344(c), its policy is further authorized and appropriate.\n\nII. Discussion\n\n\nA. Jurisdiction\nEPA asserts that it has never used its in-stream policies as a basis for blocking draft NPDES permits and, therefore, the policies do not constitute final agency action reviewable by this court. The materials submitted, however, indicate otherwise. Specifically, EPA stated in its letter dated July 10, 1987, that \"We urge your acceptance of this instream treatment policy.... In the meantime, we intend on using it as a basis for commenting or objecting to draft NPDES permits.\" Complaint, Exhibit A.\nEPA cites the recent decision of the Seventh Circuit in American Paper Institute, Inc. v. U.S.E.P.A., 882 F.2d 287 (7th Cir. 1989), as supporting its contention of nonreviewability. However, in American Paper, the court stated that in order for action by an agency, such as the one at issue here, to be reviewable, \"[i]t must have bite it must at least control the states or the permit holders, rather than serve as advice about how the EPA will look at things when the time comes.\" Id. at 289.\nAlthough at the time the DNR became aware of the policies, such policies constituted mere advice concerning EPA's potential posture on the fills and ponds, it appears that EPA has taken the exact course of action of which DNR was advised; EPA has used the policy to object to draft permits on 41 occasions.\nIt appears to the court that the Fourth Circuit decision in Champion International Corp. v. U.S.E.P.A., 850 F.2d 182 (4th Cir.1988), is controlling. In that case, the Fourth Circuit addressed the jurisdictional limits of a federal district court to entertain challenges to EPA action under the Clean Water Act. In Champion, a dispute arose between North Carolina and Tennessee concerning the appropriate amount of color removal necessary for Champion to comply with the Clean Water Act. Champion operated a pulp and paper mill in Canton, North Carolina, on the Pigeon River, twenty-six miles upstream from the North Carolina-Tennessee border. Tennessee was concerned about the aesthetic quality of the color of the Pigeon River. Id. at 184.\nAfter North Carolina approved a draft permit with a color removal limitation that did not take into account aesthetic considerations, Tennessee informed North Carolina of its objection and ultimately asked the EPA to intervene. Soon thereafter, North Carolina issued a final permit identical to the draft permit. On August 6, 1985, EPA formally objected to North Carolina's issuance of the permit and assumed permitting authority. Id. at 184-85.\nThereafter, Champion brought a declaratory and injunction action in the district court on the basis that EPA's objections to the permit were invalid and that the EPA was without power to assume permitting authority. Champion appealed from an order granting EPA summary judgment.\nThe Fourth Circuit began its opinion by stating: \"We must first address the issue of whether the district court should have entertained this suit at all or should have summarily dismissed the same for want of subject matter jurisdiction.\" Id. at 185 (footnote omitted). Relying on the Supreme Court's decision in Leedom v. Kyne, 358 U.S. 184, 79 S. Ct. 180, 3 L. Ed. 2d 210 (1958), the Fourth Circuit held:\nWe are of the opinion the district court had subject matter jurisdiction to entertain 1284 the suit ..., to the extent that it properly inquired whether the EPA had exceeded its delegated authority. When that question was ascertained favorably to EPA, the district court should have gone no further and should have dismissed for want of subject matter jurisdiction to consider the merits of the various objections EPA made to the North Carolina permit. Leedom v. Kyne requires that a federal court ascertain whether an administrative agency is acting within its authority and if the decision is that the agency is within its authority, the court is then required to dismiss the case for want of subject matter jurisdiction when the subject matter is one entrusted to the agency or in which review of the administrative decision has been specifically prescribed by Congress.\nId. at 185-86, 79 S. Ct. at 182-83 (footnote omitted; citation omitted).[4]\nOn March 6, 1989, this court entered an order announcing that analysis of the appropriateness of EPA's promulgation and implementation of its in-stream treatment policy would proceed on the limited inquiry, as set forth in Champion, of whether EPA has \"clearly exceeded\" its authority under the Clean Water Act. If the court now finds that EPA has not done so, it is required to dismiss the action for lack of subject matter jurisdiction, jurisdiction having been found to remain with the agency. See Champion International Corp. v. U.S.E.P.A., 850 F.2d 182 (4th Cir.1988); and Phillip Morris, Inc. v. Block, 755 F.2d 368 (4th Cir.1985).\n\nB. Conflict With Surface Mining Laws\nInitially, in their Memorandum in Support of Motion for Summary Judgment, the plaintiffs assert that EPA's in-stream policy is in \"direct conflict with the federal Surface Mining Control and Reclamation Act\" (hereinafter, \"SMCRA\"), 30 U.S.C. §§ 1201-1328 (1986), inasmuch as that body of federal law authorizes in-stream fills and ponds. Id. at 12. The plaintiffs subsequently concede that such laws and regulations do not expressly require that fills and ponds be located in existing stream courses. See Reply of Plaintiffs to EPA's Response to Additional Submission of Plaintiffs at 2, n. 1. Rather, the plaintiffs contend that due to the mountainous character of portions of West Virginia where surface mining occurs, the SMCRA and the regulations promulgated thereunder have the practical effect of requiring in-stream location.\nPlaintiffs correctly note that SMCRA and the West Virginia Surface Coal Mining and Reclamation Act (hereinafter, \"WVSCMRA\") contain provisions relating to sedimentation ponds and refuse disposal. Those Acts generally require sediment-laden runoff to be treated, 30 U.S.C. § 1265(b)(10)(B)(i) and (ii), and W.Va.Code § 22A-3-12(b)(10)(B), and refuse to be disposed of in an environmentally sound manner, 30 U.S.C. § 1265(b)(22); and W.Va. Code § 22A-3-12(b)(22). Furthermore, both Acts provide for the protection of water quality by minimizing \"the disturbances to the prevailing hydrologic balance at the mine-site and in associated offsite areas and to the quality and quantity of water in surface and ground water systems both during and after surface coal mining operations and during reclamation.\" 30 U.S.C. § 1265(b)(10); and W.Va.Code § 22A-3-12(b)(10). Moreover, both Acts contain numerous references to federal and 1285 state water quality standards and generally require that those standards be met.\nSpecifically, the plaintiffs argue that the Office of Surface Mining (hereinafter, \"OSM\") regulations, which require that placement of excess spoil material be such that maximum stability is ensured by placing such fill in the \"most moderately sloping and naturally stable area available,\" 30 C.F.R. § 816.71, necessitate placement of fills in \"head of hollows\" and in valleys in areas of rugged terrain. Most of these hollows and valleys contain existing streams. The plaintiffs point to various regulations promulgated under SMCRA as authorizing such placement; however, upon examination of the regulations cited, it appears that the regulations do not conflict with EPA's regulation of in-stream fills and ponds; rather, they merely recognize such placement as a possibility. For example, 30 C.F.R. § 816.71(f) provides that \"[I]f the disposal area contains springs, natural or manmade water courses, or wet weather seeps, the fill design shall include diversions and underdrains as necessary to control erosion, prevent water infiltration into the fill, and ensure stability.\" (Emphasis supplied.) The plaintiffs argue that because OSM regulations, such as the one above, address in-stream placement of fills and because EPA concurred in the promulgation of such regulations, see 47 Fed.Reg. 47221, EPA cannot now assert jurisdiction over such fills and treatment ponds. It is clear from a reading of 30 C.F.R. § 816.71(f) that OSM did not intend to go so far as to usurp EPA's jurisdiction over the protection of water quality of the nation's waters. The OSM regulations are targeted at stability of reclamation efforts and address the quality of water leaving the fills only incidentally. As noted above, SMCRA expressly requires that any runoff meet federal and state water quality standards. It is clear that Congress intended that the regulation of the quality of water, including water connected with mining operations, be carried out by EPA. The plaintiffs' argument that EPA cannot regulate such water because of the conflict with OSM is without merit.\n\nC. Regulation of Fills and Discharges Therefrom\nAs earlier noted, section 402 charges EPA with permitting authority for the discharge of \"any pollutant\"; however, the discharge of \"dredged and fill material\" is expressly excepted from EPA's authority. 33 U.S.C. § 1342(a)(1). Section 404, 33 U.S.C. § 1344, charges the Secretary of the Army with authority to issue permits \"for the discharge of dredged or fill material into the navigable waters at specified disposal sites.\" 33 U.S.C. § 1344(a). The plaintiffs contend that this exception serves to carve out of EPA's jurisdiction the authority to regulate surface mining in-stream fills and treatment ponds as well as the discharges therefrom.\nAt the outset, it is noted that the question before the court is not whether or to what extent the Secretary of the Army holds companion authority over portions of in-stream treatment pond construction and disposal of waste or spoil material. Rather, the issue to be decided is whether EPA has statutory authority over such construction and disposal so that it may lawfully object to and prohibit the fills and ponds on the ground that the discharges therefrom do not comply with the Clean Water Act and on the further ground that the Secretary of the Army has ceded to EPA the control of fill material not used for the primary purpose of replacing an aquatic area with dry land or of changing the bottom elevation of a waterbody.\nSince the time the Clean Water Act was enacted, some confusion has existed as to the parameters of the Army's and EPA's permitting authority. The peculiar nature of in-stream treatment pond construction and disposal of waste or spoil involves not only the placement of fill material (construction of waste or spoil fills and of the embankment of the pond), but also the discharge of fill material which emanates from the waste or spoil fills and ponds. Questions as to the respective agencies' authority center upon the nature of the substance being discharged, the Army generally having authority over the discharge 1286 of fill, EPA having authority over the discharge of pollutants.\nA \"discharge of a pollutant\" is defined by EPA as follows:\nAny addition of any \"pollutant\" or combination of pollutants to \"waters of the United States\" from any \"point source,\" ...\n....\nThis definition includes additions of pollutants into waters of the United States from: surface runoff which is collected or channelled by man; discharges through pipes, sewers, or other conveyances owned by a State, municipality, or other person which do not lead to a treatment works; and discharges through pipes, sewers, or other conveyances, leading into privately owned treatment works.\n40 C.F.R. § 122.2. EPA further defines \"pollutant\" as follows:\n\nPollutant means dredged spoil, solid waste, incinerator residue, filter backwash, sewage, garbage, sewage sludge, munitions, chemical wastes, biological materials, radioactive materials, ... heat, wrecked or discarded equipment, rock, sand, cellar dirt and industrial, municipal, and agricultural wastes discharged into water.\n40 C.F.R. § 122.2.\nBoth EPA and the Army define \"discharge of fill material\" as follows:\n\nDischarge of fill material means the addition of fill material into waters of the United States. The term generally includes, without limitation, the following activities: Placement of fill that is necessary to the construction of any structure; the building of any structure or impoundment requiring rock, sand, dirt, or other materials for its construction; site-development fills for recreational, industrial, commercial, residential, and other uses, causeways or road fills; dams and dikes; artificial islands; property protection and/or reclamation devices such as riprap, groins, seawalls, breakwaters, and revetments; beach nourishment; levees; fill for structures such as sewage treatment facilities, intake and outfall pipes associated with power plants and subaqueous utility lines; and artificial reefs.\n33 C.F.R. § 323.2(f) [Army's regulation]; 40 C.F.R. § 232.2(f) [EPA's regulation].[5] EPA regulations further define fill material as \"any `pollutant' which replaces portions of the `waters of the United States' with dry land or which changes the bottom elevation of a water body for any purpose.\" 40 C.F.R. § 232.2(i) (emphasis supplied).\nIt is apparent from EPA's definition that the term \"pollutant\" is inclusive of fill material; however, it is a pollutant the discharge of which is exempted from EPA's permitting authority under section 402.\nPlaintiffs argue that the fill material used to construct the in-stream treatment ponds as well as the fill material placed in the valleys or hollows falls within EPA's own definition of fill material because it \"changes the bottom elevation of a water body for any purpose\"; therefore, the authority to issue permits for the placement of fill material, as well as for discharges therefrom, resides with the Secretary of the Army and not with the EPA.\nThe confusion arises because Army regulations define fill material differently than EPA's definition set forth above. The Army's definition reads as follows:\nThe term \"fill material\" means any material used for the primary purpose of replacing an aquatic area with dry land or of changing the bottom elevation of an [sic] waterbody. The term does not include any pollutant discharged into the water primarily to dispose of waste, as that activity is regulated under section 402 of the Clean Water Act.\n33 C.F.R. § 323.2(e) (1977) (emphasis supplied). Had the Army defined fill material in the same manner as EPA, i.e., to include material which \"changes the bottom elevation of a water body, for any purpose,\" 1287 then it would appear that EPA would indeed lack jurisdiction to regulate valley fills and the discharges therefrom through the NPDES permitting program. However, because the Army's definition of fill material includes only material placed for the \"primary purpose\" of \"changing the bottom elevation of a waterbody,\" it would appear that the Army never intended to regulate the disposal of waste or spoil in valley fills. The primary purpose of the fills and treatment ponds is to dispose of waste or spoil and treat sediment-laden water, not to create dry land such as is needed for construction of buildings or land development, as contemplated by the Army's definition above.[6]\nDue to the confusion over the permitting authority for the discharge of fill material, the Army and EPA, entered into a memorandum of agreement dated February 28, 1986, for the specific purpose of clarifying the parameters of their respective permitting programs.[7] Paragraph B.5 of the agreement provides in pertinent part:\n[A] pollutant [fill material] (other than dredged material) will normally be considered by EPA and the Corps to be subject to section 402 if it is a discharge in liquid, semi-liquid, or suspended form or if it is a discharge of solid material of a homogeneous nature normally associated with single industry wastes, and from a fixed conveyance, or if trucked, from a single site and set of known processes. These materials include placer mining wastes, phosphate mining wastes, titanium mining wastes, sand and gravel wastes, fly ash, and drilling muds. As appropriate, EPA and the Corps will identify additional such materials.\nThe plaintiffs argue that inasmuch as coal mining is an extensive and well known industry, its conspicuous absence in the activities listed above indicates an intent on the part of EPA to exempt the discharges at issue from the scope of section 402. This argument, however, contradicts the clear language of the memorandum of agreement. Sediment-laden runoff emanating from the valley fills is a \"discharge in liquid, semi-liquid, or suspended form.\" Moreover, the Army's definition of \"fill material\" includes the clarifying statement that it \"does not include any pollutant discharged into the water primarily to dispose of waste.\" The discharges emanating from the valley fills are indeed primarily for the purpose of disposing of waste. This waste is channeled directly into a pond for treatment. Furthermore, EPA has expressed concern that pollutants other than sediment will be found in the discharge due to the leaching of water through the refuse fills.[8] Clearly, EPA has jurisdiction over the discharge of these other pollutants.[9]\n1288 As for the construction of the embankment for the ponds, it appears that the placement of fill material for this purpose does fall within the Army's definition of fill material inasmuch as the embankment is constructed for the \"primary purpose\" of \"changing the bottom elevation\" of the stream in which it is constructed in order to create a treatment pond. In its 1988 policy, EPA concedes that the Secretary of the Army possesses some authority over such portions of in-stream treatment pond construction. In that policy it is stated:\nThe Corps of Engineers administers a Nationwide Section 404 permit which applies to most stream filling operations associated with the coal mining industry, including instream treatment pond construction and disposal of waste spoil material. EPA is concerned that the Nationwide permit may allow stream filling which will harm fish and other significant aquatic life. To minimize harm to the aquatic ecosystem, stream biological surveys and evaluations of feasible alternatives must precede filling operations in all stream segments except for headwaters of nontrout streams having watershed drainage areas of 200 acres or less.\nDefendant's Motion to Extend Time or, In the Alternative, Response to Plaintiffs' Additional Material, Attachment A at 2 (emphasis supplied).\nWhile EPA concedes that the Secretary of the Army possesses permitting authority over some phases of in-stream treatment pond construction, it has not conceded its own authority over such construction. As discussed above, EPA is the proper authority through which one must obtain a permit for discharges at point sources. Moreover, the Army has expressly disclaimed jurisdiction over such discharges inasmuch as they are for the purpose of disposing of waste. This being the case, logic dictates that in order for EPA to control discharges from the point sources involved here, it must have the authority to regulate the construction of the fills and ponds from which the discharges emanate.\n\nD. Regulation of Waters Above In-Stream Ponds\nAs indicated earlier, the Clean Water Act prohibits the discharge of pollutants except pursuant to an NPDES permit issued by the EPA. The \"discharge of pollutants\" is defined as \"any addition of any pollutant to navigable waters from any point source.\" 33 U.S.C. § 1362(12)(A). \"Navigable waters\" are defined as \"the waters of the United States, including the territorial seas.\" 33 U.S.C. § 1362(7).\nIn 1979, EPA developed definitional implementing regulations which provided:\n(t) \"Navigable waters\" means \"waters of the United States, including territorial seas.\" This term includes:\n(1) All waters which are currently used, were used in the past, or may be susceptible to use in interstate or foreign commerce, including all waters which are subject to the ebb and flow of the tide;\n(2) Interstate waters, including interstate wetlands;\n(3) All other waters such as intrastate lakes, rivers, streams (including intermittent streams), mudflats, sandflats and wetlands, the use, degradation or destruction of which would affect or could affect interstate or foreign commerce including any such waters:\n(i) Which are or could be used by interstate or foreign travelers for recreational or other purposes;\n(ii) From which fish or shellfish are or could be taken and sold in interstate or foreign commerce;\n(iii) Which are used or could be used for industrial purposes by industries in interstate commerce.\n(4) All impoundments of waters otherwise defined as navigable waters under this paragraph;\n(5) Tributaries of waters identified in paragraphs (t)(1)-(4) of this section, including adjacent wetlands; and\n(6) Wetlands adjacent to waters identified in paragraphs (t)(1)-(5) of this section (\"Wetlands\" means those areas that are inundated or saturated by surface or 1289 ground water at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands generally include playa lakes, swamps, marshes, bogs, and similar areas such as sloughs, prairie potholes, wet meadows, prairie river overflows, mudflats, and natural ponds); provided that waste treatment systems (other than cooling ponds meeting the criteria of this paragraph) are not waters of the United States.\n40 C.F.R. § 122.2(t) (1979). On May 19, 1980, the definitional regulations were revised somewhat and provided:\nWaters of the United States means:\n(1) All waters which are currently used, were used in the past, or may be susceptible to use in interstate or foreign commerce, including all waters which are subject to the ebb and flow of the tide.\n(2) All interstate waters, including interstate wetlands.\n(3) All other waters, such as intrastate lakes, rivers, streams (including intermittent streams), mudflats, sandflats, wetlands, sloughs, prairie potholes, wet meadows, playa lakes, or natural ponds, the use, degradation or destruction of which would affect or could affect interstate or foreign commerce including any such waters:\n(i) Which are or could be used by interstate or foreign travelers for recreational or other purposes; or\n(ii) From which fish or shellfish are or could be taken and sold in interstate or foreign commerce; or\n(iii) Which are used or could be used for industrial purposes by industries in interstate commerce.\n(4) All impoundments of waters otherwise defined as waters of the United States under this definition;\n(5) Tributaries of waters identified in paragraphs (g)(1)-(4) of this section;\n(6) The territorial sea; and\n(7) Wetlands adjacent to waters (other than waters that are themselves wetlands) identified in paragraphs (q)(1)-(6) of this section.\nWaste treatment systems, including treatment ponds or lagoons designed to meet the requirements of the Act (other than cooling ponds as defined in 40 CFR 123.11(m) which also meet the criteria of this definition) are not waters of the United States. This exclusion applies only to manmade bodies of water which neither were originally created in waters of the United States (such as a disposal area in wetlands) nor resulted from the impoundment of waters of the United States.\n40 C.F.R. § 122.3 (1980) (emphasis added).\nAt the time this regulation was announced, EPA stated that \"[b]ecause [the Clean Water Act] was not intended to license dischargers to freely use waters of the United States as waste treatment systems, the definition makes clear that treatment systems created in those waters or from their impoundment remain waters of the United States.\" 45 Fed.Reg. 33,298 (May 19, 1980).\nOn July 21, 1980, EPA suspended the above underlined sentence after concerns were voiced by industries that the last sentence suggested that they might be required to obtain permits for discharges into existing waste treatment systems, such as power plant ash ponds. 45 Fed.Reg. 48,620 (July 21, 1980). EPA agreed that the sentence could be construed too broadly and suspended it pending public comment. Id. The definition currently exists as set forth above without the underlined portion. See 40 C.F.R. § 122.2 (1988).\nPlaintiffs argue that the final portion of the current definition explicitly excludes in-stream treatment ponds and the water above such ponds from the definition of waters of the United States. Plaintiffs maintain that any question as to whether the exclusion was limited to treatment ponds constructed in manmade bodies of water was answered in the negative by the 1980 suspension of the last sentence.\nEPA counters that in-stream treatment ponds and the waters above such ponds are included in the definition of waters of the 1290 United States because they constitute an \"impoundment of waters otherwise defined as waters of the United States under this definition,\" see 40 C.F.R. § 232(q)(4) (1988), and that the exclusion for treatment ponds was never meant to apply to treatment ponds constructed in United States waters. According to EPA, the last sentence was not definitional, rather it was merely explanatory in nature. Accordingly, EPA contends, the suspension of the last sentence has no effect upon the clear definitional mandate that impoundments of waters of the United States remain \"waters of the United States.\"\nJudicial review of an agency's interpretation of its own regulations is sharply circumscribed. As the Supreme Court in Udall v. Tallman, 380 U.S. 1, 85 S. Ct. 792, 13 L. Ed. 2d 616 (1965), observed: \"When the construction of an administrative regulation rather than a statute is in issue, deference is even more clearly in order.... `[T]he ultimate criterion is the administrative interpretation, which becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation.'\" Id. at 16-17, 85 S. Ct. at 801-802 (quoting Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414, 65 S. Ct. 1215, 1217, 89 L. Ed. 1700 (1945)). While the court concedes that the suspension of the last sentence creates some confusion as to the parameters of EPA's jurisdiction upon the ponds and waters at issue here, the court cannot find that EPA's interpretation of its own definitional regulation is plainly erroneous or inconsistent with either the regulation, which seems to include such impoundments, or the Clean Water Act, which Congress enacted for the purpose of keeping a tight rein on water pollution.\n\nE. Violation of the West Virginia Water Quality Standards\nEPA stated in its objection letters that the proposed fills and ponds constitute a violation of the West Virginia Anti-degradation policy. That regulation provides as follows:\nIt is the policy of the State of West Virginia that instream water uses shall be maintained and protected as follows: a. Existing instream water uses and the level of water quality necessary to protect existing uses shall be maintained and protected. Waste assimilation and transport are not recognized as designated uses.\nThat regulation was adopted in compliance with EPA regulations, which require states administering their own NPDES permitting program to adopt a statewide anti-degradation policy to protect existing in-stream water uses and water quality. 40 C.F.R. § 131.12. Permits may not be issued by a state under conditions that would violate applicable state water quality standards. 40 C.F.R. § 122.4(d).\nThe plaintiffs attempt to skirt the apparent violation of West Virginia's anti-degradation policy by arguing, in a manner similar to their contention that the discharges are not into waters of the United States, that the discharges into the ponds and waters above such ponds are not discharges into the \"waters of the State.\"[10] The West Virginia Water Pollution Control Act, W.Va.Code §§ 20-54-1 to 20-5A-16 defines waters of the state as:\n[A]ny and all water on or beneath the surface of the ground, whether percolating, standing, diffused or flowing, wholly or partially within this State, or bordering this State and within its jurisdiction, and shall include, without limiting the generality of the foregoing, natural or 1291 artificial lakes, rivers, streams, creeks, branches, brooks, ponds (except farm ponds, industrial settling basins and ponds and waste treatment facilities), impounding reservoirs, springs, wells and watercourses.\nW.Va.Code § 20-5A-2 (emphasis supplied).\nThe plaintiffs contend that the proposed in-stream ponds fall within the exception underlined above and, therefore, they are not within the scope of the state NPDES permit program. As further support of this contention, the plaintiffs offer the testimony of an assistant director of DNR, who, during a deposition in another civil action,[11] stated that the impounding of waters of the state would probably remove those waters from the waters of the state by virtue of the exception appearing in the above-stated code section. The plaintiffs also provide a decision of the West Virginia Water Resources Board[12] which indicates that the Board had permitted the temporary de facto removal of a portion of a stream from the waters of the state. The plaintiffs vehemently contend that the State's interpretation of its own laws and regulations controls and that EPA cannot base its objection upon its own interpretation of West Virginia Water Quality Standards. Once EPA has approved the state NPDES programs, contend the plaintiffs, it cannot interject its own interpretations and more stringent policies without first withdrawing its approval of the program pursuant to EPA's regulatory procedures.\nThis contention is unsupported by the statutory scheme of the Clean Water Act, which provides EPA with continuing dominion over state NPDES programs. 33 U.S.C. § 1342(d). Federal-state cooperative programs, such as the NPDES program, characteristically come \"with strings attached.\" In Shell Oil Co. v. Train, 585 F.2d 408 (9th Cir.1978), the Ninth Circuit stated:\nIn the area of the environment, qualifications for federal funding combined with the delegation of operational authority to the states have been tied to state compliance with federal policies and to ongoing federal-state consultations.... The express conditioning of federal aid and the delegation of operational authority to states in compliance with federal guidelines are replete with \"coercion.\" The unquestioned constitutional validity of these programs and other forms of cooperative federalism, secured by the Supreme Court's decisions in such cases as Oklahoma v. Civil Service Commission [citation omitted] and Steward Machine [citation omitted], means that the concept of undue influence and duress are inappropriate in this context.\nId. at 413-14.\nMoreover, when EPA approves a state NPDES program, it suspends the issuance of permits \"as to those navigable waters subject to [the State] program.\" 33 U.S.C. § 1342. Consequently, even if the waters are not covered by the state program, if they are \"waters of the United States,\" EPA retains regulatory and permitting authority over them. Given that EPA voiced its concerns to the State of West Virginia sometime after 1982 and threatened withdrawal of approval, citing the issuance of permits for in-stream treatment as one of its concerns, the court will not pronounce that EPA has overstepped its authority by objecting to in-stream ponds and fills on the basis of violation of West Virginia Water Quality Standards.\n\nF. Administrative Rulemaking\nFinally, the plaintiffs contend that even if EPA has authority to prohibit or regulate in-stream treatment ponds and fills, the 1987 and 1988 policies, relied upon by EPA in objecting to various permits and applications, constitute unlawful rulemaking for failure to comply with rulemaking procedures mandated by the Administrative Procedures Act (hereinafter, \"APA\"), 5 U.S.C. § 551 et seq.\n1292 The APA defines a \"rule\" as \"the whole or part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure or practice requirements of an agency.\" 5 U.S.C. § 551(4). \"Rulemaking\" is defined as \"agency process for formulating, amending, or repealing a rule.\" 5 U.S.C. § 551(5). The APA requires that each agency of the United States publish in the Federal Register all \"substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretation of general applicability formulated and adopted by the agency.\" 5 U.S.C. § 552(a)(1)(D). Generally, before an agency may adopt a rule, it must publish the proposed rule in the Federal Register and allow for public comment. 5 U.S.C. § 553(b). To this requirement of \"notice and comment\" rulemaking, there exist certain exceptions. Except when notice and/or hearings are required by statute, notice and comment are not required for \"interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice.\" 5 U.S.C. § 553(b).\nThe plaintiffs contend that EPA's instream treatment policy is a substantive rule having the force and effect of law. While EPA does not pointedly address this contention, the court concludes from EPA's briefs that it considers the policy to be merely EPA's interpretation of the requirements of the Clean Water Act and of the rules and regulations formally adopted by EPA.\nAn agency rule is considered to be \"interpretive\" rather than \"substantive\" when (1) it is not promulgated pursuant to the legislative power delegated to the agency by Congress to make rules having the force of law, or (2) the agency intends it to be \"no more than an expression of its [own] construction of a statute or rule.\" Chamber of Commerce of the United States v. OSHA, 636 F.2d 464, 468 (D.C.Cir. 1980). While an agency's own characterization is indicative of whether it intended the rule to be \"interpretive\" or \"substantive,\" it is not dispositive. Id. at 468. Rather, the substance of the agency's action is decisive. Id. Interpretive rules merely \"remind[] affected parties of existing duties.\" Id. at 469, quoting Citizens to Save Spencer County v. United States Environmental Protection Agency, 600 F.2d 844, 876 n. 153 (D.C.Cir.1979).\nWhile at first blush EPA's written policy on in-stream treatment may appear to impose new duties upon NPDES applicants, the duties imposed are entirely consistent with the Clean Water Act and EPA's existing regulations. Congress' intent in enacting the Clean Water Act was to eliminate water pollution on a national basis. Quarles Petroleum Co., Inc. v. United States, 213 Ct. Cl. 15, 551 F.2d 1201 (1977). As earlier indicated, EPA regulations require that state-wide anti-degration policies provide protection of existing water uses. 40 C.F.R. § 131.12. The proposed fills and ponds represent a plain disruption and change of the existing use of the streams in which they are located. Thus, the plaintiffs, by being required to comply with EPA's in-stream policy, are required to do no more than abide by existing federal law. Indeed, inasmuch as EPA allows the proposed construction and operations of fills and ponds to go forward provided certain conditions are met, it would appear that EPA has in some measure attempted to be reasonably accommodating in light of the mandates of the Clean Water Act and its own regulations.\nAccordingly, the court finds the EPA's in-stream policy to be an interpretation of the Clean Water Act and existing EPA regulations and, therefore, compliance with the APA's notice and comment requirements is unnecessary under the circumstances.[13]\n*1293 Having found EPA's regulation of the fills and ponds to be proper under the authority vested in EPA by the Clean Water Act, the court need not address EPA's authority to regulate the fills and ponds by virtue of its internal waste stream rule, 40 C.F.R. § 122.46(h), or to prohibit their construction through implementation of its veto power over section 404 permits, 33 U.S.C. § 1344(c).[14]\n\nIII. Conclusion\n\nIn attempting to construct and operate the fills and ponds necessary to carry on mining operations and at the same time comply with all federal and state laws and regulations, the plaintiffs have been confronted with a maze of administrative rules and requirements emanating from three federal agencies (OSM, EPA and the Army Corps of Engineers) and two state agencies (DNR and the Department of Energy) that plaintiffs must satisfy in order to function.\nInasmuch as Congress has mandated that the Army, EPA and OSM meet in order to establish procedures to avoid needless delay and duplication of effort, see, 30 U.S.C. § 1211(c)(6) and (12) [SMRCA], 33 U.S.C. § 1251(f) and 33 U.S.C. § 1344(a) [the Clean Water Act], and, to date, no such procedures have been established, the validity of the plaintiffs' frustration is obvious. Nevertheless, the court does not find that EPA has in any way \"clearly exceeded its authority,\" and, accordingly, it is ORDERED that the plaintiffs' motion for summary judgment be, and the same hereby is, denied.\nHaving determined that EPA has not exceeded its jurisdiction, the court must adhere to Champion and dismiss the action. Champion, 850 F.2d at 186 n. 11. Order shall be entered accordingly.\nNOTES\n[1] Those conditions were set forth as follows:\n\n1. Such facility will be located as close as feasible to the headwaters of the stream.\n2. Placement of dredged or fill material for construction and operation of such facility will be in compliance with any permit issued under Section 404 of the Clean Water Act and applicable State wetland regulations.\n3. Placement of any material for construction and operation of such facility will be consistent with the guidelines issued under the authority of Section 404(b)(1) of the Clean Water Act and 40 CFR 230.10.\n4. The discharge from such facility located in a wet weather stream will be in compliance with applicable effluent guidelines.\n5. Such facility may be located in an intermittent stream only if the discharge from the facility complies with Water Quality Standards, in addition to applicable effluent guidelines.\n6. No such facility or fill material may be located in a perennial stream or wetland, as defined in 40 CFR 230.3.\n7. At the completion of mining and reclamation, settled material in such facility shall be stabilized to prevent migration of the material downstream. This may be accomplished by removal and proper disposal of the material, capping the impoundment or other appropriate measures.\n[2] The 1988 policy provides as follows:\n\nEPA will not object to a proposed instream treatment pond or fill under the following conditions.\n1. If the watershed drainage area above a proposed instream treatment pond or fill is greater than 200 acres, the following conditions must be met:\na(1). Fish or those invertebrates necessary for supporting downstream fish life are not found in the stream segment impacted by the instream facilities, and\n(2). There are not feasible alternative sites for the instream facilities, or\nb(1). Fish or those invertebrates necessary for supporting downstream fish life are found in the stream segment impacted by the instream facilities, and\n(2). The instream facilities do not impact stream segments containing fishable populations, and\n(3). There are no feasible alternative sites for the instream facilities, and\n(4). The loss of aquatic life in the stream segment impacted by the instream facilities will be compensated by the establishment of a permanent aquatic life habitat in that stream or, if not practical, a nearby area. The habitat must support an aquatic community which will be a significant improvement in quality and quantity over the existing aquatic community and will not adversely affect any downstream aquatic community. This mitigation must be included as a condition to the Nationwide Section 404 permit applicable to the proposed instream filling operations.\n2. Timber cutting on the proposed mining area must not begin until after any necessary biological surveys have been provided.\n3. The instream facilities must be located as close as feasible to the mining area and headwaters.\n4. The instream facilities must not be located in a wetland, as defined in 40 CFR Section 230.3.\n5. The instream facilities must be designed and operated to prevent contamination of groundwater and the stream ecosystem during and after cessation of operation.\n6. At completion of mining and reclamation, settled material in any permitted instream treatment pond must be stabilized in accordance with appropriate state and federal migration of the material downstream. This may be accomplished by removal and proper disposal of the material, capping the impoundment or other appropriate measures.\n7. The performance bond must be sufficient to provide adequate reclamation of instream ponds and any associated fills.\n8. Discharges from all instream treatment ponds must comply with applicable state water quality standards at the outfall except for ponds located on very small streams which flow only in direct response to precipitation.\nEPA Draft Policy for Instream Treatment and Filling by the Coal Mining Industry, Defendant's Motion to Extend Time or in the Alternative Response to Plaintiffs' Additional Material, Attachment A at 3-4.\n[3] Specifically, the letter stated:\n\nEPA Region III will remove its objections under the following conditions:\n1. Information must be provided which demonstrates the following:\na. There is no feasible alternative to the location of the sediment pond in a natural watercourse, and\nb. The designated use of aquatic life upstream from the sediment pond in Tom's Branch does not exist and is not attainable due to one of the reasons cited in Sections 4.1.b.1 through 4.1.b.6 of the State Water Quality Standards. The State Water Quality Standards and, therefore, the designated uses of aquatic life, apply to all streams which support aquatic life whose life history requires residency in flowing waters for a continuous period of at least six months. A biological study would be necessary to evaluate the status of aquatic life in this stream.\n2. All point source discharges into Tom's Branch, where aquatic life uses are designated, must comply with applicable federal effluent limitation guidelines and State Water Quality Standards.\n[4] See also Phillip Morris, Inc. v. Block, 755 F.2d 368 (4th Cir.1985), where the Fourth Circuit stated:\n\nIt is a \"long settled rule of judicial administration that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted.\" Myers v. Bethlehem Shipbuilding Corporation, 303 U.S. 41, 50-52, 58 S. Ct. 459, 463-64, 82 L. Ed. 638 (1938); see McKart v. United States, 395 U.S. 185, 193, 89 S. Ct. 1657, 1662, 23 L. Ed. 2d 194 (1969); Eastern Band of Cherokee Indians v. Donovan, 739 F.2d 153, 156 (4th Cir.1984); American Federation of Government Employees, AFL-CIO v. Nimmo, 711 F.2d 28, 31 (4th Cir.1983). This court has noted, however, that judicial intervention is authorized when an agency acts in \"brazen defiance\" of its statutory authorization. Mayor and City Council of Baltimore v. Mathews, 562 F.2d 914, 920 (4th Cir.1977), vacated on other grounds, 571 F.2d 1273 (4th Cir.), cert. denied, 439 U.S. 862, 99 S. Ct. 184, 58 L. Ed. 2d 171 (1978); see Leedom v. Kyne, 358 U.S. 184, 188, 79 S. Ct. 180, 183, 3 L. Ed. 2d 210 (1958).\nId. at 369-70.\n[5] The Army Corps of Engineers has tacked onto its definition an exclusion which is not relevant to the issue before the court.\n[6] In the preamble to the Memorandum of Agreement entered into by the Army and EPA, infra, it was explained that:\n\nThe Army Corps of Engineers' definition of \"fill material\" provides that only those materials discharged for the primary purpose of replacing an aquatic area or of changing the bottom elevation of a waterbody are regulated under the Corps section 404 permit program. These discharges include discharges of pollutants intended to fill a regulated wetland to create fast land for development. The Corps' definition excludes pollutants discharged with the primary purpose to dispose of waste which, under the Corps definition, would be regulated under section 402.\n[7] The agreement was published in the Federal Register at 51 Fed.Reg. 8871 (March 14, 1986). The EPA recently affirmed the agreement as agency policy. See 53 Fed.Reg. 20764 (June 6, 1988).\n[8] EPA has indicated that some of the permit applications at issue indicate that the sediment may be toxic due to the nature of the refuse contained within the fills and thus require treatment. Defendant's Supplemental Response to Plaintiffs' Additional Submission at 4. The plaintiffs do not dispute this contention entirely, although they state that \"the ponds are almost without exception sedimentation or siltation ponds.\" Plaintiffs' Additional Submission at 3.\n[9] Section 301(e) of the Clean Water Act provides that federal effluent limitations shall be applied to \"all point sources of discharge of pollutants.\" 33 U.S.C. § 1311(e). EPA defines \"point source\" as \"any discernible confined, and discrete conveyance, including but not limited to, any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, vessel, or other floating craft for which pollutants are or may be discharged.\" 40 C.F.R. § 122.2 (emphasis supplied).\n\nClearly, EPA contemplates regulating not only conveyance systems which in fact discharge pollutants, but also ones that may discharge pollutants over which EPA has jurisdiction.\n[10] The West Virginia Water Pollution Control Act provides in pertinent part:\n\nIt shall be unlawful for any person, unless he holds a permit therefor from the department, which is in full force and effect, to:\n(1) Allow seepage, industrial wastes or other wastes, or the effluent therefrom, produced by or emanating from any point source, to flow into the waters of this State;\n(2) Make, cause or permit to be made any outlet, or substantially enlarge or add to the load of any existing outlet, for the discharge of waters of this State;\n(3) Acquire, construct, install, modify or operate a disposal system or part thereof for the direct or indirect discharge or deposit of treated or untreated waters of this State, or any extension to or addition to such disposal system.\n[11] State ex rel. Potesta v. Thomas, Civil Action No. 2:88-0329, and Donaldson Mine Co. v. Thomas, Civil Action No. 2:88-0328 (S.D.W.Va.), depositions of Robert K. Parsons taken on April 12, 1988.\n[12] Meade v. DNR, Appeal No. 343, and P & C \"Bituminous Coal,\" Inc. v. DNR, Appeal No. 349 (West Virginia Water Resources Board).\n[13] Although technically the EPA, by virtue of the APA, is required to publish interpretative rules, as well as substantive ones in the Federal Register before it can enforce such rules, 5 U.S.C. § 552(a)(1)(D), the fact that it was not so published is of no legal moment, to the extent persons adversely affected by such interpretive rule have \"actual and timely notice of the terms thereof.\" 5 U.S.C. § 552(a)(1).\n[14] Those measures which are available to EPA have prerequisite procedures and findings to be made by EPA. The record before the court indicates no compliance therewith.\n\n", "ocr": false, "opinion_id": 2596660 } ]	S.D. West Virginia	District Court, S.D. West Virginia	FD	West Virginia, WV
213,741	Chagares, Fuentes, Pollak	2011-03-31	false	hered-llc-v-seneca-insurance	null	Hered LLC v. Seneca Insurance	HERED LLC, Appellant v. SENECA INSURANCE COMPANY, INC.	Bruce J. Phillips, Esq., John P. Rodgers, Esq., Wetzel, Caverly, Shea, Phillips & Rodgers, Wilkes-Barre, PA, for Seneca Insurance Company, Inc., Michelle D. Coburn, Esq., Edward M. Koch, Esq., White & Williams, Philadelphia, PA, Christopher P. Leise, Esq., Nancy L. Siegel, Esq., White & Williams, Cherry Hill, NJ, for Seneca Insurance Company, Inc.	null	null	null	null	null	null	null	Submitted Pursuant to Third Circuit L.A.R. 34.1(a) Jan. 24, 2011.	null	null	0	Unpublished	null	<parties id="b169-7"> HERED LLC, Appellant v. SENECA INSURANCE COMPANY, INC. </parties><br><docketnumber id="b169-9"> No. 10-2026. </docketnumber><br><court id="b169-10"> United States Court of Appeals, Third Circuit. </court><br><otherdate id="b169-11"> Submitted Pursuant to Third Circuit L.A.R. 34.1(a) Jan. 24, 2011. </otherdate><br><decisiondate id="b169-12"> Filed: March 31, 2011. </decisiondate><br><attorneys id="b170-5"> <span citation-index="1" class="star-pagination" label="144"> 144 </span> Bruce J. Phillips, Esq., John P. Rodgers, Esq., Wetzel, Caverly, Shea, Phillips & Rodgers, Wilkes-Barre, PA, for Seneca Insurance Company, Inc. </attorneys><br><attorneys id="b170-6"> Michelle D. Coburn, Esq., Edward M. Koch, Esq., White <em> & </em> Williams, Philadelphia, PA, Christopher P. Leise, Esq., Nancy L. Siegel, Esq., White & Williams, Cherry Hill, NJ, for Seneca Insurance Company, Inc. </attorneys><br><judges id="b170-7"> Before: FUENTES and CHAGARES, Circuit Judges, and POLLAK <a class="footnote" href="#fn" id="fn_ref"> </a> , District Judge. </judges><div class="footnotes"><div class="footnote" id="fn" label=""> <a class="footnote" href="#fn_ref"> </a> <p id="b170-11"> Honorable Louis H. Poliak, Senior District Judge for the U.S. District Court for the Eastern District of Pennsylvania, sitting by designation. </p> </div></div>	[ "420 F. App'x 143" ]	[ { "author_str": "Fuentes", "per_curiam": false, "type": "010combined", "page_count": 15, "download_url": "http://www.ca3.uscourts.gov/opinarch/102026np.pdf", "author_id": null, "opinion_text": " NOT PRECEDENTIAL\n\n UNITED STATES COURT OF APPEALS\n FOR THE THIRD CIRCUIT\n\n\n No. 10-2026\n _____________\n\n HERED LLC,\n Appellant\n\n v.\n\n SENECA INSURANCE COMPANY, INC.\n\n\n\nOn Appeal from the United States District Court for the Middle District of Pennsylvania\n District Court No. 06-cv-00255\n District Judge: The Honorable Thomas I. Vanaskie\n\n\n Submitted Pursuant to Third Circuit L.A.R. 34.1(a)\n January 24, 2011\n\n Before: FUENTES and CHAGARES, Circuit Judges, and POLLAK, District Judge\n\n (Filed: March 31, 2011)\n\n _____________\n\n OPINION\n _____________\n\nFUENTES, Circuit Judge.\n\n Hered LLC is the owner of a 175,000 square foot building that includes a storage\n\nfacility and a convention center located at 601 S. Poplar Street, Hazleton, Pennsylvania.\n\n\nHonorable Louis H. Pollak, Senior District Judge for the U.S. District Court for the Eastern District of\nPennsylvania, sitting by designation.\n\fOn February 5, 2005, a fire occurred at these premises. Hered then filed a claim with its\n\ninsurance provider, Seneca Insurance Company, for approximately $3,462,179. For\n\nnearly a year, the parties disputed the amount of the damages, and on February 2, 2006,\n\nHered filed a two-count complaint in the District Court. Count One alleged that Seneca\n\nbreached the terms of the insurance policy by failing to fully pay out Hered’s claim. In\n\nCount Two, Hered alleged that Seneca’s decision to deny Hered’s full claim was made in\n\nbad faith and sought damages pursuant to 42 Pa. Cons. Stat. Ann. § 8371. On February\n\n16, 2006, Seneca issued a final denial of Hered’s claim, citing three reasons: Hered had\n\nmade misrepresentations during the application process; the automatic sprinkler system\n\nwas not operating at the time of the fire in violation of the Protective Safeguard\n\nEndorsement provision; and the building fire loss claim was grossly, unreasonably and\n\nintentionally overstated. The parties proceeded to trial and on July 23, 2009, a jury found\n\nin favor of Seneca.\n\n On appeal, Hered argues that the District Court erred by: (1) denying Hered’s\n\nmotion for judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50\n\nand motion for a new trial pursuant to Rule 59; (2) inaccurately responding to a jury\n\nquestion; and (3) admitting prejudicial evidence.\n\n I.\n\n Because we write solely for the parties, we will discuss only the facts and\n\nproceedings to the extent necessary for resolution of this case. 1 The issues in this case\n\n\n1\n The District Court had subject matter jurisdiction pursuant to 28 U.S.C. § 1332. We\nhave jurisdiction over this appeal pursuant to 28 U.S.C. § 1291 and § 1294(a).\n 2\n\frelate to Hered’s application for insurance coverage, and thus we begin by setting forth\n\nthose circumstances.\n\n Hered’s first insurance policy was issued by Peerless Insurance Company\n\n(“Peerless”) in March 2004. In October of 2004, Peerless cancelled Hered’s insurance,\n\nciting nonpayment of the premiums and Hered’s failure to update Peerless on repairs to\n\nthe building’s sprinkler system. This led Hered to seek new insurance coverage through\n\nits insurance broker, Collins Insurance, Inc. On November 8, 2004, Collins, on behalf of\n\nHered, submitted an insurance application to W.N. Tuscano Agency, Inc. (“Tuscano”), an\n\ninsurance wholesaler that represented Seneca. Hered’s application for insurance stated\n\nonly that Hered’s prior insurance coverage had been terminated for non-payment. In\n\naddition, Hered left blank the part of the application that inquired about the building’s\n\nsprinkler system. The application was signed by Roger Soler, Hered’s principal. After\n\nreceiving the application, a Tuscano agent spoke with an agent at Collins regarding the\n\nblank portion of the application. The Collins agent informed the Tuscano agent that the\n\nbuilding was “sprinklered.” Tuscano then submitted Hered’s application to Seneca via an\n\nemail stating that the property was “a sprinklered building used as a flea market.”\n\n Seneca responded by sending Tuscano a quote for insurance. The quote stated that\n\nit was conditioned upon the submission of a “NEW & COMPLETE” application and a\n\nsatisfactory inspection. On November 10, 2004, Tuscano submitted that quote to Collins.\n\nOn November 12, 2004, Soler signed and accepted the Seneca quote on behalf of Hered.\n\nSeneca bound coverage as agreed, and issued a policy that was effective as of November\n\n\n\n 3\n\f12, 2004, (Policy No. ESP15001558, providing up to $6.5 million in coverage). On\n\nNovember 29, 2004, Tuscano forwarded a copy of the insurance policy to Collins.\n\nSeneca never asked Hered to complete a new application.\n\n Following Hered’s acceptance of the policy, two inspections of the property were\n\nconducted. The first inspection was undertaken on November 24, 2004, by ISI Insurance\n\nServices on behalf of Hered’s liability carrier, Essex Insurance Company. During the\n\ninspection, Soler represented that an outside company had conducted a flow test of the\n\nsprinkler system within the previous ninety days. Soler also stated that the sprinkler\n\nheads were scheduled to be changed within the next sixty days. The final ISI report\n\ncontained the following information:\n\n There is a dry sprinkler system that protects the entire\n building. There are approximately 1,100 sprinkler heads. All\n sprinkler heads are scheduled to be changed, within the next\n 60 days. An outside company has most recently conducted a\n flow test of the sprinkler system within the past 90 days and\n will continue to do so on an annual basis. The post indicator\n valve of the sprinkler system was not accessible to inspector.\n\nSeneca received the ISI report on January 10, 2005.\n\n On January 21, 2005, the Hered property was inspected by Thomas Czarnowski, a\n\nrepresentative from H & S Technical Services, on behalf of Seneca. The inspection\n\nyielded the following information: (1) tags indicating that the sprinkler system had last\n\nbeen inspected in the 1990s; (2) no pressure in the sprinkler system; and (3) evidence that\n\nthe sprinkler heads had been painted over. When Czarnowski asked Soler, who was\n\npresent, about the absence of pressure in the sprinkler system, Soler stated that the fire\n\nmarshal had recently inspected the building. Czarnowski drafted a report recommending\n\n 4\n\fthat an expert be hired to determine whether the sprinkler system was operational.\n\nSeneca received the H & S report on February 7, 2005.\n\n Also on February 7, 2005, Seneca received a Property Loss Notice from Hered\n\nnotifying it that on February 5, 2005, a fire had damaged the insured property. For\n\nseveral months, the parties disputed the amount and value of the damages. 2 On February\n\n2, 2006, Hered filed a complaint alleging non-payment of the insurance coverage and\n\nasking for damages in excess of $3.4 million.\n\n On February 16, 2006, Seneca denied Hered’s claim in its entirety, demanded\n\nreturn of the advance payments, and asserted that the policy was void ab initio. Seneca\n\nbased its denial of coverage on three reasons: (1) Hered and its representatives made\n\nmisrepresentations during the application process relating to the status of the sprinkler\n\nsystem; (2) the fact that the sprinkler system was not functional at the time of the fire\n\nconstituted a violation of the policy’s Protective Safeguard Endorsement provision and\n\nthus insurance coverage was suspended at the time of the loss; and (3) Hered’s loss claim\n\nwas grossly, unreasonably, and intentionally overstated.\n\n On May 24, 2006, Seneca filed an Answer and Counterclaim. On November 29,\n\n2007, Hered filed a motion for summary judgment. Seneca filed its cross-motion for\n\nsummary judgment the following day. On September 9, 2008, the Magistrate Judge\n\nissued a 73-page report and recommendation. On February 13, 2009, the District Court\n\ndenied Hered’s motion for summary judgment and Seneca’s motion for summary\n\n\n2\n Hered submitted its final claim for damages on October 10, 2005 asking for\n$3,416,179. Seneca estimated that the loss amount was $168,543.\n 5\n\fjudgment was granted with regard to Hered’s allegation of bad faith, but denied in all\n\nother respects.\n\n A jury trial commenced on July 14, 2009. On July 19, 2009, Seneca filed a\n\nmotion for judgment as a matter of law. On July 21, 2009, Hered also filed a motion for\n\njudgment as a matter of law, raising essentially the same arguments contained in its\n\nmotion for summary judgment. The District Court refrained from ruling on the motions\n\nuntil after the close of trial. On July 23, 2009, the jury issued a verdict in favor of\n\nSeneca. The jury found the following: (1) Seneca had proven by clear and convincing\n\nevidence that Hered made material misrepresentations of fact in the process of applying\n\nfor insurance coverage with Seneca and (2) Hered had failed to prove by a preponderance\n\nof the evidence that Seneca waived its right to deny coverage on the basis of material\n\nmisrepresentations in the application process.\n\n A number of post-trial motions were filed. On March 18, 2010, the District Court\n\nheard oral argument on Seneca’s motion to alter judgment pursuant to Rule 59(e) and\n\nHered’s motions for a new trial pursuant to Rule 59 and for judgment as a matter of law\n\npursuant to Rule 50. That same day Judge Vanaskie issued a written order denying both\n\nHered’s motions and Seneca’s motion to amend the judgment. Hered filed this timely\n\nappeal.\n\n II.\n\n A.\n\n We begin with Hered’s appeal from the denial of its motion for judgment as a\n\nmatter of law. Hered argues that the District Court erred in denying this motion, and that\n\n 6\n\fjudgment as a matter of law is appropriate on three grounds: (1) Seneca could not meet\n\nits burden of proof of showing fraud or misrepresentation; (2) Seneca waived its right to\n\nassert the misrepresentation defense by accepting an incomplete application for\n\ninsurance; and (3) Seneca waived its right to rescind the policy pursuant to the policy’s\n\n“Protective Safeguard Endorsement.” We address each of these arguments in turn.\n\n Under Rule 50, judgment as a matter of law is appropriate when:\n\n (1) In General. If a party has been fully heard on an issue\n during a jury trial and the court finds that a reasonable jury\n would not have a legally sufficient evidentiary basis to find\n for the party on that issue, the court may:\n (A) resolve the issue against the party; and\n (B) grant a motion for judgment as a matter of law\n against the party on a claim or defense that, under the\n controlling law, can be maintained or defeated only\n with a favorable finding on that issue.\n\nFed. R. Civ. P. 50. “We exercise plenary review of the grant of a motion for judgment as\n\na matter of law and apply the same standard as the district court.” Wittekamp v. Gulf &\n\nWestern Inc., 991 F.2d 1137, 1141 (3d Cir. 1993). A Rule 50 motion “should be granted\n\nonly if, viewing the evidence in the light most favorable to the nonmoving party, there is\n\nno question of material fact for the jury and any verdict other than the one directed would\n\nbe erroneous under the governing law.” McGreevy v. Stroup, 413 F.3d 359, 364 (3d Cir.\n\n2005) (citing Beck v. City of Pittsburgh, 89 F.3d 966, 971 (3d Cir. 1996)). “[J]udgment\n\nas a matter of law should be granted sparingly.” Ambrose v. Twp. of Robinson, 303 F.3d\n\n488, 492 (3d Cir. 2002) (citations omitted). “[T]he question is not whether there is\n\nliterally no evidence supporting the party against whom the motion is directed but\n\n\n\n 7\n\fwhether there is evidence upon which the jury could properly find a verdict for that\n\nparty.” Id. (citations omitted).\n\n To succeed on its claim of fraud or misrepresentation, Seneca needed to prove, by\n\nclear and convincing evidence, that: (1) Hered made a false statement; (2) the false\n\nstatement was made knowingly or in bad faith; and (3) the subject matter of the statement\n\nwas material to the insurance transaction. Tudor Ins. Co. v. Twp. of Stowe, 697 A.2d\n\n1010, 1016 (Pa. Super. Ct. 1997). Hered submits that there was no testimony or evidence\n\npresented at trial that it made “any verbal or written misrepresentation or false statement\n\nregarding the sprinkler system.” Appellant Br. 24.\n\n Viewing all of the facts in the light most favorable to Seneca, we conclude that the\n\nDistrict Court correctly found that there was sufficient evidence of misrepresentation on\n\nthe part of Hered for the jury to consider the issue. The evidence at trial showed the\n\nfollowing: (1) Hered and its insurance broker, Collins, submitted an incomplete\n\napplication for insurance that failed to answer a question about building protection; (2)\n\nthe application was submitted to Debra Fleming at Tuscano, Seneca’s insurance broker;\n\n(3) after discovering the blank portion of the application, Fleming spoke with an agent at\n\nCollins who informed Fleming that the building was “sprinklered,” App. 1037; 1182; and\n\n(4) in conveying Hered’s insurance application to Seneca, Fleming advised Seneca that\n\nthe building was “non-combustible and sprinklered.” App. 1036. Although there was\n\nsome evidence supporting Hered’s argument that “sprinklered” referred only to a\n\nbuilding containing a sprinkler system, there was also evidence that the term\n\n“sprinklered” is generally understood to refer to an operational sprinkler system. App.\n\n 8\n\f1182-83, 1420-21, 656-58. Thus, Seneca provided sufficient evidence for a reasonable\n\njury to conclude that the statements made by Hered were false.\n\n Seneca also presented evidence dating to Hered’s relationship with its prior\n\ninsurance provider, Peerless, that satisfied the other two elements of this cause of action.\n\nThat evidence consisted of the following: (1) in March of 2004, Soler hired Collins to\n\nobtain insurance coverage; (2) as part of that process, Collins submitted an application\n\nthat contained the number “100” in the box marked “% SPRINK”; (3) Hered’s\n\napplication included Soler’s signature; (4) Peerless discovered that the sprinkler system at\n\nthe Hered building was not operational and thus refused to give Hered credit for a\n\npremium reduction ordinarily available for buildings containing operational sprinkler\n\nsystems; (5) Soler had informed Peerless that it would endeavor to repair the system and\n\nto make it operational by June 22, 2004; and (6) Soler had contracted with G.C. Fire\n\nProtection Systems, Inc., to repair the sprinkler system. Peerless eventually cancelled\n\nSeneca’s insurance policy for failure to pay insurance premiums and failure to update\n\nPeerless on the operability of the sprinkler system. This evidence lends support to\n\nSeneca’s argument that Hered was aware that the sprinkler system did not work when it\n\napplied for insurance and intentionally misrepresented the state of the system in order to\n\nreceive lower insurance premiums from Seneca.\n\n Given this evidence and this Court’s admonition that a Rule 50 motion “should\n\nonly be granted if the record is critically deficient of that minimum quantity of evidence\n\nfrom which a jury might reasonably afford relief,” Raiczyk v. Ocean County Veterinary\n\n\n\n 9\n\fHosp., 377 F.3d 266, 269 (3d Cir. 2004) (internal quotation marks and citation omitted),\n\nwe find that the District Court did not err by denying Hered’s motion.\n\n Hered’s second argument is that judgment as a matter of law should have been\n\ngranted because Seneca waived the right to assert the misrepresentation defense by\n\naccepting an incomplete application and issuing the insurance policy nonetheless. Hered\n\nsubmits that the law bars claims of verbal misrepresentation of the type Seneca asserts\n\nhere because Seneca chose to issue an insurance policy even though the portion of\n\nHered’s insurance application relating to the sprinkler system was incomplete. We are\n\nnot persuaded by this argument. As a general rule, “the question of whether an insurance\n\ncompany has waived its right to rescind a contract or policy is a question of fact.”\n\nMatinchek v. John Alden Life Ins. Co., 93 F.3d 96, 102 n.6 (3d Cir. 1996) (citing cases).\n\nThis is because, “under Pennsylvania law, for an insurer’s failure to rescind to amount to\n\na waiver of the right to rescind, ‘there must be sufficient knowledge disclosed to the\n\ninsurer that there is some falsity in the statement by the insured or something of some\n\nsignificance which would put a reasonably prudent person on notice to make further\n\ninquiry.’” Id. at 102 (citing First Penn, Banking and Trust Co. v. U.S. Life Ins. Co., 421\n\nF.2d 959, 963 (3d Cir. 1969)). In short, the duty to request clarification of an imperfect\n\nanswer exists only “if the [insurance company] was in possession of information warning\n\nit of the falsity of the answers in the application would the duty devolve upon it to make\n\nindependent inquiry or be held bound by the knowledge such inquiry would have\n\ndisclosed.” Franklin Life Ins. Co. v. Bieniek, 312 F.2d 365, 375 (3d Cir. 1972).\n\n\n\n 10\n\f Whether Hered’s assertions regarding the status of the sprinkler system should\n\nhave put Seneca on notice of the falsity of the information in the application was an issue\n\nfor the jury to decide because there was evidence on both sides. Although Hered’s\n\ninsurance application left the sprinkler question blank, Seneca followed up by obtaining\n\nassurance from Hered’s broker that the building was “sprinklered.” There was evidence\n\nthat the term “sprinklered” referred to a functional sprinkler system. Hered submits that\n\nSeneca knew that the sprinkler system was not operational when it received the ISI and\n\nthe H & S reports. Yet the ISI report, the only report Seneca received before the fire,\n\nstated only that a sprinkler system existed and that the sprinkler heads were scheduled to\n\nbe changed within the next 60 days, and that an outside company “recently conducted a\n\nflow test of the sprinkler system in the past 90 days.” Seneca received the H & S report\n\nafter the fire, and thus that report could not have put Seneca on notice that the sprinkler\n\nsystem did not function.\n\n In light of this competing evidence, whether “there [was] sufficient knowledge”\n\nfor Seneca to have waived this argument was an issue properly left to the jury.\n\n Hered’s Rule 50 motion also sought judgment as a matter of law on the ground\n\nthat Seneca waived its right to rescind the policy pursuant to the Protective Safeguard\n\nEndorsement contained in the policy. The “Protective Safeguard Endorsement” provided\n\nas follows:\n\n 1. This insurance will be automatically suspended at the\n involved location if you fail to notify us immediately when\n you:\n 1.1 Know of any suspension or impairment in the\n protective safeguards; or\n\n 11\n\f 1.2 Fail to maintain the protective safeguards over\n which you have control in complete working order.\n\n If a part an Automatic Sprinkler System is shut off due\n to breakage, leakage, freezing conditions or opening of\n sprinkler heads, notification to us will not be necessary\n if you can restore full protection within 48 hours.\n\nThe policy specified that the protective safeguard at issue was an “AUTOMATIC\n\nSPRINKLER SYSTEM.” Seneca denied Hered’s claim for damages on the ground that\n\nHered had failed to inform Seneca that the sprinkler system did not function, and thus the\n\ninsurance policy was not in effect at the time of the fire. Hered argues on appeal, as it did\n\nin the District Court, that the testimony at trial showed that, although Seneca possessed\n\ntwo separate reports informing it that the sprinkler system was inoperable, appellee\n\ncontinued to issue coverage and accept premiums. Therefore, there was no genuine issue\n\nof material fact “for the Jury to decide upon the issue of waiver.” Appellant Br. 28.\n\n Again, we conclude that the District Court correctly denied Hered’s Rule 50\n\nmotion. In this case, both parties offered evidence at trial relating to when Seneca\n\nlearned that the sprinkler system was not operational. Seneca argues that it did not\n\ndefinitely learn that Hered’s sprinkler system did not work until November 9, 2005, while\n\nHered argues that the two reports put Seneca on notice of the problem. Given that the\n\ntestimony and evidence offered by both parties at trial could support either party, the\n\nDistrict Court properly left this issue to the jury.\n\n B.\n\n\n\n\n 12\n\f We now turn to Hered’s argument that the District Court erred in its response to a\n\nquestion asked by the jury during deliberations and that a new trial is required.\n\n During the course of its deliberations, the jury sent the following question to the\n\ncourt: “Please clarify the scope of the application process. Does this include the time\n\nnecessary for an inspection and report and insurer’s consideration?” App. 1682. Hered\n\nargued then, as it does now, that the term “application process” in this question referred\n\nto the language in Seneca’s insurance quote stating the policy was “subject to satisfactory\n\ninspection and complete application.” App. 1682-83. Hered urged the District Court to\n\ninform the jury that the “application process” did not conclude until the two inspections\n\nhad been completed. The court explained that it had used the term “application process”\n\nthroughout the trial to refer to the time before and up to the issuance of the policy, and\n\nrejected Hered’s proposed answer. App. 1683. Instead, the court issued the following\n\nresponse: “In this case, the application process did not include the inspection report and\n\ninsurer’s consideration of that report. The application process concluded with the\n\nissuance of the policy.” App. 1683-84. Hered argues that the District Court’s response\n\nessentially directed the jury not to consider the H & S and ISI inspections as evidence of\n\nSeneca’s waiver, which was relevant to whether Seneca waived its right to deny coverage\n\non the basis of material misrepresentations. Hered made these same complaints at the\n\npost-trial motions hearing, but the District Court rejected Hered’s Rule 59 motion for a\n\nnew trial. We will affirm.\n\n “[W]e review jury instructions for abuse of discretion.” Armstrong v. Burdette\n\nTomlin Memorial Hosp., 438 F.3d 240, 245-46 (3d Cir. 2006) (citing United States v.\n\n 13\n\fMcLaughlin, 386 F.3d 547, 551-52 (3d Cir. 2004)). “However, our review is plenary\n\nwhen the issue is whether the instructions misstated the law.” Armstrong, 438 F.3d at\n\n245 (citing McLaughlin, 386 F.3d at 552). “Harmless errors in parts of a jury charge that\n\ndo not prejudice the complaining party are not sufficient grounds on which to vacate a\n\njudgment and order a new trial.” Id. (citing Watson v. S.E. Pa. Transp. Auth., 207 F.3d\n\n207, 221-22 (3d Cir. 2000).\n\n We must also keep in mind the precepts of a Rule 59 motion. Rule 59 provides for\n\na new trial as follows:\n\n (1) Grounds for New Trial. The court may, on motion, grant a\n new trial on all or some of the issues--and to any party--as\n follows:\n (A) after a jury trial, for any reason for which a new trial has\n heretofore been granted in an action at law in federal court; or\n (B) after a nonjury trial, for any reason for which a rehearing\n has heretofore been granted in a suit in equity in federal court.\n\nFed. R. Civ. P. 59(a). Under Rule 59, a new trial may be granted if “the record shows\n\nthat the jury’s verdict resulted in a miscarriage of justice or where the verdict, on the\n\nrecord, cries out to be overturned or shocks [the court’s] conscience.” Greenleaf v.\n\nGarlock, Inc., 174 F.3d 352, 366 (3d Cir. 1999).\n\n We find that the District Court did not err in giving this instruction and no new\n\ntrial is warranted under Rule 59. In referring to the application process as concluding\n\nwith the issuance of the policy, the District Court was being consistent with how the term\n\nhad been used throughout the trial. The court’s response was also consistent with the\n\nchronology of this case. By its terms, Seneca’s insurance policy became effective on\n\nNovember 12, 2004. To find that the “application process” was not complete until\n\n 14\n\fmonths after Hered started paying premiums and the policy was issued—as Hered\n\nurged—would have been illogical. Thus, the District Court did not err in informing the\n\njury that the “application process” was complete when the policy was issued.\n\n C.\n\n Finally, Hered argues on appeal that the District Court erred in permitting\n\ntestimony about two issues: (1) Hered’s nonpayment of the Peerless insurance policy and\n\n(2) a collateral arbitration proceeding brought against Hered for nonpayment of services\n\nrelating to the repair of the sprinkler system. Hered argues that this testimony was\n\nunfairly prejudicial and that a new trial is required. We have carefully considered the\n\narguments of counsel on these issues and find no abuse of discretion in the court’s\n\nrulings.\n\n III.\n\n For the reasons above, we will affirm the District Court’s order.\n\n\n\n\n 15\n\f", "ocr": false, "opinion_id": 213741 } ]	Third Circuit	Court of Appeals for the Third Circuit	F	USA, Federal
2,163,077	Cobey	1971-02-24	false	mcmillin-v-ventura-savings-loan-assn	McMillin	McMillin v. Ventura Savings & Loan Ass'n	VELMA K. McMILLIN Et Al., Plaintiffs and Appellants, v. VENTURA SAVINGS & LOAN ASSOCIATION Et Al., Defendants and Respondents	Counsel, Thomas M. Dankert for Plaintiffs and Appellants., Loebl, Bringgold & Peck and Bruce D. Bringgold for Defendants and Respondents.	null	null	null	null	null	null	null	null	null	null	1	Published	null	<docketnumber id="b528-4"> [Civ. No. 37029. </docketnumber><court id="AE-"> Second Dist., Div. Three. </court><decisiondate id="AIQ"> Feb. 24, 1971.] </decisiondate><br><parties id="b528-5"> VELMA K. McMILLIN et al., Plaintiffs and Appellants, v. VENTURA SAVINGS & LOAN ASSOCIATION et al., Defendants and Respondents. </parties><br><attorneys id="b529-2"> <span citation-index="1" class="star-pagination" label="589"> *589 </span> Counsel </attorneys><br><attorneys id="b529-3"> Thomas M. Dankert for Plaintiffs and Appellants. </attorneys><br><attorneys id="b529-4"> Loebl, Bringgold & Peck and Bruce D. Bringgold for Defendants and Respondents. </attorneys>	[ "15 Cal. App. 3d 588", "93 Cal. Rptr. 359" ]	[ { "author_str": "Cobey", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 6359, "opinion_text": "\n15 Cal. App. 3d 588 (1971)\n93 Cal. Rptr. 359\nVELMA K. McMILLIN et al., Plaintiffs and Appellants,\nv.\nVENTURA SAVINGS & LOAN ASSOCIATION et al., Defendants and Respondents.\nDocket No. 37029.\nCourt of Appeals of California, Second District, Division Three.\nFebruary 24, 1971.\n*589 COUNSEL\nThomas M. Dankert for Plaintiffs and Appellants.\nLoebl, Bringgold & Peck and Bruce D. Bringgold for Defendants and Respondents.\nOPINION\nCOBEY, Acting P.J.\n(1) This appeal is from a judgment of dismissal of the second cause of action of the second amended complaint made and entered pursuant to Code of Civil Procedure sections 581, subdivision 3 and 581d. The dismissal was made by the court on motion of two of the defendants after their general demurrer to this cause of action against them alone had been sustained with leave to amend and plaintiffs had failed to amend their complaint within the time allowed by the court. There remained pending against these demurring defendants, however, and against another defendant as well the first cause of action of the second amended complaint. There also remained pending against the third defendant alone the third cause of action.\nThis appeal must be dismissed because it has been taken from a nonappealable interlocutory judgment and not from a final judgment. (See Code Civ. Proc., §§ 904, 904.1, subd. (a); Mather v. Mather, 5 Cal. 2d 617, 618 [55 P.2d 74]; Gombos v. Ashe, 158 Cal. App. 2d 517, 520-523 [322 P.2d 933]; Daniels v. Daniels, 136 Cal. App. 2d 224, 227 [288 P.2d 910]; Johnson v. Master Fan Corp., 181 Cal. App. 2d 569, 570, 572 [5 Cal. Rptr. 187].) The judgment under appeal disposed of but one cause of action in a complaint containing three causes of action.\nThe appeal is dismissed.\nSchweitzer, J., and Allport, J., concurred.\n", "ocr": false, "opinion_id": 2163077 } ]	California Court of Appeal	California Court of Appeal	SA	California, CA
529,289	null	1989-09-15	false	manhattan-industries-inc-bayard-shirt-corporation-and-don	null	null	Manhattan Industries, Inc., Bayard Shirt Corporation, and Don Sophisticates, Inc. v. Sweater Bee by Banff, Ltd., and Robert Belsky, Sweater Bee by Banff, Ltd., Contempt-Plaintiff-Appellant v. Manhattan Industries, Inc., Bayard Shirt Corporation, Champpierre, Ltd., Laurence L. Leeds, Jr., Donald Kallman, Robert Hamel, and Fred Feldstein, Contempt-Defendants, Manhattan Industries, Inc., Bayard Shirt Corporation, Donald Kallman, and Robert Hamel, Contempt-Defendants-Appellees	null	null	null	null	null	null	null	null	null	null	null	53	Published	null	null	[ "885 F.2d 1" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/885/885.F2d.1.88-7810.893.html", "author_id": null, "opinion_text": "885 F.2d 1\n 12 U.S.P.Q.2d 1368\n MANHATTAN INDUSTRIES, INC., Bayard Shirt Corporation, andDon Sophisticates, Inc., Plaintiffs,v.SWEATER BEE BY BANFF, LTD., and Robert Belsky, Defendants.SWEATER BEE BY BANFF, LTD., Contempt-Plaintiff-Appellant,v.MANHATTAN INDUSTRIES, INC., Bayard Shirt Corporation,Champpierre, Ltd., Laurence L. Leeds, Jr., DonaldKallman, Robert Hamel, and FredFeldstein, Contempt-Defendants,Manhattan Industries, Inc., Bayard Shirt Corporation, DonaldKallman, and Robert Hamel, Contempt-Defendants-Appellees.\n No. 893, Docket 88-7810.\n United States Court of Appeals,Second Circuit.\n Argued April 4, 1989.Decided Sept. 15, 1989.\n \n Dennis Grossman, New York City (Eileen King, Grossman & King, New York City, of counsel), for contempt-plaintiff-appellant.\n Thomas J. Sweeney, III, New York City (Cynthia A. Feigin, Davis, Markel & Edwards, Paul Fields, McAulay, Fields, Fisher, Goldstein & Nissen, New York City, of counsel), for contempt-defendants-appellees.\n Before LUMBARD, PRATT and MINER, Circuit Judges.\n MINER, Circuit Judge:\n \n \n 1\n This is an appeal from a judgment entered in the United States District Court for the Southern District of New York (Broderick, J.) that approved and adopted a report of a special master finding the Bayard Shirt Corporation (\"Bayard\") in civil contempt of that court's February 27, 1981 consent judgment and injunction (\"consent judgment\"). The finding of contempt was premised on Bayard's failure to use a source reference to distinguish a mark it had adopted in connection with the sale of certain products from the mark adopted by Sweater Bee by Banff, Ltd. (\"Sweater Bee\"). Despite this finding, the district court agreed with the special master that Bayard's conduct was not willful and that Sweater Bee had failed to prove any injury. As a result, the court declined to award an accounting, damages or attorney's fees against Bayard. Also adopted by the district court was the special master's recommendation that Sweater Bee pay one-third of his fees and expenses.\n \n \n 2\n On appeal, Sweater Bee contends that Bayard's conduct was willful as a matter of law, that sanctions may be imposed for non-willful conduct in any event, and that the district court erred in refusing to order an accounting of Bayard's contempt revenues or profits. We hold that Sweater Bee is entitled to the benefit of sanctions for Bayard's continuous violations of the consent judgment notwithstanding the absence of a finding that the violations were willful and the absence of proof that Sweater Bee sustained any lost sales by reason of the violations, and we award an appropriate sanction.\n \n BACKGROUND\n \n 3\n In May 1979, General Mills, Inc. abandoned its \"Kimberly\" trademark for women's apparel. Immediately thereafter, Manhattan Industries, Inc. (\"Manhattan\")--Bayard's corporate parent--and Sweater Bee, both of which manufacture and market women's apparel, claimed the right to use the mark. To enforce its claim, Manhattan commenced an action under section 43(a) of the Lanham Act, 15 U.S.C. Sec. 1125(a) (1982), in the Southern District of New York in October 1979, seeking (i) an accounting of profits derived from Sweater Bee's use of the mark, (ii) damages, (iii) costs and (iv) an injunction to prevent Sweater Bee's continued use of the Kimberly name (\"1979 action\").\n \n \n 4\n Ruling in favor of Manhattan, the district court issued a permanent injunction against Sweater Bee but denied any monetary relief. On appeal, we reversed, finding that both parties had an equal right to use the Kimberly mark and that they could do so concurrently, provided that each party differentiated its mark from that of the other. Manhattan Indus., Inc. v. Sweater Bee By Banff, Ltd., 627 F.2d 628, 631 (2d Cir.1980). Accordingly, we remanded the matter to the district court \"for the fashioning of an appropriate order....\" Id. On remand, the parties entered into a consent order, which on February 27, 1981 was incorporated into a judgment, permitting each party to use the Kimberly mark on all advertising material, brochures, labels, envelopes, business cards and the like in connection with the sale, distribution and advertising of women's apparel, but only when accompanied by a \"source reference\" in close proximity to the Kimberly mark (e.g., \"Kimberly by Sweater Bee\" and \"Kimberly by Bayard\").\n \n \n 5\n On June 26, 1981, Sweater Bee commenced an action against Manhattan (\"1981 action\"), claiming that in the prior trademark action Manhattan had committed fraud and perjury in procuring its concurrent right to use the Kimberly trademark and tradename, and that Manhattan repeatedly had failed to use an appropriate source reference in conjunction with the Kimberly name, in violation of the consent judgment. Later, on March 24, 1982, Sweater Bee filed an amended complaint, asserting causes of action under, inter alia, section 43(a) of the Lanham Act, the antitrust laws, federal common law and state law. On October 19, 1982, the district court granted in part and denied in part a motion by Manhattan to dismiss the amended complaint, see Fed.R.Civ.P. 12(b)(6), noting that Manhattan's failure to use a source reference \"states a claim under Sec. 43(a) of the Lanham Act.\"\n \n \n 6\n Sweater Bee moved for leave to file a second amended complaint in December 1983, to assert, among other things, additional source-reference claims and a claim against Manhattan, Bayard and certain other Manhattan-related entities and individuals for civil contempt of the consent judgment. Sweater Bee moved also for partial summary judgment on the civil contempt claim and for a judgment of criminal contempt.\n \n \n 7\n After hearing oral argument, Judge Broderick on August 23, 1984 granted Sweater Bee's motion to add the additional source-reference claims, denied its motion for partial summary judgment, and held that Sweater Bee's civil contempt claim should proceed under the caption of the 1979 action so that the court could retain jurisdiction over it. He then referred the matter to a special master, who was to conduct discovery and an evidentiary hearing, report to the district court whether there had been a civil contempt of the consent judgment and, if so, determine \"the amount of damages, if any, suffered by [Sweater Bee] as the result of such civil contempt.\" In referring the matter to the special master, the court ordered also that each side pay one-half of the master's fees, \"with the ultimate responsibility for the ... fees to abide the event.\" Finally, the court deferred ruling on Sweater Bee's motion for a judgment of criminal contempt, which, on December 6, 1984, was dismissed upon Sweater Bee's own request.1\n \n \n 8\n Discovery proceedings commenced toward the end of 1984. During discovery, the special master on several occasions noted Sweater Bee's failure to comply with the discovery schedule he had established. Not only was Sweater Bee regularly delinquent in producing documents and complying with the master's discovery orders, but it responded belatedly and inadequately to Manhattan's interrogatories. In fact, the special master cautioned that \"appropriate actions\" might be taken if Sweater Bee continued to cause delay, and observed that the number of times Sweater Bee had not met discovery deadlines \"outnumber[s] the other side in a geometric fashion.\"\n \n \n 9\n Twenty-three days of hearings, between March 14 and October 8, 1985, were held before the special master. On June 27, 1986, the special master filed his report, finding Bayard, but not Manhattan nor any of the other contempt-defendants, in civil contempt of the consent judgment. However, because he determined that Bayard's conduct was not willful and that Sweater Bee had failed to prove any injury, he declined to require an accounting of revenues or profits.\n \n \n 10\n In reaching his decision, the special master reviewed various violations of the terms of the consent judgment, finding repeated omissions of the required source references in clothing labels and hang tags, sales invoices, dealings with salesmen (trade shows, sales order forms, salesmen contracts and business cards), stationary, advertising (\"counter signs,\" co-op newspaper ads and one store catalogue), and New York lobby listings, building directories, and telephone listings. He found that the greater part of Bayard's contemptuous conduct lasted well into 1983, more than two years after the entry of the consent judgment. Further, the master determined that, by and large, Bayard's Kimberly sales invoices lacked source references until the end of July 1982, and that Bayard's New York telephone listing for its Kimberly line and showroom appeared without the required reference until sometime after January 1984, when Bayard finally advised New York Telephone to change the listing.\n \n \n 11\n Equally as important, the special master concluded that Bayard failed to develop and implement a \"thorough, considered ... plan of attack on compliance\" with the consent judgment \"that would have prevented the problems that occurred.\" Although Bayard--principally through Robert Hamel, Executive Vice-President, who was responsible for ensuring compliance with the judgment--instructed its employees and suppliers to use the source reference in connection with all goods sold under the Kimberly name, the master noted that there \"appear[s] to have been little follow-through once initial instructions ... had been given.\"\n \n \n 12\n Despite finding widespread contemptuous conduct, the special master concluded that Bayard's conduct was not willful. For instance, the master found that although 13,000 \"Kimberly Sport\" labels without a source reference were missing from Bayard's inventory and presumably added to Bayard garments, they probably were taken and sewn onto the garments \"mistakenly.\" He found also that while the number of garments shipped with improper labels after August 1982 was \"probably substantial,\" there was no \"intentional, deliberate effort by Bayard to ship garments with the wrong labels or tags.\" As well, he found that even though Bayard retained and continued to use its old sales invoices and hang tags (i.e., those that lacked appropriate source references) after entry of the consent judgment in order to save money, it had ordered a \"by Bayard\" rubber stamp, which it received on February 26, 1981, to mark the old tags and invoices until new ones could be purchased; although the \"rubber stamping\" policy \"was not effectively implemented or supervised,\" Bayard began using (with only five exceptions) \"properly referenced invoices\" in August of 1982.\n \n \n 13\n Additionally, the master determined that there was no evidence that any actual or potential customers of Sweater Bee were or would be confused or deceived by Bayard's misconduct, particularly because of the sophistication of the customers. He found also that there was \"no evidence as to the level of goodwill [Sweater Bee] may have established relating to its Kimberly line or that it experienced any loss of good will [sic] ... due to Bayard's ... conduct.\" He therefore determined that \"there is insufficient basis for one to conclude that any sale by Bayard was at [Sweater Bee's] expense.\"\n \n \n 14\n Consequently, the special master concluded that Sweater Bee had not shown any loss of sales or profits or, for that matter, any other type of pecuniary harm. Absent such proof of injury, the master stated that he could make no award. Moreover, the master concluded that Sweater Bee had failed to satisfy any of the standards necessary to compel an accounting: Sweater Bee failed to prove that it sustained any injury, that Bayard was unjustly enriched or that an accounting was necessary to deter Bayard from violating the consent judgment again.\n \n \n 15\n Pointing to the dilatory behavior of Sweater Bee's counsel throughout discovery, the special master imposed upon Sweater Bee the obligation of paying approximately $30,000, one-third of his expenses and fees, despite having found Bayard in contempt. Finally, in light of his finding that Bayard's conduct had not been willful, the master recommended that attorney's fees not be awarded.\n \n \n 16\n On July 14, 1988, more than two years after the master submitted his report, the district court summarily approved and adopted the special master's report in its entirety. Judgment was entered on August 17, 1988. This appeal timely ensued.\n \n DISCUSSION\n \n 17\n 1. Civil Contempt Sanctions & Attorney's Fees\n \n \n 18\n Having found \"clear and convincing\" proof of violation of the court's 1981 consent judgment, see, e.g., Hart Schaffner & Marx v. Alexander's Dep't Stores, Inc., 341 F.2d 101, 102 (2d Cir.1965) (per curiam), the special master recommended, and rightfully so, that Bayard be held in civil contempt. Not only did Bayard engage in sustained and material violations of the consent judgment for prolonged periods of time, but, as the master recognized, it failed to ensure proper and effective compliance with the terms of that judgment. Bayard simply was not \"reasonably diligent and energetic in attempting to accomplish what was ordered,\" EEOC v. Local 638, 753 F.2d 1172, 1178 (2d Cir.1985) (quoting Powell v. Ward, 643 F.2d 924, 931 (2d Cir.), cert. denied, 454 U.S. 832, 102 S.Ct. 131, 70 L.Ed.2d 111 (1981)), aff'd, 478 U.S. 421, 106 S.Ct. 3019, 92 L.Ed.2d 344 (1986).\n \n \n 19\n Given the substantial violations and Bayard's failure \"to energetically police compliance\" with the consent judgment, 1 J. Gilson, Trademark Protection and Practice Sec. 8.07, at 8-169 (1988), we think that contempt sanctions are particularly appropriate here, and that the special master and the district court erred in concluding that no relief was warranted. That Bayard's conduct may not have been willful does not preclude such an award, since \"sanctions for civil contempt can be imposed without a finding of wilfulness,\" Canterbury Belts Ltd. v. Lane Walker Rudkin, Ltd., 869 F.2d 34, 39 (2d Cir.1989); see McComb v. Jacksonville Paper Co., 336 U.S. 187, 191, 69 S.Ct. 497, 499, 93 L.Ed. 599 (1949).\n \n \n 20\n It is well settled, however, that civil contempt proceedings must be \"remedial and compensatory, and not punitive,\" Sunbeam Corp. v. Golden Rule Appliance Co., 252 F.2d 467, 469 (2d Cir.1958) (citing United States v. United Mine Workers, 330 U.S. 258, 304, 67 S.Ct. 677, 701, 91 L.Ed. 884 (1947)), and any award resulting from such a proceeding should be \"for the benefit of the complainant,\" Gompers v. Buck's Stove & Range Co., 221 U.S. 418, 441, 31 S.Ct. 492, 498, 55 L.Ed. 797 (1911); accord Hicks v. Feiock, 485 U.S. 624, 108 S.Ct. 1423, 1429, 99 L.Ed.2d 721 (1988) (where the relief provided in a contempt proceeding is a fine, \"it is remedial when it is paid to the complainant\"). Bayard argues that sanctions are inappropriate here because Sweater Bee has not demonstrated any injury, and that, consequently, an award of profits necessarily would be punitive.\n \n \n 21\n Monetary sanctions for civil contempt traditionally have been awarded to compensate the plaintiff for injury caused by past noncompliance or to prevent continued disobedience. Perfect Fit Indus., Inc. v. Acme Quilting Co., 673 F.2d 53, 56-57 (2d Cir.), cert. denied, 459 U.S. 832, 103 S.Ct. 73, 74 L.Ed.2d 71 (1982); Vuitton et Fils S.A. v. Carousel Handbags, 592 F.2d 126, 130 (2d Cir.1979). When awarded as a means of compensation, however, a civil contempt fine is not always dependent on a demonstration of \"actual pecuniary loss.\" Leman v. Krentler-Arnold Hinge Last Co., 284 U.S. 448, 455-56, 52 S.Ct. 238, 241-42, 76 L.Ed. 389 (1932) (civil contempt proceeding for violation of injunction in patent infringement suit).\n \n \n 22\n In Leman, the Supreme Court explicitly rejected a position identical to that embraced by Bayard in holding that \"the concept of compensatory relief\" includes profits derived by the contemnor from violation of a court order, id. at 455-57, 52 S.Ct. at 241-42; see United States v. Aberbach, 165 F.2d 713, 715 (2d Cir.1948); John B. Stetson Co. v. Stephen L. Stetson Co., 133 F.2d 129, 130 (2d Cir.1943) (per curiam). Such profits are \"an equivalent or a substitute for legal damages,\" when damages have not been shown, and are recoverable \"not by way of punishment but to insure full compensation to the party injured.\" Leman, 284 U.S. at 456, 52 S.Ct. at 241; accord Sunbeam, 252 F.2d at 470; id. at 471 (Hand, J., concurring); see Connolly v. J.T. Ventures, 851 F.2d 930, 932-34 (7th Cir.1988); see also Oral-B Laboratories, Inc. v. Mi-Lor Corp., 810 F.2d 20, 25-26 (2d Cir.1987) (award of profits permitted on sales made in contempt of preliminary injunction to deter future infringement). Moreover, as this type of award \"goes no further than to give to the plaintiff the profits derived by the defendant's wrongful conduct: it does not take from the defendant assets not related to its wrongful conduct,\" Sunbeam, 252 F.2d at 470; see Connolly, 851 F.2d at 934, it is not punitive, Sunbeam, 252 F.2d at 470.2\n \n \n 23\n Contempt sanctions are to be imposed \"once the plaintiff has proved that he has suffered harm because of a violation of the terms of an injunction,\" Vuitton et Fils S.A., 592 F.2d at 130, but, under a theory of unjust enrichment, a contempt plaintiff is entitled to defendant's profits without submitting direct proof of injury, much less proof that any such injury \"approximated in amount the defendant's profits,\" Monsanto Chem. Co. v. Perfect Fit Products Mfg. Co., 349 F.2d 389, 395 (2d Cir.1965), cert. denied, 383 U.S. 942, 86 S.Ct. 1198, 16 L.Ed.2d 206 (1966); cf. Maier Brewing Co. v. Fleischmann Distilling Corp., 390 F.2d 117, 121-24 (9th Cir.) (unjust enrichment theory of recovery effectuates policies of Lanham Act), cert. denied, 391 U.S. 966, 88 S.Ct. 2037, 20 L.Ed.2d 879 (1968). This is because an award based on the defendant's profits, resting upon principles of unjust enrichment, focuses on the defendant's wrongdoing, not on damage to the plaintiff. See Blue Bell Co. v. Frontier Refining Co., 213 F.2d 354, 363 (10th Cir.1954) (in trademark infringement case, profits award \"predicated upon the equitable principle of unjust enrichment, not the legal theory of provable damages\").\n \n \n 24\n The special master apparently concluded that Sweater Bee did not prove direct injury (which is not to say that no injury existed), that Bayard was not unjustly enriched and, therefore, that Sweater Bee was not entitled to any profits earned by Bayard from sales made in violation of the consent judgment. Based on the record before us, however, \"it seems obvious that there must have been some economic injury to [Sweater Bee],\" such as the loss of goodwill, Monsanto Chem. Co., 349 F.2d at 396. The master did not find to the contrary. He merely found that Sweater Bee had not demonstrated any economic injury.\n \n \n 25\n As to his conclusion regarding unjust enrichment, the special master apparently assumed that both Bayard and Sweater Bee had a concurrent right to use the unmodified Kimberly mark, and that, consequently, Bayard had a right to reap profits from its Kimberly sales. We think that the special master began his analysis with a faulty premise. Neither party possessed the right to use the Kimberly mark standing alone. Instead, each party was permitted to sell Kimberly merchandise only when the Kimberly name was accompanied by a source reference. Thus, Bayard had the right to sell not \"Kimberly\" goods, but \"Kimberly by Bayard\" goods. Under this approach, all of Bayard's profits derived from goods sold without the requisite source reference were unjustly earned.\n \n \n 26\n Accordingly, we hold that Sweater Bee is entitled to those profits derived by Bayard from the unlawful sales of Bayard's Kimberly merchandise--namely, the profits from sales made between February 27, 1981 and January 10, 1984, the period in which Bayard was in civil contempt of the district court's consent judgment. Of course, by \"profits\" we mean net profits, see Murphy Door Bed Co. v. Interior Sleep Systems, Inc., 874 F.2d 95, 103 (2d Cir.1989); W.E. Bassett Co. v. Revlon, Inc., 435 F.2d 656, 665 (2d Cir.1970), and note that the burden is on the contemnor \"to prove any deductions for its costs from the gross revenues attributable to its contempt,\" Oral-B, 810 F.2d at 26; cf. Sheldon v. Metro-Goldwyn Pictures Corp., 106 F.2d 45, 54 (2d Cir.1939) (overhead that does not assist in production of infringing item \"should not be credited to the infringer; that which does, should be\"), aff'd, 309 U.S. 390, 60 S.Ct. 681, 84 L.Ed. 825 (1940).\n \n \n 27\n Before determining an appropriate award based on those profits, however, we pause to comment on the propriety of calculating profits at the appellate level. Though such matters ordinarily are best left to a trial court, we may determine Bayard's unlawful Kimberly net profits here because the record already contains all the evidence necessary to do so. See Chris-Craft Indus., Inc. v. Piper Aircraft Corp., 516 F.2d 172, 186 & n. 16 (2d Cir.1975), rev'd on other grounds, 430 U.S. 1, 97 S.Ct. 926, 51 L.Ed.2d 124 (1977). Such evidence was submitted to the special master, who was charged with responsibility of computing damages in the event that he found Bayard in contempt. This case already has been protracted unduly, and \"[w]e have no doubt that, given the tenacity of both sides, a remand would result in still another appeal....\" Id. at 186. While \"in certain types of cases the failure of the trial court to make necessary findings of fact on the issue of [calculating profits] requires a remand for such findings,\" id. at 186 n. 16, we need not remand this matter since \"the critical evidence is largely documentary\" and the testimony of the experts essentially tracks the written evidence, id.; see Barnes v. Santacroce, 815 F.2d 888, 889 (2d Cir.1987) (per curiam); Mallis v. Bankers Trust Co., 717 F.2d 683, 697-99 & n. 2 (2d Cir.1983) (Newman, J., concurring).\n \n \n 28\n We start, then, for purposes of this case, with Bayard's gross sales in its Kimberly line for the relevant period less discounts; both Sweater Bee and Bayard agree that this amount comes to $2,165,074. From these sales, Bayard bears the burden of demonstrating deductions for costs and expenses: It must prove not only that it has borne the particular cost or expense but also that the cost or expense is attributable to its unlawful sales. See Oral-B, 810 F.2d at 26; W.E. Bassett, 435 F.2d at 665; cf. Louis Vuitton S.A. v. Spencer Handbags Corp., 765 F.2d 966 at 973 (2d Cir.1985). Bayard has sustained its burden as to the costs of goods sold, and the gross profit remaining after that deduction is $786,298.\n \n \n 29\n Next, we consider various enumerated expenses for which Bayard may be entitled to a deduction. As to the sales commissions, returns, samples and markdowns, shipping costs, interest on money borrowed from its corporate parent, and taxes that it claims, we find sufficient support in the record to conclude that Bayard has sustained its burden, see Kamar Int'l, Inc. v. Russ Berrie & Co., 752 F.2d 1326, 1332-33 (9th Cir.1984) (expenses deductible where the contemnor can adequately demonstrate that they \"actually contributed to the production, distribution or sales of the [unlawful] goods\"). Bayard there is entitled to a deduction for these enumerated expenses in the amount of $619,341.\n \n \n 30\n Bayard also seeks to deduct selling expenses, or overhead, totalling $281,730 for the three year period. We are not convinced, however, that Bayard is entitled to the entire deduction claimed for this item. Although Bayard need not prove its overhead expenses and their relationship to the production of the contemptuous goods in \"minute detail,\" Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505, 516 (9th Cir.1985) (citing Sheldon, 106 F.2d at 52), it still must carry its burden of demonstrating a sufficient nexus between each expense claimed and the sales of the unlawful goods. The rationale for this rule is obvious: Because Bayard manufactured the goods that were found to have violated the consent judgment and presumably maintains records of its sales and production, Bayard, and not Sweater Bee, is obliged to produce satisfactory records of, and demonstrate with sufficient particularity, its Kimberly overhead. Bayard, however, has offered grossly inadequate evidence of its Kimberly overhead; the record contains only data pertaining to Bayard's overall selling expenses. For example, Bayard's detailed schedules of fixed expenses for the relevant three year period do not indicate whether and to what extent Bayard's expenses are attributable to its Kimberly production.\n \n \n 31\n Bayard attempts to compensate for this evidentiary shortcoming by estimating its Kimberly overhead as 9.5% of its Kimberly net sales for the 1981 fiscal year, 12.8% for the 1982 fiscal year, and 22.9% for the 1983 fiscal year. These percentages apparently are derived by dividing Bayard's total overhead by its total net sales for all its lines, including Kimberly. There is some support for the proposition that a party may approximate overhead in the absence of reliable data pertaining to actual overhead. See Frank Music, 772 F.2d at 516; Kamar, 752 F.2d at 1333. Bayard, however, has not adequately demonstrated that reliable data are unavailable. Estimates should not be used unless such a showing has been made. See Wilkie v. Santly Bros., 139 F.2d 264, 265 (2d Cir.1943) (in apportioning overhead, there are no \"hard and fast\" rules; profits, however, \"must be determined as fairly and as accurately as the circumstances of the case will permit\"), cert. denied, 322 U.S. 740, 64 S.Ct. 1058, 88 L.Ed. 1574 (1944). Accordingly, based on the record before us, see Chris-Craft, 516 F.2d at 186 & n. 16, we hold that Bayard is not entitled to the overhead expenses deduction that it claims. Nevertheless, because Sweater Bee concedes that Bayard is entitled to a deduction for this category of expenses of $19,758, clearly a reasonable figure, see W.E. Bassett, 435 F.2d at 665, we deduct that amount.\n \n \n 32\n After making the necessary calculations, we conclude that Sweater Bee is entitled to an award representing Bayard's unlawful Kimberly net profits in the amount of $147,199, plus interest calculated as of August 17, 1988, the date of the district court's judgment. See 28 U.S.C. Sec. 1961(a) (1982); Fed.R.App.P. 37. Since the net profits are shown sufficiently in the record, no further accounting is necessary.\n \n \n 33\n As to attorney's fees, courts in this Circuit generally \"award the reasonable costs of prosecuting the contempt, including attorney's fees,\" only where violation of a court order is found to have been willful. Canterbury Belts, 869 F.2d at 39 (quoting Vuitton et Fils S.A., 592 F.2d at 130); W.E. Bassett, 435 F.2d at 664-65 & n. 5; accord Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 718, 87 S.Ct. 1404, 1407, 18 L.Ed.2d 475 (1967). While Bayard's course of conduct over a period of years may have \"demonstrated a callous disregard for the rights of [Sweater Bee] and for the mandates of the federal courts,\" W.E. Bassett, 435 F.2d at 664, the special master and the district court determined that Bayard did not willfully violate the consent judgment. We see no reason to disturb that finding, and therefore decline to award attorney's fees.\n \n 2. The Special Master's Fees & Expenses\n \n 34\n The special master, in imposing on Sweater Bee one-third of his fees and expenses, took into account the \"numerous failures\" of Sweater Bee's counsel \"to meet discovery deadlines\" as well as counsel's \"conduct throughout the proceedings.\" The special master also recognized Manhattan-Bayard's responsibility for some delay in the proceedings, and concluded: \"Bayard should be held responsible for its own conduct, but it should not suffer prejudice because of [Sweater Bee's] counsel's conduct. Nevertheless, the overriding fact is that it was Bayard's failures that brought us here in the first place.\"Certainly the special master was in the best position to judge the nature of both parties' conduct and to apportion his fees and expenses accordingly. We cannot say, therefore, that the district court abused its discretion in approving the apportionment. See Apponi v. Sunshine Biscuits, Inc., 809 F.2d 1210, 1220 (6th Cir.), cert. denied, 484 U.S. 820, 108 S.Ct. 77, 98 L.Ed.2d 40 (1987); Morgan v. Kerrigan, 530 F.2d 401, 427 (1st Cir.), cert. denied, 426 U.S. 935, 96 S.Ct. 2649, 49 L.Ed.2d 386 (1976).\n \n 3. Costs & Sanctions on Appeal\n \n 35\n On appeal, Bayard requests (1) an award of costs, including attorney's fees, for having to defend in this Court the district court's assessment of costs against Sweater Bee; (2) sanctions pursuant to Fed.R.App.P. 38 for Sweater Bee's prosecution of a frivolous appeal regarding the allocation of the special master's fees; and (3) sanctions pursuant to section 38 of the Rules of the Second Circuit because of Sweater Bee's dilatory and improper conduct on this appeal (e.g., four extensions of time to file its brief; motion to file an oversize brief (244 pages) made nine days after the brief was filed; joint appendix filed three weeks late).\n \n \n 36\n We decline to award any such costs or sanctions. Appealing the assessment of the master's fees and expenses hardly was frivolous; Sweater Bee prevailed below on the contempt issue and the district court had ordered that the \"ultimate responsibility\" for the master's fees was to abide the event. Likewise, given the discretionary nature of Second Circuit Rule Sec. 38, Sweater Bee's conduct was neither \"grossly delinquent,\" as Bayard would have us believe, nor sufficiently remiss so as to warrant the imposition of sanctions under that Rule.\n \n CONCLUSION\n \n 37\n The judgment of the district court is reversed to the extent that it declined to award contempt sanctions and the matter is remanded for entry of a judgment in the amount of $147,199, plus interest from August 17, 1988. The judgment is affirmed to the extent that it denied Sweater Bee its attorney's fees and imposed upon Sweater Bee the obligation of paying one-third of the special master's fees and expenses. Bayard's request for costs and sanctions on appeal is denied. In light of our disposition today, we trust that Sweater Bee will withdraw with prejudice its claims in the 1981 action, as it has indicated it would.\n \n \n \n 1\n On November 9, 1984, the Kimberly controversy came before our Court for the second time, but this time in connection with the 1981 action. Sweater Bee By Banff, Ltd. v. Manhattan Indus., Inc., 754 F.2d 457, 460 (2d Cir.), cert. denied, 474 U.S. 819, 106 S.Ct. 68, 88 L.Ed.2d 55 (1985). As the consent judgment provided for arbitration of \"[a]ll disputes under or arising out of this judgment,\" id. at 459 (quoting consent judgment), Manhattan had moved for arbitration of the source-reference claims and a stay of the proceedings pending arbitration. The district court granted the motion in part, and Sweater Bee appealed. On appeal, we were presented only with the issues whether Manhattan had waived its right to arbitration and \"whether the exercise of pendent appellate jurisdiction is appropriate in connection with the denial of Sweater Bee's motion to add civil contempt to the tort theories under which the source-reference allegations were being litigated, the denial of its motion for partial summary judgment as to liability for civil contempt, and the reference of the civil contempt claim to a master.\" Id. at 460. On February 6, 1985, noting the \"neverending supply of arrows from [Sweater Bee's] quiver,\" id. at 465, we held that arbitration had not been waived and declined to exercise pendent appellate jurisdiction over the nonappealable portions of the district court's August 23, 1984 order\n \n \n 2\n Even though Bayard may have \"discontinued\" its business and \"terminated\" all its employees, and Manhattan indicates that it has not used the Kimberly trademark \"for several years,\" we are persuaded that civil relief is warranted here not merely to compensate Sweater Bee, but to ensure compliance with the consent judgment in the future. See Oral-B, 810 F.2d at 25. That such relief will have the added effect of vindicating the court's authority in no way suggests that sanctions awarded to Sweater Bee are punitive and not remedial. See Hicks, 108 S.Ct. at 1431 (\"both civil and criminal [contempt] relief have aspects that can be seen as either remedial or punitive or both\")\n \n \n ", "ocr": false, "opinion_id": 529289 } ]	Second Circuit	Court of Appeals for the Second Circuit	F	USA, Federal
2,671,430	null	2014-04-25	false	billie-jo-crigler-v-darrell-r-bailey	null	Billie Jo Crigler v. Darrell R. Bailey	null	null	Tort, Contract, and Real Property	null	null	null	null	null	null	null	null	null	0	Published	null	null	null	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": 4, "download_url": "http://www.courtswv.gov/supreme-court/memo-decisions/spring2014/13-0604memo.pdf", "author_id": null, "opinion_text": " STATE OF WEST VIRGINIA\n\n SUPREME COURT OF APPEALS\n\n\nBillie Jo Crigler, FILED\nDefendant Below, Petitioner April 25, 2014\n RORY L. PERRY II, CLERK\n SUPREME COURT OF APPEALS\nvs) No. 13-0604 (Pendleton County 11-C-26) OF WEST VIRGINIA\n\n\n\nDarrell R. Bailey, Plaintiff Below and\nSouth Fork Volunteer Fire Department,\nDefendant Below, Respondents\n\n\n MEMORANDUM DECISION\n Petitioner Billie Jo Crigler, by counsel Charles F. Hilton, appeals the order of the Circuit\nCourt of Pendleton County, entered April 24, 2013, that, in part, denied her motion for summary\njudgment. Respondent Darrell R. Bailey appears by counsel Brian E. Bigelow. Respondent South\nFork Volunteer Fire Department appears by counsel Jeffrey W. Molenda and Mikaela D.\nTorbert.\n\n This Court has considered the parties’ briefs and the record on appeal. The facts and legal\narguments are adequately presented, and the decisional process would not be significantly aided\nby oral argument. Upon consideration of the standard of review, the briefs, and the record\npresented, the Court finds no substantial question of law and no prejudicial error. For these\nreasons, a memorandum decision affirming the circuit court’s order is appropriate under Rule 21\nof the Rules of Appellate Procedure.\n\n On appeal, petitioner asserts five assignments of error to the circuit court’s denial of her\nmotion for summary judgment, all related to the court’s declining to apply immunity from\nliability pursuant to West Virginia Code § 29-12A-5(b) after petitioner, a volunteer firefighter,\nwas involved in an automobile accident with Respondent Bailey on a snowy day.1 “‘This Court\n\n\n 1\n West Virginia Code § 29-12A-5(b) provides:\n\n An employee of a political subdivision is immune from liability unless\n one of the following applies;\n\n (1) His or her acts or omissions were manifestly outside the scope of\n employment or official responsibilities;\n\n (2) His or her acts or omissions were with malicious purpose, in bad faith,\n or in a wanton or reckless manner; or\n\n\n 1\n\n\freviews de novo the denial of a motion for summary judgment, where such a ruling is properly\nreviewable by this Court.’ Syl. Pt. 1, Findley v. State Farm Mut. Auto. Ins. Co., 213 W.Va. 80,\n576 S.E.2d 807 (2002).” Syl. Pt. 1, W.Va. Dept. of Health and Human Res. v. Payne, 231 W.Va.\n563, 746 S.E.2d 554 (2013). “‘A circuit court’s denial of summary judgment that is predicated\non qualified immunity is an interlocutory ruling which is subject to immediate appeal under the\n‘collateral order’ doctrine.’ Syl. Pt. 2, Robinson v. Pack, 223 W.Va. 828, 679 S.E.2d 660\n(2009).” Syl. Pt. 2, id. “The ultimate determination of whether qualified or statutory immunity\nbars a civil action is one of law for the court to determine. Therefore, unless there is a bona fide\ndispute as to the foundational or historical facts that underlie the immunity determination, the\nultimate questions of statutory or qualified immunity are ripe for summary disposition.” Syl. Pt.\n1, Hutchison v. City of Huntington, 198 W. Va. 139, 479 S.E.2d 649 (1996). With this standard\nin mind, we begin our review.2\n\n At the core of the circuit court’s order is its finding that there is a dispute about whether\npetitioner was acting within the scope of her “employment” as a volunteer with respondent fire\ndepartment on December 5, 2009, when she collided her 2007 Chevrolet Cobalt with Respondent\nBailey’s 2005 Chevrolet Silverado after crossing the center line while traveling westward on\nU.S. Route 33.3 The circuit court had ordered the parties to engage in a period of discovery on\n\n\n (3) Liability is expressly imposed upon the employee by a provision of\n this code.\n 2\n In the same order that denied petitioner’s motion for summary judgment, the circuit\ncourt also addressed the other parties’ motions for summary judgment. The court denied\nRespondent Bailey’s motion for partial summary judgment on the question of petitioner’s\nnegligence because the initial discovery period had been limited to the questions of immunity,\nthe statute of limitations, and the relationship between petitioner and respondent fire department,\nand discovery had not been conducted on liability. The court also granted respondent fire\ndepartment’s motion, finding plaintiff’s action against respondent fire department, which was\nadded as a party by amended complaint, was barred by the applicable statute of limitations.\nThose conclusions are not before this Court on appeal. Though petitioner does not claim error in\nthe grant of respondent fire department’s motion for summary judgment, respondent fire\ndepartment made an appearance and filed a responsive brief herein. In one assignment of error,\npetitioner contends that she was entitled sanctions because that respondent altered evidence, and\nasks us to find that “[i]t was an abuse of discretion for the trial court to defer ruling on this issue\nthat directly impacted [the] immunity defense.” However, we find that the evidence at issue—the\npossible listing and subsequent covering of petitioner’s name on a log of emergency\nresponders—does not resolve the factual questions that prevent summary judgment, as further\ndescribed in the body of this decision. Furthermore, the lower court deferred ruling on\npetitioner’s motion for sanctions, and there is no final order on that issue before us. We thus\nleave petitioner’s motion for sanctions to the evaluation of the circuit court, and find no error in\nthe deferral.\n 3\n As explained herein, the circuit court’s denial of petitioner’s motion for summary\njudgment on this issue was based on the court’s finding that there is a dispute about whether\npetitioner was acting within the scope of her employment at the time of the collision. For this\n 2\n\n\fthis limited subject.4 Discovery revealed inconsistent information on a key issue: that is, whether\nan emergency dispatch by respondent fire department had triggered her to act in her volunteer\ncapacity.\n\n Petitioner maintained that at the time of the accident, she was responding to an\nemergency dispatch received at 1:51:33 p.m. while she shopped at the H&J Superette. She\ntestified that while traveling toward the accident, she realized that road conditions would not\nallow her car to climb Shenandoah Mountain, and at Brandywine Lake she turned the car away\nfrom the accident scene. The collision with Respondent Bailey’s car occurred when she was\ndriving away. Petitioner’s statement to the trooper conducting the investigation of her accident\nindicated that she had been responding to an emergency notification when she collided with Mr.\nBailey’s automobile. However, the trooper’s report indicated that the accident occurred at 1:35\np.m. and that he made his report at 1:50 p.m. The trooper later testified that these times were a\n“rough guess, at best.”5\n\n In contrast, respondents offered the testimony of petitioner’s ex-husband, William\nCrigler, who also was a volunteer with respondent fire department. He stated that he had been\nwith petitioner at Brandywine Lake immediately before he received the same emergency\ndispatch, and that he received the dispatch while traveling on Route 33, but before reaching the\nH&J Superette. Mr. Crigler concluded that because he had left the meeting with his ex-wife first,\nit would not have been possible for her to reach the H&J Superette, travel toward the scene of the\naccident, and turn around before he received his own dispatch.\n\n Based on this evidence, we agree with the circuit court that there exists a “bona fide\ndispute as to the foundational . . . facts that underlie the immunity determination. . . ” because\nthere is a disagreement about whether petitioner was responding to an emergency dispatch at the\ntime of the accident, and it is therefore not clear whether she was acting in the scope of\nemployment when she collided with Respondent Bailey’s automobile. Syl. Pt. 1, Hutchison. We\nfind that petitioner’s first assignment of error—that the circuit court improperly shifted the\nburden to petitioner to prove that she was within the scope of her employment rather than\nrequiring respondents to prove that she was “manifestly outside” the scope—seeks to make a\ndistinction without a difference for this purpose. Petitioner argues that she was not manifestly\n\n\nreason, we easily dismiss petitioner’s third and fifth assignments of error—that the circuit court\nerred by failing to find petitioner was an employee of respondent fire department and that the\ncircuit court erred because there is no evidence supporting Respondent Bailey’s allegation that\npetitioner’s actions were reckless, wanton, or willful. The circuit court made no findings on these\nissues, nor did it need to do so to support its denial of petitioner’s motion.\n 4\n Pursuant to the court’s order, this time period also was used to conduct discovery related\nto respondent fire department’s challenge to the timeliness of service on it.\n 5\n A dispatcher for respondent fire department testified that he dispatched responders to\ntwo accidents at 1:52 p.m., but he did not know if petitioner’s collision with Respondent Bailey\nwas one of them.\n\n\n 3\n\n\foutside the scope of her employment no matter whether she was traveling to or from an accident\nscene. However, this argument minimizes the testimony of Mr. Crigler, which could lead the\ntrier of fact to conclude that petitioner was en route neither to nor from the scene of an\nemergency at the time of her own accident.6\n\n Petitioner argues in her fourth assignment of error that Mr. Crigler is a disgruntled ex-\nhusband and that his testimony is unbelievable.7 “In assessing the factual record, we must grant\nthe nonmoving party the benefit of inferences, as ‘[c]redibility determinations . . . are jury\nfunctions, not those of a judge[.]’” Williams v. Precision Coil, Inc., 194 W.Va. 52, 59, 459\nS.E.2d 329, 336 (1995) (citing Anderson [v. Liberty Lobby, Inc.], 477 U.S. [242] at 255, 106\nS.Ct. [2505] at 2513, 91 L.Ed.2d [202] at 216 (1986). Furthermore, testimony should be found\ninherently incredible “only when the testimony defies physical laws.” State v. McPherson, 179\nW.Va. 612, 617, 371 S.E.2d 333, 338 (1988). We find no such deficit on the face of Mr.\nCrigler’s testimony, and leave determinations of his credibility in the capable hands of a jury.\n\n For the foregoing reasons, we affirm.\n\n Affirmed.\n\nISSUED: April 25, 2014\n\nCONCURRED IN BY:\n\nJustice Brent D. Benjamin\nJustice Margaret L. Workman\nJustice Menis E. Ketchum\nJustice Allen H. Loughry II\n\nDISSENTING:\n\nChief Justice Robin Jean Davis\n\n\n\n 6\n We note that respondents also presented evidence that there were no reported accidents\nbetween 8:58 a.m. and 1:52 p.m. on the day of the petitioner’s accident. They also presented\nevidence suggesting that the device assigned to petitioner for the purpose of receiving dispatch\nnotification may not have worked on the day of the accident. Thus, we find sufficient basis for\nthe circuit court’s determination that material facts were in dispute.\n 7\n Petitioner’s assertion that Mr. Crigler’s testimony is incredible is based on Mr. Crigler’s\nhaving testified that petitioner’s accident with Respondent Bailey was the accident that appears\nto have been dispatched at 1:51:33 p.m., and that petitioner’s name was initially recorded on the\nlog as a responder because she sat in a vehicle belonging to respondent fire department while\ndepartment members responded to a second call directing them to close the roadway because of\nweather conditions. Petitioner argues that the timeline required for Mr. Crigler’s testimony to be\ntruthful is “fanciful” and an “impossibility.”\n 4\n\n\f", "ocr": false, "opinion_id": 2671430 } ]	West Virginia Supreme Court	West Virginia Supreme Court	S	West Virginia, WV
534,644	Holloway, Tacha, Winder	1990-01-10	false	pacific-enterprises-oil-company-a-california-corporation-v-charles-s	null	Pacific Enterprises Oil Company, a California Corporation v. Charles S. Hertz	PACIFIC ENTERPRISES OIL COMPANY, a California Corporation, Plaintiff-Appellee, v. Charles S. HERTZ, Defendant-Appellant	Stephen H. Glickman (David A. Hicker-son, of Zuckerman, Spaeder, Goldstein, Taylor & Kolker, Washington, D.C., with him on the briefs), of Zuckerman, Spaeder, Goldstein, Taylor & Kolker,' Washington, D.C., for defendant-appellant., Robert C. Hawley (Kathleen M. Kulasza, of Hawley & VanderWerf, Denver, Colo., and William H. Everett, III, Gen. Counsel, Terra Resources, Inc., Tulsa, Okl., with him on the brief), of Hawley & VanderWerf, Denver, Colo., for plaintiff-appellee.	null	null	null	null	null	null	null	null	null	null	1	Published	null	<parties id="b370-11"> PACIFIC ENTERPRISES OIL COMPANY, a California Corporation, Plaintiff-Appellee, v. Charles S. HERTZ, Defendant-Appellant. </parties><br><docketnumber id="b370-14"> No. 88-1765. </docketnumber><br><court id="b370-15"> United States Court of Appeals, Tenth Circuit. </court><br><decisiondate id="b370-17"> Jan. 10, 1990. </decisiondate><br><attorneys id="b371-16"> <span citation-index="1" class="star-pagination" label="281"> 281 </span> Stephen H. Glickman (David A. Hicker-son, of Zuckerman, Spaeder, Goldstein, Taylor & Kolker, Washington, D.C., with him on the briefs), of Zuckerman, Spaeder, Goldstein, Taylor & Kolker,' Washington, D.C., for defendant-appellant. </attorneys><br><attorneys id="b371-17"> Robert C. Hawley (Kathleen M. Kulasza, of Hawley & VanderWerf, Denver, Colo., and William H. Everett, III, Gen. Counsel, Terra Resources, Inc., Tulsa, Okl., with him on the brief), of Hawley & VanderWerf, Denver, Colo., for plaintiff-appellee. </attorneys><br><judges id="b371-18"> Before HOLLOWAY, Chief Judge, TACHA, Circuit Judge, and WINDER, District Judge. <a class="footnote" href="#fn" id="fn_ref"> </a> </judges><div class="footnotes"><div class="footnote" id="fn" label=""> <a class="footnote" href="#fn_ref"> </a> <p id="b371-14"> Honorable David K. Winder, United States District Judge for the District of Utah, sitting by designation. </p> </div></div>	[ "893 F.2d 280" ]	[ { "author_str": "Tacha", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/893/893.F2d.280.88-1765.html", "author_id": null, "opinion_text": "893 F.2d 280\n PACIFIC ENTERPRISES OIL COMPANY, a California Corporation,Plaintiff-Appellee,v.Charles S. HERTZ, Defendant-Appellant.\n No. 88-1765.\n United States Court of Appeals,Tenth Circuit.\n Jan. 10, 1990.\n \n Stephen H. Glickman (David A. Hickerson, of Zuckerman, Spaeder, Goldstein, Taylor & Kolker, Washington, D.C., with him on the briefs), of Zuckerman, Spaeder, Goldstein, Taylor & Kolker, Washington, D.C., for defendant-appellant.\n Robert C. Hawley (Kathleen M. Kulasza, of Hawley & VanderWerf, Denver, Colo., and William H. Everett, III, Gen. Counsel, Terra Resources, Inc., Tulsa, Okl., with him on the brief), of Hawley & VanderWerf, Denver, Colo., for plaintiff-appellee.\n Before HOLLOWAY, Chief Judge, TACHA, Circuit Judge, and WINDER, District Judge.\n TACHA, Circuit Judge.\n \n \n 1\n This is an appeal from the district court's grant of summary judgment in favor of Terra Resources, Inc., which had initiated a declaratory judgment action to determine its rights and obligations under a contract to assign an oil and gas lease. We affirm.\n \n I.\n \n 2\n Defendant Charles S. Hertz, a Pennsylvania resident, applied for an oil and gas lease under section 17 of the Mineral Leasing Act of 1920, 30 U.S.C. Secs. 181-263. The Colorado office of the Bureau of Land Management (\"BLM\") accepted Hertz's application and issued oil and gas lease number C-30483 on July 22, 1981. The lease became effective on August 1, 1981.\n \n \n 3\n On August 21, Hertz entered into a lease assignment agreement with Terra Resources, a Delaware corporation with its principal place of business in Tulsa, Oklahoma.1 1] Under the terms of the lease, Hertz agreed to assign the lease approximately 53 weeks after its effective date. Terra Resources, in turn, agreed to accept assignment of the lease and to pay approximately $700,000 to Hertz. In consideration for making this agreement, Hertz paid Terra Resources $500 on August 21, 1981. The agreement contained no express warranty of marketable title.\n \n \n 4\n On December 3, 1981, several months after the parties entered the agreement to assign the lease, but prior to the date set for actual assignment, the BLM cancelled Hertz's lease. The BLM found that Hertz's original lease application had been defective. Hertz appealed this decision to the Interior Board of Land Appeals (\"IBLA\"), which affirmed the BLM on March 10, 1982.\n \n \n 5\n On August 9, 1982, 53 weeks and one day after the effective date of assignment, Hertz executed an assignment of the lease. On August 13, Terra Resources informed Hertz that it would not accept the attempted lease assignment because Hertz did not have a leasehold title to assign. Terra Resources also stated that it had both actual and constructive notice of the lease's title defect and that it, therefore, failed to qualify for protections extended by law to bona fide purchasers of subsequently cancelled leases. See Bona Fide Purchaser Amendment to the Mineral Leasing Act, 30 U.S.C. Sec. 184(h)(2) [hereinafter \"Bona Fide Purchaser Amendment\" or \"Amendment\"].\n \n \n 6\n Hertz threatened to file suit against Terra Resources for breach of contract. In response, Terra Resources initiated this action in the United States District Court for the District of Colorado, seeking a declaratory judgment under 28 U.S.C. Sec. 2201 to determine its rights and obligations under the lease agreement. Terra Resources filed a motion for summary judgment, and Hertz counterclaimed, requesting damages for Terra Resources' alleged breach of contract. The district court granted Terra Resources' motion for summary judgment and denied Hertz's claim for damages. Hertz filed this appeal.\n \n \n 7\n While this appeal was pending, Hertz also appealed the IBLA's decision to cancel his lease to the United States District Court for the District of Columbia. On March 11, 1986, the district court ruled that the BLM's cancellation of the lease constituted an abuse of discretion. The BLM then vacated part of its earlier decision and reissued the original lease to Hertz. Hertz petitioned the IBLA for a new lease that would extend the term of the original lease five years, so that the lease would expire in 1996. In support of his request, Hertz argued that he could neither assign the lease nor conduct operations for much of the time that litigation was pending in this matter.\n \n \n 8\n Hertz next filed suit against the United States in United States Claims Court, which returned a verdict in Hertz's favor on February 18, 1988. The claims court awarded Hertz $750,000 for the loss of the lease and ordered Hertz to reduce his counterclaim in this action by the same amount.\n \n II.\n \n 9\n Hertz argues that Terra Resources had no legal justification for refusing to perform under the lease agreement because the Bona Fide Purchaser Amendment, 30 U.S.C. Sec. 184(h)(2), shielded Terra Resources from any possible adverse consequences arising from the BLM's cancellation of Hertz's lease. Hertz also contends that this case involves genuine issues of material fact that preclude summary judgment. Terra Resources counters with four arguments: (1) that the district court lacked subject matter jurisdiction over this case because Hertz failed to demonstrate an injury in fact; (2) that Hertz lacks standing to invoke the Bona Fide Purchaser Amendment on behalf of Terra Resources; (3) that Terra Resources does not qualify as a bona fide purchaser under the Bona Fide Purchaser Amendment and therefore lacked protection from any adverse consequences that might have arisen from the BLM's cancellation of Hertz's lease; and (4) that Terra Resources was not required to accept Hertz's assignment because Colorado law requires that the seller convey marketable title.\n \n III.\n \n 10\n We first determine if Hertz has suffered an injury sufficient to establish subject matter jurisdiction over this case. This is a legal question, which we review de novo. Carey v. United States Postal Serv., 812 F.2d 621, 623 (10th Cir.1987). Article III of the United States Constitution limits the judicial power of the federal courts to the resolution of \"cases\" or \"controversies.\" U.S. Const. art. III. A case or controversy does not exist unless a plaintiff can show, at a minimum, that he or she has suffered \"some actual or threatened injury.\" Valley Forge Christian College v. Americans United for Separation of Church & State, Inc., 454 U.S. 464, 472, 102 S. Ct. 752, 758, 70 L. Ed. 2d 700 (1982). Terra Resources argues that Hertz cannot show the requisite injury because the claims court fully compensated Hertz for any injuries resulting from the cancellation of the lease. We disagree.\n \n \n 11\n Hertz seeks $701,669.50, the amount allegedly due under the lease agreement, as well as interest at the rate of eight percent per year. Colorado law permits a claimant to recover eight percent interest from the time a payment is wrongfully withheld to either the date of payment or the date judgment is entered. See Colo.Rev.Stat. Sec. 5-12-102(1)(b) (Supp.1988); Mesa Sand & Gravel Co. v. Landfill, Inc., 776 P.2d 362, 364-66 (Colo.1989) (holding that mere breach of contract is sufficient to trigger the Sec. 5-12-102(1)(b) allowance for recovery of interest on amounts \"wrongfully withheld\"); see also Casto v. Arkansas-Louisiana Gas Co., 562 F.2d 622, 625 (10th Cir.1977) (state law governs the award of prejudgment interest on a state law claim in federal court). If Hertz can show that Terra Resources wrongfully breached the lease agreement, he will be entitled to recover annual interest payments of eight percent of $701,669.50 or approximately $56,000 a year, for the five and a half years between the time of the alleged breach and the date that the court of claims paid Hertz $750,000. The sum of these interest payments would amount to approximately $308,000. Because the sum of $308,000 and $701,669.50 is well in excess of the $750,000 that Hertz has already received, it is clear that Hertz has adequately alleged that he suffers from uncompensated financial injury. We hold that proper subject matter jurisdiction exists over this case.\n \n IV.\n \n 12\n We next address Terra Resources' argument that, even if it did qualify as a bona fide purchaser under the Bona Fide Purchaser Amendment, it still was not required to accept Hertz's assignment because Colorado law implies a warranty of marketable title in a contract to assign an oil and gas lease. We review this question of law de novo. Carey, 812 F.2d at 623. The Colorado Supreme Court has not yet ruled on this issue, so we must predict how that court would decide the question if faced with it. To guide us in this inquiry, we consider all the resources available to us, including Colorado and federal case law, decisions from other jurisdictions, and the weight and trend of authority. Farmers Alliance Mutual Ins. Co. v. Bakke, 619 F.2d 885, 888 (10th Cir.1980).\n \n \n 13\n We first examine any Colorado caselaw that is related to the issues in this case. It is settled law in Colorado that agreements to convey real property, unless they provide otherwise, contain an implied warranty that the conveyance of title will be \"free from lien or encumbrance.\" Micheli v. Taylor, 114 Colo. 258, 159 P.2d 912, 914 (1945) (en banc); see Tilbury v. Osmundson, 143 Colo. 12, 352 P.2d 102, 105 (1960) (purchaser of land is not required to accept title which invites or exposes him to litigation); Heaton v. Nelson, 69 Colo. 320, 194 P. 614 (1920); W.T. Craft Realty Co. v. Livernash, 27 Colo. App. 1, 146 P. 121, 123 (1915) (citing Price v. Immel, 48 Colo. 163, 109 P. 941 (1910)). However, the actual conveyance, unlike the agreement to convey, contains no implied warranty, see Micheli, 159 P.2d at 914, because prior negotiations and agreements to convey merge into the deed, which then determines the rights of the parties, see Reed v. Dudley, 35 Colo. App. 420, 533 P.2d 507, 508 (1975) (citations omitted).\n \n \n 14\n The substantial weight of authority indicates that there is little reason to expect that the Colorado Supreme Court would treat oil and gas leases differently than real property. \"The majority rule in other states holds that a lessee's interest in a gas and oil lease is an interest in real estate. Colorado seems to favor the general rule.\" Hagood v. Heckers, 31 Colo. App. 172, 502 P.2d 961, 963 (1972) (citations omitted); see also Brice v. Pugh, 143 Colo. 508, 354 P.2d 1024 (1960) (per curiam) (treating an oil and gas lease as an interest in real estate for purposes of mortgage recording requirements).\n \n \n 15\n The commentators are in accord that a warranty of marketable title is implied by law in a contract to assign an oil and gas lease, even though no such warranty is implied in the actual assignment. For example, one treatise writer has noted:\n \n \n 16\n with respect to ordinary land transactions, it is well established that in the absence of a specific provision on the subject, it is implied in every executory contract for the sale of land that the vendor must provide merchantable or marketable title. The same is true in the instance of contracts for the execution or assignment of an oil and gas lease.\n \n \n 17\n 2 E. Kuntz, A Treatise on the Law of Oil and Gas Sec. 19.11, at 38 (1989) (footnotes omitted) [hereinafter E. Kuntz]. Another writer has observed:\n \n \n 18\n A contract to assign an oil and gas lease carries with it an implied covenant of quiet enjoyment, although it contains no express warranty.... In an assignment of a lease, on the other hand, as distinguished from a contract to assign, there is no implied warranty of title, where the law as to the conveyance of land is followed.\n \n \n 19\n 2 A. Casner, American Law of Property, Sec. 10.88, at 707 (1952) (footnotes omitted) (citing Sunset Oil Co. v. Whistleman, 77 Colo. 570, 237 P. 1116 (1925), for the proposition that, in contrast to contracts to assign, there is no implied warranty of title in the executed assignment) [hereinafter A. Casner]; see 3 W. Summers, The Law of Oil and Gas Sec. 544, at 524-29 (1958); see also O'Kane v. Walker, 561 F.2d 207, 212 (10th Cir.1977) (effect of absence of warranty of title in executed assignment in the New Mexico oil and gas industry is that no warranty exists).\n \n \n 20\n In Sunset Oil Co. v. Whistleman, 77 Colo. 570, 237 P. 1116 (1925), the Colorado Supreme Court followed the settled trend that no warranty of title should be implied into an assignment of an oil and gas lease. The court rejected the argument that the defendant assignor was liable for a breach of contract due to a failure of title in the oil and gas lease:\n \n \n 21\n there being no covenants of warranty in the assignment between the parties, nor any promise or agreement broken by the defendants, as far as the record discloses: hence no basis for an action. If the parties had so intended, they could have easily inserted such provision in the contract.\n \n \n 22\n Id., 237 P. at 1116.\n \n \n 23\n We interpret the Sunset Oil Co. court's reference to a \"promise or agreement\" to be applicable only to subsequent agreements and not prior unexecuted agreements, such as a contract to assign. Ordinarily, when an assignment is completed, the contract to assign is considered executed and the transaction is merged into the assignment. The parties must then look to the express or implied provisions of the assignment rather than the contract to assign. E. Kuntz Sec. 19.11, at 44-45. Sunset Oil Co. involved an executed assignment. Thus, we read the holding of the case to apply only to actual assignments and subsequent agreements. This interpretation is the only one in accordance with well-settled law. See A. Casner Sec. 10.88, at 707, n. 3 & accompanying text.\n \n \n 24\n We conclude that the contract between Terra Resources and Hertz to assign the oil and gas lease in question contained an implied warranty of marketable title. Because Hertz did not have title in the lease at the time set for performance, we hold that Terra Resources was under no duty to accept the assignment.\n \n \n 25\n Finally, we address Hertz's argument that the district court's grant of summary judgment was inappropriate in this case. Hertz argues that summary judgment was improper because the trial court should have resolved, as a factual matter, whether it can be inferred from the practice of the Colorado oil and gas industry that in \"the absence of an express warranty of marketable title in a contract to purchase a federal oil and gas lease ... no such warranty is to be implied.\" We disagree. Hertz's argument presents no material issue since in the absence of an express warranty of marketable title in an agreement to assign an oil and gas lease, Colorado implies the warranty into the contract, as a matter of law. We conclude that no genuine issue of material fact exists, see Baker v. Penn Mut. Life Ins. Co., 788 F.2d 650, 653 (10th Cir.1986), and that the grant of summary judgment was appropriate.\n \n V.\n \n 26\n We do not reach the other issues raised on appeal and express no opinion as to their proper resolution. The judgment of the district court is AFFIRMED.\n \n \n \n \n Honorable David K. Winder, United States District Judge for the District of Utah, sitting by designation\n \n \n 1\n Terra Resources, Inc., through a statutory merger has been renamed Pacific Enterprises Oil Company, a California corporation\n \n \n ", "ocr": false, "opinion_id": 534644 } ]	Tenth Circuit	Court of Appeals for the Tenth Circuit	F	USA, Federal
249,246	Hutcheson, Tuttle, Wisdom	1959-12-21	false	kenneth-john-berry-v-united-states	null	Kenneth John Berry v. United States	Kenneth John BERRY, Appellant, v. UNITED STATES of America, Appellee	Leonard Moriber, Miami, Fla., for appellant., Lavinia L. Redd, Asst. U. S. Atty., James L. Guilmartin, U. S. Atty., Miami, Fla., for appellee.	null	null	null	null	null	null	null	Rehearing Denied Dec. 21, 1959.	null	null	17	Published	null	<parties data-order="0" data-type="parties" id="b845-9"> Kenneth John BERRY, Appellant, v. UNITED STATES of America, Appellee. </parties><br><docketnumber data-order="1" data-type="docketnumber" id="b845-11"> No. 17751. </docketnumber><br><court data-order="2" data-type="court" id="b845-12"> United States Court of Appeals Fifth Circuit. </court><br><decisiondate data-order="3" data-type="decisiondate" id="b845-13"> Nov. 23, 1959. </decisiondate><br><otherdate data-order="4" data-type="otherdate" id="b845-14"> Rehearing Denied Dec. 21, 1959. </otherdate><br><attorneys data-order="5" data-type="attorneys" id="b846-13"> <span citation-index="1" class="star-pagination" label="776"> *776 </span> Leonard Moriber, Miami, Fla., for appellant. </attorneys><br><attorneys data-order="6" data-type="attorneys" id="b846-14"> Lavinia L. Redd, Asst. U. S. Atty., James L. Guilmartin, U. S. Atty., Miami, Fla., for appellee. </attorneys><br><p data-order="7" data-type="judges" id="b846-15"> Before HUTCHESON, TUTTLE and WISDOM, Circuit Judges. </p>	[ "271 F.2d 775" ]	[ { "author_str": "Hutcheson", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/271/271.F2d.775.17751.html", "author_id": null, "opinion_text": "271 F.2d 775\n Kenneth John BERRY, Appellant,v.UNITED STATES of America, Appellee.\n No. 17751.\n United States Court of Appeals Fifth Circuit.\n Nov. 23, 1959, Rehearing Denied Dec. 21, 1959.\n \n Leonard Moriber, Miami, Fla., for appellant.\n Lavinia L. Redd, Asst. U.S. Atty., James L. Guilmartin, U.S. Atty., Miami, Fla., for appellee.\n Before HUTCHESON, TUTTLE and WISDOM, Circuit Judges.\n HUTCHESON, Circuit Judge.\n \n \n 1\n Appealing from his conviction and sentence on a one count indictment charging him with causing the transportation in interstate commerce of a falsely made and forged security with unlawful and fraudulent intent, knowing the same to have been falsely made and forged, defendant is here urging two specifications of error.\n \n \n 2\n One of these is that a judgment of acquittal should have been, and should be here, directed. The other, in the alternative, is that the judgment should be reversed and the cause remanded because of the admission of evidence, tending to prove the commission of other offenses than the one charged, and the failure to instruct the jury as to the limited purpose and effect of such evidence.\n \n \n 3\n As to the first ground of error, with respect to which the appellant confidently relies on the Hubsch case from this court, Hubsch v. United States, 256 F.2d 820, appellee points out that in that case the instrument was a check on a bank and the defendant, admitting that he had made and signed the instrument, claimed only that in executing it he had not committed forgery because he had signed his own name, though an alias, while here the instrument was a travelers check and the defendant, disputing the testimony of the government's witnesses, denied that he had signed it or had had anything to do with it.\n \n \n 4\n As to the claimed procedural grounds of error, appellee points out that the evidence complained of was in itself admissible as tending to prove knowledge or intent. Ehrlich v. United States, 5 Cir., 238 F.2d 481; Anthony v. United States, 9 Cir., 256 F.2d 50; that the defendant did not object to its admission or request or suggest any limiting instructions; and that it has been held that failure to give such limited instructions is not error. Fowler v. United States, 5 Cir., 242 F.2d 860; Wright v. United States, 4 Cir., 192 F.2d 595.\n \n \n 5\n We find ourselves in complete agreement with these views. The Hubsch case was not intended to, it did not, go beyond the 'true name' doctrine. Marteney v. United States, 10 Cir., 216 F.2d 761; Greathouse v. United States, 4 Cir., 170 F.2d 512; cf. Edge v. United States, 5 Cir., 270 F.2d 837. The uncontradicted testimony in the Hubsch case showed that Hubsch made and passed the instrument in question and that he did not deny this but, on the contrary, freely admitted that he did, and the argument which this court sustained as to one count was; that A. A. Weinstein was his alias, a name by which he was otherwise known and called; and that, without more, the drawing of a check in his own name on a bank in which he had no funds, though it would be a fraud or swindle, was not under the 'true name' doctrine a forgery.\n \n \n 6\n Far from asserting that defense here, appellant testified in his own behalf that he had not possessed or had anything to do with the travelers check in question. He did not at any time testify, nor does he now claim, that he had used as his, or had any connection as an alias with, the name Irving Rubin, appearing on the travelers checks. Besides what is in question here is not an ordinary check but a travelers check which, though it requires for negotiation the signature of the person to whom it is issued, is, when issued and signed by the payee, complete against, and cannot be countermanded by, the issuer. Pines v. United States, 8 Cir., 123 F.2d 825. Such checks are cashed, not upon the credit of the persons negotiating them but upon the credit of the issuer and the correspondence of the endorsement of the negotiator with the signature on the face of the instrument. In the case, therefore, of such instruments, the first negotiator, if not the person to whom the check was issued, is necessarily a forger.\n \n \n 7\n No reversible error attended the trial. The judgment was right and it is affirmed.\n \n ", "ocr": false, "opinion_id": 249246 } ]	Fifth Circuit	Court of Appeals for the Fifth Circuit	F	USA, Federal
372,777	null	1979-10-19	false	united-states-v-shin	Shin	United States v. Shin	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "611 F.2d 375" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/611/611.F2d.375.79-5069.html", "author_id": null, "opinion_text": "611 F.2d 375\n U. S.v.Shin\n No. 79-5069\n United States Court of Appeals, Sixth Circuit\n 10/19/79\n \n 1\n W.D.Tenn.\n \n AFFIRMED\n ", "ocr": false, "opinion_id": 372777 } ]	Sixth Circuit	Court of Appeals for the Sixth Circuit	F	USA, Federal
2,087,117	Judges King, Gaulkin and Gruccio	1988-04-19	false	nogue-v-estate-of-santiago	Nogue	Nogue v. Estate of Santiago	null	null	null	null	null	null	null	null	null	null	null	null	6	Published	null	null	[ "540 A.2d 889", "224 N.J. Super. 383" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n224 N.J. Super. 383 (1988)\n540 A.2d 889\nHECTOR NOGUE, A MINOR, BY HIS PARENT AND NATURAL GUARDIAN, ANGEL L. NOGUE, AND ANGEL L. NOGUE, INDIVIDUALLY, PLAINTIFFS-APPELLANTS,\nv.\nTHE ESTATE OF JOSE R. SANTIAGO, MARIE L. ROBLES, ADMINISTRATRIX, DEFENDANT-RESPONDENT.\nSuperior Court of New Jersey, Appellate Division.\nArgued February 29, 1988.\nDecided April 19, 1988.\n384 Before Judges KING, GAULKIN and GRUCCIO.\nRobert F. Dunlap argued the cause for appellants (Lipman, Antonelli, Batt & Dunlap, P.A., attorneys; William M. Gilson, on the brief).\nWilliam M. Honan argued the cause for respondent (Horn, Kaplan, Goldberg, Gorny & Daniels, attorneys; Alfred J. Durney, on the brief).\nThe opinion of the court was delivered by GAULKIN, J.A.D.\nIn this personal injury action, plaintiffs' complaint was dismissed as barred by a liability finding made in an earlier 385 uninsured motorist (UM) arbitration. Plaintiffs appeal. We reverse.\nPlaintiff Hector Nogue, a passenger in a car operated by his step-brother Jose R. Santiago, was injured when the vehicle went out of control and overturned. Santiago himself died in the accident. Nogue filed with Cigna Companies, Santiago's insurance carrier, a demand for arbitration of his claim for UM benefits on the ground that the Santiago automobile had been \"involved in accident with unknown motor vehicle.\" A similar claim for UM benefits and demand for arbitration was filed on behalf of Santiago. The arbitrations were jointly conducted on January 20, 1987. Counsel for Nogue presented witnesses; counsel for Cigna and the Santiago estate cross-examined Nogue's witnesses, but presented no evidence.\nThe arbitrator subsequently issued his written award, finding that \"a phantom vehicle ... precipitated the accident and left the scene of the accident before anyone could ascertain his license number.\" He concluded that \"based on the evidence presented, I do not find any negligence on the part of the driver [Santiago].\" The arbitrator awarded $5000 as damages to the estate of Santiago and $15,000, the UM policy limit, to Nogue for his personal injuries.\nWhile the arbitration proceedings were pending, Nogue filed this action in the Law Division against the estate of Santiago[1], alleging that Santiago had been negligent in the operation of his car. After the arbitration award was returned, the Santiago estate moved for summary judgment, urging that principles of collateral estoppel and res judicata barred the Nogue claim. The motion was granted and this appeal ensued.\n\nI.\nBoth parties assume, and we agree, that in appropriate circumstances an arbitration award can have a res judicata or 386 collateral estoppel effect in subsequent litigation. See Restatement, Judgments 2d, § 84 (1982); Chattin v. Cape May Greene, Inc., 216 N.J. Super. 618, 634-638 (App.Div. 1987). The question is whether the circumstances here justify precluding Nogue from relitigating Santiago's liability. In traditional legal parlance, that is a question of collateral estoppel rather than res judicata, since it concerns issue preclusion rather than claim preclusion. See Chattin, 216 N.J. Super. at 635.\nWhether a party should be foreclosed from relitigating an issue turns \"on many factors, all of which are considered because they contribute to the greatest good for the greatest number so long as fairness is not sacrificed on that altar.\" Continental Can Co. v. Hudson Foam Latex Prod., 129 N.J. Super. 426, 430 (App.Div. 1974). See also Matter of Coruzzi, 95 N.J. 557, 568 (1984); State v. Gonzalez, 75 N.J. 181 (1977); Allesandra v. Gross, 187 N.J. Super. 96 (App.Div. 1982). In identifying and weighing the relevant factors, the New Jersey courts have largely been guided by the Restatement. See, e.g., Gonzalez, 75 N.J. at 189-190; United Rental Equip. Co. v. Aetna Life & Cas. Ins. Co., 74 N.J. 92, 101 (1977); Allesandra, 187 N.J. Super. at 104-106. We have not yet had occasion, however, to consider the factors which determine the issue-preclusive effect of an arbitration award. Cf. Chattin, 216 N.J. Super. at 635 (claim-preclusion resulting from arbitration award).\nThe Restatement suggests that an arbitration award, like an adjudicative determination of an administrative tribunal, should be issue-preclusive only under certain circumstances. That is because of the special roles and procedures of such non-judicial decisionmakers:\nThe essential question is whether ... an issue is formulated as it would be in a court and decided according to procedures similar to those of a court.... An issue of fact is so formulated when there is assertion and controversion of the occurrence of a legally significant event.... If an issue has thus been formulated, and if the procedure for resolving it is substantially similar to that 387 used in judicial adjudication, the ... determination of the issue should be given preclusive effect in accordance with the rules of res judicata.\nRestatement, Judgments 2d, § 83 Comment b, p. 271.\nSections 83 and 84 of the Restatement thus grant issue-preclusive effect to a \"valid and final\" arbitration award under the same rules applicable to a judgment of a court (see Restatement, Judgments 2d, §§ 27, 28), but \"only insofar as the proceeding resulting in the determination entailed the essential elements of adjudication,\" including:\n(a) Adequate notice to persons who are to be bound by the adjudication....\n(b) The right on behalf of a party to present evidence and legal argument in support of the party's contentions and fair opportunity to rebut evidence and argument by opposing parties;\n(c) A formulation of issues of law and fact in terms of the application of rules with respect to specified parties concerning a specific transaction, situation, or status, or a specific series thereof;\n(d) A rule of finality, specifying a point in the proceeding when presentations are terminated and a final decision is rendered; and\n(e) Such other procedural elements as may be necessary to constitute the proceeding a sufficient means of conclusively determining the matter in question, having regard for the magnitude and complexity of the matter in question, the urgency with which the matter must be resolved, and the opportunity of the parties to obtain evidence and formulate legal contentions.\nRestatement, Judgments 2d, § 83.\nSection 28 of the Restatement, incorporated by reference in sections 83 and 84, provides in relevant part that relitigation of an issue is not precluded where\n(3) A new determination of the issues is warranted by differences in the quality or extensiveness of the procedures followed in the two [forums]....\n* * * * * * * \n(5) There is a clear and convincing need for a new determination of the issue\n...\n(b) because it was not sufficiently foreseeable at the time of the initial action that the issue would arise in the context of a subsequent action, or (c) because the party sought to be precluded, as a result of the conduct of his adversary or other special circumstances, did not have an adequate opportunity or incentive to obtain a full and fair adjudication in the initial action.\nWe are satisfied that, tested by those standards, the arbitrator's comparative negligence finding should not be given preclusive effect in Nogue's liability action.\n\n\n388 II.\nPreliminarily, we reject Nogue's contention that the determination as to Santiago's negligence cannot bind him because the arbitrator did not have jurisdiction to decide that issue in resolving Nogue's UM claim. Nogue relies on Riccio v. Prudential Property & Cas. Ins. Co., 108 N.J. 493 (1987), which holds that where a passenger or other \"innocent claimant\" seeks UM coverage, \"[t]he only liability question before the arbitrator... is the liability in any degree of the uninsured.\" Id. at 498. In response, Santiago relies on Riccio's further holding that where a driver is a UM claimant, as Santiago was before the arbitrator, \"a calculation of the comparative degrees of fault is unquestionably necessary.\" Id. Santiago thus urges that the arbitrator had jurisdiction to determine comparative fault as between him and the phantom and that Nogue can fairly be bound by the determination since his claim was heard and determined jointly with the Santiago claim.\nWhile it might be said that the arbitrator conducted two independent proceedings, each involving different parties and issues, those facts alone do not justify a holding that Nogue must be allowed to litigate the issue of Santiago's liability. The arbitrations were jointly heard in a proceeding to which both Nogue and Santiago were parties; a single award determined both of their claims. Although under their separate submissions Nogue and the Santiago estate were not adversaries to each other, they may be subject to issue preclusion as to issues which were fully and fairly litigated between them as adversaries and were essential to the award. See Restatement, Judgments 2d, § 38.\n\nIII.\nAt the joint arbitration hearing[2], Nogue, represented by counsel, testified that the phantom car cut in front of Santiago 389 as they were proceeding in the same direction along a four-lane undivided highway. Santiago \"swerved over to the oncoming traffic,\" then cut to the right, lost control of the wheel, hit a curb and a sign and turned over. In response to a few questions concerning Santiago's conduct, Nogue said only that Santiago had not been weaving in and out of traffic. Counsel for the Santiago estate did not cross-examine Nogue at all. Counsel for Cigna cross-examined solely as to Nogue's injuries and damages.\nThe only other testimony concerning the happening of the accident came from Zaida Nogue Esteras, another passenger in the car. Called by Nogue's attorney, she corroborated Nogue's description of the occurrence. In response to a few brief questions from Cigna's counsel, Esteras said that Santiago had not been weaving in and out of traffic, was operating his car carefully and had done nothing to cause the accident.\nThat recitation makes evident that Nogue's rights against Santiago were not fully or fairly litigated in the arbitration. The only relevant issue in Nogue's arbitration was the phantom's negligence. Riccio, 108 N.J. at 498. Nogue's counsel did not formulate or project any issue as to Santiago's negligence. No such issue was litigated, in fact, between Nogue and the Santiago estate. Cf. In re Matter of Arbitration Between Grover, 80 N.J. 221, 229 (1979). There is no suggestion in the record that Nogue had any opportunity to prove Santiago's negligence or any notice that the arbitration award might foreclose him from pursuing his pending Law Division action. Indeed, had Nogue been given such opportunity and notice, a simple UM arbitration would have been expanded well beyond its intended scope, \"rais[ing] the stakes [and] actually resulting in more protracted litigation with attendant judicial diseconomies.\" Gonzalez, 75 N.J. at 191.\nWe also note that there was little, if any, incentive for any party to the arbitration to urge or deny Santiago's liability. 390 Nogue's interest was solely to establish negligence of the phantom. The Santiago estate had no interest in exculpating itself from liability to Nogue: the administratrix, Nogue's mother, was represented by personal counsel and had every incentive to bring Nogue within the liability coverage of the Cigna policy. Further, since Cigna provided both UM and liability coverage, its real economic interest may have been to limit its exposure to the UM coverage by establishing that the phantom was solely responsible for the accident.\nIn Restatement terms, then, we find that Nogue did not have adequate notice that he would be bound by the Santiago UM adjudication (Restatement, Judgments 2d § 83(2)(a)), that Nogue was not afforded a right or fair opportunity to contest the issue of Santiago's negligence (id. at § 83(2)(b)), that no issues of law and fact with respect to Santiago's liability to Nogue were formulated (id. at § 83(2)(c)), that it was not foreseeable that the resolution of Santiago's UM claim would be dispositive of Nogue's liability claim (id. at § 28(5)(c)), that Nogue had neither an adequate opportunity or incentive to obtain a full and fair adjudication of Santiago's liability in the arbitration (id. at §§ 28(5)(c), 38) and that the arbitration procedures did not provide a sufficient means for determining Santiago's liability to Nogue (id. at §§ 28(3), 83(2), (3)). In short, the joint UM arbitrations were not intended, structured or conducted to resolve, and thus cannot be said to have fairly determined, the issue of liability between Nogue and Santiago.\nThe order granting summary judgment is reversed. The matter is remanded to the Law Division for further proceedings.\nNOTES\n[1] Maria Robles, administratix of the Santiago estate, is Nogue's mother.\n[2] The record before us includes a full transcript of the hearing.\n\n", "ocr": false, "opinion_id": 2087117 } ]	New Jersey Superior Court App Division	New Jersey Superior Court Appellate Division	SA	New Jersey, NJ
856,964	Per Curiam	2013-04-02	false	richard-ringer-v-joseph-f-john	null	Richard Ringer v. Joseph F. John	Richard RINGER, Defendant Below, Petitioner v. Joseph F. JOHN, Plaintiff Below, Respondent	William C. Brewer, Esq., J. Tyler Slavey, Esq., J. Brandon Shumaker, Esq., Brewer & Giggenbaeh, PLLC, Morgantown, WV, for Petitioner., Peter D. Dinardi, Esq., Morgantown, WV, for Respondent.	null	null	null	null	null	null	null	Submitted Feb. 5, 2013.	null	null	0	Published	null	<citation id="b707-11"> 742 S.E.2d 103 </citation><br><parties id="b707-12"> Richard RINGER, Defendant Below, Petitioner v. Joseph F. JOHN, Plaintiff Below, Respondent. </parties><br><docketnumber id="b707-15"> No. 11-1325. </docketnumber><br><court id="b707-16"> Supreme Court of Appeals of West Virginia. </court><br><otherdate id="b707-17"> Submitted Feb. 5, 2013. </otherdate><br><decisiondate id="b707-18"> Decided April 2, 2013. </decisiondate><br><attorneys id="b708-18"> <span citation-index="1" class="star-pagination" label="688"> *688 </span> William C. Brewer, Esq., J. Tyler Slavey, Esq., J. Brandon Shumaker, Esq., Brewer & Giggenbaeh, PLLC, Morgantown, WV, for Petitioner. </attorneys><br><attorneys id="b708-19"> Peter D. Dinardi, Esq., Morgantown, WV, for Respondent. </attorneys>	[ "230 W. Va. 687", "742 S.E.2d 103" ]	[ { "author_str": "Per Curiam", "per_curiam": false, "type": "010combined", "page_count": 10, "download_url": "http://www.courtswv.gov/supreme-court/docs/spring2013/11-1325.pdf", "author_id": null, "opinion_text": " IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA\n\n\n January 2013 Term\n\n FILED\n\n April 2, 2013\n\n No. 11-1325 released at 3:00 p.m.\n RORY L. PERRY II, CLERK\n SUPREME COURT OF APPEALS\n OF WEST VIRGINIA\n\n\n\n RICHARD RINGER,\n\n Defendant Below, Petitioner\n\n\n v.\n\n\n JOSEPH F. JOHN,\n\n Plaintiff Below, Respondent\n\n\n\n\n Appeal from the Circuit Court of Preston County\n\n Honorable Larry V. Starcher, Special Judge\n\n Civil Action No. 09-C-225\n\n\n REVERSED AND REMANDED\n\n\n\n Submitted: February 5, 2013\n Filed: April 2, 2013\n\n\nWilliam C. Brewer, Esq. Peter D. Dinardi, Esq.\nJ. Tyler Slavey, Esq. Morgantown, West Virginia\nJ. Brandon Shumaker, Esq. Attorney for Respondent\nBrewer & Giggenbach, PLLC\nMorgantown, West Virginia\nAttorneys for Petitioner\n\n\nThe Opinion of the Court was delivered PER CURIAM.\n\f SYLLABUS BY THE COURT\n\n\n\n\n 1. “The standard of review applicable to an appeal from a motion to alter\n\nor amend a judgment, made pursuant to W. Va. R. Civ. P. 59(e), is the same standard that\n\nwould apply to the underlying judgment upon which the motion is based and from which the\n\nappeal to this Court is filed.” Syl. Pt. 1, Wickland v. American Travellers Life Ins. Co., 204\n\nW.Va. 430, 513 S.E.2d 657 (1998).\n\n\n\n 2. “Where the issue on an appeal from the circuit court is clearly a question\n\nof law or involving an interpretation of a statute, we apply a de novo standard of review.”\n\nSyl. Pt. 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995).\n\n\n\n 3. “In an action founded on contract, a claimant is entitled to have the jury\n\ninstructed that interest may be allowed on the principal due, W.Va.Code, 56-6-27 [1923], but\n\nis not entitled to the mandatory award of interest contemplated by W.Va.Code, 56-6-31\n\n[1981], since this statute does not apply where the rule concerning interest is otherwise\n\nprovided by law.” Syl. Pt. 4, Thompson v. Stuckey, 171 W.Va. 483, 300 S.E.2d 295 (1983).\n\fPer Curiam:\n\n\n\n The petitioner and counterclaim plaintiff below, Richard Ringer, appeals a final\n\norder of the Circuit Court of Preston County entered on August 18, 2011, denying his motion\n\nto amend the judgment order in this civil action for breach of contract and unjust enrichment.\n\nIn this appeal, Mr. Ringer contends that the circuit court erred in determining the date of\n\naccrual for pre-judgement interest and also utilized an incorrect prejudgment interest rate.\n\nUpon consideration of the parties’ arguments, the submitted record, and the pertinent\n\nauthorities, the final order is reversed, and this case is remanded for further proceedings\n\nconsistent with this opinion.\n\n\n\n I. Factual and Procedural Background\n\n This case arose out of 2007 verbal agreement entered into by Mr. Ringer and\n\nthe respondent and counterclaim defendant below, Joseph F. John, to construct a subdivision\n\non a parcel of land in Preston County. Mr. John purchased the property for the subdivision\n\nand was going to finance the project. Mr. Ringer, a contractor, was responsible for\n\nconstructing roads and excavating the subject property. Disagreements arose between the\n\nparties, however, and the subdivision was never completed.\n\n\n\n\n 1\n\n\f In 2010, Mr. John filed this civil action against Mr. Ringer asserting that he had\n\nfailed to make payments on an endloader that had been purchased for the project. Mr. John\n\nalleged that he had purchased the endloader to use in excavating the property and that Mr.\n\nRinger agreed to buy it from him by making monthly payments. Mr. John claimed that Mr.\n\nRinger had possession of the endloader and had not made all of the payments that were due.\n\nAfter Mr. John filed suit, Mr. Ringer filed a counterclaim against him for unjust enrichment\n\nbased on the excavation services he performed on the subdivision property.\n\n\n\n The case proceeded to trial in June 2011. The jury returned a verdict in favor\n\nof Mr. John with regard to the endloader. The jury also found in favor of Mr. Ringer with\n\nregard to his counterclaim and awarded him damages. In particular, Mr. Ringer was awarded\n\n$20,000 for stone; $5,000 for excavation services; $100 for a percolation test; $500 for the\n\nearnest money he put towards the purchase of the property; and $16,500 for the storage of\n\ntopsoil for a total of $42,100. Thereafter, the court ruled that Mr. Ringer’s damages were\n\nspecial damages1 pursuant to West Virginia Code § 56-6-31 (2012)2 and that he was entitled\n\nto prejudgment interest at a rate of 7% beginning on the date of accrual which the court\n\ndetermined was August 2, 2010, the date Mr. Ringer filed his counterclaim against Mr. John.\n\n\n 1\n This ruling was never appealed.\n 2\n West Virginia Code § 56-6-31(a) states, in pertinent part: “Special damages include\nlost wages and income, medical expenses, damages to tangible personal property and similar\nout-of-pocket expenditures, as determined by the court.”\n\n 2\n\n\f On July 18, 2011, Mr. Ringer filed a motion to amend the judgment order\n\ncontending that the court had erred in determining the date on which prejudgment interest\n\nbegan to accrue and had utilized an incorrect prejudgment interest rate. Mr. Ringer asserted\n\nthat prejudgment interest begins to accrue on the date that a party first has a right to bring suit\n\nand not from the date that suit is actually filed. Mr. Ringer maintained that he had the right\n\nto bring a cause of action against Mr. John for unjust enrichment as of July 19, 2007, the date\n\nhe last performed work on Mr. John’s property. Mr. Ringer also argued that the applicable\n\ninterest rate should be 9.75%, which was the interest rate for the calendar year of 2007 as\n\nestablished by this Court.3\n\n\n\n\n 3\n West Virginia Code § 56-6-31(b) provides, in pertinent part:\n\n The administrative office of the Supreme Court of Appeals shall\n annually determine the interest rate to be paid upon judgments\n or decrees for the payment of money and shall take appropriate\n measures to promptly notify the courts and members of the West\n Virginia State Bar of the rate of interest in effect for the\n calendar year in question. Once the rate of interest is\n established by a judgment or decree as provided in this section,\n that established rate shall thereafter remain constant for that\n particular judgment or decree, notwithstanding changes in the\n Federal Reserve District discount rate in effect in subsequent\n years.\n\n 3\n\n\f On August 18, 2011, the circuit court4 entered an order denying Mr. Ringer’s\n\nmotion to amend the judgment order.5 This appeal followed.\n\n\n\n II. Standard of Review\n\n “The standard of review applicable to an appeal from a motion to alter or\n\namend a judgment, made pursuant to W. Va. R. Civ. P. 59(e), is the same standard that would\n\napply to the underlying judgment upon which the motion is based and from which the appeal\n\nto this Court is filed.” Syl. Pt. 1, Wickland v. American Travellers Life Ins. Co., 204 W.Va.\n\n430, 513 S.E.2d 657 (1998). In this case, we are asked to resolve questions of law with\n\nregard to the way that prejudgment interest is calculated. Pursuant to syllabus point one of\n\nChrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995), “[w]here the issue\n\non an appeal from the circuit court is clearly a question of law or involving an interpretation\n\nof a statute, we apply a de novo standard of review.” See also State Farm Mut. Auto Ins. Co.\n\nv. Rutherford, 229 W.Va. 73, 726 S.E.2d 41 (2011) (explaining that determining amount of\n\nprejudgment interest on judgment is question of law requiring de novo review). With this\n\nstandard in mind, we consider the issues presented in this case.\n\n\n 4\n This case was tried before the Honorable Lawrance S. Miller, Jr., Judge of the Circuit\nCourt of Preston County, but the post-trial motions were ruled upon by the Honorable Larry\nV. Starcher, sitting as a Special Judge in this matter.\n 5\n In the same order, the court denied Mr. John’s Motion for a New Trial and granted,\nin part, and denied, in part, Mr. John’s Motion for Stay of Execution/Ruling on Topsoil. Mr.\nJohn did not appeal those rulings.\n\n 4\n\n\f III. Discussion\n\n In this case, we are asked to determine whether the trial court properly awarded\n\nprejudgment interest. The trial court found that Mr. Ringer was entitled to prejudgment\n\ninterest on his award of damages for his unjust enrichment claim pursuant to West Virginia\n\nCode § 56-6-31(a), which provides, in pertinent part:\n\n Except where it is otherwise provided by law, every\n judgment or decree for the payment of money, whether in an\n action sounding in tort, contract or otherwise, entered by any\n court of this State shall bear interest from the date thereof,\n whether it be so stated in the judgment or decree or not:\n Provided, That if the judgment or decree, or any part thereof, is\n for special damages, as defined below, or for liquidated\n damages, the amount of special or liquidated damages shall bear\n interest at the rate in effect for the calendar year in which the\n right to bring the same shall have accrued, as determined by the\n court and that established rate shall remain constant from that\n date until the date of the judgment or decree, notwithstanding\n changes in the federal reserve district discount rate in effect in\n subsequent years prior to the date of the judgment or decree.\n\nAs discussed above, Mr. Ringer asserts that the trial court erred by finding that prejudgement\n\ninterest began to accrue on the date he filed his counterclaim against Mr. John and,\n\nconsequently, applied an incorrect prejudgment interest rate.\n\n\n\n Upon review of the submitted record, we find that the trial court erred by\n\napplying West Virginia Code § 56-6-31 in the first instance. The record reflects that this case\n\nwas prosecuted as a breach of contract. While Mr. Ringer’s counterclaim was framed in\n\nterms of unjust enrichment, it is, nonetheless, an action founded on contract. See Realmark\n\n 5\n\n\fDevelopments, Inc. v. Ranson, 214 W.Va. 161, 164, 588 S.E.2d 150, 153 (2003) (explaining\n\nthat unjust enrichment, sometimes referred to as restitution, is a contract implied in law or\n\na quasi-contract). West Virginia Code § 56-6-27 (2012), rather than West Virginia Code §\n\n56-6-31, provides for prejudgment interest in actions founded on contract. In that regard, this\n\nCourt has previously held:\n\n In an action founded on contract, a claimant is entitled to\n have the jury instructed that interest may be allowed on the\n principal due, W.Va.Code, 56-6-27 [1923], but is not entitled to\n the mandatory award of interest contemplated by W.Va.Code,\n 56-6-31 [1981], since this statute does not apply where the rule\n concerning interest is otherwise provided by law.\n\nSyl. Pt. 4, Thompson v. Stuckey, 171 W.Va. 483, 300 S.E.2d 295 (1983). West Virginia Code\n\n§ 56-6-27 states:\n\n The jury, in any action founded on contract, may allow\n interest on the principal due, or any part thereof, and in all cases\n they shall find the aggregate of principal and interest due at the\n time of the trial, after allowing all proper credits, payments and\n sets-off; and judgment shall be entered for such aggregate with\n interest from the date of the verdict.\n\n\n In Stuckey, the plaintiff was hired by a landowner to prepare a plot of land as\n\na mine site. The plaintiff undertook the work on the basis of an oral promise from the land\n\nowner to pay him $1200 per month plus a bonus of ten cents per ton of coal mined once the\n\nmine became operational. In the event the mine was sold, the landowner promised that the\n\nplaintiff would receive a minimum of $100,000. The plaintiff was paid regularly for his\n\nwork at the monthly rate, but the mine was sold before production started. When the plaintiff\n\n 6\n\n\fdid not receive his $100,000 bonus, he filed suit against the landowner. The plaintiff was\n\nsuccessful at trial and the defendant landowner filed an appeal. The plaintiff cross-assigned\n\nas error the trial court’s refusal to instruct the jury that it could award prejudgment interest.\n\nIn finding that the trial court had erred in that regard, this Court explained:\n\n W.Va.Code, 56-6-27 [1923] provides that “[t]he jury, in any\n action founded on contract, may allow interest on the principal\n due. . .”, and W.Va.Code, 56-6-31 [1981] provides that “[e]xcept\n where it is otherwise provided by law, every judgment or decree\n for payment of money entered by any court of this State shall\n bear interest from the date thereof. . . : Provided, that if the\n judgment or decree, or any part thereof, is for special or\n liquidated damages, the amount of such liquidated changes shall\n bear interest from the date the right to bring the same shall have\n accrued. . . .” Since this action was “founded on contract,” we\n consider Code, 56-6-27 [1923] to apply to the matter of\n prejudgment interest, and not Code, 56-6-31 [1981], which by\n its own terms only applies where the rule concerning interest is\n not otherwise provided by law.6\n\n171 W.Va. at 488, 300 S.E.2d at 300 (footnote added); see also CMC Enterprise, Inc. v. Ken\n\nLowe Mgmt. Co., 206 W.Va. 414, 418, 525 S.E.2d 295, 299 (1999) (explaining that West\n\nVirginia Code § 56-6-27 is the general authority for awarding prejudgment interest in\n\ncontract actions); City Nat’l Bank of Charleston v. Wells, 181 W.Va. 763, 778, 384 S.E.2d\n\n\n\n\n 6\n When this Court decided Stuckey, West Virginia Code § 56-6-31 did not include the\nlanguage “whether in an action sounding in tort, contract or otherwise.” This language was\nadded when the statute was amended in 2006. Despite the insertion of this language, the\nphrase “[e]xcept where it is otherwise provided by law” was retained. Accordingly, we do\nnot find that this statutory amendment provides any basis to revisit our holding in Stuckey.\n\n 7\n\n\f374, 389 (1989) (observing that W.Va.Code 56-6-31 does not specifically apply to contract\n\nactions).\n\n\n\n Having found that the trial court erred by awarding Mr. Ringer prejudgment\n\ninterest pursuant to West Virginia Code § 56-6-31, instead of allowing the jury to determine\n\nwhether an award of prejudgment interest was warranted as provided by West Virginia Code\n\n§ 56-6-27, we reverse the final order of the circuit court to the extent it denied Mr. Ringer’s\n\nmotion to amend the judgment order. We further remand this case for reconsideration of the\n\namount of prejudgment interest owed to Mr. Ringer in accordance with West Virginia Code\n\n§ 56-6-27.7\n\n\n\n IV. Conclusion\n\n For the reasons set forth above, the final order of the Circuit Court of Preston\n\nCounty entered on August 18, 2011, is reversed insofar as it denied Mr. Ringer’s motion to\n\namend the judgment order, and this case is remanded to the circuit court for further\n\nproceedings consistent with this opinion.\n\n Reversed and remanded.\n\n\n\n 7\n Because we have determined that West Virginia Code § 56-6-27 applies to this case,\nit is unnecessary to address Mr. Ringer’s second assignment of error, which related to the\ninterest rate applicable to prejudgment interest awarded pursuant West Virginia Code § 56-6\n31.\n\n 8\n\f", "ocr": false, "opinion_id": 856964 } ]	West Virginia Supreme Court	West Virginia Supreme Court	S	West Virginia, WV
2,391,930	Flannery	1982-01-28	false	arrington-v-national-broadcasting-co-inc	Arrington	Arrington v. National Broadcasting Co., Inc.	Percy L. ARRINGTON, Et Al., Plaintiffs, v. NATIONAL BROADCASTING COMPANY, INC., Defendant and Third-Party Plaintiff, v. NATIONAL ASSOCIATION OF BROADCAST ENGINEERS AND TECHNICIANS, AFL-CIO, Third-Party Defendant; Douglas H. ALLMOND, Et Al., Plaintiffs, v. AMERICAN BROADCASTING COMPANY, INC., Defendant	Lawrence S. Lapidus, Lawrence J. Sherman, Sherman & Lapidus, Washington, D. C., for plaintiffs., Stuart M. Gerson, Judah Lifschitz, Epstein, Becker, Borsody & Green, Washington, D. C., for defendant in No. 81-2018., Donald W. Savelson, Proskauer, Rose, Goetz & Mendelsohn, Washington, D. C., for defendant in No. 81-2019.	null	null	null	null	null	null	null	null	null	null	12	Published	null	<parties id="b558-12"> Percy L. ARRINGTON, et al., Plaintiffs, v. NATIONAL BROADCASTING COMPANY, INC., Defendant and Third-Party Plaintiff, v. NATIONAL ASSOCIATION OF BROADCAST ENGINEERS AND TECHNICIANS, AFL-CIO, Third-Party Defendant. Douglas H. ALLMOND, et al., Plaintiffs, v. AMERICAN BROADCASTING COMPANY, INC., Defendant. </parties><br><docketnumber id="b558-18"> Civ. A. Nos. 81-2019, 81-2018. </docketnumber><br><court id="b558-19"> United States District Court, District of Columbia. </court><br><decisiondate id="b558-20"> Jan. 28, 1982. </decisiondate><br><attorneys id="b559-16"> <span citation-index="1" class="star-pagination" label="499"> *499 </span> Lawrence S. Lapidus, Lawrence J. Sherman, Sherman & Lapidus, Washington, D. C., for plaintiffs. </attorneys><br><attorneys id="b559-17"> Stuart M. Gerson, Judah Lifschitz, Epstein, Becker, Borsody & Green, Washington, D. C., for defendant in No. 81-2018. </attorneys><br><attorneys id="b559-18"> Donald W. Savelson, Proskauer, Rose, Goetz & Mendelsohn, Washington, D. C., for defendant in No. 81-2019. </attorneys>	[ "531 F. Supp. 498" ]	[ { "author_str": "Flannery", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 1075, "opinion_text": "\n531 F. Supp. 498 (1982)\nPercy L. ARRINGTON, et al., Plaintiffs,\nv.\nNATIONAL BROADCASTING COMPANY, INC., Defendant and Third-Party Plaintiff,\nv.\nNATIONAL ASSOCIATION OF BROADCAST ENGINEERS AND TECHNICIANS, AFL-CIO, Third-Party Defendant.\nDouglas H. ALLMOND, et al., Plaintiffs,\nv.\nAMERICAN BROADCASTING COMPANY, INC., Defendant.\nCiv. A. Nos. 81-2019, 81-2018.\nUnited States District Court, District of Columbia.\nJanuary 28, 1982.\n499 Lawrence S. Lapidus, Lawrence J. Sherman, Sherman & Lapidus, Washington, D. C., for plaintiffs.\nStuart M. Gerson, Judah Lifschitz, Epstein, Becker, Borsody & Green, Washington, D. C., for defendant in No. 81-2018.\nDonald W. Savelson, Proskauer, Rose, Goetz & Mendelsohn, Washington, D. C., for defendant in No. 81-2019.\n\nMEMORANDUM OPINION\nFLANNERY, District Judge.\nThis matter comes before the court on defendants' motions for summary judgment or, in the alternative, disqualification of plaintiffs' counsel. Defendants assert three grounds in support of their motions: 1) that the instant litigation is, in effect, being 500 brought by plaintiffs' union, NABET, and as such is barred by section 5 of the Portal-to-Portal Act, 2) that this Fair Labor Standards Act (hereinafter FLSA) suit for overtime wages should be dismissed because it is pre-empted by the collective bargaining agreement between plaintiffs' union and defendants, and 3) that, in any event, plaintiffs' counsel must be disqualified because of conflicts of interest and professional disciplinary rules violations created by their representation of plaintiffs in this case. In response, plaintiffs maintain: 1) that this suit is being brought by individual employees not by their union; 2) that plaintiffs' FLSA rights cannot in any way be pre-empted by the instant collective bargaining agreement, and 3) that there are no conflict of interest and/or disciplinary rule problems preventing them from representing plaintiffs in this case. For the reasons discussed below, defendants' motions are denied.\n\nFACTS\nPlaintiffs, broadcast engineers at both the American Broadcasting Company and the National Broadcasting Company (hereinafter \"ABC\" and \"NBC\"), bring this action under the FLSA primarily seeking an award of unpaid overtime compensation.[1] Plaintiffs claim that they are entitled to such an award because defendants' rate of compensating them for overseas work violates the FLSA. Plaintiffs bring this action under section 16(b) of the FLSA, 29 U.S.C. § 216(b), which allows employees to bring both individual and group suits for FLSA violations. In order to bring a group suit, the only prerequisite is that all party plaintiffs must file \"consent[s] in writing\" to be plaintiffs;[2] the instant case is such a group suit.[3]\nDefendants' version of the facts differs only in that they view the plaintiffs' union, NABET, and not the individual plaintiffs as being the \"real party in interest\" in this suit. See at 502-503, infra.\n\nI. Portal-to-Portal Act\n\nIn 1947, in response to a \"national emergency\"[4] created by a flood of suits under the FLSA aimed at collecting portal-to-portal pay allegedly due employees,[5] Congress enacted the Portal-to-Portal amendments to the FLSA. 61 Stat. 87 (1947). The original, stated purpose of the bill containing these amendments was: \"To define and limit the jurisdiction of the courts, to regulate actions arising under certain laws of the United States, and for other purposes.\" 93 Cong. Rec. 156 (H.R. 2157). To this end, the amendments, among other things,[6] barred unions from bringing representative actions under the FLSA.\nThis ban on representative actions originated in the Senate's consideration of the bill. See 93 Cong. Rec. 4371. The Chairman of the Senate Judiciary Committee, Senator Donnell, explained the rationale behind this ban:\n\n501 We now proceed to the final portion of the bill, part IV. Section 8 contains a provision entitled \"Representative Actions Banned.\" Let me say just a word about what is meant by representative actions. It will be recalled that in section 16(b) of the Fair Labor Standards Act there is a provision reading as follows:\nAction to recover such liability\nThis is, the liability for unpaid minimum wages, unpaid overtime compensation, and liquidated damages\nAction to recover such liability may be maintained in any court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.\nIt will be observed, Mr. President, that two types of action are permitted under this sentence in section 16(b) of the Fair Labor Standards Act of 1938: First, a suit by one or more employees, for himself and all other employees similarly situated. That I shall call for the purpose of identification a collective action, a suit brought by one collectively for himself and others. The second class of actions authorized by that sentence embrace those in which an agent or a representative who may not be an employee of the company at all can be designated by the employee or employees to maintain an action on behalf of all employees similarly situated.\nIn illustration of this latter category which category for purposes of identification I call a representative action, as distinguished from a collective actionsuppose that every one here present this afternoon were employed by the X steel company, and we all belonged to a labor union, and gave a power of attorney to the district director of the labor union who might live 500 miles away and not be employed at all in the plant in which we were employed. He could file a suit there as a representative of all of us. We would not be in that case at all except as he is our representative. It will be noted, therefore, Mr. President, that in those two classes of cases there is this difference: In the first case, an employee, a man who is working for the X steel company can sue for himself and other employees. We see no objection to that. But the second class of cases, namely, cases in which an outsider, perhaps someone who is desirous of stirring up litigation without being an employee at all, is permitted to be the plaintiff in the case, may result in very decidedly unwholesome champertous[[7]]situations which we think should not be permitted under the law.\n\nSo section 8 amends the Fair Labor Standards Act by eliminating that portion of section 16(b) which permits employees to designate an agent or representative to maintain an action for and in behalf of all employees similarly situated.\n93 Cong. Rec. 2182 (Remarks of Senator Donnell) (emphasis supplied). Thus, it seems clear that the purpose of the ban on representative actions was to prevent large group actions, with their vast allegations of liability, from being brought on behalf of employees who had no real involvement in, or knowledge of, the lawsuit.[8] Such situations unfairly left employers in the dark concerning the identity of the individuals whose claims would be litigated at trial. See Bartels v. Pier Brothers, 74 F. Supp. 41, 44 (E.D.N.Y.1947).\nThis interpretation is reinforced by the Senate's further amendment to the same section of the FLSA; this amendment provided that no individual could become a party plaintiff in any action unless he gives his consent in writing and such consent is 502 filed in the court where the action is brought. Once again, Senator Donnell articulated the rationale for adopting this provision:\nObviously, Mr. President, this is a wholesome provision, for it is certainly unwholesome to allow an individual to come into court alleging that he is suing on behalf of 10,000 persons and actually not have a solitary person behind him, and then later on have 10,000 men join in the suit, which was not brought in good faith, was not brought by a party in interest, and was not brought with the actual consent or agency of the individuals for whom an ostensible plaintiff filed the suit.\nSo we have provided, as I say, that no employee shall be made a party plaintiff to any such action unless he gives his consent in writing and unless such consent is filed in the court in which the action is brought.\nCertainly there is no injustice in that, for if a man wants to join in the suit, why should he not give his consent in writing, and why should not that consent be filed in court?\n93 Cong. Rec. 2182. Clearly then, the \"consent in writing\" requirement is a parallel provision to the ban on representative actions; together they seek to eradicate the problem of totally uninvolved employees gaining recovery as a result of some third party's action in filing suit.\nFurther, a contemporaneous judicial construction of the amendments supports this court's interpretation of the purpose underlying the ban on representative actions. In 1949, in Gibbons v. Equitable Life Insurance Society of the United States, 173 F.2d 337 (2d Cir. 1949), Judge Augustus Hand noted: \"The terms of the Portal-to-Portal Act indicate that one of its aims was to prevent the assertion of surprise claims by unnamed employees at a time when the statute of limitations would otherwise have run.\" Id. at 339.\nBased upon the ban of representative actions discussed above, defendants argue that the instant cases must be dismissed because they are, in effect, representative actions. Although it is undisputed that plaintiffs' union is not named as a party plaintiff representative in this action, defendants argue that the sum of the union's activities in connection with the instant case indicate that the union is the \"real party in interest\" in this case and that, in this manner, the union is attempting to achieve indirectly what the Portal-to-Portal Act prohibits it from doing directly. As illustration of the union's activities and involvement, defendants have attached exhibits which indicate:\n1) that the initial inquiry to the Department of Labor concerning whether defendants' overseas compensation policies violate the FLSA was made by plaintiffs' counsel at the request of plaintiffs' union;\n2) that in this letter plaintiffs' counsel referred to the union as his client;\n3) that subsequent to the Department of Labor's response indicating that defendants' overseas compensation policy appeared to violate the FLSA, an official of plaintiffs' union wrote to the Vice-president of Labor Relations at NBC[9] and requested that NBC recalculate the amounts owed to broadcast engineers for overseas assignments in light of the Department of Labor's response;\n4) that in this letter to NBC the union official noted: \"If we don't receive your agreement to our suggestion, or a mutually acceptable alternative plan we will be forced to seek other means to protect the rights of our members under the statute.\"; and\n5) that the union sent out letters to the membership of its locals which advised the membership that the instant lawsuit had been filed and which noted that \"our attorneys\" and the Labor Department advise us that the current rates violate the FLSA; in 503 addition, the letter tells the membership: \"[i]f you wish to be paid properly for your overseas assignments since September 1, 1978, you MUST complete the attached CONSENT FORM and return it to the Local 16 offices as soon as possible.\"\nIn response, plaintiffs acknowledge that the above-noted activities have taken place, but maintain that such activities merely comprise the union's lawful actions in protecting and informing its membership. Plaintiffs maintain that these types of activities are constitutionally protected associational rights. See, e.g., United Transportation Union v. State Bar of Michigan, 401 U.S. 576, 91 S. Ct. 1076, 28 L. Ed. 2d 339 (1971); Brotherhood of Railroad Trainmen v. Virginia, 377 U.S. 1, 84 S. Ct. 1113, 12 L. Ed. 2d 89 (1963); NAACP v. Button, 371 U.S. 415, 83 S. Ct. 328, 9 L. Ed. 2d 405 (1963). These claims by plaintiffs have substantial merit. In United Transportation Union, the Court referred to \"group legal action\" as a basic right, 401 U.S. at 585, 91 S.Ct. at 1082, and in Brotherhood of Railroad Trainmen, the Court stated:\nIt cannot be seriously doubted that the First Amendment's guarantees of free speech, petition and assembly give railroad workers the right to gather together for the lawful purpose of helping and advising one another in asserting the rights Congress gave them in the Safety Appliance Act and the Federal Employer's Liability Act, statutory rights which would be vain and futile if the workers could not talk together freely as to the best course to follow.\n377 U.S. at 5-6, 84 S. Ct. at 1115. Since all the union's activities in this case are lawful, protected activities, plaintiffs argue that the Portal-to-Portal Act's restrictions cannot be extended to reach these activities. Instead, plaintiffs maintain that the Act prohibits only actual representation by a union.\nAnalyzing the arguments of both sides, it is clear that there is a basic tension between the \"associational\" and \"group legal action\" rights recognized by the Supreme Court and the reach of the Portal-to-Portal Act's restrictions on union representation in FLSA suits.[10] This being so, the court must strive to achieve a resolution which will protect both sets of interests. Considering the court's above-noted interpretation of the primary purpose of the ban on representative actions, this court finds that the strictures of the Portal-to-Portal Act must be limited solely to prohibiting actual representation by a union.[11] Such a limited reading of the ban both fulfills the primary purpose of the amendment by ensuring that all plaintiffs are properly before the court to some degree and protects the legitimate associational rights and privileges shared by a union and its members. Such a limited reading is further supported by the fact that the Portal-to-Portal Amendments were specifically directed at resolving an emergency situation and beyond that context they should be interpreted narrowly. See 93 Cong.Rec. 2098 (Remarks of Senator Donnell) (Act solves national problem to best of committee's ability and is accompanied by minimum deprivations). Acceptance of defendants' argument would be contrary to the limited objectives[12] undertaken by the Congress during this unique period of the country's history and, as a result, cannot be permitted.\n\nII. Pre-emption By Collective Bargaining Agreement\n\nIn this argument, defendants argue that the instant lawsuit should be dismissed because plaintiffs' FLSA claims have been pre-empted by the collective bargaining agreement between defendants and plaintiffs' 504 union.[13] In effect, defendants are arguing that plaintiffs left their right to assert these individual FLSA claims at the bargaining table (i.e. waived their individual rights) when they, through their union, agreed to the current overseas compensation policy employed by defendants.[14] Such an argument, however, is plainly foreclosed by the Supreme Court's recent decision in Barrentine v. Arkansas-Best Freight System, 450 U.S. 728, 101 S. Ct. 1437, 67 L. Ed. 2d 641 (1981). In Barrentine, the Court expressly addressed the issue of whether the provisions of a collective bargaining agreement could overcome an individual's right to maintain suit under the FLSA. In so doing, the Court noted:\nThis Court's decisions interpreting the FLSA have frequently emphasized the nonwaivable nature of an individual employee's right to a minimum wage and to overtime pay under the Act. Thus, we have held that FLSA rights cannot be abridged by contract or otherwise waived because this would \"nullify the purposes\" of the statute and thwart the legislative policies it was designed to effectuate. Moreover, we have held that congressionally-granted FLSA rights take precedence over conflicting provisions in a collectively-bargained compensation arrangement.\n101 S.Ct. at 1444-45 (citations omitted). In conclusion, the Court finally noted: \"[T]he FLSA rights petitioners seek to assert in this action are independent of the collective-bargaining process. They devolve on petitioners as individual workers, not as members of a collective organization. They are not waivable.\" Id., 101 S.Ct. at 1447 (emphasis supplied). This being so, defendants' claims that plaintiffs have somehow waived their right to assert their FLSA claims clearly lacks merit. Defendants' attempts to refute the plain language of Barrentine are totally unimpressive.\n\nIII. Disqualification of Plaintiffs' Counsel\n\nDefendants have also moved for disqualification of plaintiffs' counsel from this action mainly because of the apparently close relationship between plaintiffs' counsel and plaintiffs' union.[15] Defendants argue that this close relationship creates ethical, professional responsibility problems in the instant case in a number of ways: 1) plaintiffs' counsel, Mr. Lapidus, could be called as a witness by defendants in their action against plaintiffs' union, NABET, which action defendants are seeking to bring together with the instant FLSA action, see ABA, Code of Professional Responsibility (hereinafter \"CPR\") at DR 5-102, 2) plaintiffs' counsel's multiple interests between the union and the plaintiffs could impair both counsel's effectiveness and the integrity of plaintiffs' attorney-client relationship, see CPR at DR 5-105, and 3) the association between plaintiffs' counsel and the union could create a significant \"appearance of impropriety\" in this case. See CPR at Canon 9.\n\nA. Plaintiffs' Counsel As Witness\nSince plaintiffs' counsel, Mr. Lapidus, undeniably had contacts relevant to the instant proceeding with the union prior to the institution of this suit, see text supra at 4-5, defendants maintain that he is clearly subject to being called by them as a witness in any action by them against the union as a result of the union's activities behind this suit. This fact is only important in that both defendants are seeking to maintain third-party actions against the union in this case[16] and Mr. Lapidus might therefore be 505 called as a witness in this very action, which, defendants maintain, presents serious problems for the court. See CPR at DR 5-102. Without deciding whether Mr. Lapidus' testimony would even be covered by the strictures of DR 5-102 (i.e. would be prejudicial to his client), this court finds that the \"witness\" issue presents no problem in this case because this court has decided not to allow the maintenance of defendants' third-party actions in this case and, hence, there is no possibility of Mr. Lapidus being called as a witness in this action.\nRule 14(a) provides, in pertinent part:\n(a) When Defendant May Bring in Third Party. At any time after commencement of the action a defending party, as a third-party plaintiff, may cause a summons and complaint to be served upon a person not a party to the action who is or may be liable to him for all or part of the plaintiff's claim against him.\n\nFed.R.Civ.P. 14(a) (emphasis supplied). As the above-highlighted language indicates, Rule 14(a) contemplates that a third-party impleader action, such as those being sought by defendants in this case, will be based on some sort of derivative liability owed to the defendant by the putative third-party defendant. See House v. Mine Safety Appliances Co., 573 F.2d 609, 622 (9th Cir.), cert. denied, 439 U.S. 862, 99 S. Ct. 182, 58 L. Ed. 2d 171 (1978) (impleader requires secondary or derivative liability by third-party defendant); Wright & Miller, Federal Practice and Procedure § 1446.\nIn the instant case, any finding of derivative liability appears foreclosed by the Supreme Court's recent decision in Northwest Airlines, Inc. v. Transport Workers Union of America, AFL-CIO, 450 U.S. 728, 101 S. Ct. 1437, 67 L. Ed. 2d 641 (1981) which held that there is no right of contribution from a labor union based upon employer violations of the Equal Pay Act provisions of the FLSA. Recognizing the bar imposed by this decision, defendants maintain, nonetheless, that under various theories the union will eventually be liable to them in damages as a result of union activities in \"fomenting\" this suit and that impleader is therefore proper; such liability, however, is insufficient to meet the \"derivative\" requirements of Rule 14(a). This being so, this court is exercising its discretion, see Laffey v. Northwest Airlines, Inc., 567 F.2d 429 (D.C.Cir.1976), to deny defendants' claims in support of the instant third-party actions: \"Impleader under Rule 14(a) is not permissible unless its conditions are complied with; it is not a device for bringing into an action any controversy which may happen to have some relationship with it.\" 3 Moore's Federal Practice ¶ 14.04.\n\nB. Multiple Interests\nThe predicate for this disqualification motion is the notion that plaintiffs' counsel will be unable to provide the plaintiffs with effective representation in this matter because plaintiffs' counsel's attention and energy is improperly split between the interests of the plaintiffs and those of the union.[17] Of course, the above-rendered decision denying defendants third-party actions in this case has removed the main thrust of this \"multiple interest\" problem from the case at present by ensuring that the plaintiffs and the union will not both be involved in this action. Further, any other \"multiple interest\" problems that might affect 506 plaintiffs' counsel's representation in this case have been cured by the fact that plaintiffs' counsel provided the plaintiffs with full disclosure of their relationship to the union prior to plaintiffs' retention of them as counsel, see Plaintiffs' Opposition at 20-21; this is all that the Code of Professional Responsibility seems to require. See DR 5-101(A).\n\nC. Appearance of Impropriety\nDefendants' last argument[18] for disqualifying plaintiffs' counsel is based upon an alleged appearance of impropriety resulting from plaintiffs' counsel's close contact with the union. As defendants correctly note, such appearance of impropriety should be expressly avoided according to Canon 9 of the Code. The court finds, however, that plaintiffs' counsel's relationship to plaintiffs' union creates no such appearance of impropriety in this case.\nNOTES\n[1] Plaintiffs also seek liquidated damages, attorneys fees, declaratory and injunctive relief.\n[2] This group action is not a true class action; recovery is allowed only to those similarly situated individuals who actually file written consents. 29 U.S.C. § 216(b).\n[3] This court has already established a procedure for the filing of written consents in this case.\n[4] 93 Cong. Rec. 2194, 80th Cong., 1st Session (Remarks of Senator Wheeler); see 93 Cong. Rec. 2098 (Remarks of Senator Donnell) (\"appalling national problem\").\n[5] In the seven-month period from July 1, 1946 to January 31, 1947, 1,913 portal-to-portal pay cases were filed in the federal courts, see 93 Cong. Rec. 2088 (Remarks of Senator Donnell); most of these cases involved very large allegations of liability. Id. at 2087. This flood of litigation resulted from the Supreme Court's decision in Anderson v. Mount Clemens Pottery Co., 328 U.S. 680, 66 S. Ct. 1187, 90 L. Ed. 1515 (1946), wherein the Court held that the FLSA required that workers be compensated for time spent walking to work stations and other preliminary and postliminary activities. Id. at 691-92, 66 S. Ct. at 1194.\n[6] Such as alteration of the FLSA statute of limitations and institution of a \"good faith\" defense for employers. Indeed, these other actions taken by Congress appear to have been \"the main features of the bill.\" See 93 Cong. Rec. 4388-89 (Remarks of Representative Gwynne Re: Conference Report on Bill).\n[[7]] Champerty is defined as: \"A bargain by a stranger with a party to a suit, by which such third person undertakes to carry on the suit at his own cost and risk, in consideration of receiving, if successful, a part of the proceeds or subject sought to be recovered.\" Black's Law Dictionary at 292 (4th ed. 1968).\n[8] The ban was also partially aimed at a fear that unions, as representatives, were concretely benefitting from participation in these suits. See note 7 supra; 93 Cong. Rec. at 2092-96.\n[9] A similar, although gentler, letter was written to the Vice-president of Labor Relations at ABC.\n[10] As can best be determined, no other court has yet been faced with this precise issue.\n[11] See 93 Cong. Rec. 2098 (Exchange Between Senator Aiken and Senator Donnell) (implying that union support, even of financial nature, behind individual's FLSA suit was permissible under amendments).\n[12] Such as giving the employer early and adequate notice of the identity of the claimant, the nature of the claim, and the asserted extent of liability.\n[13] All plaintiffs are members of the union, NABET, which collectively bargained with the defendants.\n[14] It is undisputed that defendants have abided completely by the terms of this agreement.\n[15] It is undisputed that plaintiffs' counsel does provide the union with some legal services and that plaintiffs' union referred the instant FLSA plaintiffs to their current counsel. However, plaintiffs' counsel are not the union's general counsel nor have they ever represented the union in collective bargaining.\n[16] At present, defendant ABC has a motion for leave to file a third-party complaint pending before this court, while defendant NBC's third-party complaint has already been filed. The reason for this disparity in the status of these third-party complaints is that NBC's third-party complaint was timely filed and, hence, filed as a matter of right, whereas ABC failed to file its third-party complaint within 10 days of its answer in this case, hence that complaint was untimely and needs \"leave of court\" to be filed. See Fed.R.Civ.P. 14(a). Plaintiffs have vigorously opposed the third-party actions by opposing ABC's motion for leave to file and by moving to strike NBC's third-party complaint.\n[17] As support for the idea that these multiple interests present problems in this case, defendant ABC cites the recent Barrentine decision where the Supreme Court noted that the interests of individual union members, such as the plaintiffs in this case, are often at odds with those of the union. See Barrentine, 101 S.Ct. at 1445-46. However, such citation in no way answers the vital question of whether those interests are inconsistent in this case. In fact, the interests of the union in this case in its present posture may be exactly congruent with the individual plaintiffs' interests.\n[18] At oral argument on the instant motion, after plaintiffs' counsel informed the court that at present plaintiffs are incurring no financial obligations in pursuing the instant action because the union is helping to pay costs and plaintiffs' attorneys are hoping to recover their fees through the attorneys' fees provision in the FLSA, defendants raised one additional ground in support of disqualificationEthical Consideration 5-8, which provides that the ultimate financial liability behind a lawsuit must be that of the client. Although this issue has not been briefed by the parties, two points appear worth mentioning: 1) the ethical considerations contained in the CPR are generally more aspirational and less mandatory than the disciplinary rules contained in the Code, and 2) it is unclear how this ethical consideration should be viewed when the underlying case permits an attorney the possibility of recovering attorneys' fees. It does seem clear that this ethical consideration should not preclude attorneys from pursuing congressionally-sanctioned causes of action, such as the instant FLSA suit. In such instances, an attorney's reliance upon the possibility of attorneys' fees appears no different from the straight contingent fee arrangements so frequently used in other litigation.\n\n", "ocr": false, "opinion_id": 2391930 } ]	District of Columbia	District Court, District of Columbia	FD	USA, Federal
2,369,481	Cornelius, C.J., and Grant and Ross	1996-12-17	false	holmes-v-state	Holmes	Holmes v. State	Reginald HOLMES, Appellant, v. the STATE of Texas, Appellee	Connie Mitchell, Texarkana, for appellant., Alwin A. Smith, Assistant District Attorney, Texarkana, for appellee.	null	null	null	null	null	null	null	Submitted Dee. 16, 1996.	null	null	21	Published	null	<parties id="b526-8"> Reginald HOLMES, Appellant, v. The STATE of Texas, Appellee. </parties><br><docketnumber id="b526-11"> No. 06-96-00025-CR. </docketnumber><br><court id="b526-12"> Court of Appeals of Texas, Texarkana. </court><br><otherdate id="b526-13"> Submitted Dee. 16, 1996. </otherdate><br><decisiondate id="b526-14"> Decided Dec. 17, 1996. </decisiondate><br><attorneys id="b527-14"> <span citation-index="1" class="star-pagination" label="489"> *489 </span> Connie Mitchell, Texarkana, for appellant. </attorneys><br><attorneys id="b527-15"> Alwin A. Smith, Assistant District Attorney, Texarkana, for appellee. </attorneys><br><judges id="b527-16"> Before CORNELIUS, C.J., and GRANT, and ROSS, JJ. </judges>	[ "938 S.W.2d 488" ]	[ { "author_str": "Cornelius", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n938 S.W.2d 488 (1996)\nReginald HOLMES, Appellant,\nv.\nThe STATE of Texas, Appellee.\nNo. 06-96-00025-CR.\nCourt of Appeals of Texas, Texarkana.\nSubmitted December 16, 1996.\nDecided December 17, 1996.\n489 Connie Mitchell, Texarkana, for appellant.\nAlwin A. Smith, Assistant District Attorney, Texarkana, for appellee.\nBefore CORNELIUS, C.J., and GRANT and ROSS, JJ.\n\nOPINION\nCORNELIUS, Chief Justice.\nReginald Holmes appeals from his conviction for sexual assault and indecency with a child. He was convicted in a jury trial and sentenced to fifteen years' imprisonment and a $5,000.00 fine.\nAlthough factual sufficiency is not raised, we briefly set forth the facts so that the second point of error may be placed in some context. The victim testified that Holmes sexually assaulted her on the afternoon of May 8, 1992, while she was staying at the home of Holmes's estranged wife, the victim's older sister. During the assault Holmes's mother-in-law (the mother of the victim) pulled into the driveway and saw Holmes get up and run away. She testified that there was blood on the victim's shorts. She took the victim to the hospital, and there is medical testimony confirming a sexual assault.\nHolmes first contends that his conviction should be reversed because he was denied his constitutional right to a speedy trial. The Sixth Amendment to the United States Constitution, as applied to the states through the Fourteenth Amendment, guarantees the right to a speedy trial. The Texas Constitution guarantees the same right in Article I, § 10.\nTo determine whether an accused has been denied the right to a speedy trial, the trial court employs the balancing test set out in Barker v. Wingo, 407 U.S. 514, 530, 92 S. Ct. 2182, 2192, 33 L. Ed. 2d 101, 117 (1972). In reviewing Holmes's claim of error, we apply the Barker v. Wingo balancing test de 490 novo.[1]Emery v. State, 881 S.W.2d 702, 708 (Tex.Crim.App.1994). Under this test the reviewing court considers the length of delay, the reason for the delay, the defendant's assertion of the right, and prejudice to the defendant resulting from that delay. Deeb v. State, 815 S.W.2d 692, 704 (Tex.Crim.App. 1991), cert. denied, 505 U.S. 1223, 112 S. Ct. 3038, 120 L. Ed. 2d 907 (1992). Holmes makes no separate argument on Texas constitutional grounds.\nThe following is a chronology of this prosecution:\nMay 8, 1992, the sexual assault occurs.\nJune 27, 1992, Holmes is arrested and released on bond.\nMarch 1, 1993, first court setting. Holmes did not appear.\nApril 1993, Holmes is rearrested and again released on bond.\nJune 7, 1992, case passed on defense motion.\nJune 21, 1993, case called for trial. Holmes pleads not guilty.\nApril 10, 1995, capias issued for Holmes's arrest.\nMay 21, 1995, Holmes is rearrested in San Antonio.\nJune 5, 1995, case set for trial on this date, continued at Holmes's request so that a polygraph could be taken. (Holmes then refused to take the polygraph.)\nOctober 17, 1995, case transferred to the 202nd District Court on request of defendant.\nNovember 2, 1995, Holmes files a pro se motion for speedy trial.\nJanuary 25, 1996, new attorney appointed.\nFebruary 27, 1996, case goes to trial.\nHolmes argues that the continuance of the case on June 7, 1992 must be charged to the State because the record does not show who requested the continuance. The statement of facts does show, however, that the prosecutor in his colloquy with the district judge stated that the case was passed on June 7, 1992 on the motion of the defense. Holmes's counsel was present at that discussion and participated in it when she chronicled her asserted delays. She did not dispute or contradict the prosecutor's statement that the \"pass\" on June 7, 1992 was at the defense's request. At any rate, the continuance on June 7 had little effect on the overall delay, since the case was called and Holmes pleaded not guilty on June 21, 1992, just fourteen days later.\nThe docket reflects no activity in this case between June 21, 1993 and April 10, 1995. During a discussion between counsel and the court at the hearing on the speedy trial motion, it became apparent that there had been at least two interim conversations between counsel and the court in chambers during which defense counsel had stated that he did not know where to find his client. The prosecutor stated that he did not immediately pursue the case because he wanted to allow defense counsel time to locate Holmes. Defense counsel, however, finally abandoned his efforts to find Holmes and told the prosecutor that he had been unable to locate or contact his client. At that time, in April 1995, a capias was issued. Holmes was arrested in San Antonio on May 21, 1995.\nWe first look at the length of the delay. The delay in commencement of the trial must be of sufficient length to be presumptively prejudicial before a review of the remaining three factors is triggered. Barker v. Wingo, 407 U.S. at 530, 92 S. Ct. at 2192, 33 L.Ed.2d at 117. The length of the delay is measured from the time the defendant is arrested or 491 formally accused, and a speedy trial claim will not be entertained until passage of a period of time that is on its face unreasonable under the circumstances. From the date of Holmes's arrest until trial, three years and nine months elapsed. It has been held that any delay over eight months is presumptively unreasonable. Harris v. State, 827 S.W.2d 949, 956 (Tex.Crim.App. 1992); State v. Perkins, 911 S.W.2d 548, 552 (Tex.App.-Fort Worth 1995, no pet.).\nWe thus turn to the next factor, the reason for the delay. Continuances at Holmes's request are shown until June of 1993. Those delays may not be assessed against the State. The subsequent time period between that date and the eventual date of his arrest in San Antonio is largely due to the delay while defense counsel unsuccessfully sought to locate Holmes. From the time Holmes was arrested until the date of trial, various delays occurred that were caused in part by his two requests to take a polygraph test followed by his refusal to take the test, the transfer of the case to a different court, and the appointment of new counsel. These delays are not chargeable against the State.\nHolmes did not assert his right to a speedy trial until November 1995, and the trial was held three months later. Although his failure to assert the claim earlier does not waive the right, his failure to assert the right in a more timely fashion tends to indicate that he did not want a speedy trial. Barker v. Wingo, 407 U.S. at 531-32, 92 S. Ct. at 2192-93, 33 L.Ed.2d at 117-18; Harris v. State, 827 S.W.2d at 957.\nThe final factor to consider is prejudice resulting from the pretrial delay. Delay can be harmful because pretrial incarceration may be oppressive, the accused may be unduly subjected to anxiety and concern, and the accused's defense may be impaired by loss of exculpatory evidence and dimming memories. Barker v. Wingo, 407 U.S. at 532, 92 S. Ct. at 2193, 33 L.Ed.2d at 118.\nHolmes was incarcerated for a relatively short time during the early portion of this time period, and then again from June 1995 until trial in February 1996. The reason for his later incarceration is largely due to his own activities in violating bail twice and then disappearing.\nIt is likely that Holmes was subjected to anxiety and concern as a result of the charge against him, but that concern could have been alleviated had he remained in contact with his attorney and earlier sought the relief he now seeks. This factor does not operate in favor of his claim.\nThe additional prejudice Holmes asserts stems from the victim's inability to clearly remember various facts when asked about them at trial. Admittedly, it is difficult to adequately cross-examine a witness when she cannot clearly remember some of the facts, but that same inability to remember also weakens the State's case. There is no suggestion of alibi witnesses whose memories dimmed, or that evidence was damaged by the delay.\nAfter applying the various factors to the case, we conclude that most of the delay in trying Holmes was largely attributable to Holmes's own actions. The remaining delay is unremarkable. Those facts, combined with Holmes's failure to invoke his right until November 1995 and the lack of any particularized prejudice from the delay, leads us to the conclusion that the balance is in favor of the State. The court did not err by overruling Holmes's speedy trial motion.\nHolmes next contends that the trial court erred by failing to grant his motion for a new trial because of newly discovered evidence. On the morning of the second day of trial, Holmes's estranged wife brought to the district attorney a pair of boy's underwear, apparently stained with blood, that she said were found in the attic of the home in which she and the victim were living at the time of the attack. She stated that she had found them a year after the attack. Holmes's request for a continuance was tabled by the court, who refused to rule on the motion unless the underwear was introduced into evidence. It was not.\nTEX.CODE CRIM.PROC.ANN. art. 40.001 (Vernon Supp.1997) provides: \"A new trial shall be granted an accused where material evidence favorable to the accused has been discovered since trial.\" The granting or denying 492 of a motion for new trial is within the discretion of the trial court. We do not substitute our judgment for that of the trial court, but rather decide whether the trial court's decision was arbitrary or unreasonable. Lewis v. State, 911 S.W.2d 1, 7 (Tex. Crim.App.1995); State v. Gonzalez, 855 S.W.2d 692, 696 (Tex.Crim.App.1993). Motions for new trial based on newly discovered evidence are not favored by the courts and are viewed with great caution. Drew v. State, 743 S.W.2d 207, 225-26 (Tex.Crim.App. 1987).\nTo show that the trial court abused its discretion in not granting a new trial, the movant must show: (1) the newly discovered evidence was unknown to the movant at the time of trial; (2) the failure to discover the evidence was not due to his want of diligence; (3) the evidence is admissible and not merely cumulative, corroborative, collateral, or impeaching; and (4) the evidence is probably true and would probably bring about a different result in another trial. Moore v. State, 882 S.W.2d 844, 849 (Tex.Crim.App.1994).\nHere, the evidence became known to Holmes during the trial. Moreover, Holmes has failed to establish the fourth prong, that the new evidence is probably true and would probably bring about a different result in another trial.\nEven if the blood tests desired by the defense showed that the underwear was stained by the victim's blood, it would not tend to disprove the State's case. At most, it might show that the victim had sexual intercourse with someone else, without rebutting the testimony that Holmes committed the crime charged. Likewise, if the blood was shown to be neither the victim's nor Holmes's, it would not indicate that the victim had engaged in other sexual conduct, nor would it be favorable to Holmes's defense. In this situation, we cannot say that the trial court abused its discretion by denying the motion for new trial.\nThe judgment of the trial court is affirmed.\nNOTES\n[1] There is some disagreement about whether appellate review should be de novo, or whether we should review the trial court's ruling on the matter using an abuse of discretion standard. The Fort Worth Court of Appeals discussed this problem in some detail in Clarke v. State, 928 S.W.2d 709 (Tex.App.-Fort Worth 1996, no pet. h.). We agree in principle with the concurrence that we should review the trial court's decision rather than making a de novo review because this is a fact-driven question. However, we must also agree with the majority in that opinion that the Court of Criminal Appeals in Emery v. State, 881 S.W.2d 702 (Tex.Crim.App.1994), has very slightly altered the language of Barker v. Wingo, 407 U.S. 514, 92 S. Ct. 2182, 33 L. Ed. 2d 101 (1972), to provide that the reviewing court is to independently consider the evidence. This conclusion is further supported by the Emery court's independent review of the evidence on a speedy trial point. Thus, we address the issue anew.\n\n", "ocr": false, "opinion_id": 2369481 } ]	Court of Appeals of Texas	Court of Appeals of Texas	SA	Texas, TX
250,019	Bazelon, Edgerton, Washington	1960-01-21	false	commissariat-a-lenergie-atomique-v-robert-c-watson-commissioner-of	null	Commissariat a L'EnErgiE Atomique v. Robert C. Watson, Commissioner of Patents	COMMISSARIAT a L’ENERGIE ATOMIQUE Et Al., Appellants, v. Robert C. WATSON, Commissioner of Patents Et Al., Appellees	Mr. James L. Morrisson, Washington, D. C., for appellants., Mr. Joseph Schimmel, Atty. U. S. Patent Office, with whom Mr. Clarence W. Moore, Solicitor, U. S. Patent Office, was on the brief, for appellees.	null	null	null	null	null	null	null	Argued Sept. 17,1959.	null	null	9	Published	null	<parties data-order="0" data-type="parties" id="b686-3"> COMMISSARIAT A L’ENERGIE ATOMIQUE et al., Appellants, v. Robert C. WATSON, Commissioner of Patents et al., Appellees. </parties><br><docketnumber data-order="1" data-type="docketnumber" id="b686-5"> No. 14929. </docketnumber><br><court data-order="2" data-type="court" id="b686-6"> United States Court of Appeals District of Columbia Circuit </court><br><otherdate data-order="3" data-type="otherdate" id="b686-7"> Argued Sept. 17,1959. </otherdate><br><decisiondate data-order="4" data-type="decisiondate" id="b686-8"> Decided Jan. 21,1960. </decisiondate><br><attorneys data-order="5" data-type="attorneys" id="b686-20"> Mr. James L. Morrisson, Washington, D. C., for appellants. </attorneys><br><attorneys data-order="6" data-type="attorneys" id="b686-21"> Mr. Joseph Schimmel, Atty. U. S. Patent Office, with whom Mr. Clarence W. Moore, Solicitor, U. S. Patent Office, was on the brief, for appellees. </attorneys><br><p data-order="7" data-type="judges" id="b686-22"> Before Edgerton, Bazelon and Washington, Circuit Judges. </p>	[ "274 F.2d 594" ]	[ { "author_str": "Washington", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/274/274.F2d.594.14929.html", "author_id": null, "opinion_text": "274 F.2d 594\n 107 U.S.App.D.C. 85, 124 U.S.P.Q. 126\n COMMISSARIAT A L'ENERGIE ATOMIQUE et al., Appellants,v.Robert C. WATSON, Commissioner of Patents et al., Appellees.\n No. 14929.\n United States Court of Appeals District of Columbia Circuit.\n Argued Sept. 17, 1959.Decided Jan. 21, 1960.\n \n Mr. James L. Morrisson, Washington, D.C., for appellants.\n Mr. Joseph Schimmel, Atty. U.S. Patent Office, with whom Mr. Clarence W. Moore, Solicitor, U.S. Patent Office, was on the brief, for appellees.\n Before EDGERTON, BAZELON and WASHINGTON, Circuit Judges.\n WASHINGTON, Circuit Judge.\n \n \n 1\n This is a patent case. Appellants (plaintiffs below) appeal from a decision of the District Court granting appellees' motion to dismiss appellants' complaint on the ground that it failed to state a cause of action and that the court lacked jurisdiction over the subject matter.\n \n \n 2\n Appellants' complaint sought to review the refusal of the Commissioner of Patents to revive an application for a patent covering certain processes for the production of nuclear energy, and the refusal of the Board of Appeals of the Patent Office to reconsider its affirmance on November 17, 1950, of the Patent Examiner's original denial of the patent. Both the request for revival and the request for reconsideration were founded on alleged new evidence which would, appellants claimed, have shown that a patent should have been granted. In asking the District Court to review the denials of these requests to revive and reconsider, appellants maintained that the District Court had jurisdiction with respect to the revival decision because the Commissioner failed to make findings in accordance with Section 133 of Title 35 U.S.C. (1958).1 It was asserted that these omissions involved failure to exercise the discretion required by statute and were reviewable in the District Court by writ of mandamus. With respect to the Board of Appeals' refusal to reconsider, appellants asserted that denial of this request constituted a final decision on the merits of a patent application which was reviewable by the District Court under Section 145 of Title 35 U.S.C. (1958).2\n \n \n 3\n The background, in brief, is this: On April 5, 1940, appellants-- members of an agency of the French Government-- applied for a United States patent on an apparatus for the production of energy by a nuclear chain reaction. The Patent Examiner rejected the application on November 8, 1941, because the subject matter was not 'sufficiently useful and important,' given the then state of the art. On May 5, 1942-- before appellants' time for appeal to the Board of Appeals had expired-- the application was placed under a Patent Office secrecy order and further proceedings were suspended until 1949. During this interval the application was vested in the Alien Property Custodian, and appellants claim that evidence which was relevant to the application was put under additional secrecy restrictions by the passage of the Atomic Energy Act of 1946, 60 Stat. 755, 42 U.S.C.A. 1801-193 . In 1949, while the application was still controlled by the Alien Property Custodian, and while the allegedly relevant information was still (according to appellants) under Atomic Energy Act secrecy restraints, the Patent Office lifted its secrecy order and resumed proceedings. On November 17, 1950, the Board of Appeals affirmed the Examiner's rejection of the application. For some time, no further action was taken by anyone. In 1954, the application was returned to appellants by the Alien Property Custodian. Appellants did not proceed immediately in the Patent Office, but waited until August 29, 1955, by which time, they claim, sufficient data restricted under the Atomic Energy Act had been declassified so that they could, for the first time, disprove the findings of the Patent Examiner and Board of Appeals. On that date appellants petitioned the Commissioner to revive their application, invoking Section 133 of Title 35 of the U.S.C. The petition was denied on July 10, 1956, and requests for reconsideration were denied on February 26, 1957, July 15, 1957, February 14, 1958, and May 2, 1958. Appellants filed their complaint in the District Court on July 1, 1958, and the proceedings in that court led to this appeal.\n \n \n 4\n It is clear that at the time appellants' complaint was filed the District Court had no jurisdiction to consider the merits of the patent application under Section 145 of Title 35 U.S.C. Section 145 requires complaints to be filed in the District Court 'within such time after (the Board's) decision, not less than sixty days, as the Commissioner appoints.' The Commissioner has appointed sixty days.4 Whatever effect may be given to the fact that the application was vested in the Alien Property Custodian at the time of the Board's decision, much more than sixty days elapsed between the date of the return of the application to appellants and their filing of a complaint in the District Court. The time for bringing suit under Section 145 has thus long since run. There is nothing to indicate that appellants have ever made application to the Commissioner for an extension of time within which to bring suit. See Grady v. Watson, 1958, 104 U.S.App.D.C. 286, 261 F.2d 752; Eckey v. Watson, 1959, 106 U.S.App.D.C. 16, 268 F.2d 891. The dismissal of the complaint insofar as it seeks relief under Section 145 will accordingly be affirmed, without prejudice to the making of an appropriate application to the Commissioner under the rule of the Eckey case, and without prejudice to such proceedings for reinstatement of the complaint as may be proper in the event the Commissioner grants the application.\n \n \n 5\n However, with respect to the commissioner's refusal to revive the application, after request made under Section 133 of Title 35, we think that appellants' complaint states a cause of action over which the District Court had jurisdiction. Section 133, impliedly permitting the Commissioner to revive a patent application, requires an applicant to show 'to the satisfaction of the Commissioner that * * * delay (in prosecuting the application) was unavoidable': otherwise, the application 'shall be regarded as abandoned.' True, in the days when appeals from decisions of the Commissioner were taken directly to the Court of Appeals of the District of Columbia, it was held that the then governing statutes did not authorize an appeal from a decision denying revival of an application. In re Carvalho, 1918, 47 App.D.C. 584. Later, in a case where suit was brought in the Supreme Court of the District of Columbia under Section 4915 of the Revised Statutes (the predecessor of Section 145 of Title 35), it was held that the Commissioner's refusal to revive an application was not cognizable in such a suit. Chessin v. Robertson, 61 App.D.C. 376, 63 F.2d 267, certiorari denied, 1933, 289 U.S. 725, 53 S.Ct. 523, 77 L.Ed. 1475. A like decision was rendered in Cregier v. Coe, 1933, 62 App.D.C. 320, 67 F.2d 692, certiorari denied, 1934, 291 U.S. 683, 54 S.Ct. 560, 78 L.Ed. 1070. We have no quarrel with those holdings. As the court pointed out in the Cregier case, 'The denial of a motion to revive an application is not equivalent to the refusal to grant a patent,' and such refusal is the sole basis for a suit under Section 4915.5 Id. 62 App.D.C. at page 321, 67 F.2d at page 693. Dicta may be found in Chessin and Cregier that a denial by the Commissioner of a request for revival 'is not subject to judicial review.' But this cannot mean that mandamus will never lie to correct an arbitrary or capricious action by the Commissioner in respect of a request for revival.\n \n \n 6\n The Commissioner doubtless possesses a large measure of discretion in matters of this sort. The statute does not, however, purport to make that discretion plenary and unreviewable; it speaks of a showing 'to the satisfaction of the Commissioner.' Many years ago the Supreme Court construed similar language in a statute which provided that 'where it shall appear to the satisfaction of the Secretary of the Interior' that excessive payments had been made to the Government, the 'excess shall be repaid.' The Court emphatically denied that this provision allowed the Secretary to refuse repayment in his 'uncontrolled judgment and discretion,' where the facts were not in dispute and where as a matter of law a debt existed. United States v. Laughlin, 1919, 249 U.S. 440, 39 S.Ct. 340, 341, 63 L.Ed. 696. Similarly, in cases like the present, where valuable rights are at stake, the Commissioner's discretion cannot remain wholly uncontrolled, if the facts clearly demonstrate that the applicant's delay in prosecuting the application was unavoidable, and that the Commissioner's adverse determination lacked any basis in reason or common sense. No doubt the courts should be and will be extremely reluctant to disturb the Commissioner's decision in a matter of this sort.6 But jurisdiction exists, though the occasion for its exercise may only rarely arise.\n \n \n 7\n Appellants further allege that they requested, but did not receive, 'specific findings of fact setting forth the basis for * * * (the Commissioner's) determination'7 that the application for revival should be denied. Although Section 133 does not require an affirmative finding that the delay was avoidable, the Commissioner should tell the applicant-- at least if a timely request for findings is made, as appellants here claim-- why his plea was unavailing, in order to provide an adequate basis for judicial review. Under comparable circumstances, we have held that the courts may require the naking of explicit findings. See Coffey v. Jordan, 1959, 107 U.S.App.D.C. , 275 F.2d 1. Such findings are particularly necessary where, as here, appellants also allege their ability to prove facts (set forth in the complaint and certainly not of obviously frivolous character) which they say would cause the Commissioner, in the proper exercise of his discretion, to hold in their favor. Cf. Greensboro-High Point Airport Authority v. Civil Aeronautics Board, 1956, 97 U.S.App.D.C. 358, 231 F.2d 517.\n \n \n 8\n For these reasons, we hold that the complaint's prayer for mandamus, and its attendant request for findings of fact, stated a cause of action over which the District Court should have exercised jurisdiction. The judgment of the District Court will be reversed with respect to this aspect of the complaint, and the cause will be remanded for further proceedings not inconsistent with this opinion. See Joint Anti-Fascist Refugee Committee v. McGrath, 1951, 341 U.S. 123, 142, 71 S.Ct. 624, 95 L.Ed. 817. Inasmuch as the Patent Office has not filed an answer, but has simply filed a motion to dismiss, the Commissioner should be given a reasonable time to submit findings on a voluntary basis, and/or to file an answer to the allegations of the complaint, or take other appropriate action, as he may be advised.\n \n \n 9\n The judgment of the District Court will be affirmed in part and reversed in part, and the cause remanded for further proceedings.\n \n \n 10\n So ordered.\n \n \n \n 1\n Section 133 provides as follows:\n 'Upon failure of the applicant to prosecute the application within six months after any action therein, of which notice has been given or mailed to the applicant, or within such shorter time, not less than thirty days, as fixed by the Commissioner in such action, the application shall be regarded as abandoned by the parties thereto, unless it be shown to the satisfaction of the Commissioner that such delay was unavoidable.'\n \n \n 2\n Section 145 provides in pertinent part:\n 'An applicant dissatisfied with the decision of the Board of Appeals may * * * have remedy by civil action against the Commissioner in the United States District Court for the District of Columbia if commenced within such time after such decision, not less than sixty days, as the Commissioner appoints. The court may adjudge that such applicant is entitled to receive a patent for his invention, as specified in any of his claims involved in the decision of the Board of Appeals, as the facts in the case may appear and such adjudication shall authorize the Commissioner to issue such patent on compliance with the requirements of law. * * *'\n \n \n 3\n Now 2011 et seq\n \n \n 4\n Rule 304, Rules of Practice of the U.S. Patent Office in Patent Cases, 35 U.S.C.Appendix. Appendix\n \n \n 5\n Or its successor, Section 145 of Title 35\n \n \n 6\n See, on the general problem, Davis, Administrative Law 842-67 (1951)\n \n \n 7\n The complaint says:\n 'In a petition for reconsideration addressed to defendant Crocker, plaintiffs requested a specific determination whether the delay in further prosecuting the application was avoidable or unavoidable, and requested specific findings of fact setting forth the basis for that determination. This request was ignored.'\n \n \n ", "ocr": false, "opinion_id": 250019 } ]	D.C. Circuit	Court of Appeals for the D.C. Circuit	F	USA, Federal
2,671,515	O'Malley, Reyna, Wallach	2014-04-28	false	shell-oil-company-v-united-states	null	Shell Oil Company v. United States	SHELL OIL COMPANY, Atlantic Richfield Company, Texaco, Inc., and Union Oil Company of California, Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee	Michael W. Kirk, Cooper & Kirk, PLLC, of Washington, DC, argued for plaintiffs-appellants. With him on the brief were Vincent J. Colatriano and Peter A. Patterson., Stephen C. Tosini, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendantappellee. With him on the brief were Stuart F. Delery, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director., Hilary S. Cairnie, BakerHostetler LLP, of Washington, DC, for amicus curiae American Fuel & Petrochemical Manufacturers. Of counsel were Richard B. Raile and Christopher H. Marraro., Daniel M. Steinway, Baker Botts L.L.P., of Washington, DC, for amicus curiae Exxon Mobil Corporation. With him on the brief were William S. Foster, Jr., and Michael Patrick Mcgovern.	null	null	null	null	null	null	null	null	null	null	2	Published	null	<parties id="b1330-8"> SHELL OIL COMPANY, Atlantic Richfield Company, Texaco, Inc., and Union Oil Company of California, Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee. </parties><br><docketnumber id="b1330-11"> No. 2013-5051. </docketnumber><br><court id="b1330-12"> United States Court of Appeals, Federal Circuit. </court><br><decisiondate id="b1330-14"> April 28, 2014. </decisiondate><br><attorneys id="b1332-6"> <span citation-index="1" class="star-pagination" label="1284"> *1284 </span> Michael W. Kirk, Cooper <em> & </em> Kirk, PLLC, of Washington, DC, argued for plaintiffs-appellants. With him on the brief were Vincent J. Colatriano and Peter A. Patterson. </attorneys><br><attorneys id="b1332-7"> Stephen C. Tosini, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendantappellee. With him on the brief were Stuart F. Delery, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E. White, Jr., Assistant Director. </attorneys><br><attorneys id="b1332-8"> Hilary S. Cairnie, BakerHostetler LLP, of Washington, DC, for amicus curiae American Fuel <em> & </em> Petrochemical Manufacturers. Of counsel were Richard B. Raile and Christopher H. Marraro. </attorneys><br><attorneys id="b1332-11"> Daniel M. Steinway, Baker Botts L.L.P., of Washington, DC, for amicus curiae Exxon Mobil Corporation. With him on the brief were William S. Foster, Jr., and Michael Patrick Mcgovern. </attorneys><br><judges id="b1332-12"> Before O’MALLEY, REYNA, and WALLACH, Circuit Judges. </judges>	[ "751 F.3d 1282" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": 48, "download_url": "http://www.cafc.uscourts.gov/images/stories/opinions-orders/13-5051.Opinion.4-24-2014.1.PDF", "author_id": null, "opinion_text": " United States Court of Appeals\n for the Federal Circuit\n ______________________\n\n SHELL OIL COMPANY, ATLANTIC RICHFIELD\n COMPANY, TEXACO, INC., AND UNION OIL\n COMPANY OF CALIFORNIA,\n Plaintiffs-Appellants,\n\n v.\n\n UNITED STATES,\n Defendant-Appellee.\n ______________________\n\n 2013-5051\n ______________________\n\n Appeal from the United States Court of Federal\nClaims in Consolidated Nos. 06-CV-0141 and 06-CV-1411,\nJudge Thomas C. Wheeler.\n ______________________\n\n Decided: April 28, 2014\n ______________________\n\n MICHAEL W. KIRK, Cooper & Kirk, PLLC, of Washing-\nton, DC, argued for plaintiffs-appellants. With him on the\nbrief were VINCENT J. COLATRIANO and PETER A.\nPATTERSON.\n\n STEPHEN C. TOSINI, Senior Trial Counsel, Commercial\nLitigation Branch, Civil Division, United States Depart-\nment of Justice, of Washington, DC, argued for defendant-\nappellee. With him on the brief were STUART F. DELERY,\n\f2 SHELL OIL COMPANY v. US\n\n\n\nActing Assistant Attorney General, JEANNE E. DAVIDSON,\nDirector, and FRANKLIN E. WHITE, JR., Assistant Director.\n\n HILARY S. CAIRNIE, BakerHostetler LLP, of Washing-\nton, DC, for amicus curiae American Fuel & Petrochemi-\ncal Manufacturers. Of counsel were RICHARD B. RAILE\nand CHRISTOPHER H. MARRARO.\n\n DANIEL M. STEINWAY, Baker Botts L.L.P., of Washing-\nton, DC, for amicus curiae Exxon Mobil Corporation.\nWith him on the brief were WILLIAM S. FOSTER, JR., and\nMICHAEL PATRICK MCGOVERN.\n ______________________\n\nBefore O’MALLEY, REYNA, AND WALLACH, Circuit Judges.\n Opinion for the court filed by Circuit Judge WALLACH.\n Dissenting opinion filed by Circuit Judge REYNA.\nWALLACH, Circuit Judge.\n The seventieth anniversary of the end of active United\nStates participation in the Second World War will fall on\nSeptember 2 of next year. A nation of pragmatists, we\ntend to forget our history until necessity revives our\nmemory. 1 To resolve this contract claim by Shell Oil Co.\n\n\n\n 1 “‘There are no new problems in the law, only for-\ngotten solutions[,] and the issues which arose yesterday\nwill always arise again tomorrow.’” Jeremy Rabkin &\nAriel Rabkin, Navigating Conflicts in Cyberspace: Legal\nLessons from the History of War at Sea, 14 Chi. J. Int’l L.\n197, 198 (2013) (quoting Evan J. Wallach, Partisans,\nPirates, and Pancho Villa: How International and Na-\ntional Law Handled Non-State Fighters in the “Good Old\nDays” Before 1949 and That Approach’s Applicability to\nthe “War on Terror,” 24 Emory Int’l L. Rev. 549, 552–53\n(2010)).\n\fSHELL OIL COMPANY v. US 3\n\n\n\n(“Shell”), Atlantic Richfield Co. (“ARCO”), Texaco, Inc.\n(“Texaco”), and Union Oil Co. of California (“Union Oil”)\n(collectively, “the Oil Companies”), we must recall and\nplace into its appropriate context the atmosphere of stark\ndetermination for victory at all costs, which drove our war\neffort after the Japanese Empire attacked the United\nStates Naval Base at Pearl Harbor on December 7, 1941.\n Each of the Oil Companies entered into contracts with\nthe United States to provide high-octane aviation gas\n(“avgas”) to fuel military aircraft as part of the national\nwar effort (“the avgas contracts”). The production of\navgas resulted in waste products such as spent alkylation\nacid and “acid sludge.” The Oil Companies disposed of\nsuch acid waste by contracting with Eli McColl, a former\nShell engineer, to dump the waste at real property in\nFullerton, California (“the McColl site”). Over fifty years\nlater, California and the United States obtained compen-\nsation from the Oil Companies pursuant to the Compre-\nhensive Environmental Response, Compensation, and\nLiability Act (“CERCLA”), 42 U.S.C. § 9601 et seq., for the\ncosts of cleaning up the McColl site. The Oil Companies\nfiled suit in the Court of Federal Claims, arguing the\navgas contracts require the Government to indemnify\nthem for the CERCLA costs. The Court of Federal Claims\ngranted summary judgment in favor of the Government\nand denied the Oil Companies’ motion for summary\njudgment. Shell Oil Co. v. United States, 108 Fed. Cl. 422\n(Fed. Cl. 2013) (“Shell Remand Decision”). Because the\navgas contracts require the Government to reimburse the\nOil Companies for their CERCLA “charges,” this court\nreverses with respect to breach of contract liability. The\nCourt of Federal Claims correctly determined, however,\nthat material factual disputes preclude granting sum-\nmary judgment on damages, and that issue is accordingly\nremanded for trial.\n\f4 SHELL OIL COMPANY v. US\n\n\n\n BACKGROUND\n I. World War II and the Need for Avgas\n Compared to other available fuels, high-octane avgas\nenabled aircraft to fly faster and higher, with improved\nrates of climb and higher payload carrying capacity. It\nwas “the most critically needed refinery product” during\nWorld War II and was essential to the United States’ war\neffort. 2 J.A. 477 ¶ 4. It was still a new technology in the\nlate 1930s, however, and production was nowhere near\nsufficient for the massive quantities the United States\nand its allies would need to prosecute the war.\n In 1942 and 1943, the Government, acting through\nthe Defense Supplies Corporation (“DSC”) entered into\nthe avgas contracts with the Oil Companies. The avgas\ncontracts were long-term (primarily three-year) contracts\nto purchase avgas from the Oil Companies’ refineries in\nSouthern California, and enabled the Oil Companies to\nbuild the new refining facilities needed to produce the\nhigh levels of avgas vital to the war effort.\n At the time the contracts were signed, the Govern-\nment exercised substantial wartime regulatory control\nover almost every aspect of the petroleum industry. It\nhad authority to impose obligatory product orders on\nprivate companies, with noncompliance subject to crimi-\n\n\n 2 “At least since the transformation of navies from\ncoal to diesel fuels in the early twentieth century availa-\nbility of sources of petroleum products has been recog-\nnized by great powers as vital to their national interest.”\nEvan J. Wallach, The Use of Crude Oil by an Occupying\nPower as a Munition de Guerre, 41 INT’L & COMP. L.Q.\n287, 287 (1992); see also John W. Frey & H. Chandler Ide,\nA History of the Petroleum Administration for War 1\n(1946), available at J.A. 431 (“World War II, from begin-\nning to end, was a war of oil.”).\n\fSHELL OIL COMPANY v. US 5\n\n\n\nnal sanctions or Government takeover. See Selective\nTraining and Service Act of 1940, Pub. L. No. 76-783, ch.\n720, § 9, 54 Stat. 885, 892 (1940). Facilities that accepted\nsuch obligatory product orders had to prioritize govern-\nment military contracts above all other contracts. Act of\nMay 31, 1941, Pub. L. No. 77-89, ch. 157, 55 Stat. 236\n(1941). To the extent facilities relied on scarce raw mate-\nrials, the Government could regulate supply chains to\nensure continuing production. Id.; see also Second War\nPowers Act of 1942, Pub. L. No. 77-507, ch. 199, § 301, 56\nStat 176, 178 (1942) (authorizing the President to allocate\nany material or facility as necessary “in the public inter-\nest and to promote the national defense” whenever the\ncountry’s defense needs would create a shortage in such\nmaterials or facilities).\n The Government regulatory entities most relevant to\nthe avgas contracts were (1) the Office of Petroleum\nCoordinator for National Defense (“OPC”), later replaced\nby the Petroleum Administration for War (“PAW”), and\n(2) the Office of Production Management (“OPM”), later\nrun by and then replaced by the War Production Board\n(“WPB”). The WPB and PAW were created in January\nand December 1942, respectively. The WPB had primary\nauthority over war procurement and production, and\ncooperated with the PAW to determine petroleum re-\nquirements and set national priorities for supplying the\npetroleum industry. Subject to the direction of the WPB,\nthe PAW was charged with ensuring “adequate supplies\nof petroleum for military, or other essential uses” and\n“[e]ffect[ing] the proper distribution of such amounts of\nmaterials.” Exec. Order No. 9276, 7 Fed. Reg. 10,091,\n10,092 (Dec. 4, 1942). The “PAW told the refiners what to\nmake, how much of it to make, and what quality.” John\nW. Frey & H. Chandler Ide, A History of the Petroleum\nAdministration for War 219 (1946), available at J.A. 1917.\n Days after Pearl Harbor, the Government recognized\nthe need to quickly mobilize avgas production, with the\n\f6 SHELL OIL COMPANY v. US\n\n\n\nOPC stating: “‘It is essential, in the national interest that\nthe supplies of all grades of aviation gasoline for military,\ndefense and essential civilian uses be increased immedi-\nately to the maximum.’” J.A. 498–99 (quoting OPC Rec-\nommendation No. 16) (emphases added). Then-existing\nfacilities could not produce the required levels of avgas,\nnecessitating construction of additional facilities. Howev-\ner, the Government’s substantial authority to control\nproduction only extended to existing facilities; it could not\nforce companies to invest in new ones. See, e.g., An Act to\nExpedite National Defense and for Other Purposes, Pub.\nL. No. 76-671, ch. 440, § 8(b), 54 Stat. 676, 680 (1940)\n(authorizing the Secretary of the Navy to nationalize and\noperate “any existing manufacturing plant or facility\nnecessary for the national defense” when certain condi-\ntions were met) (emphasis added). A further stumbling\nblock for the Government was that contracts with the\nArmy and the Navy were subject to annual Congressional\nappropriations and thus limited to a one-year term. Such\none-year contracts did not provide the long-term security\nnecessary to justify the Oil Companies’ investment in new\nfacilities. In light of these limitations, the Government\nturned to the DSC, a government-owned corporation\nauthorized to acquire critical and strategic materials,\nincluding avgas.\n The DSC was a subsidiary of the Reconstruction Fi-\nnance Corporation (“RFC”), another government-owned\ncorporation. The designation in 1941 of avgas as a critical\nmaterial enabled the RFC and its subsidiaries to buy, sell,\nand produce avgas and to make loans to companies to\nconstruct avgas production facilities. See Act of June 25,\n1940, Pub. L. No. 76-664, ch. 427, § 5(1), 54 Stat. 572, 573\n(codified at 15 U.S.C. § 606b (1940)). After purchasing\navgas from the Oil Companies, the DSC resold it to the\nArmy and the Navy at the national price established by\nthe PAW (or its predecessor, the OPC).\n\fSHELL OIL COMPANY v. US 7\n\n\n\n Between 1942 and 1943, the Oil Companies entered\ninto contracts with the DSC agreeing to sell vast quanti-\nties of avgas. 3 The contracts set forth a base price for\neach barrel of avgas, which was negotiated individually\nwith each refiner based on the refiner’s production costs.\nThe base price was calculated with the goal of permitting\nan estimated profit of between 6% and 7%. Profits were\nfurther subject to the Renegotiation Act of 1942, which\nrequired contractors to repay excess profits to the Gov-\nernment. Pub. L. No. 77-528, ch. 247, § 403, 56 Stat. 226,\n245 (1942).\n Given the low profit margin, the avgas contracts con-\ntained various concessions to the Oil Companies. They\nwere three-year contracts, thus providing some measure\nof certainty that the newly-constructed avgas production\nfacilities would pay off over time. They also contained\ncost-allocation measures to limit the Oil Companies’ risk\nin producing avgas. For instance, the agreed-upon base\nprice of avgas was subject to adjustment depending on the\nOil Companies’ costs, including the price of crude and\nother raw materials, and the transportation of raw mate-\nrials. The contracts also required the Buyer, DSC, to pay\n“any now existing taxes, fees, or charges . . . imposed upon\n[the Oil Companies] by reason of the production, manu-\nfacture, storage, sale or delivery of [avgas].” E.g., J.A. 111\n(1942 Shell contract) (emphasis added).\n Relevant to the CERCLA charges in this case, another\nsubsection required DSC to reimburse the Oil Companies\nfor “any new or additional taxes, fees, or charges, . . .\n\n\n 3 At least some of the avgas contracts provided for\nloans to the Oil Companies to expand avgas production\nfacilities, and required the Oil Companies to use “best\nefforts” to complete such construction as quickly as possi-\nble. See, e.g., J.A. 97, 106 (1942 Shell contract) (promising\nto “maintain work on the expansion day and night”).\n\f8 SHELL OIL COMPANY v. US\n\n\n\nwhich [the Oil Companies] may be required by any munic-\nipal, state, or federal law in the United States or any\nforeign country to collect or pay by reason of the produc-\ntion, manufacture, sale or delivery of the [avgas]” (“the\nnew or additional charges provision”). E.g., J.A. 111\n(emphases added). These price-adjustment mechanisms\nensured the Oil Companies would not be forced into loss-\nmaking activities by factors outside their control, such as\nthe costs of materials and transportation, or unforeseen\nGovernment-imposed charges. The avgas contracts thus\n“assured the manufacturer of his costs, plus a fair but\nmoderate profit.” J.A. 1996 (statement of the Chief Legal\nCounsel for the PAW to the House Appropriations Com-\nmittee).\n During contract negotiation and the years that fol-\nlowed, the Government’s primary concern was maximum\navgas production. The Government directed the Oil\nCompanies to “undertake extraordinary modes of opera-\ntion which were often uneconomical and unanticipated at\nthe time of refiners’ entry into their [avgas] contracts.”\nJ.A. 514. For example, the PAW sometimes ordered\ncompanies to purchase raw materials outside their nor-\nmal supply chain to achieve maximum avgas production.\nThe Aviation Gasoline Reimbursement Plan required the\nGovernment to assume the costs of such uneconomical\noperations.\n The arrangement between the Oil Companies and the\nGovernment was a cooperative endeavor in which the Oil\nCompanies worked to achieve the Government’s goal of\nmaximizing avgas production and the Government as-\nsumed the risks of such increased production. The Oil\nCompanies held up their end of the bargain: avgas pro-\nduction increased over twelve-fold from approximately\n40,000 barrels per day in December 1941 to 514,000\n\fSHELL OIL COMPANY v. US 9\n\n\n\nbarrels per day in 1945, and was crucial to Allied success\nin the war. 4\n II. Avgas Production and Waste Products\n Avgas consists of an ordinary gasoline base, blended\nwith petroleum distillates and chemical additives. Alkyl-\nate is the most prevalent additive (at an amount of 25% to\n40%) and is produced by alkylation, a process that uses\n98% purity sulfuric acid as a catalyst. Because of the\nimportance of avgas to the war effort, the WPB directed\nmost available sulfuric acid to avgas production.\n Spent alkylation acid is a byproduct of alkylation, and\nhas a lower acid content than sulfuric acid. During the\nrelevant time period, spent alkylation acid could be (1)\nreprocessed to its former 98% acid percentage, (2) used to\nprocess other petroleum products, like motor gasoline and\nkerosene, or (3) discarded as waste. Treating other petro-\nleum products with spent alkylation acid further diluted\nits acid content until it became “acid sludge,” which had\nacid levels of between 35% and 65%.\n Predictably, the Oil Companies’ success in increasing\navgas production resulted in a corresponding increase in\nsulfuric acid consumption, which increased five-fold from\n1941 to 1944. 5 Facilities to reprocess the spent alkylation\n\n\n 4 After the war, the new avgas production facilities’\nusefulness was questionable; avgas consumption in the\nUnited States dropped to 70,000 barrels a day. Over\ntime, however, the Oil Companies identified new uses for\nthese facilities. The DSC was dissolved in 1945, and the\nRFC was dissolved in 1957, at which time the RFC trans-\nferred all relevant liabilities and obligations to the Gen-\neral Services Administration. See Reorganization Plan\nNo. 1 of 1957, 71 Stat. 647 (1957).\n 5 The increase in sulfuric acid use did not match the\nincrease in avgas production because the Oil Companies\n\f10 SHELL OIL COMPANY v. US\n\n\n\nacid did not increase apace, however. The Government\ntwice refused applications to construct new acid pro-\ncessing facilities, and one of the facilities that did exist\nfailed to operate at its design capacity. Moreover, the\nscarcity of available railroad tank cars (and the WPB’s\nrefusal to make transportation of acid waste a priority)\nmeant the Oil Companies were unable to transport acid\nsludge for reprocessing or other uses. See J.A. 565–66\n(acid sludge could be used as fertilizer, but the scarcity of\nrailroad tank cars prevented transporting acid sludge to\nthe fertilizer plant). By late 1944 and 1945, the Oil\nCompanies were unable to reuse the vast amounts of\nspent alkylation acid at their own refineries, and ulti-\nmately dumped much of it at the McColl site. Although\ndumping and burning acid waste were common before the\nwar, the lack of reprocessing facilities and transportation\noptions (and resulting bottleneck of acid waste) necessi-\ntated dumping and burning larger quantities of acid\nwaste than ever before.\n The Oil Companies dumped waste at the McColl site\nfrom 1942 until shortly after the war ended. Approxi-\nmately 12% of the waste was spent alkylation acid, and\nanother 82.5% was acid sludge resulting from chemical\ntreatment of other petroleum products. The remaining\n5.5% was acid sludge arising from treatment of Govern-\nment-owned benzol, for which the Government was held\nliable in the CERCLA litigation. Only the non-benzol\nwaste (i.e., the spent alkylation acid and the remaining\nacid sludge) is at issue in this case. Shell contributed\nmost of the acid waste at the McColl site—at least 60%.\nARCO contributed 10% to 20%, and also relied on other\ndisposal methods, such as burning. Texaco dumped no\nwaste until almost the end of the war, and instead burned\n\n\n\ndiscovered a method of processing avgas that used far less\nsulfuric acid than had previously been necessary.\n\fSHELL OIL COMPANY v. US 11\n\n\n\nits acid sludge waste until late 1944. Some of Union Oil’s\nsludge was reprocessed rather than dumped.\n The Allies achieved victory in Europe on May 8, 1945.\nJapan officially surrendered on September 2, 1945. The\nUnited States Government no longer required huge\nquantities of avgas, and terminated the avgas contracts in\n1945 or soon thereafter.\n III. McColl CERCLA Litigation\n Over 45 years later, in 1991, the United States and\nCalifornia brought a CERCLA action against the Oil\nCompanies to recover the costs of cleaning up the McColl\nsite. The district court held the Oil Companies, among\nother parties, were jointly and severally liable for the acid\nwaste they dumped at the McColl site, United States v.\nShell Oil Co. (Shell I), 841 F. Supp. 962, 976 (C.D. Cal.\n1993), but then allocated 100% of the cleanup costs to the\nGovernment as an “arranger” of the disposal, United\nStates v. Shell Oil Co. (Shell II), 13 F. Supp. 2d 1018,\n1030 (C.D. Cal. 1998); see also 42 U.S.C. § 9607(a)(3)\n(1994) (extending CERCLA liability to “any person who by\ncontract, agreement, or otherwise arranged for disposal or\ntreatment, or arranged with a transporter for transport\nfor disposal or treatment, of hazardous substances”). The\nNinth Circuit affirmed the Oil Companies’ liability, but\nreversed the allocation to the United States, holding the\nUnited States was not an “arranger” for the non-benzol\nacid waste. United States v. Shell Oil Co. (Shell III), 294\nF.3d 1045, 1056, 1058 (9th Cir. 2002) (“No court has\nimposed arranger liability on a party who never owned or\npossessed, and never had any authority to control or duty\nto dispose of, the hazardous materials at issue.”) (internal\nquotation marks and citation omitted).\n Following remand, the district court transferred the\nOil Companies’ breach of contract counterclaim to the\nCourt of Federal Claims pursuant to 28 U.S.C. § 1631.\nThe Oil Companies voluntarily dismissed the transferred\n\f12 SHELL OIL COMPANY v. US\n\n\n\nComplaint without prejudice, exhausted their administra-\ntive remedies with the General Services Administration\npursuant to the Contract Settlement Act of 1944 (“CSA”),\nPub. L. No. 78-395, ch. 358, 58 Stat. 694 (1944) (codified\nat 41 U.S.C. § 113, et seq. (2006)), and filed a new Com-\nplaint in the Court of Federal Claims, seeking reim-\nbursement for the CERCLA costs.\n IV. Court of Federal Claims Litigation\n The Court of Federal Claims entered summary judg-\nment in favor of the Oil Companies with respect to breach\nof contract liability and damages, holding the Government\nwas required to reimburse the Oil Companies for 100% of\ntheir non-benzol CERCLA costs. Shell Oil Co. v. United\nStates, 93 Fed. Cl. 439, 442 (2010); Shell Oil Co. v. United\nStates, 93 Fed. Cl. 153 (2010). On appeal, this court found\nthe presiding trial judge had a conflict of interest arising\nfrom his wife’s stock ownership of Chevron Corp., the\nparent company of plaintiffs-appellants Texaco and Union\nOil. Shell Oil Co. v. United States, 672 F.3d 1283, 1294\n(Fed. Cir. 2012). Because the judge’s failure to recuse\nhimself was not harmless error, this court vacated and\nremanded with instructions that the case be reassigned to\na different judge. Id.\n On remand, the Court of Federal Claims granted\nsummary judgment in favor of the Government. Shell\nRemand Decision, 108 Fed. Cl. at 422. It held there were\nthree independent reasons why the Oil Companies were\nnot entitled to reimbursement under the avgas contracts.\nFirst, it held the CERCLA costs incurred by the Oil\nCompanies were not “charges” within the meaning of the\nnew or additional charges provision in the avgas con-\ntracts. Id. at 434. Second, even if the contracts required\nreimbursement, the court found the Oil Companies re-\nleased any valid claim when the contracts were terminat-\ned and “all other issues” were settled in the mid-to-late\n1940s. Id. at 436. Finally, the court held that even if the\n\fSHELL OIL COMPANY v. US 13\n\n\n\nOil Companies had otherwise valid indemnification\nclaims based on the avgas contracts, the Anti-Deficiency\nAct barred such indemnification. Id. at 437.\n The Court of Federal Claims denied the Oil Compa-\nnies’ motion for summary judgment for the additional\nreason that there were disputed facts over how much of\nthe non-benzol waste at the McColl site was dumped “by\nreason of” the Oil Companies’ “production, manufacture,\nsale or delivery” of avgas. Id. at 446–48.\n The Oil Companies filed this timely appeal. This\ncourt has jurisdiction pursuant to 28 U.S.C. § 1295(a)(3)\n(2012).\n DISCUSSION\n On appeal, the Oil Companies challenge each of the\nthree independent bases for the trial court’s decision.\nThey further contend there is no genuine dispute that\nthey are entitled to recover 100% of the non-benzol\nCERCLA costs. Each argument is addressed in turn.\n This court reviews the Court of Federal Claims’ con-\ntract interpretation de novo. Ford Motor Co. v. United\nStates, 378 F.3d 1314, 1316 (Fed. Cir. 2004). “Summary\njudgments also receive plenary review, the appellate\ntribunal applying the same criteria as did the trial court,\nwith all justifiable factual inferences drawn in favor of the\nnon-movant.” Id. (citing Anderson v. Liberty Lobby, Inc.,\n477 U.S. 242, 255 (1986)).\nI. The Avgas Contracts Require Reimbursement of the Oil\n Companies’ CERCLA Costs\n The parties dispute the meaning of “charges” as it ap-\npears in the new or additional charges provision. The Oil\nCompanies contend it is a broad indemnification provision\ndesigned to reimburse the Oil Companies for all Govern-\nment-imposed “expenses” or “costs,” including CERCLA\nresponse costs. The Government claims that the plain\n\f14 SHELL OIL COMPANY v. US\n\n\n\nlanguage of the contract and other contemporaneous\nwartime contracts show that environmental cleanup costs\nare not “taxes, fees, or charges” as contemplated by the\navgas contracts.\n The avgas contracts promise reimbursement for “any\nnew or additional taxes, fees, or charges” imposed on the\nOil Companies, with certain exceptions not relevant here.\nE.g., J.A. 111. The two paragraphs following this provi-\nsion require the Government to pay “any now existing\ntaxes, fees, or charges,” and describe the Government’s\nobligation in the event of a disagreement regarding the\ncontractor’s entitlement to an exemption. E.g., J.A. 111–\n12. The avgas contracts provide (with some insignificant\nwording variations marked in brackets):\n Taxes.\n [(a)] Buyer shall pay in addition to the prices as\n established in [Sections IV and V] hereof [“Price\n and Payment” and “Price Escalation” clauses], any\n new or additional taxes, fees, or charges, other\n than income, excess profits, or corporate franchise\n taxes, which Seller may be required by any munic-\n ipal, state, or federal law in the United States or\n any foreign country to collect or pay by reason of\n the production, manufacture, sale or delivery of\n the commodities delivered hereunder. Buyer shall\n also pay any such taxes on crude petroleum, or\n the transportation thereof, to the extent such tax-\n es result in increased cost of the commodities de-\n livered hereunder not compensated for by [Section\n V] hereof.\n [(b)] Buyer shall also pay in addition to the prices\n as established in [Sections IV and V] hereof, any\n now existing taxes, fees, or charges measured by\n the volume or sales price of the aviation gasoline\n delivered hereunder, imposed upon Seller by rea-\n son of the production, manufacture, storage, sale\n\fSHELL OIL COMPANY v. US 15\n\n\n\n or delivery of such gasoline, unless Buyer or Seller\n is entitled to exemption from a given tax, fee or\n charge by virtue of Buyer’s governmental status;\n it being understood that Buyer now believes that\n both Buyer and Seller are entitled to such exemp-\n tion. Seller represents that the taxes, fees and\n charges referred to in this paragraph have not\n been included in its computation of costs on which\n the prices set forth in [Section IV] hereof are\n based.\n [(c)] If in any case the parties cannot agree on the\n question as to whether or not Buyer or Seller is\n entitled to exemption from a given tax[, fee or\n charge] by virtue of Buyer’s governmental status,\n the burden shall be upon Buyer to obtain a ruling\n in writing from a duly constituted and authorized\n governmental tax authority as to such exemption.\n Until such ruling is obtained Buyer shall pay the\n amount of the tax to Seller or to the appropriate\n tax collecting agency or make satisfactory ar-\n rangements with such tax collecting agency.\nJ.A. 111–12 (Shell contract, Apr. 10, 1942); J.A. 136–37\n(Shell contract, May 1, 1943); J.A. 156–57 (Union Oil\ncontract, Dec. 31, 1942, different section numbering); J.A.\n179–80 (Union Oil contract, May 1, 1943); J.A. 207 (ARCO\ncontract, Feb. 3, 1942, bracketed language in section (c),\ndifferent paragraph labeling); J.A. 227–28 (ARCO con-\ntract, Feb. 20, 1943, bracketed language in section (c));\nJ.A. 254 (Texaco contract, Jan. 17, 1942, different lan-\nguage in subsection (b), different section numbering and\nparagraph labeling); J.A. 278–79 (Texaco contract, Feb. 8,\n1943, different language in subsection (b)) (emphases\nadded to disputed term).\n “Reading the relevant clause as a whole, including the\ntitle, ‘Taxes,’” the Court of Federal Claims found “it was\nplainly intended as a price-adjustment mechanism in the\n\f16 SHELL OIL COMPANY v. US\n\n\n\nevent the Oil Companies were assessed additional or\nunanticipated taxes as a result of their avgas production.”\nShell Remand Decision, 108 Fed. Cl. at 432 (emphasis\nadded). It accorded a “fairly narrow tax-related meaning”\nto “charges,” interpreting it to mean “an encumbrance,\nlien, or other like financial burden or liability, especially\none that relates to real property.” Id. at 432–33. Such an\ninterpretation, the trial court found, was consistent with\nthe noscitur a sociis canon of interpretation, which “‘coun-\nsels that a word [be] given more precise content by the\nneighboring words with which it is associated.’” Id. at 432\n(holding that “‘charges’ [should] be ‘given more precise\ncontent’ by ‘taxes’ and ‘fees’”) (internal citation omitted).\n The Court of Federal Claims found that multiple tex-\ntual signals supported its narrow interpretation of\n“charges” as an encumbrance or lien: (1) the provisions\nare entitled “Taxes”; (2) they sometimes use the “umbrella\nidentifier ‘such taxes’” to refer to “‘taxes, fees, or charges,’”\nid.; and (3) the exclusions from “‘taxes, fees, or charges’”\nare “specific types of taxes,” i.e., “‘income, excess profits, or\ncorporate franchise taxes,’” id.\n On appeal, the Oil Companies argue that “charges”\nshould be interpreted to mean “costs,” including CERCLA\ncosts. Appellants’ Br. 20–21 (quoting, inter alia, Black’s\nLaw Dictionary 265 (9th ed. 2009) (“charge” means\n“[p]rice, cost or expense”); Black’s Law Dictionary 311 (3d\ned. 1933) (“charges” means “[t]he expenses which have\nbeen incurred, or disbursements made, in connection with\na contract, suit, or business transaction”)). According to\nthe Oil Companies, the “new or additional taxes, fees, or\ncharges” mentioned in the avgas contracts “clearly refer to\ndifferent classes of payments,” whereas encumbrances or\nliens (as the trial court interpreted “charges”) do not refer\nto payment, “but rather to obligations or burdens often\nattached to property, usually for the purpose of securing a\npayment.” Appellants’ Br. 27.\n\fSHELL OIL COMPANY v. US 17\n\n\n\n The Government apparently agrees that the trial\ncourt’s interpretation of “charges” is incorrect. It does not\ndefend the Court of Federal Claims’ interpretation of\n“charges” as “an encumbrance or lien,” but instead states\nthat “‘charge’ plainly connotes an amount paid to receive\na privilege, product, or service.” Appellee’s Br. 29. It\nnonetheless argues charges cannot mean “costs,” because\nanother part of the avgas contracts uses “costs” in a\ndifferent context. Id. at 23 (citing J.A. 111 (“Buyer shall\nalso pay any such taxes on crude petroleum or the trans-\nportation thereof, to the extent such taxes result in in-\ncreased cost of the commodities delivered hereunder.”)).\nThe Government contends this shows the parties “neces-\nsarily ascribed different meanings to the [words charges\nand costs].” Id.\n It is unclear how the Government’s proposed defini-\ntion of charges as “an amount paid to receive a privilege,\nproduct, or service” differs from the plain meaning of\n“costs.” See Black’s Law Dictionary 397 (9th ed. 2009)\n(defining “cost” as “[t]he amount paid or charged for\nsomething; price or expenditure. Cf. EXPENSE”). Moreo-\nver, the Government’s earlier arguments to the Court of\nFederal Claims conceded that the new or additional\ncharges provision covers “new costs (with exceptions not\npertinent here) imposed by authorities at any level of\nGovernment ‘by reason of the production, manufacture or\nsale of [avgas].’” 6 Defendant’s Motion to Dismiss the\nComplaint at 11, Shell Oil Co. v. United States, 93 Fed.\nCl. 153 (2010) (No. 06-CV-141), ECF No. 7 (emphasis\n\n\n\n 6 Even if the Government’s proposed definition is\nnot synonymous with “costs,” it plainly includes CERCLA\nliability costs: “[T]he costs at issue were ‘amount[s]’ the\nOil Companies ‘paid to receive . . . service[s],’ specifically\nthe removal of hazardous substances from the McColl Site\nand remediation of their effects.” Reply Br. 4.\n\f18 SHELL OIL COMPANY v. US\n\n\n\nadded) (citation omitted). In light of the common mean-\ning of “charges” as “costs or expenses,” and because the\nGovernment’s own proposed definition accords with that\nmeaning, this court interprets “charges” to mean “costs.” 7\n The Government nevertheless argues that “charges”\ncannot include CERCLA costs, because “the word ‘charge’\nappears nowhere in CERCLA, with the exception of its\nuse in the context of ‘person in charge,’ 42 U.S.C. §§ 9603,\n9604, and one discussion of a party ‘sought to be charged’\nfor ‘natural resource damage.’ 42 U.S.C. § 9607(f)(1).”\nAppellee’s Br. 29. The Government further observes that\n“the district court and appellate CERCLA cases under-\npinning this matter wholly lack the word ‘charge’” (with\nexceptions not relevant here), and argues that “one need\nlook no further than those cases to determine that the\nCERCLA response costs here have not been held to be\n‘charges’ under any definition of that term.” Id. at 31.\n Contrary to the Government’s arguments, CERCLA\ncosts are “charges” within the meaning of the relevant\ncontract provision: The avgas contracts promise reim-\nbursement of “any new or additional . . . charges” the\nGovernment imposes on the Oil Companies “by reason of\nthe production, manufacture, sale or delivery of [avgas].”\n\n\n 7 The dissent offers no different meaning. It agrees\nwith the trial court’s application of the noscitur a sociis\ncanon of interpretation, but does not appear to adopt the\ntrial court’s definition of “charges” as an encumbrance or\nlien. See Dissenting Op. at 5. By nevertheless concluding\nthat the new or additional charges provision only covers\n“‘Taxes’ and tax-related items,” id. at 6, the dissent gives\nno effect to the parties’ inclusion of “charges” in that\nprovision, Metric Constr., Inc. v. Nat’l Aeronautics &\nSpace Admin., 169 F.3d 747, 754 (Fed. Cir. 1999) (“Courts\nprefer . . . an interpretation of a contract that gives effect\nto all its terms and leaves no provision meaningless.”).\n\fSHELL OIL COMPANY v. US 19\n\n\n\nSee, e.g., J.A. 111 (emphasis added). CERCLA is a federal\nlaw requiring responsible parties to pay the “costs of\nremoval or remedial action,” 42 U.S.C. § 9607(a)(4)(A)\n(emphasis added), and is thus a charge (i.e., cost) imposed\nby a federal law. The plain language of the new or addi-\ntional charges provision thus requires the Government to\nindemnify the Oil Companies for CERCLA costs incurred\n“by reason of” the avgas contracts. The Government’s\nsearch for exactitude in the CERCLA context is beside the\npoint.\n The Government argues that other textual indicators\nin the avgas contracts require limiting the scope of in-\ndemnification. For instance, it argues the new or addi-\ntional charges provision only extends to charges imposed\nby “duly constituted and authorized governmental tax\nauthorit[ies].” Appellee’s Br. 35 (internal quotation\nmarks and citation omitted) (modification in original).\nThe “duly constituted . . . tax authority” language is\nlocated two paragraphs after the new or additional charg-\nes provision, and addresses when “the parties cannot\nagree . . . whether or not Buyer or Seller is entitled to\nexemption . . . by virtue of Buyer’s governmental status”\n(“the exemption provision”). See, e.g., J.A. 112. In such\ncases, “the burden shall be upon Buyer to obtain a ruling\nin writing from a duly constituted and authorized gov-\nernmental tax authority as to such exemption.” J.A. 112\n(emphasis added).\n The exemption provision is not relevant to the proper\nmeaning of “charges.” Only two of the contracts’ exemp-\ntion provisions (the ARCO contracts) refer to exemption\nfrom a “given tax, fee or charge,” e.g., J.A. 207; the re-\nmaining contracts refer only to “exemption from a given\ntax,” e.g., J.A. 112. The Government argues that the\nassociation in the ARCO contracts between “taxes, fees, or\ncharges” and a “governmental tax authority” necessitates\nfinding that “charges” is limited to taxes imposed by such\nbodies. The other six contracts, however, refer only to\n\f20 SHELL OIL COMPANY v. US\n\n\n\ntaxes imposed by a “governmental tax authority,” omitting\nfees and charges. To the extent any conclusion can be\ndrawn from such language, the express exclusion of “fees\nor charges” in most of the contracts suggests that the\nparties recognized fees and taxes were not limited to taxes\nimposed by tax authorities. 8\n Moreover, no contrary conclusion could be reconciled\nwith the new or additional charges provision at issue,\nwhich expressly applies to charges “required by any\nmunicipal, state, or federal law in the United States or any\nforeign country,” and is clearly not limited to laws en-\nforced by tax authorities. J.A. 111 (emphasis added). “We\nmust interpret the contract in a manner that gives mean-\ning to all of its provisions and makes sense.” McAbee\nConstr., Inc. v. United States, 97 F.3d 1431, 1435 (Fed.\nCir. 1996). It would make little sense to give determina-\ntive weight to a phrase that appears in a separate provi-\nsion, in a minority of the contracts, and which contradicts\nthe plain scope of the relevant language. After proposing\na broad meaning of “charges” that includes CERCLA\ncosts, the Government has not shown that other portions\nof the contract exempt the Government from indemnify-\ning the Oil Companies for CERCLA costs imposed as a\nresult of the avgas contracts. 9\n\n\n\n 8 Nor does the Government contend the ARCO con-\ntracts should be construed differently than the other\ncontracts that lack any reference to “charges” imposed by\na tax authority.\n 9 The dissent places great weight on other “textual\nsignals,” including the title of the provision (“Taxes”) and\nother portions of the text referring to “taxes, fees and\ncharges” as “such taxes.” See Dissenting Op. at 4–5.\nWith respect to the former, the Supreme Court recently\nemphasized that it “has placed less weight on” headings\nand titles, especially when their “under-inclusiveness . . .\n\fSHELL OIL COMPANY v. US 21\n\n\n\n The Government nevertheless argues that indemnifi-\ncation is improper because the promise to pay for new or\nadditional charges cannot encompass environmental\nliability. See Appellee’s Br. 18 (“[T]he ‘Taxes’ clause lacks\nany language that could be construed to cover environ-\nmental remediation resulting from the oil companies’ own\ndecisions to dump acid waste.”). It argues the avgas\ncontracts are distinguishable from the World War II\nprocurement contracts in DuPont and Ford Motor Co.,\nwhere this court required CERCLA indemnification. See\nE.I. Du Pont de Nemours & Co. v. United States, 365 F.3d\n1367 (Fed. Cir. 2004); Ford Motor Co., 378 F.3d at 1314.\nThe indemnification provision in DuPont, for example,\nagreed “‘to hold [DuPont] harmless against any loss,\nexpense (including expense of litigation), or dam-\nage (including damage to third persons because of death,\nbodily injury or property injury or destruction or other-\nwise) of any kind whatsoever,’” as long as the loss resulted\nfrom performance under the contract and did not result\nfrom the negligence of DuPont corporate officers or repre-\nsentatives. DuPont, 365 F.3d at 1372 (citation omitted)\n(emphases removed). This court held DuPont’s “hold\n\n\nis apparent.” Lawson v. FMR LLC, 134 S. Ct. 1158, 1169\n(2014). Because the “Taxes” heading omits the “fees” and\n“charges” that are also addressed by the new or additional\ncharges provision, it is under-inclusive. It is “‘but a short-\nhand reference to the general subject matter’ of the provi-\nsion, ‘not meant to take the place of the detailed provi-\nsions of the text.’” Id. (quoting Trainmen v. Balt. & Ohio\nR. Co., 331 U.S. 519, 528 (1947)). Moreover, aside from\nreciting the trial court’s reasoning, the Government’s\nbriefing to this court did not rely on the title of the “Tax-\nes” clause, nor on the references to “such taxes.” Like the\nother portions of the contract discussed above, these\ntextual indicators do not alter the plain scope of the new\nor additional charges provision.\n\f22 SHELL OIL COMPANY v. US\n\n\n\nharmless” provision “‘show[ed] an intent to allocate all\npossible liabilities among the parties,’” and that\n“‘CERCLA liability must be included among the future\nunknown liabilities which the parties allocated between\nthemselves.’” Id. at 1373 (quoting Elf Atochem N. Am. v.\nUnited States, 866 F. Supp. 868, 870 (E.D. Pa. 1994)).\nThe procurement contract in Ford Motor Co. required\nreimbursement of “allowable costs,” including “‘loss or\ndestruction of or damage to property as may arise out of\nor in connection with the performance of the work under\nthis contract,’” which this court held covered CERCLA\nliability. Ford Motor Co., 378 F.3d at 1319.\n The Government argues the avgas contracts contain\nneither a “hold harmless” provision, as in DuPont, nor an\n“allowable costs” provision, as in Ford Motor Co. As the\nGovernment concedes, however, “no ‘special words’ are\nrequired to create a promise of indemnification.” Appel-\nlee’s Br. 37 (quoting Corbitt v. Diamond M. Drilling Co.,\n654 F.2d 329, 334 (5th Cir. 1981)). While it is true that\nthe language in the avgas contracts differs from the\ncontract language in DuPont and Ford Motor Co., the\nrelevant portions of the latter contracts also differed from\none another. The proper question is whether the avgas\ncontracts require the Government to pay the Oil Compa-\nnies’ CERCLA charges. Indemnification is required by\nthe contracts’ promise to pay for “any” government-\nimposed “charges” incurred “by reason of” the avgas\ncontracts, and it is immaterial whether the new or addi-\ntional charges provision is identical to the provisions in\nDuPont and Ford Motor Co.\n The Government further argues the new or additional\ncharges provision “does not contemplate indemnity for\ndamages sounding in tort,” and therefore cannot require\nCERCLA indemnification. Appellee’s Br. 34. It relies on\na statement in DuPont that “CERCLA evolved from the\ndoctrine of common law nuisance.” DuPont, 365 F.3d at\n1373. Contrary to the Government’s argument, DuPont\n\fSHELL OIL COMPANY v. US 23\n\n\n\nsupports requiring CERCLA indemnification in this case.\nIn DuPont, the Government argued the contract’s “hold\nharmless” provision did not require reimbursement for\nCERCLA liability because CERCLA was not foreseeable\nat the time the contract was entered into. Id. This court\nrejected that argument, holding there was “no basis in the\nlaw for reading a limitation of foreseeability” into the\ncontract, which “evidence[d] . . . that indemnification was\navailable for all claims, foreseeable or not.” Id. In the\nalternative, the DuPont court noted the Government’s\nconcession that nuisance liability would have been fore-\nseeable, and observed that “CERCLA evolved from the\ndoctrine of common law nuisance.” Id.\n As in DuPont, the avgas contract’s new or additional\ncharges provision requires reimbursement for even un-\nforeseeable charges. The relevant provision in DuPont\nmade no mention of new or additional charges, yet was\nnonetheless found to encompass unforeseeable CERCLA\nliability. The avgas contracts’ promise to reimburse for\n“new or additional” charges must similarly extend to “all\nclaims, foreseeable or not.” See id. The DuPont court’s\nalternative reasoning, based on nuisance liability, is\nirrelevant to the interpretation of the new or additional\ncharges provision.\n The Government offers other contemporaneous con-\ntracts as extrinsic evidence that the new or additional\ncharges provision does not require CERCLA indemnifica-\ntion. It relies on Government contracts with Humble Oil\nand DuPont that contain both a “hold harmless” clause\nand a promise to reimburse for applicable taxes and\ncharges. See J.A. 889–90, 898–99 (Humble Oil contract\nJune 1, 1944); J.A. 845, 850 (DuPont contract Nov. 28,\n1940). The Government argues these contracts provide\n“powerful evidence” that the new or additional charges\nprovision “[was] never intended to provide the sort of\nindemnity that the oil companies seek.” Appellee’s Br. 26.\n\f24 SHELL OIL COMPANY v. US\n\n\n\n The Government has not established ambiguity in the\nrelevant provision, in the absence of which it is improper\nto rely on extrinsic evidence. See Coast Fed. Bank, FSB v.\nUnited States, 323 F.3d 1035, 1040 (Fed. Cir. 2006) (en\nbanc) (“If the provisions are clear and unambiguous, they\nmust be given their plain and ordinary meaning, and we\nmay not resort to extrinsic evidence to interpret them.”)\n(internal quotation marks and citation omitted). The\nGovernment’s argument is also unpersuasive since the\ntaxes clauses in the DuPont and Humble contracts are not\nthe same as the new or additional charges provision in the\navgas contracts. The Humble and DuPont contracts\npromise reimbursement for “[a]ll applicable taxes, and\nother proper charges,” J.A. 850, and “any applicable\nFederal, State or local taxes, assessments or charges,”\nrespectively. J.A. 889. They do not extend to “new or\nadditional” government-imposed charges, and are, in fact,\nmore analogous to the avgas contract’s promise to pay for\n“any now existing taxes, fees, or charges.” See J.A. 111.\nThe Humble and DuPont contracts thus provide no reason\nto narrow the otherwise plain meaning of the new or\nadditional charges provision.\n Even assuming the taxes provision in the Humble and\nDuPont contracts extends to CERCLA liability, it is not\ncoextensive with the “hold harmless” clause. The latter\napplies to losses arising from destruction of property,\nwhether or not it is Government imposed, whereas the\nformer applies to Government-imposed charges, whether\nor not loss to property was otherwise incurred. Because\nthe taxes provision and the “hold harmless” provision\nrequire indemnification for different types of risks, the\nfact that both appear in the same contract does not render\neither provision “‘superfluous[ ] or redundant,’” as the\nGovernment contends. See Appellee’s Br. 28 (quoting\nMedlin Constr. Grp., Ltd. v. Harvey, 449 F.3d 1195, 1200\n(Fed. Cir. 2006)).\n\fSHELL OIL COMPANY v. US 25\n\n\n\n Finally, to the extent extrinsic evidence is considered,\nit confirms that the parties intended “charges” to mean\n“costs.” See TEG-Paradigm Envt’l, Inc. v. United States,\n465 F.3d 1329, 1338 (Fed. Cir. 2006) (citing Coast Fed.\nBank, 323 F.3d at 1040) (“Although extrinsic evidence\nmay not be used to interpret an unambiguous contract\nprovision, we have looked to it to confirm that the parties\nintended for the term to have its plain and ordinary\nmeaning.”). Communications between the parties used\n“charges” interchangeably with “costs,” referring to, inter\nalia: (1) “the estimated charge for raw materials,” (2)\n“[i]nvestment charges,” (3) “interest charges,” and (4)\n“overhead charges.” J.A. 1955–56 (emphases added); see\nalso J.A. 1964 (a letter from Standard Oil to the PAW\nstating “this proposed additional charge for tank car or\ntank truck shipping reflects quite accurately the addi-\ntional cost to Seller and its Suppliers of tank car or tank\ntruck shipping as compared with barge and tanker ship-\nping”) (emphases added). 10 This usage confirms that the\nparties intended the new or additional charges provision\nto extend to Government-imposed costs, such as CERCLA\nliability.\n The context in which the contracts were formed simp-\nly further confirms that the new or additional charges\nprovision requires reimbursement of the Oil Companies’\nCERCLA costs. See Metric Constr., Inc. v. Nat’l Aero-\nnautics & Space Admin., 169 F.3d 747, 752 (Fed. Cir.\n1999) (quoting Hol-Gar Mfg. Corp. v. United States, 351\nF.2d 972, 975 (Ct. Cl. 1965)) (“‘[T]he language of a con-\n\n\n\n 10 The United States objects to this and other mate-\nrial located at Joint Appendix pages 914 to 2003 and 2011\nto 2026, which was not before the trial court in this case.\nAlthough the objected-to material is helpful for context\nand background, this court nowhere accords it determina-\ntive weight.\n\f26 SHELL OIL COMPANY v. US\n\n\n\ntract must be given that meaning that would be derived\nfrom the contract by a reasonably intelligent person\nacquainted with the contemporaneous circumstances.’”).\nWorld War II and the stark necessity of increased avgas\nproduction are the circumstances surrounding the for-\nmation of the avgas contracts. The Government was in a\nposition of near-complete authority over existing refiner-\nies, but needed the Oil Companies’ cooperation to con-\nstruct new production facilities to meet the extraordinary\ndemand for avgas. The Oil Companies agreed to the\navgas contracts’ low profits in return for the Govern-\nment’s assumption of certain risks outside of the Oil\nCompanies’ control. See supra Background Part I. The\nCERCLA charges in this case are one such risk. The Oil\nCompanies could not have contemplated such CERCLA\ncharges at the time they entered into the contracts; in-\ndeed, dumping the acid waste at the McColl site was\nexpressly permitted. See J.A. 605 ¶ 492 (Eli McColl had a\npermit from the City of Fullerton to dump the waste.).\nThese circumstances confirm that the new or additional\ncharges provision must be interpreted to require reim-\nbursement for the Oil Companies’ CERCLA costs arising\nfrom avgas production. The Court of Federal Claims’\nholding to the contrary is accordingly reversed.\nII. The Court of Federal Claims Erred in Holding the Oil\n Companies’ Contractual Claims Were Released\n The Court of Federal Claims denied the Oil Compa-\nnies’ reimbursement claims for the additional reason that\nthey were released when the avgas contracts were termi-\nnated and settled in the mid-to-late 1940s. The parties\nstipulated in the CERCLA litigation that the avgas con-\ntracts “were terminated in 1945 or, in the case of [ARCO],\nshortly thereafter. Matters relating to profits from these\ncontracts, termination costs, and all other issues concern-\ning these contracts were settled between the parties in\nthe late 1940s.” J.A. 640.\n\fSHELL OIL COMPANY v. US 27\n\n\n\n The Court of Federal Claims relied on DuPont and\nFord Motor Co. in reasoning that the Oil Companies’\nclaims did not survive the termination and settlement of\nthe underlying avgas contracts. In both DuPont and Ford\nMotor Co., this court held there was no release of the\ncontractor’s indemnification claim because the agreement\nterminating the underlying World War II contract ex-\npressly reserved future indemnification claims. DuPont,\n365 F.3d at 1370; Ford Motor Co., 378 F.3d at 1318. In\nthis case, neither party could locate the Oil Companies’\ntermination agreements, and the Court of Federal Claims\nreasoned that “the Oil Companies have offered no evi-\ndence or argument that this ‘termination’ and ‘set-\ntle[ment]’ differed in any material way from a general\nrelease.” Shell Remand Decision, 108 Fed. Cl. at 436.\n On appeal, the Oil Companies argue that “[t]he stipu-\nlation says nothing at all about whether the Oil Compa-\nnies executed a release (general or otherwise) as part of\n[the] settlement, or if they did execute such a release,\nwhether it encompassed or excepted future reimburse-\nment claims for ‘taxes, fees, or charges.’” Appellants’ Br.\n34. The Oil Companies contend this uncertainty is fatal\nto the trial court’s finding of a general release, because\nthe Government (as the defendant) bore “‘the burden of\nproving the validity and applicability of a release,’” and\nfailed to meet that burden. Id. at 35 (quoting A.R.S. Inc.\nv. United States, 157 Ct. Cl. 71, 76 (1962)).\n The Government responds that the new or additional\ncharges provision did not “remain in force after the expi-\nration or termination of the contracts,” and that “[s]uch\npermanence should not be inferred.” Appellee’s Br. 23; see\nalso id. (quoting Consumers Ice Co. v. United States, 475\nF.2d 1161, 1166–67 (Ct. Cl. 1973) (describing “a judicial\nreluctance to lock parties into a given set of rights and\nobligations for long or indefinite periods without some\nclear indication that this was actually intended by the\nparties”)). The parties’ stipulation is adequate to prove\n\f28 SHELL OIL COMPANY v. US\n\n\n\nrelease, the Government contends, because the stipula-\ntion “admits . . . that ‘all other issues concerning these\ncontracts were settled between the parties in the late\n1940s.’” Appellee’s Br. 43 (quoting J.A. 640 ¶ 609).\n The Court of Federal Claims erred in holding the\nGovernment met its burden to prove release. “Once the\nfacts of breach are established, the defendant has the\nburden of pleading and proving any affirmative defense\nthat legally excuses performance.” Stockton E. Water\nDist. v. United States, 583 F.3d 1344, 1360 (Fed. Cir.\n2009) (internal quotation marks and citation omitted); see\nalso R. Ct. Fed. Cl. 8(c)(1) (“In responding to a pleading, a\nparty must affirmatively state any avoidance or affirma-\ntive defense, including . . . release.”). “[T]he burden of\nproving the validity and applicability of release is on the\ndefendant.” A.R.S. Inc., 157 Ct. Cl. at 76. The two facts\nrelied upon by the Government—termination and settle-\nment of all claims—do not satisfy its burden to prove\nrelease of the Oil Companies’ claims for CERCLA indem-\nnification.\n The Oil Companies brought these claims under the\nCSA, which is meant to ensure “speedy and equitable\nfinal settlement of claims under terminated war con-\ntracts.” 41 U.S.C. § 101 (2006) (emphasis added), repealed\nand replaced by An Act To Enact Certain Laws Relating\nto Public Contracts, Pub. L. No. 111-350, § 6, 124 Stat.\n3677, 3854 (Jan. 4, 2011); see also id. § 103(h)\n(“‘[T]ermination claim’ means any . . . claim under a\nterminated war contract . . . .”). The CSA allows post-\ntermination indemnification claims, such as the Oil\nCompanies’ claims on the terminated avgas contracts, “‘so\nlong as the expenditure arose on account of the contrac-\ntor’s performance under the contract, and the expenditure\nis not otherwise excluded from payment by other provi-\nsions.’” Ford Motor Co., 378 F.3d at 1320 (quoting Hou-\ndaille Indus., Inc. v. United States, 151 F. Supp. 298, 312\n(Ct. Cl. 1957)); see also id. at 1319 (“[T]he CSA explicitly\n\fSHELL OIL COMPANY v. US 29\n\n\n\ncontemplated later-arising claims, and set no period of\nlimitations.”).\n Houdaille, for example, involved a World War II pro-\ncurement contract in which the Government agreed to\nreimburse the contractor for, inter alia, its reasonable\ncosts and expenditures resulting from contract termina-\ntion. Houdaille, 151 F. Supp. at 300. The contract was\nterminated in 1946, and the contractor “paid $420,212.46\nmore in [unemployment insurance] contributions because\nof its experience under [the contract] than it would have if\nits contribution rate was based only on the operations of\nits three normal peacetime plants.” Id. at 305. The\nHoudaille court rejected the Government’s argument that\n“there [was] no authority” to reimburse costs “after the\ncontract had expired,” finding the expenses were reim-\nbursable because they “arose on account of plaintiff’s\noperation under the contract.” Id. at 312. The court also\nheld the contractor’s indemnification claim was not\nbarred by release, id. at 310, making it clear that a con-\ntract termination is not the same as a general release. In\nthis case, the CERCLA costs for which the Oil Companies\nnow seek indemnification arose, at least in part, from the\nproduction of avgas pursuant to the avgas contracts. The\nfact that the costs were not imposed until after the con-\ntracts were terminated does not bar the Oil Companies’\nCSA claims.\n The Government nonetheless argues that the parties’\nsettlement of all issues concerning the avgas contracts\namounts to a general release of claims for reimbursement.\nIt contends this case is distinguishable from DuPont and\nFord Motor Co., where the Termination Agreements\nexpressly preserved the contractor’s indemnification\nclaims. See DuPont, 365 F.3d at 1373–74 (The Termina-\ntion Supplement preserved all indemnification claims and\n“apparently included no termination or expiration date.”);\nFord Motor Co., 378 F.3d at 1319 (“The Termination\nAgreement . . . includes all claims ‘not now known’ arising\n\f30 SHELL OIL COMPANY v. US\n\n\n\nfrom performance of the War Contract.”). The Govern-\nment maintains there is no indication that the settlement\nagreements in this case include any analogous promises\nto allow future indemnification claims. Just as the con-\ntract in DuPont was “no longer in effect, having been\nsupplanted by the Termination Supplement,” DuPont, 365\nF.3d at 1373, the Government maintains the avgas con-\ntracts in this case are “no longer in effect,” having been\nsupplanted by the settlement agreements of “all other\nissues.” Appellee’s Br. 42–44. According to the Govern-\nment, the terminated and settled avgas contracts cannot\nsupport any new indemnification claim; such a claim\nwould have to be based on the settlement agreements,\nwhich are not in the record.\n The parties’ stipulation that “all other issues” were\nsettled does not satisfy the Government’s burden to prove\na general release. See J.A. 640. A settlement between\ntwo parties may resolve all then-existing issues without\ndischarging any and all obligations between the parties.\nSee Restatement (Second) of Contracts § 284(1) (“A re-\nlease is a writing providing that a duty owed to the maker\nof the release is discharged immediately or on the occur-\nrence of a condition.”). In Ford Motor Co., for example, all\nissues had been settled, but not all rights were released;\nthe parties agreed to allow future indemnification claims\nunder the contract. 378 F.3d at 1319–20. It is the Gov-\nernment’s burden to prove the settlement agreements\nreleased future claims under the avgas contracts, A.R.S.\nInc., 157 Ct. Cl. at 76, and the Government has failed to\nestablish the content of those settlement agreements.\nThe Government has not shown that the termination and\nsettlement in this case amount to a general release of the\nOil Companies’ claims for reimbursement of new or addi-\ntional charges. The Court of Federal Claims therefore\nerred in holding the Oil Companies’ contract claims were\nreleased.\n\fSHELL OIL COMPANY v. US 31\n\n\n\n III. The Court of Federal Claims Erred in Holding the\nAnti-Deficiency Act Barred the Oil Companies’ Indemnifi-\n cation Claims\n The final independent basis for the Court of Federal\nClaims’ grant of summary judgment in favor of the Gov-\nernment was that any indemnification promise broad\nenough to encompass future CERCLA liability was an\nunenforceable violation of the Anti-Deficiency Act\n(“ADA”).\n The ADA provides, in relevant part:\n No executive department or other Government es-\n tablishment of the United States shall expend, in\n any one fiscal year, any sum in excess of appro-\n priations made by Congress for that fiscal year, or\n involve the Government in any contract or other\n obligation for the future payment of money in ex-\n cess of such appropriations unless such contract or\n obligation is authorized by law.\n31 U.S.C. § 665 (1940) (now revised and codified at 31\nU.S.C. § 1341) (emphasis added). “[A]bsent an express\nprovision in an appropriation for reimbursement ade-\nquate to make such payment, [the ADA] proscribes in-\ndemnification on the grounds that it would constitute the\nobligation of funds not yet appropriated.” Cal.-Pac. Utils.\nCo. v. United States, 194 Ct. Cl. 703, 715 (1971). In Chase\nv. United States, for example, the plaintiff sought damag-\nes under a building lease entered into with the Postmas-\nter General. 155 U.S. 489, 490 (1894). The Supreme\nCourt held the Postmaster General was authorized to\nenter into contracts on behalf of the United States only if\n“authorized by law, or . . . under an appropriation ade-\nquate to its fulfil[l]ment.” Id. at 502. Because “[t]here is\nno claim that the lease in question was made under any\nappropriation whatever, . . . the only inquiry is whether\nthe contract of lease was ‘authorized by law,’ within the\n\f32 SHELL OIL COMPANY v. US\n\n\n\nmeaning of the [ADA].” Id. (holding the contract was not\nauthorized by law).\n The inquiry at the Court of Federal Claims likewise\ncentered on whether the indemnification provisions at\nissue were “authorized by law.” Before this court, howev-\ner, the parties and amicus disagree on a preliminary\nquestion: whether the DSC was subject to the ADA in the\nfirst place. The Oil Companies argue that “DSC’s con-\ntracts were not funded through appropriations,” and\ncontend the ADA thus does not apply. Appellants’ Br. 39\n(citing GAO, Reference Manual of Government Corpora-\ntions, S. Doc. No. 86 (1945); J.A. 420 (DSC “did not receive\ndirect annual appropriations.”)). Amicus American Fuel\n& Petrochemical Manufacturers (“AFPM”) elaborates that\nthe DSC “was funded through borrowings and retained\nearnings, not through Congressional appropriations and\nhad no borrowing limit.”11 AFPM Br. 20. The Oil Com-\npanies and AFPM therefore contend that the new or\nadditional charges provision in the avgas contracts is not\nsubject to the ADA.\n This preliminary question—whether the DSC is sub-\nject to the ADA—was not raised before the Court of Fed-\n\n\n 11 The RFC, of which the DSC was a subsidiary, was\ncapitalized with $500 million in capital stock subscribed\nby the United States, but was otherwise funded primarily\nby debt and retained earnings. J.A. 1429; see also 15\nU.S.C. § 602 (1940). The RFC was authorized to charter a\nsubsidiary “on such terms and conditions as [the RFC]\nmay determine.” 15 U.S.C. § 606b (1940). In August\n1940, the RFC chartered the DSC, vesting it with authori-\nty “to borrow money and issue its secured or unsecured\nobligations therefore.” J.A. 1447–48; see also J.A. 1440,\n1443–44 (DSC borrowed over $6 billion and earned\nenough to repay approximately $4.8 billion back after the\nwar.).\n\fSHELL OIL COMPANY v. US 33\n\n\n\neral Claims, where both parties assumed the applicability\nof the ADA and only disputed whether the indemnifica-\ntion provision was authorized pursuant to the ADA. See\nShell Remand Decision, 108 Fed. Cl. at 438. By failing to\nraise this issue below, the Oil Companies waived their\nargument that the ADA is inapplicable to the DSC. See\nHarris Corp. v. Ericsson Inc., 417 F.3d 1241, 1263 (Fed.\nCir. 2005). Like the Court of Federal Claims, this court\nassumes the ADA applies and limits the inquiry to\nwhether the relevant indemnification provision was\n“authorized by law.”\n The Oil Companies argued before the trial court that\nthe ADA did not bar recovery, because the new or addi-\ntional charges provision was “authorized by” the First\nWar Powers Act and implementing Executive Orders\n9024 and 9001. The Court of Federal Claims held “that\nnone of these sources provided the requisite ADA waiver\nthat would have allowed the Government to indemnify\nthe Oil Companies.” 12 Shell Remand Decision, 108 Fed.\nCl. at 437. On appeal, the Oil Companies contend the\nCourt of Federal Claims wrongly required them to prove\nan ADA “waiver” when the ADA only requires authoriza-\ntion for the relevant provision. They maintain the author-\nity granted to the President in the First War Powers Act,\nand delegated to the DSC through implementing Execu-\ntive Orders 9024 and 9001, authorized the avgas con-\ntracts’ new or additional charges provision.\n Both parties agree that Title II of the First War Pow-\ners Act, enacted in 1941, granted the President the power\n\n\n 12 Before the Court of Federal Claims, the Oil Com-\npanies also contended that the requisite authorization\nwas provided by the National Defense Act of 1916 and a\nJune 1941 amendment to the charter of the DSC, Shell\nRemand Decision, 108 Fed. Cl. at 437, but do not raise\nthese arguments on appeal.\n\f34 SHELL OIL COMPANY v. US\n\n\n\nto “authorize any department or agency” to enter into\ncontracts that would otherwise violate the ADA, “whenev-\ner he deems such action would facilitate the prosecution of\nthe war.” Pub. L. No. 77-354, ch. 593, § 201, 55 Stat. 838,\n839 (1941). The parties disagree, however, whether the\nPresident delegated this authority to the DSC in Execu-\ntive Orders 9024 and 9001. In Executive Order 9024,\nPresident Roosevelt invoked the “authority vested in\n[him] by the Constitution and statutes of the United\nStates,” to establish the WPB and grant the WPB Chair-\nman the power to, inter alia, “[d]etermine the policies,\nplans, procedures, and methods of the several Federal\ndepartments, establishments, and agencies in respect to\nwar procurement and production, including purchasing,\ncontracting, specifications, and construction.” 7 Fed. Reg.\n329, 330 ¶ 2(b) (Jan. 17, 1942). In a February 13, 1942,\nletter, the WPB Chairman then delegated to the OPC the\nauthority “to determine . . . the price at which [avgas] is to\nbe purchased, the capacity of the particular refiner to\nperform and the technical details of the particular con-\ntract,” and delegated to the DSC the authority “to deter-\nmine . . . the other terms and the form of such [avgas]\ncontracts.” J.A. 400.\n By invoking authority from the “statutes of the Unit-\ned States,” Executive Order 9024 delegates to the WPB\nthe authority under the First War Powers Act to author-\nize indemnification provisions otherwise barred by the\nADA. Moreover, the Chairman’s letter to the DSC dele-\ngating the authority to determine “the other terms and\nthe form of such [avgas] contracts” transfers that authori-\nty to the DSC. Contrary to the Government’s objection\nthat Executive Order 9024 does not mention contracting,\nit clearly directs the WPB Chairman to direct “the poli-\ncies, plans, procedures, and methods” with respect “to war\nprocurement and production, including purchasing, con-\ntracting, specifications, and construction.” This delega-\n\fSHELL OIL COMPANY v. US 35\n\n\n\ntion is sufficient to authorize the indemnification provi-\nsions at issue under the ADA.\n Indeed, the DuPont court found that a similar provi-\nsion in the CSA was sufficient to authorize otherwise\nprohibited indemnification agreements. The relevant\nportion of the CSA stated:\n Each contracting agency shall have authori-\n ty, notwithstanding any provisions of law other\n than contained in this chapter, (1) to make any\n contract necessary and appropriate to carry out\n the provisions of this chapter; (2) to amend by\n agreement any existing contract, either before or\n after notice of its termination, on such terms and\n to such extent as it deems necessary and appro-\n priate to carry out the provisions of this chapter;\n and (3) in settling any termination claim, to agree\n to assume, or indemnify the war contractor\n against, any claims by any person in connection\n with such termination claims or settlement.\n41 U.S.C. § 120(a) (1946) (emphasis added). The CSA did\nnot expressly mention the ADA, but this court nonethe-\nless reasoned that the “bestowal of contracting authority\n‘notwithstanding any provisions of law other than con-\ntained in this chapter’” was sufficient to authorize indem-\nnification pursuant to the ADA. DuPont, 365 F.3d at\n1375. Similarly, although Executive Order 9024 does not\nexpressly state that the Chairman of the WPB (and, in\nturn, the DSC) can expend unappropriated funds other-\nwise in violation of the ADA, it is a broad delegation of\ncontracting authority that impliedly invokes the Presi-\ndent’s authority under the First War Powers Act to by-\npass the ADA’s restrictions. The Court of Federal Claims\ntherefore erred in holding that the ADA rendered the\nindemnification provision unenforceable.\n The Government nevertheless argues the DSC was at\nall times subject to prior Executive Order 8512, which\n\f36 SHELL OIL COMPANY v. US\n\n\n\nstated: “No agency shall make expenditures or involve the\nGovernment in any contract or other obligation for the\nfuture payment of money in excess of the amount current-\nly available therefor under the apportionments so ap-\nproved or revised.” Appellee’s Br. 46 (quoting 5 Fed. Reg.\n2,849 (Aug. 15, 1940)) (internal quotation marks omitted).\nAlthough Executive Order 9024 provides that all prior\n“conflicting” Executive Orders “are hereby superseded,”\nthe Government argues the terms of Executive Order\n9024 do not conflict with Executive Order 8512, whose\nprohibition thus remained in effect. To the contrary,\nhowever, Executive Order 9024 delegates the President’s\ngeneral contracting authority to the WPB “[b]y virtue of\nthe authority vested in [the President] by the . . . statutes\nof the United States.” Such statutes include the First\nWar Powers Act’s authority to enter into contracts that\nwould otherwise violate the ADA. Delegating authority to\nbypass the ADA conflicts with Executive Order 8512,\nwhich prohibited contracts in excess of then-current\nappropriations. Executive Order 8512 thus does not\ncontrol in this case.\n Because the new or additional charges provision was\nauthorized by the First War Powers Act, as delegated to\nthe DSC through Executive Order 9024 and the WPB\nChairman’s letter, there is no need to consider whether\nthe President also delegated such authority under Execu-\ntive Order 9001. The Court of Federal Claims’ holding\nthat the ADA prohibited reimbursement of new or addi-\ntional charges is therefore reversed.\n Each of the three independent bases for denying the\nOil Companies’ reimbursement claims has been reversed,\nmaking it appropriate to enter summary judgment in\nfavor of the Oil Companies with respect to breach of\ncontract liability. The sole remaining issue is whether the\nCourt of Federal Claims correctly determined that genu-\nine disputed facts prevented granting summary judgment\nwith respect to damages.\n\fSHELL OIL COMPANY v. US 37\n\n\n\n IV. The Court of Federal Claims Correctly Held That\n Disputed Facts Prevent Granting the Oil Companies’\n Motion for Summary Judgment on Damages\n The Court of Federal Claims found there were “factu-\nal questions” regarding “what portion of the non-benzol\nwaste [(i.e., the spent alkylation acid and the non-benzol\nacid sludge)] was created ‘by reason of’ the avgas pro-\ngram.” Shell Remand Decision, 108 Fed. Cl. at 448. On\nappeal, the Oil Companies argue this court should award\n100% of their CERCLA costs on the ground that the\nGovernment is collaterally estopped from arguing that\nanything less than 100% of the non-benzol acid waste was\ndue to the avgas contracts.\n The Oil Companies rely on the decision of the district\ncourt in the CERCLA litigation, which found “that 100\npercent of the non-benzol waste at the McColl Site is\nattributable to the avgas program.” Shell II, 13 F. Supp.\n2d at 1026. The Oil Companies argue the district court’s\nattribution “finding is binding on the Government as a\nmatter of issue preclusion.” Appellants’ Br. 56 (quoting\nUnited States v. Mendoza, 464 U.S. 154, 158 (1984)\n(“[O]nce a court has decided an issue of fact or law neces-\nsary to its judgment, that decision is conclusive in a\nsubsequent suit based on a different cause of action\ninvolving a party to the prior litigation.”)). The district\ncourt’s finding was not final, however, but rather was\nreversed by the Ninth Circuit. Shell III, 294 F.3d at\n1048–49. The Ninth Circuit instead held the Government\nwas not an “arranger” for the non-benzol waste, and thus\ndid not reach the question of how much non-benzol waste\nwas attributable to the avgas program. Id. The final\ndecision in Shell III thus did not resolve the attribution\nissue and cannot serve as the basis for issue preclusion.\nSee Laguna Hermosa Corp. v. United States, 671 F.3d\n1284, 1288 (Fed. Cir. 2012) (issue preclusion requires,\ninter alia, that “resolution of the issue was essential to a\n\f38 SHELL OIL COMPANY v. US\n\n\n\nfinal judgment in the first action”) (internal quotation\nmarks and citations omitted).\n The Oil Companies contend the district court’s non-\nbenzol attribution analysis was necessary to the Ninth\nCircuit’s holding because the Ninth Circuit affirmed the\ndistrict court’s apportionment analysis with respect to the\nbenzol waste. This argument confuses the district court’s\nattribution holding (based on the factual question of how\nmuch acid waste was caused by the avgas program) with\nits apportionment holding. In the latter, the district court\nidentified multiple reasons why 100% of the waste for\nwhich the Government was an “arranger” (both the benzol\nand non-benzol waste) should be equitably apportioned to\nthe Government: (1) it would properly place the costs of\nwar on society as a whole, and (2) it would reflect the\nGovernment’s role in limiting reprocessing facilities and\naccess to tank cars. Shell II, 13 F. Supp. 2d at 1027. The\nNinth Circuit affirmed this apportionment analysis with\nrespect to the benzol waste.\n This equitable apportionment holding is distinct from\nthe issue of attribution relevant in this case: how much of\nthe acid waste dumped at the McColl site was “by reason\nof” the avgas program. The Ninth Circuit did not rely on\nor incorporate the district court’s attribution holding with\nrespect to the non-benzol waste, and instead stated “[t]he\nundisputed facts indicate that the Oil Companies . . .\ndumped acid waste from operations other than avgas\nproduction at the McColl site.” Shell III, 294 F.3d at 1062\n(emphasis added). In short, the prior CERCLA litigation\ndoes not preclude the Government from challenging the\namount of acid waste attributable to the avgas contracts.\n Absent collateral estoppel, the Oil Companies do not\ncontest the trial court’s finding of a genuine dispute\nregarding how much of the acid waste at the McColl site\nresulted from the avgas contracts, nor does this court\ndiscern any error. See, e.g., J.A. 569 (“Kerosene and\n\fSHELL OIL COMPANY v. US 39\n\n\n\nlubricating oils were also acid treated” and “produced acid\nsludge.”); J.A. 572 (The McColl site “contains acid sludge\nresulting from the treatment of civilian and military\npetroleum products.”). The case is remanded for the\nCourt of Federal Claims to determine how much acid\nwaste at the McColl site was “by reason of” the avgas\ncontracts.\n CONCLUSION\n For the foregoing reasons, this court reverses the\nCourt of Federal Claims’ grant of summary judgment\nwith respect to breach of contract liability, and remands\nfor a trial on damages.\n REVERSED AND REMANDED\n\f United States Court of Appeals\n for the Federal Circuit\n ______________________\n\n SHELL OIL COMPANY, ATLANTIC RICHFIELD\n COMPANY, TEXACO, INC., AND UNION OIL\n COMPANY OF CALIFORNIA,\n Plaintiffs-Appellants,\n\n v.\n\n UNITED STATES,\n Defendant-Appellee.\n ______________________\n\n 2013-5051\n ______________________\n\n Appeal from the United States Court of Federal\nClaims in Consolidated Nos. 06-CV-0141 and 06-CV-1411,\nJudge Thomas C. Wheeler.\n ______________________\nREYNA, Circuit Judge, dissenting.\n The majority concludes that a “Taxes” clause in sev-\neral contracts for high-octane aviation gas (“avgas”)\nshould be broadly interpreted to require the United States\nto indemnify the Oil Companies for a CERCLA judgment\ncovering restoration efforts of the McColl acid waste site\nmore than fifty years after the completion of the con-\ntracts. I do not interpret the “Taxes” clause as a general\nindemnification clause that captures production-related\ncosts. For this and the other reasons set forth below, I\nrespectfully dissent.\n\f2 SHELL OIL COMPANY v. US\n\n\n\n I.\n This appeal arises following the Oil Companies’ fail-\nure to recover the McColl site clean-up costs through the\nCERCLA litigation that took place in California. The\nCERCLA regime allows a party that is financially respon-\nsible for the clean-up costs of environmental contamina-\ntion to seek contribution from other responsible parties.\n42 U.S.C. § 9613(f)(1). District courts thus have broad\ndiscretion to resolve contribution claims “using such\nequitable factors as [they] determine[] are appropriate.”\nId.; see also Boeing Co. v. Cascade Corp., 207 F.3d 1177,\n1187 (9th Cir. 2000) (noting that CERCLA “gives district\ncourts discretion to decide what factors ought to be con-\nsidered, as well as the duty to allocate costs according to\nthose factors”). After failing to achieve a satisfactory\noutcome under CERCLA’s equitable considerations, the\nOil Companies now seek recovery through a different\navenue—a breach of contract action. In doing so, they\nbreach the four corners of their avgas contracts by asking\nthis court to interpret the “Taxes” clause as a catch-all\nindemnification provision. Such an interpretation, in my\nview, has no basis in the plain language of the clause or\nthe overall scope of the contract. I would therefore affirm\nthe decision of the Court of Federal Claims and hold that\nthe “Taxes” clause was intended by the parties to be\nnothing more than a price-adjustment mechanism cover-\ning additional or unanticipated tax-related burdens\nassessed by reason of avgas production. 1\n “Contract interpretation is a question of law, which\n[the court] review[s] without deference.” 1st Home Liqui-\n\n\n 1 I do not interpret the “Taxes” clause as allowing\nthe Oil Companies to recover their CERCLA costs, I do\nnot address the Court of Federal Claims’s conclusion that\nrecovery is also precluded by general release and the Anti-\nDeficiency Act.\n\fSHELL OIL COMPANY v. US 3\n\n\n\ndating Trust v. United States, 581 F.3d 1350, 1355 (Fed.\nCir. 2009); Teg-Paradigm Envtl., lnc. v. United States, 465\nF.3d 1329, 1336 (Fed. Cir. 2006). “In the case of con-\ntracts, the avowed purpose and primary function of the\ncourt is the ascertainment of the intention of the parties.”\nAlvin Ltd. v. U.S. Postal Serv., 816 F.2d 1562, 1565 (Fed.\nCir. 1987). Contract interpretation begins with the lan-\nguage of the written agreement, which must be given\n“[its] ordinary meaning unless the parties mutually\nintended and agreed to an alternative meaning.” Harris\nv. Dep’t of Veterans Affairs, 142 F.3d 1463, 1467 (Fed. Cir.\n1998). We may not resort to extrinsic evidence “to create\nan ambiguity where a contract was not reasonably sus-\nceptible of differing interpretations at the time of con-\ntracting.” Metric Constructors, Inc. v. Nat’l Aeronautics &\nSpace Admin., 169 F.3d 747, 752 (Fed. Cir. 1999); see also\nCoast Fed. Bank, FSB v. United States, 323 F.3d 1035,\n1038 (Fed. Cir. 2004) (en banc).\n Under the “Taxes” clause of the avgas contracts, the\nGovernment agreed to reimburse the Oil Companies for\n“any new or additional taxes, fees, or charges” that may\nbe imposed “by reason of” the production, sale, and deliv-\nery of avgas. Shell Oil Company’s contract, dated April\n10, 1942, is representative of all the avgas contracts at\nissue here and provides:\n XII. Taxes\n a) Buyer shall pay in addition to the prices as\n established in Sections IV and V hereof,\n any new or additional taxes, fees, or charg-\n es, other than income, excess profits, or\n corporate franchise taxes, which Seller may\n be required by any municipal, state, or fed-\n eral law in the United States or any foreign\n country to collect or pay by reason of the\n production, manufacture, sale or delivery of\n the commodities delivered hereunder.\n\f4 SHELL OIL COMPANY v. US\n\n\n\n Buyer shall also pay any such taxes on\n crude petroleum, or the transportation\n thereof, to the extent such taxes result in\n increased cost of the commodities delivered\n hereunder not compensated for by Section\n V hereof.\nJ.A. 111-12 (Shell Oil Co. Contract, Apr. 10, 1942) (em-\nphasis added).\n The majority’s conclusion that CERCLA liability is\ncovered by this clause hinges on an isolated interpretation\nof the word “charges.” The majority engages in a lengthy\ndiscussion of the plain meaning of “charges” and con-\ncludes that it is synonymous with “costs.” Maj. Op. at 17-\n19. The majority then proceeds to hold that the “Taxes”\nclause requires the Government to reimburse the Oil\nCompanies for costs of any and all type, regardless of how\nthey were incurred, as long as those costs arise “by reason\nof” the production and delivery of avgas.\n Such an interpretation ignores the contractual char-\nacter and import of the “Taxes” clause. When read as a\nwhole, the contract signals that the parties, at the time\nthey entered into the contract, intended the “Taxes”\nclause to be read as a price-adjustment mechanism cover-\ning unexpected tax-related burdens. First, the clause is\ntitled “Taxes.” Second, the clause uses the term “such\ntaxes” several times to refer back to the broader category\nof “taxes, fees, or charges.” Third, the specific exclusions\nfrom “taxes, fees, or charges” are all income and related\ntaxes, including “income, excess profits, [and] corporate\nfranchise taxes.” Finally, the clause provides that the\npayment of “new or additional taxes, fees, or charges” will\nbe in addition to the prices established in the “Price and\nPayment” (Section IV) and “Price Escalation” (V) clauses\nof the contract. The term “charges” should thus be inter-\npreted consistently and in harmony with the broader\n\fSHELL OIL COMPANY v. US 5\n\n\n\noperation of the “Taxes” clause as a price-adjustment\nmechanism.\n The majority summarily dismisses these textual sig-\nnals in favor of an isolated and overly-broad interpreta-\ntion of the singular term “charges” to conclude that “[t]he\nplain language of the new or additional charges provision”\nmust encompass CERCLA liability. Maj. Op. at 19. In\ndoing so, the majority ignores the trial court’s use of the\nnoscitur a sociis canon of interpretation, which “is just an\nerudite (or some would say antiquated) way of saying\nwhat common sense tells us to be true: ‘[A] word is\nknown by the company it keeps.’” James v. United States,\n550 U.S. 192, 222 (2007) (Scalia, J., dissenting) (alteration\nin original) (quoting Jarecki v. G.D. Searle & Co., 367\nU.S. 303, 307 (1961)). Indeed, contract terms must be\nconstrued, not in isolation, but as a whole and in a way\nthat gives effect to the surrounding context. NVT Techs.,\nInc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 2004)\n(noting that a contract must “be considered as a whole\nand interpreted so as to harmonize and give reasonable\nmeaning to all of its parts”); Metric Constructors, 169 F.3d\nat 752 (“Before arriving at a legal reading of a contract\nprovision, a court must consider the context and inten-\ntions of the parties.”). “The context and subject matter of\na contract may indicate that an ordinary word or phrase\nhas an unusual meaning in a given sentence.” 11 Richard\nA. Lord, Williston on Contracts § 32:6 (4th ed. 1999 &\nSupp. 2009). “[I]t is questionable whether a word has a\nmeaning at all when divorced from the circumstances in\nwhich it is used.” E. Allen Farnsworth, Contracts 454\n(4th ed. 2004). Here, the majority’s interpretation ignores\nthe plain meaning of the text, fails to give harmony to the\ncontracts as a whole, and is overall unreasonable.\n For example, the majority dismisses, in a footnote,\nany reliance on the title of the clause (“Taxes”) as evi-\ndence of the clause’s fairly narrow tax-related meaning.\nMaj. Op. at 20 n.9. The majority notes that the Supreme\n\f6 SHELL OIL COMPANY v. US\n\n\n\nCourt tends to “place[] less weight on” captions, headings\nand titles when construing statutory provisions. Id.\n(quoting Lawson v. FMR LLC, No. 12-3, 2014 WL 813701,\nat 10 (U.S. Mar. 4, 2014)). This principle, which is often\nused when “the [statutory] text is complicated and prolif-\nic,” nevertheless recognizes that a heading can be a help-\nful “‘short-hand reference to the general subject matter’ of\nthe provision.” Lawson, 2014 WL 813701, at 10 (quoting\nTrainmen v. Baltimore & Ohio R. Co., 331 U.S. 519, 528\n(1947)). Hence, Supreme Court precedent supports a\nfinding that the parties intended for the “general subject\nmatter” of this clause to cover “Taxes” and tax-related\nitems.\n The majority rejects the Government’s comparison of\nthe “Taxes” clause to the terms of other contemporaneous\ncontracts as an improper reliance on extrinsic evidence in\nthe absence of an “established ambiguity.” Maj. Op. at 24.\nAt the same time, the majority itself informs its broad\ninterpretation of the “Taxes” clause by heavily relying on\nextrinsic evidence. As the majority notes:\n World War II and the stark necessity of increased\n avgas production are the circumstances surround-\n ing the formation of the avgas contracts. The\n Government was in a position of near-complete\n authority over existing refineries, but needed the\n Oil Companies’ cooperation to construct new pro-\n duction facilities to meet the extraordinary de-\n mand for avgas.\nMaj. Op. at 26 (emphasis original). The majority con-\ncludes that “[t]hese circumstances confirm that the new or\nadditional charges provision must be interpreted to\nrequire reimbursement for the Oil Companies’ CERCLA\ncosts arising from avgas production.” Id. The majority\nthus justifies its broad interpretation of the “Taxes”\nclause not on the language of the clause itself but on a\nweighing of the equities in light of the wartime circum-\n\fSHELL OIL COMPANY v. US 7\n\n\n\nstances, subject matter not in the record before us and\ncertainly not reflected by the terms of the contract. I\nbelieve that reliance on unsupported historical and social\nanecdotes should not trump the plain meaning of the\ncontract terms and, in this case, transform a straightfor-\nward “Taxes” clause into a catch-all indemnification\nprovision. See, e.g., City of Oxnard v. United States, 851\nF.2d 344, 347 (Fed. Cir. 1988) (noting that the contract\nlanguage is the best evidence of the parties’ intent and\nshould take precedence over any “subjective intent of one\nof the parties, if contrary to the unambiguous and reason-\nable text of the written contract”).\n II.\n Even if the “Taxes” clause could be interpreted to en-\ncompass certain non-tax-related costs, the majority does\nnot adequately explain why the clause should be extended\nto indemnify CERCLA liability. As we have previously\nnoted:\n In order for a pre-CERCLA indemnification clause\n to cover CERCLA liability, courts have held that\n the clause must be either [1] specific enough to in-\n clude CERCLA liability or [2] general enough to\n include any and all environmental liability which\n would, naturally, include subsequent CERCLA\n claims.\nE.I. Du Pont de Nemours & Co. v. United States, 365 F.3d\n1367, 1373 (Fed. Cir. 2004) (quoting Elf Atochem N. Am.\nv. United States, 866 F. Supp. 868, 870 (E.D. Pa. 1994)).\nAs we noted in DuPont, “CERCLA evolved from the\ndoctrine of common law nuisance” and is thus similar to\ntort-based liability claims. DuPont, 365 F.3d at 1373.\nCERCLA gives the President broad power to direct the\nGovernment to clean up a hazardous waste site itself or to\ncommand the responsible parties to do so. See Cooper\nIndus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 160 (2004).\nResponsible parties may thus satisfy their CERCLA\n\f8 SHELL OIL COMPANY v. US\n\n\n\nliability by means other than cash payments to govern-\nmental entities. Had the Oil Companies self-performed\nthe clean-up efforts at the McColl Site, they would have\neven less of a basis to argue that the clean-up costs are\nencompassed by the “Taxes” clause because the clause\ncovers only “charges” the contractor was required by a\ngovernment entity “to collect or pay.”\n Here, nothing in the plain language of the avgas con-\ntracts indicates that the parties intended for the “Taxes”\nclause to “allocate [generally] all possible liabilities”\namong themselves, much less to allocate specifically the\nrisks of environmental liability. Id. The “Taxes” clause is\ndevoid of any language that resembles the broad indemni-\nfication provisions considered by our decisions in DuPont\nand Ford Motor Co. See DuPont. 365 F.3d at 1367; Ford\nMotor Co. v. United States, 378 F.3d 1314, 1314 (Fed. Cir.\n2004). In DuPont, we held that the Government’s agree-\nment “to hold [DuPont] harmless against any loss, ex-\npense . . . or damage . . . of any kind whatsoever” was\nsufficient to include CERCLA liability. 365 F.3d at 1372\n(emphasis added). In Ford Motor Co., we similarly held\nthat CERCLA liability was covered by a provision requir-\ning reimbursement of all “allowable costs,” including “loss\nor destruction of or damage to property as may arise out of\nor in connection with the performance of the work under\nthis contract.” 378 F.3d at 1319 (emphasis added). No\nsuch provision exists in this case.\n Yet, the majority’s entire analysis rests on the conclu-\nsion that a term requiring payment of “charges” or “costs”\nis sufficient to require broad indemnification. Maj. Op. at\n22. But the “Taxes” clause lacks any reference to concepts\nindicating that the parties intended to enter into a broad\nindemnity provision; terms like “loss,” “damage,” “liabil-\nity,” “destruction,” “indemnify,” “hold harmless,” and\n“injury” are nowhere to be found. Although I agree with\nthe majority that no “special words” are required to give\neffect to a promise of indemnification, id., that does not\n\fSHELL OIL COMPANY v. US 9\n\n\n\nmean that the contract can be devoid of any objective\nindicia of the parties’ intent to generally allocate liability\nbetween them. See, e.g., City of Oxnard, 851 F.2d at 347.\nIn my view, the avgas contracts lack any evidence of such\nintent.\n If history serves a purpose in this case, it is to show\nthat in the 1940s, as today, avgas production results in\nbyproducts, some of which are wastes. Waste created in\nthe production of petrochemicals represents a cost on the\nproducer, in this case the Oil Companies. That the con-\ntracts are silent on who bears the cost related to the\nproduction and disposal of avgas-related byproducts\nindicates that the parties intended the cost to be borne by\nthe Oil Companies.\n Indeed, the plaintiffs in this case are sophisticated\ncompanies that “surely would know how to [negotiate\nand] draft broad hold harmless indemnification clauses\nextending in perpetuity if that were their intent,” even\nduring wartime. Shell Remand Decision, 108 Fed. Cl. at\n425. Our previous decisions in DuPont and Ford Motor\nCo. provide evidence of this very fact. The Oil Companies’\nbest opportunity to recover their clean-up costs from the\nGovernment was through the CERCLA litigation in\nCalifornia, and they should not now be allowed to recover\nby fitting a square peg into a round hole. The majority\nerrs by interpreting a straightforward “Taxes” clause as a\ncatch-all indemnification provision. Therefore, I must\ndissent.\n\f", "ocr": false, "opinion_id": 2671515 }, { "author_str": "Wallach", "per_curiam": false, "type": "020lead", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\nOpinion for the court filed by Circuit Judge WALLACH.\nDissenting opinion filed by Circuit Judge REYNA.\nWALLACH, Circuit Judge.\nThe seventieth anniversary of the end of active United States participation in the Second World War will fall on September 2 of next year. A nation of pragmatists, we tend to forget our history until necessity revives our memory.1 To resolve this contract claim by Shell Oil Co. (“Shell”), Atlantic Richfield Co. (“ARCO”), Texaco, Inc. (“Texaco”), and Union Oil Co. of California (“Union Oil”) (collectively, “the Oil Companies”), we must recall and place into its appropriate context the atmosphere of stark determination for victory at all costs, which drove our war effort after the Japanese Empire attacked the United States Naval Base at Pearl Harbor on December 7,1941.\nEach of the Oil Companies entered into contracts with the United States to provide high-octane aviation gas (“avgas”) to fuel military aircraft as part of the national war effort (“the avgas contracts”). The production of avgas resulted in waste products such as spent alkylation acid and “acid sludge.” The Oil Companies disposed of 1285such acid waste by contracting with Eli MeColl, a former Shell engineer, to dump the waste at real property in Fullerton, California (“the MeColl site”). Over fifty years later, California and the United States obtained compensation from the Oil Companies pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et seq., for the costs of cleaning up the MeColl site. The Oil Companies filed suit in the Court of Federal Claims, arguing the avgas contracts require the Government to indemnify them for the CERCLA costs. The Court of Federal Claims granted summary judgment in favor of the Government and denied the Oil Companies’ motion for summary judgment. Shell Oil Co. v. United States, 108 Fed.Cl. 422 (Fed.Cl.2013) (“Shell Remand Decision ”). Because the avgas contracts require the Government to reimburse the Oil Companies for their CERCLA “charges,” this court reverses with respect to breach of contract liability. The Court of Federal Claims correctly determined, however, that material factual disputes preclude granting summary judgment on damages, and that issue is accordingly remanded for trial.\nBackground\nI. World War II and the Need for Avgas\nCompared to other available fuels, high-octane avgas enabled aircraft to fly faster and higher, with improved rates of climb and higher payload carrying capacity. It was “the most critically needed refinery product” during World War II and was essential to the United States’ war effort.2 J.A. 477 ¶ 4. It was still a new technology in the late 1930s, however, and production was nowhere near sufficient for the massive quantities the United States and its allies would need to prosecute the war.\nIn 1942 and 1943, the Government, acting through the Defense Supplies Corporation (“DSC”) entered into the avgas contracts with the Oil Companies. The avgas contracts were long-term (primarily three-year) contracts to purchase avgas from the Oil Companies’ refineries in Southern California, and enabled the Oil Companies to build the new refining facilities needed to produce the high levels of avgas vital to the war effort.\nAt the time the contracts were signed, the Government exercised substantial wartime regulatory control over almost every aspect of the petroleum industry. It had authority to impose obligatory product orders on private companies, with noncompliance subject to criminal sanctions or Government takeover. See Selective Training and Service Act of 1940, Pub.L. No. 76-783, ch. 720, § 9, 54 Stat. 885, 892 (1940). Facilities that accepted such obligatory product orders had to prioritize government military contracts above all other contracts. Act of May 31, 1941, Pub.L. No. 77-89, ch. 157, 55 Stat. 236 (1941). To the extent facilities relied on scarce raw materials, the Government could regulate supply chains to ensure continuing production. Id.; see also Second War Powers Act of 1942, Pub.L. No. 77-507, ch. 199, § 301, 56 Stat 176, 178 (1942) (authorizing the President to allocate any material or facility as necessary “in the public interest and to promote the national defense” whenever the country’s defense needs 1286would create a shortage in such materials or facilities).\nThe Government regulatory entities most relevant to the avgas contracts were (1) the Office of Petroleum Coordinator for National Defense (“OPC”), later replaced by the Petroleum Administration for War (“PAW”), and (2) the Office of Production Management (“OPM”), later run by and then replaced by the War Production Board (“WPB”). The WPB and PAW were created in January and December 1942, respectively. The WPB had primary authority over war procurement and production, and cooperated with the PAW to determine petroleum requirements and set national priorities for supplying the petroleum industry. Subject to the direction of the WPB, the PAW was charged with ensuring “adequate supplies of petroleum for military, or other essential uses” and “[e]ffectfing] the proper distribution of such amounts of materials.” Exec. Order No. 9276, 7 Fed.Reg. 10,091, 10,092 (Dec. 4, 1942). The “PAW told the refiners what to make, how much of it to make, and what quality.” John W. Frey & H. Chandler Ide, A History of the Petroleum Administration for War 219 (1946), available at J.A.1917.\nDays after Pearl Harbor, the Government recognized the need to quickly mobilize avgas production, with the OPC stating: “ ‘It is essential, in the national interest that the supplies of all grades of aviation gasoline for military, defense and essential civilian uses be increased immediately to the maximum.’ ” J.A. 498-99 (quoting OPC Recommendation No. 16) (emphases added). Then-existing facilities could not produce the required levels of avgas, necessitating construction of additional facilities. However, the Government’s substantial authority to control production only extended to existing facilities; it could not force companies to invest in new ones. See, e.g., An Act to Expedite National Defense and for Other Purposes, Pub.L. No. 76-671, ch. 440, § 8(b), 54 Stat. 676, 680 (1940) (authorizing the Secretary of the Navy to nationalize and operate “any existing manufacturing plant or facility necessary for the national defense” when certain conditions were met) (emphasis added). A further stumbling block for the Government was that contracts with the Army and the Navy were subject to annual Congressional appropriations and thus limited to a one-year term. Such one-year contracts did not provide the long-term security necessary to justify the Oil Companies’ investment in new facilities. In light of these limitations, the Government turned to the DSC, a government-owned corporation authorized to acquire critical and strategic materials, including avgas.\nThe DSC was a subsidiary of the Reconstruction Finance Corporation (“RFC”), another government-owned corporation. The designation in 1941 of avgas as a critical material enabled the RFC and its subsidiaries to buy, sell, and produce avgas and to make loans to companies to construct avgas production facilities. See Act of June 25, 1940, Pub.L. No. 76-664, ch. 427, § 5(1), 54 Stat. 572, 573 (codified at 15 U.S.C. § 606b (1940)). After purchasing avgas from the Oil Companies, the DSC resold it to the Army and the Navy at the national price established by the PAW (or its predecessor, the OPC).\nBetween 1942 and 1943, the Oil Companies entered into contracts with the DSC agreeing to sell vast quantities of avgas.3 1287The contracts set forth a base price for each barrel of avgas, which was negotiated individually with each refiner based on the refiner’s production costs. The base price was calculated with the goal of permitting an estimated profit of between 6% and 7%. Profits were further subject to the Renegotiation Act of 1942, which required contractors to repay excess profits to the Government. Pub.L. No. 77-528, ch. 247, § 403, 56 Stat. 226, 245 (1942).\nGiven the low profit margin, the avgas contracts contained various concessions to the Oil Companies. They were three-year contracts, thus providing some measure of certainty that the newly-constructed avgas production facilities would pay off over time. They also contained cost-allocation measures to limit the Oil Companies’ risk in producing avgas. For instance, the agreed-upon base price of avgas was subject to adjustment depending on the Oil Companies’ costs, including the price of crude and other raw materials, and the transportation of raw materials. The contracts also required the Buyer, DSC, to pay “any now existing taxes, fees, or charges ... imposed upon [the Oil Companies] by reason of the production, manufacture, storage, sale or delivery of [av-gas].” E.g., J.A. 111 (1942 Shell contract) (emphasis added).\nRelevant to the CERCLA charges in this case, another subsection required DSC to reimburse the Oil Companies for “any new or additional taxes, fees, or charges, ... which [the Oil Companies] may be required by any municipal, state, or federal law in the United States or any foreign country to collect or pay by reason of the production, manufacture, sale or delivery of the [avgas]” (“the new or additional charges provision”). E.g., J.A. 111 (emphases added). These price-adjustment mechanisms ensured the Oil Companies would not be forced into loss-making activities by factors outside their control, such as the costs of materials and transportation, or unforeseen Government-imposed charges. The avgas contracts thus “assured the manufacturer of his costs, plus a fair but moderate profit.” J.A. 1996 (statement of the Chief Legal Counsel for the PAW to the House Appropriations Committee).\nDuring contract negotiation and the years that followed, the Government’s primary concern was maximum avgas production. The Government directed the Oil Companies to “undertake extraordinary modes of operation which were often uneconomical and unanticipated at the time of refiners’ entry into their [avgas] contracts.” J.A. 514. For example, the PAW sometimes ordered companies to purchase raw materials outside their normal supply chain to achieve maximum avgas production. The Aviation Gasoline Reimbursement Plan required the Government to assume the costs of such uneconomical operations.\nThe arrangement between the Oil Companies and the Government was a cooperative endeavor in which the Oil Companies worked to achieve the Government’s goal of maximizing avgas production and the Government assumed the risks of such increased production. The Oil Companies held up their end of the bargain: avgas production increased over twelve-fold from approximately 40,000 barrels per day in December 1941 to 514,000 barrels per day in 1945, and was crucial to Allied success in the war.4\n1288II. Avgas Production and Waste Products\nAvgas consists of an ordinary gasoline base, blended with petroleum distillates and chemical additives. Alkylate is the most prevalent additive (at an amount of 25% to 40%) and is produced by alkylation, a process that uses 98% purity sulfuric acid as a catalyst. Because of the importance of avgas to the war effort, the WPB directed most available sulfuric acid to av-gas production.\nSpent alkylation acid is a byproduct of alkylation, and has a lower acid content than sulfuric acid. During the relevant time period, spent alkylation acid could be (1) reprocessed to its former 98% acid percentage, (2) used to process other petroleum products, like motor gasoline and kerosene, or (3) discarded as waste. Treating other petroleum products with spent alkylation acid further diluted its acid content until it became “acid sludge,” which had acid levels of between 35% and 65%.\nPredictably, the Oil Companies’ success in increasing avgas production resulted in a corresponding increase in sulfuric acid consumption, which increased five-fold from 1941 to 1944.5 Facilities to reprocess the spent alkylation acid did not increase apace, however. The Government twice refused applications to construct new acid processing facilities, and one of the facilities that did exist failed to operate at its design capacity. Moreover, the scarcity of available railroad tank cars (and the WPB’s refusal to make transportation of acid waste a priority) meant the Oil Companies were unable to transport acid sludge for reprocessing or other uses. See J.A. 565-66 (acid sludge could be used as fertilizer, but the scarcity of railroad tank cars prevented transporting acid sludge to the fertilizer plant). By late 1944 and 1945, the Oil Companies were unable to reuse the vast amounts of spent alkylation acid at their own refineries, and ultimately dumped much of it at the McColl site. Although dumping and burning acid waste were common before the war, the lack of reprocessing facilities and transportation options (and resulting bottleneck of acid waste) necessitated dumping and burning larger quantities of acid waste than ever before.\nThe Oil Companies dumped waste at the McColl site from 1942 until shortly after the war ended. Approximately 12% of the waste was spent alkylation acid, and another 82.5% was acid sludge resulting from chemical treatment of other petroleum products. The remaining 5.5% was acid sludge arising from treatment of Government-owned benzol, for which the Government was held liable in the CERCLA litigation. Only the non-benzol waste (i.e., the spent alkylation acid and the remaining acid sludge) is at issue in this case. Shell contributed most of the acid waste at the McColl site — at least 60%. ARCO contributed 10% to 20%, and also relied on other disposal methods, such as burning. Texaco dumped no waste until almost the end of the war, and instead burned its acid sludge waste until late 1944. Some of Union Oil’s sludge was reprocessed rather than dumped.\nThe Allies achieved victory in Europe on May 8, 1945. Japan officially surrendered on September 2, 1945. The United States Government no longer required huge quantities of avgas, and terminated the avgas contracts in 1945 or soon thereafter.\nIII. McColl CERCLA Litigation\nOver 45 years later, in 1991, the United States and California brought a CERCLA 1289action against the Oil Companies to recover the costs of cleaning up the McColl site. The district court held the Oil Companies, among other parties, were jointly and severally liable for the acid waste they dumped at the McColl site, United States v. Shell Oil Co. {Shell I), 841 F.Supp. 962, 976 (C.D.Cal.1993), but then allocated 100% of the cleanup costs to the Government as an “arranger” of the disposal, United States v. Shell Oil Co. (Shell II), 13 F.Supp.2d 1018, 1030 (C.D.Cal.1998); see also 42 U.S.C. § 9607(a)(3) (1994) (extending CERCLA liability to “any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances”). The Ninth Circuit affirmed the Oil Companies’ liability, but reversed the allocation to the United States, holding the United States was not an “arranger” for the non-benzol acid waste. United States v. Shell Oil Co. (Shell III), 294 F.3d 1045, 1056, 1058 (9th Cir.2002) (“No court has imposed arranger liability on a party who never owned or possessed, and never had any authority to control or duty to dispose of, the hazardous materials at issue.”) (internal quotation marks and citation omitted).\nFollowing remand, the district court transferred the Oil Companies’ breach of contract counterclaim to the Court of Federal Claims pursuant to 28 U.S.C. § 1631. The Oil Companies voluntarily dismissed the transferred Complaint without prejudice, exhausted their administrative remedies with the General Services Administration pursuant to the Contract Settlement Act of 1944 (“CSA”), Pub.L. No. 78-395, ch. 358, 58 Stat. 694 (1944) (codified at 41 U.S.C. § 113, et seq. (2006)), and filed a new Complaint in the Court of Federal Claims, seeking reimbursement for the CERCLA costs.\nIV. Court of Federal Claims Litigation\nThe Court of Federal Claims entered summary judgment in favor of the Oil Companies with respect to breach of contract liability and damages, holding the Government was required to reimburse the Oil Companies for 100% of their nonbenzol CERCLA costs. Shell Oil Co. v. United States, 93 Fed.Cl. 439, 442 (2010); Shell Oil Co. v. United States, 93 Fed.Cl. 153 (2010). On appeal, this court found the presiding trial judge had a conflict of interest arising from his wife’s stock ownership of Chevron Corp., the parent company of plaintiffs-appellants Texaco and Union Oil. Shell Oil Co. v. United States, 672 F.3d 1283, 1294 (Fed.Cir.2012). Because the judge’s failure to recuse himself was not harmless error, this court vacated and remanded with instructions that the case be reassigned to a different judge. Id.\nOn remand, the Court of Federal Claims granted summary judgment in favor of the Government. Shell Remand Decision, 108 Fed.Cl. at 422. It held there were three independent reasons why the Oil Companies were not entitled to reimbursement under the avgas contracts. First, it held the CERCLA costs incurred by the Oil Companies were not “charges” within the meaning of the new or additional charges provision in the avgas contracts. Id. at 434. Second, even if the contracts required reimbursement, the court found the Oil Companies released any valid claim when the contracts were terminated and “all other issues” were settled in the mid-to-late 1940s. Id. at 436. Finally, the court held that even if the Oil Companies had otherwise valid indemnification claims based on the avgas contracts, the Anti-Deficiency Act barred such indemnification. Id. at 437.\nThe Court of Federal Claims denied the Oil Companies’ motion for summary judg1290ment for the additional reason that there were disputed facts over how much of the non-benzol waste at the McColl site was dumped “by reason of’ the Oil Companies’ “production, manufacture, sale or delivery” of avgas. Id. at 446-48.\nThe Oil Companies filed this timely appeal. This court has jurisdiction pursuant to 28 U.S.C. § 1295(a)(3) (2012).\nDiscussion\nOn appeal, the Oil Companies challenge each of the three independent bases for the trial court’s decision. They further contend there is no genuine dispute that they are entitled to recover 100% of the non-benzol CERCLA costs. Each argument is addressed in turn.\nThis court reviews the Court of Federal Claims’ contract interpretation de novo. Ford Motor Co. v. United States, 378 F.3d 1314, 1316 (Fed.Cir.2004). “Summary judgments also receive plenary review, the appellate tribunal applying the same criteria as did the trial court, with all justifiable factual inferences drawn in favor of the non-movant.” Id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).\nI. The Avgas Contracts Require Reimbursement of the Oil Companies’ CERCLA Costs\nThe parties dispute the meaning of “charges” as it appears in the new or additional charges provision. The Oil Companies contend it is a broad indemnification provision designed to reimburse the Oil Companies for all Government-imposed “expenses” or “costs,” including CERCLA response costs. The Government claims that the plain language of the contract and other contemporaneous wartime contracts show that environmental cleanup costs are not “taxes, fees, or charges” as contemplated by the avgas contracts.\nThe avgas contracts promise reimbursement for “any new or additional taxes, fees, or charges” imposed on the Oil Companies, with certain exceptions not relevant here. E.g., J.A. 111. The two paragraphs following this provision require the Government to pay “any now existing taxes, fees, or charges,” and describe the Government’s obligation in the event of a disagreement regarding the contractor’s entitlement to an exemption. E.g., J.A. 111-12. The avgas contracts provide (with some insignificant wording variations marked in brackets):\nTaxes.\n[ (a) ] Buyer shall pay in addition to the prices as established in [Sections IV and V] hereof [“Price and Payment” and “Price Escalation” clauses], any new or additional taxes, fees, or charges, other than income, excess profits, or corporate franchise taxes, which Seller may be required by any municipal, state, or federal law in the United States or any foreign country to collect or pay by reason of the production, manufacture, sale or delivery of the commodities delivered hereunder. Buyer shall also pay any such taxes on crude petroleum, or the transportation thereof, to the extent such taxes result in increased cost of the commodities delivered hereunder not compensated for by [Section V] hereof.\n[ (b) ] Buyer shall also pay in addition to the prices as established in [Sections TV and V] hereof, any now existing taxes, fees, or charges measured by the volume or sales price of the aviation gasoline delivered hereunder, imposed upon Seller by reason of the production, manufacture, storage, sale or delivery of such gasoline, unless Buyer or Seller is entitled to exemption from a given tax, fee or charge by virtue of Buyer’s governmental status; it being understood that Buyer now believes that both Buyer and Seller are entitled to such exemp1291tion. Seller represents that the taxes, fees and charges referred to in this paragraph have not been included in its computation of costs on which the prices set forth in [Section IV] hereof are based.\n[ (c) ] If in any case the parties cannot agree on the question as to whether or not Buyer or Seller is entitled to exemption from a given tax[, fee or charge ] by virtue of Buyer’s governmental status, the burden shall be upon Buyer to obtain a ruling in writing from a duly constituted and authorized governmental tax authority as to such exemption. Until such ruling is obtained Buyer shall pay the amount of the tax to Seller or to the appropriate tax collecting agency or make satisfactory arrangements with such tax collecting agency.\nJ.A. 111-12 (Shell contract, Apr. 10, 1942); J.A. 136-37 (Shell contract, May 1, 1943); J.A. 156-57 (Union Oil contract, Dec. 31, 1942, different section numbering); J.A. 179-80 (Union Oil contract, May 1, 1943); J.A. 207 (ARCO contract, Feb. 3, 1942, bracketed language in section (c), different paragraph labeling); J.A. 227-28 (ARCO contract, Feb. 20, 1943, bracketed language in section (c)); J.A. 254 (Texaco contract, Jan. 17, 1942, different language in subsection (b), different section numbering and paragraph labeling); J.A. 278-79 (Texaco contract, Feb. 8, 1943, different language in subsection (b)) (emphases added to disputed term).\n“Reading the relevant clause as a whole, including the title, ‘Taxes,’ ” the Court of Federal Claims found “it was plainly intended as a price-adjustment mechanism in the event the Oil Companies were assessed additional or unanticipated taxes as a result of their avgas production.” Shell Remand Decision, 108 Fed.Cl. at 432 (emphasis added). It accorded a “fairly narrow tax-related meaning” to “charges,” interpreting it to mean “an encumbrance, lien, or other like financial burden or liability, especially one .that relates to real property.” Id. at 432-33. Such an interpretation, the trial court found, was consistent with the noscitur a sociis canon of interpretation, which “ ‘counsels that a word [be] given more precise content by the neighboring words with which it is associated.’ ” Id. at 432 (holding that “ ‘charges’ [should] be ‘given more precise content’ by ‘taxes’ and ‘fees’ ”) (internal citation omitted).\nThe Court of Federal Claims found that multiple textual signals supported its narrow interpretation of “charges” as an encumbrance or lien: (1) the provisions are entitled “Taxes”; (2) they sometimes use the “umbrella identifier ‘such taxes’ ” to refer to “‘taxes, fees, or charges,”’ id.; and (3) the exclusions from “ ‘taxes, fees, or charges’ ” are “specific types of taxes,” i.e., “ ‘income, excess profits, or corporate franchise taxes,’ ” id.\nOn appeal, the Oil Companies argue that “charges” should be interpreted to mean “costs,” including CERCLA costs. Appellants’ Br. 20-21 (quoting, inter alia, Black’s Law Dictionary 265 (9th ed.2009) (“charge” means “[p]rice, cost or expense”); Black’s Law Dictionary 311 (3d ed.1933) (“charges” means “[t]he expenses which have been incurred, or disbursements made, in connection with a contract, suit, or business transaction”)). According to the Oil Companies, the “new or additional taxes, fees, or charges” mentioned in the avgas contracts “clearly refer to different classes of payments,” whereas encumbrances or liens (as the trial court interpreted “charges”) do not refer to payment, “but rather to obligations or burdens often attached to property, usually for the purpose of securing a payment.” Appellants’ Br. 27.\nThe Government apparently agrees that the trial court’s interpretation of “charges” is incorrect. It does not defend the Court of Federal Claims’ interpretation of 1292“charges” as “an encumbrance or lien,” but instead states that “ ‘charge’ plainly connotes an amount paid to receive a privilege, product, or service.” Appellee’s Br. 29. It nonetheless argues charges cannot mean “costs,” because another part of the avgas contracts uses “costs” in a different context. Id. at 23 (citing J.A. 111 (“Buyer shall also pay any such taxes on crude petroleum or the transportation thereof, to the extent such taxes result in increased cost of the commodities delivered hereunder.”)). The Government contends this shows the parties “necessarily ascribed different meanings to the [words charges and costs].” Id.\nIt is unclear how the Government’s proposed definition of charges as “an amount paid to receive a privilege, product, or service” differs from the plain meaning of “costs.” See Black’s Law Dictionary 397 (9th ed.2009) (defining “cost” as “[t]he amount paid or charged for something; price or expenditure. Cf. Expense”). Moreover, the Government’s earlier arguments to the Court of Federal Claims conceded that the new or additional charges provision covers “new costs (with exceptions not pertinent here) imposed by authorities at any level of Government ‘by reason of the production, manufacture or sale of [avgas].” ’6 Defendant’s Motion to Dismiss the Complaint at 11, Shell Oil Co. v. United States, 93 Fed.Cl. 153 (2010) (No. 06-CV-141), ECF No. 7 (emphasis added) (citation omitted). In light of the common meaning of “charges” as “costs or expenses,” and because the Government’s own proposed definition accords with that meaning, this court interprets “charges” to mean “costs.”7\nThe Government nevertheless argues that “charges” cannot include CERCLA costs, because “the word ‘charge’ appears nowhere in CERCLA, with the exception of its use in the context of ‘person in charge,’ 42 U.S.C. §§ 9603, 9604, and one discussion of a party ‘sought to be charged’ for ‘natural resource damage.’ 42 U.S.C. § 9607(f)(1).” Appellee’s Br. 29. The Government further observes that “the district court and appellate CERCLA cases underpinning this matter wholly lack the word ‘charge’ ” (with exceptions not relevant here), and argues that “one need look no further than those cases to determine that the CERCLA response costs here have not been held to be ‘charges’ under any definition of that term.” Id. at 31.\nContrary to the Government’s arguments, CERCLA costs are “charges” within the meaning of the relevant contract provision: The avgas contracts promise reimbursement of “any new or additional ... charges” the Government imposes on the Oil Companies “by reason of the production, manufacture, sale or delivery of [avgas].” See, e.g., J.A. 111 (emphasis added). CERCLA is a federal law requiring responsible parties to pay the 1293“costs of removal or remedial action,” 42 U.S.C. § 9607(a)(4)(A) (emphasis added), and is thus a charge (i.e., cost) imposed by a federal law. The plain language of the new or additional charges provision thus requires the Government to indemnify the Oil Companies for CERCLA costs incurred “by reason of’ the avgas contracts. The Government’s search for exactitude in the CERCLA context is beside the point.\nThe Government argues that other textual indicators in the avgas contracts require limiting the scope of indemnification. For instance, it argues the new or additional charges provision only extends to charges imposed by “duly constituted and authorized governmental tax authorities].” Appellee’s Br. 85 (internal quotation marks and citation omitted) (modification in original). The “duly constituted ... tax authority” language is located two paragraphs after the new or additional charges provision, and addresses when “the parties cannot agree ... whether or not Buyer or Seller is entitled to exemption ... by virtue of Buyer’s governmental status” (“the exemption provision”). See, e.g., J.A. 112. In such cases, “the burden shall be upon Buyer to obtain a ruling in writing from a duly constituted and authorized governmental tax authority as to such exemption.” J.A. 112 (emphasis added).\nThe exemption provision is not relevant to the proper meaning of “charges.” Only two of the contracts’ exemption provisions (the ARCO contracts) refer to exemption from a “given tax, fee or charge,” e.g., J.A. 207; the remaining contracts refer only to “exemption from a given tax,” e.g., J.A. 112. The Government argues that the association in the ARCO contracts between “taxes, fees, or charges” and a “governmental tax authority” necessitates finding that “charges” is limited to taxes imposed by such bodies. The other six contracts, however, refer only to taxes imposed by a “governmental tax authority,” omitting fees and charges. To the extent any conclusion can be drawn from such language, the express exclusion of “fees or charges” in most of the contracts suggests that the parties recognized fees and taxes were not limited to taxes imposed by tax authorities.8\nMoreover, no contrary conclusion could be reconciled with the new or additional charges provision at issue, which expressly applies to charges “required by any municipal, state, or federal law in the United States or any foreign country,” and is clearly not limited to laws enforced by tax authorities. J.A. 111 (emphasis added). “We must interpret the contract in a manner that gives meaning to all of its provisions and makes sense.” McAbee Constr., Inc. v. United States, 97 F.3d 1431, 1435 (Fed.Cir.1996). It would make little sense to give determinative weight to a phrase that appears in a separate provision, in a minority of the contracts, and which contradicts the plain scope of the relevant language. After proposing a broad meaning of “charges” that includes CERCLA costs, the Government has not shown that other portions of the contract exempt the Government from indemnifying the Oil Companies for CERCLA costs imposed as a result of the avgas contracts.9\n1294The Government nevertheless argues that indemnification is improper because the promise to pay for new or additional charges cannot' encompass environmental liability. See Appellee’s Br. 18 (“[T]he ‘Taxes’ clause lacks any language that could be construed to cover environmental remediation resulting from the oil companies’ own decisions to dump acid waste.”). It argues the avgas contracts are distinguishable from the World War II procurement contracts in DuPont and Ford Motor Co., where this court required CERCLA indemnification. See E.I. Du Pont de Nemours & Co. v. United States, 365 F.3d 1367 (Fed.Cir.2004); Ford Motor Co., 378 F.3d at 1314. The indemnification provision in DuPont, for example, agreed “‘to hold [DuPont] harmless against any loss, expense (including expense of litigation), or damage (including damage to third persons because of death, bodily injury or property injury or destruction or otherwise) of any kind whatsoever,’ ” as long as the loss resulted from performance under the contract and did not result from the negligence of DuPont corporate officers or representatives. DuPont, 365 F.3d at 1372 (citation omitted) (emphases removed). This court held DuPont’s “hold harmless” provision “ ‘show[ed] an intent to allocate all possible liabilities among the parties,’ ” and that “ ‘CERCLA liability must be included among the future unknown liabilities which the parties allocated between themselves.’ ” Id. at 1373 (quoting Elf Atochem N. Am. v. United States, 866 F.Supp. 868, 870 (E.D.Pa.1994)). The procurement contract in Ford Motor Co. required reimbursement of “allowable costs,” including “ ‘loss or destruction of or damage to property as may arise out of or in connection with the performance of the work under this contract,’ ” which this court held covered CERCLA liability. Ford Motor Co., 378 F.3d at 1319.\nThe Government argues the avgas contracts contain neither a “hold harmless” provision, as in DuPont, nor an “allowable costs” provision, as in Ford Motor Co. As the Government concedes, however, “no ‘special words’ are required to create a promise of indemnification.” Appellee’s Br. 37 (quoting Corbitt v. Diamond M. Drilling Co., 654 F.2d 329, 334 (5th Cir.1981)). While it is true that the language in the avgas contracts differs from the contract language in DuPont and Ford Motor Co., the relevant portions of the latter contracts also differed from one another. The proper question is whether the avgas contracts require the Government to pay the Oil Companies’ CERCLA charges. Indemnification is required by the contracts’ promise to pay for “any” government-imposed “charges” incurred “by reason of’ the avgas contracts, and it is immaterial whether the new or additional charges provision is identical to the provisions in DuPont and Ford Motor Co.\nThe Government further argues the new or additional charges provision “does not contemplate indemnity for damages sounding in tort,” and therefore cannot require CERCLA indemnification. Appellee’s Br. 34. It relies on a statement in DuPont 1295that “CERCLA evolved from the doctrine of common law nuisance.” DuPont, 365 F.3d at 1373. Contrary to the Government’s argument, DuPont supports requiring CERCLA indemnification in this case. In DuPont, the Government argued the contract’s “hold harmless” provision did not require reimbursement for CERCLA liability because CERCLA was not foreseeable at the time the contract was entered into. Id. This court rejected that argument, holding there was “no basis in the law for reading a limitation of foreseeability” into the contract, which “evidenee[d] ... that indemnification was available for all claims, foreseeable or not.” Id. In the alternative, the DuPont court noted the Government’s concession that nuisance liability would have been foreseeable, and observed that “CERCLA evolved from the doctrine of common law nuisance.” Id.\nAs in DuPont, the avgas contract’s new or additional charges provision requires reimbursement for even unforeseeable charges. The relevant provision in DuPont made no mention of new or additional charges, yet was nonetheless found to encompass unforeseeable CERCLA liability. The avgas contracts’ promise to reimburse for “new or additional” charges must similarly extend to “all claims, foreseeable or not.” See id. The DuPont court’s alternative reasoning, based on nuisance liability, is irrelevant to the interpretation of the new or additional charges provision.\nThe Government offers other contemporaneous contracts as extrinsic evidence that the new or additional charges provision does not require CERCLA indemnification. It relies on Government contracts with Humble Oil and DuPont that contain both a “hold harmless” clause and a promise to reimburse for applicable taxes and charges. See J.A. 889-90, 898-99 (Humble Oil contract June 1, 1944); J.A. 845, 850 (DuPont contract Nov. 28, 1940). The Government argues these contracts provide “powerful evidence” that the new or additional charges provision “[was] never intended to provide the sort of indemnity that the oil companies seek.” Appellee’s Br. 26.\nThe Government has not established ambiguity in the relevant provision, in the absence of which it is improper to rely on extrinsic evidence. See Coast Fed. Bank, FSB v. United States, 323 F.3d 1035, 1040 (Fed.Cir.2003) (en banc) (“If the provisions are clear and unambiguous, they must be given their plain and ordinary meaning, and we may not resort to extrinsic evidence to interpret them.”) (internal quotation marks and citation omitted). The Government’s argument is also unpersuasive since the taxes clauses in the DuPont and Humble contracts are not the same as the new or additional charges provision in the avgas contracts. The Humble and DuPont contracts promise reimbursement for “[a]ll applicable taxes, and other proper charges,” J.A. 850, and “any applicable Federal, State or local taxes, assessments or charges,” respectively. J.A. 889. They do not extend to “new or additional” government-imposed charges, and are, in fact, more analogous to the avgas contract’s promise to pay for “any now existing taxes, fees, or charges.” See J.A. 111. The Humble and DuPont contracts thus provide no reason to narrow the otherwise plain meaning of the new or additional charges provision.\nEven assuming the taxes provision in the Humble and DuPont contracts extends to CERCLA liability, it is not coextensive with the “hold harmless” clause. The latter applies to losses arising from destruction of property, whether or not it is Government imposed, whereas the former applies to Government-imposed charges, whether or not loss to property was otherwise incurred. Because the tax1296es provision and the “hold harmless” provision require indemnification for different types of risks, the fact that both appear in the same contract does not render either provision “ ‘superfluousf ] or redundant,’ ” as the Government contends. See Appellee’s Br. 28 (quoting Medlin Constr. Grp., Ltd. v. Harvey, 449 F.3d 1195, 1200 (Fed.Cir.2006)).\nFinally, to the extent extrinsic evidence is considered, it confirms that the parties intended “charges” to mean “costs.” See TEG-Paradigm Envt’l, Inc. v. United States, 465 F.3d 1329, 1338 (Fed.Cir.2006) (citing Coast Fed. Bank, 323 F.3d at 1040) (“Although extrinsic evidence may not be used to interpret an unambiguous contract provision, we have looked to it to confirm that the parties intended for the term to have its plain and ordinary meaning.”). Communications between the parties used “charges” interchangeably with “costs,” referring to, inter alia: (1) “the estimated charge for raw materials,” (2) “[finvestment charges,” (3) “interest charges,” and (4) “overhead charges.” J.A.1955-56 (emphases added); see also J.A.1964 (a letter from Standard Oil to the PAW stating “this proposed additional charge for tank car or tank truck shipping reflects quite accurately the additional cost to Seller and its Suppliers of tank car or tank truck shipping as compared with barge and tanker shipping”) (emphases added).10 This usage confirms that the parties intended the new or additional charges provision to extend to Government-imposed costs, such as CERCLA liability.\nThe context in which the contracts were formed simply further confirms that the new or additional charges provision requires reimbursement of the Oil Companies’ CERCLA costs. See Metric Constr., Inc. v. Nat’l Aeronautics & Space Admin., 169 F.3d 747, 752 (Fed.Cir.1999) (quoting Hol-Gar Mfg. Corp. v. United States, 351 F.2d 972, 975 (Ct.Cl.1965)) (“‘[T]he language of a contract must be given that meaning that would be derived from the contract by a reasonably intelligent person acquainted with the contemporaneous circumstances.’ ”). World War II and- the stark necessity of increased avgas production are the circumstances surrounding the formation of the avgas contracts. The Government was in a position of near-complete authority over existing refineries, but needed the Oil Companies’ cooperation to construct new production facilities to meet the extraordinary demand for avgas. The Oil Companies agreed to the avgas contracts’ low profits in return for the Government’s assumption of certain risks outside of the Oil Companies’ control. See supra Background Part I. The CERCLA charges in this case are one such risk. The Oil Companies could not have contemplated such CERCLA charges at the time they entered into the contracts; indeed, dumping the acid waste at the McColl site was expressly permitted. See J.A. 605 ¶492 (Eli McColl had a permit from the City of Fullerton to dump the waste.). These circumstances confirm that the new or additional charges provision must be interpreted to require reimbursement for the Oil Companies’ CERCLA costs arising from avgas production. The Court of Federal Claims’ holding to the contrary is accordingly reversed.\nII. The Court of Federal Claims Erred in Holding the Oil Companies’ Contractual Claims Were Released\nThe Court of Federal Claims denied the Oil Companies’ reimbursement claims 1297for the additional reason that they were released when the avgas contracts were terminated and settled in the mid-to-late 1940s. The parties stipulated in the CERCLA litigation that the avgas contracts “were terminated in 1945 or, in the case of [ARCO], shortly thereafter. Matters relating to profits from these contracts, termination costs, and all other issues concerning these contracts were settled between the parties in the late 1940s.” J.A. 640.\nThe Court of Federal Claims relied on DuPont and Ford Motor Co. in reasoning that the Oil Companies’ claims did not survive the termination and settlement of the underlying avgas contracts. In both DuPont and Ford Motor Co., this court held there was no release of the contractor’s indemnification claim because the agreement terminating the underlying World War II contract expressly reserved future indemnification claims. DuPont, 365 F.3d at 1370; Ford Motor Co., 378 F.3d at 1318. In this case, neither party could locate the Oil Companies’ termination agreements, and the Court of Federal Claims reasoned that “the Oil Companies have offered no evidence or argument that this ‘termination’ and ‘settle[ment]’ differed in any material way from a general release.” Shell Remand Decision, 108 Fed.Cl. at 436.\nOn appeal, the Oil Companies argue that “[t]he stipulation says nothing at all about whether the Oil Companies executed a release (general or otherwise) as part of [the] settlement, or if they did execute such a release, whether it encompassed or excepted future reimbursement claims for ‘taxes, fees, or charges.’ ” Appellants’ Br. 34. The Oil Companies contend this uncertainty is fatal to the trial court’s finding of a general release, because the Government (as the defendant) bore “ ‘the burden of proving the validity and applicability of a release,”’ and failed to meet that burden. Id. at 35 (quoting A.R.S. Inc. v. United States, 157 Ct.Cl. 71, 76 (1962)).\nThe Government responds that the new or additional charges provision did not “remain in force after the expiration or termination of the contracts,” and that “[s]uch permanence should not be inferred.” Appellee’s Br. 23; see also id. (quoting Consumers Ice Co. v. United States, 475 F.2d 1161, 1166-67 (Ct.C1.1973) (describing “a judicial reluctance to lock parties into a given set of rights and obligations for long or indefinite periods without some clear indication that this was actually intended by the parties”)). The parties’ stipulation is adequate to prove release, the Government contends, because the stipulation “admits ... that ‘all other issues concerning these contracts were settled between the parties in the late 1940s.’ ” Appellee’s Br. 43 (quoting J.A. 640 ¶ 609).\nThe Court of Federal Claims erred in holding the Government met its burden to prove release. “Once the facts of breach are established, the defendant has the burden of pleading and proving any affirmative defense that legally excuses performance.” Stockton E. Water Dist. v. United States, 583 F.3d 1344, 1360 (Fed.Cir.2009) (internal quotation marks and citation omitted); see also R. Ct. Fed. Cl. 8(c)(1) (“In responding to a pleading, a party must affirmatively state any avoidance or affirmative defense, including ... release.”). “[T]he burden of proving the validity and applicability of release is on the defendant.” A.R.S. Inc., 157 Ct.Cl. at 76. The two facts relied upon by the Government — termination and settlement of all claims — do not satisfy its burden to prove release of the Oil Companies’ claims for CERCLA indemnification.\nThe Oil Companies brought these claims under the CSA, which is meant to ensure “speedy and equitable final settlement of claims under terminated war con1298tracts.” 41 U.S.C. § 101 (2006) (emphasis added), repealed and replaced by An Act To Enact Certain Laws Relating to Public Contracts, Pub.L. No. 111-350, § 6, 124 Stat. 3677, 3854 (Jan. 4, 2011); see also id. § 103(h) (“ ‘[TJermination claim’ means any ... claim under a terminated war contract....”). The CSA allows posttermination indemnification claims, such as the Oil Companies’ claims on the terminated avgas contracts, “ ‘so long as the expenditure arose on account of the contractor’s performance under the contract, and the expenditure is not otherwise excluded from payment by other provisions.’ ” Ford Motor Co., 378 F.3d at 1320 (quoting Houdaille Indus., Inc. v. United States, 151 F.Supp. 298, 312 (Ct.Cl.1957)); see also id. at 1319 (“[T]he CSA explicitly contemplated later-arising claims, and set no period of limitations.”).\nHoudaille, for example, involved a World War II procurement contract in which the Government agreed to reimburse the contractor for, inter alia, its reasonable costs and expenditures resulting from contract termination. Houdaille, 151 F.Supp. at 300. The contract was terminated in 1946, and the contractor “paid $420,212.46 more in [unemployment insurance] contributions because of its experience under [the contract] than it would have if its contribution rate was based only on the operations of its three normal peacetime plants.” Id. at 305. The Houdaille court rejected the Government’s argument that “there [was] no authority” to reimburse costs “after the contract had expired,” finding the expenses were reimbursable because they “arose on account of plaintiffs operation under the contract.” Id. at 312. The court also held the contractor’s indemnification claim was not barred by release, id. at 310, making it clear that a contract termination is not the same as a general release. In this case, the CERCLA costs for which the Oil Companies now seek indemnification arose, at least in part, from the production of avgas pursuant to the avgas contracts. The fact that the costs were not imposed until after the contracts were terminated does not bar the Oil Companies’ CSA claims.\nThe Government nonetheless argues that the parties’ settlement of all issues concerning the avgas contracts amounts to a general release of claims for reimbursement. It contends this ease is distinguishable from DuPont and Ford Motor Co., where the Termination Agreements expressly preserved the contractor’s indemnification claims. See DuPont, 365 F.3d at 1373-74 (The Termination Supplement preserved all indemnification claims and “apparently included no termination or expiration date.”); Ford Motor Co., 378 F.3d at 1319 (“The Termination Agreement ... includes all claims ‘not now known’ arising from performance of the War Contract.”). The Government maintains there is no indication that the settlement agreements in this case include any analogous promises to allow future indemnification claims. Just as the contract in DuPont was “no longer in effect, having been supplanted by the Termination Supplement,” DuPont, 365 F.3d at 1373, the Government maintains the avgas contracts in this ease are “no longer in effect,” having been supplanted by the settlement agreements of “all other issues.” Appellee’s Br. 42-44. According to the Government, the terminated and settled avgas contracts cannot support any new indemnification claim; such a claim would have to be based on the settlement agreements, which are not in the record.\nThe parties’ stipulation that “all other issues” were settled does not satisfy the Government’s burden to prove a general release. See J.A. 640. A settlement between two parties may resolve all then-existing issues without discharging any and all obligations between the parties. 1299See Restatement (Second) of Contracts § 284(1) (“A release is a writing providing that a duty owed to the maker of the release is discharged immediately or on the occurrence of a condition.”). In Ford Motor Co., for example, all issues had been settled, but not all rights were released; the parties agreed to allow future indemnification claims under the contract. 378 F.3d at 1319-20. It is the Government’s burden to prove the settlement agreements released future claims under the avgas contracts, A.R.S. Inc., 157 Ct.Cl. at 76, and the Government has failed to establish the content of those settlement agreements. The Government has not shown that the termination and settlement in this case amount to a general release of the Oil Companies’ claims for reimbursement of new or additional charges. The Court of Federal Claims therefore erred in holding the Oil Companies’ contract claims were released.\nIII. The Court of Federal Claims Erred in Holding the Anti-Deficiency Act Barred the Oil Companies’ Indemnification Claims\nThe final independent basis for the Court of Federal Claims’ grant of summary judgment in favor of the Government was that any indemnification promise broad enough to encompass future CERCLA liability was an unenforceable violation of the Anti-Deficiency Act (“ADA”).\nThe ADA provides, in relevant part:\nNo executive department or other Government establishment of the United States shall expend, in any one fiscal year, any sum in excess of appropriations made by Congress for that fiscal year, or involve the Government in any contract or other obligation for the future payment of money in excess of such appropriations unless such contract or obligation is authorized by law.\n31 U.S.C. § 665 (1940) (now revised and codified at 31 U.S.C. § 1341) (emphasis added). “[A]bsent an express provision in an appropriation for reimbursement adequate to make such payment, [the ADA] proscribes indemnification on the grounds that it would constitute the obligation of funds not yet appropriated.” Cal.-Pac. Utils. Co. v. United States, 194 Ct.Cl. 703, 715 (1971). In Chase v. United States, for example, the plaintiff sought damages under a building lease entered into with the Postmaster General. 155 U.S. 489, 490, 15 S.Ct. 174, 39 L.Ed. 234 (1894). The Supreme Court held the Postmaster General was authorized to enter into contracts on behalf of the United States only if “authorized by law, or ... under an appropriation adequate to its fulfil[l]ment.” Id. at 502, 15 S.Ct. 174. Because “[t]here is no claim that the lease in question was made under any appropriation whatever, ... the only inquiry is whether the contract of lease was ‘authorized by law,’ within the meaning of the [ADA].” Id. (holding the contract was not authorized by law).\nThe inquiry at the Court of Federal Claims likewise centered on whether the indemnification provisions at issue were “authorized by law.” Before this court, however, the parties and amicus disagree on a preliminary question: whether the DSC was subject to the ADA in the first place. The Oil Companies argue that “DSC’s contracts were not funded through appropriations,” and contend the ADA thus does not apply. Appellants’ Br. 39 (citing GAO, Reference Manual of Government Corporations, S. Doc. No. 86 (1945); J.A. 420 (DSC “did not receive direct annual appropriations.”)). Amicus American Fuel & Petrochemical Manufacturers (“AFPM”) elaborates that the DSC “was funded through borrowings and retained earnings, not through Congressional appropriations and had no borrowing lim1300it.”11 AFPM Br. 20. The Oil Companies and AFPM therefore contend that the new or additional charges provision in the av-gas contracts is not subject to the ADA.\nThis preliminary question — whether the DSC is subject to the ADA — was not raised before the Court of Federal Claims, where both parties assumed the applicability of the ADA and only disputed whether the indemnification provision was authorized pursuant to the ADA. See Shell Remand Decision, 108 Fed.Cl. at 438. By failing to raise this issue below, the Oil Companies waived their argument that the ADA is inapplicable to the DSC. See Harris Corp. v. Ericsson Inc., 417 F.3d 1241, 1263 (Fed.Cir.2005). Like the Court of Federal Claims, this court assumes the ADA applies and limits the inquiry to whether the relevant indemnification provision was “authorized by law.”\nThe Oil Companies argued before the trial court that the ADA did not bar recovery, because the new or additional charges provision was “authorized by” the First War Powers Act and implementing Executive Orders 9024 and 9001. The Court of Federal Claims held “that none of these sources provided the requisite ADA waiver that would have allowed the Government to indemnify the Oil Companies.”12 Shell Remand Decision, 108 Fed.Cl. at 437. On appeal, the Oil Companies contend the Court of Federal Claims wrongly required them to prove an ADA “waiver” when the ADA only requires authorization for the relevant provision. They maintain the authority granted to the President in the First War Powers Act, and delegated to the DSC through implementing Executive Orders 9024 and 9001, authorized the av-gas contracts’ new or additional charges provision.\nBoth parties agree that Title II of the First War Powers Act, enacted in 1941, granted the President the power to “authorize any department or agency” to enter into contracts that would otherwise violate the ADA, “whenever he deems such action would facilitate the prosecution of the war.” Pub.L. No. 77-354, ch. 593, § 201, 55 Stat. 838, 839 (1941). The parties disagree, however, whether the President delegated this authority to the DSC in Executive Orders 9024 and 9001. In Executive Order 9024, President Roosevelt invoked the “authority vested in [him] by the Constitution and statutes of the United States,” to establish the WPB and grant the WPB Chairman the power to, inter alia, “[d]etermine the policies, plans, procedures, and methods of the several Federal departments, establishments, and agencies in respect to war procurement and production, including purchasing, contracting, specifications, and construction.” 7 Fed. Reg. 329, 330 ¶ 2(b) (Jan. 17, 1942). In a February 13, 1942, letter, the WPB Chairman then delegated to the OPC the authority “to determine ... the price at which [avgas] is to be purchased, the capacity of the particular refiner to perform 1301and the technical details of the particular contract,” and delegated to the DSC the authority “to determine ... the other terms and the form of such [avgas] contracts.” J.A. 400.\nBy invoking authority from the “statutes of the United States,” Executive Order 9024 delegates to the WPB the authority under the First War Powers Act to authorize indemnification provisions otherwise barred by the ADA. Moreover, the Chairman’s letter to the DSC delegating the authority to determine “the other terms and the form of such [avgas] contracts” transfers that authority to the DSC. Contrary to the Government’s objection that Executive Order 9024 does not mention contracting, it clearly directs the WPB Chairman to direct “the policies, plans, procedures, and methods” with respect “to war procurement and production, including purchasing, contracting, specifications, and construction.” This delegation is sufficient to authorize the indemnification provisions at issue under the ADA.\nIndeed, the DuPont court found that a similar provision in the CSA was sufficient to authorize otherwise prohibited indemnification agreements. The relevant portion of the CSA stated:\nEach contracting agency shall have authority, notwithstanding any provisions of law other than contained in this chapter, (1) to make any contract necessary and appropriate to carry out the provisions of this chapter; (2) to amend by agreement any existing contract, either before or after notice of its termination, on such terms and to such extent as it deems necessary and appropriate to carry out the provisions of this chapter; and (3) in settling any termination claim, to agree to assume, or indemnify the war contractor against, any claims by any person in connection with such termination claims or settlement.\n41 U.S.C. § 120(a) (1946) (emphasis added). The CSA did not expressly mention the ADA, but this court nonetheless reasoned that the “bestowal of contracting authority ‘notwithstanding any provisions of law other than contained in this chapter’ ” was sufficient to authorize indemnification pursuant to the ADA. DuPont, 365 F.3d at 1375. Similarly, although Executive Order 9024 does not expressly state that the Chairman of the WPB (and, in turn, the DSC) can expend unappropriated funds otherwise in violation of the ADA, it is a broad delegation of contracting authority that impliedly invokes the President’s authority under the First War Powers Act to bypass the ADA’s restrictions. The Court of Federal Claims therefore erred in holding that the ADA rendered the indemnification provision unenforceable.\nThe Government nevertheless argues the DSC was at all times subject to prior Executive Order 8512, which stated: “No agency shall make expenditures or involve the Government in any contract or other obligation for the future payment of money in excess of the amount currently available therefor under the apportionments so approved or revised.” Appellee’s Br. 46 (quoting 5 Fed.Reg. 2,849 (Aug. 15, 1940)) (internal quotation marks omitted). Although Executive Order 9024 provides that all prior “conflicting” Executive Orders “are hereby superseded,” the Government argues the terms of Executive Order 9024 do not conflict with Executive Order 8512, whose prohibition thus remained in effect. To the contrary, however, Executive Order 9024 delegates the President’s general contracting authority to the WPB “[b]y virtue of the authority vested in [the President] by the ... statutes of the United States.” Such statutes include the First War Powers Act’s authority to enter into contracts that would otherwise violate the ADA. Delegating authority to bypass the ADA con1302flicts with Executive Order 8512, which prohibited contracts in excess of then-current appropriations. Executive Order 8512 thus does not control in this case.\nBecause the new or additional charges provision was authorized by the First War Powers Act, as delegated to the DSC through Executive Order 9024 and the WPB Chairman’s letter, there is no need to consider whether the President also delegated such authority under Executive Order 9001. The Court of Federal Claims’ holding that the ADA prohibited reimbursement of new or additional charges is therefore reversed.\nEach of the three independent bases for denying the Oil Companies’ reimbursement claims has been reversed, making it appropriate to enter summary judgment in favor of the Oil Companies with respect to breach of contract liability. The sole remaining issue is whether the Court of Federal Claims correctly determined that genuine disputed facts prevented granting summary judgment with respect to damages.\nIV. The Court of Federal Claims Correctly Held That Disputed Facts Prevent Granting the Oil Companies’ Motion for Summary Judgment on Damages\nThe Court of Federal Claims found there were “factual questions” regarding “what portion of the non-benzol waste [ (i.e., the spent alkylation acid and the non-benzol acid sludge) ] was created ‘by reason of the avgas program.” Shell Remand Decision, 108 Fed.Cl. at 448. On appeal, the Oil Companies argue this court should award 100% of their CERCLA costs on the ground that the Government is collaterally estopped from arguing that anything less than 100% of the non-benzol acid waste was due to the avgas contracts.\nThe Oil Companies rely on the decision of the district court in the CERCLA litigation, which found “that 100 percent of the non-benzol waste at the McColl Site is attributable to the avgas program.” Shell II, 13 F.Supp.2d at 1026. The Oil Companies argue the district court’s attribution “finding is binding on the Government as a matter of issue preclusion.” Appellants’ Br. 56 (quoting United States v. Mendoza, 464 U.S. 154, 158, 104 S.Ct. 568, 78 L.Ed.2d 379 (1984) (“[Ojnce a court has decided an issue of fact or law necessary to its judgment, that decision is conclusive in a subsequent suit based on a different cause of action involving a party to the prior litigation.”)). The district court’s finding was not final, however, but rather was reversed by the Ninth Circuit. Shell III, 294 F.3d at 1048-49. The Ninth Circuit instead held the Government was not an “arranger” for the non-benzol waste, and thus did not reach the question of how much non-benzol waste was attributable to the avgas program. Id. The final decision in Shell III thus did not resolve the attribution issue and cannot serve as the basis for issue preclusion. See Laguna Hermosa Corp. v. United States, 671 F.3d 1284, 1288 (Fed.Cir.2012) (issue preclusion requires, inter alia, that “resolution of the issue was essential to a final judgment in the first action”) (internal quotation marks and citations omitted).\nThe Oil Companies contend the district court’s nonbenzol attribution analysis was necessary to the Ninth Circuit’s holding because the Ninth Circuit affirmed the district court’s apportionment analysis with respect to the benzol waste. This argument confuses the district court’s attribution holding (based on the factual question of how much acid waste was caused by the avgas program) with its apportionment holding. In the latter, the district court identified multiple reasons why 100% of the waste for which the Government was an “arranger” (both the benzol and non-benzol waste) should be equi1303tably apportioned to the Government: (1) it would properly place the costs of war on society as a whole, and (2) it would reflect the Government’s role in limiting reprocessing facilities and access to tank cars. Shell II, 13 F.Supp.2d at 1027. The Ninth Circuit affirmed this apportionment analysis with respect to the benzol waste.\nThis equitable apportionment holding is distinct from the issue of attribution relevant in this case: how much of the acid waste dumped at the McColl site was “by reason of’ the avgas program. The Ninth Circuit did not rely on or incorporate the district court’s attribution holding with respect to the non-benzol waste, and instead stated “[t]he undisputed facts indicate that the Oil Companies ... dumped acid waste from operations other than avgas production at the McColl site.” Shell III, 294 F.3d at 1062 (emphasis added). In short, the prior CERCLA litigation does not preclude the Government from challenging the amount of acid waste attributable to the avgas contracts.\nAbsent collateral estoppel, the Oil Companies do not contest the trial court’s finding of a genuine dispute regarding how much of the acid waste at the McColl site resulted from the avgas contracts, nor does this court discern any error. See, e.g., J.A. 569 (“Kerosene and lubricating oils were also acid treated” and “produced acid sludge.”); J.A. 572 (The McColl site “contains acid sludge resulting from the treatment of civilian and military petroleum products.”). The case is remanded for the Court of Federal Claims to determine how much acid waste at the McColl site was “by reason of’ the avgas contracts.\nConclusion\nFor the foregoing reasons, this court reverses the Court of Federal Claims’ grant of summary judgment with respect to breach of contract liability, and remands for a trial on damages.\nREVERSED AND REMANDED\n\n. \" ‘There are no new problems in the law, only forgotten solutions!,] and the issues which arose yesterday will always arise again tomorrow.’ ” Jeremy Rabkin & Ariel Rabkin, Navigating Conflicts in Cyberspace: Legal Lessons from the History of War at Sea, 14 Chi. J. Int’l L. 197, 198 (2013) (quoting Evan J. Wallach, Partisans, Pirates, and Pancho Villa: How International and National Law Handled Non-State Fighters in the \"Good Old Days” Before 1949 and That Approach's Applicability to the \"War on Terror,” 24 Emory Int’l L.Rev. 549, 552-53 (2010)).\n\n\n. \"At least since the transformation of navies from coal to diesel fuels in the early twentieth century availability of sources of petroleum products has been recognized by great powers as vital to their national interest.” Evan J. Wallach, The Use of Crude Oil by an Occupying Power as a Munition de Guerre, 41 Int’l & Comp. L.Q. 287, 287 (1992); see also John W. Frey & H. Chandler Ide, A History of the Petroleum Administration for War 1 (1946), available at J.A. 431 (\"World War II, from beginning to end, was a war of oil.”).\n\n\n. At least some of the avgas contracts provided for loans to the Oil Companies to expand avgas production facilities, and required the Oil Companies to use “best efforts\" to compíete such construction as quickly as possible. See, e.g., J.A. 97, 106 (1942 Shell contract) (promising to \"maintain work on the expansion day and night”).\n\n\n. After the war, the new avgas production facilities’ usefulness was questionable; avgas consumption in the United States dropped to 70,000 barrels a day. Over time, however, the Oil Companies identified new uses for these facilities. The DSC was dissolved in 1945, and the RFC was dissolved in 1957, at which time the RFC transferred all relevant liabilities and obligations to the General Services Administration. See Reorganization Plan No. 1 of 1957, 71 Stat. 647 (1957).\n\n\n. The increase in sulfuric acid use did not match the increase in avgas production because the Oil Companies discovered a method of processing avgas that used far less sulfuric acid than had previously been necessary.\n\n\n. Even if the Government's proposed definition is not synonymous with \"costs,'' it plainly includes CERCLA liability costs: \"[T]he costs at issue were 'amount[s]' the Oil Companies 'paid to receive ... service[s],’ specifically the removal of hazardous substances from the McColl Site and remediation of their effects.” Reply Br. 4.\n\n\n. The dissent offers no different meaning. It agrees with the trial court's application of the noscitur a sociis canon of interpretation, but does not appear to adopt the trial court’s definition of \"charges” as an encumbrance or lien. See Dissenting Op. at 1305. By nevertheless concluding that the new or additional charges provision only covers \" 'Taxes' and tax-related items,” id. at 1305-06, the dissent gives no effect to the parties' inclusion of \"charges” in that provision, Metric Constr., Inc. v. Nat’l Aeronautics & Space Admin., 169 F.3d 747, 754 (Fed.Cir.1999) (\"Courts prefer ... an interpretation of a contract that gives effect to all its terms and leaves no provision meaningless.”).\n\n\n. Nor does the Government contend the ARCO contracts should be construed differently than the other contracts that lack any reference to \"charges” imposed by a tax authority.\n\n\n. The dissent places great weight on other \"textual signals,” including the title of the provision (\"Taxes”) and other portions of the text referring to \"taxes, fees and charges” as \"such taxes.” See Dissenting Op. at 1304-05. With respect to the former, the Supreme Court recently emphasized that it \"has placed less weight on” headings and titles, especially when their “under-inclusiveness ... is apparent.” Lawson v. FMR LLC,-U.S.-, 134 S.Ct. 1158, 1169, 188 L.Ed.2d 158 (2014). Because the \"Taxes” heading omits the \"fees” 1294and \"charges” that are also addressed by the new or additional charges provision, it is under-inclusive. It is \" 'but a shorthand reference to the general subject matter’ of the provision, ‘not meant to take the place of the detailed provisions of the text.’ \" Id. (quoting Trainmen v. Balt. & Ohio R. Co., 331 U.S. 519, 528, 67 S.Ct. 1387, 91 L.Ed. 1646 (1947)). Moreover, aside from reciting the trial court's reasoning, the Government’s briefing to this court did not rely on the title of the \"Taxes” clause, nor on the references to \"such taxes.” Like the other portions of the contract discussed above, these textual indicators do not alter the plain scope of the new or additional charges provision.\n\n\n. The United States objects to this and other material located at Joint Appendix pages 914 to 2003 and 2011 to 2026, which was not before the trial court in this case. Although the objected-to material is helpful for context and background, this court nowhere accords it determinative weight.\n\n\n. The RFC, of which the DSC was a subsidiary, was capitalized with $500 million in capital stock subscribed by the United States, but was otherwise funded primarily by debt and retained earnings. J.A. 1429; see also 15 U.S.C. § 602 (1940). The RFC was authorized to charter a subsidiary “on such terms and conditions as [the RFC] may determine.” 15 U.S.C. § 606b (1940). In August 1940, the RFC chartered the DSC, vesting it with authority \"to borrow money and issue its secured or unsecured obligations therefore.” J.A. 1447-48; see also J.A. 1440, 1443-44 (DSC borrowed over $6 billion and earned enough to repay approximately $4.8 billion back after the war.).\n\n\n. • Béfore the Court-of Federal Claims, the Oil Companies also contended that the requisite authorization was provided by the National Defense Act of 1916 and a June 1941 amendment to the charter of the DSC, Shell Remand Decision, 108 Fed.Cl. at 437, but do not raise these arguments on appeal.\n\n", "ocr": false, "opinion_id": 9799462 }, { "author_str": "Reyna", "per_curiam": false, "type": "040dissent", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\nREYNA, Circuit Judge,\ndissenting.\nThe majority concludes that a “Taxes” clause in several contracts for high-octane aviation gas (“avgas”) should be broadly interpreted to require the United States to indemnify the Oil Companies for a CERCLA judgment covering restoration efforts of the McColl acid waste site more than fifty years after the completion of the contracts. I do not interpret the “Taxes” clause as a general indemnification clause that captures production-related costs. For this and the other reasons set forth below, I respectfully dissent.\nI.\nThis appeal arises following the Oil Companies’ failure to recover the McColl site clean-up costs through the CERCLA litigation that took place in California. The CERCLA regime allows a party that is financially responsible for the clean-up costs of environmental contamination to seek contribution from other responsible parties. 42 U.S.C. § 9613(f)(1). District courts thus have broad discretion to resolve contribution claims “using such equitable factors as [they] determine[ ] are appropriate.” Id.; see also Boeing Co. v. Cascade Corp., 207 F.3d 1177, 1187 (9th Cir.2000) (noting that CERCLA “gives district courts discretion to decide what factors ought to be considered, as well as the duty to allocate costs according to those factors”). After failing to achieve a satisfactory outcome under CERCLA’s equitable considerations, the Oil Companies now seek recovery through a different avenue — a breach of contract action. In doing so, they breach the four corners of their avgas contracts by asking this court to interpret the “Taxes” clause as a catch1304all indemnification provision. Such an interpretation, in my view, has no basis in the plain language of the clause or the overall scope of the contract. I would therefore affirm the decision of the Court of Federal Claims and hold that the “Taxes” clause was intended by the parties to be nothing more than a price-adjustment mechanism covering additional or unanticipated tax-related burdens assessed by reason of avgas production.1\n“Contract interpretation is a question of law, which [the court] review[s] without deference.” 1st Home Liquidating Trust v. United States, 581 F.3d 1350, 1355 (Fed.Cir.2009); TEG-Paradigm Envtl., Inc. v. United States, 465 F.3d 1329, 1336 (Fed.Cir.2006). “In the ease of contracts, the avowed purpose and primary function of the court is the ascertainment of the intention of the parties.” Alvin Ltd. v. U.S. Postal Serv., 816 F.2d 1562, 1565 (Fed.Cir.1987). Contract interpretation begins with the language of the written agreement, which must be given “[its] ordinary meaning unless the parties mutually intended and agreed to an alternative meaning.” Harris v. Dep’t of Veterans Affairs, 142 F.3d 1463, 1467 (Fed.Cir.1998). We may not resort to extrinsic evidence “to create an ambiguity where a contract was not reasonably susceptible of differing interpretations at the time of contracting.” Metric Constructors, Inc. v. Nat’l Aeronautics & Space Admin., 169 F.3d 747, 752 (Fed.Cir.1999); see also Coast Fed. Bank, FSB v. United States, 323 F.3d 1035, 1038 (Fed.Cir.2004) (en banc).\nUnder the “Taxes” clause of the avgas contracts, the Government agreed to reimburse the Oil Companies for “any new or additional taxes, fees, or charges” that may be imposed “by reason of’ the production, sale, and delivery of avgas. Shell Oil Company’s contract, dated April 10, 1942, is representative of all the avgas contracts at issue here and provides:\nXII. Taxes\na) Buyer shall pay in addition to the prices as established in Sections IV and V hereof, any new or additional taxes, fees, or charges, other than income, excess profits, or corporate franchise taxes, which Seller may be required by any municipal, state, or federal law in the United States or any foreign country to collect or pay by reason of the production, manufacture, sale or delivery of the commodities delivered hereunder. Buyer shall also pay any such taxes on crude petroleum, or the transportation thereof, to the extent such taxes result in increased cost of the commodities delivered hereunder not compensated for by Section V hereof.\nJ.A. 111-12 (Shell Oil Co. Contract, Apr. 10,1942) (emphasis added).\nThe majority’s conclusion that CERCLA liability is covered by this clause hinges on an isolated interpretation of the word “charges.” The majority engages in a lengthy discussion of the plain meaning of “charges” and concludes that it is synonymous with “costs.” Maj. Op. at 1291-93. The majority then proceeds to hold that the “Taxes” clause requires the Government to reimburse the Oil Companies for costs of any and all type, regardless of how they were incurred, as long as those costs arise “by reason of’ the production and delivery of avgas.\nSuch an interpretation ignores the contractual character and import of the “Taxes” clause. When read as a whole, the contract signals that the parties, at the 1305time they entered into the contract, intended the “Taxes” clause to be read as a price-adjustment mechanism covering unexpected tax-related burdens. First, the clause is titled “Taxes.” Second, the clause uses the term “such taxes” several times to refer back to the broader category of “taxes, fees, or charges.” Third, the specific exclusions from “taxes, fees, or charges” are all income and related taxes, including “income, excess profits, [and] corporate franchise taxes.” Finally, the clause provides that the payment of “new or additional taxes, fees, or charges” will be in addition to the prices established in the “Price and Payment” (Section IV) and “Price Escalation” (V) clauses of the contract. The term “charges” should thus be interpreted consistently and in harmony with the broader operation of the “Taxes” clause as a price-adjustment mechanism.\nThe majority summarily dismisses these textual signals in favor of an isolated and overly-broad interpretation of the singular term “charges” to conclude that “[t]he plain language of the new or additional charges provision” must encompass CERCLA liability. Maj. Op. at 1293. In doing so, the majority ignores the trial court’s use of the noscitur a sociis canon of interpretation, which “is just an erudite (or some would say antiquated) way of saying what common sense tells us to be true: ‘[A] word is known by the company it keeps.’ ” James v. United States, 550 U.S. 192, 222, 127 S.Ct. 1586, 167 L.Ed.2d 532 (2007) (Scalia, J., dissenting) (alteration in original) (quoting Jarecki v. G.D. Searle & Co., 367 U.S. 303, 307, 81 S.Ct. 1579, 6 L.Ed.2d 859 (1961)). Indeed, contract terms must be construed, not in isolation, but as a whole and in a way that gives effect to the surrounding context. NVT Techs., Inc. v. United States, 370 F.3d 1153, 1159 (Fed.Cir.2004) (noting that a contract must “be considered as a whole and interpreted so as to harmonize and give reasonable meaning to all of its parts”); Metric Constructors, 169 F.3d at 752 (“Before arriving at a legal reading of a contract provision, a court must consider the context and intentions of the parties.”). “The context and subject matter of a contract may indicate that an ordinary word or phrase has an unusual meaning in a given sentence.” 11 Richard A. Lord, Williston on Contracts § 32:6 (4th ed. 1999 & Supp.2009). “[I]t is questionable whether a word has a meaning at all when divorced from the circumstances in which it is used.” E. Allen Farnsworth, Contracts 454 (4th ed.2004). Here, the majority’s interpretation ignores the plain meaning of the text, fails to give harmony to the contracts as a whole, and is overall unreasonable.\nFor example, the majority dismisses, in a footnote, any reliance on the title of the clause (“Taxes”) as evidence of the clause’s fairly narrow tax-related meaning. Maj. Op. at 1293-94 n. 9. The majority notes that the Supreme Court tends to “placet ] less weight on” captions, headings and titles when construing statutory provisions. Id. (quoting Lawson v. FMR LLC, No. 12-3, — U.S.-, 134 S.Ct. 1158, 1169, 188 L.Ed.2d 158 (2014)). This principle, which is often used when “the [statutory] text is complicated and prolific,” nevertheless recognizes that a heading can be a helpful “ ‘short-hand reference to the general subject matter’ of the provision.” Lawson, 134 S.Ct. at 1169 (quoting Trainmen v. Baltimore & Ohio R. Co., 331 U.S. 519, 528, 67 S.Ct. 1387, 91 L.Ed. 1646 (1947)). Hence, Supreme Court precedent supports a finding that the parties intended for the “general subject matter” of this clause to cover “Taxes” and tax-related items.\nThe majority rejects the Government’s comparison of the “Taxes” clause to the terms of other contemporaneous contracts as an improper reliance on extrinsic evidence in the absence of an “established 1306ambiguity.” Maj. Op. at 1295. At the same time, the majority itself informs its broad interpretation of the “Taxes” clause by heavily relying on extrinsic evidence. As the majority notes:\nWorld War II and the stark necessity of increased avgas production are the circumstances surrounding the formation of the avgas contracts. The Government was in a position of near-complete authority over existing refineries, but needed the Oil Companies’ cooperation to construct new production facilities to meet the extraordinary demand for av-gas.\nMaj. Op. at 1296 (emphasis original). The majority concludes that “[tjhese circumstances confirm that the new or additional charges provision must be interpreted to require reimbursement for the Oil Companies’ CERCLA costs arising from avgas production.” Id. The majority thus justifies its broad interpretation of the “Taxes” clause not on the language of the clause itself but on a weighing of the equities in light of the wartime circumstances, subject matter not in the record' before us and certainly not reflected by the terms of the contract. I believe that reliance on unsupported historical and social anecdotes should not trump the plain meaning of the contract terms and, in this case, transform a straightforward “Taxes” clause into a catch-all indemnification provision. See, e.g., City of Oxnard v. United States, 851 F.2d 344, 347 (Fed.Cir.1988) (noting that the contract language is the best evidence of the parties’ intent and should take precedence over any “subjective intent of one of the parties, if contrary to the unambiguous and reasonable text of the written contract”).\nII.\nEven if the “Taxes” clause could be interpreted to encompass certain non-tax-related costs, the majority does not adequately explain why the clause should be extended to indemnify CERCLA liability. As we have previously noted:\nIn order for a pre-CERCLA indemnification clause to cover CERCLA liability, courts have held that the clause must be either [1] specific enough to include CERCLA liability or [2] general enough to include any and all environmental liability which would, naturally, include subsequent CERCLA claims.\nE.I. Du Pont de Nemours & Co. v. United States, 365 F.3d 1367, 1373 (Fed.Cir.2004) (quoting Elf Atochem N. Am. v. United States, 866 F.Supp. 868, 870 (E.D.Pa.1994)). As we noted in DuPont, “CERCLA evolved from the doctrine of common law nuisance” and is thus similar to tort-based liability claims. DuPont, 365 F.3d at 1373. CERCLA gives the President broad power to direct the Government to clean up a hazardous waste site itself or to command the responsible parties to do so. See Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 160, 125 S.Ct. 577, 160 L.Ed.2d 548 (2004). Responsible parties may thus satisfy their CERCLA liability by means other than cash payments to governmental entities. Had the Oil Companies self-performed the clean-up efforts at the McColl Site, they would have even less of a basis to argue that the clean-up costs are encompassed by the “Taxes” clause because the clause covers only “charges” the contractor was required by a government entity “to collect or pay.”\nHere, nothing in the plain language of the avgas contracts indicates that the parties intended for the “Taxes” clause to “allocate [generally] all possible liabilities” among themselves, much less to allocate specifically the risks of environmental liability. Id. The “Taxes” clause is devoid of any language that resembles the broad indemnification provisions considered by our decisions in DuPont and Ford Motor Co. See DuPont, 365 F.3d at 1367; Ford 1307Motor Co. v. United States, 378 F.3d 1314, 1314 (Fed.Cir.2004). In DuPont, we held that the Government’s agreement “to hold [DuPont] harmless against any loss, expense ... or damage ... of any kind whatsoever ” was sufficient to include CERCLA liability. 365 F.3d at 1372 (emphasis added). In Ford Motor Co., we similarly held that CERCLA liability was covered by a provision requiring reimbursement of all “allowable costs,” including “loss or destruction of or damage to property as may arise out of or in connection with the performance of the work under this contract.” 378 F.3d at 1319 (emphasis added). No such provision exists in this case.\nYet, the majority’s entire analysis rests on the conclusion that a term requiring payment of “charges” or “costs” is sufficient to require broad indemnification. Maj. Op. at 1294. But the “Taxes” clause lacks any reference to concepts indicating that the parties intended to enter into a broad indemnity provision; terms like “loss,” “damage,” “liability,” “destruction,” “indemnify,” “hold harmless,” and “injury” are nowhere to be found. Although I agree with the majority that no “special words” are required to give effect to a promise of indemnification, id., that does not mean that the contract can be devoid of any objective indicia of the parties’ intent to generally allocate liability between them. See, e.g., City of Oxnard, 851 F.2d at 347. In my view, the avgas contracts lack any evidence of such intent.\nIf history serves a purpose in this case, it is to show that in the 1940s, as today, avgas production results in byproducts, some of which are wastes. Waste created in the production of petrochemicals represents a cost on the producer, in this case the Oil Companies. That the contracts are silent on who bears the cost related to the production and disposal of avgas-related byproducts indicates that the parties intended the cost to be borne by the Oil Companies.\nIndeed, the plaintiffs in this case are sophisticated companies that “surely would know how to [negotiate and] draft broad hold harmless indemnification clauses extending in perpetuity if that were their intent,” even during wartime. Shell Remand Decision, 108 Fed.Cl. at 425. Our previous decisions in DuPont and Ford Motor Co. provide evidence of this very fact. The Oil Companies’ best opportunity to recover their clean-up costs from the Government was through the CERCLA litigation in California, and they should not now be allowed to recover by fitting a square peg into a round hole. The majority errs by interpreting a straightforward “Taxes” clause as a catch-all indemnification provision. Therefore, I must dissent.\n\n. I do not interpret the \"Taxes” clause as allowing the Oil Companies to recover their CERCLA costs, I do not address the Court of Federal Claims’s conclusion that recovery is also precluded by general release and the Anti-Deficiency Act.\n\n", "ocr": false, "opinion_id": 9799463 } ]	Federal Circuit	Court of Appeals for the Federal Circuit	F	USA, Federal
1,060,344	Justice Janice M. Holder	2003-01-07	false	jessica-diane-toms-v-james-anthony-toms	null	Jessica Diane Toms v. James Anthony Toms	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	null	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": 6, "download_url": "http://www.tsc.state.tn.us/sites/default/files/OPINIONS/TSC/PDF/031/TomsJD.pdf", "author_id": 5727, "opinion_text": " IN THE SUPREME COURT OF TENNESSEE\n AT JACKSON\n HEARD AT MEMPHIS\n November 13, 2002 Session\n\n JESSICA DIANE TOMS v. JAMES ANTHONY TOMS, ET AL.\n\n Appeal by Permission from the Court of Appeals\n Circuit Court for Shelby County\n No. CT000085-00, Div. 9 James F. Russell, Judge\n\n\n\n No. W2002-02245-SC-R10-CV - Filed January 7, 2003\n\n\nThis case is before the Court on an interlocutory appeal pursuant to Rule 10 of the Tennessee Rules\nof Appellate Procedure.1 In this extraordinary appeal, Appellant asserts that the trial court erred in\ngranting temporary custody of her two children to their paternal grandparents during the pendency\nof the underlying divorce action. Specifically, she claims that the trial court erred in failing to\nconduct an evidentiary hearing and in considering only the guardian ad litem’s reports in making its\ncustody determination. Having carefully reviewed the issues raised by the parties, we hold that the\ntrial court erred in basing its decision to change custody solely upon the guardian ad litem’s reports.\nAccordingly, we reverse the judgment of the trial court awarding custody to the grandparents and\nremand the case for proceedings consistent with this opinion.\n\n Tenn. R. App. P. 10 Appeal by Permission; Judgment of the Trial Court Reversed;\n Case Remanded\n\nJANICE M. HOLDER, J., delivered the opinion of the court, in which FRANK F. DROWOTA , III, C.J.,\nand E. RILEY ANDERSON, ADOLPHO A. BIRCH, JR., and WILLIAM M. BARKER, JJ., joined.\n\nWilliam T. Winchester, Memphis, Tennessee, for the appellant, Jessica Diane Toms.\n\nWendy S. Dabbous, Memphis, Tennessee, for the appellee, James Anthony Toms.\n\nWilliam M. Monroe, Memphis, Tennessee, for the intervenors-appellees, Gerald Williams and Robin\nWilliams.\n\n\n\n\n 1\n This Court may grant an interlocutory appeal pursuant to Rule 10 of the Tennessee R ules of A ppe llate\nProcedure when a lower court “so far depart[s] from the accepted and usual course of judicial proceedings as to require\nimmediate review.”\n\fBarbaralette G. Davis, Christina A. Zawisza, Nancy Percer Kessler, and Webb A. Brewer, Memphis,\nTennessee, for the amicus curiae, Memphis Area Legal Services, Inc.\n\nMarc E. Reisman, Memphis, Tennessee, for the guardian ad litem, Susan A. Hinsley.\n\n OPINION\n\n Factual Background\n\n On February 4, 2000, Robin Williams (“Grandmother”) filed a dependency and neglect\npetition in the Juvenile Court of Memphis and Shelby County. In her petition, Grandmother asserted\nthat her eight-month-old grandson, Chase Anthony Toms (“Chase”), was in need of the protection\nand assistance of the Court because he was without proper guardianship. Specifically, Grandmother\nclaimed that her daughter-in-law, Jessica Diane Toms (“Mother”), failed to provide adequate care\nand a stable home for Chase.\n\n On February 8, 2000, Mother filed a complaint for divorce from her husband, James Anthony\nToms (“Father”), in the Circuit Court of Shelby County. In her complaint, Mother sought custody\nof Chase. Six days later, Grandmother and her husband (“Grandparents”) filed a motion to\nintervene. Grandparents alleged that neither Mother nor Father was fit to have custody of Chase.\nBy its order dated February 25, 2000, the circuit court appointed Susan A. Hinsley as guardian ad\nlitem for Chase. On March 9, 2000, the juvenile court referee dismissed without prejudice\nGrandmother’s dependency and neglect action for failure to prosecute the petition. The circuit court\ngranted Grandparents’ motion to intervene on March 14, 2000.\n\n Grandparents filed a complaint on March 31, 2000, seeking custody of Chase. In their\ncomplaint, they alleged that Chase was not properly cared for while in the custody of Mother. In\nsupport of their petition, they claimed that: 1) Chase was frequently sick as a result of being exposed\nto numerous cats, ferrets, and reptiles as well as to cigarette smoke; 2) Mother had received\npsychological treatment at two treatment facilities and had been hospitalized in a psychiatric unit as\na result of a suicide attempt; and 3) Father had been noncompliant as to his medication for bipolar\ndisorder and had failed to show a consistent pattern of stable behavior during Chase’s lifetime.2\n\n The guardian ad litem conducted an investigation and filed an interim report on May 2, 2000.\nThe investigation revealed that Chase had spent a significant part of his life in the care of\nGrandparents. She recommended that Grandparents babysit Chase while Mother is working and that\na specific visitation schedule be implemented to give Chase needed stability and an opportunity to\nbond with both parents. She also recommended that Mother limit Chase’s exposure to animals and\ncigarette smoke.\n\n\n\n 2\n In his response to Grandparents’ petition for immediate change of temporary custody, Father admitted that\nthese allegations were true and corre ct.\n\n -2-\n\f Thereafter, the parties attempted to reconcile. A second child, Christopher Taylor Toms\n(“Christopher”), was born on April 29, 2002. However, on August 1, 2002, Mother filed an\namended complaint for divorce. Grandparents again intervened. By its order dated August 12, 2002,\nthe trial court set a hearing for November 13, 2002.\n\n In a letter dated August 30, 2002, Grandparents informed Mother of their intent to file a\npetition for immediate change of temporary custody and to request a second judge for an immediate\nhearing.3 They filed their petition on September 3, 2002, reasserting the facts contained in their\nMarch 31, 2000 complaint. The petition also alleged that Chase and Christopher were not receiving\nproper medical attention. Grandparents reported that Mother failed to seek medical treatment for\ninfections Christopher had developed in his eyes and ears and failed to seek dental treatment for\nChase. They further alleged that Mother left Chase and Christopher alone with people of\nquestionable reputation to whom she was not related. Mother did not respond to Grandparents’\npetition. Judge James F. Russell, sitting by interchange, entered an order on September 11, 2002,\nsetting the petition to be heard on September 13, 2002. Judge Russell also reappointed Susan A.\nHinsley as guardian ad litem for both Chase and Christopher.\n\n On the day of the hearing, the guardian ad litem presented a written report to Judge Russell\nand to the parties. Mother’s counsel objected to the admission of any written report by the guardian\nas hearsay.4 Judge Russell overruled the objection. No other proof was taken.\n\n After reviewing the guardian’s new report as well as the guardian’s interim report filed in\nMay 2000, Judge Russell held that a change in custody was in the children’s best interests. Judge\nRussell ordered that the guardian’s reports be filed under seal. He instructed the parties to present\nto the court a temporary parenting plan that incorporated the recommendations of the guardian. He\nordered that any dispute regarding the temporary parenting plan be presented to the guardian, who\nwould act as the final arbiter of the terms and conditions of the parenting plan. Finally, he ordered\nthe immediate transfer of Chase and Christopher to Grandparents and enjoined the parties from\ninterfering with their orderly and peaceful transfer.\n\n On September 18, 2002, Mother filed an application for extraordinary appeal to the\nTennessee Court of Appeals pursuant to Rule 10 of the Tennessee Rules of Appellate Procedure.\n\n\n\n 3\n The judge to which the case was assigned was on vacation.\n\n 4\n On a ppe al, Appellant has also asserted the following additional issues: 1) that the trial court denied her due\nprocess when it awarded temporary custody of her two children to the paternal grandparents; 2) that Grandparents lacked\nstanding to intervene in the pending divorce action between Appellant and Appellee; 3) that Grandparents’ petition for\nimme diate change of temporary custody failed to state a claim upon which relief could be granted; and 4) that the trial\ncourt impro perly d elegated its authority to the guardian ad litem b y basing its custod y deter minatio n solely on the\nguard ian’s reports and by designating the guardian as the final arbiter on issues of visitation. As these issues were not\nraised in the trial court, we decline to add ress them o n app eal. See In re A dop tion of F emale Child , 42 S.W.3d 26, 31-32\n(Tenn. 2001 ).\n\n -3-\n\fThe Court of Appeals denied the application on October 7, 2002. Mother then filed an application\nfor extraordinary appeal in this Court. We granted the appeal.\n\n Analysis\n\n I. Subject Matter Jurisdiction\n\n Subject matter jurisdiction involves a court's power to adjudicate a particular controversy\nbrought before it. See Northland Ins. Co. v. State, 33 S.W.3d 727, 729 (Tenn. 2000). Appellate\ncourts must address the issue of subject matter jurisdiction even if the issue is not raised in the trial\ncourt. See First Am. Trust Co. v. Franklin-Murray Dev. Co., L.P., 59 S.W.3d 135, 140-41 (Tenn.\nCt. App. 2001) (citing Manning v. Feidelson, 136 S.W.2d 510, 510-11 (Tenn. 1940)). Accordingly,\nwe will address Mother’s claim that the trial court lacked subject matter jurisdiction to consider\nGrandparents’ request for custody even though this issue was first raised on appeal.\n\n Mother contends that Tennessee Code Annotated section 37-1-103(a) grants exclusive\noriginal jurisdiction to the juvenile court over dependency and neglect proceedings. Because\nGrandparents first filed their allegations concerning Mother’s lack of fitness in the juvenile court,\nMother asserts that the juvenile court has exclusive jurisdiction to decide this issue. We disagree.\nWe conclude that the juvenile court lost jurisdiction of the case upon the dismissal of the dependency\nand neglect petition on March 9, 2000.\n\n Tennessee Code Annotated section 37-1-103(c) provides that when a juvenile court acquires\njurisdiction of a dependency and neglect petition, “such jurisdiction shall continue until the case has\nbeen dismissed, or until the custody determination is transferred to another juvenile, circuit, chancery\nor general sessions court exercising domestic relations jurisdiction . . . .” The juvenile court\ndismissed Grandmother’s petition on March 9, 2000, at which time it lost jurisdiction. At that time,\nthe circuit court, which had jurisdiction over the pending divorce action, properly acquired\njurisdiction over Grandparents’ petition for immediate change of temporary custody.\n\n II. Guardian Ad Litem Reports\n\n Mother claims that the trial court erred in granting custody to Grandparents without an\nevidentiary hearing and in reliance upon the written reports of the guardian ad litem. We conclude\nthat the guardian ad litem’s reports were hearsay and that the trial court erred in relying upon the\nreports as the basis for its custody determination.\n\n Under the Tennessee Rules of Evidence, “hearsay” is defined as “a statement, other than one\nmade by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth\nof the matter asserted.” Tenn. R. Evid. 801. A guardian ad litem’s report constitutes hearsay under\nthis definition. The report is an out-of-court statement made by the guardian ad litem that normally\nwill be introduced for the truth of the statements contained in it. In this case, counsel objected to the\nhearsay nature of the written reports. We hold that the objection should have been sustained.\n\n\n -4-\n\f In lieu of the introduction of the written report, a guardian ad litem should testify at the trial\nor hearing and be subject to cross-examination. Not all of a guardian’s interviews and observations\nwill be admissible. To be admissible, evidence must conform to the Tennessee Rules of Evidence.\nIf the evidence is hearsay, it will not be admissible unless it falls within an exception to the hearsay\nrule. See Tenn. R. Evid. 802. For example, a guardian may testify concerning any admissions made\nby the parties. See Tenn. R. Evid. 803. However, a guardian may not testify as to statements made\nby witnesses who were interviewed in the course of the guardian’s investigation, unless the statement\ndoes not meet the definition of hearsay or a hearsay exception governs the testimony. If the\nsubstance of a non-party witness’ statements are sought to be introduced as evidence and those\nstatements constitute hearsay, the witness must testify at trial.\n\n Although a guardian ad litem’s report is not admissible evidence, we hold that such a report\nmay be reviewed by a trial court. To hold otherwise would effectively undermine the important role\nplayed by a guardian ad litem. A guardian ad litem’s report is a tool to be used by the parties and\nthe court. The report may assist the parties by: 1) alerting the parties to the identity of potential\nwitnesses who may be interviewed; 2) highlighting the testimony, both favorable and unfavorable,\nthat may be presented at trial; and 3) providing a third party’s view of the facts of the case. In short,\nit assists the parties in preparing for an evidentiary hearing. The report also may assist the trial court\nby providing an overview of the evidence and by allowing the court to determine which of the issues\nare contested.\n\n At least one other jurisdiction supports a view similar to the one we adopt in this case. In\nJorgensen v. Jorgensen, 231 N.W.2d 360, 363 (Neb. 1975), the Supreme Court of Nebraska reversed\na lower court’s custody determination that was based on the report of a guardian ad litem rather than\non the evidence in the record. The court stated that earlier cases had found that such reports are not\nevidence. See id. (citing Dier v. Dier, 4 N.W.2d 731 (Neb. 1942)). Due process required that\nwitnesses, including a guardian ad litem, be subject to cross-examination. See id. In the present\ncase, the trial court considered the guardian ad litem’s reports as evidence. No other evidence was\npresented, and the report was the sole basis for the court’s decision to grant Grandparents’ petition\nfor immediate change of temporary custody. Because no admissible evidence was presented at the\nhearing, the trial court had no basis upon which to find a threat of substantial harm to the children’s\nwelfare.5 We conclude that the court’s exclusive reliance on the reports of the guardian ad litem in\ngranting Grandparents’ petition for immediate change of temporary custody was inappropriate.\n\n\n\n\n 5\n In a contest between a parent and a non-parent, a parent cannot be deprived of the care and custody of a child\nunless there has been a finding of substantial harm to the child. See Bond v. McKenzie (In re Adoption of Female Child),\n896 S.W.2d 546, 548 (Tenn. 1995). Due process requires that a non-parent seeking custody of a child must show\nsubstantial harm by clear and convincing evidence. See Hall v. Bookout, 87 S.W .3d 80, 86 (T enn. Ct. App. 2002);\nStokes v. Arnold, 27 S .W .3d 5 16, 5 20 (Tenn. Ct. A pp. 2 000 ). Only after this showing is made may a court engage in\na gene ral \"b est interest of the child\" ev aluation in making a d etermination o f custod y. See Bond , 896 S.W.2d at 548.\n\n -5-\n\f III. Attorney’s Fees\n\n Mother seeks attorney’s fees from Grandparents under Tennessee Code Annotated section\n36-5-103(c). This section provides that\n\n the spouse or other person to whom the custody of the child, or\n children, is awarded may recover from the other spouse reasonable\n attorney fees incurred . . . in regard to any suit or action concerning\n the adjudication of the custody or the change of custody of any child,\n or children, of the parties, both upon the original divorce hearing and\n at any subsequent hearing . . . .\n\nTenn. Code Ann. § 36-5-103(c) (2001). From this language, it is clear that the spouse to whom\ncustody is awarded may recover attorney’s fees from the other spouse. It is also clear that a third\nperson to whom custody is awarded may recover attorney’s fees. In this case, however, the spouse\nhaving custody is seeking to recover attorney’s fees from a third party intervenor seeking custody.\nWe conclude that the statutory language supports such an award of attorney’s fees.\n\n Grandparents were made parties to the divorce action as a result of their request to intervene.\nThe trial court awarded Grandparents temporary custody of the children. Had Grandparents\nprevailed in this Court, they would have been entitled to recover attorney’s fees from Mother, Father,\nor both under Tennessee Code Annotated section 36-5-103(c). See D v. K, 917 S.W.2d 682, 686\n(Tenn. Ct. App. 1995) (construing Tennessee Code Annotated section 36-5-103(c) to allow for fees\non appeal). We conclude that parties to whom attorney’s fees may be awarded pursuant to this\nstatute may also have attorney’s fees awarded against them when their petition is unsuccessful.\n\n Conclusion\n\n We hold that the trial court erred in relying upon the reports of the guardian ad litem as its\nsole basis for granting Grandparents’ petition for immediate change of temporary custody.\nTherefore, we reverse the trial court’s award of temporary custody to Grandparents. The case is\nremanded to the trial court for proceedings consistent with this opinion and for an assessment of\nattorney’s fees. Costs on appeal are taxed to Grandparents, Robin Williams and Gerald Williams,\nfor which execution may issue if necessary.\n\n\n ____________________________________\n JANICE M. HOLDER, JUSTICE\n\n\n\n\n -6-\n\f", "ocr": false, "opinion_id": 1060344 } ]	Tennessee Supreme Court	Tennessee Supreme Court	S	Tennessee, TN
2,671,594	Howard, Lipez, Stahl	2014-04-29	false	adamson-v-walgreens-co	Adamson	Adamson v. Walgreens Co.	Robert ADAMSON, Plaintiff, Appellant, v. WALGREENS CO., Defendant, Appellee	Paul J. Caruso, with whom John Martin and Mann Martin LLP were on brief, for appellant., Gregory A. Manousos, with whom Laura E. Ogden and Morgan, Brown & Joy, LLP were on brief, for appellee.	null	null	null	null	null	null	null	null	null	null	0	Published	null	<parties id="b97-6"> Robert ADAMSON, Plaintiff, Appellant, v. WALGREENS CO., Defendant, Appellee. </parties><br><docketnumber id="b97-8"> No. 13-1511. </docketnumber><br><court id="b97-9"> United States Court of Appeals, First Circuit. </court><br><decisiondate id="b97-11"> April 29, 2014. </decisiondate><br><attorneys id="b100-6"> <span citation-index="1" class="star-pagination" label="76"> *76 </span> Paul J. Caruso, with whom John Martin and Mann Martin LLP were on brief, for appellant. </attorneys><br><attorneys id="b100-7"> Gregory A. Manousos, with whom Laura E. Ogden and Morgan, Brown & Joy, LLP were on brief, for appellee. </attorneys><br><judges id="b100-8"> Before HOWARD, STAHL, and LIPEZ, Circuit Judges. </judges>	[ "750 F.3d 73" ]	[ { "author_str": "Stahl", "per_curiam": false, "type": "010combined", "page_count": 20, "download_url": "http://media.ca1.uscourts.gov/pdf.opinions/13-1511P-01A.pdf", "author_id": null, "opinion_text": " United States Court of Appeals\n For the First Circuit\n\nNo. 13-1511\n\n ROBERT ADAMSON,\n\n Plaintiff, Appellant,\n\n v.\n\n WALGREENS CO.,\n\n Defendant, Appellee.\n\n\n\n\n APPEAL FROM THE UNITED STATES DISTRICT COURT\n FOR THE DISTRICT OF MASSACHUSETTS\n\n [Hon. Richard G. Stearns, U.S. District Judge]\n\n\n\n\n Before\n\n Howard, Stahl, and Lipez,\n Circuit Judges.\n\n\n\n Paul J. Caruso, with whom John Martin and Mann Martin LLP were\non brief, for appellant.\n Gregory A. Manousos, with whom Laura E. Ogden and Morgan,\nBrown & Joy, LLP were on brief, for appellee.\n\n\n\n April 29, 2014\n\f STAHL, Circuit Judge. Plaintiff-Appellant Robert Adamson\n\nwas terminated from his position as an assistant manager for\n\nDefendant-Appellee the Walgreen Co. (\"Walgreens\") after two\n\ninstances of failing to provide what Walgreens considered adequate\n\ncustomer service. Adamson appeals from the district court's grant\n\nof summary judgment to Walgreens on his state and federal age\n\ndiscrimination claims. We affirm.\n\n I. Facts & Background\n\n Because this appeal is from the entry of summary judgment\n\nin favor of Walgreens, we recite the facts in the light most\n\nfavorable to Adamson and draw all reasonably supported inferences\n\nin his favor. Faiola v. APCO Graphics, Inc., 629 F.3d 43, 45 (1st\n\nCir. 2010). However, \"evidence from the moving party as to\n\nspecific facts can be accepted by the court where no contrary\n\nevidence is tendered by the party opposing summary judgment.\"\n\nStatchen v. Palmer, 623 F.3d 15, 18 (1st Cir. 2010) (emphasis\n\nomitted).\n\n Adamson began his tenure with Walgreens in September\n\n2007, when he was hired to work as an assistant manager in one of\n\nits Florida stores. Among other duties, assistant managers are\n\nresponsible for the \"protection of store assets\" and providing\n\n\"proper service to all customers.\" Adamson was fifty-five years\n\nold when hired. Just over a year later, he requested and received\n\na transfer to Massachusetts, working first in Chicopee and later in\n\n\n -2-\n\fWorcester. In October 2010, he was transferred to the Walgreens\n\nstore in Ware, Massachusetts, where his supervisor was Stephen\n\nBenoit. Adamson was fifty-eight years old at that time.\n\n On October 21, 2010, a customer entered the Ware store\n\nand attempted to make a return. The cashier called for managerial\n\nassistance via intercom, but Adamson, who was the manager on duty,\n\ndid not respond. At that time, he was taking in a delivery in the\n\nstockroom at the back of the store. The cashier sought Adamson out\n\nin the stockroom and asked for his assistance with the return.\n\nAdamson asked the cashier to tell the customer that he would take\n\nthe return later.1 By the time Adamson left the stockroom to\n\nprocess the return, the customer had already left the store.\n\nBenoit testified during deposition that this incident prompted a\n\ncomplaint from the customer, which the cashier subsequently relayed\n\nto Benoit.\n\n Before determining whether or how to discipline Adamson\n\nfor this incident, Benoit contacted Peter Serafin. Serafin is a\n\nWalgreens Loss Prevention Supervisor, and Benoit sought his input\n\ndue to his knowledge of disciplinary issues involving other\n\nWalgreens employees in the region. After consulting with Serafin,\n\nBenoit issued Adamson a \"Final Written Warning,\" listing as the\n\nbasis for the discipline \"Poor Customer Service/refused customer\n\n\n 1\n There is a dispute as to exactly what Adamson instructed the\ncashier, but all parties agree that he asked that the customer be\ntold that he could not process the return immediately.\n\n -3-\n\freturn.\" When given the option to offer a written response,\n\nAdamson acknowledged that he had made a bad judgment call and\n\nstated that he would \"continue to maintain [his] high standards of\n\ncustomer service throughout while exercising better judgement\n\n[sic].\"\n\n On February 5, 2011, Adamson opened the Ware store alone\n\nbecause the other employee scheduled that morning had not arrived.\n\nWhen he could not find the employee's telephone number at the front\n\nof the store, he went to the back office to look for the employee\n\ntelephone list. He did not locate the list, and, still in the back\n\noffice, made two telephone calls to other colleagues in an attempt\n\nto determine the missing employee's number. He eventually obtained\n\nthe number and called the clerk from a cosmetics counter in the\n\nfront of the store. Adamson admits that he was in the back office\n\nwith the door closed for approximately two to three minutes.\n\n That same day, a customer called a Walgreens customer\n\nhotline to complain that she had been in the Ware store that\n\nmorning and was unable to make a purchase because the register was\n\nunattended. A written record of the call indicates that she\n\nreported that she called out for an employee but nobody came and\n\nthat she waited at the register for fifteen minutes. However, a\n\nsurveillance video shows that she was actually in the store for\n\njust over two minutes and waited at the register for approximately\n\ntwenty seconds. The video shows the customer placing items at the\n\n\n -4-\n\fregister, looking up and down the aisles, and then leaving without\n\nmaking a purchase. Adamson does not appear in the video -- which\n\ncovers the front of the store -- for a stretch of approximately\n\ntwelve minutes, eventually appearing about thirty seconds after the\n\ncustomer left. Adamson admits that the video does not show him for\n\na twelve-minute period, but states that, aside from the two to\n\nthree minutes he was in the back office, he was working in aisles\n\nin the back part of the store. He states that he was in the\n\naisles, and not in the back office, at the time that the video\n\nshows the complainant in the store, but says he never saw the\n\ncomplainant or heard anyone calling out for an employee.\n\n The written record of the complaint was passed along to\n\nBenoit for investigation. A Walgreens policy required him to\n\nfollow up with the complainant within two days. Benoit's attempts\n\nto contact her in that time frame were unsuccessful, so he\n\nsubmitted information to Walgreens indicating that he had not\n\ncontacted her. In his deposition, Benoit testified that he was\n\nlater able to reach the complainant, that they discussed the\n\nFebruary 5 incident, and that she indicated that she was not\n\nseeking a monetary settlement and simply wanted to advise the\n\ncompany of what had happened. He also testified that he contacted\n\nSerafin and Paul Holstein (then forty-six), the district manager,\n\nfor \"fairness and consistency\" purposes and to discuss their\n\ninterpretation of Walgreens' policies, procedures, and guidelines.\n\n\n -5-\n\fBenoit also viewed the video footage from that morning, although\n\nthe parties dispute when he did so.\n\n On February 10, Walgreens terminated Adamson's\n\nemployment. The termination notice states in part: \"In reviewing\n\nthe video, [c]onfirmed that the main [cashier] was not present and\n\nyou were not present as well.\" It lists \"Poor Customer Service\" as\n\nthe basis of the discipline, noting that Adamson \"[s]hould have\n\nmanaged the store from the front entrance [until] support\n\narrived. . . . Mr. Adamson fail[ed] to do so and left the front\n\nstore[,] opening it up to possible theft and poor customer\n\nservice.\"\n\n After Adamson was terminated, an existing employee, then\n\nfifty years old, was transferred into his position. A few weeks\n\nlater, this employee suffered an on-the-job injury and began a\n\nleave of absence, and another existing employee, then thirty-seven\n\nyears old, was transferred into the position.\n\n Adamson filed suit in federal court, alleging that he was\n\nterminated because of his age in violation of both the Age\n\nDiscrimination in Employment Act (\"ADEA\"), 29 U.S.C. §§ 621–634,\n\nand Massachusetts General Laws chapter 151B, § 4(1B). The district\n\ncourt granted summary judgment in favor of Walgreens. Adamson\n\nappeals.\n\n\n\n\n -6-\n\f II. Analysis\n\n We review a grant of summary judgment de novo, reversing\n\nthe district court \"only if, after reviewing the facts and making\n\nall inferences in favor of the non-moving party . . . , the\n\nevidence on record is sufficiently open-ended to permit a rational\n\nfactfinder to resolve the issue in favor of either side.\" Prescott\n\nv. Higgins, 538 F.3d 32, 39–40 (1st Cir. 2008) (internal quotation\n\nmarks omitted). We draw all reasonable inferences in Adamson's\n\nfavor, but we are \"not obliged to accept as true or to deem as a\n\ndisputed material fact, each and every unsupported, subjective,\n\nconclusory, or imaginative statement made to the [c]ourt by a\n\nparty.\" Torrech-Hernández v. Gen. Electric Co., 519 F.3d 41, 47\n\n(1st Cir. 2008).\n\n The ADEA makes it unlawful for an employer to discharge\n\nan employee because of that employee's age. 29 U.S.C. § 623(a)(1).\n\nThe employee bears the burden of proving that age was the but-for\n\ncause of his termination. Gross v. FBL Fin. Servs., Inc., 557 U.S.\n\n167, 176 (2009). \"Where, as here, the employee lacks direct\n\nevidence, we utilize the burden-shifting framework developed by the\n\nSupreme Court to facilitate the process of proving discrimination.\"\n\nBonefont-Igaravidez v. Int'l Shipping Corp., 659 F.3d 120, 123 (1st\n\nCir. 2011) (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792,\n\n802–05 (1973)).\n\n\n\n\n -7-\n\f The first step of this framework requires the employee to\n\nestablish his prima facie case by producing evidence that shows:\n\n\"(1) that he was at least forty years old when he was fired; (2)\n\nthat his job performance met the employer's legitimate\n\nexpectations; (3) that he suffered an adverse employment action\n\nsuch as a firing; and (4) that the employer filled the position,\n\nthereby showing a continuing need for the services that he had been\n\nrendering.\" Meléndez v. Autogermana, Inc., 622 F.3d 46, 50 (1st\n\nCir. 2010). Doing so gives rise to a rebuttable presumption of\n\ndiscrimination and shifts the burden of production -- but not\n\npersuasion -- \"to the employer to articulate a legitimate,\n\nnon-discriminatory reason for its decisions.\" Vélez v. Thermo King\n\nde P.R., Inc., 585 F.3d 441, 447 (1st Cir. 2009) (internal\n\nquotation marks omitted). If the employer meets this burden, \"the\n\nfocus shifts back to the plaintiff, who must then show, by a\n\npreponderance of the evidence, that the employer's articulated\n\nreason for the adverse employment action is pretextual and that the\n\ntrue reason for the adverse action is discriminatory.\" Gómez-\n\nGonzález v. Rural Opportunities, Inc., 626 F.3d 654, 662 (1st Cir.\n\n2010) (internal quotation mark omitted). At the summary judgment\n\nstage, the plaintiff need not prove his case, but must proffer\n\nsufficient evidence to raise a genuine issue of material fact as to\n\nwhether he was fired because of his age. See Domínguez-Cruz\n\nv. Suttle Caribe, Inc., 202 F.3d 424, 433 (1st Cir. 2000).\n\n\n -8-\n\f After noting that the parties agreed that Adamson had\n\nmade out the first, third, and fourth factors of his prima facie\n\ncase, the district court assumed that Adamson had made out the\n\nsecond, and we follow suit. See Gómez-González, 626 F.3d at 662\n\n(finding it \"expeditious and appropriate\" to assume prima facie\n\ncase was made where primary focus of dispute was whether proffered\n\nreasons for termination were pretextual). We also agree with the\n\ndistrict court that Walgreens articulated a legitimate, non-\n\ndiscriminatory reason for terminating Adamson; namely, the two\n\nincidents of what it perceived as inadequate customer service. The\n\nparties do not appear to dispute either of these points on appeal.\n\n Instead, the parties focus on the final stage of the\n\nburden-shifting analysis: whether Adamson presented sufficient\n\nevidence to create a genuine issue of material fact as to whether\n\nthe proffered reason for his termination was pretextual and that\n\nthe \"the pretextual reason[] [was] 'intended to cover up the\n\nemployer's real motive: age discrimination.'\" Acevedo-Parrilla v.\n\nNovartis Ex-Lax, Inc., 696 F.3d 128, 143 (1st Cir. 2012) (quoting\n\nMesnick v. Gen. Electric Co., 950 F.2d 816, 824 (1st Cir. 1991)).\n\n\"Pretext can be shown by such weaknesses, implausibilities,\n\ninconsistencies, incoherencies, or contradictions in the employer's\n\nproffered legitimate reasons for its action that a reasonable\n\nfactfinder could rationally find them unworthy of credence and\n\nhence infer that the employer did not act for the asserted\n\n\n -9-\n\fnon-discriminatory reasons.\" Gómez-González, 626 F.3d at 662–63\n\n(internal quotation marks omitted).\n\n Before the district court, Adamson advanced four claims\n\nin attempting to meet his burden of showing both pretext and\n\ndiscriminatory intent: (1) the reason proffered for his termination\n\nwas false; (2) Walgreens violated company policies to facilitate\n\nhis termination; (3) younger peers were treated better than he was\n\nin terms of scheduling and responsibilities; and (4) younger peers\n\nwere disciplined less harshly for more severe behavior. The\n\ndistrict court held that these claims, to the extent they found any\n\nevidentiary support in the record, were insufficient to create a\n\ngenuine issue of material fact. Adamson argues that, in reaching\n\nthis conclusion, the district court impermissibly resolved disputed\n\nfacts, a task properly left to the fact-finder.\n\n Adamson first argues that the district court\n\nimpermissibly resolved disputed issues as to Benoit's credibility\n\nwhen rejecting Adamson's claim that the reason proffered for his\n\ntermination was false. In essence, Adamson suggests that there is\n\na genuine issue as to whether Benoit himself believed that the\n\nreason given for his termination was actually true. \"In assessing\n\npretext, a court's 'focus must be on the perception of the\n\ndecisionmaker,' that is, whether the employer believed its stated\n\nreason to be credible.\" Mesnick, 950 F.2d at 824 (quoting Gray v.\n\nNew Eng. Tel. & Tel. Co., 792 F.2d 251, 256 (1st Cir. 1986)).\n\n\n -10-\n\f Adamson's argument centers on discrepancies regarding how\n\nlong the February 5 complainant waited at the register. The\n\nwritten record of the complaint states that the complainant\n\nreported having waited fifteen minutes at the counter, while the\n\nvideo shows that she was in the store for just over two minutes and\n\nwaited at the register for approximately twenty seconds. In his\n\ndeposition, Benoit stated that his investigation showed that the\n\ncomplainant was in the store for fifteen minutes but that he could\n\nnot remember how long she was at the register.2 After conferring\n\nwith counsel, he later said that he did not know how long she was\n\nin the store, and that it may have been only five minutes.\n\n As the district court noted, it would not be surprising\n\nif Benoit misremembered events that had happened more than two\n\nyears earlier and recited the timing reported by the complainant\n\nrather than the correct timing as shown by the video. Regardless,\n\nthe district court did not determine whether Benoit was credible\n\nregarding the duration of the complainant's wait; it simply (and\n\ncorrectly) noted that the undisputed facts showed that Adamson left\n\nthe register unattended long enough for a customer to be unable to\n\nmake a purchase. There is no evidence to suggest that the length\n\nof time she waited played any role in the decision to terminate\n\n\n\n 2\n He first stated that her report that she was at the register\nfor fifteen minutes was \"[a]ccurate.\" However, in response to the\nnext question (\"She was at the register for 15 minutes?\"), he\nclarified that she was in the store for fifteen minutes.\n\n -11-\n\fhim. Adamson states that Benoit \"reported to his superiors that he\n\nreviewed [the] video and [the] customer was at the counter for\n\nfifteen minutes.\" He points to no evidentiary support for this\n\nclaim, and we have found none. And, contrary to Adamson's\n\nassertion on appeal, the termination notice does not even mention\n\nthe duration of the complainant's wait, let alone indicate that the\n\nduration was relevant to Walgreens' ultimate decision.3 Because\n\nnothing in the record suggests that the length of the complainant's\n\nwait was material, the district court did not have occasion to, and\n\ndid not, render any determination as to Benoit's credibility on\n\nthis issue.4 See Bonefont-Igaravidez, 659 F.3d at 124–25 (\"Even\n\n\n\n 3\n The notice states, in part, that the \"[c]ustomer informed\nthe company that the front store had no employees working. Due to\nthis, she was unable to make a purchase.\"\n 4\n Adamson also asserts that Benoit \"admitted to lying . . .\nabout the Adamson incident in order to facilitate the firing of Mr.\nAdamson\" and \"admitted to . . . falsifying documents.\" As\nWalgreens has pointed out both before the district court and here,\nthese assertions misconstrue Benoit's deposition testimony. As\nstated on the internal \"Issue Communication Form,\" Benoit was\nrequired to resolve the complaint within two business days. He\ntestified that his attempts to contact the complainant within that\ntime period were unsuccessful, so he made a notation on the form\nthat the \"contact attempt failed.\" When asked why he had made that\nnotation, he repeated the two-day requirement and stated that he\n\"didn't want to lie and say that I contacted the customer when I\nreally didn't at that time.\" He stated that he was eventually able\nto reach the complainant, but did not go back and update the form.\nBenoit testified that his notation was truthful at the time made,\nand Adamson presents no argument or evidence that Benoit was\nrequired to subsequently update the form after the two-day window\nhad passed. We do not understand how this testimony could lend\ncredence to Adamson's assertion that Benoit admitted that he had\nlied or falsified documents.\n\n -12-\n\fassuming, arguendo, that the inconsistencies identified by [the\n\nplaintiff] find support in the record, they are still insufficient\n\nto demonstrate pretext absent some cognizable nexus to [the\n\ndefendant's] offered basis for termination. To impugn the veracity\n\nof a tangential aspect of [the defendant's] story is not enough.\")\n\n(footnote omitted). Adamson has not raised any genuine issue as to\n\nwhether Walgreens believed the truth of its stated reason for\n\nterminating him.\n\n Adamson next claims that the district court improperly\n\nresolved disputed issues as to Walgreens' violations of its\n\ndisciplinary policy.5 It is true that \"pretext can be demonstrated\n\nthrough a showing that an employer has deviated inexplicably from\n\none of its standard business practices,\" Acevedo-Parrilla, 696 F.3d\n\nat 142 (internal quotation marks omitted), but Adamson has not made\n\nthat showing here. He recites some unexceptional passages from\n\n\n\n 5\n In fact, the district court did not resolve any factual\ndisputes as to whether Walgreens followed its policies, finding the\nentire subject to fall within the coverage of the business judgment\nrule. See Adamson v. Walgreens Co., No. 12-30068-RGS, 2013 WL\n1456315, at *5 (D. Mass. Apr. 10, 2013). Some of Adamson's\narguments are requests that \"the court . . . second-guess\nWalgreens' decision to fire [him] for two instances of poor\ncustomer service,\" id., an endeavor, as the district court properly\nnoted, that is not the province of the court, see Mesnick, 950 F.2d\nat 825 (\"Courts may not sit as super personnel departments,\nassessing the merits -- or even the rationality -- of employers'\nnondiscriminatory business decisions.\"). However, we do not\nbelieve that all of his arguments can be so characterized. The rule\nthat deviations from policy can be evidence of pretext would be\nmeaningless if such deviations were automatically deemed to be\nbusiness judgments immune from the court's scrutiny.\n\n -13-\n\fWalgreens' constructive discipline policy -- rules should be\n\nclearly communicated to employees; employees cannot be expected to\n\ncomply with rules that have not been communicated to them; rules\n\nmust be enforced in a fair and consistent way -- but relies on a\n\ndistorted version of the facts in an attempt to show that these\n\npolicies were not followed.\n\n He first says that the rule communicated to him in the\n\nfinal written warning was that he was required to take customer\n\nreturns in a timely fashion, and thus he could be subject to\n\nenhanced discipline only if he again failed to do exactly that.\n\nBut the warning communicated more than that. It listed as the\n\nbasis of discipline \"Poor Customer Service/refused customer\n\nreturn,\" and, when explaining the reason for the discipline,\n\nstated, \"[c]ustomer service is a great part of our job, not being\n\nhelpful to any customer, no matter what the issue[,] is just poor\n\ncustomer service.\" Thus, the evidence shows that he was given\n\nclear notice that failure to help a customer was not acceptable,\n\nregardless of whether the customer was trying to return\n\nmerchandise, purchase merchandise, or something else altogether.\n\n Adamson also argues that no clear rule was ever\n\ncommunicated to him regarding how he should handle opening the\n\nstore when alone, but this is irrelevant. He was clearly informed\n\nof his responsibility to attend to customers \"no matter what the\n\n\n\n\n -14-\n\fissue\"; Walgreens did not need to provide him with an additional\n\nrule saying \"even when you open the store alone.\"\n\n In arguing that Walgreens violated its policy to\n\nuniformly enforce its rules, Adamson presents several examples of\n\nyounger managerial employees who engaged in misconduct that he\n\ncharacterizes as more severe than his own but who were subject only\n\nto final written warnings, while he was subject to termination.\n\n\"An employer's disparate treatment of employees in response to\n\nbehavior that legitimately offends the employer can provide\n\nevidence of discriminatory animus.\" Vélez, 585 F.3d at 451 (citing\n\nMcDonald v. Santa Fe Trail Transp. Co., 427 U.S. 273, 283 (1976)).\n\nHowever, the evidence Adamson offers does not suggest\n\ndiscrimination and actually shows that Walgreens treated them all\n\nalike. Adamson and every supposed comparator received the same\n\ndiscipline for their first offense -- a final written warning. It\n\nwas only when he had a second customer service incident, not even\n\nfour months later, that he received the more severe discipline of\n\ntermination.6 He has not provided any example of a younger\n\n\n 6\n Adamson also states that Benoit admitted that no other\nemployee was disciplined for customer service issues \"despite the\nfact that customers had complained about other employees.\" The\nrecord does not support this claim. Benoit did not say that\ncustomers complained about other employees; he stated that he\n\"get[s] various complaints on [sic] various different reasons.\"\nNothing in the record establishes that those complaints were about\nemployees as opposed to, for example, product availability or\nprices. Moreover, Benoit averred in a declaration that, \"[b]esides\nthose involving [Adamson], I did not receive any verbal or written\ncustomer complaints about any customer service issues involving a\n\n -15-\n\femployee who had a second incident of misconduct after having\n\nalready received a final written warning. Because his second\n\ninfraction renders him materially different from these other\n\nemployees, his attempt to show disparate treatment necessarily\n\nfails. See id. (\"[I]n order to be probative of discriminatory\n\nanimus, a claim of disparate treatment 'must rest on proof that the\n\nproposed analogue is similarly situated in material respects.'\"\n\n(quoting Perkins v. Brigham & Women's Hosp., 78 F.3d 747, 752 (1st\n\nCir. 1996))). Adamson argues that the district court erred in\n\nconsidering the second incident in determining that these other\n\nemployees were not similarly situated to him, but this is\n\nnonsensical. While he admits that the second incident occurred, he\n\nwants it to be ignored, arguing that he was treated differently\n\nthan other employees who only received Final Written Warnings after\n\none incident. This argument fails because Adamson was fired after\n\ntwo incidents, and there is no basis for the court to ignore that\n\ndistinction.\n\n Finally, Adamson contends that Walgreens violated its own\n\npolicies in failing to give him a chance to explain himself and to\n\nconduct further investigation once Adamson said that the customer\n\ncomplaint was untrue. However, the policy that he points to is the\n\npolicy for \"Counseling (Verbal Warning),\" the first, lowest level\n\nof the constructive discipline policy. While it may be good\n\n\nmanagerial employee in 2010 or 2011.\n\n -16-\n\fpractice to allow employees to justify their conduct before\n\ndiscipline is imposed, nothing in Walgreens' policies required\n\nBenoit to do so when issuing his termination notice. See Rivera-\n\nAponte v. Restaurant Metropol #3, Inc., 338 F.3d 9, 11 (1st Cir.\n\n2003) (rejecting argument that failure to give plaintiff an\n\nopportunity to explain his side showed pretext because \"[w]hether\n\na termination decision was wise or done in haste is irrelevant, so\n\nlong as the decision was not made with discriminatory animus\"\n\n(citing Gray, 792 F.2d at 255)).\n\n In sum, Adamson has failed to provide any evidence that\n\nwould raise a triable issue with respect to whether Walgreens\n\nviolated its own policies and practices -- much less whether such\n\nviolations establish pretext.\n\n Finally, Adamson argues that the district court erred in\n\nresolving disputes regarding alleged preferential treatment given\n\nto two younger managerial employees. He states that Benoit gave\n\nfavorable schedules to younger employees and provided training and\n\npromotional opportunities to a younger employee, Julie Martineau,\n\nthat were denied to him.7\n\n As to the first claim, Adamson testified in his\n\ndeposition that he was required to work six to nine consecutive\n\ndays, while the younger employees only had to work three to five\n\n\n 7\n Adamson also reprises his claim that he was disciplined more\nseverely than similarly situated younger employees. We need not\nre-address it here.\n\n -17-\n\fconsecutive days, before getting a day off. The district court\n\nrightly determined that the record evidence was to the contrary.\n\nWalgreens provided a chart comparing the three employees' schedules\n\nthat shows that they each sometimes worked eight, nine, or, in the\n\ncase of one of the younger employees, even ten straight days before\n\nhaving a day off. Although he stated that he \"question[ed] the\n\nvalidity or the accuracy\" of this information, he has not produced\n\nany evidence to call it into question.8\n\n As to the second claim, Walgreens admits that Martineau\n\nwas identified by multiple people as having promotion potential\n\nand, beginning in November or December of 2010, was provided\n\nadditional mentorship as part of Walgreens' promotion process.\n\nMartineau began working at the Ware store several months before\n\nAdamson did. Benoit testified that she did a good job, she knew\n\nthe store, and that, having worked with her for some time, he was\n\ncomfortable with and trusted her. Walgreens' decision to prepare\n\nMartineau, but not Adamson, for promotion, without more, does not\n\nsupport an inference of age discrimination, especially in light of\n\nthe fact that Adamson was disciplined for an admitted customer\n\nservice incident within weeks of transferring to the Ware store.\n\n\n\n 8\n He also states that he usually only got one day off at a\ntime while the other two employees often got two consecutive days\noff. He has cited no record evidence for this assertion, and the\nschedule provided by Walgreens shows that he was scheduled to have\na single day off slightly less frequently than the other employees.\n\n\n -18-\n\f In sum, being mindful \"that courts should exercise\n\nparticular caution before granting summary judgment for employers\n\non such issues as pretext, motive, and intent,\" Santiago-Ramos v.\n\nCentennial P.R. Wireless Corp., 217 F.3d 46, 54 (1st Cir. 2000)\n\n(citing Hodgens v. Gen. Dynamics Corp., 144 F.3d 151, 167 (1st Cir.\n\n1998)), and \"viewing the 'aggregate package of proof offered by\n\n[Adamson]' and taking all inferences in [his] favor,\" Domínguez-\n\nCruz, 202 F.3d at 431 (quoting Mesnick, 950 F.2d at 824–25), we\n\nconclude that the record is devoid of evidence from which a jury\n\ncould infer that Walgreens' proffered reason for terminating\n\nAdamson was pretext designed to disguise age discrimination. We\n\ntherefore affirm the district court's grant of summary judgment on\n\nAdamson's ADEA claim.\n\n Because the ADEA and ch. 151B, § 4(1B), analyses are\n\n\"substantially similar\" in all relevant respects,9 see Bennett v.\n\nSaint-Gobain Corp., 507 F.3d 23, 30 (1st Cir. 2007), this\n\nconclusion is also fatal to his claim under Massachusetts\n\ndiscrimination law.\n\n\n\n\n 9\n Massachusetts law deviates from federal law in at least one\nrespect -- the availability of a \"mixed motive\" theory, see Diaz\nv. Jiten Hotel Mgmt., Inc., 671 F.3d 78, 82–84 (1st Cir. 2012) --\nthat is not material here. Adamson relies solely on the federal\nframework in this appeal.\n\n -19-\n\f III. Conclusion\n\n For the foregoing reasons, we affirm the district court's\n\norder granting summary judgment in favor of Walgreens. Costs are\n\nawarded to appellees.\n\n\n\n\n -20-\n\f", "ocr": false, "opinion_id": 2671594 } ]	First Circuit	Court of Appeals for the First Circuit	F	USA, Federal
34,163	Emilio, Garza, Higginbotham, Per Curiam, Prado	2004-02-16	false	shirley-v-michigan-state	Shirley	Shirley v. Michigan State	Pamela SHIRLEY, Plaintiff-Appellant, v. MICHIGAN STATE, Defendant-Appellee	Pamela Shirley, pro se, Arabi, LA, for Plaintiff-Appellant.	null	null	null	null	null	null	null	null	null	null	0	Unpublished	null	<parties data-order="0" data-type="parties" id="b806-7"> Pamela SHIRLEY, Plaintiff-Appellant, v. MICHIGAN STATE, Defendant-Appellee. </parties><br><docketnumber data-order="1" data-type="docketnumber" id="b806-9"> No. 03-30759. </docketnumber><br><p data-order="2" data-type="misc" id="b806-10"> Conference Calendar. </p><br><court data-order="3" data-type="court" id="b806-11"> United States Court of Appeals, Fifth Circuit. </court><br><decisiondate data-order="4" data-type="decisiondate" id="b806-13"> Feb. 17, 2004. </decisiondate><br><attorneys data-order="5" data-type="attorneys" id="b806-16"> Pamela Shirley, pro se, Arabi, LA, for Plaintiff-Appellant. </attorneys><br><p data-order="6" data-type="judges" id="b806-17"> Before HIGGINBOTHAM, EMILIO M. GARZA, and PRADO, Circuit Judges. </p>	[ "86 F. App'x 776" ]	[ { "author_str": "Per Curiam", "per_curiam": false, "type": "010combined", "page_count": 2, "download_url": "http://www.ca5.uscourts.gov/opinions\\unpub\\03/03-30759.0.wpd.pdf", "author_id": null, "opinion_text": " United States Court of Appeals\n Fifth Circuit\n F I L E D\n IN THE UNITED STATES COURT OF APPEALS\n FOR THE FIFTH CIRCUIT February 17, 2004\n\n Charles R. Fulbruge III\n Clerk\n No. 03-30759\n Conference Calendar\n\n\n\nPAMELA SHIRLEY,\n\n Plaintiff-Appellant,\n\nversus\n\nMICHIGAN STATE,\n\n Defendant-Appellee.\n\n --------------------\n Appeal from the United States District Court\n for the Eastern District of Louisiana\n USDC No. 03-CV-1544-T\n --------------------\n\nBefore HIGGINBOTHAM, EMILIO M. GARZA, and PRADO, Circuit Judges.\n\nPER CURIAM:\n\n Pamela Shirley, a Louisiana resident and a non-prisoner\n\nproceeding pro se, has filed a motion to proceed in forma\n\npauperis (IFP) on appeal challenging the district court’s\n\ncertification that her appeal was not taken in good faith.\n\nSee Baugh v. Taylor, 117 F.3d 197, 199-202 (5th Cir. 1997).\n\nThe district court dismissed her complaint and denied permission\n\nto proceed IFP for lack of jurisdiction.\n\n\n\n \n Pursuant to 5TH CIR. R. 47.5, the court has determined\nthat this opinion should not be published and is not precedent\nexcept under the limited circumstances set forth in 5TH CIR.\nR. 47.5.4.\n\f No. 03-30759\n -2-\n\n Shirley has failed to brief the issue of jurisdiction.\n\nTherefore, she effectively has waived the only issue relevant to\n\nher entitlement to IFP status on appeal. See Yohey v. Collins,\n\n985 F.2d 222, 224-25 (5th Cir. 1993).\n\n Even if Shirley had briefed the jurisdictional issue, we\n\nconclude that an appeal would be frivolous. Federal courts\n\nhave a long-standing policy of abstaining from the exercise of\n\ndiversity jurisdiction in cases involving intrafamily relations,\n\nincluding child custody actions, known as the domestic relations\n\nexception. See Congleton v. Holy Cross Child Placement Agency,\n\nInc., 919 F.2d 1077, 1078 (5th Cir. 1990). The district court\n\ndid not err in construing Shirley’s complaint as essentially\n\nconcerning the custody of her children.\n\n The district court’s certification that Shirley’s appeal is\n\nnot taken in good faith is upheld, Shirley’s motion for IFP is\n\nDENIED, and this appeal is DISMISSED AS FRIVOLOUS. See Baugh,\n\n117 F.3d at 202 and n.24. Shirley’s motion for appointment of\n\ncounsel also is DENIED. See Ulmer v. Chancellor, 691 F.2d 209,\n\n212 (5th Cir. 1982). Shirley is WARNED that future frivolous\n\nfilings will be met with sanctions. To avoid sanctions, she\n\nshould review any pending appeals to ensure that they do not\n\nraise arguments that are frivolous.\n\n IFP DENIED; APPOINTMENT OF COUNSEL DENIED; APPEAL DISMISSED;\n\nSANCTION WARNING ISSUED.\n\f", "ocr": false, "opinion_id": 34163 } ]	Fifth Circuit	Court of Appeals for the Fifth Circuit	F	USA, Federal
250,889	Aldrich, Hartigan, Woodbury	1960-04-26	false	national-labor-relations-board-v-c-malone-trucking-inc	null	National Labor Relations Board v. C. Malone Trucking, Inc.	NATIONAL LABOR RELATIONS BOARD, Petitioner, v. C. MALONE TRUCKING, INC., Respondent	t /-( t, . i. ... t * t. James C. Paras, Atty., Washington, D. „ ... . L. , T-. ,, C., with whom Stuart Rothman, Gen. „ i mi T w » Counsel, Thomas J. McDermott, Assoc. 0 i n/r i ir n i -n 4. Gen. Counsel, Marcel Mallet-Prevost, . , ~ „ , . . TX Asst. Gen. Counsel, and Frederick U. . . T tat A j-i. Reel and Jerome L. Avedon, Attys., ...... „ „ , „ Washington, D. C., were on brief, for petitioner, Frank Daniels, Boston, Mass., for respondent.	null	null	null	null	null	null	null	null	null	null	6	Published	null	<parties id="Ash"> NATIONAL LABOR RELATIONS BOARD, Petitioner, v. C. MALONE TRUCKING, INC., Respondent. </parties><docketnumber id="AJ"> No. 5586. </docketnumber><court id="AT1"> United States Court of Appeals First Circuit. </court><decisiondate id="Ajy"> April 26 1960 </decisiondate><attorneys id="AX"> <span citation-index="1" class="star-pagination" label="93"> 93 </span> t /-( t, . i. ... t t. James C. Paras, Atty., Washington, D. „ ... . <em> L. </em> , T-. ,, C., with whom Stuart Rothman, Gen. „ i mi T w » Counsel, Thomas J. McDermott, Assoc. 0 i n/r i ir n <em> i </em> -n <em> 4. </em> Gen. Counsel, Marcel Mallet-Prevost, . , ~ „ , . . TX Asst. Gen. Counsel, and Frederick U. . . T tat A j-i. Reel and Jerome L. Avedon, Attys., ...... „ „ , „ Washington, D. C., were on brief, for petitioner </attorneys><attorneys id="APl"> Frank Daniels, Boston, Mass., for respondent. </attorneys><judges id="AeB"> Before WOODBURY, Chief Judge, and HARTIGAN and ALDRICH, Circuit . , </judges>	[ "278 F.2d 92" ]	[ { "author_str": "Hartigan", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/278/278.F2d.92.5586_1.html", "author_id": null, "opinion_text": "278 F.2d 92\n NATIONAL LABOR RELATIONS BOARD, Petitioner,v.C. MALONE TRUCKING, INC., Respondent.\n No. 5586.\n United States Court of Appeals First Circuit.\n April 26, 1960.\n \n James C. Paras, Atty., Washington, D. C., with whom Stuart Rothman, Gen. Counsel, Thomas J. McDermott, Assoc. Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, and Frederick U. Reel and Jerome L. Avedon, Attys., Washington, D. C., were on brief, for petitioner.\n Frank Daniels, Boston, Mass., for respondent.\n Before WOODBURY, Chief Judge, and HARTIGAN and ALDRICH, Circuit Judges.\n HARTIGAN, Circuit Judge.\n \n \n 1\n This is a petition for enforcement of an order of the National Labor Relations Board issued in conjunction with the Board's decision, 124 N.L.R.B. No. 48, which found that respondent, C. Malone Trucking, Inc. (hereinafter referred to as the Company) violated Sections 8(a) (1) and (3) of the National Labor Relations Act, 61 Stat. 136 (1947), as amended, 29 U.S.C.A. §§ 158(a) (1), (3) (1958) by the discriminatory discharges of employees Beechim and Crispo, and also Section 8(a) (1) by interrogation by Company president Malone of employees Pooler, Withrow and Crispo.\n \n \n 2\n The primary contention of the respondent Company is that there is no substantial evidence in the record considered as a whole to support the Board's findings of unfair labor practices.1 The evidence in the record showed the following: employees Beechim and Crispo became interested about September 1957 in having Local 25, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the charging union, hereinafter called Teamsters) represent the employees of the Company rather than the Watch City Independent Chauffeurs, Helpers and Warehouse Union which at the time represented the Company employees and had a collective bargaining contract with the Company. Beechim and Crispo contacted the Teamsters, got authorization cards, and began to sign up their fellow employees. James Feeney, the business agent for the Teamsters, testified that he contacted president Malone within a week before the Teamsters filed a request for certification with the Board on September 26. An organizational meeting of the employees was held about a week before the discharge of employee Beechim, at which John Cardillo, then a foreman of the Company, was present. Employees Pooler and Withrow each testified that he attended a meeting of the employees at the Teamsters office, and that after the meeting president Malone questioned him about the union and about union cards. Pooler and Withrow could not fix the date of the meeting, however. President Malone testified that prior to the notice of filing of the request for certification of the Teamsters, he had not known of employee activity on behalf of the Teamsters.\n \n \n 3\n Employee Beechim was discharged on September 25, 1957. Beechim testified that on the 25th he made several deliveries, that he was delayed at two stops, but that he had called in to the dispatcher of the Company for instructions as he was told to on meeting delays,2 and that after making the last of his deliveries he was told to report back to the Company yard. There he was told Malone wanted to see him. Malone, he said, accused him of taking too much time to make deliveries; a graph of the truck was examined and he explained to Malone each of the stops and the delays. Beechim said he told Malone that he had called in, and he asked Malone to call the customers to check on the delays, but that Malone said he would not. He said Malone then told the bookkeeper to make up Beechim's money and that Beechim \"was through.\" Beechim said he had been reprimanded once about a year before, but not for delays, and that he had not heard of complaints since. Beechim also explained a delay in another delivery about a week before his discharge, saying that he had to wait for pallets that were not available, and that he had called twice for instructions during the delay of about six hours.\n \n \n 4\n President Malone testified that he had had complaints about Beechim taking too long on twenty to twenty-five occasions during the year previous to Beechim's discharge; that he had spoken to Beechim eight or ten times and to the steward seven to ten times; that when he saw Beechim on the 25th and told him that he was taking too long Beechim said \"Oh, no, oh, no,\" but nothing else. Malone also testified that on calls in to the dispatcher the driver gets instructions on whether to remain or go on; that he had called a receiver at one of the delivery stops where Beechim had said he was delayed on the 25th and was told that nothing had happened to Beechim that day. However, Malone admitted that he had not called any receiver on the other portion of that same delivery nor called the other stops where Beechim said he was delayed. Malone also stated he had not been paying any particular attention to Beechim's time sheets, despite the asserted complaints of delays. He also testified that during the year prior to Beechim's discharge the Company had fired three truck drivers.\n \n \n 5\n Employee Crispo, who was not present at the hearing, but who had given a deposition, stated that before the second of two organizational meetings of those interested in the Teamsters, he had been called into president Malone's office and asked if he knew of the applications being distributed, and that he had said no. Crispo stated he lied about this matter because he felt he would be fired if Malone knew of his part in getting signatures. Crispo said that he spoke in favor of the Teamsters at the second meeting and that afterwards Malone called him to his office and wanted to know what Crispo was doing after saying he had not signed an application. Crispo said Malone then repeated the substance of what Crispo had said at the union meeting. Crispo said that on November 18 he went to work at 7 a. m. and worked until 10:30 a. m.; that Rizzo, the company dispatcher, then told him that was all for the day, but to call at six o'clock that night; that when Crispo called, Rizzo had told him there was nothing for him the next day. Crispo testified he went to observe the yard the next morning and saw two drivers junior to him given work; that he went to Rizzo to find out about this, and was told to see president Malone. Crispo said he called Malone and Malone told him there would be no work for him. Crispo said that no reason was ever given to him and that he was never involved in an accident while employed by the Company.\n \n \n 6\n In regard to the Crispo discharge, president Malone testified that on November 15, 1957 he had observed Crispo backing into a regular stop and had seen Crispo damage another Company trailer. Malone said he had his brother take a photo of the damaged trailer the next day and that he had waited to see if Crispo would report the accident as company rules required. After three days, Malone said, he called Crispo in and asked him why he had not reported the accident and that Crispo said nothing. Malone testified that he then told Crispo he was being fired as anyone would be who violated the company rule on reporting accidents. On cross-examination Malone admitted that he had not shown the photo to the Board's field examiner.\n \n \n 7\n On the basis of the whole record, and his observation of the various witnesses (except Crispo), the trial examiner concluded that the reasons advanced by Malone as motivating the discarge of Beechim were not the real reasons; that Malone's account of an unreported accident involving Crispo and his discharge of Crispo for this reason was not factual; and that each employee was discharged on account of his activities in behalf of the Teamsters in violation of Section 8(a) (3). The trial examiner also concluded that Malone's interrogation of Pooler, Withrow and Crispo, and the discharge of Beechim and Crispo constituted a violation of Section 8(a) (1). These findings and conclusions were adopted by the Board.\n \n \n 8\n The credibility of witnesses is for the Board's determination. National Labor Relations Board v. Lunder Shoe Corp., 1 Cir., 1954, 211 F.2d 284. The Board's acceptance of the trial examiner's disbelief in a witness' testimony based on his observance of the witness while testifying in general, is to be overturned only if the finding is incredible on its face. National Labor Relations Board v. Dinion Coil Co., 2 Cir., 1952, 201 F.2d 484. It makes no difference that on a de novo consideration, we might conclude differently than did the examiner or the Board. National Labor Relations Board v. Stanislaus Imp. & H. Co., 9 Cir., 1955, 226 F.2d 377; National Labor Relations Board v. San Diego Gas & El. Co., 9 Cir., 1953, 205 F.2d 471. In the instant case the testimony of the witnesses which were credited by the trial examiner, as against the testimony of the Company's president, affords substantial evidence of the violations found by the Board. Accordingly, we cannot say that the Board's findings are not supported by substantial evidence on the record considered as a whole.\n \n \n 9\n A decree will be entered enforcing the order of the Board.\n \n \n \n Notes:\n \n \n 1\n Respondent in its brief presents the question: \"Whether substantial evidence had been presented by the Respondent to warrant a finding that the discharges of * * * Beechim and * * * Crispo were for proper cause.\" However, we believe this inverts the question that is legally before us under the rule of Universal Camera Corp. v. National Labor Relations Board, 1951, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456, and we shall consider the record as a whole to determine if there is substantial evidence to support the Board's conclusions. N. L. R. B. v. M. & M. Bakeries, 1 Cir., 1959, 271 F.2d 602\n \n \n 2\n It might be noted that president Malone testified that one of his remarks to Beechim on the 25th was that Beechim \"called up\" more than all the other drivers together\n \n \n ", "ocr": false, "opinion_id": 250889 } ]	First Circuit	Court of Appeals for the First Circuit	F	USA, Federal
2,597,166	Hatfield	1995-06-09	false	ecology-center-inc-v-gorman	Gorman	Ecology Center, Inc. v. Gorman	The ECOLOGY CENTER, INC., a Montana Non-Profit Corporation, and Alliance for the Wild Rockies, Plaintiffs, v. John D. GORMAN, in His Official Capacity as Forest Supervisor of the Lewis and Clark National Forest, United States Forest Service, an Agency of the Department of Agriculture, and United States Fish & Wildlife Service, an Agency of the Department of the Interior, Defendants	Jack R. Tuholske, Tuholske Law Office, Missoula, MT, for plaintiffs., Joseph Perella, U.S. Department of Justice — Wildlife & Marine Resources, Washington, DC, Allison Rumsey, General Litigation Section, U.S. Department of Justice, Washington, DC, for defendants.	null	null	null	null	null	null	null	null	null	null	0	Published	null	<parties id="b281-10"> The ECOLOGY CENTER, INC., a Montana non-profit corporation, and Alliance for the Wild Rockies, Plaintiffs, v. John D. GORMAN, in his official capacity as Forest Supervisor of the Lewis and Clark National Forest, United States Forest Service, an agency of the Department of Agriculture, and United States Fish & Wildlife Service, an agency of the Department of the Interior, Defendants. </parties><br><docketnumber id="b281-13"> No. CV-94-54-GF. </docketnumber><br><court id="b281-14"> United States District Court, D. Montana, Great Falls Division. </court><br><decisiondate id="b281-17"> June 9, 1995. </decisiondate><br><attorneys id="b282-4"> <span citation-index="1" class="star-pagination" label="204"> *204 </span> Jack R. Tuholske, Tuholske Law Office, Missoula, MT, for plaintiffs. </attorneys><br><attorneys id="b282-5"> Joseph Perella, U.S. Department of Justice — Wildlife & Marine Resources, Washington, DC, Allison Rumsey, General Litigation Section, U.S. Department of Justice, Washington, DC, for defendants. </attorneys>	[ "902 F. Supp. 203" ]	[ { "author_str": "Hatfield", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 1394, "opinion_text": "\n902 F. Supp. 203 (1995)\nThe ECOLOGY CENTER, INC., a Montana non-profit corporation, and Alliance for the Wild Rockies, Plaintiffs,\nv.\nJohn D. GORMAN, in his official capacity as Forest Supervisor of the Lewis and Clark National Forest, United States Forest Service, an agency of the Department of Agriculture, and United States Fish & Wildlife Service, an agency of the Department of the Interior, Defendants.\nNo. CV-94-54-GF.\nUnited States District Court, D. Montana, Great Falls Division.\nJune 9, 1995.\n204 Jack R. Tuholske, Tuholske Law Office, Missoula, MT, for plaintiffs.\nJoseph Perella, U.S. Department of Justice Wildlife & Marine Resources, Washington, DC, Allison Rumsey, General Litigation Section, U.S. Department of Justice, Washington, DC, for defendants.\n\nMEMORANDUM AND ORDER\nHATFIELD, Chief Judge.\nPlaintiffs, The Ecology Center, Inc. and Alliance for the Wild Rockies, instituted the above-entitled action challenging the United States Forest Service's decision to renew a grazing permit in the Little Badger Allotment of the Lewis and Clark National Forest. Plaintiffs contend the Forest Service's decision is violative of the Endangered Species Act, 16 U.S.C. §§ 1536 et seq., the National Environmental Policy Act, 42 U.S.C. §§ 4321 et seq., and the National Forest Management Act, 16 U.S.C. §§ 1600 et seq. Presently before the court is defendants' motion requesting the court to enter a protective order, pursuant to Fed.R.Civ.P. 26(c), prohibiting the plaintiffs from undertaking discovery in the above-entitled matter. Having reviewed the record herein, together with the parties' briefs in support of their respective positions, the court is prepared to rule.\n\nDISCUSSION\nThe focal point for judicial review of agency action is the administrative record already in existence, not a new record made initially in the reviewing court. Seattle Audubon Society v. Moseley, 798 F. Supp. 1473, 1477 (W.D.Wash.1992), citing, Asarco, Inc. v. EPA, 616 F.2d 1153, 1159 (9th Cir.1980). The court may, however, consider evidence outside the administrative record for certain limited purposes, e.g., to explain the agency's action or to determine whether its course of inquiry was insufficient or inadequate. Id., citing, Love v. Thomas, 858 F.2d 1347, 1356 (9th Cir.1988), cert. denied, 490 U.S. 1035, 109 S. Ct. 1932, 104 L. Ed. 2d 403 (1989); Animal Defense Council v. Hodel, 840 F.2d 1432, 1436 (9th Cir.1988). In addition, a court, in certain instances, may require supplementation of the record or allow a party challenging agency action to engage in limited discovery. National Wildlife Federation v. Burford, 677 F. Supp. 1445, 1457 (D.Mont.1985).\nSupplementation of an administrative record is the exception, not the rule. See, San Luis Obispo Mothers for Peace v. Nuclear Regulatory Commission., 751 F.2d 1287, 1324 (D.C.Cir.1984). In Public Power Council v. Johnson, 674 F.2d 791 (9th Cir.1982), the Ninth Circuit isolated four circumstances where supplementation or discovery may be justified: (1) when the record need be expanded to explain agency action; (2) when the agency has relied upon documents or materials not included in the record; (3) to explain or clarify technical matter involved in the agency action; and (4) where there has been a strong showing in support of a claim of bad faith or improper behavior on the part of the agency decision makers.\nId. See also, Animal Lovers Volunteer Association, Inc. v. Cheney, 795 F. Supp. 994, 997 (C.D.Cal.1992) (citations omitted).\nIn the case sub judice, plaintiffs seek to depose Keith Aune, a biologist with the Montana Department of Fish Wildlife and Parks, and Seth Diamond, a biologist with the United States Forest Service. Plaintiffs contend the limited discovery will provide the court with a better understanding of the issues raised in the above-entitled action.\n205 Having reviewed the record herein, the court concludes the present action falls within the exceptions to the general rule limiting review of agency action to the administrative record. In so holding, the court remains cognizant of the fact that the weight to be given to the testimony and evidence elicited during the course of the proposed depositions remains subject to the court's discretion. Allowing the limited discovery requested by the plaintiffs would not, in this matter, impermissibly alter the action from a record review to a trial de novo. Accordingly, the court concludes defendants' motion for a protective order be, and the same hereby is, DENIED.\nIT IS SO ORDERED.\n", "ocr": false, "opinion_id": 2597166 } ]	D. Montana	District Court, D. Montana	FD	Montana, MT
110,166	Burger, Marshall, Members	1980-01-08	false	mclain-v-real-estate-board-of-new-orleans-inc	McLain	McLain v. Real Estate Board of New Orleans, Inc.	McLAIN Et Al. v. REAL ESTATE BOARD OF NEW ORLEANS, INC., Et Al.	Richard G. Vinet argued the cause for petitioners. With him on the brief was John P. Nelson, Jr., Harry McCall, Jr., argued the cause for respondents. With him on the brief for respondents Real Estate Board of New Orleans et al. were Arthur L. Ballin, Frank C. Dudenhejer, Edward F. Wegmann, Harry S. Redmon, Jr., Rutledge Clement, Jr., Charles F. Barbera, Moise S. Steeg, Jr., and William D. North. Edward F. Schijj, Paul B. Hewitt, and Moise W. Dennery filed a brief for respondent Latter & Blum, Inc., Deputy Solicitor General Easterbrook argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General McCree, Assistant Attorney General Shenejield, John J. Powers III, and Margaret G. Halpern.*	null	null	null	null	null	null	null	Argued November 6, 1979	null	null	353	Published	null	<parties id="b378-4"> McLAIN et al. <em> v. </em> REAL ESTATE BOARD OF NEW ORLEANS, INC., et al. </parties><br><docketnumber id="b378-7"> No. 78-1501. </docketnumber><otherdate id="AN8"> Argued November 6, 1979 </otherdate><decisiondate id="Aed"> Decided January 8, 1980 </decisiondate><br><judges id="b379-7"> <span citation-index="1" class="star-pagination" label="233"> 233 </span> Burger, C. J., delivered the opinion of the Court, in which all other Members joined, except Marshall, J., who took no part in the consideration or decision of the case. </judges><br><attorneys id="b379-8"> <em> Richard G. Vinet </em> argued the cause for petitioners. With him on the brief was <em> John P. Nelson, Jr. </em> </attorneys><br><attorneys id="b379-9"> <em> Harry McCall, Jr., </em> argued the cause for respondents. With him on the brief for respondents Real Estate Board of New <span citation-index="1" class="star-pagination" label="234"> 234 </span> Orleans et al. were <em> Arthur L. Ballin, Frank C. Dudenhejer, Edward F. Wegmann, Harry S. Redmon, Jr., Rutledge Clement, Jr., Charles F. Barbera, Moise S. Steeg, Jr., </em> and <em> William D. North. Edward F. Schijj, Paul B. Hewitt, </em> and <em> Moise W. Dennery </em> filed a brief for respondent Latter & Blum, Inc. </attorneys><br><attorneys id="b380-5"> <em> Deputy Solicitor General Easterbrook </em> argued the cause for the United States as <em> amicus curiae </em> urging reversal. With him on the brief were <em> Solicitor General McCree, Assistant Attorney General Shenejield, John J. Powers III, </em> and <em> Margaret G. Halpern. </em> <a class="footnote" href="#fn" id="fn_ref"> <em> * </em> </a> </attorneys><div class="footnotes"><div class="footnote" id="fn" label=""> <a class="footnote" href="#fn_ref"> </a> <p id="b380-11"> <em> William D. North </em> and <em> Valentine A. Weber, Jr., </em> filed a brief for the National Association of Realtors as <em> amicus curiae </em> urging affirmance. </p> <p id="b380-12"> <em> Ellen Broadman </em> and <em> Alan Mark Silbergeld </em> filed a brief for Consumers Union of United States, Inc., as <em> amicus curiae. </em> </p> </div></div>	[ "62 L. Ed. 2d 441", "100 S. Ct. 502", "444 U.S. 232", "1980 U.S. LEXIS 21" ]	[ { "author_str": "Burger", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 464, "opinion_text": "\n444 U.S. 232 (1980)\nMcLAIN ET AL.\nv.\nREAL ESTATE BOARD OF NEW ORLEANS, INC., ET AL.\nNo. 78-1501.\nSupreme Court of United States.\nArgued November 6, 1979.\nDecided January 8, 1980.\nCERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT.\n233 Richard G. Vinet argued the cause for petitioners. With him on the brief was John P. Nelson, Jr.\nHarry McCall, Jr., argued the cause for respondents. With him on the brief for respondents Real Estate Board of New 234 Orleans et al. were Arthur L. Ballin, Frank C. Dudenhefer, Edward F. Wegmann, Harry S. Redmon, Jr., Rutledge Clement, Jr., Charles F. Barbera, Moise S. Steeg, Jr., and William D. North. Edward F. Schiff, Paul B. Hewitt, and Moise W. Dennery filed a brief for respondent Latter & Blum, Inc.\nDeputy Solicitor General Easterbrook argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General McCree, Assistant Attorney General Shenefield, John J. Powers III, and Margaret G. Halpern.[]\nEllen Broadman and Alan Mark Silbergeld filed a brief for Consumers Union of United States, Inc., as amicus curiae.\nMR. CHIEF JUSTICE BURGER delivered the opinion of the Court.\nThe question in this case is whether the Sherman Act extends to an agreement among real estate brokers in a market area to conform to a fixed rate of brokerage commissions on sales of residential property.\n\nI\nThe complaint in this private antitrust action, filed in the Eastern District of Louisiana in 1975, alleges that real estate brokers in the Greater New Orleans area have engaged in a price-fixing conspiracy in violation of § 1 of the Sherman Act, ch. 647, 26 Stat. 209, as amended, 15 U. S. C. § 1. No trial has as yet been had on the merits of the claims since the complaint was dismissed for failure to establish the interstate commerce component of Sherman Act jurisdiction.\nThe complaint asserts a claim individually and on behalf of that class of persons who employed the services of a respondent real estate broker in the purchase or sale of 235 residential property in the Louisiana parishes of Jefferson or Orleans (the Greater New Orleans area) during the four years preceding the filing of the complaint. The respondents are two real estate trade associations, six named real estate firms, and that class of real estate brokers who at some time during the period covered by the complaint transacted realty brokerage business in the Greater New Orleans area and charged a brokerage fee for their services. The unlawful conduct alleged is a continuing combination and conspiracy among the respondents to fix, control, raise, and stabilize prices for the purchase and sale of residential real estate by the systematic use of fixed commission rates, widespread fee splitting, suppression of market information useful to buyers and sellers, and other allegedly anticompetitive practices. The complaint asserts that respondents' conduct has injured petitioners in their business or property because the fees and commissions charged for brokerage services have been maintained at an artificially high and noncompetitive level, with the effect that the prices of residential properties have been artificially raised. The complaint seeks treble damages and injunctive relief as authorized by §§ 4 and 16 of the Clayton Act, 38 Stat. 731, 737, as amended, 15 U. S. C. §§ 15, 26.\nThe allegations of the complaint pertinent to establishing federal jurisdiction are:\n(1) that the activities of the respondents are \"within the flow of interstate commerce and have an effect upon that commerce\";\n(2) that the services of respondents were employed in connection with the purchase and sale of real estate by \"persons moving into and out of the Greater New Orleans area\";\n(3) that respondents \"assist their clients in securing financing and insurance involved with the purchase of real estate in the Greater New Orleans area,\" which \"financing and insurance are obtained from sources outside the State of Louisiana and move in interstate commerce into the State of Louisiana through the activities of the [respondents]\"; and\n236 (4) that respondents have engaged in an unlawful restraint of \"interstate trade and commerce in the offering for sale and sale of real estate brokering services.\"\nRespondents moved in the District Court to dismiss the complaint for failure to state a claim within the ambit of the Sherman Act. This motion was supported by a memorandum and by the affidavits of two officers of respondent Real Estate Board of New Orleans. The affiants testified that real estate brokers in Louisiana were licensed to perform their function in that State only, that there was no legal or other requirement that real estate brokers be employed in connection with the purchase or sale of real estate within Louisiana, and that the affiants had personal knowledge of such transactions occurring without the assistance of brokers. The function of real estate brokers was described as essentially completed when buyer and seller had been brought together on agreeable terms. The affiants also stated that real estate brokers did not obtain and were not instrumental in obtaining financing of credit sales, save in a few special cases, nor were they involved with examination of titles in connection with the sale of real estate or the financing of such sales.\nThe memorandum in support of the motion to dismiss sought to distinguish this case from Goldfarb v. Virginia State Bar, 421 U. S. 773 (1975), in which we held that § 1 of the Sherman Act had been violated by conformance with a bar association's minimum-fee schedule that established fees for title examination services performed by attorneys in connection with the financing of real estate purchases. The respondents construed the applicability of Goldfarb as limited by certain language in the opinion that described the activities of lawyers in the examination of titles as an inseparable and integral part of the interstate commerce in real estate financing. 421 U. S., at 784-785. In contrast, with respect to this case, respondents asserted on the basis of the affidavits that \"the role of . . . real estate brokers in financing such purchases is neither integral nor inseparable.\" Respondents 237 contended (1) that the activities of respondent real estate brokers were purely local in nature; (2) that the allegation that respondents assisted in securing financing or insurance in connection with the purchase of real estate had been controverted by the affidavits; and (3) that the conclusory assertion in the complaint that respondents' activities \"are within the flow of interstate commerce and have an effect upon that commerce\" was insufficient by itself to establish federal jurisdiction.\nPetitioners' response to the motion to dismiss asserted that since adequate pretrial discovery up to that time had been precluded pursuant to a pretrial order, petitioners had not had a full opportunity to substantiate the jurisdictional allegations of their complaint. Petitioners advanced two independent theories to support federal jurisdiction: (1) that respondents' activities occurred within the stream of interstate commerce; and (2) that even if respondents' activities were wholly local in character they depended upon and affected the interstate flow of both services and people.\nAccompanying the response was an affidavit stating that one of the named petitioners had employed the services of a respondent real estate broker to assist in an interstate relocation. There was also an affidavit from a loan guarantee officer of the Veterans' Administration disclosing that VA-insured loans for residential purchases in the Greater New Orleans area for the years 1973-1975 amounted to $46.3 million, $45.9 million, and $53.5 million, respectively.\nAfter briefing on the jurisdictional issue, the District Court heard oral argument and received postargument briefs. The court then held a conference with counsel, the substance of which was carefully recorded in the minute entries by the District Judge:\n\"The Court advised counsel that it appears plaintiffs may satisfy said jurisdictional requirement only by bringing the facts of this case within the parameters of the 238 Supreme Court's holding in Goldfarb v. Virginia State Bar. . . . It is recognized, however, that further discovery is needed on the issue of Goldfarb's applicability sub judice. More specifically, such discovery should determine whether, in the first place, there is the requisite interdependence between the brokerage activity of defendants and the financing and/or insuring of real estate transactions in the New Orleans area and, secondly, whether there is a substantial involvement of interstate commerce in such real estate transactions via the financing and/or insurance aspects thereof.\" Following this conference, petitioners deposed nine witnesses, who produced various documents. The deponents included government officials, real estate brokers, mortgage lenders, and real estate title insurers. This evidence was directed to establishing that an appreciable amount of interstate commerce was involved in various aspects of the purchase and sale of residential property in the Greater New Orleans area.\nThe deposition testimony of the president of Security Homestead Association, one of nearly 40 savings and loan institutions in the Greater New Orleans area, revealed that during the period covered by the complaint the Association lent in excess of $100 million for local purchases of residential property. The Association obtained loan capital from deposits by investors, some of whom lived out of state, and from borrowings from the Federal Home Loan Bank of Little Rock, Ark. Toward the close of the relevant period, the Association entered the interstate secondary mortgage market, in which existing mortgages were sold to raise new capital for future loans.\nAnother deponent was the president of Carruth Mortgage Corp., an Arkansas corporation doing business in Louisiana, Mississippi, and Texas. Its business was to originate home loans, then to sell the financial paper in the secondary mortgage market. The testimony showed that during the 239 relevant period Carruth made in excess of $100 million in loans on residential real estate in the Greater New Orleans area. The overwhelming proportion of these home loans was guaranteed by either the Federal Housing Administration or the Veterans' Administration. With respect to the FHA-guaranteed loans, Carruth collected and remitted premiums for the guarantee to the FHA in Washington, D. C., on a periodic basis for each account.\nBoth deponents testified that real estate brokers often play a role in securing financing information on behalf of a borrower and in bringing borrower and lender together, but that after the introductory phases the substance of the mortgage transaction progressed without the involvement of a real estate broker. The president of Carruth testified that his company required title insurance on all the home loans it made. This testimony was accompanied by the deposition of the president of Lawyers Title Insurance Co. of Louisiana, which revealed that each of the nearly 30 title insurance companies then writing coverage in the Greater New Orleans area was a subsidiary or branch of a corporation in another state.\nFollowing the close of the discovery period and the filing of additional briefs the District Court took the matter under submission and, having considered the memoranda of counsel and the relevant documents of record, issued a memorandum opinion and order granting the motion to dismiss the complaint. 432 F. Supp. 982 (1977). The court stated that the ground upon which respondents had challenged jurisdiction was that \"brokerage activities are wholly intrastate in nature and, since they neither occur in nor substantially affect interstate commerce, are beyond the ambit of federal anti-trust prohibition.\" Id., at 983. In line with the view expressed at the earlier conference, see supra, at 237-238, the District Court viewed the jurisdictional inquiry as narrowly confined: the question was whether the facts of this case 240 could be brought within the Goldfarb holding. In the District Court's view, \"any inquiry based upon [Goldfarb] must be twofold: 1) whether a `substantial' volume of interstate commerce is involved in the overall real estate transaction, and 2) whether the challenged activity is an essential, integral part of the transaction and inseparable from its interstate aspects.\" 432 F. Supp., at 984. The District Court assumed, arguendo, that the title insurance and financing aspects of the New Orleans residential real estate market were interstate in character, but ruled that federal jurisdiction was not established because in its view \"the inescapable conclusion to be drawn from the evidence is that the participation of the broker in these (presumably interstate) phases of the real estate transaction is an incidental rather than indispensable occurrence in the transactional chain of events.\" Id., at 985.\nThe United States Court of Appeals for the Fifth Circuit affirmed the dismissal of the complaint. 583 F. 2d 1315 (1978). Examining first the specific acts complained of in this case, the Court of Appeals concluded that they failed to satisfy the \"in commerce\" test. Realty was viewed as a quintessentially local product, and the brokerage activity described in the pleadings was found to occur wholly intrastate. Id., at 1319. Second, that court rejected petitioners' \"effect on commerce\" argument. The interpretation of Goldfarb that had guided the District Court's analysis was adopted by the Court of Appeals, which ruled that \"unlike the attorneys in Goldfarb whose participation in title insurance was statutorily mandated, real estate brokers are neither necessary nor integral participants in the `interstate aspects' of realty financing and insurance.\" 583 F. 2d, at 1321-1323.\nThe Court of Appeals noted that the District Court had styled its judgment as a dismissal under Federal Rule of Civil Procedure 12 (b) (6) for failure to state a claim upon which relief could be granted, to be treated as a summary judgment insofar as matters outside of the pleadings were considered. 241 The Court of Appeals concluded that the appropriate designation of the dismissal was for lack of subject-matter jurisdiction under Rule 12 (b) (1), and affirmed the dismissal on that basis.\nWe granted certiorari. 441 U. S. 942.\n\nII\n\nA\nThe broad authority of Congress under the Commerce Clause has, of course, long been interpreted to extend beyond activities actually in interstate commerce to reach other activities that, while wholly local in nature, nevertheless substantially affect interstate commerce. Wickard v. Filburn, 317 U. S. 111 (1942); United States v. Darby, 312 U. S. 100 (1941). This Court has often noted the correspondingly broad reach of the Sherman Act. Hospital Building Co. v. Rex Hospital Trustees, 425 U. S. 738, 743 (1976); United States v. Employing Plasterers Assn., 347 U. S. 186, 189 (1954); United States v. South-Eastern Underwriters Assn., 322 U. S. 533, 558 (1944); Atlantic Cleaners & Dyers, Inc. v. United States, 286 U. S. 427, 435 (1932). During the near century of Sherman Act experience, forms and modes of business and commerce have changed along with changes in communication and travel, and innovations in methods of conducting particular businesses have altered relationships in commerce. Application of the Act reflects an adaptation to these changing circumstances. Compare United States v. E. C. Knight Co., 156 U. S. 1, 12-15 (1895), and Hopkins v. United States, 171 U. S. 578, 587-592 (1898), with Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U. S. 219, 231-235 (1948), and United States v. Employing Plasterers Assn., supra, at 189.\nThe conceptual distinction between activities \"in\" interstate commerce and those which \"affect\" interstate commerce has been preserved in the cases, for Congress has seen fit to preserve 242 that distinction in the antitrust and related laws by limiting the applicability of certain provisions to activities demonstrably \"in commerce.\" United States v. American Building Maintenance Industries, 422 U. S. 271 (1975); Gulf Oil Corp. v. Copp Paving Co., 419 U. S. 186 (1974); FTC v. Bunte Bros., Inc., 312 U. S. 349 (1941). It can no longer be doubted, however, that the jurisdictional requirement of the Sherman Act may be satisfied under either the \"in commerce\" or the \"effect on commerce\" theory. Hospital Building Co. v. Rex Hospital Trustees, supra, at 743; Gulf Oil Corp. v. Copp Paving Co., supra, at 194-195; United States v. Women's Sportswear Manufacturers Assn., 336 U. S. 460, 464 (1949); Mandeville Island Farms, Inc. v. American Crystal Sugar Co., supra, at 235-237.\nAlthough the cases demonstrate the breadth of Sherman Act prohibitions, jurisdiction may not be invoked under that statute unless the relevant aspect of interstate commerce is identified; it is not sufficient merely to rely on identification of a relevant local activity and to presume an interrelationship with some unspecified aspect of interstate commerce. To establish jurisdiction a plaintiff must allege the critical relationship in the pleadings and if these allegations are controverted must proceed to demonstrate by submission of evidence beyond the pleadings either that the defendants' activity is itself in interstate commerce or, if it is local in nature, that it has an effect on some other appreciable activity demonstrably in interstate commerce. Gulf Oil Corp. v. Copp Paving Co., supra, at 202.\nTo establish the jurisdictional element of a Sherman Act violation it would be sufficient for petitioners to demonstrate a substantial effect on interstate commerce generated by respondents' brokerage activity. Petitioners need not make the more particularized showing of an effect on interstate commerce caused by the alleged conspiracy to fix commission rates, or by those other aspects of respondents' activity that 243 are alleged to be unlawful. The validity of this approach is confirmed by an examination of the case law. If establishing jurisdiction required a showing that the unlawful conduct itself had an effect on interstate commerce, jurisdiction would be defeated by a demonstration that the alleged restraint failed to have its intended anticompetitive effect. This is not the rule of our cases. See American Tobacco Co. v. United States, 328 U. S. 781, 811 (1946); United States v. Socony-Vacuum Oil Co., 310 U. S. 150, 225, n. 59 (1940). A violation may still be found in such circumstances because in a civil action under the Sherman Act, liability may be established by proof of either an unlawful purpose or an anti-competitive effect. United States v. United States Gypsum Co., 438 U. S. 422, 436, n. 13 (1978); see United States v. Container Corp., 393 U. S. 333, 337 (1969); United States v. National Assn. of Real Estate Boards, 339 U. S. 485, 489 (1950); United States v. Socony-Vacuum Oil Co., supra, at 224-225, n. 59.\nNor is jurisdiction defeated in a case relying on anticompetitive effects by plaintiff's failure to quantify the adverse impact of defendant's conduct. See Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U. S. 100, 123-125 (1969); Bigelow v. RKO Radio Pictures, Inc., 327 U. S. 251, 265-266 (1946). Even where there is an inability to prove that concerted activity has resulted in legally cognizable damages, jurisdiction need not be impaired, though such a failure may confine the available remedies to injunctive relief. See Georgia v. Pennsylvania R. Co., 324 U. S. 439, 452-463 (1945); Keogh v. Chicago & N. W. R. Co., 260 U. S. 156 (1922).\n\nB\nThe interpretation and application of our holding in Goldfarb v. Virginia State Bar, 421 U. S. 773 (1975), has figured prominently in this case. The District Court held that petitioners could establish federal jurisdiction only if the facts of 244 this case could be brought within Goldfarb. As previously noted, as interpreted by that court, \"any inquiry based upon [Goldfarb] must be twofold: 1) whether a `substantial' volume of interstate commerce is involved in the overall real estate transaction, and 2) whether the challenged activity is an essential, integral part of the transaction and inseparable from its interstate aspects.\" 432 F. Supp., at 984. The Court of Appeals took a similar view of Goldfarb, holding that Sherman Act jurisdiction did not exist because petitioners had failed to demonstrate that real estate brokers are either necessary or integral participants in the interstate aspects of residential real estate financing and title insurance. 583 F. 2d, at 1322.\nIt is with the second phase of the analysis of the District Court and of the Court of Appeals that we disagree. The facts of Goldfarb revealed an application of the state bar association's minimum-fee schedule to fix fees for attorneys' title examination services. Since the financing depended on a valid and insured title we concluded that title examination was \"an integral part\" of the interstate transaction of obtaining financing for the purchase of residential property and, because of the \"inseparability\" of the attorneys' services from the title examination process, we held that the legal services were in turn an \"integral part of an interstate transaction.\" 421 U. S., at 784-785. By placing the Goldfarb holding on the available ground that the activities of the attorneys were within the stream of interstate commerce, Sherman Act jurisdiction was established. The Goldfarb holding was not addressed to the \"effect on commerce\" test of jurisdiction and in no way restricted it to those challenged activities that have an integral relationship to an activity in interstate commerce. To adopt the restrictive interpretation urged upon us by respondents would return to a jurisdictional analysis under the Sherman Act of an era long past. It has been more than 30 years since this Court stated: \"At this late day we are not 245 willing to take that long backward step.\" Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U. S., at 235.\n\nC\nOn the record thus far made, it cannot be said that there is an insufficient basis for petitioners to proceed at trial to establish Sherman Act jurisdiction. It is clear that an appreciable amount of commerce is involved in the financing of residential property in the Greater New Orleans area and in the insuring of titles to such property. The presidents of two of the many lending institutions in the area stated in their deposition testimony that those institutions committed hundreds of millions of dollars to residential financing during the period covered by the complaint. The testimony further demonstrates that this appreciable commercial activity has occurred in interstate commerce. Funds were raised from out-of-state investors and from interbank loans obtained from interstate financial institutions. Multistate lending institutions took mortgages insured under federal programs which entailed interstate transfers of premiums and settlements. Mortgage obligations physically and constructively were traded as financial instruments in the interstate secondary mortgage market. Before making a mortgage loan in the Greater New Orleans area, lending institutions usually, if not always, required title insurance, which was furnished by interstate corporations. Reading the pleadings, as supplemented, most favorably to petitioners, for present purposes we take these facts as established.\nAt trial, respondents will have the opportunity, if they so choose, to make their own case contradicting this factual showing. On the other hand, it may be possible for petitioners to establish that, apart from the commerce in title insurance and real estate financing, an appreciable amount of interstate commerce is involved with the local residential real estate market arising out of the interstate movement of people, or otherwise.\n246 To establish federal jurisdiction in this case, there remains only the requirement that respondents' activities which allegedly have been infected by a price-fixing conspiracy be shown \"as a matter of practical economics\" to have a not insubstantial effect on the interstate commerce involved. Hospital Building Co. v. Rex Hospital Trustees, 425 U. S., at 745; see Goldfarb v. Virginia State Bar, supra, at 784, n. 11; Burke v. Ford, 389 U. S. 320, 321-322 (1967). It is clear, as the record shows, that the function of respondent real estate brokers is to bring the buyer and seller together on agreeable terms. For this service the broker charges a fee generally calculated as a percentage of the sale price. Brokerage activities necessarily affect both the frequency and the terms of residential sales transactions. Ultimately, whatever stimulates or retards the volume of residential sales, or has an impact on the purchase price, affects the demand for financing and title insurance, those two commercial activities that on this record are shown to have occurred in interstate commerce. Where, as here, the services of respondent real estate brokers are often employed in transactions in the relevant market, petitioners at trial may be able to show that respondents' activities have a not insubstantial effect on interstate commerce.\nIt is axiomatic that a complaint should not be dismissed unless \"it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.\" Conley v. Gibson, 355 U. S. 41, 45-46 (1957); see 5 C. Wright & A. Miller, Federal Practice and Procedure §§ 1202, 1205-1207, 1215-1224, 1228 (1969). This rule applies with no less force to a Sherman Act claim, where one of the requisites of a cause of action is the existence of a demonstrable nexus between the defendants' activity and interstate commerce. Here, what was submitted to the District Court shows a sufficient basis for satisfying the Act's jurisdictional requirements under the effect-on-commerce theory so as to 247 entitle the petitioners to go forward. We therefore conclude that it was error to dismiss the complaint at this stage of the proceedings. The judgment of the Court of Appeals is vacated, and the case is remanded for further proceedings consistent with this opinion.\nVacated and remanded.\nMR. JUSTICE MARSHALL took no part in the consideration or decision of this case.\nNOTES\n[*] William D. North and Valentine A. Weber, Jr., filed a brief for the National Association of Realtors as amicus curiae urging affirmance.\n\n", "ocr": false, "opinion_id": 110166 } ]	Supreme Court	Supreme Court of the United States	F	USA, Federal
2,498	Walker, Katzmann, and John R. Gibson	2009-07-28	false	spagnola-v-chubb-corp	Spagnola	Spagnola v. Chubb Corp.	Fred SPAGNOLA, Individually, and on Behalf of All Those Similarly Situated, Plaintiff-Appellant, v. the CHUBB CORPORATION, Federal Insurance Company, Great Northern Insurance Company, John D. Finnegan and Thomas F. Motamed, Defendants-Appellees	Roger W. Kirby (David Kovel, on the brief), Kirby Mclnerney & Squire, LLP, Kenneth Elan, Harold Edgar, New York, NY, of counsel, for Plaintiff-Appellant., Keara M. Gordon, (Joseph G. Finnerty III, Sara Z. Moghadam, on the brief), DLA Piper U.S. LLP, New York, N.Y. and Washington, DC, for Defendants-Appellees.	null	null	null	null	null	null	null	Argued: Sept. 17, 2008.	null	null	15	Published	null	<parties id="b90-5"> Fred SPAGNOLA, individually, and on behalf of all those similarly situated, Plaintiff-Appellant, v. The CHUBB CORPORATION, Federal Insurance Company, Great Northern Insurance Company, John D. Finnegan and Thomas F. Motamed, Defendants-Appellees. </parties><br><docketnumber id="b90-8"> Docket No. 07-1296-CV. </docketnumber><br><court id="b90-9"> United States Court of Appeals, Second Circuit. </court><br><otherdate id="b90-10"> Argued: Sept. 17, 2008. </otherdate><br><decisiondate id="b90-11"> Decided: July 28, 2009. </decisiondate><br><attorneys id="b92-4"> <span citation-index="1" class="star-pagination" label="66"> 66 </span> Roger W. Kirby (David Kovel, on the brief), Kirby Mclnerney & Squire, LLP, Kenneth Elan, Harold Edgar, New York, NY, of counsel, for Plaintiff-Appellant. </attorneys><br><attorneys id="b92-5"> Keara M. Gordon, (Joseph G. Finnerty III, Sara Z. Moghadam, on the brief), DLA Piper U.S. LLP, New York, N.Y. and Washington, DC, for Defendants-Appellees. </attorneys><br><judges id="b92-6"> Before WALKER, KATZMANN, and JOHN R. GIBSON, <a class="footnote" href="#fn" id="fn_ref"> </a> Circuit Judges. </judges><div class="footnotes"><div class="footnote" id="fn" label=""> <a class="footnote" href="#fn_ref"> </a> <p id="b92-10"> The Honorable John R. Gibson, Circuit Judge, United States Court of Appeals for the Eighth Circuit, sitting by designation. </p> </div></div>	[ "574 F.3d 64" ]	[ { "author_str": "Gibson", "per_curiam": false, "type": "010combined", "page_count": 23, "download_url": "http://www.ca2.uscourts.gov/decisions/isysquery/9c4d23a6-1c14-4a46-97ee-8c7a979737b8/93/doc/07-1296-cv_opn.pdf", "author_id": null, "opinion_text": "\n574 F.3d 64 (2009)\nFred SPAGNOLA, individually, and on behalf of all those similarly situated, Plaintiff-Appellant,\nv.\nThe CHUBB CORPORATION, Federal Insurance Company, Great Northern Insurance Company, John D. Finnegan and Thomas F. Motamed, Defendants-Appellees.\nDocket No. 07-1296-CV.\nUnited States Court of Appeals, Second Circuit.\nArgued: September 17, 2008.\nDecided: July 28, 2009.\n66 Roger W. Kirby (David Kovel, on the brief), Kirby McInerney & Squire, LLP, Kenneth Elan, Harold Edgar, New York, NY, of counsel, for Plaintiff-Appellant.\nKeara M. Gordon, (Joseph G. Finnerty III, Sara Z. Moghadam, on the brief), DLA Piper U.S. LLP, New York, N.Y. and Washington, DC, for Defendants-Appellees.\nBefore WALKER, KATZMANN, and JOHN R. GIBSON,[] Circuit Judges.\nJOHN R. GIBSON, Circuit Judge.\nOn July 13, 2001, Fred Spagnola and his wife purchased a Chubb Masterpiece homeowner's policy.[1] The policy provided dwelling coverage of $600,000, contents coverage of $300,000, and liability coverage of $500,000.\nThe Masterpiece policy allows the insured to select one of three types of coverage: extended replacement cost, verified replacement cost, or conditional replacement cost. Spagnola purchased the extended replacement coverage, which, in the event of an insurable loss, pays the cost of reconstruction even if that cost exceeds the stated coverage of the policy.[2] The policy defines \"reconstruction cost\" as the \"amount required at the time of loss to repair or rebuild the house whichever is less, at the same location, with the same quality of materials and workmanship which existed before the loss.\"\nThe amount of coverage was listed in the policy's Coverage Summary and during each annual policy period, Chubb indicated that the coverage amount:\nwill be increased daily to reflect the current effect of inflation. At the time of a covered loss, your amount of house coverage will include any increase in the United States Consumer Price Index from the beginning of the policy period.\nThe coverage amount could be changed:\nWith your consent, we may change [the amount of coverage reflected in the coverage summary] when appraisals are conducted and when the policy is renewed, to reflect current costs and values.\nThe term \"costs and values\" is not further defined in the policy. Spagnola's policy originally had a one year policy period. Chubb, however, was obligated to renew the policy for three years and could decline to renew the policy \"only on grounds for which [Chubb] could cancel it.\"[3] The policy also contained a conditional renewal provision. Under this provision, if Chubb had grounds to cancel or refuse to renew the policy, it could instead make continued coverage conditional on a change in policy 67 limits or on eliminating any coverage not required by law.\nAs far as renewing coverage, the policy stated that at the time of renewal, Chubb \"may offer to renew [the policy], at the premiums and under the policy provisions in effect at the date of renewal . . . by mailing [the insured] a bill for the premium. . . along with any changes in the policy provisions or amounts of coverage.\" If Spagnola did not pay the new premium, the policy would automatically terminate at the end of the current policy period. \"Failure to pay the required renewal premium when due shall mean that you have not accepted our offer.\"\nOver the next five years, Chubb annually increased Spagnola's coverage and likewise his premiums. The coverage amount for house and contents was increased each year by approximately ten percent, well in excess of the Consumer Price Index (\"CPI\"). Chubb sent the annual premium summary renewals with the bill for the next year's coverage describing it as an \"annual premium savings.\" In 2006, Spagnola discovered that the increases in his premiums had risen faster than the CPI and he filed suit on behalf of a putative class, in state court, later removed to federal court, claiming that Chubb breached the terms of the policy and violated New York Insurance Law by improperly increasing coverage and premiums without his consent and in excess of the CPI. In addition, Spagnola brought an unjust enrichment claim as well as a deceptive business practices claim under New York General Business Law § 349. Chubb responded by filing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6).\nThe district court granted Chubb's motion to dismiss all claims. First, the court held that the complaint failed to state a claim under New York Insurance Law § 3425 because the coverage adjustments at issue were properly made pursuant to a mechanism established in the policy. The court concluded that the policy established that the premium increases were tied to \"current costs and values.\" The court concluded that the original policy notified Spagnola that Chubb had the right to increase coverage and premiums annually and that Spagnola's payment of the annual premium bill reflected Spagnola's consent to each such increase. The court also dismissed the breach of contract claim, both because the contract terms upon which Spagnola relied \"[did] not exist,\" and because the breach of contract claim was \"barred by the voluntary payment doctrine.\" Finally, the court dismissed the deceptive business practices claim under New York law, holding that there were not sufficient facts to support a finding that the policy was \"misleading in a material respect\" or that Spagnola or any other member of the putative class was injured as a result. Spagnola now appeals.[4]\nWe review a Rule 12(b)(6) order of dismissal de novo. Amron v. Morgan Stanley Inv. Advisors Inc., 464 F.3d 338, 343 (2d Cir.2006). In reviewing such an order, we take all well-pled factual allegations as true and draw all reasonable inferences in the plaintiff's favor to decide whether the plaintiff has pled a plausible claim for relief. See Ashcroft v. Iqbal, ___ U.S. ___, ___, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).\n\n\n68 I.\nSpagnola first argues that the district court erred in dismissing his claim under New York Insurance Law § 3425.[5] Section 3425 restricts when and how an insurer may condition renewal or changes of limits or elimination of coverage. With respect to a \"personal lines\" insurance policy, such as this one, § 3425(e) provides: \"[N]o notice of nonrenewal or conditional renewal of a covered policy shall be issued to become effective during the required policy period unless it is based upon a ground for which the policy could have been cancelled.\" N.Y. Ins. Law § 3425(e). The statute defines \"required policy period\" in this instance as \"a period of three years from the date as of which a covered policy is first issued or is voluntarily renewed.\" Id. at § 3425(a)(7). Spagnola contends that, if Chubb wanted to change the limits of the policy, it was obligated under § 3425(d)(1) to issue a conditional notice that provided the \"specific reason or reasons\" for the changes. Id. at § 3425(d)(1). Since Chubb did not follow the notice requirement of § 3425(d)(1), Spagnola contends that any unilateral increases by Chubb violated the statute.\nSpagnola's § 3425 argument is essentially twofold. First he argues that under the protections of § 3425 he was entitled to three years of continuous coverage unless he failed to pay the premiums due under the policy. See N.Y. Ins. Law § 3425(a)(7). He goes on to assert that Chubb could only increase his premiums and coverage during the three-year period by providing the required notice and statement of reasons required by § 3425(d)(1). Spagnola concedes that under § 3425 an insurer may increase coverage limits (and premiums) during the three-year required policy period if the policy itself provides for an \"automatic increase\" or a \"mechanism\" to determine the increase, such as a predetermined figure or the CPI. Spagnola argues, however, that § 3425 bars the increases Chubb imposed because the policy did not provide for an automatic increase or specify a mechanism by which the increase could be measured. Spagnola alleges that the policy's provision permitting a change in the amount of coverage \"when the policy's renewed to reflect current costs and values\" is not a \"mechanism\" by which the increase could be measured because the insured cannot look to the policy itself to determine the amount of an increase which could be subject to the \"whim\" of the insurer.\nChubb and Spagnola agree that § 3425 permits an insurer to increase coverage limits (and therefore premiums) when the policy itself provides for such periodic increases. The two disagree on whether there is such a provision in this policy. Chubb characterizes the policy as an \"inflation guard\" policy which permits periodic coverage increases upon renewal to reflect current costs and values. In his complaint, Spagnola similarly characterizes the policy: \"Annual premiums for replacement cost policies theoretically are based on the home's estimated replacement cost, not its market value. These premiums are subject to limited annual cost increases, sometimes referred to in the industry as `inflation guard coverage.'\"\nIt is well established that we defer to an agency's construction of a statute 69 when \"the interpretation of a statute or its application involves knowledge and understanding of underlying operational practices.\" N.Y. State Ass'n of Life Underwriters, Inc. v. N.Y. State Banking Dep't, 83 N.Y.2d 353, 610 N.Y.S.2d 470, 632 N.E.2d 876, 879 (1994) (quoting Kurcsics v. Merchants Mut. Ins. Co., 49 N.Y.2d 451, 426 N.Y.S.2d 454, 403 N.E.2d 159 (1980)). Several opinions from the New York Department of Insurance are instructive.\nIn a July 23, 2003 opinion, the Department unequivocally concluded that the three-year policy period requirement of § 3425 \"[does] not have any effect upon the ability of the insurer to renew policies with a premium change, provided that the premium change conforms to its rate filing. . . .\" Rate Changes and N.Y. Ins. Law § 3425, Office of Gen. Counsel, N.Y. Ins. Dep't, No. 03-07-38 (Jul. 23, 2003) (informal opinion). Chubb renewed the policy each year and the coverage increase at the time of renewal does not facially violate the three-year required policy period of § 3425(a)(7), nor does it run counter to the purpose behind § 3425. See Rosner v. Metro. Prop. & Liab. Ins. Co., 236 F.3d 96, 100 (2d Cir.2000) (purpose behind § 3425 is \"to provide a three-year period of renewability\" and \"to establish guaranteed continuity of coverage\") (internal quotation marks omitted).\nAs to the notice requirement, the Department considered a policy provision similar to the one here and concluded that no conditional renewal notice was required when a premium increase was due to the application of an inflation guard mechanism provided for in the policy. Conditional Renewal Notices, Office of Gen. Counsel, N.Y. Ins. Dep't, No. 02-04-10 (April 8, 2002) (informal opinion). The Department reasoned that no notice was required because the premium increase was attributable to the operation of the inflation guard \"required by and set forth in the policy itself.\" Spagnola argues that this opinion actually supports his interpretation of § 3425 on two grounds. First, he states this is not an inflation guard policy so the Department opinion does not control. Spagnola distances himself from his initial characterization of the policy, stating in his reply brief that the clauses at issue are not \"inflation guards as conventionally defined\" because they do not \"automatically adjust[ ] the coverage limit on the dwelling each time the policy is renewed to reflect current construction costs.\" Second, he contends that the Chubb policy is different in any event because its \"costs and values\" provision is not fixed or tied to a recognized index within the policy. Spagnola points to the Department's clarification in that opinion: \"Had the increase in coverage/premium not been solely attributable to a policy provision or a request by the insured, a conditional renewal notice would be required under the statute. . . .\" Although this language is consistent with the conclusion that a conditional notice is not required when the policy provides for an annual increase, it does not affirmatively answer the question of whether the costs and values provision is a sufficient mechanism for increasing annual premiums upon renewal so as to negate the conditional notice requirements.\nTwo other Department opinions help to resolve this issue. In the first, the Department decided that a conditional renewal notice was not required under New York Insurance Law § 3426 (the commercial insurance counterpart to § 3425) because the increase was tied to a provision in the policy which required the insured to maintain coverage equal to the appraised value of the property. Conditional Renewal of Commercial Lines Insurance Policies, Office of Gen. Counsel, N.Y. Ins. Dep't, No. 9-9-96(#1) (Sept. 9, 1996) (informal 70 opinion). The Department concluded that \"appraised value,\" a term we believe is substantially similar to the \"costs and values\" term of Spagnola's policy, is a sufficient mechanism to provide the insured notice that the coverage amount will change on a periodic basis. While this opinion considers the provision of a commercial lines insurance policy and not a personal lines policy, the Department's interpretation of a similar policy provision to the one in this case supports our conclusion that the conditional notice requirements do not apply to the renewals at issue here.\nIn contrast, another Department opinion decided that an increase in the amount of deductible expenses for windstorm coverage did require conditional notice under § 3425(d)(1). Conditional Renewal under § 3425(d)(1), Office of Gen. Counsel, N.Y. Ins. Dept., No. 06-08-17 (Aug. 24, 2006) (informal opinion). The Department based its conclusion on the fact that the \"deductible in the original policy was fixed and was not subject to any provision that would provide for an automatic increase of any kind.\" Id. These opinions suggest that the determinative factor for the Department in deciding whether conditional notice requirements are necessary is whether the policy contemplates a periodic change in the policy's coverage or terms.\nHere, the policy provided that Chubb could condition annual renewal on the payment of increased premiums based on current \"costs and values,\" and thus, the conditional notice requirements of § 3425 are not triggered. That the increase cannot be specifically measured from the policy itself is not determinative. As the district court wrote: \"An extended replacement cost policy is designed to keep pace with inflation and prevent underinsurance, and therefore, does not and for the insured's protection, cannot specify\" the amount of the future coverage increases in the original policy. Spagnola v. Chubb Corp., No. 06 CIV 9960, 2007 WL 927198, at 4 (S.D.N.Y. Mar.27, 2007) (emphasis omitted).\nWe therefore affirm the district court's dismissal of Spagnola's § 3425 claim.\n\nII.\nSpagnola next argues that the district court erred in dismissing his breach of contract claim. He claims that Chubb violated the insurance contract by: (1) not obtaining his consent to increase the amount of his coverage, and (2) increasing his coverage by an amount that does not reflect current costs and values.[6]\n\nA.\nSpagnola contends that Chubb breached the insurance policy by failing to obtain his consent to the annual policy renewals. Spagnola states that his payment of the increased premiums did not amount to consent because the payment was not \"knowing and voluntary.\" He complains that: (1) Chubb never told him that it was increasing his coverage; (2) Chubb never asked for his consent; (3) Chubb did not provide an explanation for the increased coverage; and (4) Chubb never told him the amount of the annual change in premiums and coverage.\nWe easily resolve this argument. First, the amount of coverage was shown in the coverage summary that Spagnola received with each reissue of the policy. This summary notified Spagnola that 71 \"[w]ith your consent, we may change this amount . . . when the policy is renewed, to reflect current costs and values.\" The policy provided that renewal each year would be at the premiums and under the policy provisions in effect on the date of renewal. It would be effectuated when Chubb mailed a bill for the premium \"along with any changes in the policy provisions or amounts of coverage.\" The policy provided: \"Failure to pay the required renewal premium when due shall mean that you have not accepted our offer.\" Thus, the offer was contained in each new policy reissue and coverage summary, and acceptance occurred if and when Spagnola paid the renewal premium. Each of these occasions resulted in a new contract between the parties, and Spagnola's payment was his consent.\nSpagnola directs us to a New Jersey Supreme Court case from 1961 which held that \"[a]bsent notification that there have been changes in the restrictions, conditions or limitations of [an insurance policy], the insured is justly entitled to assume that they remain the same and that his coverage has not in anywise been lessened.\" Bauman v. Royal Indem. Co., 36 N.J. 12, 174 A.2d 585, 592 (1961). We need not address the precedential value of Bauman, as there is nothing here to suggest that Spagnola was \"entitled to assume\" that the coverage amounts remained the same year to year. As the Bauman Court pointed out, an insured is \"expected to [have] read\" the restrictions, conditions and limitations in his original policy. Id. at 591-92. Spagnola does not dispute that the original policy included language permitting Chubb to adjust coverage amounts. In addition, Bauman involved an exclusion of insurance coverage that was added for the first time in a renewal policy with nothing to draw the insured's attention to such a change. See id. at 586. That is a different situation than a dispute centered around premium amounts that are always contained in a renewal notice.\nWe reject Spagnola's argument that the district court erred insofar as it dismissed the breach of contract claim based on lack of consent.\n\nB.\nSpagnola also claims that Chubb breached the insurance contract by increasing his coverage amounts and premiums in a way that did not reflect current costs and values. The policy does not define the term \"current costs and values.\" According to Spagnola, the policy could reasonably be interpreted to base costs and values on either actual reconstruction costs or the CPI. He alleges that Chubb breached this term by increasing the coverage amount without using either as a basis. Spagnola points out that his contents coverage increased at the same percentage rate as his dwelling coverage each year, and this automatic coupling alone supports an inference that Chubb increased coverage in a manner that did not accurately reflect current costs and values.\nChubb concedes that the premiums were not increased in an amount determined by the CPI. Chubb argues that this fact is irrelevant, and that it is to be expected that the increases would have exceeded the CPI because the CPI only applies to interim period adjustments, and not the annual increases at issue here. Chubb states: \"No fact is pled to permit the inference that the increased coverage amounts were inconsistent with the reconstruction costs of the plaintiff's home in any of the last five years.\" Chubb characterizes Spagnola's home and contents comparison analysis as a \"red herring\" built on \"multiple layers of unreasonable assumptions.\" Chubb asserts that under Spagnola's interpretation of \"costs and values,\" one assumes 72 that contents and dwelling coverage must increase at different rates based on the additional assumption that the amount of contents coverage equals the sum of the value of each personal possession, and that such an interpretation is inconsistent with industry practice and at odds with the policy terms.\nSpagnola directs us to Beller v. William Penn Life Insurance Co. of N.Y., 8 A.D.3d 310, 778 N.Y.S.2d 82 (App.Div. 2004). The plaintiff in Beller purchased a life insurance policy that set out a number of factors the insurer would evaluate in setting premiums to maintain the policy's coverage. Id. at 84. After paying the premiums for several years, the insured realized that the insurer was determining premiums on a basis different than the one required by the policy's language. Id. The court suggested in dicta that the insured's allegations, if true, constituted a breach of contract as well as a deceptive business practices claim. Id. at 85-86. The reasoning of Beller convinces us that Spagnola's breach of contract claim should survive a motion to dismiss. Chubb's explanation that the fixed proportion of home and contents coverage is standard industry practice does not address Spagnola's allegation that the annual increases were not based on current costs and values as required by the express terms of the policy. Cf. id. at 85 (insurer's customary filed rates do not insulate insurer from contract claim). Chubb does not tell us the basis for its costs and values determination, but only tells us what the calculation is not based on. Chubb's explanation neither resolves the ambiguity of the term \"current costs and values\" nor adequately refutes Spagnola's claim that the increases were not based on current costs and values. Spagnola has therefore met the standard necessary to resist Chubb's motion to dismiss. See Iqbal, 129 S.Ct. at 1949 (\"A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.\").\n\nIII.\nThe district court dismissed Spagnola's breach of contract claim on the alternative ground that the claim was barred by the voluntary payment doctrine. According to the doctrine, a breach of contract claim is barred if a party continues to pay amounts charged under the contract without objection. The district court found that Spagnola had full knowledge of the facts regarding coverage and premiums at the time of his first renewal in 2002 and continued (without objection) to pay the increased premium amounts on each of the five succeeding anniversary dates. The district court reasoned: \"It is a little late now, after [Spagnola] has enjoyed the benefits and protections of [Chubb's] coverage for more than five years,\" to challenge the \"propriety of [his] coverage.\" Spagnola, 2007 WL 927198, at 3.\nThe voluntary payment doctrine precludes a plaintiff from recovering payments \"made with full knowledge of the facts\" and with a \"lack of diligence\" in determining his contractual rights and obligations. See Dillon v. U-A Columbia Cablevision of Westchester, Inc., 292 A.D.2d 25, 740 N.Y.S.2d 396, 397 (App.Div. 2002); see also Westfall v. Chase Lincoln First Bank, N.A., 258 A.D.2d 299, 685 N.Y.S.2d 181, 182 (App.Div.1999); Gimbel Bros., Inc. v. Brook Shopping Ctrs., Inc., 118 A.D.2d 532, 499 N.Y.S.2d 435, 438 (App.Div.1986). The doctrine does not apply, however, when a plaintiff made payments under a mistake of fact or law regarding the plaintiff's contractual duty to pay. See Dillon, 740 N.Y.S.2d at 397; Gimbel, 499 N.Y.S.2d at 438.\n73 Spagnola claims that the voluntary payment doctrine does not apply because he did not have full knowledge of the facts relevant to his claim until he filed suit in 2006, and that his lack of full knowledge was not due to a lack of diligence, but instead due to being misled by Chubb as to the basis upon which his coverage was increased. He points to, among other things, renewal notices which stated that he was receiving an \"annual premium savings.\"\nChubb points out that Spagnola renewed his policy five times, and that \"simple math\" should have alerted Spagnola to the notion that the increases were not based on the CPI as Spagnola thought. In Dillon, a cable customer brought a putative class action seeking to recover five-dollar late fees paid to her cable company over the course of seven years. 740 N.Y.S.2d at 397. The cable company represented that the fee was an administrative fee reflecting costs it incurred from the \"customers' late payments or non-payments.\" Id. (internal quotation marks omitted). The plaintiff alleged that the fee substantially exceeded the cable company's true cost for a late or non-payment and instead constituted an improper penalty. Id. The trial court granted the cable company's motion to dismiss based on the voluntary payment doctrine, concluding that the customer should have known that the five-dollar charge might be excessive simply because it constituted 19% of her total bill. Id. at 398. The Appellate Division affirmed. Id.\nAlthough the voluntary payment doctrine may ultimately bar Spagnola's breach of contract claim, we decide that it is too early in this case to conclusively answer that question. In some years, Chubb sent Spagnola a renewal letter enclosing the policy and stating that Spagnola was receiving an \"annual premium savings,\" even while it increased his premiums. See Samuel v. Time Warner, Inc., 10 Misc.3d 537, 809 N.Y.S.2d 408, 418 (Sup.Ct.2005) (voluntary payment doctrine not applicable when claim predicated on lack of full disclosure). Chubb does not argue that the increases were such that Spagnola should have been on notice that they were not based on current costs and values. Cf. Dillon, 740 N.Y.S.2d at 397 (customer should have known based on degree of increase). The pleadings before the district court do not establish whether Spagnola knew or should have known that the increased amounts were not based on current costs and values, and Spagnola was not required to preemptively plead facts refuting the voluntary payment doctrine. See Abbas v. Dixon, 480 F.3d 636, 640 (2d Cir.2007) (not required to include facts in complaint in anticipation of affirmative defense). Thus, drawing all reasonable inferences in Spagnola's favor, we conclude that the voluntary payment doctrine cannot stand at this time as an alternate basis for dismissal of Spagnola's claim.\nThe cases cited by Chubb do not change our view that the complaint cannot be dismissed based on the voluntary payment doctrine. In Gimbel, the appellate court held that the plaintiff could not receive restitution for certain payments made pursuant to a mistake of fact when the record showed that \"no mistake of fact had been made.\" 499 N.Y.S.2d at 438. In that case, the plaintiff sought to recover certain extra rent payments it had made to its landlord for a year and a half. The court determined that although the lease did not require the extra rent payments, the plaintiff's recovery was barred by the voluntary payment doctrine. Because the plaintiff made the improper rent payments for a year and a half before questioning them, it \"displayed a marked lack of diligence in determining what its contractual rights 74 were, and is therefore not entitled to the equitable relief of restitution.\" Id. at 439. In Gimbel, however, the judgment was entered denying plaintiff's claim after discovery and a bench trial, not on the basis of plaintiff's complaint. Id. at 436-37; see also Lavin v. Town of E. Greenbush, 17 Misc.3d 766, 843 N.Y.S.2d 484, 491-92 (Sup.Ct.2007) (applying voluntary payment doctrine on summary judgment motion).\n\nIV.\nFinally, Spagnola appeals the district court's dismissal of his deceptive business practices claim under § 349 of the New York General Business Law.\nTo state a claim under § 349, a plaintiff must allege: (1) the act or practice was consumer-oriented; (2) the act or practice was misleading in a material respect; and (3) the plaintiff was injured as a result. Maurizio v. Goldsmith, 230 F.3d 518, 521 (2d Cir.2000) (per curiam). \"Deceptive practices\" are \"acts which are dishonest or misleading in a material respect.\" Kramer v. Pollock-Krasner Found., 890 F.Supp. 250, 258 (S.D.N.Y. 1995). \"`Deceptive acts' are defined objectively[] as acts likely to mislead a reasonable consumer acting reasonably under the circumstances.\" Boule v. Hutton, 328 F.3d 84, 94 (2d Cir.2003) (internal quotation marks omitted).\nThe district court dismissed Spagnola's claim because it failed to plead either a deceptive act or requisite injury. Although a monetary loss is a sufficient injury to satisfy the requirement under § 349, that loss must be independent of the loss caused by the alleged breach of contract. For example, in Sokoloff v. Town Sports Int'l, Inc., 6 A.D.3d 185, 778 N.Y.S.2d 9, 10 (App.Div.2004), the Appellate Division dismissed a health club member's deceptive practice claim made against her health club. The member sought the return of her initiation fee. Id. The court held that the member did not claim a sufficient injury because she alleged no other loss besides the payment of her membership fee. Id. She did not claim that the health club failed to deliver services called for under the contract and \"she never sought to cancel the contract.\" Id.; see also Small v. Lorillard Tobacco Co., 94 N.Y.2d 43, 698 N.Y.S.2d 615, 720 N.E.2d 892, 897-98 (1999) (injury must be separate and distinct from the deceptive act).\nHere, as in Sokoloff, Spagnola does not claim that he did not receive adequate insurance coverage or that he did not contract for the coverage he received. Cf. Samuel, 809 N.Y.S.2d at 418 (requisite injury established when plaintiffs received services never contracted for). Spagnola has therefore failed to plead a sufficient injury under New York General Business Law § 349.\nFor the foregoing reasons, we reverse the district court's dismissal of Spagnola's breach of contract claim and affirm the district court's dismissal of all other claims.[7] We remand the case to the district court for further proceedings consistent with this opinion.\nNOTES\n[*] The Honorable John R. Gibson, Circuit Judge, United States Court of Appeals for the Eighth Circuit, sitting by designation.\n[1] Spagnola also named as defendants various affiliated entities and persons related to Chubb. For the purpose of this appeal we will refer to the named defendants-appellees collectively as \"Chubb.\"\n[2] In contrast, a verified replacement cost policy covers the reconstruction cost up to a specified amount of coverage, and a conditional replacement cost policy covers a portion of the reconstruction cost up to a stated amount.\n[3] Grounds for cancellation include such events as nonpayment of premium, conviction of a crime, or misrepresentation increasing the hazard assumed.\n[4] Spagnola does not appeal the district court's dismissal of his unjust enrichment claim.\n[5] At oral argument we questioned whether this issue should be certified to the New York Court of Appeals. After reviewing New York case law and the opinions of the New York Insurance Department, we conclude that certification is unnecessary. But see Great N. Ins. Co. v. Mt. Vernon Fire Ins. Co., 143 F.3d 659, 662 (2d Cir.1998) (certification appropriate where no state court decisions interpret relevant provision).\n[6] The complaint also asserted a third breach of contract claim, based on Chubb's alleged violation of § 3425, which Spagnola claims was incorporated by reference into the policy. However, because we conclude that Chubb did not violate § 3425, this claim also fails.\n[7] We also deny as without merit Spagnola's claim that the district court's failure to consider certain authority \"warrant[s] reassignment\" of his case to a different judge.\n\n", "ocr": false, "opinion_id": 2498 } ]	Second Circuit	Court of Appeals for the Second Circuit	F	USA, Federal
2,592,760	Joyce Hens Green	1989-07-26	false	jones-v-rivers	Jones	Jones v. Rivers	Joan v. JONES, Plaintiff, v. David RIVERS, Et Al., Defendants	Stephen C. Leckar, Cohen & White, Washington, D.C., for plaintiff., Arthur D. Burger, Asst. Corp. Counsel, D.C., Washington, D.C., for defendants.	null	null	null	null	null	null	null	null	null	null	2	Published	null	<parties id="b855-16"> Joan V. JONES, Plaintiff, v. David RIVERS, et al., Defendants. </parties><docketnumber id="A4CO"> Civ. A. No. 86-2276. </docketnumber><br><court id="b855-19"> United States District Court, District of Columbia. </court><br><decisiondate id="b855-20"> July 26, 1989. </decisiondate><br><attorneys id="b856-16"> <span citation-index="1" class="star-pagination" label="772"> *772 </span> Stephen C. Leckar, Cohen & White, Washington, D.C., for plaintiff. </attorneys><br><attorneys id="b856-17"> Arthur D. Burger, Asst. Corp. Counsel, D.C., Washington, D.C., for defendants. </attorneys>	[ "722 F. Supp. 771" ]	[ { "author_str": "Green", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n722 F. Supp. 771 (1989)\nJoan V. JONES, Plaintiff,\nv.\nDavid RIVERS, et al., Defendants.\nCiv. A. No. 86-2276.\nUnited States District Court, District of Columbia.\nJuly 26, 1989.\n772 Stephen C. Leckar, Cohen & White, Washington, D.C., for plaintiff.\nArthur D. Burger, Asst. Corp. Counsel, D.C., Washington, D.C., for defendants.\n\nMEMORANDUM OPINION\nJOYCE HENS GREEN, District Judge.\nPlaintiff Joan V. Jones brought this action against the District of Columbia and David Rivers, then Director of the District's Department of Human Services (DHS), alleging sexual discrimination and retaliation arising out of her employment at DHS. After a trial on the merits, the Court concludes, for the reasons set forth below, that plaintiff has proven by a preponderance of the evidence her case of discrimination and retaliation.\n\nI. Background\nJoan Jones is a 47 year-old female who has, with minor exceptions, enjoyed a long career of employment with the District of Columbia in the area of health and social services. She began working for DHS' predecessor in 1965, starting as a DS-7 social worker and eventually reaching the DS-11 level as supervisor of a unit that handled over 2000 cases. Trial Transcript (Tr.) 81-84; Joint Statement of Material Facts Not in Dispute (\"JS\") 1. In 1973, Jones was selected as a DS-12 social welfare specialist in the office of Albert Russo, the Assistant Director for Social Services. Russo later became Deputy Director and then Director of Social Services, and plaintiff was selected as his Executive Assistant 773 and Executive Officer, respectively. By 1978, Ms. Jones had been promoted to Assistant to the Director for Social Services and had reached the DS-15 grade level.\nIn 1979, DHS was reorganized as a result of the new administration entering under Mayor Marion Barry. Ms. Jones' position was not affected by the change, but Albert Russo resigned in 1980 and was replaced by James Burford. Dissatisfied with what she considered scaled-back responsibilities under Burford, Jones left the District government in January 1982 to accept a one-year appointment at Howard University's Graduate School of Social Work. In January 1983, plaintiff returned to DHS when she was selected for a temporary appointment as the Acting Chief of the Office of Policy and Planning (OPP), a position at the DS-15 level. In April 1983, however, that position was converted from DS-15 competitive status to the excepted service at the DS-16 level; it therefore became one of the 100 positions whose occupants serve at the pleasure of the Mayor. JS 8; D.C.Code §§ 1-610.1 et seq. At approximately the same time, Burford left DHS and was replaced as Director of DHS by David Rivers, who had been serving as Deputy Director since 1981. Jones received another temporary appointment as Acting OPP Chief in December 1983. Rivers was confirmed as the permanent Director of DHS in February of 1984.\nThe turning point in plaintiff's employment with DHS was the year 1984. In her capacity as a member of the Contracts Review Committee (CRC), an interagency group responsible for reviewing and approving DHS contracts in excess of $25,000, Jones attended a meeting in June 1984 and voted against a contract to provide services for the homeless at the Pitts Motor Hotel. On December 2, 1984, Rivers selected Carl Wilson, who was then serving as Director of DHS' State Health Planning and Development Agency (SHPDA), to become the permanent DS-16 Chief of OPP. On that same day, plaintiff was reassigned as Assistant to the Director for Special Initiatives, a DS-15 position. Shortly thereafter, Jones filed an internal charge of sex discrimination with Rivers, who denied the charges. In June 1985, plaintiff filed charges of discrimination and retaliation with the Equal Employment Opportunity Commission (EEOC).\nMs. Jones thereafter instituted this action against the District of Columbia and David Rivers.[1] Plaintiff alleges that a pattern of discrimination exists in DHS towards women above the DS-14 grade level and contends that, since April 1980, she has been \"thwarted in her efforts at career advancement\" by virtue of denial of promotions, reassignments to undesirable positions, and preferential treatment given to less-qualified male employees. Complaint ¶¶ 6, 7. In Counts 1, 3 and 4, Jones maintains that this pattern and these acts constitute impermissible sex discrimination, in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq., and 42 U.S.C. § 1983. Plaintiff also asserts, in Counts 2, 5 and 6, that David Rivers impermissibly retaliated against her for opposing the Pitts contract and for filing her EEOC charges, in contravention of Title VII and Section 1983.[2] Having considered all of the testimony, exhibits and evidence adduced at the five-day bench trial, the parties' post-trial submissions, and the entire record in this case, the Court finds, for the reasons articulated below, that plaintiff Joan Jones has successfully proved by a preponderance of the evidence that she was discriminated against because of her sex and that she suffered retaliation during her employment with the District of Columbia.\n\nII. Discussion\nPlaintiff's claims fall into three categories. She asserts that she was the victim of sex discrimination because Carl Wilson, not she, was chosen for the OPP Chief position. She also maintains that Title VII was transgressed because David Rivers retaliated against her for filing an EEOC 774 complaint. Finally, she contends that her First Amendment rights were infringed because her opposition to the Pitts Hotel contract contributed to her nonselection for OPP Chief.\n\nA. Discrimination Claims\n\n1. Standards. Jones asserts sex discrimination under both Title VII and 42 U.S.C. § 1983. Disparate treatment occurs under Title VII when a plaintiff shows that her \"employer treats some people less favorably than others\" because she is a woman. Furnco Construction Corp. v. Waters, 438 U.S. 567, 577, 98 S. Ct. 2943, 2949, 57 L. Ed. 2d 957 (1978). The order and quantum of proof in disparate treatment cases was set forth by the Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S. Ct. 1817, 1824, 36 L. Ed. 2d 668 (1973), and its progeny. To succeed on her claim, plaintiff must first establish a prima facie case of discrimination by a preponderance of the evidence. Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 253, 101 S. Ct. 1089, 1093, 67 L. Ed. 2d 207 (1981). In the context of a failure to promote, this showing consists of proof that the plaintiff (1) belongs to a protected group, (2) was qualified for and applied for a promotion, (3) was considered for and denied the promotion, and (4) was passed by in favor of another employee with similar qualifications who was not within the protected group. Bundy v. Jackson, 641 F.2d 934, 951 (D.C.Cir.1981).\nOnce a prima facie case has been made, a presumption of unlawful discrimination arises, see United States Postal Service Board of Governors v. Aikens, 460 U.S. 711, 714, 103 S. Ct. 1478, 1481, 75 L. Ed. 2d 403 (1983), which the employer may rebut by \"articulat[ing] some legitimate, nondiscriminatory reason\" for the challenged action. McDonnell Douglas, 411 U.S. at 802, 93 S. Ct. at 1824. If defendant carries this burden, the presumption \"drops from the case,\" Burdine, 450 U.S. at 255, 101 S. Ct. at 1094, and the party alleging discrimination must \"demonstrate that the proffered reason was not the true reason for the employment decision [and] that she has been the victim of intentional discrimination.\" Id. at 256, 101 S. Ct. at 1095. Where, as here, a case has been fully tried on the merits, the question whether plaintiff has made out a prima facie case \"is no longer relevant\" and the court should proceed to the ultimate issue of whether discrimination has in fact occurred. Aikens, 460 U.S. at 715, 103 S. Ct. at 1482. Finally, the McDonnell Douglas framework also applies to plaintiff's claim that defendants' acts of sex discrimination violated her due process rights protected under 42 U.S.C. § 1983. Oates v. District of Columbia, 824 F.2d 87, 90 (D.C.Cir.1987).\n2. Analysis. As noted above, plaintiff's discrimination claim is that David Rivers selected Carl Wilson, rather than her, to be Chief of OPP because she was a woman. A variety of factors, described in detail below, convinces the Court that sex discrimination promoted the selection of Carl Wilson.\nJoan Jones enjoyed a remarkable and distinguished career in the Department of Human Services. She rose rapidly through the agency from a DS-7 social worker to a DS-15 Assistant to the Director for Social Services. Plaintiff performed a wide variety of tasks along the way. She served as a caseworker for the elderly, she was the supervisor of a family services unit, and she dealt with rental payment and child care problems as a social welfare specialist. While managing the Director's office as executive assistant to Albert Russo, Ms. Jones took the lead on projects relating to social rehabilitation, day care, targeted jobs and employee courtesy. In her spare time, plaintiff managed to raise a family and obtain a masters degree in social work from Howard University.\nMs. Jones was more than simply a \"jack of all trades.\" The devotion to and quality of her work became evident at trial. Her performance evaluations throughout the years were uniformly outstanding. Plaintiff's Group Exhibit (Pl.Gr.Ex.) 1. Moreover, the special skills that Jones possessed were described by a number of witnesses. One co-worker, Bernard Phifer, agreed 775 with an evaluation by plaintiff's supervisor which noted that she \"demonstrated the ability to work with the most difficult social problems and to be willing to attempt new treatment methods with a high degree of success.\" Tr. 188-89. Richard Artis, Jones' assistant at OPP, stated that \"she exhibited the kinds of leadership qualities that I can professionally respond to,\" including delegation of authority and creativity in developing new solutions to old problems. Tr. 215-16. Calling Jones his \"alter ego,\" Albert Russo extensively described the qualities he valued in Joan Jones:\nI've always regarded Mrs. Jones as a rather extraordinary woman, with great ability, great empathy, and great feeling for clients. I often told her that she was not only client-oriented, but also community oriented. She really cared....\nSeveral times the thought [putting Jones in charge of running a specific program] did entertain my mind, but for perhaps selfish reasons, I discarded the idea ... And while I felt that she had certainly the ability to run several major programs within the Department, I felt that I wanted her to continue in her staff position because of the invaluable services she was providing.\nDuring the seven years Mrs. Jones worked with me, she extraordinarily manifested the highest qualities of leadership that I have yet encountered up to that point in time in any female employee, or in any male employee.\nTr. 254-259. Carl Wilson, a subordinate of Jones until he was selected as Chief of OPP (and a man who certainly had no motive to give such testimony), agreed that she was \"very analytical,\" very helpful,\" \"very patient,\" and \"cooperative.\" Tr. 326. Even David Rivers admitted that Jones was an \"intelligent,\" \"compassionate,\" \"dedicated\" and \"committed\" employee. Tr. 625-26.\nAnother measure of Ms. Jones' unusual abilities was the warm personal relationship she enjoyed with members of her staff. During all of her time at DHS, not a single grievance or complaint was lodged against plaintiff by another employee, a fact that Albert Russo stated was \"an exceptional tribute to her ability to work well with people, and it spoke of the excellent interpersonal relationships that she had established, both with her peers, her superiors, and her subordinates.\" Tr. 256. Bernard Phifer related how plaintiff was once given a standing ovation by her fellow employees, a truly rare event in bureaucratic circles.\nNonetheless, despite Ms. Jones' unblemished record of accomplishment and performance, it was Carl Wilson who was selected by Rivers for the position of Chief of OPP. Rivers maintained that plaintiff was not selected because she had not displayed \"leadership\" qualities while she served as acting Chief of OPP. Stating his preference for aggressive individuals, Rivers described Jones as \"timid\" and unable to take the difficult steps needed to properly interact with other agencies and pursue OPP programs in a timely fashion.[3] Rivers also observed that he had received complaints from other managers about Jones during her tenure as OPP Chief. Carl Wilson, according to Rivers, was better qualified to carry out the functions of OPP Chief.\nThe \"leadership\" rationale offered by Rivers was severely undermined by the evidence presented in this case. For one thing, the concern about leadership expressed by Rivers and others at trial did not surface during the nearly one-quarter century of her exemplary government service but only after it was clear that litigation by Jones was imminent. None of Jones' performance evaluations contain any reservations about her management abilities. Indeed, Rivers gave Jones an excellent 776 performance evaluation for a one-year period in which he observed her work. Joint Gr.Ex. 3. Neither Rivers nor any other DHS official ever sent Jones a written memorandum highlighting existing deficiencies that needed to be corrected. The subject of leadership was not broached when Rivers informed Jones that he had selected Wilson for the job; to the contrary, Rivers said that Jones was a good manager but, citing his \"management prerogatives,\" informed her that the decision was the result of an \"executive rotation.\" When Jones filed an internal grievance, and later an EEOC complaint, the responses submitted by defendants never intimated that the selection decision was influenced by her lack of leadership skills. Pl. Exs. 23, 44, 46.[4] This post hoc rationale, unsupported by documentary evidence, strongly suggests that defendants' reason for not selecting Jones was pretextual in nature. See, e.g., Legrand v. Trustees of University of Arkansas, 821 F.2d 478, 482-83 (8th Cir.1987), cert. denied, ___ U.S. ___, 108 S. Ct. 1592, 99 L. Ed. 2d 907 (1988).\nQuite apart from the late date at which the \"leadership\" defense appears to have been constructed (as well as its lack of documentation), defendants' characterization of Jones' performance is suspect on several other grounds. Joan Jones' record as acting Chief of OPP, for example, stands prominently in the way. For twenty three months, plaintiff performed her job with distinction. Jones developed policy proposals for centralized planning and a uniform cost schedule for agency consultants, reviewed grant applications and hearing decisions and implemented a number of Mayoral recommendations. Plaintiff was also responsible for coordinating the One Fund drive, a project that raised monies for arts and services organizations and for which Jones received letters of commendation from James Burford and Mayor Barry. Pl.Gr.Ex. 4. On a larger scale, Ms. Jones developed a program under which recipients of DHS welfare and social service funds would eliminate their dependence on public assistance. This \"self-sufficiency\" initiative soon assumed city-wide significance, when an inter-agency task force was established and the private sector became involved. OPP produced a comprehensive document entitled \"Ten Steps to Client Self-Sufficiency,\" in which almost every other interested District agency expressed support. Pl.Ex. 24. In addition, Jones was actively involved in producing a teenage pregnancy prevention program within OPP, which ultimately resulted in the establishment of a blue ribbon panel and personal thanks from Mayor Barry. See Tr. 36-54. These accomplishments convincingly rebut defendants' contention that plaintiff was neither a leader nor aggressive enough to reach consensus with other components of DHS and agencies within the District of Columbia government.\nMoreover, our court of appeals has warned that \"heightened scrutiny\" must be applied when an employer relies on subjective factors (such as leadership) rather than objective ones in reaching its decision. Bishopp v. District of Columbia, 788 F.2d 781, 787 (D.C.Cir.1986). The complaints voiced by Rivers and others were quite vague, however, lacking the degree of specificity one would normally expect when difficulties in employee performance are encountered. For example, Rivers spoke of \"some dialogue\" he had with Jones about several issues (such as teen pregnancy, homelessness and infant mortality) that \"were hounding me,\" Tr. 644, yet he was unable to recall any of the times, dates or locations of those discussions and did not memorialize his concerns in memoranda to Jones, to any other DHS employee or even to his own files.[5] Audrey Rowe, then Commissioner of Social Services, testified that Jones' predecessor, Barbara Sable, was a far better Chief of OPP than Jones, that 777 planning in OPP stopped when plaintiff took over and that the processing of administrative orders became bogged down under Jones. Under cross-examination, however, Rowe was impeached by prior testimony in which she admitted no opinion on Jones' effectiveness as a leader, Tr. 533, and she displayed a surprising lack of recall about planning meetings between Jones and her staff and about particular administrative orders that were allegedly not processed in a timely manner. Tr. 524-29; 541-58.[6] And although former City Councilwoman Polly Shackleton similarly questioned the effectiveness of plaintiff while heading OPP, and contrasted Jones' performance with that of her admired predecessor, Mrs. Shackleton later admitted that she had never worked directly with Jones and could identify no specific aspect of Jones' performance that was deficient. These sorts of unfocused and undocumented criticisms do not pass the \"heightened scrutiny\" required by Bishopp, especially when they are juxtaposed with the positive record of achievement compiled by Jones during her long career.\nSeveral other DHS employees also testified. Byron Marshall accused plaintiff of failing to develop coherent budget policies; Virginia Fleming stated that Rivers never treated her (Fleming) differently because she was a woman; and Barbara Walker testified (as will be explored infra) about events occurring after Jones was not selected for the OPP position. Each of these individuals, however, had substantial ties to Rivers. Marshall, who enjoyed a meteoric rise at DHS, admitted that he attended basketball games and drank beer with Rivers. Fleming conceded her connections to the Barry administration, and Walker described Rivers as her \"mentor.\" In addition, Audrey Rowe admitted that she was social friends with Rivers and with Marshall. In short, most of the witnesses offered by defendants were closely intertwined with Rivers and with each other (either personally or professionally or both) at the time of the events in question, and could scarcely be considered to be wholly objective observers.\nAdditional evidence of discrimination is found in the make-up of top-level employees at DHS. On October 1, 1984, David Rivers signed an affirmative action report as Director of DHS. Pl.Ex. 20. The report found that females, both black and white, were underrepresented at the DS-16 level in the agency and set hiring goals to alleviate that disparity. David Rivers' actions, however, failed to keep the spirit of that document. Although Rivers boasted that he brought several women onto his staff, none was hired at the DS-16 level. More significantly, of the thirteen managers occupying DS-16 positions or higher from 1981 to 1986, only three were women, two of whom received their DS-16 appointments after plaintiff filed her sex discrimination grievance.[7] This situation stands in stark contrast to the situation of DHS as a whole: in 1985, for example, a full two-thirds of all employees at DHS were women. Pl.Ex. 34, ¶ 13. The nonselection of Joan Jones, therefore, was not an isolated event, for it is consistent with a pattern that existed at the highest echelons of DHS management. Having advanced without a negative mark on her record to that point, plaintiff was confronted with a situation where her sex became an impediment to further advancement.\n778 There finally remains to be considered the selection of Carl Wilson. Although Rivers stated that he chose Wilson because he was better qualified that Jones, Wilson's own testimony indicates that Rivers had decided to remove Jones first, and only then cast about for a suitable replacement:\nQ. Mr. Wilson, you talked about your [sic] becoming OPP Chief and applying for the position. As I understand it, you knew that position was posted in 1983; isn't that true?\nA. That's true.\nQ. And you didn't apply at that time.\nA. No, I did not.\nQ. You looked at the posting, considered it, but were happy where you were. Isn't that true?\nA. That's true, yes.\nQ. And later on, in the fall of 1984, David Rivers sought you out to become the OPP Chief, isn't that correct?\nA. That's correct.\nQ. And before that time you really weren't interested in the job; isn't that true?\nA. That's correct. I really didn't pursue the job prior to that.\nQ. And what David Rivers told you was that Joan Jones was going to move on; isn't that true?\nA. He indicated that she would be moving to another position, yes.\nTr. 339. Several other considerations also undermine Rivers' choice of Wilson. For one thing, the bulk of Mr. Wilson's experience was in the area of health, not (as in the case of Jones) in the provision of social services. In addition, Wilson's major accomplishment as head of SHPDA, the development of a state health plan, was pursued in accordance with federally-produced criteria, a situation that would seem to contradict Rivers' desire for a creative person in the OPP Chief's position. Finally, Richard Artis, who was the only subordinate of both Jones and Wilson to testify at trial, stated his opinion that Jones was the \"more effective leader\" of the two. Tr. 216. Given these circumstances, the sterling achievements of Jones during her long career at the agency, the fact that Jones had served admirably in the OPP Chief position for twenty three months, and the failure of DHS and Rivers to alleviate the severe underrepresentation of women at the GS-16 level, the aggressive recruitment of Jones' subordinate (who was content in his own position) to take the job she was performing does not appear to be a legitimate and justified managerial decision.\nWilson's selection is understandable only if one concludes, as the Court now does, that it was motivated by discrimination based on sex. While this determination is never lightly reached, the evidence presented points unmistakably in that direction. A woman enjoys a steady and rapid rise through the ranks of the District of Columbia government, serving with distinction whenever she is called on. She is considered an extraordinary employee. Upon reaching a level dominated by men, she is passed over (in favor of a man) for a position that she has already held for almost two years. The man who refused to promote her, and several of his close associates, now maintain that she lacked \"leadership\" abilities. Unlike the woman's stellar record of achievement and accomplishment, however, these concerns are not set forth in any contemporaneous documentation, and thus might well be considered as pretextual (especially when viewed through the prism of her prior accomplishments). These facts speak clearly. They demonstrate that Joan Jones was not selected as Chief of the Office of Planning and Placement because she was a woman. No other reasonable conclusion may be drawn from the evidence.\n\nB. Retaliation: Title VII\n\n1. Standards. In Count 2, plaintiff contends that David Rivers retaliated against her because she opposed his acts of discrimination and because she filed discrimination charges with the EEOC, in violation of Title VII. In analyzing that claim, the Court is also guided by the McDonnell Douglas formulation used in disparate treatment cases. The prima facie case differs, however. To show retaliation, plaintiff must prove that (1) she was engaged in a statutorily-protected activity; 779 (2) an adverse personnel action was taken against her; and (3) a causal link exists between the two. McKenna v. Weinberger, 729 F.2d 783, 790 (D.C.Cir.1984). A causal connection may be established by proving that \"the employer had knowledge of the employee's protected activity, and that the adverse personnel action took place shortly after that activity.\" Mitchell v. Baldridge, 759 F.2d 80, 86 (D.C.Cir. 1985).\n2. Analysis. It is evident that, when plaintiff lodged her internal grievance with David Rivers on December 21, 1984 and her EEOC charges in May 1985, she was engaged in activity protected by Title VII. 42 U.S.C. § 2000e-3. It is equally clear that, soon after these complaints were registered, adverse employment action was taken. Jones testified that immediately after she filed her internal grievance Rivers called her on the telephone. Using an angry voice and shouting, Rivers told her that she should not have gotten a lawyer to file a grievance, that Jones would never become Chief of OPP as long as he was Director of DHS and that, if she wanted a \"shoot-out,\" he would give her one. In his testimony, Rivers only denied that he had used the words \"shoot out\" but did not challenge any other aspect of plaintiff's recollection of the call. Tr. 593-94. Soon thereafter, the nature of plaintiff's employment changed drastically. Occupying a position Special Assistant to the Director for Special Initiatives that David Rivers acknowledged would be downgraded when she left it, Jones first saw her duties taken from her and given to Brenda Walker, a former student intern who viewed David Rivers as her mentor. Plaintiff soon found that Walker was reviewing her correspondence and critiquing her \"Ten Steps to Self-Sufficiency\" plan. Although Walker testified that she performed similar tasks in other areas, plaintiff's situation was different, since she had pioneered the self-sufficiency initiative and was Rivers' special assistant on that issue.\nMore significantly, however, Ms. Jones' efforts to craft programs and carry out projects were stifled at every turn. The cornerstone of the self-sufficiency program, the establishment of an Office of Self-Sufficiency (OSS), was stalled under the administration of Rivers, who again asserted vague concerns about the \"structure\" and \"coordination\" of the OSS.[8] Ultimately, Byron Marshall, who also expressed reservations about the plan, approved the OSS after working out differences he had with Jones. A more blatant instance occurred when Rivers was scheduled to testify before the City Council in 1986. To prepare Rivers for anticipated questions from Councilwoman Shackleton, Jones prepared a memorandum describing how approximately 440 individuals had received training through OSS programs. Pl.Ex. 26. At the hearing, however, Rivers stated that only 17 people had been trained. After the meeting, budget monies were taken from OSS and transferred to the Income Maintenance Administration (IMA), a component of the Commission on Social Services. Rivers described his statement as a \"mistake,\" and defendants maintained at trial, through the testimony of Marshall and Shackleton, that the decision to shift the funds was made because OSS was duplicating the efforts of IMA in the area of training. On cross-examination, however, Shackleton could not provide any details of the nature of the alleged duplication and Marshall admitted that the transfer of funds resulted from the City Council hearing. On another occasion, Ms. Jones began preparations for a nationwide conference on self-sufficiency to be held in the District of Columbia, developing a conference notice and a planning workbook. Pl.Gr.Ex. 30a & e. Rivers postponed the conference, stating at trial that he had \"not been briefed fully\" and was \"not comfortable enough\" with event plans. This concern, however, directly contradicts Mr. Rivers' avowed desire for \"aggressive\" action within DHS. In addition, although Marshall noted that he did not believe that 780 Jones could arrange all the conference details in a short period of time, he later conceded that he had no idea of how long Jones and OSS had been planning the event.\nIt is ironic that, although Rivers complained that Jones was not aggressive enough in carrying out programs during her tenure as OPP Chief, he undertook to frustrate creative attempts made by plaintiff after she filed her discrimination complaint. Although a full accounting of plaintiff's allegations is unnecessary, the examples cited above demonstrate, without doubt, that plaintiff suffered adverse employment actions after she filed her EEOC grievance. Moreover, the sheer number of incidents and their timing demonstrate that these actions were causally related to the filing of plaintiff's EEOC charges. Accordingly, the Court concludes that defendants impermissibly retaliated against plaintiff because she filed an EEOC complaint.\n\nC. Retaliation: First Amendment\n\n1. Standards. Counts 5 and 6 assert that David Rivers transgressed plaintiff's right to free speech guaranteed under the First Amendment. Plaintiff maintains that Rivers retaliated against her because she opposed a contract for the Pitts Hotel, an emergency shelter for homeless, by selecting Wilson for the OPP Chief's job. In Hall v. Ford, 856 F.2d 255 (D.C.Cir.1988), our court of appeals recently summarized the law governing such claims:\nThe Pickering [v. Board of Education, 391 U.S. 563, 88 S. Ct. 1731, 20 L. Ed. 2d 811 (1968)] cause of action has four elements. First, the public employee must have been speaking on a matter of public concern. If the speech is not of public concern, \"it is unnecessary ... to scrutinize the reasons for [the] discharge,\" Connick v. Myers, 461 U.S. 138, 146 [103 S. Ct. 1684, 1689, 75 L. Ed. 2d 708] (1983), at least \"absent the most unusual circumstances.\" Id. [461 U.S.] at 147 [103 S.Ct. at 1690]. Second, the court must \"balance\" the interests of the employee, \"as a citizen, in commenting upon matters of public interest, and the interest of the State, as an employer, in promoting the efficiency of the public services it performs through its employees.\" Pickering, 391 U.S. at 568 [88 S.Ct. at 1734]. Third, the employee must prove that his speech was a substantial or motivating factor in his discharge. Mt. Health City Bd. of Educ. v. Doyle, 429 U.S. 274, 287 [97 S. Ct. 568, 576, 50 L. Ed. 2d 471] (1977). Finally, the government employer must be given an opportunity to prove that it would have reached the same decision even absent the protected conduct. Id.\n\nId. at 258.\n2. Analysis. The Pitts contract came before DHS's Contracts Review Committee (CRC) on June 22, 1984. At the meeting, plaintiff expressed numerous reservations that she had about the contract: its excessive cost, its staffing patterns, the effect that the Pitts arrangement would have on families and the fact that the contract ran for three years rather than one. These comments clearly relate to a matter of public concern, which is speech that involves \"`issues about which information is needed or appropriate to enable members of society' to make informed decisions about the operation of their government.\" Hall, 856 F.2d at 259 (citations omitted). Reservations about the manner and cost of providing shelter and care for the homeless of the District of Columbia surely meets this test.[9]\nJones' interest in commenting on these matters of political and social concern must next be weighed against the government's interest. In that regard, the Supreme Court has identified the following relevant factors:\nwhether the statement impairs discipline by superiors or harmony among coworkers, has a detrimental impact on close working relationships for which personal loyalty and confidence are necessary, or impedes the performance of the speaker's 781 duties or interferes with the regular operation of the enterprise.\nRankin v. McPherson, 483 U.S. 378, 107 S. Ct. 2891, 2899, 97 L. Ed. 2d 315 (1987). At trial, defendants did not present any evidence that Ms. Jones' statements about the Pitts contract affected employee relations or that they interfered with the operations of the DHS; indeed, despite plaintiff's comments, the contract was approved by the CRC. Accordingly, there is no government interest that would justify retaliation against Ms. Jones.\nDefendants' principal focus at trial concerned the third and fourth Pickering factorswhether plaintiff had proved that her opposition to the Pitts contract was a substantial or motivating factor in her non-selection as OPP Chief and whether Wilson would have been selected even had plaintiff not expressed problems with the Pitts contract. The evidence adduced on these issues supports plaintiff's retaliation claim.\nImmediately after the Pitts vote, Rivers telephoned Jones. According to plaintiff, Rivers berated Jones for her vote, told her to address any concerns that she might have to Audrey Rowe and slammed down the telephone. Rivers acknowledged that his voice was not pleasant and that he \"chewed her [plaintiff] out\" on the telephone. No other CRC member who voted against the contract was called. Nevertheless, Rivers strenuously maintained that his displeasure was not due to her vote against the contract, but rather because Jones had simply voted \"no\" without providing any alternatives for the housing of homeless people. On cross-examination, however, Rivers admitted that alternatives to Pitts did in fact exist, such as a request for procurement and quantum meruit payments. Moreover, Rivers' recollection of his call to Jones was also somewhat confused. He initially stated that he told Jones of his concerns and, when she said nothing in response, he hung up the phone. Tr. 586. He later changed his view:\nQ. And what happened next? Did you hear anything coming on the other end of the line?\nA. I made my concern known to Joan. And I don't recall her saying anything, whether it wasit was probably because I hung up the phone, probably.\n\nTr. 671 (emphasis added). By his own admission, then, Rivers did not allow Jones to respond. Given these contradictions, Rivers' version of events loses credibility.\nShortly after the conversation, the conditions of plaintiff's employment deteriorated rapidly, as described elsewhere. In October 1984just four months laterRivers informed plaintiff that he had selected Carl Wilson for OPP Chief. Given the proximity in time of this decision to the Pitts opposition, the inconsistencies in Rivers' testimony, and the failure of defendants to articulate any legitimate reason for their promotion decision, the Court must conclude that plaintiff's vocalized concern about the Pitts contract was a motivating factor in the decision by Rivers to choose Carl Wilson as head of OPP.\n\nIII. Conclusion\nJoan Jones epitomized the oft-maligned notion of one who renders public service to those less fortunate than herself. The evidence presented demonstrated that her efforts and her career were abruptly halted simply because of her sex just as she reached the pinnacle of her service to the District of Columbia and its residents. Such discriminatory actions are prohibited by both Title VII and 42 U.S.C. § 1983, and plaintiff has prevailed on her claims under those statutes. Judgment shall therefore be entered in her favor.\nThere remains the matter of relief. At the time this action was instituted, plaintiff requested compensatory damages of $50,000 and punitive damages against Rivers in the amount of $100,000. At trial, however, plaintiff sought only $10,395 in compensatory damages and $10,000 in punitive damages. Tr. 778.[10] In addition, Ms. Jones seeks equitable relief (1) barring future *782 acts of discrimination and retaliation, (2) promoting her with back pay to the DS-17 level, which she maintains she would have reached absent the discriminatory conduct that defendants pursued, and (3) expunging any adverse material in files pertaining to her. She also asks for attorney's fees and costs.\nThe Court will defer the entry of relief for the time being. Given the delicate situation that discrimination suits can often produce, it appears useful for the parties to explore the question of relief among themselves, attempting to reach agreement consistent with the Court's findings and in a manner that would accommodate both plaintiff's rights and injuries as well as the District of Columbia's personnel and administrative requirements. If the matter is not resolved, the Court will conduct a hearing on September 26, 1989 at 3:30 p.m. for the purpose of making its own determination in this regard.\nA separate Judgment accompanies this Memorandum Opinion.\n\nJUDGMENT\nIn accordance with the Memorandum Opinion issued this date, judgment is hereby entered in favor of plaintiff, Joan V. Jones, and against defendants, David Rivers and the District of Columbia.\nNOTES\n[1] Rivers is sued in his official and individual capacities. Complaint at 1.\n[2] The District of Columbia is named as a defendant in Counts 1, 2, 4 and 6; Rivers is the defendant in Counts 3 and 5.\n[3] At another point, however, Rivers himself used the word \"aggressive\" to describe Ms. Jones' performance:\n\nQ. All right. Was Joan Jones diligent in her job?\nA. Yes. Joan, no question about it. No matter what happens during this hearing, Joan is a person I've come to like and admire, given what she did best. She was very aggressive, she put in a lot of time in terms of taking on one situation at a time. She put in time, she was compassionate, and I think she really wanted to do a good job in that regard.\nTr. 568-69 (emphasis added).\n[4] Defendants' response to Jones' EEOC grievance referred to leadership in one line in describing the OPP Chief job, but no assertion was made that Jones herself was not a leader. Pl.Ex. 44 at 4.\n[5] When pressed on cross-examination, Rivers admitted that he did not have a \"distinct recollection\" about conversations with Jones about homelessness issues.\n[6] The following colloquy, just one of many, took place regarding a memorandum and questionnaire that Rowe received dealing with self-sufficiency:\n\nQ. And exactly when did you receive that memo and questionnaire, Mrs. Rowe?\nA. I can't remember. It was right after the project. It was either a part of the initial development of the project or after the project got started, part of the information-gathering process.\nQ. For what year, Mrs. Rowe?\nA. As I said, I don't remember.\nQ. And how many pages was the memorandum, Mrs. Rowe?\nA. I have no idea.\nQ. What particular problem did you have with the memorandum in which you say it wasn't well thought out, Mrs. Rowe?\nA. The whole project, as far as I was concerned.\nTr. 516-17.\n[7] The testimony of two of the DS-16 women, Rowe and Fleming, has been previously noted.\n[8] In response, Jones' staff wrote an unsolicited memorandum outlining their concerns and expressing their frustration with the pace of implementation of the self-sufficiency initiative. Pl.Gr.Ex. 31.\n[9] That plaintiff did not make her concerns public does not (as defendants suggest) alter this conclusion. Hall, 856 F.2d at 260 (a matter of public concern does not \"lose its importance merely because it arises in an employee dispute\").\n[10] The compensatory damages figure represents the amount Jones expended for psychological consulting fees after she lost weight, became tense and anxious, and suffered from work-induced depression and post-traumatic stress, as well as an additional $5,000 for mental distress.\n\n", "ocr": false, "opinion_id": 2592760 } ]	District of Columbia	District Court, District of Columbia	FD	USA, Federal
251,664	Hutcheson, Jones, Wisdom	1960-07-22	false	city-of-villa-rica-and-southern-natural-gas-company-v-mrs-marie-couch-and	null	City of Villa Rica and Southern Natural Gas Company v. Mrs. Marie Couch and Mrs. Eva Broom, Southern Natural Gas Company v. Mrs. Winnie Leathers Dyer	CITY OF VILLA RICA and Southern Natural Gas Company, Appellants, v. Mrs. Marie COUCH and Mrs. Eva Broom, Appellees; SOUTHERN NATURAL GAS COMPANY, Appellant, v. Mrs. Winnie Leathers DYER, Appellee	R. Emerson Gardner, Atlanta, Ga., Walter D. Sanders, Newnan, Ga., Hugh E. Wright, Atlanta, Ga., Shirley C. Boy-kin, Wm. P. Johnson, Carrollton, Ga., Moise, Post & Gardner, Atlanta, Ga., for appellant., Hamilton Lokey, Atlanta, Ga., A. Cecil Palmour, Summerville, Ga., Anthony A. Alaimo, Brunswick, Ga., J. T. Johnson, Oneonta, Ala., Joseph L. Lk>p, Atlanta, Ga., Oscar W. Roberts, Jr., Carrollton, Ga., Cook & Llop, Atlanta, Ga., Bobby Lee Cook, for appellees., Independent Natural Gas Association of America, by Lawrence H. Gall, Washington, D. C., Acting Gen. Counsel. Ami-cus Curiae.	null	null	null	null	null	null	null	null	null	null	5	Published	null	<parties data-order="0" data-type="parties" id="b332-8"> CITY OF VILLA RICA and Southern Natural Gas Company, Appellants, v. Mrs. Marie COUCH and Mrs. Eva Broom, Appellees. SOUTHERN NATURAL GAS COMPANY, Appellant, v. Mrs. Winnie Leathers DYER, Appellee. </parties><docketnumber data-order="1" data-type="docketnumber" id="A96"> No. 18082. </docketnumber><br><court data-order="2" data-type="court" id="b332-12"> United States Court of Appeals Fifth Circuit </court><decisiondate data-order="3" data-type="decisiondate" id="AjK-"> July 22, 1960. </decisiondate><br><attorneys data-order="4" data-type="attorneys" id="b333-10"> <span citation-index="1" class="star-pagination" label="285"> *285 </span> R. Emerson Gardner, Atlanta, Ga., Walter D. Sanders, Newnan, Ga., Hugh E. Wright, Atlanta, Ga., Shirley C. Boy-kin, Wm. P. Johnson, Carrollton, Ga., Moise, Post & Gardner, Atlanta, Ga., for appellant. </attorneys><br><attorneys data-order="5" data-type="attorneys" id="b333-11"> Hamilton Lokey, Atlanta, Ga., A. Cecil Palmour, Summerville, Ga., Anthony A. Alaimo, Brunswick, Ga., J. T. Johnson, Oneonta, Ala., Joseph L. Lk>p, Atlanta, Ga., Oscar W. Roberts, Jr., Carrollton, Ga., Cook & Llop, Atlanta, Ga., Bobby Lee Cook, for appellees. </attorneys><br><attorneys data-order="6" data-type="attorneys" id="b333-12"> Independent Natural Gas Association of America, by Lawrence H. Gall, Washington, D. C., Acting Gen. Counsel. Ami-cus Curiae. </attorneys><br><p data-order="7" data-type="judges" id="b333-13"> Before HUTCHESON, JONES and WISDOM, Circuit Judges. </p>	[ "281 F.2d 284" ]	[ { "author_str": "Hutcheson", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/281/281.F2d.284.18082_1.html", "author_id": null, "opinion_text": "281 F.2d 284\n CITY OF VILLA RICA and Southern Natural Gas Company, Appellants,v.Mrs. Marie COUCH and Mrs. Eva Broom, Appellees.SOUTHERN NATURAL GAS COMPANY, Appellant,v.Mrs. Winnie Leathers DYER, Appellee.\n No. 18082.\n United States Court of Appeals Fifth Circuit.\n July 22, 1960.\n \n R. Emerson Gardner, Atlanta, Ga., Walter D. Sanders, Newnan, Ga., Hugh E. Wright, Atlanta, Ga., Shirley C. Boykin, Wm. P. Johnson, Carrollton, Ga., Moise, Post & Gardner, Atlanta, Ga., for appellant.\n Hamilton Lokey, Atlanta, Ga., A. Cecil Palmour, Summerville, Ga., Anthony A. Alaimo, Brunswick, Ga., J. T. Johnson, Oneonta, Ala., Joseph L. Llop, Atlanta, Ga., Oscar W, Roberts, Jr., Carrollton, Ga., Cook & Llop, Atlanta, Ga., Bobby Lee Cook, for appellees.\n Independent Natural Gas Association of America, by Lawrence H. Gall, Washington, D.C., Acting Gen. Counsel. Amicus Curiae.\n Before HUTCHESON, JONES and WISDOM, Circuit Judges.\n HUTCHESON, Circuit Judge.\n \n \n 1\n Ordered by the Federal Power Commission, on December 29, 1953, and July 16, 1954, to serve the 'City of Villa Rica, Georgia , a municipal corporation * * * legally authorized to engage in the local distribution of natural gas', Southern Natural Gas Co., 'a natural gas company within the meaning of the Natural Gas Act (15 U.S.C.A. 717 et seq.)', began selling gas to Villa Rica in 1954, and delivering it at a point about six and one-half miles from Villa Rica, and it has since continued to do so pursuant to the contract which, providing for quantities and costs of gas and fixing the place of delivery as above, further provided:\n \n \n 2\n 'Purchaser (City of Villa Rica) shall also construct, maintain and operate pressure regulating equipment of standard type for the purpose of reducing the pressure of gas as delivered by Company (Southern Natural Gas Company) to a pressure suitable for introduction into Purchaser's system and an odorizing plant to introduce a warning odor into the gas after delivery by the Company.'\n \n \n 3\n On December 7, 1957, a gas explosion occurred in the City within the block in which Berry's drugstore was located. Three prrsons, among others, were killed in the explosion. The widows to two, and the mother of one, of them brought separate actions for alleged wrongful death. Mrs. Couch and Mrs. Broom sued William L. Berry, the owner and operator of the drugstore, the City of Villa Rica, the local gas distributor, and Southern Natural Gas Company. Mrs. Dyer sued only Berry and Southern Natural Gas Company.\n \n \n 4\n While the gravamen of the original complaints was that the presence of escaping gas was known to all of the defendants and they were negligent in not taking precautions to provide against an explosion, each complaint, as amended, added generally that the explosion was of natural gas which was insufficiently and, therefore, negligently odorized when distributed to Berry by Villa Rica, the owner and operator of the municipal gas distribution system, and, for want of proper warning, the danger from the leaking gas was not discovered in time to prevent the explosion and deaths.\n \n \n 5\n The charges of negligence against Villa Rica included improper design, construction, and maintenance of its gas system; failure to locate the gas leak; failure to shut off the gas supply after notice of the leak; failure to warn the deceased persons, etc. Defendant Berry was alleged to have been negligent in failing to shut off the gas after the leak was discovered, failure to ventilate, failure to warn the deceased persons, etc. Many charges were made against Southern Natural, but there was evidence offered on only one, that of its failure to odorize the natural gas before it sold it to Villa Rica, and its consequent liability for Villa Rica's failure to do so.\n \n \n 6\n For convenience the three cases were tried together and appealed upon one record. The verdict in each case was for defendant Berry and in favor of the plaintiffs against Villa Rica and Southern Natural Gas Company in the Couch and Broom cases and against Southern Natural in the Dyer case.\n \n \n 7\n Judgments having been entered on the verdicts and the cases having been consolidated for appeal, both defendants are here insisting: (1) that verdicts should have been directed in their favor and the judgments must, therefore, be reversed and rendered; and (2) that, if not, procedural errors were committed on the trial and the judgments must be reversed and the causes remanded for trial anew.\n \n \n 8\n In respect of the fact issue common to both appellants, whether there was evidence sufficient to support the claim that the gas was not sufficiently and, therefore, was negligently odorized, both vigorously insist that the evidence wholly failed to establish this fact, indeed, showing that the presence of escaping gas was known, established quite the contrary.\n \n \n 9\n This issue aside, however, each stands upon and presents its individual defenses. Because this is so and because we are of the opinion that verdicts as to Southern should have been directed and that, as to it, the judgments must be reversed and here rendered, while as to Villa Rica, they must be affirmed, we shall, in setting down our reasons for these views, state them separately as to each appellant.\n \n \n 10\n While, because of the trial of the three cases together and the personal opinion nature of a large part of the evidence as to whether particular individuals did or did not smell gas before the explosion, the witnesses are many and the question and answer record is voluminous, the substance of the evidence as material to the appeals may be put in reasonable compass.1\n \n \n 11\n The Case as to Southern Natural Gas Company\n \n \n 12\n Appellant, Southern Natural, is here urging upon us that, under the undisputed facts, it was under no duty to odorize the gas and, therefore, was not responsible for the negligence, if any, of the City of Villa Rica, or any other person, in respect thereto and a verdict should have been directed for it.\n \n \n 13\n While it is settled law that because of the dangers from the escape of natural gas and the fact that in its natural state it has no betraying odor, ororization before being distributed to consumers is proper, indeed necessary, it is equally settled law that Southern having sold, and Villa Rica having purchased, the gas with knowledge on the part of both that Villa Rica should and would odorize the gas, and, under the undisputed evidence it has made provision to do so, Southern was under no duty to odorize it and was not responsible for the explosion and the damages caused by it. So broad and comprehensive are the underlying propositions which support this view and so numerous are the authorities which sustain it, that appellees, in pressing their claim, that under the facts of this case Southern owed a non-delegable duty, to the private consumers to whom Villa Rica supplied it, to odorize the gas, and that it could not rid itself of that duty, though it knew that the City of Villa Rica was conscious of its obligation to odorize the gas before distribution and had made provisions for doing so, find themselves hard pressed, indeed unable, to present a single sound reason or marshal a single apposite authority which supports their view.\n \n \n 14\n Citing textbooks and cases dealing with agreements by an agent or contractor to discharge for his employer duties incumbent upon the employer, they seek in vain to analogize Southern's position as seller to Villa Rica to that of the employer in those cases. Basing their argument on the premise that it is the same and drawing the conclusion, impermissible under the applicable facts and law, that Southern had a non-delegable duty in this case to Villa Rica's customers as to whom, under the undisputed evidence in this case it has a right to and did assume that its vendee would exercise proper care in discharging its duty, appellees rely vainly, we think, on the Georgia case of Community Gas Co. v. Williams, 87 Ga.App. 68, 73 S.E.2d 119, Georgia Code, 105-502, subd. (2),2 and equally vainly on Winkler v. Macon Gas Co., 361 Mo. 1017, 238 S.W.2d 386; Parkinson v. California Co., 9 Cir., 233 F.2d 432, 436, and Hulke v. International Mfg. Co., 14 Ill.App.2d 5, 142 N.E.2d 717.\n \n \n 15\n Meeting all of appellees' contentions head on, including the contention that there is adequate proof that the gas was not odorized, Southern argues that, since there was positive evidence that the gas was odorized and none that it was not, and the only reliance of appellees to support their position that it was not is on the opinion testimony of some of the witnesses that they did not smell gas, the case is one of an attempt by negative evidence to overcome positive evidence, and in Georgia this cannot be done. In support it cites: Georgia Code, 38-111, which provides:\n \n \n 16\n 'The existence of a fact testified to by one positive witness is to be believed, rather than that such fact did not exist because many witnesses who had the same opportunity of observation swear that they did not see or know of its having existed.'\n \n \n 17\n Hambright v. Western, 112 Ga. 36, 37 S.E. 99; and Myers v. Phillips, 197 Ga. 536, 29 S.E.2d 700. Cf. Winkler v. Macon Gas Co., 361 Mo. 1017, 238 S.W.2d 386, at pages 388-389.\n \n \n 18\n Arguing in further support of this contention, that when the evidence taken as a whole is considered in the light of the undisputed evidence of Dr. Goodgain, that if the leaking gas was not in the atmosphere of the drugstore but was underneath its floor or under the floor of the shop next door and was properly odorized it could not have been smelled until it came into the store and into contact with the nostrils of the witnesses, it insists that the finding of the jury, if it did so find that the gas was not odorized, was without evidence to support it and was based only on surmise and suspicion.\n \n \n 19\n On the applicable law, Southern invokes the established principles: that, even though it is known that gas is dangerous, it may be presumed, in the absence of knowledge to the contrary, that it will be safely confined and transported by a purchaser having knowledge of its nature and characteristics, Indiana Natural Gas & Oil Co. v. Jones, 14 Ind.App. 55, 42 N.E. 487; that a public utility will be maintained and operated in a proper and lawful manner, Hastings Co. v. Southern Natural Gas, 45 Ga.App. 774, 166 S.E. 56; and that, under the facts of this case, it could not have been reasonably foreseen that Villa Rica, the local gas distributor, would act in a negligent manner. Liberty Homes, Inc. v. Stratton, 90 Ga.App. 675, 83 S.E.2d 818; United States Steel Corp. v. McCraney, 5 Cir., 257 F.2d 457; Fisher v. Minneapolis & St. Louis Ry., 8 Cir., 199 F.2d 308; Union Tank & Supply Co. v. Kelly, 5 Cir., 167 F.2d 811.\n \n \n 20\n Urging upon us that the district court correctly ruled on the trial of the case in accordance with cases from Georgia and elsewhere and so charged the jury, without exceptions from plaintiff, that, absent actual knowledge to the contrary, Southern could presume that Villa Rica's gas system and its personnel were such that it could and would properly deal with the gas, and further, that, absent such knowledge, Southern had no duty to inspect Villa Rica's system or personnel, it cites many cases from Georgia and elsewhere, including Community Gas Co. v. Williams, supra, on which appellees strongly but vainly rely, in complete accordance with this view.\n \n \n 21\n Discussing those cases which, dealing with the products liability doctrine, hold that it does not apply where the product is to be further processed before it reaches the consumer and the manufacturer supplier has no reason to believe that the further processing will not be properly done, and citing many cases in support, Liberty Mutual Ins. Co. v. Hercules, 3 Cir., 224 F.2d 293, 54 A.L.R. 2d 513; Schneider v. Suhrmann, 8 Utah 2d 35, 327 P.2d 822; Hornsby v. Haverty, 85 Ga.App. 425, 69 S.E.2d 630, Southern invokes the principle stated in Sec. 388 Torts Restatement and applied in cases without number. Cf. Gulf Oil v. Wright, 5 Cir., 236 F.2d 46, 56, and Sword, Houston Fire & Cas. Ins. Co., v. Gulf .oil, 5 Cir., 251 F.2d 829, that the supplier of a dangerous commodity directly or through a third person is subject to liability to those whom he should expect to use it, only if the supplier: (a) knows of its dangerous potential, (b) knows or reasonably should know that the user will not realize the danger, and (c) fails to use reasonable care to safeguard against the danger or to inform the user of the facts which make it likely to be dangerous.\n \n \n 22\n Addressing itself to the precise, the specific, situation which the facts of this case present, appellant takes its stand firmly on the proposition that a wholesaler supplier of gas to a local retailer has no duty to the ultimate consumer to odorize it where the supplier has no reason to believe that the gas will reach the consumer unodorized, citing in support Winkler v. Macon, 361 Mo. 1017, 238 S.W.2d 386, supra, and the many authorities cited and discussed in it; Parkinson v. California Co., 9 Cir., 255 F.2d 265; and numerous other cases.\n \n \n 23\n Finally, assuming for the purpose of the argument that it was negligent in not itself odorizing the gas, Southern insists that such negligence, under the facts of this case, was not in fact and in law the proximate cause of the explosion. The subsequent negligence of the City of Villa Rica was the independent, intervening and proximate cause which, superseding Southern's negligence, was in law the responsible cause.3\n \n \n 24\n In respect to appellees' counter contention that the defense of subsequent negligence cannot apply in this case because Southern had and breached a 'non-delegable duty', appellant urges upon us that this contention begs the question by assuming, contrary to the fact and law of the case, that Southern owed such duty. Cf. Community Gas Co. v. Williams, supra; Robbins Home Improvement Co. v. Guthrie, 213 Ga. 138, 97 S.E.2d 153; Georgia Code, 105-501, 105-502; Dekle v. Southern Bell, 208 Ga. 254, 66 S.E.2d 218.\n \n \n 25\n We find ourselves in substantial agreement with these views. Look at the case as one will, no statute providing otherwise, there is, under the facts of this case, no reasonable basis for the view that the defendant owed or breached any duty to the persons injured in this case, and it was, therefore, error not to direct a verdict.\n \n \n 26\n In view of this holding, it is not necessary for us to consider the contentions of appellant, that the court erred in charging the jury, other than to say that it is quite clear that it follows from it that the charge of the court incorrectly submitted to the jury the question of law, whether Southern owed a duty, a question which was for the court to determine and which it should have determined in favor of Southern by directed verdict.\n \n \n 27\n The Case as to Villa Rica.\n \n \n 28\n While, as we have said above in connection with Southern's appeal, we are of the clear opinion that the finding of the jury, if it did so find, that the gas was not odorized, was without evidence to support it and was based only on surmise and suspicion, we think it equally clear that the jury could, and did, find that the City was negligent in not taking proper precautions after complaints of escaping gas had reached it, and that such negligence was the proximate cause of the damages sustained and recovered by plaintiffs. Womack v. Central Georgia Gas Co., 85 Ga.App. 799, 70 S.E.2d 398.4\n \n \n 29\n The record furnishes ample proof to support the finding implied in the verdict, that Villa Rica had ample notice of leaking gas, not only in Berry's Drugstore but also in adjacent premises, and that its negligent failure to take prompt corrective action commensurate with the dangers involved proximately caused the explosion.\n \n \n 30\n On its claims of procedural error, the City stands no better. We think it quite clear that in the general charge to the jury, the court properly instructed them that the city was not liable for defects in installations on private premises unless it had knowledge or reasonable grounds for knowing that there were defects in them and thereafter failed to use reasonable care to prevent dangers therefrom. Its requested charge, limiting the city's duty of care to defects or troubles in its own lines, is not a correct statement of the law.\n \n \n 31\n Its final point, that, since at the beginning of the trial the jurors were questioned, without objection being made, as to whether or not they were employees or stockholders or related to stockholders of certain insurance companies, it was reversible error, then during the trial of the case a witness, placed on the stand by the defendant Berry, stated that Berry had told him that he had insurance, not to grant the city's motion for mistrial or, in the alternative, permit it to show that it did not have insurance, is, we think, for the reasons hereafter stated, clearly without merit. First, the statement referred to Berry, another defendant. It did not refer to insurance carried by Villa Rica or raise any inference that it had insurance. Annotation 4 A.L.R.2d p. 819. Second, none of the cases cited by the appellant, Villa Rica, concern, as here, the liability of another other defendant. Third, in a colloquy with counsel representing each defendant, the court, out of the presence of the jury, calling attention to the fact that if anyone was hurt by the proof, it was the defendant Berry, and he could not complain because his own counsel had brought the matter out, ruled that it would be improper, as against the other defendants, for the city to make proof that it was without insurance. Fourth, the court thereupon recalled the jury and, with the apparent acquiescence of all the counsel since no further objection was made, instructed them as follows:\n \n \n 32\n 'Now Gentlemen of the jury, the witness on the stand here made some reference to insurance, I want to state to you that you will disregard that statement entirely. It has nothing to do with the issues in this case. You will no way be influenced in any sort of way by that testimony. I will ask you to please disregard it entirely and to give no thought or consideration to it in this case. Be very careful to observe those instructions.'\n \n \n 33\n The judgments against Villa Rica are affirmed. The judgments against Southern Natural Gas Company are reversed and here rendered.\n \n \n \n 1\n The issue of odorization\n It is undisputed: that both Southern and Villa Rica knew that the gas furnished by Southern was and would be unodorized when received by Villa Rica; that it recognized its obligation to odorize it and undertook to discharge the obligation.\n The evidence established: that the odorizing station designed and constructed for Villa Rica through which the gas purchased from Southern moved on its way to customers was of approved design and capacity; that the type of odorizing equipment used, 'Peerless Odorizer', the most commonly used odorizer, was a superior type of equipment manufactured by a reputable company, and was the best in its field.\n The undisputed testimony shows that the gas was odorized with mercaptan, an odorant which has a sulphur base and produces distinct and separate olfactory reactions on different people.\n It was testified, and no one disputed, that a sufficient quantity of mercaptan odorant was kept in the automatic odorizing plant, or station, at all times, and that before and after the explosion, there was sufficient mercaptan odorizer in the automatic odorizing station, and the odorizing plant was working at all times.\n Natural gas in its natural state is odorless and sightless. When odorized at a point before it goes into any distribution system, it becomes odorized at any and every point in said system. There is no way to get the odor out, save burn it out. This is particularly true with reference to a system of the type installed by the City of Villa Rica. In the City of Villa Rica system, the one main gas line coming from the Southern Natural Gas line supplies the entire system. Any gas reaching any customer of the Villa Rica gas system necessarily passed through the automatic odorizing station.\n On the morning of the explosion, many people in the City of Villa Rica smelled and detected the odor of odorized natural gas. Some of these detected and noticed the odor of odorized natural gas when lighting the heater, etc.\n Mr. Oscar Hixon, the manager of the Villa Rica Gas Department with three laborers was making a new tap on the gas line within the system within the City of Villa Rica, at the time he received notice from the defendant Berry, by and through his clerk and employee, Ray Tyson, that a peculiar odor was prevalent in the drugstore. These workers testified that within a few minutes of the time of the explosion on the morning of Dec. 5, 1957, they noticed and detected the odor of odorized gas.\n There was no direct or positive evidence whatever disputing the facts above stated, and there was also direct and positive evidence from many of the twenty witnesses, who testified to their sensations, that they had smelled odorized gas in and about the block where the explosion occurred during the week of the explosion; and negative testimony of many of them that they had not smelled it.\n Reeves Jewelry Store, two doors from Berry's drugstore, reported a gas leak on Monday before the explosion on Thursday, but no leak was found.\n A witness testified to hearing defendant Berry on his visit to the City Hall the morning of, and before, the explosion, to report the presence of gas, tell the clerk that he, Berry, had smelled gas for a day or two. Another witness swore that, after the explosion, defendant Berry told him that gas had been smelled in his store before it.\n A witness, Vaughn, swore that Tyson, an employee of Berry's, had told him that natural gas had been smelled in Berry's for several days before the explosion.\n Mrs. Bell, the operator of the dress shop next to the drugstore testified that Tyson told her Thursday that they had been smelling gas for three days in the drugstore and it had been burning their eyes.\n Defendant Berry testified that on the morning of the explosion he ventilated his drugstore to remove the odor which was a 'peculiar odor' different from normal odors in the prescription department. His eyes burned. He went to the City Hall to find the gas superintendent and later called the City Hall in a further attempt to find him.\n The owner of Reeves Jewelry Store swore that prior to the explosion he had noticed the odor of gas about the premises. The same odor was noticed on the morning before the explosion, and he was concerned about having a gas leak.\n Witnesses Lancaster, Baughn, Bohannon and Tyson, all of whom were in the drugstore at the time of the explosion, testified that they were blown up and fell back into the wreckage.\n Both expert witnesses, Dr. Goodgain and Mr. Roush, testified that, for a person to be blow up, the explosion would have to be underneath the floor. Dr. Goodgain testified that if the gas were under the floor and not in the building, it could not be smelled by those in the building, even though properly odorized, and in a building with front and back doors and windows open, gas in the building would be dispelled and the odor dissipated.\n Several witnesses, including defendant Berry, testified that the drugstore was ventilated the morning of the explosion.\n Tyson testified that the two plumbers, requested by defendant Berry to check the odor, came into the store followed by the gas superintendent of Villa Rica, and that shortly thereafter the explosion occurred. These two plumbers were near the hot water heater in the drug store and immediately before the explosion Tyson saw the arm of one plumber moving up and down.\n In opposition to the positive testimony as to the approved nature and character of the odorizing equipment and of the use in it of mercaptan, an approved odorant, plaintiff offered no direct evidence in contradiction but relied entirely upon the negative testimony of some of the witnesses that, under the various conditions and circumstances recited by them, they did not smell gas before the explosion.\n In recognition of the importance, indeed necessity, to their case, on the issue of odorization, of this sensory preception opinion evidence, appellees greatly stress it, while appellants, relying on the provision of the Georgia Code, sec. 38-111 and the many Georgia decisions under it, that negative evidence would not be permitted to overcome positive evidence, greatly discount this testimony.\n On the issue of notice to Villa Rica of gas leakage and its negligence in respect thereto in not taking proper action against danger, the following facts were established without contradiction:\n Tom Pope, who testified that one of his duties was to look for leaks, checked Reeves Jewelry Store for leaking gas on December 2 at Gas Superintendent Hixon's request, upon complaint of Mrs. Reeves. Hixon checked it at Reeves request at 6:00 P.M. December 4. He then explained to Mr. Hixon that the odor seemed to be coming from the back of Berry's Drug Store. Hixon knew that the Berry Drug Store had been converted from a Butane service system. Hixon examined the Reeves building only. No pressure test was made to check the Reeves complaints. At no time did Pope cut off the gas to Reeves' store or undertake to ventilate the premises. Nor did he make an air test for leaks. On Tuesday Hixon checked Reeves' store. On Wednesday Hixon checked Reeves' store and was told the odor seemed stronger 'up toward the back of the drug store'. After checking around the jewelry store Hixon advised Reeves that he did not have a leak. Apparently no effort was made to see if the leak was somewhere else in the row of stores.\n Dr. Berry called the City desk Dec. 5, complaining of gas odor and later came over personally about 9:30 complaining of an odor which had existed for two days, stating that the had become dubious about it. No records are kept of prior complaints. The City clerk did not attempt to get in touch with the Gas Service Department, although the City has a method for locating department heads. The City also has a Radio-Police setup for this contingency.\n Dr. Berry resorted to sending one of his employees for Hixon and Hixon arrived, at Berry's Drug Store about 11 o'clock. When Hixon arrived, he did not go to the back of the Drug Store, did not order the premises ventilated, did not take charge of the situation, did not order the occupants out, but walked in and said: 'This is not gas I smell'. Hixon came in as the Dyers did; walked over to where the Dyers were standing and watched them 'tightening up something'. They had been there only a short time when the explosion occurred.\n When a warning odor is detected, flames should be extinguished, electric motors shut off, premises ventilated, and a check made for leaks. There was a cut-off back of Berry's Drug Store.\n Dr. Goodgain testified as an expert on handling of natural gas that the safe procedure to follow in searching for a gas leak is: (1) get the people out of the building; (2) shut off sources of fire, such as pilot lights, electric motors and things that may spark; (3) ventilate the building thoroughly to get the gas out; (4) shut off the gas supply to the building; and (5) test for leaks with a device that is safr in the presence of explosive mixtures.\n Gus Cobb, who succeeded Oscar Hixon as superintendent of the Villa Rica gas system, testified that the safe method in inspecting for gas leaks is: (1) cut off the gas going into the premises; (2) ventilate the premises; and (3) test for leaks with a gas detector pump. He further testified that it was unsafe to search for a leak inside the premises without first cutting the gas off. Mr. Frank Bennett, an expert witness for appellant Southern, testified that not to ventilate premises when the odor of gas is present 'is the worst thing you can do.'\n \n \n 2\n 'The employer is liable for the negligence of the contractor-- 2. If, according to previous knowledge and experience, the work to be done is in its nature dangerous to others, however carefully performed.'\n \n \n 3\n Harley v. General Motors, 98 Ga.App. 348, 103 S.E.2d 191; Liberty Homes, Inc. v. Stratton, 90 Ga.App. 675, 83 S.E.2d 818; Kuhr Bros., Inc. v. Spahos, 89 Ga.App. 885, 81 S.E.2d 491; Washington v. Kemp, 97 Ga.App. 235, 102 S.E.2d 910; Nishida v. Dupont, 5 Cir., 245 F.2d 768; Hopkins v. DuPont, 3 Cir., 212 F.2d 623; Crude Oil Contracting Co. v. Insurance Co., 10 Cir., 118 F.2d 476; Walton v. Sherwin-Williams, 8 Cir., 191 F.2d 277; and E. I. DuPont De Nemours & Co. v. Ladner, 221 Miss. 378, 73 So. 2d 249\n \n \n 4\n Cf. Atlanta Gas Light Co. v. Gholston, 87 Ga.App. 40, 73 S.E.2d 49: Metz v. Georgia Public Utilities Corp., 52 Ga.App. 771, 184 S.E. 629; Southern Indiana Gas Co. v. Tyner, 49 Ind.App. 475, 97 N.E. 580; Skelly Oil Co. v. Holloway, 8 Cir., 171 F.2d 670; Chattanooga Gas Co. v. Underwood, 38 Tenn.App. 142, 270 S.W.2d 652\n \n \n ", "ocr": false, "opinion_id": 251664 } ]	Fifth Circuit	Court of Appeals for the Fifth Circuit	F	USA, Federal
251,924	Hamlin, Merrill, Wollenberg	1960-09-02	false	metropolitan-building-company-v-commissioner-of-internal-revenue	null	Metropolitan Building Company v. Commissioner of Internal Revenue	METROPOLITAN BUILDING COMPANY, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent	James W. Johnston, Seattle, Wash., for petitioner on review., Graham, Green & Dunn, Seattle, Wash., Charles K. Rice, Asst. Atty. Gen., Lee A. Jackson, I. Henry Kutz, Carter Bledsoe, Attys., Dept of Justice, Washington, D. C., for respondent.	null	null	null	null	null	null	null	null	null	null	13	Published	null	<parties data-order="0" data-type="parties" id="b640-3"> METROPOLITAN BUILDING COMPANY, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. </parties><br><docketnumber data-order="1" data-type="docketnumber" id="b640-5"> No. 16609. </docketnumber><br><court data-order="2" data-type="court" id="b640-6"> United States Court of Appeals Ninth Circuit. </court><br><decisiondate data-order="3" data-type="decisiondate" id="b640-7"> Sept. 2, 1960. </decisiondate><br><attorneys data-order="4" data-type="attorneys" id="b640-13"> James W. Johnston, Seattle, Wash., for petitioner on review. </attorneys><br><attorneys data-order="5" data-type="attorneys" id="b640-14"> Graham, Green & Dunn, Seattle, Wash., Charles K. Rice, Asst. Atty. Gen., Lee A. Jackson, I. Henry Kutz, Carter Bledsoe, Attys., Dept of Justice, Washington, D. C., for respondent. </attorneys><br><p data-order="6" data-type="judges" id="b640-15"> Before HAMLIN and MERRILL, Circuit Judges, and WOLLENBERG, District Judge. </p>	[ "282 F.2d 592" ]	[ { "author_str": "Merrill", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/282/282.F2d.592.16609_1.html", "author_id": null, "opinion_text": "282 F.2d 592\n METROPOLITAN BUILDING COMPANY, Petitioner,v.COMMISSIONER OF INTERNAL REVENUE, Respondent.\n No. 16609.\n United States Court of Appeals Ninth Circuit.\n September 2, 1960.\n \n James W. Johnston, Seattle, Wash., for petitioner on review.\n Graham, Green & Dunn, Seattle, Wash., Charles K. Rice, Asst. Atty. Gen., Lee A. Jackson, I. Henry Kutz, Carter Bledsoe, Attys., Dept of Justice, Washington, D. C., for respondent.\n Before HAMLIN and MERRILL, Circuit Judges, and WOLLENBERG, District Judge.\n MERRILL, Circuit Judge.\n \n \n 1\n The question presented by this case involves the owner of real property, his lessee and a sublessee. The sublessee wished to enter into a desirable arrangement directly with the owner and to this end to eliminate the intervening interest of the lessee-sublessor. He paid a sum of money to the lessee, in consideration of which the lessee released to the owner, his lessor, all his right and interest under his lease.\n \n \n 2\n The question presented is whether the sum so paid to the lessee is to be regarded entirely as the equivalent of rent owed to the lessee and taxable to the lessee as income or whether it is to be regarded entirely as a sale by the lessee of a capital asset and taxable as capital gain. The Commissioner of Internal Revenue ruled that the payment was the equivalent of rental and taxable as income.\n \n \n 3\n At issue is the amount of tax from Metropolitan Building Company, the lessee, for the taxable year ending June 30, 1953. Following the ruling of the Commissioner, this proceeding was instituted in the Tax Court by Metropolitan for redetermination of deficiencies in income and excess profits taxes for that year. The Tax Court affirmed the ruling of the Commissioner. Metropolitan has petitioned this Court for review, contending that the payment in question should be held to be capital gain. We have concluded that petitioner is correct in its contention and that the judgment of the Tax Court must be reversed.\n \n \n 4\n The University of Washington owns real estate comprising about four city blocks in the downtown area of Seattle. In 1907 it executed a lease upon this property extending to November 1, 1954. This lease was acquired by petitioner Metropolitan Building Company on December 3, 1907.\n \n \n 5\n On August 1, 1922, Metropolitan executed a sublease of the greater portion of one city block, extending to October 31, 1954, one day prior to the termination of the main lease. Under the terms of the sublease the sublessee was to construct a hotel upon the leased premises. Rental provided was $25,000.00 a year. In addition, the sublessee agreed to pay its just proportion of any ad valorem personal property taxes assessed against Metropolitan's leasehold. The Olympic Hotel was constructed upon the leased premises. On March 31, 1936, the sublease was acquired by The Olympic, Inc.\n \n \n 6\n During the year 1952, the University of Washington, as fee owner, was attempting to arrange a long-term disposition of the Olympic Hotel property for the period following the expiration of Metropolitan's lease in November, 1954. To this end the University invited proposals for the lease of the hotel, and a number of highly competitive proposals were submitted by various large hotel operators. All these proposals, except that of The Olympic, Inc., necessarily contemplated a lease commencing November 1, 1954.\n \n \n 7\n The proposal made by The Olympic, Inc., offered, at no cost or expense to the University, to procure from Metropolitan a release to the University of all Metropolitan's right, title and interest in and to the Olympic Hotel property under its lease. Olympic then offered the University to take a new lease directly from it for a term of approximately twenty-two years commencing forthwith. Under this proposal, additional rentals of $725,000.00 would accrue to the University during the period prior to November 1, 1954, which otherwise would not have been forthcoming.\n \n \n 8\n The University was favorably disposed to this proposal and negotiations were undertaken with Metropolitan for the acquisition by the University of Metropolitan's leasehold interest. A letter was written on August 18, 1952, by the Board of Regents of the University to Metropolitan requesting Metropolitan to release to the University its leasehold rights with respect to the Olympic Hotel property. At a meeting of the Board of Directors of Metropolitan, held August 19, 1952, the following resolution was adopted:\n \n \n 9\n \"Resolved, the President hereby is authorized to sell to the University of Washington our leasehold rights to that area of the Metropolitan Tract occupied by the Olympic Hotel, including the existing sub-lease, provided an agreement can be reached which is approved by the company's accounting and legal counsel.\"\n \n \n 10\n On September 8, 1952, an agreement was reached between Metropolitan and the State of Washington, acting through the Board of Regents of the University, whereby petitioner conveyed, quitclaimed, assigned and released to the State of Washington all of the right, title and interest of Metropolitan in and to that portion of the leasehold upon which the Olympic Hotel was located. For this assignment and transfer Metropolitan received from The Olympic, Inc., the sum of $137,000.00. The University then proceeded in accordance with its understanding to lease the property to The Olympic, Inc.\n \n \n 11\n Metropolitan's president, asked as to how the sum of $137,000.00 had been computed, testified that roughly it covered $53,000.00 ground rent, $44,000.00 as Metropolitan's just proportion of the ad valorem personal property tax assessed against Metropolitan's leasehold, and $40,000.00 for increased taxes.\n \n \n 12\n The Commissioner contends that this payment is taxable to Metropolitan as ordinary income. He relies upon Hort v. Commissioner, 1940, 313 U.S. 28, 31, 61 S. Ct. 757, 85 L. Ed. 1168, where it is held:\n \n \n 13\n \"Where, as in this case, the disputed amount was essentially a substitute for rental payments which § 22(a) [26 U.S.C.A. § 22(a)] expressly characterizes as gross income, it must be regarded as ordinary income * * *.\"\n \n \n 14\n In that case the petitioner owned a business building, a portion of which had been leased to the Irving Trust Company for a term of fifteen years at $25,000.00 a year. The Trust Company, finding it unprofitable to maintain a branch office at that location, paid the petitioner $140,000.00 for cancellation of the lease.\n \n \n 15\n In that case the Trust Company did not acquire any interest of its lessor. It simply compromised and liquidated its rental obligation under the lease. The sum received by the lessor was in lieu of the rentals which the Trust Company otherwise was obligated to pay and was not compensation for acquisition of any interest of the lessor.\n \n \n 16\n In the case before us, the sums paid to Metropolitan were not simply a discharge of Olympic's obligation to pay rental. They were paid for the purchase of Metropolitan's entire leasehold interest. The case is not one of a liquidation of a right to future income as is Hort, but rather it is one of a disposition of income-producing property itself. The giving up of a lease by a tenant fits the legal requirements of a sale or exchange under Internal Revenue Code 1939, 117 (j) 26 U.S.C.A. § 117(j) and a gain realized by the tenant on such a transaction is capital gain. Commissioner of Internal Revenue v. Golonsky, 3 Cir., 1952, 200 F.2d 72, certiorari denied 345 U.S. 939, 73 S. Ct. 830, 97 L. Ed. 1366; Commissioner of Internal Revenue v. Ray, 5 Cir., 1954, 210 F.2d 300, certiorari denied 348 U.S. 829, 75 S. Ct. 53, 99 L. Ed. 654; Commissioner of Internal Revenue v. McCue Bros. & Drummond, Inc., 2 Cir., 1954, 210 F.2d 752, certiorari denied 348 U.S. 829, 75 S. Ct. 53, 99 L. Ed. 654; Walter H. Sutliff, 1942, 46 B.T.A. 446.\n \n \n 17\n In Golonsky the court stated the problem of the case as follows:\n \n \n 18\n \"A tenant in possession of premises under a lease, upon receipt of payment by the landlord, and pursuant to an agreement made with the landlord, `vacated and surrendered the premises' before the date at which the lease expired.\" 200 F.2d at page 73.\n \n \n 19\n It was held that the proceeds of the transaction constituted capital gain.\n \n \n 20\n The Commissioner would (and the Tax Court did) distinguish Golonsky upon the ground that in the instant case the consideration passed not from the lessor but from the sublessee, the very party obliged to pay rental to the recipient, and that such consideration represented the amount which the recipient felt it would otherwise have received under the sublease. Further, it is said, the value of the leasehold was fixed and limited by the rentals due under the sublease since the term of the sublease corresponded with that of the lease.\n \n \n 21\n We are not impressed by this proposed distinction. The lease clearly had value over the amount of rentals due by virtue of the fact that its acquisition was of importance to Olympic. Irrespective of the method used by Metropolitan in arriving at the figure of $137,000.00, it is clear that Metropolitan did profit to some extent by the transaction. The Commissioner seems to concede1 that if the consideration had been paid by the University or if the lease had been assigned to a third party the transaction would have constituted a sale by the lessee.\n \n \n 22\n It is not the person of the payor which controls the nature of the transaction in our view. Rather, it is the fact that the transaction constituted a bona fide transfer, for a legitimate business purpose, of the leasehold in its entirety. It did not constitute a release or transfer only of the right to future income under the sublease and the business purpose of the transaction would not have been met by such a release.\n \n \n 23\n We conclude that the sum of $137,000.00, received by petitioner for release of its leasehold, must be held taxable as capital gain and not as ordinary income.\n \n \n 24\n Reversed and remanded for redetermination, in accordance with this opinion, of deficiencies in income and excess profits taxes of petitioner for its taxable year ended June 30, 1953.\n \n \n \n Notes:\n \n \n 1\n \"In 1954 the taxpayer sold the remainder of the Metropolitan Tract lease to a third party, and the Tax Court held that the proceeds of the sale were taxable under Section 117 as gain realized from the sale of property. From this adverse decision, the Commissioner has not appealed.\"\n \n \n ", "ocr": false, "opinion_id": 251924 } ]	Ninth Circuit	Court of Appeals for the Ninth Circuit	F	USA, Federal
252,085	Brown, Cameron, Per Curiam, Rives	1960-11-09	false	james-e-courtin-v-llewellyn-sharp-iv	null	James E. Courtin v. Llewellyn Sharp, IV	James E. COURTIN, Appellant, v. Llewellyn SHARP, IV, Appellee	James E. Courtin, New Orleans, La., for appellant., David C. Treen, New Orleans, La., for appellee.	null	null	null	null	null	null	null	null	null	null	1	Published	null	<parties data-order="0" data-type="parties" id="b323-4"> James E. COURTIN, Appellant, v. Llewellyn SHARP, IV, Appellee. </parties><br><docketnumber data-order="1" data-type="docketnumber" id="b323-6"> No. 18223. </docketnumber><br><court data-order="2" data-type="court" id="b323-7"> United States Court of Appeals Fifth Circuit. </court><br><decisiondate data-order="3" data-type="decisiondate" id="b323-8"> Nov. 9, 1960. </decisiondate><br><attorneys data-order="4" data-type="attorneys" id="b323-10"> James E. Courtin, New Orleans, La., for appellant. </attorneys><br><attorneys data-order="5" data-type="attorneys" id="b323-11"> David C. Treen, New Orleans, La., for appellee. </attorneys><br><p data-order="6" data-type="judges" id="b323-12"> Before RIVES, Chief Judge, and CAMERON and BROWN, Circuit Judges. </p>	[ "283 F.2d 255" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/283/283.F2d.255.18223.html", "author_id": null, "opinion_text": "283 F.2d 255\n James E. COURTIN, Appellant,v.Llewellyn SHARP, IV, Appellee.\n No. 18223.\n United States Court of Appeals Fifth Circuit.\n Nov. 9, 1960.\n \n Appeal from the United States District Court for the Eastern District of Louisiana; Ben C. Dawkins, Sr., Judge.\n James E. Courtin, New Orleans, La., for appellant.\n David C. Treen, New Orleans, La., for appellee.\n Before RIVES, Chief Judge, and CAMERON and BROWN, Circuit Judges.\n PER CURIAM.\n \n \n 1\n The petition for rehearing in the above-styled and numbered cause, 280 F.2d 345, which affirmed D.C., 176 F. Supp. 1, is hereby\n \n \n 2\n Denied.\n \n \n 3\n CAMERON, Circuit Judge (dissenting).\n \n \n 4\n The doubts which I entertained at the time I concurred in the result announced in the original opinion have, under the petition for rehearing, ripened into a conviction that the judgment of the lower court should be reversed and judgment rendered in favor of appellant Courtin.\n \n \n 5\n I agree that the case presents only a question of law. As is true with respect to all written contracts, the parties in advance thereof agree either orally, or in writing, or both, upon the terms which will go into the written contract. That is what happened here. Sharp himself wanted the oral negotiations to be put into writing because a part of the money was not then to be paid by Courtin. Sharp's lawyer, therefore, drew up a contract in which, as a matter of law, all prior negotiations were merged. It is clear to me that the written contract into which the parties had agreed to merge everything which had passed between them could not, as a matter of law, become effective until each party had signed and delivered a copy of the written contract to the other.\n \n \n 6\n This had not been done when the colt died. Courtin signed a copy of the contract and sent it to Sharp's lawyer. Sharp received it after the colt's death. There is testimony that Sharp had already signed a copy and delivered it to his lawyer. That could not, in my opinion, be construed as delivery to Courtin. As far as the record shows, no copy of the writing was ever delivered to Courtin. There was never a time, therefore, when Courtin could have enforced performance of the contract or recovered damages for its breach. A contract lacking in mutuality is not enforceable by either party.\n \n \n 7\n Since these facts appear in the record without dispute, I think the contract is unenforceable for lack of mutuality. I think, moreover, that the statutes of fraud of both Kentucky and Louisiana require such a contract as this to be in writing, but I do not find it necessary to reach that question.\n \n \n 8\n For the reasons stated, I respectfully dissent from the action of the Court in enforcing this contract.\n \n ", "ocr": false, "opinion_id": 252085 }, { "author_str": "Per Curiam", "per_curiam": false, "type": "020lead", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\nPER CURIAM.\nThe petition for rehearing in the above-styled and numbered cause, 280 F. 2d 345, which affirmed D.C., 176 F.Supp. 1, is hereby\nDenied.\n", "ocr": false, "opinion_id": 9447592 }, { "author_str": "Cameron", "per_curiam": false, "type": "040dissent", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\nCAMERON, Circuit Judge\n(dissenting) .\nThe doubts which I entertained at the time I concurred in the result announced in the original opinion have, under the petition for rehearing, ripened into a conviction that the judgment of the lower court should be reversed and judgment rendered in favor of appellant Courtin.\nI agree that the ease presents only a question of law. As is true with respect to all written contracts, the parties in advance thereof agree either orally, or in writing, or both, upon the terms which will go into the written contract. That is what happened here. Sharp himself wanted the oral negotiations to be put into writing because a part of the money was not then to be paid by Courtin. Sharp’s lawyer, therefore, drew up a contract in which, as a matter of law, all prior negotiations were merged. It is clear to me that the written contract into which the parties had agreed to merge everything which had passed between them could not, as a matter of law, become effective until each party had signed and delivered a copy of the written contract to the other.\nThis had not been done when the colt died. Courtin signed a copy of the contract and sent it to Sharp’s lawyer. Sharp received it after the colt’s death. There is testimony that Sharp had already signed a copy and delivered it to his lawyer. That could not, in my opinion, be construed as delivery to Courtin. As far as the record shows, no copy of the writing was ever delivered to Cour-tin. There was never a time, therefore, when Courtin could have enforced performance of the contract or recovered damages for its breach. A contract lacking in mutuality is not enforceable by either party.\nSince these facts appear in the record without dispute, I think the contract is unenforceable for lack of mutuality. I think, moreover, that the statutes of fraud of both Kentucky and Louisiana require such a contract as this to be in writing, but I do not find it necessary to reach that question.\nFor the reasons stated, I respectfully dissent from the action of the Court in enforcing this contract.\n", "ocr": false, "opinion_id": 9447593 } ]	Fifth Circuit	Court of Appeals for the Fifth Circuit	F	USA, Federal
858,632	Lynch, Selya, Souter	2013-04-22	false	lund-v-city-of-fall-river	Lund	Lund v. City of Fall River	Gary LUND, D/B/A Club Martinique, Plaintiff, Appellant, v. CITY OF FALL RIVER, MA; James Hartnett, City Planner; Fall River Zoning Board of Appeals; David Assad, as Chairman of the Fall River Zoning Board of Appeals; Gene Alves, as Vice Chairman of the Fall River Zoning Board of Appeals; Richard Mateus, as Member of the Fall River Zoning Board of Appeals; Andrea Merolla-Simister, as Member of the Fall River Zoning Board of Appeals; John Frank, III, as Member of the Fall River Zoning Board of Appeals, Defendants, Appellees	Brian R. Cunha, with whom Brian Cunha & Associates, P.C. was on brief, for appellant., Elizabeth Sousa, with whom the Office of the Corporation Counsel was on brief, for appellees.	null	null	null	null	null	null	null	null	null	null	0	Published	null	<parties id="b109-8"> Gary LUND, d/b/a Club Martinique, Plaintiff, Appellant, v. CITY OF FALL RIVER, MA; James Hartnett, City Planner; Fall River Zoning Board of Appeals; David Assad, as Chairman of the Fall River Zoning Board of Appeals; Gene Alves, as Vice Chairman of the Fall River Zoning Board of Appeals; Richard Mateus, as Member of the Fall River Zoning Board of Appeals; Andrea Merolla-Simister, as Member of the Fall River Zoning Board of Appeals; John Frank, III, as Member of the Fall River Zoning Board of Appeals, Defendants, Appellees. </parties><br><docketnumber id="b109-11"> No. 12-1758. </docketnumber><br><court id="b109-12"> United States Court of Appeals, First Circuit. </court><decisiondate id="Ag"> April 22, 2013. </decisiondate><br><attorneys id="b111-7"> <span citation-index="1" class="star-pagination" label="67"> 67 </span> Brian R. Cunha, with whom Brian Cunha & Associates, P.C. was on brief, for appellant. </attorneys><br><attorneys id="b111-8"> Elizabeth Sousa, with whom the Office of the Corporation Counsel was on brief, for appellees. </attorneys><br><judges id="b111-9"> Before LYNCH, Chief Judge, SOUTER, <a class="footnote" href="#fn" id="fn_ref"> </a> Associate Justice, and SELYA, Circuit Judge. </judges><div class="footnotes"><div class="footnote" id="fn" label=""> <a class="footnote" href="#fn_ref"> </a> <p id="b111-12"> Hon. David H. Souter, Associate Justice (Ret.) of the Supreme Court of the United States, sitting by designation. </p> </div></div>	[ "714 F.3d 65" ]	[ { "author_str": "Souter", "per_curiam": false, "type": "010combined", "page_count": 15, "download_url": "http://www.ca1.uscourts.gov/pdf.opinions/12-1758P-01A.pdf", "author_id": null, "opinion_text": " United States Court of Appeals\n For the First Circuit\nNo. 12-1758\n\n GARY LUND, d/b/a CLUB MARTINIQUE,\n\n Plaintiff, Appellant,\n\n v.\n\n CITY OF FALL RIVER, MA; JAMES HARTNETT, City Planner; FALL RIVER\n ZONING BOARD OF APPEALS; DAVID ASSAD, as Chairman of the Fall\n River Zoning Board of Appeals; GENE ALVES, as Vice Chairman of\nthe Fall River Zoning Board of Appeals; RICHARD MATEUS, as Member\n of the Fall River Zoning Board of Appeals; ANDREA\n MEROLLA-SIMISTER, as Member of the Fall River Zoning Board of\n Appeals; JOHN FRANK, III, as Member of the Fall River Zoning\n Board of Appeals,\n\n Defendants, Appellees.\n\n\n APPEAL FROM THE UNITED STATES DISTRICT COURT\n FOR THE DISTRICT OF MASSACHUSETTS\n [Hon. George A. O’Toole, Jr., U.S. District Judge]\n\n\n Before\n\n Lynch, Chief Judge,\n Souter,* Associate Justice,\n and Selya, Circuit Judge.\n\n\n Brian R. Cunha, with whom Brian Cunha & Associates, P.C. was\non brief, for appellant.\n Elizabeth Sousa, with whom the Office of the Corporation\nCounsel was on brief, for appellees.\n\n\n April 22, 2013\n\n\n\n \n Hon. David H. Souter, Associate Justice (Ret.) of the\nSupreme Court of the United States, sitting by designation.\n\f SOUTER, Associate Justice. Appellant, Gary Lund,\n\ncontends that the City of Fall River’s zoning ordinances violate\n\nthe First Amendment by preventing him from opening an adult\n\nentertainment establishment on land zoned industrial without\n\nproviding an adequate opportunity elsewhere. The district court\n\nrejected his claim, and we affirm.\n\n I\n\n By the terms of a Fall River ordinance, intending\n\nproviders of adult entertainment must obtain a “special permit,”\n\nsee Revised Code of Ordinances of the City of Fall River, Mass.,\n\nRev. Ordinances § 86-85, which may be granted only if the applicant\n\nmeets a variety of zoning conditions, see id. §§ 86-88, 86-201. So\n\nfar as it matters here, § 86-88 mandates a minimum amount of\n\nparking proportional to the size of the building to be used and\n\nrequires it to be surrounded by a four-foot, landscaped perimeter.\n\nAll parking and loading structures must be at least 50 feet from\n\nany street and 750 feet from any residence. Section 86-201 forbids\n\nadult entertainment on a site within an “Industrial District.”\n\n Lund applied for a special permit to open “Club\n\nMartinique” at 139 Front Street, even though he conceded that his\n\nproposal failed to comply with the ordinance. See J.A. 17. 139\n\nFront Street is within an Industrial District and is thus\n\ndisqualified as a site for adult entertainment by § 86-201, and\n\nbeyond that his proposal would have violated § 86-88 owing to the\n\n\n -2-\n\fpresence of parking spaces closer than 50 feet to the street and\n\nthe absence of landscaping. When the City denied his application,\n\nLund appealed to the Zoning Board of Appeals for variances from the\n\nordinances, which the Board denied, noting the unequivocal language\n\nof §§ 86-88 and 86-201. See, e.g., id. § 86-88 (“Any building\n\n. . . containing an adult use shall meet the setback requirements\n\n. . . .”); id. § 86-201 (“In an Industrial District, no structure\n\nshall be used except for one of the following uses: Existing mill\n\nbuildings may be used for art use, except adult use as defined in\n\nsection 86-81 is prohibited.” (ellipses omitted)).\n\n Lund then went to the Superior Court of the Commonwealth\n\nof Massachusetts for declaratory and injunctive relief, as well as\n\ncompensatory damages, alleging that the City’s ordinances violate\n\nthe First Amendment. He contended that sections 86-88 and 86-201,\n\nindividually and in combination, “den[y him] a reasonable\n\nopportunity and accommodation to open and operate, within the City,\n\nan adult entertainment club.” J.A. 21. The City removed the case\n\nto the district court, see 28 U.S.C. § 1441(a), which had\n\njurisdiction under 28 U.S.C. § 1331.\n\n There, the scope of disagreement narrowed substantially\n\nafter an evidentiary hearing on Lund’s request for preliminary\n\ninjunction, in which he and the City offered expert testimony about\n\nthe amount of legally available land in the City. At the close of\n\nevidence, Lund’s counsel stated, “I don’t think that there’s any\n\n\n -3-\n\ffacts (sic) in dispute here. And I know I said at the beginning\n\njust a preliminary injunction, but I don’t see why . . . you can’t\n\nmake a summary judgment decision as well. I don’t think there’s\n\nany factual dispute . . . between the two experts. There are\n\ndifferent scenarios that they’ve presented . . . .” Evidentiary\n\nHearing Tr. 59, June 3, 2010. The district court responded that\n\nthe disputed question was fairly discrete, as addressing the last\n\nof the conditions to be met by adult commerce regulation subject to\n\nintermediate scrutiny under City of Renton v. Playtime Theatres,\n\nInc., 475 U.S. 41 (1986): whether the ordinances blocking the\n\nproposed adult use provide reasonable alternative means for Lund to\n\nconduct his adult entertainment business.\n\n THE COURT: If that’s the framing of the issue . . . then\n I think we have all the evidence we need to decide the\n merits of the case one way or the other.\n MR. CUNHA [plaintiff’s counsel]: And I don't disagree.\n THE COURT: Does the [C]ity disagree with that?\n MS. PEREIRA [defendants’ counsel]: No, your Honor.\n\nEvidentiary Hearing Tr. 60, June 3, 2010; see also Lund v. City of\n\nFall River, No. 10-10310, 2012 WL 1856947, at 2 (D. Mass. May 22,\n\n2012) (“Lund conceded that the sole question presented here is\n\nwhether sections 86-88 and 86-201 provide reasonable alternative\n\navenues of communication.”).\n\n After consideration, the district court entered judgment\n\nfor the City on the authority of Renton. See Lund, 2012 WL\n\n1856947, at 2-6. The court found that out of the City’s 11,783\n\ndevelopable acres, 28.53 acres (or 0.24%), on 8 separate sites, are\n\n -4-\n\favailable as adult entertainment venues. Id. at 5–7. The court\n\nthus rejected Lund’s objections that he could not have adequate\n\nspace within that acreage without combining multiple parcels and\n\nundertaking costly redevelopment to comply with the ordinances; the\n\ndistrict court declined to declare any of the 28.53 acres\n\nunavailable due to such “economic” considerations. See id. at\n\n7–11. Finally, the court held that 0.24% of the City provided Lund\n\nwith reasonable room to exercise his protected expressive right,\n\nid. at 9–11, relying upon our decision in D.H.L. Associates, Inc.\n\nv. O’Gorman, 199 F.3d 50, 60 (1st Cir. 1999), which found no\n\nconstitutional deprivation in municipal zoning that left only 0.09%\n\nof developable land available for adult entertainment.\n\n This timely appeal followed, there being no question of\n\nour jurisdiction under 28 U.S.C. § 1291.\n\n II\n\n The standard of review that we apply turns on the\n\ncharacter of the proceeding in the period after the case was\n\nsubmitted to the court at the end of the colloquy just quoted.\n\nLund’s counsel expressly proposed treating his motion for a\n\npreliminary injunction as a motion for summary judgment, which\n\nwould leave it to the court to draw fair inferences from the\n\nundisputed material facts and determine whether Lund was entitled\n\nto judgment as a matter of law. See Jirau-Bernal v. Agrait, 37\n\nF.3d 1, 3 (1st Cir. 1994). Presumably he intended the court to act\n\n\n -5-\n\fas if cross-motions for summary judgement were before him, and so\n\nto grant judgment for the City if it was entitled to it as a matter\n\nof law. Looked at this way, the case here would present only\n\nissues of fair inference and legal entitlement, which we would\n\nreview de novo, as on a conventional appeal from summary judgment.\n\nSee Shafmaster v. United States, 707 F.3d 130, 135 (1st Cir. 2013).\n\n But the colloquy did not end with simple assent to\n\nproceed on summary judgment. The court’s response spoke of\n\n“hav[ing] all the evidence we need to decide the merits of the case\n\none way or the other,” and each counsel went on record as having no\n\ndisagreement. This sounds more like an agreement for plenary\n\nsubmission of the case to the judge as fact-finder, and this is\n\nwhat the judge ultimately understood. His order here on appeal\n\nbegins with citation to Federal Rule of Civil Procedure 65,\n\nsubsection (a)(2) of which authorizes a court to “advance the trial\n\non the merits and consolidate it with the hearing” on a motion for\n\npreliminary relief. This also seems to be what Lund’s counsel\n\nunderstood he had agreed to, for his appeal addresses the merits of\n\nthe ruling, not the procedural propriety of the route to reaching\n\nit. Accordingly, we think the better view is to see the order\n\nappealed not as one of summary judgment, but as the product of the\n\nprocedural crawl that then-Judge Breyer described in Federacion de\n\nEmpleados del Tribunal Gen. de Justicia v. Torres, 747 F.2d 35 (1st\n\nCir. 1984).\n\n\n -6-\n\f [W]here, in a nonjury case, ‘the basic dispute between\n the parties concerns the factual inferences . . . that\n one might draw from the more basic facts to which the\n parties have drawn the court’s attention,’ where ‘[t]here\n are no significant disagreements about those basic\n facts,’ and where neither party has ‘sought to introduce\n additional factual evidence or asked to present\n witnesses’ . . . . the standard for appellate oversight\n shifts from de novo review to clear-error review.\n\nEEOC v. Steamship Clerks Union, Loc. 1066, 48 F.3d 594, 603 (1st\n\nCir. 1995) (quoting Federacion de Empleados del Tribunal Gen. de\n\nJusticia, 747 F.2d at 36). It follows that our review standard is\n\nfor clear error on all issues not purely legal, though we will be\n\ncandid to say that the result would be the same if the examination\n\nwere de novo.\n\n III\n\n Lund’s exceptions to the district court’s ruling boil off\n\nat two. He contends it was error to find that 28.53 acres on 8\n\nsites were “available” for adult entertainment, and he argues that\n\nthe available land does not provide him a reasonable opportunity to\n\nopen an adult business.\n\n A\n\n After testimony and evidence from both parties’ experts,\n\nthe district court adopted the City’s contention that the\n\nordinances left 28.53 acres for adult entertainment, being 0.24% of\n\nthe City’s developable land, comprising 8 sites. The court found\n\nthat Lund’s contrary assertions “lack[ed] evidentiary support,\n\nwhereas the City’s figure [was] well-supported by the testimony and\n\n\n -7-\n\fexhibits presented.” Lund, 2012 WL 1856947, at 3. Lund argues\n\nthe contrary on three grounds.\n\n First, despite his concession in the district court that\n\nno further trial proceedings were necessary, he says now that a\n\nremand is needed to determine the effect of the § 86-88 limitation\n\nthat “[p]arking and loading facilities . . . be set back a minimum\n\nof . . . 750 feet from any structure used . . . for residential\n\npurposes.” He concedes that the district court correctly\n\nconsidered § 86-88’s 750-foot buffer requirement with respect to\n\nparking but argues that it failed to assess the impact of applying\n\nit to loading facilities. But the answer is that Lund never raised\n\nthis claim below. Save for his quotation of the ordinance in a\n\nfootnote, the word “loading” does not appear in his motion for a\n\npreliminary injunction, and he did not make this argument at the\n\nhearing. That is the end of the matter here. See McCoy v.\n\nMassachusetts Institute of Technology, 950 F.2d 13, 22 (1st Cir.\n\n1991) (“[T]heories not raised squarely in the district court cannot\n\nbe surfaced for the first time on appeal.”).\n\n Second, Lund points out that excluding sites covered by\n\nlong-term leases or requiring costly redevelopment would greatly\n\ndiminish the quantity of land “available,” and he contends that\n\ndeclining to weigh the consequences of these leases and costs in\n\nfiguring the quantity of available land in the City was error. The\n\ndistrict court rejected this claim as “primarily one of economic\n\n\n -8-\n\fimpact upon his speech-related business,” a consideration that the\n\nSupreme Court “has cautioned against considering in First Amendment\n\nanalyses.” Lund, 2012 WL 1856947, at 3.\n\n The district court was correct. The proper enquiry looks\n\nto restrictions imposed by the government, not to the market\n\neffects of other people’s commerce or the economics of site\n\nclearance. Even if we credit Lund’s representation that sites\n\nidentified by the district court are subject to long-term leases,\n\nthe fact that other competing private parties got ahead of him is\n\nnot alone of any moment in the constitutional analysis, and the\n\ncost of development is nothing more than a business consideration\n\nfor Lund to weigh. As the Renton Court put it, “That [plaintiffs]\n\nmust fend for themselves in the real estate market, on an equal\n\nfooting with other prospective purchasers and lessees, does not\n\ngive rise to a First Amendment violation.” 475 U.S. at 54; accord\n\nD.H.L. Associates, 199 F.3d at 60. Hence, whether it makes sense\n\nfor Lund to finance a costly redevelopment or to pay what current\n\ntenants would demand to break their leases are simply private\n\nbusiness considerations.1 It is worth noting that our sister\n\n\n 1\n It is true, as Lund notes, that we said in D.H.L. Associates\nthat the case would have been “entirely different” if the land had\nbeen encumbered by restrictive covenants precluding its use for\nadult entertainment. Appellant’s Br. 32-33 (quoting 199 F.3d at 60\nn.6). Lund argues that D.H.L. Associates makes clear that\nrestrictive covenants are, therefore, relevant to the availability\ndetermination. Maybe so. But restrictive covenants are\nsubstantive land-use restrictions enforceable by the governmental\npower of the courts, and, in any case, Lund failed to offer any\n\n -9-\n\fcircuits have been quick to reject similar arguments. See, e.g.,\n\nDavid Vincent, Inc. v. Broward Cnty., Fla., 200 F.3d 1325, 1334\n\n(11th Cir. 2000) (“[T]he economic feasibility of relocating to a\n\nsite is not a First Amendment concern.”); Ambassador Books & Video,\n\nInc. v. City of Little Rock, Ark., 20 F.3d 858, 864-65 (8th Cir.\n\n1994) (“[T]he cost factor is unimportant in determining whether the\n\nordinance satisfies the standards of the First Amendment.”); World\n\nWide Video of Wash., Inc. v. City of Spokane, 368 F.3d 1186,\n\n1199-200 (9th Cir. 2004).\n\n Third, Lund assigns error to the district court’s finding\n\nof 8 sites available for adult use. He argues that treating parcel\n\nC-11-7 as a possible site for more than one adult business was\n\nincorrect because its access drive would need to be relocated and\n\nthe existing structure torn down. He argues that parcels D-19-1,\n\nD-19-91, and D-19-93 could not accommodate 6 sites, as the district\n\ncourt found, because the lots would require sub-division. But Lund\n\ngives us no reason to see these as anything more than further\n\neconomic arguments that the district court rightly declined to\n\nconsider.\n\n Lund also contends that parcels D-19-1, D-19-91, and\n\nD-19-93 could not meet § 86-88’s requirement of a 50-foot setback\n\nfrom the street, contrary to evidence introduced by the City. Its\n\n\nevidence credited by the district court on that issue. The closest\nhe comes to suggesting otherwise is in a reference to an affidavit\nthat speaks of “restrictions” without further detail. J.A. 73.\n\n -10-\n\fexpert testimony, which the district court credited, was that\n\naccess drives could be constructed from William S. Canning\n\nBoulevard that would permit the buildings to be located 50 feet\n\nfrom the road and thus allow for 6 adult sites. See Evidentiary\n\nHearing Tr. 46-47, June 3, 2010. We have reviewed the maps\n\nsubmitted by the parties, along with the relevant testimony, and\n\nsee no error in the district court’s acceptance of the City’s\n\ntestimony that these parcels could have accommodated 6 sites.\n\nLund’s argument about the potential of these parcels therefore\n\nfails to discredit the district court’s conservative estimate that\n\n8 sites were available overall. See Lund, 2012 WL 1856947, at 5\n\nn. 10 (“The actual number available is surely greater.”).\n\n * * \n\n In sum, we find no error in the district court’s\n\ncalculation of available land and now turn to the constitutional\n\nquestion.\n\n B\n\n That calculation prefaces the last of the questions to be\n\naddressed under the Renton scheme for analyzing a First Amendment\n\nchallenge to zoning that limits adult businesses. If a zoning code\n\npasses muster as a time, place, and manner regulation, if it is\n\ncontent neutral, and if it advances a substantial governmental\n\ninterest, the question remaining is whether it leaves reasonable\n\nmeans of commercial adult activity as an alternative to its\n\n\n -11-\n\frestrictions.2 See Renton, 475 U.S. at 46-54; see also City of Los\n\nAngeles v. Alameda Books, Inc., 535 U.S. 425, 433-34 (2002)\n\n(plurality op.) (discussing the Renton framework); D.H.L.\n\nAssociates, 199 F.3d at 58-59 (same). Lund has conceded that the\n\nordinances survive Renton’s first two enquiries and that the City’s\n\ninterest is substantial, Lund, 2012 WL 1856947, at 2, leaving only\n\nthe issue of whether the district court correctly concluded that\n\nthe land available under the ordinances allows for “reasonable\n\nalternative avenues of communication.” Renton, 475 U.S. at 50; see\n\nalso id. at 54 (“[T]he First Amendment requires only that Renton\n\nrefrain from effectively denying respondents a reasonable\n\nopportunity to open and operate an adult theatre . . . .”).\n\n In D.H.L. Associates, we explained that this enquiry does\n\nnot ask “‘whether a degree of curtailment’ of speech exists, but\n\nrather ‘whether the remaining communicative avenues are adequate.’”\n\n199 F.3d at 59 (quoting Nat’l Amusements, Inc. v. Town of Dedham,\n\n43 F.3d 731, 745 (1st Cir. 1995)). A reviewing court looks to\n\n“multiple factors,” including “the percentage of acreage within the\n\nzone [for adult business use] compared [with] the acreage available\n\n\n\n 2\n In the district court, Lund argued that the only issue was\nthe sufficiency of space and sites to qualify as reasonable\nopportunity. See supra p. 4. In his brief here, he has suggested\nin passing that the complete ban on adult business in the\nindustrial zone removes the ordinances from the category of time,\nplace, and manner regulations, so as to entail more demanding\nscrutiny. He is obviously mistaken and in any event waived the\npoint in the district court.\n\n -12-\n\fto commercial enterprises” and “[t]he number of sites available to\n\nadult entertainment businesses,” D.H.L. Associates, 199 F.3d at\n\n59-60, there being “no single dispositive evaluative\n\nconsideration.” Id. at 60.\n\n This comprehensive canvas accords with the approaches of\n\nother circuits, which have understood the final Renton prong as\n\ncalling for a general assessment of whether the ordinances “afford\n\na reasonable opportunity to locate and operate such a business.”\n\nTJS of N.Y., Inc. v. Town of Smithtown, 598 F.3d 17, 22 (2d Cir.\n\n2010); see also Isbell v. City of San Diego, 258 F.3d 1108, 1112\n\n(9th Cir. 2001) (“whether [the number of sites] . . . afford[s]\n\n. . . a reasonable opportunity”); Big Dipper Entm’t, L.L.C. v. City\n\nof Warren, 641 F.3d 715, 719 (6th Cir. 2011) (whether “a\n\n‘reasonable opportunity’ to open”); accord BZAPS, Inc. v. City of\n\nMankato, 268 F.3d 603, 606 (8th Cir. 2001) (rejecting similar\n\nchallenge because “numerous locations . . . remain available”);\n\nCtr. for Fair Pub. Policy v. Maricopa County, Arizona, 336 F.3d\n\n1153, 1170 (9th Cir. 2003) (statute survives “unless the government\n\nenactment will foreclose an entire medium of public expression [in]\n\na particular community” (internal quotation marks omitted)). The\n\nenquiry is necessarily “fact-intensive,” Big Dipper Entertainment,\n\nL.L.C., 641 F.3d at 719, and the issue of reasonable opportunity\n\n“must be resolved on a case-by-case basis,” Fly Fish, Inc. v. City\n\n\n\n\n -13-\n\fof Cocoa Beach, 337 F.3d 1301, 1310 (11th Cir. 2003) (internal\n\nquotation marks omitted).\n\n Here, we think the ordinances provide Lund the\n\nopportunity required. This conclusion claims substantial support\n\nfrom D.H.L. Associates, where we found no First Amendment violation\n\nin a Town’s restriction of all but 0.09% of developable land from\n\nadult entertainment purposes. The percentage available here is\n\nmore than twice as great, with 8 sites available in the City, as\n\ncompared with the 5 that we held sufficient in D.H.L. Associates.\n\nLund cannot break free of the gravitational pull of that case.3\n\n Lund calls D.H.L. Associates a distinguishable case and\n\nfaults the district court for not dealing with the differences\n\nbetween the Town of Tyngsboro (the defendant in D.H.L. Associates)\n\nand the City of Fall River. Lund cites the City’s urban character,\n\nits larger land mass, the comparatively small number of parcels\n\navailable for sale, the lack of an “adult overlay district” (in\n\ncontrast to Tyngsboro), the ban on adult entertainment in the\n\n\n 3\n There are cases from some circuits that would proceed\ndifferently if presented with evidence of strong competition from\nother adult entertainment companies vying for scarce real estate in\nthe City. See Fly Fish, Inc., 337 F.3d at 1309 (contrasting cases\nthat adopt a bright-line rule in which an ordinance can survive\nonly if “there are more reasonable sites available than businesses\nwith demand for them” with cases that adopt a more contextual\nsupply-and-demand test (internal quotation marks and citations\nomitted)). We express no opinion on this question because, as the\ndistrict court noted, “neither party has presented evidence that\nanyone other than Lund has opened or has sought to open an adult\nentertainment business under these ordinances.” Lund, 2012 WL\n1856947, at 5.\n\n -14-\n\fCity’s Industrial District, and the City’s lack of an explanation\n\nfor banning adult entertainment there. See Appellant’s Br. 38–44.\n\n But the district court made just the comparison Lund\n\nstresses, in contrasting rural Tyngsboro with Fall River, “one of\n\nthe largest industrial cities in Massachusetts,” Lund, 2012 WL\n\n1856947, at 5, while recognizing that “D.H.L. Associates, Inc.\n\nteaches only that a somewhat higher level of available land might\n\nbe necessary to assure reasonable alternative locations in a\n\ndeveloped urban environment than in an undeveloped rural one,” id.\n\nThe court’s conclusion thus rested on explicit consideration of the\n\nCity’s urban nature, and the City’s larger land mass was fully\n\nacknowledged in evaluating the percentage of available land. The\n\nnumber of parcels available for sale is an economic consideration\n\nthat has no role in the constitutional analysis, and if the City\n\nchooses to allow adult businesses in shopping centers but not in\n\nfactory districts, there is nothing obviously suspect in the\n\nchoice. In sum, the differences Lund identified between this case\n\nand D.H.L. Associates fail to render the precedent inapt or the\n\ndistrict court’s analysis inadequate.\n\n Lund’s remaining points touching on § 86-201 are\n\nessentially policy differences with the City, which do not rise to\n\nthe level of First Amendment significance. Because the City has\n\nprovided Lund with a reasonable opportunity for conduct protected\n\nby the First Amendment, we affirm the district court’s judgment.\n\n It is so ordered.\n\n -15-\n\f", "ocr": false, "opinion_id": 858632 } ]	First Circuit	Court of Appeals for the First Circuit	F	USA, Federal
398,670	, Garza, Rubin, Suttle	1981-02-18	false	duward-w-stone-v-the-city-of-wichita-falls	null	Duward W. Stone v. The City of Wichita Falls	Duward W. STONE, Plaintiff-Appellee, v. the CITY OF WICHITA FALLS, Et Al., Defendants-Appellants	H. P. Hodge, Jr., City Atty., Wichita Falls, Tex., for defendants-appellants., Larry Watts, Houston, Tex., for plaintiffappellee.	null	null	null	null	null	null	null	null	null	null	1	Published	null	<parties id="b297-4"> Duward W. STONE, Plaintiff-Appellee, v. The CITY OF WICHITA FALLS, et al., Defendants-Appellants. </parties><br><docketnumber id="b297-6"> No. 79-3940. </docketnumber><br><court id="b297-7"> United States Court of Appeals, Fifth Circuit. <a class="footnote" href="#fn" id="fn_ref"> * </a> Unit A </court><br><decisiondate id="b297-10"> Feb. 18, 1982. </decisiondate><br><attorneys id="b297-21"> H. P. Hodge, Jr., City Atty., Wichita Falls, Tex., for defendants-appellants. </attorneys><br><attorneys id="b297-22"> Larry Watts, Houston, Tex., for plaintiffappellee. </attorneys><br><judges id="b297-24"> Before RUBIN and GARZA, Circuit Judges, and SUTTLE <a class="footnote" href="#fn" id="fn_ref"> ** </a> , District Judge. </judges><div class="footnotes"><div class="footnote" id="fn" label=""> <a class="footnote" href="#fn_ref"> </a> <p id="b297-19"> Former Fifth Circuit case, Section 9(1) of Public Law 96-452 — October 14, 1980. </p> </div><div class="footnote" id="fn" label=""> <a class="footnote" href="#fn_ref"> </a> <p id="b297-28"> District Judge of the Western District of Texas, sitting by designation. </p> </div></div>	[ "668 F.2d 233" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/668/668.F2d.233.79-3940.html", "author_id": null, "opinion_text": "668 F.2d 233\n Duward W. STONE, Plaintiff-Appellee,v.The CITY OF WICHITA FALLS, et al., Defendants-Appellants.\n No. 79-3940.\n United States Court of Appeals,Fifth Circuit.\n \n 1\n Unit A\n \n \n 2\n Feb. 18, 1982.\n \n \n 3\n H. P. Hodge, Jr., City Atty., Wichita Falls, Tex., for defendants-appellants.\n \n \n 4\n Larry Watts, Houston, Tex., for plaintiff-appellee.\n \n \n 5\n Appeal from the United States District Court for the Northern District of Texas.\n \n \n 6\n Before RUBIN and GARZA, Circuit Judges, and SUTTLE, District Judge.\n \n BY THE COURT:\n \n 7\n Pursuant to the Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. § 1988 (1976 ed.), counsel for a party successful on appeal seeks fees for filing a brief in opposition to the unsuccessful party's application to the Supreme Court for a writ of certiorari. Having an inadequate record from which to determine the matter, we remand it to the district court to decide by applying the same standards to services rendered in seeking or opposing Supreme Court review that are applied to other appellate services.\n \n \n 8\n Whether attorney's fees should be awarded and, if so, the amount to be allowed are matters that should normally be determined in the first instance by a trial court, subject of course to appellate review. United States v. Texas Construction Co., 237 F.2d 705, 707 (5th Cir. 1955). Even if it is clear from the result obtained and the appropriate statutory or jurisprudential rule that fees should be allowed, the amount of services rendered, the appropriateness of such services, and the fixing of a reasonable amount in compensation for them are matters that cannot usually be resolved on the face of the record but involve the consideration of evidence even as to services rendered on appeal and in connection with a petition for certiorari in the Supreme Court. Id. See also Perkins v. Standard Oil Co., 399 U.S. 222, 90 S.Ct. 1989, 26 L.Ed.2d 534 (1970); McGowan v. King, Inc., 661 F.2d 48, 50 (5th Cir. 1981). The basic principle that the prevailing party is due only compensation for \"reasonable attorney's fee(s),\" 42 U.S.C. § 1988, necessarily implies an evaluation both of the necessity of rendering those services for which a fee is sought and of the reasonableness of the amount requested. Cf. S.Rep.No. 94-1011, 94th Cong., 2d Sess. 6, reprinted in (1976) U.S.Code Cong. & Ad.News 5908, 5913 (\"In computing the fee, counsel for prevailing parties should be paid, as is traditional with attorneys compensated by a fee-paying client, 'for all time reasonably expended on a matter.' \").\n \n \n 9\n On occasion, when the facts necessary to the determination of these matters are so clear from the face of the record and our knowledge of the services rendered before us that we, as an appellate court, are in a position to fix the amount due for services rendered on appeal, we may do so. Hutto v. Finney, 437 U.S. 678, 693-700, 98 S.Ct. 2565, 2574-78, 57 L.Ed.2d 522, 535-540 (1978) (affirming an award for appellate services made by the Eighth Circuit Court of Appeals, 548 F.2d 740, 743 (8th Cir. 1977)); Davis v. Roadway Express, Inc., 590 F.2d 140, 143-44 (5th Cir. 1979). These cases usually involve compensation only for preparation of a brief and oral argument, and we are sometimes able accurately to gauge what is reasonable for such effort.\n \n \n 10\n In this case, however, compensation is sought for filing a brief in opposition to an application to the Supreme Court for a writ. Neither the application, the supporting brief, nor the opposing brief are before us. We have no basis on which we can determine whether the issues raised in the application were sufficiently likely to be successful or were stated in such fashion that reasonably competent counsel should have considered it reasonable to expend time and effort in opposing the application. For a fee is not due counsel for every pain taken, but only for time reasonably expended. Jones v. Diamond, 636 F.2d 1364, 1381-82 (5th Cir. 1981) (en banc). Moreover, we have no way to determine whether the time for which fees are sought, 19.5 hours, was reasonably necessary to prepare the opposition.\n \n \n 11\n For these reasons, the petition is REMANDED to the district court.\n \n \n \n \n Former Fifth Circuit case, Section 9(1) of Public Law 96-452-October 14, 1980\n \n \n **\n District Judge of the Western District of Texas, sitting by designation\n \n \n ", "ocr": false, "opinion_id": 398670 } ]	Fifth Circuit	Court of Appeals for the Fifth Circuit	F	USA, Federal
377,138	Cummings, Sprecher, Tone	1980-05-22	false	david-neiman-dba-london-group-1974-v-rudolf-wolff-co-ltd-james	null	David Neiman D/B/A London Group (1974) v. Rudolf Wolff & Co., Ltd., James Gourlay and Ingleram Investments, Ltd.	David NEIMAN D/B/A London Group (1974), Plaintiff-Appellant, v. RUDOLF WOLFF & CO., LTD., James Gourlay and Ingleram Investments, Ltd., Defendants-Appellees	William J. Harte, Chicago, Ill., for plaintiff-appellant., Elliott Paskoff, New York City, Theodore J. Low, Chicago, Ill., for defendants-appellees.	null	null	null	null	null	null	null	Argued Feb. 15, 1980., Rehearing and Rehearing En Banc, Denied May 22, 1980.	null	null	66	Published	null	<parties data-order="0" data-type="parties" id="b1249-12"> David NEIMAN d/b/a London Group (1974), Plaintiff-Appellant, v. RUDOLF WOLFF & CO., LTD., James Gourlay and Ingleram Investments, Ltd., Defendants-Appellees. </parties><br><docketnumber data-order="1" data-type="docketnumber" id="b1249-16"> Nos. 79-1622, 79-1802. </docketnumber><br><court data-order="2" data-type="court" id="b1249-17"> United States Court of Appeals, Seventh Circuit. </court><br><otherdate data-order="3" data-type="otherdate" id="b1249-18"> Argued Feb. 15, 1980. </otherdate><br><decisiondate data-order="4" data-type="decisiondate" id="b1249-19"> Decided April 23, 1980. </decisiondate><br><otherdate data-order="5" data-type="otherdate" id="b1249-20"> Rehearing and Rehearing En Banc </otherdate><br><otherdate data-order="6" data-type="otherdate" id="b1249-21"> Denied May 22, 1980. </otherdate><br><attorneys data-order="7" data-type="attorneys" id="b1250-9"> <span citation-index="1" class="star-pagination" label="1190"> *1190 </span> William J. Harte, Chicago, Ill., for plaintiff-appellant. </attorneys><br><attorneys data-order="8" data-type="attorneys" id="b1250-10"> Elliott Paskoff, New York City, Theodore J. Low, Chicago, Ill., for defendants-appellees. </attorneys><br><p data-order="9" data-type="judges" id="b1250-11"> Before CUMMINGS, SPRECHER, and TONE, Circuit Judges. </p>	[ "619 F.2d 1189" ]	[ { "author_str": "Tone", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/619/619.F2d.1189.79-1802.79-1622.html", "author_id": null, "opinion_text": "619 F.2d 1189\n David NEIMAN d/b/a London Group (1974), Plaintiff-Appellant,v.RUDOLF WOLFF & CO., LTD., James Gourlay and IngleramInvestments, Ltd., Defendants-Appellees.\n Nos. 79-1622, 79-1802.\n United States Court of Appeals,Seventh Circuit.\n Argued Feb. 15, 1980.Decided April 23, 1980.Rehearing and Rehearing En Banc Denied May 22, 1980.\n \n William J. Harte, Chicago, Ill., for plaintiff-appellant.\n Elliott Paskoff, New York City, Theodore J. Low, Chicago, Ill., for defendants-appellees.\n Before CUMMINGS, SPRECHER, and TONE, Circuit Judges.\n TONE, Circuit Judge.\n \n \n 1\n This is a diversity action asserting claims arising out of silver transactions on the London Silver Market. Jurisdiction over the person of the defendants is asserted under the Illinois long-arm statute, Ill.Rev.Stat., ch. 110, § 17, applicable by virtue of Rule 4(e), Fed.R.Civ.P. Based on depositions, documents, and affidavits, the court dismissed the action for lack of jurisdiction, holding that the defendants' contacts with Illinois were insufficient to subject them to that state's jurisdiction. We reverse that decision with respect to two defendants.\n \n \n 2\n Plaintiff David Neiman is a citizen of Illinois. Defendant Rudolf Wolff and Company, Ltd., is a United Kingdom corporation with its office in London. Defendant James Gourlay is a British citizen.\n \n \n 3\n Wolff is in the business of trading in metals, including silver. It acts as broker and principal in transactions on the London Silver Market. It has had no connection with Illinois other than the events described below.\n \n \n 4\n Gourlay, who lives and works in London, was formerly employed by Wolff and later was engaged in the business of advising and counseling with respect to metal trading. For purposes of the present appeal, the parties stipulate that Gourlay was acting as Wolff's agent with respect to the events involved in this case.\n \n \n 5\n Plaintiff withdrew its claim against a third defendant, Ingleram Investments, Ltd., during oral argument in this court.\n \n \n 6\n Because the district court has decided the defendants' motion solely on the basis of written materials, Neiman need only show a prima facie case for personal jurisdiction. O'Hare International Bank v. Hampton, 437 F.2d 1173, 1176 (7th Cir. 1971); Data Disc, Inc. v. Systems Technology Associates Inc., 557 F.2d 1280, 1285 & nn.1 & 2 (9th Cir. 1977). In addition, Neiman is entitled not only to the acceptance of all undenied factual assertions in his submissions, but also to the resolution in his favor of all disputes about relevant facts. United States Railway Equipment Co. v. Port Huron & Detroit Railroad, 495 F.2d 1127, 1128 (7th Cir. 1974); O'Hare International Bank v. Hampton, supra, 437 F.2d at 1176.\n \n \n 7\n Some time in late 1973 or early 1974 Gourlay visited Chicago and called on William E. Casselman, a commodities broker, whom Gourlay had known in a prior business relationship. Casselman was with a Chicago firm called ACLI. After Casselman had asked Gourlay, whom he had not seen in a few years, what he was doing and Gourlay had responded that he was \"working on a tax shelter program,\" Gourlay went on to say, according to Casselman's deposition testimony, \"(W)e have devised a method of getting an interest deduction that looks . . . like it's a feasible situation.\" Gourlay explained the tax shelter program to Casselman and two or three of the latter's business associates in the ACLI firm.1 The device around which the program was built was known as a \"cash-and-carry\" transaction and was later explained by Gourlay in an affidavit filed in this case as follows:\n \n \n 8\n A \"cash-and-carry\" transaction is a straddle in which one purchases a quantity of silver for immediate delivery; the purchase price is wholly financed by a third party financier in a nonrecourse loan secured by the purchased silver and repaid with the proceeds of the sale of that silver on the due date of the loan; and, the buyer at the time of the purchase immediately sells the silver for delivery on the loan's due date.\n \n \n 9\n Casselman understood Gourlay to say that he contemplated that the cash-and-carry transactions he had in mind would be carried out through Wolff. According to Casselman, Gourlay also said that he and an associate had arranged financing for the transactions with I. Rochester, a Swiss banking firm. Thereafter, Casselman stated, he had several telephone conversations with Gourlay about the tax shelter program in which Gourlay supplied additional information.\n \n \n 10\n During 1974 Casselman placed orders for various customers that resulted in approximately twenty-five cash-and-carry transactions. All were handled through Gourlay with Wolff, some were financed by I. Rochester, and some were actively solicited by Casselman. Marshall Persky, another ACLI broker to whom, according to Casselman, Gourlay explained the cash-and-carry transactions during his visit to Chicago, testified by way of deposition that he entered into cash-and-carry transactions through Gourlay in late 1973, 1974, and 1975.2\n \n \n 11\n In the summer of 1974 David Neiman approached Casselman to discuss the possibility of using silver trading as a tax shelter. Casselman told Neiman about the device Gourlay had worked out and answered many questions asked by Neiman about that device. Casselman also said that Gourlay was planning to be in Chicago in the fall of 1974 and could meet with Neiman. Neiman asked Casselman to arrange a meeting. Some time thereafter, and before the luncheon meeting that was ultimately held, Casselman gave Neiman a copy of the form of loan agreement used for the I. Rochester financing.\n \n \n 12\n The luncheon meeting between Neiman, Gourlay, and Casselman was arranged for October 14, 1974, during a visit Gourlay was making to Chicago for other reasons. The accounts of the meeting presented in the depositions of Neiman and Casselman and the affidavit of Gourlay vary significantly. Neiman testified that in addition to asking many questions about the tax shelter device, silver trading, the Wolff firm, and Gourlay's relationship to Wolff, Neiman discussed with Gourlay the I. Rochester loan agreement form and asked for two specific changes on the form, which Gourlay said could be made.3 Neiman also testified that he and Gourlay discussed Wolff's commission rate, Neiman asking that it be reduced and Gourlay stating that it could not be reduced. Neiman concedes that no specific amounts of silver purchases were discussed but asserts that he did tell Gourlay that he would place substantial orders if the transactions could be handled as Gourlay had outlined.\n \n \n 13\n Neiman also testified that after lunch, while he and Gourlay were sharing a taxicab, he told Gourlay that if the changes he wanted in the I. Rochester form of loan agreement were made, Neiman \"thought we had a very large thing going.\"\n \n \n 14\n Gourlay's version of the meeting, as stated in his affidavit, was that he explained the cash-and-carry transaction and \"pointed out to Neiman that its attractiveness would depend on his individual financial and tax circumstances, and suggested that the situation could only be evaluated by him and his tax and financial advisers.\" Gourlay states that no proposals were made by any of the parties.\n \n \n 15\n The version Casselman gave in his deposition was that Neiman asked many questions about the tax shelter device and silver trading. He could not recall any discussion about the loan agreement form or the nature of the Wolff firm and its business. Casselman testified that Gourlay did not solicit business from Neiman but merely answered his questions.\n \n \n 16\n In November 1974 Neiman, in the name of \"the London Group,\" placed four orders for cash-and-carry transactions with Gourlay. The orders were placed through Casselman, who by then had moved to Florida. During the next few months Neiman placed three more orders directly with Gourlay on behalf of the London Group. As a result of these orders seven cash-and-carry transactions were concluded on the London Silver Market for the purchase and sale for future delivery of a total of 16,601,000 ounces of silver. All the transactions were handled by Wolff and financed by I. Rochester in the manner Gourlay had described in his conversations with Casselman and his associates and in his conversation of October 14, 1974 with Casselman and Neiman. The purchases were confirmed by written confirmation notices sent by Wolff to Neiman. These are the transactions out of which the claims in suit arise.\n \n \n 17\n Neiman has also presented evidence that Wolff, through Gourlay, had other contacts with Illinois during this period. Specifically, Ronald Richter testified by way of deposition about two meetings with Gourlay in Chicago, in October, 1974 and October, 1975. At these two meetings, each of which lasted less than an hour, Richter and Gourlay concluded cash-and-carry transactions involving $49 million worth of silver and option contracts for silver worth hundreds of millions of dollars. The terms of the cash-and-carry transactions had been worked out prior to the meeting, but Gourlay wanted to meet Richter and persons who knew Richter before concluding the transactions. In addition, smaller details were settled and the terms were perhaps clarified. Richter had only casually mentioned option contracts over the telephone prior to the meetings. Gourlay then successfully solicited Richter's business during their meetings.\n \n \n 18\n Neiman's amended complaint alleges claims for breach of contract against Wolff and Gourlay and an alternative claim for breach of warranty of authority against Gourlay. Also alleged is a claim against both defendants for what is designated as \"common law fraud\" but is later described as a conspiracy \"to deprive Neiman of the benefits of his contracts with Wolff.\" We consider first the issue of jurisdiction over the claims sounding in contract.\n \n I.\n \n 19\n Plaintiff's argument that, by reason of the events described above, Gourlay and Wolff were doing business in Illinois in 1974 in the traditional sense, requires little discussion. Mere occasional solicitation does not subject a defendant to the state's jurisdiction generally, i. e., as to claims not arising from the solicitation. Lindley v. St. Louis-San Francisco Ry., 407 F.2d 639, 642-43 (7th Cir. 1968); Scheidt v. Young, 389 F.2d 58 (3d Cir. 1968); Long v. Victor Products Corp., 297 F.2d 577 (8th Cir. 1961). Nor do isolated, sporadic transactions with residents of the forum state. See Charia v. Cigarette Racing Team, Inc., 583 F.2d 184, 189 (5th Cir. 1978). Nor does the acceptance elsewhere of orders resulting from the solicitation, which necessarily includes mailing confirmations into the state. See Bersch v. Drexel Firestone, Inc., 519 F.2d 974, 998-99 (2d Cir.), cert. denied, 423 U.S. 1018, 96 S. Ct. 453, 46 L. Ed. 2d 389 (1975). Accordingly, the assertion of personal jurisdiction over Gourlay and Wolff must rest on the Illinois long-arm statute, § 17 of the Illinois Civil Practice Act.\n \n II.\n \n 20\n We hold that personal jurisdiction exists with respect to the contract claims under § 17(1)(a), which confers jurisdiction over a cause of action arising from \"(t)he transaction of any business within this State.\" First, the Illinois courts have applied the quoted provision to sustain jurisdiction in circumstances analogous to those at bar. In Kropp Forge Co. v. Jawitz, 37 Ill.App.2d 475, 186 N.E.2d 76 (1962), defendant, after extensive negotiations by telephone, traveled to plaintiff's premises in Illinois for a quick inspection of the machinery to be sold. This was held sufficient for jurisdiction as \"activity in furtherance of\" the contract by the defendant in Illinois.4 See also United Air Lines, Inc. v. Conductron Corp., 69 Ill.App.3d 847, 26 Ill. Dec. 344, 387 N.E.2d 1272 (1979). Compare Koplin v. Thomas, Haab & Botts, 73 Ill.App.2d 242, 219 N.E.2d 646 (1966) with Koplin v. Saul Lerner Co., 52 Ill.App.2d 97, 201 N.E.2d 763 (1964). In fact, since § 17(1)(a) reaches as far as federal due process allows, its scope \"is measured by federal standards.\" Fisons, Ltd. v. United States, 458 F.2d 1241, 1250 (7th Cir. 1972), cert. denied, 405 U.S. 1041, 92 S. Ct. 1312, 31 L. Ed. 2d 581 (1972); Lakeside Bridge & Steel Co. v. Mountain State Construction Co., 597 F.2d 596, 598-99 (7th Cir. 1979), cert. denied --- U.S. ----, 100 S. Ct. 1087, 63 L. Ed. 2d 325 (1980).\n \n \n 21\n In our opinion, the foregoing activities of Gourlay in Illinois satisfy the due process requirement, as stated in Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1240, 2 L. Ed. 2d 1283 (1958), of \"some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.\" See also World-Wide Volkswagen Corp. v. Woodson, --- U.S. ----, ----, 100 S. Ct. 559, 567, 62 L. Ed. 2d 490 (1980); Lakeside Bridge & Steel Co. v. Mountain State Construction Co., supra. The defendants here, unlike the defendant in Lakeside, 597 F.2d at 601, themselves conducted activities within the forum state. Whether these activities make exercise of personal jurisdiction reasonable is, therefore, the focus of our inquiry.\n \n \n 22\n If we credit Neiman's version of the October 14, 1974 luncheon meeting with Casselman and Gourlay, as we must for present purposes, that meeting was a significant contact by the defendants with Illinois. Although this conversation, even by Neiman's own testimony, did not constitute the entire dealings between the parties or the entry into a completed contract, neither of these results is necessary to satisfy the requirements of due process. The conversation did constitute the bulk of the parties' negotiations about terms of the arrangement. A defendant's participation in the state in substantial preliminary negotiations leading to the contract in issue has been held a sufficient basis for long-arm jurisdiction, National Gas Appliance Corp. v. AB Electrolux, 270 F.2d 472 (7th Cir. 1959), cert. denied, 361 U.S. 959, 80 S. Ct. 584, 4 L. Ed. 2d 542 (1960), even under New York's long-arm statute, which does not extend as far as due process allows, Liquid Carriers Corp. v. American Marine Corp., 375 F.2d 951 (2d Cir. 1967). Although this luncheon meeting was not as prolonged a negotiation as those in National Gas Appliance and Liquid Carriers, a defendant's participation in one or two brief meetings in the forum state has been held sufficient for the exercise of personal jurisdiction when significant negotiation of important terms of the transaction occurs.5 Since, according to Neiman's version of the luncheon meeting, the discussion resulted in agreement on important terms of the arrangement, this contact with Illinois was very significant.\n \n \n 23\n Even if we credit Gourlay's version of the luncheon meeting, his conduct amounted to circumspect solicitation of business from Neiman. Gourlay, by his own account, conferred with Neiman at the October 14 meeting about cash-and-carry silver transactions Neiman proposed to make. Gourlay explained the transactions to Neiman with a view to interesting Neiman in engaging in the transactions, although cautioning him to do so only if they would suit Neiman's tax and financial objectives.\n \n \n 24\n Whichever version we credit, when the luncheon meeting is considered with Gourlay's solicitation of Casselman and other ACLI brokers in late 1973 or early 1974, Gourlay's conduct in Illinois was sufficient to permit the district court to exercise personal jurisdiction over Gourlay and his principal, Wolff. Gourlay's statements to the brokers when he called on Casselman at ACLI were plainly aimed at interesting them in securing investors in silver transactions on the London Silver Market from which he and Wolff would make a profit. His statements to Neiman had the same purpose. This purpose was achieved: numerous transactions were entered into, among them the seven Neiman transactions out of which the claims at bar arose. The efforts of Gourlay to obtain orders through brokers in Illinois from customers generally, and not merely from Neiman, and the resulting orders placed by brokers for customers other than Neiman are relevant to the due process issue under the Supreme Court's analysis in a tort context in World-Wide Volkswagen, supra.6 The Neiman transactions were \"not simply . . . isolated occurrence(s), but (arose) from the efforts of (Wolff) to serve, directly or indirectly, the market for its product in other States.\" 100 S. Ct. at 567. Moreover, Neiman's orders themselves cannot be regarded as a casual, fortuitous result of Gourlay's two trips to Illinois.7 Neiman placed the orders through Gourlay with Wolff as a result of Gourlay's activities in Illinois. Those activities were an important factor in the formation of the contracts out of which plaintiff's contract claim arises.8 Accordingly, Gourlay's activities in Illinois were substantial enough and important enough to the subject matter of the action to satisfy the minimum contacts requirement of due process.9\n \n III.\n \n 25\n Plaintiff alternatively asserts a tort claim labeled as common-law fraud but described as a conspiracy between Gourlay and Wolff \"to deprive Neiman of the benefits of his contracts with Wolff.\" Whether the tort claim is treated as a fraud claim or as a redundant claim for inducing breach of contract, no facts have been pleaded or shown elsewhere to support the claim or jurisdiction over it. The order of dismissal is affirmed with respect to the tort claim, without prejudice to plaintiff's right to seek to amend the pleadings to conform to the proof if evidence adduced later shows the existence of a claim in tort as to which defendants are subject to Illinois long-arm jurisdiction.\n \n \n 26\n The judgment is affirmed with respect to the tort claim and reversed with respect to claims sounding in contract as to defendants Gourlay and Wolff, and the case is remanded for further proceedings consistent with this opinion. The judgment is affirmed as to defendant Ingleram. Plaintiff shall recover one-half of its costs against Gourlay and Wolff. Ingleram shall recover its costs against plaintiff.\n \n \n 27\n AFFIRMED IN PART; REVERSED AND REMANDED IN PART.\n \n \n \n 1\n Casselman testified that Gourlay also explained the tax shelter to Marshall Persky and probably to Joseph Klein at ACLI during that visit. Both Persky and Klein denied discussing any business with Gourlay in Chicago at that time. Persky did testify, however, that he learned of cash-and-carry silver from Casselman about the time of Gourlay's visit and that he placed orders with Gourlay, presumably for customers, in late 1973, 1974, and 1975. Klein, who first met Gourlay in London in 1969, also testified to having conducted six cash-and-carry transactions at some point during this time period, but did not say that he learned of the shelter through either Gourlay or Casselman. As we have said, factual disputes are resolved in favor of Neiman\n \n \n 2\n As stated in note 1, Persky denied discussing any business with Gourlay in Chicago at that time, but testified that he learned of cash-and-carry silver from Casselman about the time of Gourlay's visit\n \n \n 3\n Neiman also testified that Casselman's stated reason for proposing to Neiman that he meet with Gourlay was to work out differences in the I. Rochester loan agreement form\n \n \n 4\n This alternative holding is to be accorded precedential weight. See Woods v. Interstate Realty Co., 337 U.S. 535, 537, 69 S. Ct. 1235, 1236, 93 L. Ed. 1524 (1949)\n \n \n 5\n See Moser v. Boatman, 392 F. Supp. 270, 274 (E.D.N.Y.1975) (personal jurisdiction existed where defendants, in two short meetings in forum state, \"were actively involved in at least preliminary . . . contractual negotiations in (forum state) where agreement on at least a number of the essential terms was apparently reached.\"); Mendelson v. Fleischmann, 386 F. Supp. 436 (S.D.N.Y.1973); ECC Corp. v. Slater Elec., Inc., 336 F. Supp. 148 (E.D.N.Y.1971). But see Viers v. Mounts, 466 F. Supp. 187, 191 (W.D.Va.1979)\n When a meeting in the forum state has been viewed as an insignificant portion of the negotiations concerning only minor details of the agreement, however, it has been held not to be sufficient to give a court personal jurisdiction over a defendant. See National Spinning Co. v. Talent Network, Inc., 481 F. Supp. 1243 (S.D.N.Y.1979); Luxury Air Service, Inc. v. Cessna Aircraft Co., 78 F.R.D. 410 (N.D.Ga.1978); Verner v. Moran Towing & Transp. Co., 258 F. Supp. 169 (S.D.N.Y.1966).\n \n \n 6\n See Hardy v. Pioneer Parachute Co., 531 F.2d 193, 195 (4th Cir. 1976) (\"No unconstitutional burden is imposed on a foreign corporation by requiring it to defend a suit in a forum located in a state where it has advertised and sold a product whose use gave rise to the cause of action.\"); Stephenson v. Jordan Volkswagen, Inc., 428 F. Supp. 195 (W.D.N.C.1977). Perhaps going a bit further is Restatement (Second) of Conflict of Laws § 36, Comment e (1971) (§ 36 is provision for individual defendants parallel to § 49 for nonresident corporate defendants, which is applicable here):\n It is . . . reasonable that a state should exercise judicial jurisdiction over a foreign (corporation) as to causes of action arising from an act done . . . in the state for pecuniary profit and having substantial consequences there even though the act is an isolated act not constituting the doing of business in the state.\n See also Vencedor Mfg. Co. v. Gougler Indus., Inc., 557 F.2d 886, 891 (1st Cir. 1977) (Coffin, C. J.) (\"After McGee (v. International Life Ins. Co., 355 U.S. 220, 78 S. Ct. 199, 2 L. Ed. 2d 223 (1957)) it seems fair to say that one who solicits in a state may be sued there if the transaction he has sought goes sour.\"); Sahatjian v. Woodlets, Inc., 466 F. Supp. 945 (D.Mass.1979); cf. also Peebles v. Murray, 411 F. Supp. 1174, 1178 (D.Kan.1976) (transaction of business for purposes of long-arm statute occurs \"when an individual is within or enters this state in person or by agent and, through dealing with another within the state, effectuates or attempts to effectuate a purpose to improve his economic conditions and satisfy his desires.\").\n \n \n 7\n Thus, this case is unlike Kaye-Martin v. Brooks, 267 F.2d 394 (7th Cir.), cert. denied, 361 U.S. 832, 80 S. Ct. 84, 4 L. Ed. 2d 75 (1959). See Scovill Mfg. Co. v. Dateline Elec. Co., 461 F.2d 897, 900 (7th Cir. 1972)\n \n \n 8\n The interest of the forum state and convenience, two factors not explicitly discussed in text, are often considered as part of a due process minimum contacts analysis. See Aftanase v. Economy Baler Co., 343 F.2d 187, 197 (8th Cir. 1965); Restatement (Second) of Conflict of Laws § 36, Comment e (1971) (§ 36 is parallel to § 49, which is applicable here). However, these have been viewed as secondary factors. Aaron Ferer & Sons Co. v. Atlas Scrap Iron & Metal Co., 558 F.2d 450, 456 n.10 (8th Cir. 1977). In the case at bar the former, which depends upon the relation of the plaintiff to the forum state, favors the exercise of jurisdiction here since Neiman is an Illinois resident. Although it may be inconvenient for defendants, an English corporation and citizen, to defend in Illinois, it would also be inconvenient for plaintiff to sue overseas. Given defendants' purposeful acts in Illinois, we do not find any inconvenience to amount to a denial of due process\n Similarly, even though the fact that forum state law is to govern a contract is often viewed as a factor favoring personal jurisdiction, we do not find that the fact that these sales were, according to the conditions printed on the reverse side of the confirmation notices, apparently to be governed by the rules and regulations of the London Silver Market requires us to deny personal jurisdiction.\n \n \n 9\n See Scovill Mfg. Co. v. Dateline Elec. Co., 461 F.2d 897 (7th Cir. 1972) (in contract action, personal jurisdiction existed over defendant-seller, where defendant started attending semiannual trade show in forum state in 1967, where discussions on sale began at July 1968 show, where negotiations elsewhere completed the contract, and where further discussions about details of production occurred at January 1969 and July 1969 trade shows). See also Bastille Properties, Inc. v. Hometels of America, Inc., 476 F. Supp. 175, 176-77 (S.D.N.Y.1979); American Contract Designers, Inc. v. Cliffside, Inc., 458 F. Supp. 735 (S.D.N.Y.1978); Xedit Corp. v. Harvel Industries Corp., Fidelipac, 456 F. Supp. 725, 727-28 (S.D.N.Y.1978); Northwest Animal Hospital, Inc. v. Earnhardt, 444 F. Supp. 10 (W.D.Okl.1977); Fieldcrest Mills, Inc. v. Mohasco Corp., 442 F. Supp. 424 (M.D.N.C.1977); Scott Paper Co. v. Scott's Liquid Gold, Inc., 374 F. Supp. 184 (D.Del.1974); H. K. Corp. v. Lauter, 336 F. Supp. 79 (N.D.Ga.1971)\n This case is distinguishable from Bersch v. Drexel Firestone, Inc., 519 F.2d 974, 999-1000 (2d Cir.), cert. denied, 423 U.S. 1018, 96 S. Ct. 453, 46 L. Ed. 2d 389 (1975). The main difference between Bersch and the case at bar is that Neiman's orders were the purposeful objective of both Gourlay's earlier visit to Casselman and his luncheon meeting with Neiman. In Bersch, no connection was shown between the earlier solicitation trip and the later grant of the IOS Canadian underwriting to Crang. Also, at least the first breakfast meeting was not set with the IOS underwriting in mind. In addition, the New York long-arm statute, unlike that of Illinois, does not reach to the full extent permitted by constitutional due process. Compare Longines-Wittnauer Watch Co. v. Barnes & Reinecke, Inc., 15 N.Y.2d 443, 261 N.Y.S.2d 8, 209 N.E.2d 68 (1965), cert. denied, 382 U.S. 905, 86 S. Ct. 241, 15 L. Ed. 2d 158 (1966), with Braband v. Beech Aircraft Corp., 72 Ill. 2d 548, 557, 21 Ill. Dec. 888, 892, 382 N.E.2d 252, 256 (1978), cert. denied, 442 U.S. 928, 99 S. Ct. 2857, 61 L. Ed. 2d 296 (1979) (quoting Nelson v. Miller, 11 Ill. 2d 378, 389, 143 N.E.2d 673, 679 (1957)).\n Defendants also urge that we follow Wessel Co. v. Yoffee & Beitman Management Corp., 457 F. Supp. 939, 941 (N.D.Ill.1978), and find that the facts here constitute not \"the transaction of business in Illinois (but) the transaction of business with an Illinois (resident).\" Wessel Co. is clearly distinguishable, however, since the only contacts defendant had with Illinois were interstate phone calls and mail concerning the transaction at issue.\n \n \n ", "ocr": false, "opinion_id": 377138 } ]	Seventh Circuit	Court of Appeals for the Seventh Circuit	F	USA, Federal
2,677,831	Gould, Lemelle, Silverman	2014-06-10	false	teichert-construction-v-secretary-of-labor	null	Teichert Construction v. Secretary of Labor	TEICHERT CONSTRUCTION, Petitioner-Appellant, v. SECRETARY OF LABOR, United States Department of Labor, Respondent-Appellee	Robert D. Peterson, Robert D. Peterson Law Corporation, Rocklin, CA, for Petitioner-Appellant., Allison G. Kramer, Louise McGauley Betts, Esquire, Charles F. James, Esquire, Heather R. Phillips, Esquire, U.S. Department of Labor Office of the Solicitor, Washington, DC, for Respondent-Appel-lee.	Agency	null	null	null	null	null	null	Submitted May 14, 2014.*	null	null	0	Unpublished	null	<parties id="b673-11"> TEICHERT CONSTRUCTION, Petitioner-Appellant, v. SECRETARY OF LABOR, United States Department of Labor, Respondent-Appellee. </parties><br><docketnumber id="b673-14"> No. 12-71508. </docketnumber><br><court id="b673-15"> United States Court of Appeals, Ninth Circuit. </court><br><otherdate id="b673-16"> Submitted May 14, 2014. <a class="footnote" href="#fn" id="fn_ref"> * </a> </otherdate><br><decisiondate id="b673-17"> Filed June 10, 2014. </decisiondate><br><attorneys id="b674-9"> <span citation-index="1" class="star-pagination" label="648"> 648 </span> Robert D. Peterson, Robert D. Peterson Law Corporation, Rocklin, CA, for Petitioner-Appellant. </attorneys><br><attorneys id="b674-11"> Allison G. Kramer, Louise McGauley Betts, Esquire, Charles F. James, Esquire, Heather R. Phillips, Esquire, U.S. Department of Labor Office of the Solicitor, Washington, DC, for Respondent-Appel-lee. </attorneys><br><judges id="b674-13"> Before: SILVERMAN and GOULD, Circuit Judges, and LEMELLE, District Judge. <a class="footnote" href="#fn" id="fn_ref"> * </a> </judges><div class="footnotes"><div class="footnote" id="fn" label=""> <a class="footnote" href="#fn_ref"> </a> <p id="b673-9"> The panel unanimously concludes this case is suitable for decision without oral argument. <em> See </em> Fed. R.App. P. 34(a)(2). </p> </div><div class="footnote" id="fn" label=""> <a class="footnote" href="#fn_ref"> </a> <p id="b674-10"> The Honorable Ivan L.R. Lemelle, District Judge for the U.S. District Court for the Eastern District of Louisiana, sitting by designation. </p> </div></div>	[ "578 F. App'x 647" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": 6, "download_url": "http://cdn.ca9.uscourts.gov/datastore/memoranda/2014/06/10/12-71508.pdf", "author_id": null, "opinion_text": " FILED\n NOT FOR PUBLICATION JUN 10 2014\n\n MOLLY C. DWYER, CLERK\n UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS\n\n\n\n FOR THE NINTH CIRCUIT\n\nTEICHERT CONSTRUCTION, No. 12-71508\n\n Petitioner-Appellant, OSHAC No. 10-0220\n\n v.\n\nSECRETARY OF LABOR, UNITED MEMORANDUM\nSTATES DEPARTMENT OF LABOR,\n\n Respondent-Appellee.\n\n Petition for Review of the Occupational\n Safety and Health Review Commission\n\n Submitted May 14, 2014\n San Francisco, California\n\nBefore: SILVERMAN and GOULD, Circuit Judges, and LEMELLE, District\nJudge.*\n\n Petitioner Teichert Construction (“Teichert”) petitions for review of the\n\nOccupational Safety and Health Review Commission’s (“OSHRC”) decision finding\n\nthree violations of the Occupational Safety and Health Act of 1970 (“the Act”) at\n\n\n This disposition is not appropriate for publication and is not precedent except as\nprovided by Ninth Circuit Rule 36-3.\n\n The panel unanimously concludes this case is suitable for decision without oral\nargument. See Fed. R. App. P. 34(a)(2).\n\n The Honorable Ivan L. R. Lemelle, District Judge for the U.S. District Court for\n*\n\nthe Eastern District of Louisiana, sitting by designation.\n\fTeichert’s construction site in Paso Robles, California. Because the OSHRC’s\n\nfindings are supported by substantial evidence, we affirm.\n\n Following an inspection by OSHA Compliance Officer Van Arden Howell,\n\nTeichert was issued a citation on February 1, 2010, alleging four serious violations of\n\nthe Act. The first violation was later dismissed by agreement of the parties. The\n\nremaining three alleged violations of: (1) 29 C.F.R. § 1926.601(b)(14) for failure to\n\ncheck and correct the brakes on a truck before placing the truck into service; (2) 29\n\nC.F.R. § 1926.651(j)(2) for failing to keep a spoil pile at least two feet from the edge\n\nof an excavation; and (3) 29 C.F.R. § 1926.652(b) for failing to comply with the\n\nprotective system for the excavation, designed by a registered professional engineer.\n\nAdministrative Law Judge Dennis L. Phillips (“ALJ”) held a hearing on Teichert’s\n\nobjections to the citations, and ultimately concluded that the three citations were\n\nsupported by the evidence. Teichert filed for discretionary review to the OSHRC,\n\nwhich declined review, making the ALJ’s ruling the final order of the OSHRC. 29\n\nC.F.R. § 2200.90(d).\n\n We must affirm the ALJ’s findings of fact “if supported by substantial evidence\n\non the record considered as a whole” 29 U.S.C. § 660(a), and we accept “reasonable\n\nfactual inferences drawn by the [ALJ].” Phelps Dodge Corp. v. Occupational Safety\n\n& Health Review Comm’n, 725 F.2d 1237, 1239 (9th Cir. 1984). Further, we “must\n\n\n 2\n\fuphold a decision of the OSHRC unless it is arbitrary and capricious, not in\n\naccordance with the law, or in excess of the authority granted by OSHA.” Loomis\n\nCabinet Co. v. Occupational Safety & Health Review Comm’n, 20 F.3d 938, 941 (9th\n\nCir. 1994).\n\n We first address the violation of 29 C.F.R. § 1926.601(b)(14). The regulation\n\nrequires that vehicles be inspected at the beginning of each shift. Teichert argues that\n\nthe evidence supports a conclusion that the truck’s brakes were inspected—pointing\n\nto employee George Marquez’s statement to Howell that he inspected the brakes.\n\nHowever, this evidence was rejected by the ALJ. The ALJ found that the required\n\nsafety sheets, which document when trucks are checked, were not filled out on the day\n\nof the accident. Further, the ALJ found that no safety sheet in the record showed that\n\nMarquez ever filed a safety sheet during the month before the accident. Accordingly,\n\nthe ALJ discredited Marquez’s claims and found that the truck had not been inspected.\n\n We may not overturn these credibility findings unless they are “‘inherently\n\nincredible or patently unreasonable.’” Todd Pac. Shipyards Corp. v. Dir., Office of\n\nWorkers Comp. Programs, U.S. Dep’t of Labor, 914 F.2d 1317, 1321 (9th Cir. 1990)\n\n(quoting Cordero v. Triple A Mach. Shop, 580 F.2d 1331, 1335 (9th Cir. 1978)). The\n\nALJ’s findings are neither. Marquez’s inability to explain why he did not fill out the\n\nsafety forms, and a lack of evidence that Marquez filled out the forms in the\n\n\n 3\n\fpast—coupled with the fact that a post-accident inspection revealed the brakes were\n\nout of alignment—supports the ALJ’s finding that the vehicle was not inspected on\n\nAugust 20 and was placed into service with a defect.\n\n We next address the violation of 29 C.F.R. § 1926.651(j)(2). That provision\n\nrequires all spoil—i.e., debris—to be kept at least two feet from the edge of an\n\nexcavation. The ALJ credited Howell’s testimony that he observed the spoil pile\n\nwithin inches of the excavation on August 25, 2009. Teichert argues that the pile\n\nmoved between the date of the accident (August 20) and the date of the inspection\n\n(August 25). Howell testified that he considered this possibility. But, after comparing\n\nthe photographs taken by the coroner’s office on the date of the accident with his own\n\nphotographs from the date of the inspection, Howell determined that the pile had not\n\nmoved between the two dates. The ALJ could accept this view.\n\n Teichert argues in the alternative that even if the pile was closer than two feet\n\nto the excavation, employees were not exposed to the hazard because they only\n\nentered the excavation through the bell holes. See Buffets, Inc., 21 BNA OSHC 1065\n\n(No. 03-2097, 2005) (finding that “the Secretary must show that employees are in fact\n\nexposed to a hazard”) (internal quotation marks omitted). The ALJ found that\n\nemployees were exposed to the hazard of falling debris in other areas of the\n\nexcavation. Specifically, he pointed to the testimony of Teichert employee Sean\n\n\n 4\n\fKennedy, who testified that employees work in the areas between the bell holes for\n\nvarious reasons—including to set a line pin, and to put sand on top of the pipe. Thus,\n\nemployees were exposed to the hazards created by the spoil pile on the edge of the\n\nexcavation.\n\n Finally, we address the violation of 29 C.F.R. § 1926.652(b) for failure to\n\ncomply with the protective system for the excavation, designed by a registered\n\nprofessional engineer (“RPE plan”). Teichert claims it was not following the RPE plan\n\nat the specific portion of the excavation at issue, but rather was complying “with the\n\nrequirements of the controlling safety standards.” The ALJ considered this argument,\n\nbut found that Teichert had stipulated that it was following the RPE plan, by agreeing\n\nprior to trial: “Pursuant to 29 C.F.R. § [1926.]652(b) (4), Respondent opted to have\n\nthe protective system for the trench designed by a registered professional engineer.”\n\nTeichert makes no argument here as to why the ALJ improperly relied on the\n\nstipulation.\n\n Based on Howell’s observation of the trench, and on the photographs of the\n\ntrench, the ALJ found that the pile was closer to the sloping system than permitted by\n\nthe RPE plan. Employees were exposed to the hazard of falling spoil because some\n\nemployees worked in the areas between the bell holes. This finding is supported by\n\nthe record and relies on evidentiary findings that we do not disturb.\n\n\n 5\n\fPETITION FOR REVIEW DENIED.\n\n\n\n\n 6\n\f", "ocr": false, "opinion_id": 2677831 } ]	Ninth Circuit	Court of Appeals for the Ninth Circuit	F	USA, Federal
42,284	Anderson, Birch, Hull, Per Curiam	2005-10-05	false	united-states-v-edward-melvin	null	United States v. Edward Melvin	UNITED STATES of America, Plaintiff-Appellee, v. Edward MELVIN, Defendant-Appellant	Anne R. Schultz, U.S. Attorney’s Office, Miami, FL, for Plaintiff-Appellee., Shereen J. Charlick, Kathleen M. Williams, Miami, FL, for Defendant-Appellant.	null	null	null	null	Non-Argument Calendar.	null	null	null	null	null	0	Unpublished	null	<parties data-order="0" data-type="parties" id="b814-4"> UNITED STATES of America, Plaintiff-Appellee, v. Edward MELVIN, Defendant-Appellant. </parties><br><docketnumber data-order="1" data-type="docketnumber" id="b814-7"> No. 05-10240 </docketnumber><docketnumber data-order="2" data-type="docketnumber" id="A8t"> D.C. Docket No. 04-60192-CR-MGC. </docketnumber><br><p data-order="3" data-type="summary" id="b814-8"> Non-Argument Calendar. </p><br><court data-order="4" data-type="court" id="b814-10"> United States Court of Appeals, Eleventh Circuit. </court><br><decisiondate data-order="5" data-type="decisiondate" id="b814-11"> Oct. 5, 2005. </decisiondate><br><attorneys data-order="6" data-type="attorneys" id="b814-23"> Anne R. Schultz, U.S. Attorney’s Office, Miami, FL, for Plaintiff-Appellee. </attorneys><br><attorneys data-order="7" data-type="attorneys" id="b814-24"> Shereen J. Charlick, Kathleen M. Williams, Miami, FL, for Defendant-Appellant. </attorneys><br><judges data-order="8" data-type="judges" id="b814-26"> Before ANDERSON, BIRCH and HULL, Circuit Judges. </judges>	[ "152 F. App'x 792" ]	[ { "author_str": "Per Curiam", "per_curiam": false, "type": "010combined", "page_count": 8, "download_url": "http://www.ca11.uscourts.gov/unpub/ops/200510240.pdf", "author_id": null, "opinion_text": " [DO NOT PUBLISH]\n\n\n IN THE UNITED STATES COURT OF APPEALS\n\n FOR THE ELEVENTH CIRCUIT\n FILED\n ________________________ U.S. COURT OF APPEALS\n ELEVENTH CIRCUIT\n October 5, 2005\n No. 05-10240\n THOMAS K. KAHN\n Non-Argument Calendar CLERK\n ________________________\n\n D. C. Docket No. 04-60192-CR-MGC\n\nUNITED STATES OF AMERICA,\n\n\n Plaintiff-Appellee,\n\n versus\n\nEDWARD MELVIN,\n\n Defendant-Appellant.\n\n ________________________\n\n Appeal from the United States District Court\n for the Southern District of Florida\n _________________________\n\n (October 5, 2005)\n\nBefore ANDERSON, BIRCH and HULL, Circuit Judges.\n\nPER CURIAM:\n\n Edward Melvin appeals his sentence of 100 months imprisonment, imposed\n\nfollowing his guilty plea as to knowingly and intentionally distributing and\n\fpossessing with intent to distribute a controlled substance, “crack” cocaine, within\n\n1,000 feet of a playground, in violation of 21 U.S.C. §§ 841(a)(1) and 860.\n\nBecause Melvin preserved his Booker 1 challenge, the government must show that\n\nany constitutional error in the district judge’s imposition of sentence was harmless\n\nbeyond a reasonable doubt. Here, the record does not establish harmless error,\n\nand, therefore, we VACATE and REMAND for resentencing.\n\n I. BACKGROUND\n\n Melvin was charged by indictment with three counts of knowingly and\n\nintentionally distributing and possessing with intent to distribute an unspecified\n\nquantity of a controlled substance, “crack cocaine,” within 1,000 feet of a\n\nplayground, in violation of 21 U.S.C. §§ 841(a)(1) and 860. He agreed to plead\n\nguilty without a written plea agreement, and without admitting to the drug\n\nquantities totaling 5.63 grams outlined in the government’s factual proffer. R3 at\n\n8-10. The court accepted the guilty plea in light of the government’s consent to\n\naccept the plea without an admission as to quantity. Id. at 10-11.\n\n The probation officer computed a base offense level of 28, using the drug\n\namounts alleged by the government, but not admitted by Melvin. There were no\n\nother enhancements. Melvin was awarded a three-level reduction for timely\n\n\n\n 1\n United States v. Booker, 534 U.S. ___, 125 S. Ct. 738 (2005).\n\n 2\n\facceptance of responsibility. This yielded a total offense level of 25. The\n\nprobation officer calculated Melvin’s criminal history score at ten points, resulting\n\nin a criminal history category of V. Accordingly, Melvin’s guidelines range was\n\n100 to 125 months imprisonment.\n\n Melvin challenged the computation of his offense level on the basis of\n\nBlakely v. Washington, 542 U.S. 296, 124 S. Ct. 2531 (2004). R2-28 at 2-3, 10.\n\nHe argued that Blakely should be applied to the federal sentencing guidelines and\n\nthat, if it were so applied, his base offense level would be 12, rather than 28,\n\nbecause he had not admitted to the quantity of drugs used in calculating it. Id. at 2.\n\nMelvin also objected to the computation of his criminal history score, contending\n\nthat giving multiple points for a single offense constitutes judicial fact-finding,\n\nprecluded by Blakely and Apprendi v. New Jersey, 530 U.S. 466, 120 S. Ct. 2348\n\n(2000). Id. at 11.\n\n Melvin argued, alternatively, that he should receive a downward departure\n\npursuant to U.S.S.G. §4A1.3 (2004) because his criminal history was over-\n\nrepresented by the assigned score, and pursuant to U.S.S.G. §5K2.11, because his\n\nconduct did not threaten the harm sought to be prevented by the drug statute he had\n\nviolated. Id. at 12-16. More specifically, he argued that his distribution of drugs\n\nwithin 1,000 feet of a playground was purely inadvertent, because his family’s\n\n\n\n 3\n\fresidence (the location from which he distributed the “crack” cocaine) was located\n\nnear a park with a playground. Id. at 14-16.2\n\n At sentencing, Melvin renewed his Blakely objections and reiterated that\n\n“[w]hen the quantities were recited [at the change-of-plea hearing, he had] made no\n\nagreements, no admissions, [and] no concessions” regarding any amount of\n\n“crack” cocaine. R4 at 7. The court overruled Melvin’s objections to the base\n\noffense level and the criminal history score on the basis of United States v. Reese,\n\n382 F.3d 1308 (11th Cir. 2004),3 and denied his requests for downward departure.\n\nR4 at 10, 22-23. With regard to the §5K2.11 request, the court concluded that\n\nMelvin’s offense conduct, selling “crack” cocaine “within [ ] a stone’s throw” of a\n\npark frequented by children, fell squarely within the harm contemplated by 21\n\nU.S.C. § 860. R4 at 12, 14.\n\n Melvin also raised a sixth objection, contending that the guidelines as a\n\nwhole were unconstitutional. Id. at 7. The court overruled this objection, again\n\nciting Reese, and sentenced Melvin to 100 months imprisonment as to each count,\n\n\n\n 2\n Melvin also objected to the omission of a three-level downward adjustment for acceptance\nof responsibility. R2-28 at 12. The probation officer corrected the calculation to account for this\noversight before the sentencing hearing.\n 3\n In Reese, we held that Blakely did not apply to the federal sentencing guidelines. Reese,\n382 F.3d at 1312. Following the Supreme Court’s further consideration in light of United States v.\nBooker, 534 U.S.__ , 125 S. Ct. 738 (2005), we vacated Reese’s sentence and remanded. United\nStates v. Reese, 397 F.3d 1337 (11th Cir. 2005).\n\n 4\n\fto be served concurrently, and 6 years supervised release as to each count, also to\n\nrun concurrently. Id. at 10, 24-25. Melvin now appeals the calculation of his base\n\noffense level in light of the unadmitted drug quantities.4\n\n II. DISCUSSION\n\n In United States v. Booker, 534 U.S. ___, 125 S. Ct. 738 (2005),5 the\n\nSupreme Court held that Blakely applied to the federal sentencing guidelines and\n\nthat the Sixth Amendment required that any fact that increased a defendant’s\n\nsentence beyond the maximum sentence authorized by the facts established by a\n\nplea or a jury verdict must be admitted by the defendant or proven to a jury beyond\n\na reasonable doubt. Id. at , 125 S. Ct. 755-56. We have explained that a Booker\n\nerror also results from the district court’s use of a mandatory guidelines scheme,\n\neven in the absence of any constitutional error. See United States v. Shelton, 400\n\nF.3d 1325, 1330-31 (11th Cir. 2005).\n\n Because Melvin preserved his Booker challenge in the district court, we\n\nreview the sentence de novo, but will reverse only if the error was harmful. See\n\nUnited States v. Paz, 405 F.3d 946, 948 (11th Cir. 2005) (per curiam). The burden\n\nis on the government to show that the error was harmless. To show that a\n\n\n 4\n The other issues raised before the court, but not argued in the briefs on appeal are deemed\nabandoned. See Cross v. United States, 893 F.2d 1287, 1289 n.4 (11th Cir. 1990).\n 5\n We now review Blakley arguments under Booker.\n\n 5\n\fconstitutional error was harmless, the government must demonstrate “beyond a\n\nreasonable doubt, that the error did not contribute to the defendant’s ultimate\n\nsentence.” United States v. Mathenia, 409 F.3d 1289, 1291 (11th Cir. 2005) (per\n\ncuriam) (citation omitted). To show non-constitutional harmless error, the\n\ngovernment is held to a less demanding standard, but must show that, viewing the\n\nproceedings in their entirety, the error had no effect or a very slight effect on the\n\nsentence. See id. at 1291-92. Here, the government concedes that the record\n\nestablishes both constitutional and non-constitutional error. We agree.\n\n A sentencing court’s determination of drug quantities, if it serves to increase\n\nan individual’s base offense level under the guidelines, is constitutional error. See\n\nUnited States v. Rodriguez, 398 F.3d 1291, 1298 (11th Cir.), cert. denied, __ U.S.\n\n__, 125 S. Ct. 2935 (2005). Here, in calculating the base offense level, the court\n\nrelied on drug quantities that were neither included in the indictment nor admitted\n\nby Melvin. The court’s determination was based on the government’s statements\n\nin the change-of-plea colloquy and on the statement of offense contained in the\n\npresentence investigation report. R4 at 6. Melvin never agreed to this or any other\n\nquantity, and specifically stated that he planned to contest the quantities asserted if\n\nit ever became necessary. R3 at 11; R4 at 6-7. Reliance on these quantities in\n\ncalculating the sentence thus amounted to a constitutional error. Further, the\n\n\n\n 6\n\fcourt’s treatment of the guidelines as mandatory constitutes statutory error.\n\n The government also concedes that the error here is not harmless. We agree.\n\nWhere it is unclear whether the court would have imposed the same sentence but\n\nfor the mandatory guidelines, the government cannot show that the error was\n\nharmless beyond a reasonable doubt. See United States v. Davis, 407 F.3d 1269,\n\n1271-72 (11th Cir. 2005) (per curiam).\n\n Here, the court did not indicate that it would have imposed the same\n\nsentence if the guidelines had been advisory. During sentencing, it discussed\n\noptions for a downward departure from the guidelines range, but was unable to\n\nfind a basis for such departure under U.S.S.G. §§4A1.3 and 5K2.11. R4 at 14, 18,\n\n23. Departures under these sections must be based on factors not necessarily\n\nencompassing those considered under 18 U.S.C. §3553(a). The court also stated\n\nthat it finds “lengthy incarcerated sentences for young men extremely difficult to\n\ngive,” and gave Melvin the lowest sentence permitted in his range. R4 at 23-24.\n\nFinally, the court commented that an appeal after Booker might bring a different\n\nresult. Id. at 23. We cannot say how the court would have sentenced Melvin had it\n\nnot believed the guidelines were mandatory. Consequently, as it has conceded, the\n\ngovernment cannot show the constitutional error was harmless beyond a reasonable\n\n\n\n\n 7\n\fdoubt.6\n\n\n\n III. CONCLUSION\n\n Therefore, because the government cannot meet its burden to show harmless\n\nerror, we VACATE and REMAND for resentencing under an advisory guidelines\n\nscheme.\n\n\n\n\n 6\n The same facts would result in a remand under the less stringent test for statutory harmless\nerror. The court specifically told Melvin that its decision was predicated on her being bound by a\nmandatory sentencing scheme. R4 at 23. Where the district court has indicated a desire to impose\na lesser sentence than that mandated by federal guidelines, we have remanded the case. See Shelton,\n400 F.3d at 1332-33, 1334. The facts here suggest that the court was concerned with the length of\nMelvin’s sentence. Thus, as the government has conceded, it cannot show the error had only a slight\neffect on the sentence imposed. See Mathenia, 409 F.3d at 1292.\n\n 8\n\f", "ocr": false, "opinion_id": 42284 } ]	Eleventh Circuit	Court of Appeals for the Eleventh Circuit	F	USA, Federal
42,273	Edmondson, Per Curiam, Restani, Wilson	2005-10-07	false	k-m-v-school-board-of-lee-county	null	K. M. v. School Board of Lee County	K.M. and J.M., Individually, and on Behalf of M.M., a Minor, Plaintiffs-Appellees, v. SCHOOL BOARD OF LEE COUNTY FLORIDA, Defendant-Appellant, State of Florida, Department of Management Services, Division of Administrative Hearings, Defendant	Edward S. Polk, Wagenfeld Levine, Miami, FL, Mara Shlaekman, Brian P. Knight, Conroy, Simberg, Ganon, Krevans & Abel, P.A., Hollywood, FL, for Defendant-Appellant., J. Michael Hussey, J. Michael Hussey & Associates, Paul E. Liles, Bower & Liles, P.A., Fort Myers, FL, for Plaintiffs-Appellees.	null	null	null	null	null	null	null	null	null	null	0	Unpublished	null	<parties id="b975-10"> K.M. and J.M., individually, and on behalf of M.M., a minor, Plaintiffs-Appellees, v. SCHOOL BOARD OF LEE COUNTY FLORIDA, Defendant-Appellant, State of Florida, Department of Management Services, Division of Administrative Hearings, Defendant. </parties><br><docketnumber id="b975-14"> No. 03-12358. </docketnumber><br><docketnumber id="b975-15"> D.C. Docket No. 02-00040 CV-FTM-29-DNF. </docketnumber><br><court id="b975-16"> United States Court of Appeals, Eleventh Circuit. </court><br><decisiondate id="b975-17"> Oct. 7, 2005. </decisiondate><br><attorneys id="b976-6"> <span citation-index="1" class="star-pagination" label="954"> 954 </span> Edward S. Polk, Wagenfeld Levine, Miami, FL, Mara Shlaekman, Brian P. Knight, Conroy, Simberg, Ganon, Krevans & Abel, P.A., Hollywood, FL, for Defendant-Appellant. </attorneys><br><attorneys id="b976-7"> J. Michael Hussey, J. Michael Hussey & Associates, Paul E. Liles, Bower & Liles, P.A., Fort Myers, FL, for Plaintiffs-Appellees. </attorneys><br><judges id="b976-10"> Before EDMONDSON, Chief Judge, WILSON, Circuit Judge, and RESTANI, <a class="footnote" href="#fn" id="fn_ref"> </a> Judge. </judges><div class="footnotes"><div class="footnote" id="fn" label=""> <a class="footnote" href="#fn_ref"> </a> <p id="b976-9"> Honorable Jane A. Restani, Chief Judge, United States Court of International Trade sitting by designation. </p> </div></div>	[ "150 F. App'x 953" ]	[ { "author_str": "Per Curiam", "per_curiam": false, "type": "010combined", "page_count": 16, "download_url": "http://www.ca11.uscourts.gov/unpub/ops/200312358.pdf", "author_id": null, "opinion_text": " [DO NOT PUBLISH]\n\n IN THE UNITED STATES COURT OF APPEALS\n\n FOR THE ELEVENTH CIRCUIT FILED\n _____________________\n U.S. COURT OF APPEALS\n ELEVENTH CIRCUIT\n No. 03-12358 October 7, 2005\n _____________________ THOMAS K. KAHN\n CLERK\n D. C. Docket No. 02-00040 CV-FTM-29-DNF\n\nK.M. and J.M., individually, and on behalf of M.M.,\na minor,\n\n Plaintiffs-Appellees,\n\n versus\n\nSCHOOL BOARD OF LEE COUNTY FLORIDA,\n\n Defendant-Appellant,\n\nSTATE OF FLORIDA, DEPARTMENT OF MANAGEMENT\nSERVICES, DIVISION OF ADMINISTRATIVE HEARINGS,\n\n Defendant.\n\n _______________________\n\n Appeal from the United States District Court\n for the Middle District of Florida\n _______________________\n\n (October 7, 2005)\n\fBefore EDMONDSON, Chief Judge, WILSON, Circuit Judge, and RESTANI,\nJudge.\n\nPER CURIAM:\n\n Defendant-Appellant School Board of Lee County (“Board”) appeals from\n\nthe award of monetary damages under 42 U.S.C. § 1983 for violation of the\n\nIndividuals with Disabilities in Education Act (“IDEA”), 20 U.S.C. §§ 1400 -\n\n1482.\n\n The Board appeals the denial of its motions for judgment as a matter of law\n\nand for a new trial. The Board argues that the district court erred in denying\n\njudgment as a matter of law because (1) § 1983 does not permit recovery for IDEA\n\nviolations, (2) even if such recovery was permitted, Plaintiffs did not establish the\n\nBoard had a policy or custom that inflicted Plaintiffs’ injury as § 1983 liability\n\nrequires and (3) Plaintiffs failed to establish that the Board’s acts were the\n\nproximate cause of any damages they suffered. The Board argues that the district\n\ncourt erred in denying its motion for a new trial because (1) the verdict was\n\nagainst the great weight of the evidence, (2) the jury ignored jury instructions,\n\nmisapprehended the issues, and was influenced by sympathy and prejudice, and\n\n(3) the district court erred in excluding certain testimony on the Board’s conduct.\n\n\n \n Honorable Jane A. Restani, Chief Judge, United States Court of International Trade sitting by\ndesignation.\n\n 2\n\f Because the evidence overwhelmingly supports Defendant’s position that\n\nthe Board had no policy or custom of denying potentially disabled students access\n\nto due process hearings or delaying delivery of student records to their families,\n\nwe reverse the district court’s denial of Defendant’s motion for judgment as a\n\nmatter of law and remand for further proceedings consistent with this opinion.\n\nBecause we reverse the district court’s decision, we deny Plaintiffs’ motion for\n\nattorney’s fees.\n\n\n\n STATEMENT OF FACTS\n\n\n\n M.M. was a student at Three Oaks Middle School (“Three Oaks”) in the Lee\n\nCounty School district. During his seventh and eighth grade years, his grades\n\nbegan to decline; and he exhibited problems with his behavior and attitude.\n\nM.M.’s mother and aunt, an Exceptional Student Education (“ESE”) teacher, met\n\nwith Three Oaks teachers and counselors to discuss M.M.’s problems in October\n\n2001. At the meeting, the family members and school officials prepared an\n\nAcademic Improvement Plan (“Plan”), which called for after-school tutoring, a\n\nfollow-up meeting in six weeks, and “informal screening” of M.M. The Mother\n\ntestified she understood this screening would be disability testing. The Board\n\n 3\n\fpresented testimony that informal screening was not an IDEA function and the two\n\ntests given to M.M. during the six-week period were not given as part of an ESE\n\nevaluation. The Plan did not recommend exceptional student services, and the\n\ndirector of Three Oaks’s ESE program testified that they did not usually make ESE\n\nreferrals during an initial Plan meeting. M.M.’s aunt asked if procedural\n\nsafeguards applied; school officials told her they were not necessary for a Plan.\n\n At the meeting, the Mother also requested M.M. be tested for attention\n\ndeficit disorder (“ADD”). School officials told her that M.M.’s pediatrician was\n\nthe appropriate party to perform such an evaluation. Later in October, the Mother\n\nobtained ADD diagnostic forms from M.M.’s pediatrician, which M.M.’s teachers\n\nfilled out.\n\n On 20 November 2001, before the follow-up meeting was scheduled to take\n\nplace, a teacher overheard M.M. making a threat against another teacher, Mrs.\n\nJones. M.M. said “If she gives me another bad grade I’m going to kill her.” The\n\nteacher wrote up the incident as a threat of violence against a teacher, for which\n\nthe School Board had a zero-tolerance policy.\n\n At M.M.’s disciplinary hearing on 29 November 2001, M.M. was suspended\n\nfor ten days and was assigned to the school district’s Alternative Learning Center\n\n(“ALC”) for forty-five days. M.M.’s parents told school officials M.M. had been\n\n 4\n\fdiagnosed with ADD.1 M.M.’s parents requested that he be given IDEA\n\nprocedural safeguards, including an administrative due process hearing before the\n\nDivision of Administrative Hearings (“DOAH”). The Mother testified that the\n\nThree Oaks principal told them that M.M. did not qualify for IDEA procedural\n\nsafeguards because he did not have a disability; the principal testified she did not\n\nsay this.\n\n On 7 December, the school sent a letter to M.M.’s parents advising them of\n\nthe hearing’s outcome and that the parents could obtain a review of the decision.\n\nThe same day, the parents retained a psychologist to evaluate M.M. On 10\n\nDecember, the parents delivered a letter to Three Oaks requesting that M.M.’s\n\ngrades and discipline records be available for pickup the next day and that certain\n\nforms which the new psychologist would use for evaluation be filled out by\n\nM.M.’s teachers. The school did not comply. On 13 December, when M.M.’s\n\nmother attempted to enroll him in ALC, she was informed she could not do so\n\nuntil 8 January.\n\n On 14 December, M.M.’s parents sent a letter to the Superintendent of the\n\nschool system, stating that the October meeting had placed the School District on\n\nnotice that M.M. had a potential disability. The letter requested that school\n\n 1\n In fact, M.M.’s pediatrician had declined to diagnose M.M. with ADD.\n\n 5\n\fofficials comply with the parents’ requests for forms and invoked the IDEA’s\n\n“stay put” clause to try to keep M.M. in regular classes. See 20 U.S.C. § 1415(j).\n\nThe letter asked for an IDEA due process hearing if those requests were not\n\ngranted.2\n\n On 18 December, the parents sent the District’s staff attorney a letter\n\nrequesting an IDEA due process hearing. The attorney’s response, regarding both\n\nletters, was that the school district did not agree that M.M. was entitled to IDEA\n\nprocedural safeguards. The attorney offered a reminder that the parents could\n\nrequest a due process hearing regarding M.M.’s assignment to ALC. On 20\n\nDecember, the parents sent a letter to the District’s attorney clarifying that they\n\nwanted an IDEA due process hearing. The parents declined the due process\n\nhearing about the ALC assignment and began home schooling M.M. on 20\n\nJanuary.\n\n The parents made two more requests for an IDEA due process hearing, on 7\n\nand 10 January. The School District’s attorney again advised the parents that they\n\nwere not entitled to an IDEA due process hearing, and no due process hearing was\n\never held. According to the director of the Board’s ESE program, this incident\n\n\n 2\n Whether M.M.’s parents’ letters before 20 December clearly asked for a due process hearing\nunder IDEA was disputed. This issue does not change our analysis; so for clarity we will refer to\nthese requests as for IDEA due process hearings.\n\n 6\n\fwas the only time in at least the previous three years that a parent requested an\n\nIDEA due process hearing and was not given one.\n\n Although a Florida Department of Education Rule requires schools to\n\nprovide copies of education records to parents within thirty days of a request for\n\nthe records, M.M.’s records were not produced until 30 January, more than thirty\n\ndays after the request. M.M’s father identified two other specific parts of the\n\nrecord that were turned over after 30 January. The Board claimed that production\n\nwas delayed because (1) the school-system’s two-week winter break was between\n\nthe request for records and their delivery and (2) M.M.’s records were difficult to\n\nlocate while being transported to and from the ALC facility.3 Before the request\n\nfor the cumulative file, Three Oaks had given M.M.’s father copies of records he\n\nspecifically requested.\n\n M.M.’s family brought suit under 42 U.S.C. § 1983, claiming the Board’s\n\nfailure to deliver M.M.’s complete records in thirty days and to provide M.M. an\n\nIDEA due process hearing or forward their request for a due process hearing to\n\nDOAH violated their right to due process under the Fifth and Fourteenth\n\nAmendments to the U.S. Constitution.\n\n\n\n 3\n Plaintiffs admitted that the winter break and records being transported to and from ALC likely\ncaused some delays in Three Oaks’ production of M.M.’s records.\n\n 7\n\f DISCUSSION\n\n\n\n We review de novo a district court’s denial of a motion for judgment as a\n\nmatter of law. Etienne v. Inter-County Sec. Group, 173 F.3d 1372, 1374 (11th Cir.\n\n1999). We consider the evidence in the light most favorable to the nonmoving\n\nparty. Id. We look to see if “the evidence presents sufficient disagreement to\n\nrequire submission to a jury, or whether it is so one-sided that one party must\n\nprevail as a matter of law.” Combs v. Plantation Patterns, 106 F.3d 1519, 1526\n\n(11th Cir. 1997) (quoting Anderson v. Liberty Lobby, Inc., 106 S.Ct. 2505, 2512\n\n(1986)). If the facts and inferences overwhelmingly support one party, such that\n\nreasonable people could not disagree about the verdict, then the motion should\n\nhave been granted. Id.\n\n We conclude that the district court erred in not granting judgment as a matter\n\nof law because Plaintiffs failed to present evidence sufficient to create a jury\n\nquestion about whether the Board’s policy or custom inflicted their damages; so,\n\nwe do not reach Defendant’s other arguments.\n\n\n\n\n 8\n\fMunicipal Liability under 1983\n\n\n\n At the outset, we stress that Plaintiffs sued the School Board itself, rather\n\nthan any individual officers of the School District. Local government bodies, such\n\nas school boards, may be held liable under § 1983 only for acts “‘of the\n\nmunicipality’ -- that is, acts which the municipality has officially sanctioned or\n\nordered.” Pembaur v. Cincinnatti, 106 S.Ct. 1292, 1298 (1986); see Cuesta v.\n\nSchool Board of Miami-Dade County, 285 F.3d 962, 967 (11th Cir. 2002). This\n\n“‘official policy’ requirement was intended to distinguish acts of the municipality\n\nfrom acts of employees of the municipality, and thereby make clear that municipal\n\nliability is limited to action for which the municipality is actually responsible.”\n\nPembaur, 106 S.Ct. at 1298. Plaintiffs have the burden to establish the existence of\n\na municipal policy.\n\n State law determines which bodies or persons may establish municipal\n\npolicy. Jett v. Dallas Independent School District, 109 S.Ct. 2702, 2723-24 (1989).\n\nUnder Florida law, final policymaking authority for a school district is vested in\n\nthe School Board. Fla. Stat. Ann. § 230. 22(1) (2001) (now codified at § 1001.41).\n\nThe Superintendent may recommend policies to the School Board, but is not given\n\nauthority to make final policy without the Board’s approval. Fla. Stat. Ann. §\n\n 9\n\f230.32 (2001) (now codified at § 1001.49). Nor does state law authorize any other\n\nemployee to make final policy for the Board. “[A]lthough authority to make\n\nmunicipal policy may be . . . delegated by an official who possesses such\n\nauthority[,]” Mandel v. Doe, 888 F.2d 783, 792 (11th Cir. 1989), there is no\n\nevidence the Board delegated its policymaking authority.\n\n Because Florida law identifies the School Board as the policymaker for the\n\nSchool District, a single decision by the Board may constitute School Board policy,\n\neven if not phrased as a formal policy statement. Cuesta, 285 F.3d at 967-68; Jett,\n\n109 S.Ct. at 2723-24. If, before a decision becomes final, the School Board ratified\n\nthe decision of a subordinate who did not have final policymaking authority, the\n\nBoard will be liable for that decision. Garvie v. City of Fort Walton Beach, 366\n\nF.3d 1186, 1189 (11th Cir. 2004); Thomas v. Roberts, 261 F.3d 1160, 1174 (11th\n\nCir. 2001), vacated on other grounds by, 122 S.Ct. 2653 (2002), reinstated by 323\n\nF.3d 950 (11th Cir. 2003).\n\n The School Board will also be responsible for multiple acts by subordinates\n\nthat constitute a custom, if that custom caused the plaintiff’s injury. McDowell v.\n\nBrown, 392 F.3d 1283, 1290 (11th Cir. 2004). A custom is a practice that has not\n\nreceived official approval, but is “so settled and permanent that it takes on the force\n\n\n\n\n 10\n\fof the law.” Id. Showing an isolated incident is not enough to establish custom;\n\nthe practice must be “persistent and widespread.” Id.\n\n\n\nThe Due Process Hearing\n\n\n\n For the Board to be liable under § 1983, Plaintiffs were required to show the\n\ndecision to deny M.M. an IDEA due process hearing was (1) made pursuant to a\n\ncustom or (2) made pursuant to a preexisting formal Board policy or (3) made\n\ndirectly by the Board, as the policymaker for the School District or (4) ratified by\n\nthe Board before the decision became final.\n\n Plaintiffs presented no evidence that any other students had ever been denied\n\nan IDEA due process hearing; therefore, Plaintiffs cannot establish the denial was\n\nmade pursuant to a custom. Plaintiffs do not point to a preexisting formal Board\n\npolicy and so do not establish that the decision to deny a hearing was made\n\npursuant to a preexisting official policy that compelled no hearing. Therefore,\n\nPlaintiffs must establish that either the Board itself made the decision to deny M.M.\n\n(in particular) an IDEA due process hearing or that the Board ratified the decision\n\nbefore it became final. So, we turn to the evidence Plaintiffs presented about who\n\nmade the decision to deny M.M. an IDEA due process hearing.\n\n 11\n\f Plaintiffs established: that the School District’s ESE Director was part of a\n\ngroup that determined M.M. was not eligible for the hearing; that this group met\n\nwith the Superintendent and discussed with him that M.M. was not eligible for the\n\nhearing; and that the School District’s staff attorney, who typically arranged IDEA\n\ndue process hearings with DOAH, communicated the decision to Plaintiffs.\n\n But none of this evidence demonstrates that the Board itself made or ratified\n\nthe decision. Plaintiffs presented no evidence that any of these individuals\n\ncommunicated with the Board members about M.M.’s situation. The only evidence\n\nPlaintiffs presented that the Board made – or ratified – the decision were the letters\n\nfrom the School District’s staff attorney informing M.M.’s family of the decision to\n\ndeny M.M. the due process hearing. We therefore turn our examination to these\n\nletters.\n\n The District’s staff attorney’s letters were written on School District\n\nstationery that listed the School Board members on the letterhead. The letters\n\nstated that “The District respectfully disagrees that . . . [M.M.] is entitled to the\n\n[IDEA’s] procedural safeguards” and “The District . . . does not believe that the\n\nIDEA applies to [M.M.]” These statements raise questions about whether this\n\ndetermination represented School Board policy. But, the letters do not say that the\n\nBoard made the pertinent IDEA decision for M.M. nor indicate that the Board even\n\n 12\n\fknew about M.M.’s situation. Nor do Plaintiffs establish that the School District’s\n\nstaff attorney was speaking for the Board when he wrote the letters - or that he ever\n\nhad been authorized to speak for the Board. The letterhead itself specified that a\n\ndifferent person was the “Board Attorney.” The attorney who wrote the letters was\n\na staff attorney of the School District. Standing alone, the letters, which speak only\n\nof “the District” and were written on behalf of an unspecified decision maker, are\n\ninsufficient to establish that the School Board made any decisions about M.M.\n\n Plaintiffs do not present evidence apart from the letters to demonstrate that\n\nthe letters were communicating a Board decision, or that any Board members even\n\nknew about M.M.’s situation before the lawsuit was filed. Plaintiffs never point to\n\na Board vote or other act or to a formal Board policy. Plaintiffs present no\n\nevidence that the Board discussed M.M.’s situation with anyone, including the\n\nSchool District’s staff attorney.\n\n The most favorable construal of Plaintiff’s evidence is that an ex officio\n\nmember of the Board, the Superintendent, made the decision to deny M.M. a due\n\nprocess hearing. With no evidence of any action – or even knowledge – by the\n\nBoard itself about M.M., this is insufficient to establish the Board had a policy.\n\n It is also insufficient to establish that the Board ratified the decision. To\n\nestablish ratification, Plaintiffs must “demonstrate that local government\n\n 13\n\fpolicymakers had an opportunity to review the subordinate’s decision and agreed\n\nwith both the decision and the decision’s basis” before it became final. Id.;\n\nThomas, 261 F.3d at 1174. As discussed above, no language in the letters or\n\nevidence in the trial record indicates the Board even knew about M.M.’s situation\n\nwhen the attorney’s letters were written. Therefore, the attorney’s letters do not\n\nshow that the Board had reviewed and agreed with the decision and its basis.\n\n Plaintiffs did not present sufficient evidence to create a jury question on\n\nwhether a Board policy or custom was the moving force behind denying M.M. a\n\ndue process hearing. Defendant’s motion for judgment as a matter of law should\n\nhave been granted.\n\n\n\nProduction of Complete Student Records\n\n\n\n Plaintiffs argue that the Board had a custom of delaying production of\n\ncomplete student records to families of children with disabilities. Plaintiffs\n\npresented testimony from two families of disabled children. The first requested\n\nrecords in September 1998; the mother testified she began receiving records the\n\nfollowing February or March, after she had filed for an IDEA due process hearing.\n\nThe second began litigation over records around September 1999. This mother\n\n 14\n\ftestified that she did not receive records in thirty days, might have received some\n\nwithin sixty days, and sporadically received more records throughout her litigation\n\nover them.\n\n The delay in producing M.M.’s records involved significantly different\n\ncircumstances. First, the district had not identified M.M. as a disabled student, as it\n\nmade clear when it denied him an IDEA due process hearing. Therefore, the denial\n\nof his records could not be pursuant to a custom of delaying complete copies of\n\nrecords to disabled students, as Plaintiffs argue. In addition, peculiar\n\ncircumstances arose during the thirty days following the request for M.M.’s\n\nrecords. For two weeks, the school system was on winter break; and few\n\nemployees were available to gather and copy records. Also, M.M.’s records were\n\nmoved among several locations because of his transfer to ALC and later\n\nwithdrawal from the school system. The Board presented uncontested testimony\n\nthat this movement complicated finding the records and delayed their production.\n\nNeither reason excuses the Board’s failure to provide the records within thirty\n\ndays; but, they do show that extenuating circumstances created a delay in the\n\nproduction of M.M.’s records.\n\n Although evidence shows that students’ records were delayed in three\n\ninstances, that circumstance alone does not establish a custom; there must be some\n\n 15\n\fconnection between the three incidents. See Church v. City of Huntsville, 30 F.3d\n\n1332, 1346 (11th Cir. 1994) (determining year-old incidents of homeless persons\n\nbeing arrested and removed from city were not shown to be connected to current\n\nincidents as necessary to support pervasive practice of displacing homeless\n\npersons). In this case, the difference in whether the district perceived the students\n\nas disabled, the two-year time gap, and the peculiar administrative difficulties of\n\nM.M.’s situation make M.M.’s case materially different from the other incidents\n\nand make Plaintiffs’ evidence inadequate to show a sufficient connection between\n\nthe incidents to demonstrate a custom. Defendant’s motion for judgment as a\n\nmatter of law should have been granted.\n\n Because the evidence overwhelmingly supports Defendant’s position that the\n\nBoard did not have a policy of denying students not yet determined to be disabled\n\naccess to IDEA due process hearings or a custom of delaying production of\n\ncomplete records to disabled students, we determine that the district court erred in\n\nnot granting Defendant’s motion for judgment as a matter of law. The decision of\n\nthe district court is therefore\n\n REVERSED.\n\n\n\n\n 16\n\f", "ocr": false, "opinion_id": 42273 } ]	Eleventh Circuit	Court of Appeals for the Eleventh Circuit	F	USA, Federal
252,867	Cameron, Jones, Rives	1960-12-30	false	anderson-a-bourg-and-loyal-s-ledet-v-united-states	null	Anderson A. Bourg and Loyal S. Ledet v. United States	Anderson A. BOURG and Loyal S. Ledet, Appellants, v. UNITED STATES of America, Appellee	Francis A. Ledet, Houma, La., for appellants., Brian S. Odem, Asst. U. S. Atty.,. Brownsville, Tex., William B. Butler, U.. S. Atty., Houston, Tex., for appellee.	null	null	null	null	null	null	null	null	null	null	17	Published	null	<parties data-order="0" data-type="parties" id="b172-3"> Anderson A. BOURG and Loyal S. Ledet, Appellants, v. UNITED STATES of America, Appellee. </parties><br><docketnumber data-order="1" data-type="docketnumber" id="b172-5"> No. 18281. </docketnumber><br><court data-order="2" data-type="court" id="b172-6"> United States Court of Appeals Fifth Circuit. </court><br><decisiondate data-order="3" data-type="decisiondate" id="b172-7"> Dec. 30, 1960. </decisiondate><br><attorneys data-order="4" data-type="attorneys" id="b172-20"> Francis A. Ledet, Houma, La., for appellants. </attorneys><br><attorneys data-order="5" data-type="attorneys" id="b172-21"> Brian S. Odem, Asst. U. S. Atty.,. Brownsville, Tex., William B. Butler, U.. S. Atty., Houston, Tex., for appellee. </attorneys><br><p data-order="6" data-type="judges" id="b172-22"> Before RIVES, CAMERON and: JONES, Circuit Judges. </p>	[ "286 F.2d 124" ]	[ { "author_str": "Rives", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/286/286.F2d.124.18281.html", "author_id": null, "opinion_text": "286 F.2d 124\n Anderson A. BOURG and Loyal S. Ledet, Appellants,v.UNITED STATES of America, Appellee.\n No. 18281.\n United States Court of Appeals Fifth Circuit.\n Dec. 30, 1960.\n \n Francis A. Ledet, Houma, La., for appellants.\n Brian S. Odem, Asst. U.S. Atty., Brownsville, Tex., William B. Butler, U.S. Atty., Houston, Tex., for appellee.\n Before RIVES, CAMERON and JONES, Circuit Judges.\n RIVES, Circuit Judge.\n \n \n 1\n The first count of the indictment charged the defendants with unlawfully importing a narcotic drug, to-wit, 41 grams of heroin hydrochloride, into the United States; and the second count charged them with unlawfully receiving, concealing and transporting said narcotic drug after it had been imported into the United States contrary to law. Each count charged a violation of 21 U.S.C.A. 174.1 The defendants were found guilty on both counts. Bourg was sentenced to imprisonment for six years, and Ledet was sentenced to imprisonment for seven years. Each defendant makes two contentions on appeal: 1. That the district court erred in denying his motion for a suppression of evidence; 2. That the district court erred in denying his motion for judgment of acquittal.\n \n \n 2\n Motion to Suppress.\n \n \n 3\n The district court exercised its discretion to entertain motions to suppress at the trial,2 and denied the motions. The evidence on the motions heard in the absence of the jury showed the following: Customs Agent Morgan stationed at Laredo, Texas, between 8:30 and 9:00 on the night ofOctober 29, 1959, 'received information from a reliable source3 that a new, red and white vehicle with Louisiana plates was in Nueva Laredo and that the two occupants of the vehicle had negotiated for quantity of narcotics, and that they had further put down a quantity of money, and that they were staying at the Virginia Courts.' He relayed the information by radio to several other agents who placed the Virginia Courts Motel under observation. At about 9:20 P.M. a red and white Ford automobile, with Louisiana license, was observed parked at the motel. At about 10:00 P.M. the car left the motel and was driven into Mexico. At about 10:40 P.M. the car returned, but was not then searched as the agents were not informed whether the narcotics had been delivered. At about 12:15 A.M., on October 30, the vehicle departed from the motel and proceeded north a short distance to a filling station. Agent Hazur testified that he had by that time learned by radio communication that the men were then in possession of a quantity of heroin. When the car stopped at the filling station, the agents ordered the occupants out, searched the car, discovered the narcotics, and arrested the defendants.\n \n \n 4\n There was no dispute but that the informant was a 'reliable source.' The peculiar description of the automobile, its location at the Virginia Courts Motel, its occupancy by two men, and its operation into and out of Mexico, all corresponded with the information from the 'reliable source.' The district court corrctly ruled, we think, that the information in the possession of the agents was sufficient to justify the search of the automobile. Draper v. United States, 1959, 358 U.S. 307, 79 S. Ct. 329, 3 L. Ed. 2d 327.\n \n \n 5\n Sufficiency of the Evidence.\n \n \n 6\n On the trial before the jury, the Government proved that Bourg was driving and admitted ownership of the automobile; that the narcotics were in a small brown paper bag underneath the right seat in which Ledet had been sitting; that on the front seat, covered with a white handkerchief, were two loaded .38 caliber revolvers and a box containing 29 cartridges.\n \n \n 7\n In conversations with the agents following the search and arrest, both defendants denied knowing anything about the presence of the heroin in the automobile. Upon the trial, Ledet took the stand in his own behalf and Bourg elected not to testify. Some pertinent facts were disclosed by their statements to the agents and by Ledet's testimony. Ledet was about 30 years of age and Bourg about 23. Both lived in Houma, Louisiana. They had known each other for several years. On Wednesday morning precedign their arrest, they had left Houma in Bourg's automobile and had driven 751 miles to Laredo, Texas, simply on a pleasure jaunt. When they left Houma, Bourg had the automobile and about $900 in money, while Ledet had only about $25. Bourg agreed to pay all expenses. They had visited the 'night spots' in Nueva Laredo.\n \n \n 8\n Bourg stated to the agents that he had given $800 to Ledet on the evening before their arrest, and that he did not known what Ledet wanted the money for. The agents asked him to repeat that statement to Ledet. 'And he stated to defendant Ledet, more or less, 'You remember, I gave you $800 yesterday.' And Defendant Ledet merely shook his head, and stated, 'No, you didn't give me $800.\"\n \n \n 9\n The Government argues that, by moving to suppress the evidence, both defendants impliedly admitted possession of the heroin. Since the indictment itself charged the defendants with possession, they had standing to move to suppress without any admission of possession. 'It is not consonant with the amenities, to put it mildly, of the administration of criminal justice to sanction such squarely contradictory assertions of power by the Government.' Jones v. United States, 1960, 362 U.S. 257, 263, 264, 80 S. Ct. 725, 732, 4 L. Ed. 2d 697.\n \n \n 10\n In circumstantial evidence cases, 'the test to be applied on motion for judgment of acquittal and on review of the denial of such motion is not simply whether in the opinion of the trial judge or of the appellate court the evidence fails to exclude every reasonable hypothesis, but that of guilt, but rather whether the jury might reasonably so conclude.' Vick v. United States, 5 Cir., 1954, 216 F.2d 228, 232; see also, Riggs v. United States, 5 Cir., 1960, 280 F.2d 949, 955, and cases collected in footnote 7.\n \n \n 11\n Could the jury reasonably conclude from the evidence that both defendants held possession of the heroin? If not, then as to each defendant, was the evidence inconsistent with every reasonable hypothesis of his innocence? The defendants rely upon United States v. Landry, 7 Cir., 1958, 257 F.2d 425, and Jackson v. United States, 1957, 102 U.S.App.D.C. 109, 250 F.2d 772. More closely in point, we think, is Guevara v. United States, 5 Cir., 1957, 242 F.2d 745. In that case only the owner and driver of the automobile was prosecuted. A package containing 50 marijuana cigarettes had been found on the floor of Guevara's automobile between the driver's seat and the passenger's seat, and a wooden club had been found under Guevara's seat. After a full discussion, we answered the query as to the sufficiency of the evidence to sustain Guevara's conviction:\n \n \n 12\n 'Was then the jury warranted in deducing from the evidence inferences which excluded every reasonable hypothesis but that of guilt? We think not. The cigarettes were in such position in the car that they could easily have been placed in the unlocked vehicle by any person. Under the circumstances here proved, there is no rational connection between ownership and possession of the automobile and possession of the cigarettes. For all that the present evidence shows, it is just as reasonable to believe that the cigarettes belonged to the passenger as to the appellant. A jury must not be left to speculate and surmise in a criminal case, merely hoping that they are drawing the proper inference.' Guevara v. United States, supra at page 747.\n \n \n 13\n The present case, on its facts, is distinguishable. The two defendants had known each other for several years. They set out on this long trip together. One had $900, the other only $25.00. When arrested, Bourg had $87.50 and Ledet nothing. Bourg's statement that he had given Ledet $800 may or may not have been believed. There were other circumstances, their trips together into and out of Mexico, their departure from the motel after midnight. Particularly damning were the two loaded revolvers and the box of ammunition on the front seat with the defendants. No reasonable explanation was given of the intended use of these firearms. Ledet's actions at the time of arrest were described by Customs Agent Glenn, as follows:\n \n \n 14\n 'Mr.Rody asked, to the best of my recollection, Mr. Ledet, who was sitting on the right side, he asked them to get out of the automobile. I was standing near Mr. Rody. Mr. Ledet did not orally refuse to get out of the automobile, but he hesitated. He kept moving his hand across the seat. And Mr. Rody repeatedly told him, 'Please get out of the automobile, before I have to shoot.' Finally, when he did not, Mr. Rody jerked the door open and pulled him out.'\n \n \n 15\n We conclude that a reasonable jury could properly accept the evidence as adequate to support a conclusion of both defendants' guilt beyond a reasonable doubt. The judgments are therefore\n \n \n 16\n Affirmed.\n \n \n \n 1\n 'Whoever fraudulently or knowingly imports or brings any narcotic drug into the United States or any territoryunder its control or jurisdiction, contrary to law, or receives, conceals, buys, sells, or in any manner facilitates the transportation, concealment, or sale of any such narcotic drug after being imported or brought in, knowing the same to have been imported or brought into the United States contrary to law, or conspires to commit any of such acts in violation of the laws of the United States, shall be imprisoned not less than five or more than twenty years and, in addition, may be fined not more than $20,000. For a second or subsequent offense (as determined under Section 7237(c) of the Internal Revenue Code of 1954), the offender shall be imprisoned not less than ten or more than forty years and, in addition, may be fined not more than $20,000\n 'Whenever on trial a violation of this section the defendant is shown to have or to have had possession of the narcotic drug, such possession shall be deemed sufficient evidence to authorize conviction unless the defendant explains the possession to the satisfaction of the jury.' 21 U.S.C.A. 174.\n \n \n 2\n Rule 14(e), Federal Rules of Criminal Procedure, 18 U.S.C.A\n \n \n 3\n He was not cross-examined as to the identity or reliability of the source\n \n \n ", "ocr": false, "opinion_id": 252867 } ]	Fifth Circuit	Court of Appeals for the Fifth Circuit	F	USA, Federal
126,995	null	2003-01-27	false	langford-v-blackburn-judge-united-states-district-court-for-the-northern	Langford	Langford v. Blackburn, Judge, United States District Court for the Northern District of Alabama	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "537 U.S. 1175" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/US/537/537.US.1175.02-7680.html", "author_id": null, "opinion_text": "537 U.S. 1175\n LANGFORDv.BLACKBURN, JUDGE, UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA, ET AL.\n No. 02-7680.\n Supreme Court of United States.\n January 27, 2003.\n \n 1\n CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT.\n \n \n 2\n C. A. 11th Cir. Certiorari denied.\n \n ", "ocr": false, "opinion_id": 126995 } ]	Supreme Court	Supreme Court of the United States	F	USA, Federal
253,152	Kirkpatrick, Martin, Rich, Smith, William, Worley	1961-02-21	false	mercoid-corporation-v-airborne-instruments-laboratory-inc	null	Mercoid Corporation v. Airborne Instruments Laboratory, Inc. (Cutler-Hammer, Inc., Assignee, Substituted)	MERCOID CORPORATION, Appellant, v. AIRBORNE INSTRUMENTS LABORATORY, INC. (Cutler-Hammer, Inc., Assignee, Substituted), Appellee	Byron, Hume, Groen & Clement, Ger-ritt P. Groen, Chicago, 111., for appellant., Pennie, Edmonds, Morton, Barrows & Taylor, Clarence M. Fisher, Washington, D. C. (Harold A. Traver, New York City, of counsel), for appellee.	null	null	null	null	null	null	null	null	null	null	0	Published	null	<parties data-order="0" data-type="parties" id="b243-7"> MERCOID CORPORATION, Appellant, v. AIRBORNE INSTRUMENTS LABORATORY, INC. (Cutler-Hammer, Inc., Assignee, Substituted), Appellee. </parties><docketnumber data-order="1" data-type="docketnumber" id="APE"> Patent Appeal No. 662L </docketnumber><br><court data-order="2" data-type="court" id="b243-9"> United States Court of Customs and Patent Appeals. </court><br><decisiondate data-order="3" data-type="decisiondate" id="b243-10"> Feb. 21, 1961. </decisiondate><br><attorneys data-order="4" data-type="attorneys" id="b243-18"> Byron, Hume, Groen & Clement, Ger-ritt P. Groen, Chicago, 111., for appellant. </attorneys><br><attorneys data-order="5" data-type="attorneys" id="b243-19"> Pennie, Edmonds, Morton, Barrows & Taylor, Clarence M. Fisher, Washington, D. C. (Harold A. Traver, New York City, of counsel), for appellee. </attorneys><br><p data-order="6" data-type="judges" id="b243-20"> Before WORLEY, Chief Judge, RICH, MARTIN, and SMITH, Judges, and Judge WILLIAM H. KIRKPATRICK. <a class="footnote" href="#fn" id="fn_ref"> * </a> </p><div class="footnotes"><div class="footnote" data-order="7" data-type="footnote" id="fn" label=""> <a class="footnote" href="#fn_ref"> </a> <p id="b243-13"> United States Senior District Judge for the Eastern District of Pennsylvania, designated to participate <em> in place of Judge O’Connell, </em> pursuant to provisions of Section 294(d), Title 28, United States Code. </p> </div></div>	[ "287 F.2d 189", "48 C.C.P.A. 857" ]	[ { "author_str": "Smith", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/287/287.F2d.189.6621.html", "author_id": null, "opinion_text": "287 F.2d 189\n MERCOID CORPORATION, Appellant,v.AIRBORNE INSTRUMENTS LABORATORY, INC. (Cutler-Hammer, Inc., Assignee, Substituted), Appellee.\n Patent Appeal No. 6621.\n United States Court of Customs and Patent Appeals.\n February 21, 1961.\n \n Byron, Hume, Groen & Clement, Gerritt P. Groen, Chicago, Ill., for appellant.\n Pennie, Edmonds, Morton, Barrows & Taylor, Clarence M. Fisher, Washington, D. C. (Harold A. Traver, New York City, of counsel), for appellee.\n Before WORLEY, Chief Judge, RICH, MARTIN, and SMITH, Judges, and Judge WILLIAM H. KIRKPATRICK.\n SMITH, Judge.\n \n \n 1\n Appellee-applicant applied to register, on the Principal Register, the mark MICROtrol for \"electrical gauging and control apparatus for machine tools.\"1 The application alleges first use of the mark in October 1955.\n \n \n 2\n Appellant-opposer opposed the registration on the grounds of likelihood of purchaser confusion or deception as to the source or origin of the goods, citing its three registered marks: (1) MERCOID2 for \"Limiting, signalling and safety devices — namely, light actuated flame detectors and mercury contact devices, temperature actuated flame detectors, barometrically operated devices, thermocouple operated devices, timing devices, differential pressure and temperature devices, vacuum actuated controlling and indicating devices and float actuated controlling and indicating devices;\"3 (2) MERCOID CONTROL appearing in a globe design with the phrase \"used the world over\" thereon \"for electric controls for electric switches, temperature-operated electric switches, pressure operated electric switches, and parts thereof;\"4 and (3) MERCONTROL for \"Controlling devices, employing electric circuit controlling switches — namely, vacuum operated electric switches, float operated electric switches, mechanically operated electric switches and magnetically operated electric switches, and parts thereof including mercury switches.\"5\n \n \n 3\n Opposer, relying mainly upon its marks MERCOID CONTROL and MERCONTROL, appeals from the decision of the Trademark Trial and Appeal Board (122 U.S.P.Q. (BNA) 329), which dismissed the opposition after finding that the potential purchasers of the goods of the parties would be \"likely to be conscious of the identity of the manufacturer.\"\n \n \n 4\n The sole question before us is whether applicant's mark so resembles opposer's marks as to be likely, when applied to the goods of the applicant, to cause confusion or mistake or to deceive purchasers. Section 2(d) of Trademark Act of 1946, 15 U.S.C. § 1052(d), 15 U.S.C.A. § 1052(d).\n \n \n 5\n The products upon which opposer and applicant use their respective marks are different. Applicant's mark is used on electronic apparatus for gauging and controlling the operation of machine tools. The apparatus is used on a single machine tool, and it consists of individual components all or part of which may be purchased and used, depending upon the degree of automation, and the extent of investment desired. Thus a purchaser may wish to buy only gauging apparatus to guide the manual operation of the machine tool, or he may wish to purchase control apparatus which is actuated by the gauging apparatus to provide a completely automatic operation of the machine tool.\n \n \n 6\n The nature of applicant's products is such that they are sold according to the needs and specifications of each individual purchaser. The purchasers of applicant's apparatus generally are technically skilled, at least in the operation of machine tools. While the cost of these products varies according to the complexity of the system involved, the price may be as much as several thousand dollars.\n \n \n 7\n Opposer's products are, primarily, mercury switches, which vary in construction, to be actuated by a variety of means including temperature, pressure, light, magnetic force, fluid level and the like. The evidence indicates that opposer now has about twenty-five basic lines of controls, of which there are thousands of variations. These controls and switches are ordered by specification and vary in price which sometimes is as high as several hundred dollars. Although opposer's advertising indicates that all of its products contain mercury switches, the description of the goods in the registrations are not so limited.\n \n \n 8\n The goods to which applicant's and opposer's marks are to be applied, as exemplified by the evidence of present use, represent two specialized lines of equipment. Applicant's product is electrically operated apparatus designed specifically to measure or guide, or both, the operation of a machine tool. Opposer's products are highly specialized industrial switches designed to be actuated in various ways.\n \n \n 9\n However, while acknowledging the differences between the products, it seems clear that the goods are of such a nature that it would not be unreasonable to suppose that one manufacturer would have produced all of them. That being the case, the differences between the goods of the parties are not of determinative legal significance so far as the present issue is concerned.\n \n \n 10\n While the parties do not sell their goods to the same customers in all cases, their markets overlap to a significant degree. Therefore, for the purposes of determining the issues here presented, we shall consider it on the presumption that there will be common purchasers of MERCONTROLS and MICROtrols. Such purchasers are likely to be engineers or skilled artisans who in the purchase of the products will order the particular product required to meet precise specifications required by the particular use to which the device is to be put. Frequently considerable expense will be involved in the purchase. We find, therefore, that the purchasers of applicant's and opposer's products will be discriminating purchasers. National Motor Bearing Co., Inc. v. James-Pond-Clark, 266 F.2d 799, 46 CCPA 877, 882.\n \n \n 11\n What, then, is likely to be the response of such purchasers to the marks here in issue? Applicant's mark is the obvious combination of the word \"micro\" with the last syllable of \"control.\" Thus, it describes the hoped-for operation of applicant's product. While we follow the rule that trademarks should not be dissected, but should be dealt with as a whole, that doctrine does not blind the court to those parts of the whole which will be immediately recognized by every English-speaking person in the market place. Sealy, Inc. v. Simmons Co., 265 F.2d 934, 46 CCPA 857, 862. The word \"micro\" though derived from the Greek and once used chiefly by scientists, has almost become a household word in our age of precision technology to indicate small measurements. The suffix \"trol\" is the same as the suffix of the descriptive word \"control.\" We think, therefore, the word MICROtrol, would suggest to a machinist, or to an engineer working in these areas, the meaning of a control operated to \"micro\" tolerances.\n \n \n 12\n Opposer relies upon three marks, the first of which is MERCOID. This mark consists of the prefix MERC as in mercury, and the suffix \"OID\" meaning \"like\" or \"related to.\" As applied to opposer's goods, the mark MERCOID is but slightly suggestive. The second of opposer's marks is MERCOID CONTROL in the globe design, and the third is the obvious contraction of the second, namely: MERCONTROL. In these cases, the prefix \"merc\" in each instance appears to have its origin in the mercury switches which opposer features in its advertising as a part of its controls. It seems to us likely, therefore, that the purchaser will associate the prefix of opposer's marks with the word mercury and that as such it is a distinctive association quite different from the likely association with the prefix \"micro\" of applicant's mark.\n \n \n 13\n As between MERCOID and MICROtrol, there is no similarity. They neither look alike, sound alike nor evoke similar mental associations. The same is true of the MERCOID CONTROL mark and MICROtrol. There remains MERCONTROL which bears a closer visual and auricular similarity to MICROtrol. However, for the reasons previously set out in detail we do not believe that it is likely the potential purchasers of the products of these parties will be confused as to the origin of those products by such tenuous similarities between marks, which are so obviously different.\n \n \n 14\n We therefore affirm the decision of the Trademark Trial and Appeal Board.\n \n \n 15\n Affirmed.\n \n \n \n Notes:\n \n \n \n United States Senior District Judge for the Eastern District of Pennsylvania, designated to participatein place of Judge O'Connell, pursuant to provisions of Section 294(d), Title 28, United States Code.\n \n \n 1\n Serial No. 14,040 filed August 16, 1956\n \n \n 2\n No. 156,669 registered July 11, 1922 and renewed, for \"pressure, vacuum, thermostatic, and temperature circuit-controlling devices and switches and pressure-controlling switches and mercury tubes.\"\n \n \n 3\n Reg. No. 614,800, October 25, 1955\n \n \n 4\n Registered Oct. 28, 1930, Trade-Mark 276,768 renewed for 20 years from October 28, 1950\n \n \n 5\n Registered Apr. 8, 1952, Registration No. 557,178. First use on July 1, 1949\n \n \n ", "ocr": false, "opinion_id": 253152 } ]	Customs and Patent Appeals	Court of Customs and Patent Appeals	FS	USA, Federal
42,621	Anderson, Black, Kravitch, Per Curiam	2005-08-31	false	william-l-warren-v-jack-schwerman	null	William L. Warren v. Jack Schwerman	William L. WARREN, Plaintiff-Appellant, v. Jack SCHWERMAN, Schwerman Trucking Company, Defendants-Appellees	William L. Warren, Macon, GA, pro se., William M. Clifton, III, Kristie B. Smith, Constangy, Brooks & Smith, LLC, Macon, GA, for Defendants-Appellees.	null	null	null	null	Non-Argument Calendar.	null	null	null	null	null	0	Unpublished	null	<parties data-order="0" data-type="parties" id="b444-11"> William L. WARREN, Plaintiff-Appellant, v. Jack SCHWERMAN, Schwerman Trucking Company, Defendants-Appellees. </parties><br><docketnumber data-order="1" data-type="docketnumber" id="b444-14"> No. 05-10591 </docketnumber><br><p data-order="2" data-type="summary" id="b444-15"> Non-Argument Calendar. </p><docketnumber data-order="3" data-type="docketnumber" id="A1ov"> D.C. Docket No. 03-00293-CV-WDO-5. </docketnumber><br><court data-order="4" data-type="court" id="b444-17"> United States Court of Appeals, Eleventh Circuit. </court><br><decisiondate data-order="5" data-type="decisiondate" id="b444-18"> Aug. 31, 2005. </decisiondate><br><attorneys data-order="6" data-type="attorneys" id="b445-9"> <span citation-index="1" class="star-pagination" label="417"> *417 </span> William L. Warren, Macon, GA, pro se. </attorneys><br><attorneys data-order="7" data-type="attorneys" id="b445-10"> William M. Clifton, III, Kristie B. Smith, Constangy, Brooks & Smith, LLC, Macon, GA, for Defendants-Appellees. </attorneys><br><judges data-order="8" data-type="judges" id="b445-12"> Before ANDERSON, BLACK and KRAVITCH, Circuit Judges. </judges>	[ "155 F. App'x 416" ]	[ { "author_str": "Per Curiam", "per_curiam": false, "type": "010combined", "page_count": 6, "download_url": "http://www.ca11.uscourts.gov/unpub/ops/200510591.pdf", "author_id": null, "opinion_text": " [DO NOT PUBLISH]\n\n\n IN THE UNITED STATES COURT OF APPEALS\n\n FOR THE ELEVENTH CIRCUIT FILED\n ________________________ U.S. COURT OF APPEALS\n ELEVENTH CIRCUIT\n August 31, 2005\n No. 05-10591 THOMAS K. KAHN\n Non-Argument Calendar CLERK\n ________________________\n\n D. C. Docket No. 03-00293-CV-WDO-5\n\nWILLIAM L. WARREN,\n\n\n Plaintiff-Appellant,\n\n versus\n\nJACK SCHWERMAN,\nSCHWERMAN TRUCKING COMPANY,\n\n\n Defendants-Appellees.\n\n\n ________________________\n\n Appeal from the United States District Court\n for the Middle District of Georgia\n _________________________\n (August 31, 2005)\n\n\nBefore ANDERSON, BLACK and KRAVITCH, Circuit Judges.\n\nPER CURIAM:\n\f Plaintiff William Warren, proceeding pro se, appeals the district court’s\n\ngrant of summary judgment in favor of defendants Jack Schwerman and\n\nSchwerman Trucking Company, in his civil action brought pursuant to Title VII of\n\nthe Civil Rights Act of 1964, 42 U.S.C. § 2000e-2, alleging that the defendants\n\ndiscriminated against him by failing to make contributions to a pension plan in\n\naccordance with a contract under which he worked. For the following reasons, we\n\naffirm.\n\n I. Background\n\n Warren was employed by defendant Schwerman Trucking Company from\n\napproximately November 3, 1970 through August 2, 1982. Warren was a\n\nparticipant in a pension fund established pursuant to a collective bargaining\n\nagreement entered into between a union and Schwerman Trucking Company.\n\nBetween September 1983 and November 1984, Warren filed various claims with\n\nthe pension plan for a monthly disability benefit. After pursuing these claims\n\nwithout success through the various stages of administrative review, in October\n\n1986, Warren filed a lawsuit against the pension plan, seeking to recover the\n\nbenefits.1 In that case, the district court granted summary judgment in favor of the\n\npension plan, finding that “the defendant did not act in an arbitrary or capricious\n\n\n 1\n This case was Warren v. The Health and Welfare Fund of the Central States Southeast\nand Southwest Areas, 752 F. Supp. 452 (M.D. Ga. 1990).\n\n 2\n\fmanner in the handling of plaintiff’s application or breach any fiduciary duties it\n\nmay have owed to plaintiff.” In July 1993, Warren moved to re-open his October\n\n1986 complaint, on the basis that he discovered new evidence that his employer,\n\nSchwerman Trucking Company, had failed to properly contribute to the plan. The\n\ncourt denied the motion.\n\n About ten years went by and, in September 2003, Warren filed the instant\n\naction, again alleging that his employer improperly contributed to the plan. The\n\ndefendants answered and moved for judgment on the pleadings under Fed.R.Civ.P.\n\n12(c), or alternatively, for summary judgment. Because Warren filed documents\n\noutside of the pleadings, the court converted the motion to dismiss into one for\n\nsummary judgment and notified the parties. Subsequently, the district court\n\ngranted summary judgment in favor of the defendants. Warren now appeals.\n\n II. Standard of Review\n\n We review a district court’s grant of summary judgment de novo, viewing\n\nthe evidence in the light most favorable to the party opposing the motion. Wilson\n\nv. B/E Aerospace, Inc., 376 F.3d 1079, 1085 (11th Cir. 2004). Summary judgment\n\nis appropriate “if the pleadings, depositions, answers to interrogatories, and\n\nadmissions on file, together with the affidavits, if any, show that there is no\n\ngenuine issue as to any material fact and that the moving party is entitled to a\n\n\n\n 3\n\fjudgment as a matter of law.” Fed. R. Civ. P. 56(c); Eberhardt v. Waters, 901 F.2d\n\n1578, 1580 (11th Cir. 1990).\n\n III. Discussion\n\n Warren offers little argument explaining how the district court erred, but we\n\nare mindful of his pro se status and, therefore, we address the merits of his claims.\n\nIn doing so, we conclude that, for several reasons, summary judgment was proper\n\nin this case. First, Warren brought this action pursuant to Title VII, but he fails to\n\nallege that he was discriminated against on the basis of his membership in a\n\nprotected class. Title VII provides redress for employment discrimination based on\n\nrace, color, religion, sex, or national origin. 42 U.S.C. § 2000e-2; see also\n\nMcDonnell Douglas Corp. v. Green, 411 U.S. 792, 800-02 (1973). Warren does\n\nnot, however, allege discrimination based on race, color, religion, sex, or national\n\norigin. Thus, he fails to sufficiently allege a discrimination claim.2\n\n Although Warren filed his claim under Title VII, his argument really\n\ninvolves an alleged breach of contract claim in which he contends that the\n\n\n 2\n Notably, the complaint form that Warren used to file his lawsuit enabled him to identify\nwhether his claim was based on discrimination on account of race, religion, sex, and/or national\norigin. Warren did not select any of these categories. Even if we were to assume that his\ncomplaint sufficiently alleged a discrimination claim, his Title VII claim fails for another reason;\nhe did not exhaust his administrative remedies. As a prerequisite to filing a Title VII suit, an\nemployee must file a charge of discrimination with the Equal Employment Opportunity\nCommission (“EEOC”) within the statutory time period. 42 U.S.C. § 2000e-5(b),(f); Wilkerson\nv. Grinell Corp., 270 F.3d 1314, 1317 (11th Cir. 2001). Warren failed to do so, thus barring any\nTitle VII claim he may have had. See Wilkerson, 270 F.3d at 1317.\n\n 4\n\fdefendants failed to pay into the pension as required by the contract.3 Any breach\n\nof contract claim that Warren may have, however, is preempted by the\n\nEmployment Retirement Income Security Act, 29 U.S.C. § 1001 (“ERISA”). 29\n\nU.S.C. § 1144(a); Hobbs v. Blue Cross Blue Shield of Alabama, 276 F.3d 1236,\n\n1240 (11th Cir. 2001); see also Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 52-54\n\n(1987).\n\n Therefore, Warren’s only appropriate avenue of relief was to seek benefits\n\ndue under the plan pursuant to ERISA. The problem for Warren is that any ERISA\n\nclaim he may have had is now barred by the statute of limitations. In an ERISA\n\naction, we apply the limitations period from the state in which the action is\n\nbrought. Harrison v. Digital Health Plan, 183 F.3d 1235, 1238 (11th Cir. 1999).\n\nBecause this action was brought in Georgia, the applicable statute of limitations is\n\nsix years. Id. at 1241; O.C.G.A. § 9-3-24. In addition, a cause of action accrues\n\nwhen the plaintiff knew or should have known of the injury. Bowling v. Founders\n\nTitle Co., 773 F.2d 1175, 1178 (11th Cir. 1985). At the latest, Warren knew about\n\nhis injury in July 1993. At that time, Warren requested that the district court re-\n\nopen his earlier case because he believed he had additional evidence that\n\n“Schwerman Trucking Co. had not paid into the fund....” Warren, however, did\n\n\n 3\n His complaint states that the defendants “failed to make contributions based on the\ncontract that my duties fell under.”\n\n 5\n\fnot file the instant action until September 2003. Thus, Warren’s ERISA claim was\n\nuntimely, as he failed to file his complaint within the six-year statute of limitations.\n\n Finally, Warren argues that the district court erred in granting summary\n\njudgment because it addressed the wrong issue. He asserts that the district court\n\nshould have determined whether the contract for pension benefits was legally\n\nbinding. Because he did not challenge the validity of the contract in the district\n\ncourt, we decline to address this issue on appeal. See Access Now, Inc. v.\n\nSouthwest Airlines Co., 385 F.3d 1324, 1331 (11th Cir. 2004) (stating general rule\n\nthat we do not consider issues raised for the first time on appeal).\n\n For the foregoing reasons, we AFFIRM the district court’s grant of summary\n\njudgment in favor of the defendants.\n\nAFFIRMED.\n\n\n\n\n 6\n\f", "ocr": false, "opinion_id": 42621 } ]	Eleventh Circuit	Court of Appeals for the Eleventh Circuit	F	USA, Federal
1,735,161	Per Curiam	2000-03-24	false	swinney-v-state	Swinney	Swinney v. State	null	null	null	null	null	null	null	null	null	null	null	null	2	Published	null	null	[ "757 So. 2d 1218" ]	[ { "author_str": null, "per_curiam": true, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n757 So. 2d 1218 (2000)\nJames Ronald SWINNEY, Appellant,\nv.\nSTATE of Florida, Appellee.\nNo. 2D99-4808.\nDistrict Court of Appeal of Florida, Second District.\nMarch 24, 2000.\nRehearing Denied April 28, 2000.\nPER CURIAM.\nJames Ronald Swinney appeals the dismissal of his motion to correct sentence filed pursuant to Florida Rule of Criminal Procedure 3.800(a). We affirm. Any complaint Swinney may have about how the Department of Corrections interprets his sentences must be addressed through administrative proceedings and, if necessary, by petition for writ of mandamus filed in the circuit court in the county in which he is incarcerated. See Newsome v. Singletary, 637 So. 2d 9 (Fla. 2d DCA 1994); *1219 Killings v. State, 567 So. 2d 60 (Fla. 4th DCA 1990).\nAffirmed.\nCAMPBELL, A.C.J., and FULMER and STRINGER, JJ., Concur.\n", "ocr": false, "opinion_id": 1735161 } ]	District Court of Appeal of Florida	District Court of Appeal of Florida	SA	Florida, FL
2,010,156	null	2007-03-28	false	people-v-delgado	Delgado	People v. Delgado	null	null	null	null	null	null	null	null	null	null	null	null	1	Published	null	null	[ "862 N.E.2d 1000", "308 Ill. Dec. 797" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n862 N.E.2d 1000 (2007)\n308 Ill.Dec. 797\nPEOPLE State of Illinois, Petitioner,\nv.\nRobert DELGADO, Respondent.\nNo. 103815.\nSupreme Court of Illinois.\nMarch 28, 2007.\nIn the exercise of this Court's supervisory authority, the Appellate Court, First District, is directed to vacate its judgment in People v. Delgado, 368 Ill.App.3d 985, 307 Ill.Dec. 104, 859 N.E.2d 104 (2006). The appellate court is directed to reconsider defendant's petition under a plain error analysis.\n", "ocr": false, "opinion_id": 2010156 } ]	Illinois Supreme Court	Illinois Supreme Court	S	Illinois, IL
2,358,193	null	2011-01-26	false	in-re-jm-department-of-human-services-v-jm	Jm	In Re Jm, Department of Human Services v. Jm	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "249 P.3d 166", "240 Or. App. 563" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n249 P.3d 166 (2011)\n240 Or. App. 563\nIn RE J.M. DEPARTMENT OF HUMAN SERVICES\nv.\nJ.M.\nA146360\nCourt of Appeals of Oregon.\nJanuary 26, 2011.\nAffirmed without opinion.\n", "ocr": false, "opinion_id": 2358193 } ]	Court of Appeals of Oregon	Court of Appeals of Oregon	SA	Oregon, OR
306,312	null	1972-11-14	false	d-continental-casualty-company-v-continental-rent-	null	D Continental Casualty Company v. Continental Rent-A-Car of Georgia Inc	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "468 F.2d 950" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/468/468.F2d.950.72-2452.html", "author_id": null, "opinion_text": "468 F.2d 950\n dContinental Casualty Companyv.Continental Rent-A-Car of Georgia Inc.\n 72-2452\n UNITED STATES COURT OF APPEALS Fifth Circuit\n Nov. 14, 1972\n N.D.Ga., 349 F.Supp. 666\n \n \n \n Summary Calendar cases; Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of\n \n \n ", "ocr": false, "opinion_id": 306312 } ]	Fifth Circuit	Court of Appeals for the Fifth Circuit	F	USA, Federal
2,627,341	null	2008-12-24	false	state-v-pilant	PILANT	State v. PILANT	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "197 P.3d 906" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n197 P.3d 906 (2008)\nSTATE\nv.\nPILANT.\nNo. 99473.\nCourt of Appeals of Kansas.\nDecember 24, 2008.\nDecision without published opinion. Affirmed.\n", "ocr": false, "opinion_id": 2627341 } ]	Court of Appeals of Kansas	Court of Appeals of Kansas	SA	Kansas, KS
862,277	null	1997-10-14	false	robert-hemphill-v-ressie-hemphill	null	Robert Hemphill v. Ressie Hemphill	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	null	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": 1, "download_url": "http://courts.ms.gov/Images/Opinions/Conv7470.pdf", "author_id": null, "opinion_text": "Unable to extract the content from this file. Please try reading the original.", "ocr": true, "opinion_id": 862277 } ]	Mississippi Supreme Court	Mississippi Supreme Court	S	Mississippi, MS
1,324,948	Chandler, Finney, Gregory, Harwell, Littlejohn, Ness	1986-06-16	false	reid-v-harbison-development-corp	Reid	Reid v. Harbison Development Corp.	Rossie N. REID and Paul W. Reid, Respondents v. HARBISON DEVELOPMENT CORPORATION, and Sam D. Coogler, Builder, Inc., Defendants, of Whom Sam D. Coogler, Builder, Inc., is No Longer a Party. PETITION OF HARBISON DEVELOPMENT CORPORATION	Robert F. Fuller, of Rogers, McDonald, McKenzie, Fuller & Rubin, Columbia, for petitioner., James C. Chandler, Jr., Columbia, for plaintiffs-respondents.	null	null	null	null	null	null	null	Heard Feb. 12, 1986.	null	null	9	Published	null	<docketnumber id="b333-16"> 22573 </docketnumber><br><parties id="b333-17"> Rossie N. REID and Paul W. Reid, Respondents v. HARBISON DEVELOPMENT CORPORATION, and Sam D. Coogler, Builder, Inc., Defendants, of whom Sam D. Coogler, Builder, Inc., is No Longer A Party. PETITION OF HARBISON DEVELOPMENT CORPORATION. </parties><br><citation id="b333-18"> (345 S. E. (2d) 492) </citation><br><court id="b333-19"> Supreme Court </court><br><attorneys id="b334-9"> <span citation-index="1" class="star-pagination" label="320"> *320 </span> <em> Robert F. Fuller, </em> of <em> Rogers, McDonald, McKenzie, Fuller & Rubin, </em> Columbia, <em> for petitioner. </em> </attorneys><br><attorneys id="b334-10"> <em> James C. Chandler, Jr., </em> Columbia, <em> for plaintiffs-respondents. </em> </attorneys><br><otherdate id="b334-11"> Heard Feb. 12, 1986. </otherdate><br><decisiondate id="b334-12"> Decided June 16, 1986. </decisiondate>	[ "345 S.E.2d 492", "289 S.C. 319" ]	[ { "author_str": "Finney", "per_curiam": false, "type": "020lead", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\nFinney, Justice:\nThe plaintiffs-respondents, Rossie N. Reid and Paul W. Reid, brought this action against the defendants-respondents, Harbison Development Corporation (now Petitioner) and Sam D. Coogler, Builder, Inc., alleging fraud and deceit growing out of a contract whereby the Reids were to 321buy realty. Sam D. Coogler, Builder, Inc., is in bankruptcy and is no longer a party to this proceeding.\nAt trial, the jury found in favor of the Reids actual damages in the amount of twenty thousand ($20,000.00) dollars, plus punitive damages in the amount of twenty-thousand ($20,000.00) dollars. Harbison motioned for a new trial on the grounds that the jury was influenced by caprice and prejudice, and in the alternative, for a new trial nisi “... to reduce the amount of the actual damages award to at least the amount which the plaintiffs themselves testified was their damage under the evidence, which ought to be in the range of $4,000 to $5,000 dollars as indicated by plaintiffs’ own testimony.” The trial judge overruled both motions stating: “Where it may be high, it may be more than would reasonably be expected, I think it is within the range that a jury could return in this case, and that it is not. such that the Court can set aside.”\nHarbison appealed the order of the trial court. The Court of Appeals, in its opinion filed May 6, 1985,1 set aside the twenty thousand ($20,000) dollar actual damages verdict ruling that there was no evidence to substantiate more than five thousand ($5,000.00) dollars actual damages. The twenty thousand ($20,000.00) dollar punitive damages verdict was sustained. The Court of Appeals remanded the case to the trial court for the purpose of determining the appropriate amount of actual damages.\nThis Court granted Harbison’s Petition for Writ of Cer-tiorari, and the case has been rebriefed, on the following issues.\nI. Are the issues of liability for fraud and of damages for fraud, actual and punitive, inextricably interwined so as to require consideration by a single trier of fact to effect fairness of verdict?\nII. Are actual and punitive damages in a fraud case sufficiently separate or distinct issues as to enable a new trial or ascertain proper actual damages without disturbing an award of punitive damages arising out of the same trial and evidence?\n322Prior to our opinion in the case of Industrial Welding Supplies v. Atlas Vending Co., 276 S. C. 196, 277 S. E. (2d) 885 (1981), it was the law of this state that if a new trial was granted on any ground, the case would be retried in its entirety. In Industrial, the Court adopted the more modern view that where there are separate jury issues and a new trial is required on issues which are distinct from all other issues, the scope of the new trial may be limited to less than all issues originally submitted.\nWe agree with the Court of Appeals that the trial court erred in allowing the twenty thousand ($20,000.00) dollar actual damages verdict to stand. The verdict was excessive because the evidence indicated actual damages in the maximum amount of five thousand ($5,000.00) dollars. We do not agree that the case should be remanded for a new trial solely on the issue of actual damages.\nGenerally, actual damages should not be separated from punitive damages for a retrial on actuals alone. Punitive damages may only be awarded if actuals are recovered, Carroway v. Johnson, 245 S. C. 200, 139 S. E. (2d) 908 (1965); Allen v. Southern Rwy. Co., 218 S. C. 291, 62 S. E. (2d) 507 (1950); 25 C.J.S. Damages Section 118; and therefore, retrial only on actual damages may be improper since punitive damages may change depending on the actual damage award. In the interest of justice and fairness to all parties, both actual and punitive damages should be reconsidered together on retrial.\nThe excessiveness of the verdict may be corrected by one of two ways: 1) The Reids may be required to remit the excess as an alternative to a new trial; or 2) a new trial on the issues of actual and punitive damages. See 58 Am. Jur. (2d) New Trial Section 221, in which we find the following:\nIndeed, it has been held that in the absence of passion or prejudice, no logical basis exists for grafting a new trial unconditionally on the ground of excessiveness of the verdict; the prevailing party should be given the option of accepting a smaller amount or submitting to a new trial. The appellate court, in like manner, may affirm the judgement on the condition that the plaintiff 323remit a part of the amount for which it has been rendered, making the remittitur of such part an alternative to the granting of a new trial.\nThe case is hereby remanded to the Court of Common Pleas for Richland County for the purpose of having a judge thereof issue an order directing a new trial on actual and punitive damages unless the Reids agree in writing to remit fifteen thousand ($15,000.00) dollars of the actual damages verdict within fifteen (15) days after notice of the order. Should the Reids remit, final judgment shall be entered in favor of the Reids in the amount of five thousand ($5,000.00) dollars actual damages plus twenty thousand ($20,000.00) dollars punitive damages. If the Reids fail to remit within fifteen (15) days, a new trial shall be ordered on both actual and punitive damages.\nAffirmed in part and remanded.\nHarwell, and Chandler, JJ., concur.\nNess, C. J., not participating.\nGregory, J., and Littlejohn, Acting Associate Justice, concurring in part and- dissenting in part in separate opinions.\n\n Reid v. Harbison Development Corporation, 285 S. C. 557, 330 S. E. (2d) 532 (S. C. App. 1985).\n\n", "ocr": false, "opinion_id": 9581219 }, { "author_str": "Gregory", "per_curiam": false, "type": "035concurrenceinpart", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\nGregory, Justice\n(concurring in part, dissenting in part):\nI concur with the majority opinion in holding a new trial must be granted on both actual and punitive damages. However, I dissent insofar as the majority opinion gives the Reids the option of remitting $15,000.00 of actual damages in lieu of a retrial.\nThe jury awarded respondents $20,000.00 in actual damages although there was no evidence to support an award of more than $5,000.00. This grossly excessive award clearly influenced the $20,000.00 punitive damage award. I would hold, under the facts of this case, that both awards were obviously the product of passion, caprice or prejudice. See Rogers v. Florence Printing Co., 233 S. C. 567, 106 S. E. (2d) 258 (1958).\nAccordingly, I would reverse and remand for a new trial absolute.\n", "ocr": false, "opinion_id": 9581220 }, { "author_str": "Littlejohn", "per_curiam": false, "type": "035concurrenceinpart", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n324Littlejohn, Acting Associate Justice\n(concurring in part, dissenting in part):\nI am in partial disagreement with the majority opinion. That disagreement grows out of the fact that I do not think that the issues of liability for fraud and of damages for fraud, actual and punitive, are so inextricably intertwined as to require consideration by a single trier of fact in order to bring about a fair verdict.\nLitigation is expensive, not only to the litigants but to the taxpayers as well. The modern tendency in the interest of judicial economy is to avoid new trials where verdicts are in debate if the will of the jury can be ascertained and given effect. In 76 Am. Jur. (2d) Trial § 1208, we find:\nA verdict in a civil case which is defective or erroneous as to a mere matter of form not affecting the merits or rights of the parties may be amended by the court to conform it to the issues and to give effect to what the jury unmistakably found. In fact, it is the duty of the judge to look after its form and substance, so as to prevent a doubtful or insufficient finding from passing into the records of the court, and every reasonable construction should be adopted for the purpose of working the verdict into form so as to make it serve. Thus, when the intent of the jury is apparent, their verdict will he sufficient to sustain a judgment entered in conformity with the intent of the verdict. (Emphasis added.)\nI would let the punitive damages stand and remand the case to the trial court as ordered by the Court of Appeals, and give to the Reids the alternative of going to trial as to only actual damages unless they elect to remit the excess of actual damages in the amount of $15,000. This represents the maximum effect of the error. It could be corrected at the option of the Reids without the necessity of a new trial.\n", "ocr": false, "opinion_id": 9581221 }, { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 5640, "opinion_text": "\n289 S.C. 319 (1986)\n345 S.E.2d 492\nRossie N. REID and Paul W. Reid, Respondents\nv.\nHARBISON DEVELOPMENT CORPORATION, and Sam D. Coogler, Builder, Inc., Defendants, of whom Sam D. Coogler, Builder, Inc., is No Longer A Party. PETITION OF HARBISON DEVELOPMENT CORPORATION.\n22573\nSupreme Court of South Carolina.\nHeard February 12, 1986.\nDecided June 16, 1986.\n320 Robert F. Fuller, of Rogers, McDonald, McKenzie, Fuller & Rubin, Columbia, for petitioner.\nJames C. Chandler, Jr., Columbia, for plaintiffs-respondents.\nHeard Feb. 12, 1986.\nDecided June 16, 1986.\nFINNEY, Justice:\nThe plaintiffs-respondents, Rossie N. Reid and Paul W. Reid, brought this action against the defendants-respondents, Harbison Development Corporation (now Petitioner) and Sam D. Coogler, Builder, Inc., alleging fraud and deceit growing out of a contract whereby the Reids were to 321 buy realty. Sam D. Coogler, Builder, Inc., is in bankruptcy and is no longer a party to this proceeding.\nAt trial, the jury found in favor of the Reids actual damages in the amount of twenty thousand ($20,000.00) dollars, plus punitive damages in the amount of twenty thousand ($20,000.00) dollars. Harbison motioned for a new trial on the grounds that the jury was influenced by caprice and prejudice, and in the alternative, for a new trial nisi \"... to reduce the amount of the actual damages award to at least the amount which the plaintiffs themselves testified was their damage under the evidence, which ought to be in the range of $4,000 to $5,000 dollars as indicated by plaintiffs' own testimony.\" The trial judge overruled both motions stating: \"Where it may be high, it may be more than would reasonably be expected, I think it is within the range that a jury could return in this case, and that it is not such that the Court can set aside.\"\nHarbison appealed the order of the trial court. The Court of Appeals, in its opinion filed May 6, 1985,[1] set aside the twenty thousand ($20,000) dollar actual damages verdict ruling that there was no evidence to substantiate more than five thousand ($5,000.00) dollars actual damages. The twenty thousand ($20,000.00) dollar punitive damages verdict was sustained. The Court of Appeals remanded the case to the trial court for the purpose of determining the appropriate amount of actual damages.\nThis Court granted Harbison's Petition for Writ of Certiorari, and the case has been rebriefed on the following issues.\nI. Are the issues of liability for fraud and of damages for fraud, actual and punitive, inextricably interwined so as to require consideration by a single trier of fact to effect fairness of verdict?\nII. Are actual and punitive damages in a fraud case sufficiently separate or distinct issues as to enable a new trial or ascertain proper actual damages without disturbing an award of punitive damages arising out of the same trial and evidence?\n322 Prior to our opinion in the case of Industrial Welding Supplies v. Atlas Vending Co., 276 S.C. 196, 277 S.E. (2d) 885 (1981), it was the law of this state that if a new trial was granted on any ground, the case would be retried in its entirety. In Industrial, the Court adopted the more modern view that where there are separate jury issues and a new trial is required on issues which are distinct from all other issues, the scope of the new trial may be limited to less than all issues originally submitted.\nWe agree with the Court of Appeals that the trial court erred in allowing the twenty thousand ($20,000.00) dollar actual damages verdict to stand. The verdict was excessive because the evidence indicated actual damages in the maximum amount of five thousand ($5,000.00) dollars. We do not agree that the case should be remanded for a new trial solely on the issue of actual damages.\nGenerally, actual damages should not be separated from punitive damages for a retrial on actuals alone. Punitive damages may only be awarded if actuals are recovered, Carroway v. Johnson, 245 S.C. 200, 139 S.E. (2d) 908 (1965); Allen v. Southern Rwy. Co., 218 S.C. 291, 62 S.E. (2d) 507 (1950); 25 C.J.S. Damages Section 118; and therefore, retrial only on actual damages may be improper since punitive damages may change depending on the actual damage award. In the interest of justice and fairness to all parties, both actual and punitive damages should be reconsidered together on retrial.\nThe excessiveness of the verdict may be corrected by one of two ways: 1) The Reids may be required to remit the excess as an alternative to a new trial; or 2) a new trial on the issues of actual and punitive damages. See 58 Am. Jur. (2d) New Trial Section 221, in which we find the following:\nIndeed, it has been held that in the absence of passion or prejudice, no logical basis exists for granting a new trial unconditionally on the ground of excessiveness of the verdict; the prevailing party should be given the option of accepting a smaller amount or submitting to a new trial. The appellate court, in like manner, may affirm the judgment on the condition that the plaintiff 323 remit a part of the amount for which it has been rendered, making the remittitur of such part an alternative to the granting of a new trial.\nThe case is hereby remanded to the Court of Common Pleas for Richland County for the purpose of having a judge thereof issue an order directing a new trial on actual and punitive damages unless the Reids agree in writing to remit fifteen thousand ($15,000.00) dollars of the actual damages verdict within fifteen (15) days after notice of the order. Should the Reids remit, final judgment shall be entered in favor of the Reids in the amount of five thousand ($5,000.00) dollars actual damages plus twenty thousand ($20,000.00) dollars punitive damages. If the Reids fail to remit within fifteen (15) days, a new trial shall be ordered on both actual and punitive damages.\nAffirmed in part and remanded.\nHARWELL, and CHANDLER, JJ., concur.\nNESS, C.J., not participating.\nGREGORY, J., and LITTLEJOHN, Acting Associate Justice, concurring in part and dissenting in part in separate opinions.\nGREGORY, Justice (concurring in part, dissenting in part):\nI concur with the majority opinion in holding a new trial must be granted on both actual and punitive damages. However, I dissent insofar as the majority opinion gives the Reids the option of remitting $15,000.00 of actual damages in lieu of a retrial.\nThe jury awarded respondents $20,000.00 in actual damages although there was no evidence to support an award of more than $5,000.00. This grossly excessive award clearly influenced the $20,000.00 punitive damage award. I would hold, under the facts of this case, that both awards were obviously the product of passion, caprice or prejudice. See Rogers v. Florence Printing Co., 233 S.C. 567, 106 S.E. (2d) 258 (1958).\nAccordingly, I would reverse and remand for a new trial absolute.\n*324 LITTLEJOHN, Acting Associate Justice (concurring in part, dissenting in part):\nI am in partial disagreement with the majority opinion. That disagreement grows out of the fact that I do not think that the issues of liability for fraud and of damages for fraud, actual and punitive, are so inextricably interwined as to require consideration by a single trier of fact in order to bring about a fair verdict.\nLitigation is expensive, not only to the litigants but to the taxpayers as well. The modern tendency in the interest of judicial economy is to avoid new trials where verdicts are in debate if the will of the jury can be ascertained and given effect. In 76 Am. Jur. (2d) Trial § 1208, we find:\nA verdict in a civil case which is defective or erroneous as to a mere matter of form not affecting the merits or rights of the parties may be amended by the court to conform it to the issues and to give effect to what the jury unmistakably found. In fact, it is the duty of the judge to look after its form and substance, so as to prevent a doubtful or insufficient finding from passing into the records of the court, and every reasonable construction should be adopted for the purpose of working the verdict into form so as to make it serve. Thus, when the intent of the jury is apparent, their verdict will be sufficient to sustain a judgment entered in conformity with the intent of the verdict. (Emphasis added.)\nI would let the punitive damages stand and remand the case to the trial court as ordered by the Court of Appeals, and give to the Reids the alternative of going to trial as to only actual damages unless they elect to remit the excess of actual damages in the amount of $15,000. This represents the maximum effect of the error. It could be corrected at the option of the Reids without the necessity of a new trial.\nNOTES\n[1] Reid v. Harbison Development Corporation, 285 S.C. 557, 330 S.E. (2d) 532 (S.C. App. 1985).\n\n", "ocr": false, "opinion_id": 1324948 } ]	Supreme Court of South Carolina	Supreme Court of South Carolina	S	South Carolina, SC
2,627,355	Van Deren	2008-12-23	false	state-v-saw	SAW	State v. SAW	null	null	null	null	null	null	null	null	null	null	null	null	1	Published	null	null	[ "197 P.3d 1190" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n197 P.3d 1190 (2008)\nSTATE of Washington, Respondent,\nv.\nS.A.W., Appellant.\nNo. 36336-4-II.\nCourt of Appeals of Washington, Division 2.\nNovember 18, 2008.\nPublication Ordered December 23, 2008.\n1191 Nancy P. Collins, Susan F. Wilk, Washington Appellate Project, Seattle, WA, for Appellant.\nEdward P. Lombardo, Mason County Prosecuting Attorney, Shelton, WA, for Respondent.\nVAN DEREN, C.J.\n¶ 1 SW, a juvenile, appeals his adjudications for count I, first degree trafficking in stolen property,[1] count II, first degree possession of stolen property,[2] and count III, second degree taking a motor vehicle without permission.[3] He argues that the juvenile court erred in failing to hold a CrR 3.5 hearing and that he received ineffective assistance of counsel. Because the juvenile court failed to conduct an independent assessment of the credibility and voluntariness and, thus, the admissibility of SW's post-arrest oral incriminating statement, we reverse his adjudications and remand.\n\nFACTS\n¶ 2 On December 16, 2006, Shane Northup received an anonymous telephone call. The caller told Northup that his Honda CRF 450 motorcycle was in front of a residence in Mason County, Washington. Until the call, Northup did not realize his motorcycle was missing from his garage. He drove to the address, found the motorcycle, and loaded it into his truck. He then went to the residence and knocked on the door to find out who had stolen the motorcycle. Terry Brown answered the door. Brown told Northup that he received the motorcycle from SW; Northup called the police.\n¶ 3 Brown testified that that he met SW through a friend and co-worker, Alex Cava. Brown told Cava that he wanted to buy a dirt 1192 bike. Cava connected Brown to SW and Brown arranged to trade SW a pickup truck in exchange for the motorcycle. He stated that Cava and SW delivered the motorcycle to his house the day before Northup discovered it was missing from his garage.\n¶ 4 The first officer to contact SW, Mason County Deputy Sheriff Thurman Rankin, spoke briefly with him. SW denied involvement in the offense. SW provided Rankin with a written statement denying any involvement. A second officer, Mason County Deputy Sheriff William Philpott, also spoke with SW and, after further investigation, returned to SW's residence and placed him under arrest.\n¶ 5 While arresting SW, Philpott read him his Miranda rights and \"his additional warning to juvenile.\"[4] Report of Proceedings (RP) at 29. SW did not ask for an attorney and Philpott testified that SW \"[d]id not express any confusion about\" the rights. RP at 30. After the arrest, SW changed his previous statement. He told Philpott that he learned from Cava that Brown had stolen a motorcycle. Cava had the motorcycle in his possession and SW rode the motorcycle up and down his street with Cava's permission.\n¶ 6 On March 6, 2007, the State charged SW with (1) trafficking in stolen property, (2) possessing stolen property and (3) taking a motor vehicle without permission. The Mason County superior court held a juvenile bench trial. On cross-examination, Philpott testified that he asked SW \"more than once\" whether he had taken the motorcycle.[5] RP at 39. He also testified that he told SW that he believed he was not telling the truth and that he had not not contacted SW's mother.\n¶ 7 During closing argument, SW's attorney attempted to cast doubt on the truth of SW's post-arrest incriminatory oral statement. She contended that he had previously denied involvement \"over and over\" and added: \"[H]e could have just been trying to please the officers so they would stop asking him over and over if he had done it.\" RP at 109. She concluded: \"[T]his was a coercive statement and I would ask the Court weigh that in considering the proof.\" RP at 110. The court interrupted and observed that there had been no request for a CrR 3.5 hearing.[6] It stated that it considered the issue of whether SW's statement was credible or voluntary \"behind us\" and ruled that the \"issue [was] no longer before [the court].\" The court continued that \"[defense counsel] was attacking the credibility or the voluntariness of her client's statement ... and I was simply saying that that issue is no longer before me.\" RP at 110. But earlier it had allowed defense counsel's questioning of Philpott about the circumstances surrounding taking SW's statement. Defense counsel repeated her request that: \"The Court weigh [SW's] statement based on the evidence that we've received during this hearing.\" RP at 110.\n¶ 8 The juvenile court adjudicated SW not guilty of count I, first degree trafficking in stolen property. It found him guilty of count II, first degree possession of stolen property, and count III, second degree taking a motor vehicle without permission. With respect to the count III adjudication, the juvenile court stated: \"[P]roof of [taking a motor vehicle without permission] was in [SW's] statement to Deputy Philpott. And again, in my opinion, there is no question as to the voluntariness or the admissibility of his statement. There was no objection to that admission. [SW] had been completely advised of his ... rights at that time by Deputy Philpott.\" RP 1193 at 120. The juvenile court later entered findings of fact and conclusions of law supporting the adjudication and, for sentencing purposes, merged the count III adjudication and the count II adjudication.\n¶ 9 SW appeals.\n\nANALYSIS\n¶ 10 SW argues that the juvenile court erred in failing to hold a CrR 3.5 hearing to evaluate the admissibility of his statement to Philpott. CrR 3.5 provides a uniform procedure governing confessions in a manner \"that will prevent the jury from hearing an involuntary confession. The rule's significant impact is that the trial judge resolves the issue of voluntariness in the absence of the jury and, thus, obviates due process problems that would arise where the jury hears an involuntary confession.\" State v. Myers, 86 Wash.2d 419, 425, 545 P.2d 538 (1976); see also State v. Williams, 137 Wash.2d 746, 751, 975 P.2d 963 (1999).\n\nI. Standard of Review\n¶ 11 SW neither requested a pretrial CrR 3.5 hearing nor objected to the juvenile court's failure to hold such a hearing during trial. Generally, we do not consider issues raised for the first time on appeal. RAP 2.5(a). SW argues that this error is manifest and \"affect[s] a constitutional right,\" thus, entitling him to raise it for the first time on appeal. RAP 2.5(a)(3). We review issues of law de novo. See generally State v. Solomon, 114 Wash.App. 781, 789, 60 P.3d 1215 (2002).\n¶ 12 SW is correct that, where a manifest error \"affect[s] a constitutional right,\" it may be raised for the first time on appeal. But the defendant has the burden of making the required showing of prejudice to the court. This requirement involves the identification of the constitutional error and how the error, in the context of the trial, affected the defendant's rights. It is the showing of actual prejudice that makes the error \"manifest\" and allows for appellate review. State v. McFarland, 127 Wash.2d 322, 333, 899 P.2d 1251 (1995) (citing State v. Scott, 110 Wash.2d 682, 688, 757 P.2d 492 (1988)).\n¶ 13 The State primarily relies on Williams to argue that SW cannot appeal the juvenile court's failure to hold a CrR 3.5 hearing because our Supreme Court has held that a trial court's failure to advise a defendant of his right under CrR 3.5(b) to testify at a CrR 3.5 hearing did not require reversal when the defendant raised the error for the first time on appeal. 137 Wash.2d at 751-54, 975 P.2d 963. Williams is distinguishable, Williams did not challenge an incriminating statement but disputed a minor fact going to \"credibility and weight, not legal admissibility\" and he did not question the voluntariness of his statement. 137 Wash.2d at 755, 975 P.2d 963 (quoting State v. Williams, 91 Wash.App. 344, 352, 955 P.2d 865 (1998)). Furthermore, the trial court actually held a CrR 3.5 hearing but did not inform Williams that he had a right to testify at the hearing without being compelled to testify about the statement at trial; subsequently, Williams testified at trial about the statement. See Williams, 137 Wash.2d at 752, 975 P.2d 963 (distinguishing State v. Alexander, 55 Wash. App. 102, 105, 776 P.2d 984 (1989) on factual grounds). But because the trial court fully assessed the circumstances surrounding the admission of Williams' non-incriminating statement, the Supreme Court held that the trial court's failure to advise him of his right to testify under CrR 3.5(b) was not a constitutional error that resulted in actual prejudice. As a result, Williams could not raise his CrR 3.5 issue for the first time on appeal. Williams, 137 Wash.2d at 755-56, 975 P.2d 963; see also State v. Kidd, 36 Wash.App. 503, 509, 674 P.2d 674 (1983).\n¶ 14 Here, SW did seek to challenge the voluntariness of his incriminating statement. Not only did the juvenile court fail to hold a CrR 3.5 hearing, SW also did not testify at trial about the circumstances surrounding his statement. Moreover, the juvenile court did not inform SW that he could testify about his incriminating statement in a CrR 3.5 hearing without having to testify at trial. CrR 3.5(b). The record also shows that the juvenile court dismissed defense counsel's arguments about the statement's voluntariness, treating the issue as waived. The juvenile court later found SW's statement admissible 1194 based solely on Philpott's trial testimony. See Alexander, 55 Wash.App. at 105, 776 P.2d 984 (criticizing \"the [trial] court [for making] its decision to admit this statement based only on the officer's version of the facts\").\n¶ 15 The record before us demonstrates that the juvenile court did not allow SW to challenge the State's use of SW's incriminating statement to Philpott and prevented SW from arguing this issue at trial. Because the juvenile court based its adjudication on SW's statement, SW raises an issue that may be addressed for the first time on appeal because defendants have a constitutional right to \"have the voluntariness of an incriminating statement assessed prior to its admission.\" Williams, 137 Wash.2d at 754, 975 P.2d 963.\n\nII. CrR 3.5 Hearings in Juvenile Court\n¶ 16 SW was convicted in a juvenile court bench trial without a separate hearing under CrR 3.5 to determine the admissibility of his statement to Philpott. \"[M]ost courts have held that there is no need for a separate voluntariness hearing in the case of a bench trial, reasoning that a judge is presumed to rely only upon admissible evidence in reaching a decision.\" State v. Wolfer, 39 Wash. App. 287, 292, 693 P.2d 154 (1984), abrogated on other grounds by State v. Heritage, 152 Wash.2d 210, 95 P.3d 345 (2004).\n¶ 17 In Wolfer, Division One of this court affirmed the admission of a confession when the trial court did not hold a CrR 3.5 hearing, but where both the juvenile defendant and the officer testified at trial in detail about the circumstances surrounding the juvenile's incriminating statements. 39 Wash. App. at 291, 693 P.2d 154. This was in accord with In re the Welfare of Noble, where the trial court engaged in fact-finding regarding voluntariness of the juvenile's statement and conducted a detailed analysis of the circumstances surrounding the confession, then admitted the statement only for impeachment purposes. 15 Wash.App. 51, 54-55, 58, 547 P.2d 880 (1976).\n¶ 18 In State v. Tim S., the trial court admitted a juvenile's statement without Miranda warnings, allegedly only for impeachment purposes. 41 Wash.App. 60, 62, 701 P.2d 1120 (1985). Division Three of this court held that the trial court actually treated the statement as substantive evidence of guilt even though it was \"not clear from the record if the juvenile court considered whether Tim's statement had been voluntarily given.\" Tim S., 41 Wash.App. at 64, 701 P.2d 1120. Under these circumstances, Division Three distinguished Noble and held that a separate CrR 3.5 hearing was required in a juvenile matter. Tim S., 41 Wash.App. at 63-64, 701 P.2d 1120.\n¶ 19 In Alexander, \"the [trial] court made its decision to admit [the juvenile's] statement based only on the officer's version of the facts, without permitting the defendant the opportunity to testify or present other evidence, if any.\" 55 Wash.App. at 105, 776 P.2d 984. It also admitted the juvenile's statement based on the juvenile signing a form acknowledgement that an officer advised him of his Miranda rights without a signed form waiving those rights. We held that no separate pretrial CrR 3.5 hearing is required in a juvenile proceeding, but concluded that the trial court erred by failing to advise defendant of his rights under CrR 3.5(b). Alexander, 55 Wash.App. at 103-04, 776 P.2d 984.\n¶ 20 Recently, Division Three of this court affirmed the admission of a statement in the absence of a CrR 3.5 hearing where officers advised the juvenile of her Miranda rights; the prosecutor described the interrogation procedure to the trial court; and, importantly, the juvenile did not dispute the voluntariness of her statement. State v. G.M.V., 135 Wash.App. 366, 373, 144 P.3d 358 (2006), review denied, State v. Vargas, 160 Wash.2d 1024, 163 P.3d 794 (2007). These cases demonstrate that, although a separate CrR 3.5 hearing is not necessary in juvenile proceedings, the circumstances surrounding a juvenile's statement must be fully assessed before the admission of an alleged inculpatory statement, either in a formal pretrial hearing or during trial.\n¶ 21 Here, despite SW's counsel attempts to argue voluntariness and substantive admissibility of SW's statements to Philpott, the juvenile court ruled that, because SW did *1195 not formally request a separate CrR 3.5 hearing, the issues of credibility and voluntariness of his incriminating statement were not before it at trial. The juvenile court reiterated its conclusion when it discussed its findings of fact and conclusions of law, stating: \"[T]here is no question as to the voluntariness or admissibility of the statement.... [SW] had been completely advised of his ... rights at that time by Deputy Philpott.\" It emphasized that \"[t]here was no objection\" to the admitted incriminating statement. RP at 120. Thus, the juvenile court did not conduct an independent assessment of the statement's voluntariness and credibility.\n¶ 22 Furthermore, CrR 3.5(d)(4) provides:\nIf the court rules that the statement is admissible, and it is offered in evidence: (1) the defense may offer evidence or cross-examine the witnesses, with respect to the statement without waiving an objection to the admissibility of the statement;... (4) if the defense raises the issue of voluntariness under subsection (1) above, the jury shall be instructed that they may give such weight and credibility to the confession in view of the surrounding circumstances, as they see fit.\nHere, the juvenile court stands in the place of the jury. A defendant does not waive a challenge to the voluntariness or credibility and, thus, the admissibility of his statement by not requesting a formal CrR 3.5 hearing.\n¶ 23 The juvenile court deprived SW of an express defense to the admission of the statement, namely, that it was not a voluntary when it did not allow argument on the issues of the voluntariness and credibility of SW's statement to Philpott. A juvenile court may incorporate a CrR 3.5 inquiry into the trial, but the trial court is not free to ignore the substance of the rights such a hearing protects. Williams, 137 Wash.2d at 754, 975 P.2d 963 (quoting Williams, 91 Wash.App. at 351, 955 P.2d 865) (contrasting the \"form\" of a CrR 3.5 hearing with the \"substance\" of the rights such a hearing is supposed to protect). A juvenile court must examine the voluntariness and credibility of a juvenile's statements, particularly when the juvenile takes issue with the voluntariness or credibility of those statements. CrR 3.5(d)(4).\n¶ 24 The juvenile court erred by conducting only a cursory one-sided analysis of the statement's admissibility on the erroneous assumption that SW waived his ability to challenge the voluntariness of the incriminating statement and, in turn, its reliability and admissibility. We hold that the juvenile court erred in relying on SW's incriminating statement to adjudicate him guilty of possession of stolen property and taking a motor vehicle without permission without first having fully inquired whether his statement was voluntary and credible and, therefore, admissible.\n¶ 25 We reverse SW's adjudications for possession of stolen property and taking a vehicle without permission and remand for further proceedings, including retrial if the State so elects.[7]\nWe concur: HUNT and QUINN-BRINTNALL, JJ.\nNOTES\n[1] \"A person who knowingly initiates, organizes, plans ... the theft of property for sale to others, or who knowingly traffics in stolen property, is guilty of trafficking in stolen property in the first degree.\" RCW 9A.82.050(1).\n[2] \"A person is guilty of possessing stolen property in the first degree if he or she possesses stolen property, other than a firearm as defined in RCW 9.41.010 or a motor vehicle, which exceeds one thousand five hundred dollars in value.\" RCW 9A.56.150(1).\n[3] \"A person is guilty of taking a motor vehicle without permission in the second degree if he or she, without the permission of the owner or person entitled to possession, intentionally takes or drives away any automobile or motor vehicle. . . that is the property of another, or he or she voluntarily rides in or upon the automobile or motor vehicle with knowledge of the fact that the automobile or motor vehicle was unlawfully taken.\" RCW 9A.56.075(1).\n[4] The juvenile warning read by Deputy Philpott to SW was: \"If you are under the age of eighteen, anything you say can be used against you in a juvenile court prosecution for a juvenile offense, and can also be used against you in an adult court criminal prosecution if you are to be tried as an adult.\" Report of Proceedings (RP) at 29-30.\n[5] The State objected to this line of questioning on the basis of relevance. The juvenile court overruled the objection because the questions were \"relevant to the voluntariness of [SW's] statement.\" RP at 39.\n[6] \"When a statement of the accused is to be offered in evidence,\" the judge shall hold a hearing, \"for the purpose of determining whether the statement is admissible.\" CrR 3.5(a). CrR3.5 applies to juvenile proceedings under JuCR 1.4(b) (stating \"[t]he Superior Court Criminal Rules shall apply in juvenile offense proceedings when not inconsistent with these rules and applicable statutes\").\n[7] Because we reverse and remand, we do not address SW's claims of ineffective assistance of counsel.\n\n", "ocr": false, "opinion_id": 2627355 } ]	Court of Appeals of Washington	Court of Appeals of Washington	SA	Washington, WA
1,903,540	Williamson, C. J., and Webber, Tapley, Sullivan, Dubord and Siddall	1959-04-29	false	jordan-v-jordan	Jordan	Jordan v. Jordan	Pomeroy D. Jordan, Lawrence L. Jordan, Stewart C. Jordan, Philip N. Jordan, Emma F. Jordan, Carolyn v. Trynor and Merle R. Jordan vs. Gladys I. Jordan, Norman R. Jordan, William H. Jordan (Sometimes Known as Henry Jordan) and Gladys I. Jordan, as Administratrix, C. T. A. of Estate of Emma D. Jordan	Linnell, Perkins, Thompson, Hinckley & Thaxter, for plaintiff., Harry C. Libby, Sidney W. Wernick, for defendant.	null	null	null	null	null	null	null	null	null	null	3	Published	null	<parties id="b15-4"> Pomeroy D. Jordan, Lawrence L. Jordan, Stewart C. Jordan, Philip N. Jordan, Emma F. Jordan, Carolyn Y. Trynor and Merle R. Jordan <em> vs. </em> Gladys I. Jordan, Norman R. Jordan, William H. Jordan (Sometimes known as Henry Jordan) and Gladys I. Jordan, as Administratrix, c. t. a. of Estate of Emma D. Jordan </parties><br><court id="b15-10"> Cumberland. </court><decisiondate id="As"> Opinion, April 29, 1959. </decisiondate><br><attorneys id="b16-5"> <span citation-index="1" class="star-pagination" label="6"> *6 </span> <em> Linnell, Perkins, Thompson, Hinckley & Thaxter, </em> for plaintiff. </attorneys><br><attorneys id="b16-7"> <em> Harry C. Libby, Sidney W. Wernick, </em> for defendant. </attorneys><br><judges id="b16-9"> Sitting: Williamson, C. J., Webber, Tapley, Sullivan, Dubord, Siddall, JJ. </judges>	[ "150 A.2d 763", "155 Me. 5" ]	[ { "author_str": "Tapley", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n150 A.2d 763 (1959)\nPomeroy D. JORDAN, Lawrence L. Jordan, Stewart C. Jordan, Philip N. Jordan, Emma F. Jordan, Carolyn V. Trynor, and Merle R. Jordan,\nv.\nGladys I. JORDAN, Norman R. Jordan, William H. Jordan (Sometimes Known as Henry Jordan), and Gladys I. Jordan, as Administratrix, C.T.A. of Estate of Emma D. Jordan.\nSupreme Judicial Court of Maine.\nApril 29, 1959.\n764 Linnell, Perkins, Thompson, Hinckley & Thaxter, Portland, for plaintiff.\nHarry C. Libby, Sidney W. Wernick, Portland, for defendants.\nBefore WILLIAMSON, C. J., and WEBBER, TAPLEY, SULLIVAN, DUBORD and SIDDALL, JJ.\nTAPLEY, Justice.\nOn report. The plaintiffs seek construction of the will of Emma D. Jordan, late of Cape Elizabeth, Maine, who died on July 5, 1945. The will was drafted by the testatrix without benefit of counsel and is couched in the following language:\n \"Will of Emma D. Jordan\n \"Dec. 7, 1944\n\"I want the money from my share in Father's farm deposited in the Maine Savings bank for Henry it can be used to build a house for him on the lot I have reserved for him, I put in trust with Gladys.\n\"I give my bank book in Casco bank So. Portland to Everett to pay my funeral expenses.\n\"Take me to S. S. Rich or Hay and Peabody at once.\n\"Let what pieces of furniture Norman wants left.\n\"Let Philip have his furniture and what other he wants.\n \"Emma D. Jordan\n\"Everett C. Jordan\nDorothy S. Jordan\nGladys I. Jordan\"\nThe will was duly admitted to probate and an administratrix, c.t.a. was appointed and qualified. The administratrix, c.t.a. is Gladys I. Jordan, a daughter of the testatrix.\nEmma D. Jordan was survived by a daughter, Gladys I. Jordan and seven sons, Pomeroy D. Jordan, Lawrence L. Jordan, Stewart C. Jordan, Philip N. Jordan, Norman R. Jordan, Everett C. Jordan and William Henry Jordan, sometimes known as and called Henry Jordan. The son, Everett C. Jordan, who survived his mother, died intestate on October 9, 1951, leaving a widow, Emma F. Jordan, and as his sole heirs at law, Merle R. Jordan and Carolyn V. Trynor. Henry Jordan was, on December 7, 1944 and for sometime previous, non compos mentis. His mother, Emma D. Jordan, at the time of the execution of the will, was aware of his mental deficiency. Henry, prior to the death of his mother, was not under legal guardianship but after her death, Gladys I. Jordan was appointed his guardian upon petition filed in the Probate Court.\n765 At the time of her death, Emma D. Jordan was seized and possessed of one-third interest in common and undivided of certain lots or parcels of land, with buildings thereon, situated in Cape Elizabeth. This property was commonly known as and called \"Nathaniel Dyer Farm.\" Emma D. Jordan acquired the one-third interest under the last will and testament of her father, Nathaniel Dyer.\nThe plaintiffs claim (1) that the will, having been witnessed by the wife of a beneficiary thereunder, is void under provisions of Chap. 169, Sec. 1, R.S.1954; (2) that the three children of the testatrix, namely, Pomeroy D. Jordan, Lawrence L. Jordan and Stewart C. Jordan, not having been mentioned in her will, are pretermitted heirs, within the meaning of Chap. 169, Sec. 9, R.S.1954; (3) that the language used by the testatrix is not dispositive but only expresses desire; (4) that paragraph 1 of the will does not create a valid and enforceable trust due to indefiniteness as to the intention of the testatrix.\nThe parties to the action agreed by stipulation,\n\"That all of the children of said Emma D. Jordan received in equal or nearly equal proportions substantial gifts in cash or otherwise from their mother, the said Emma D. Jordan, prior to her death.\"\nand,\n\"That at no time prior to the execution of her Will or prior to her death did Emma D. Jordan place any property, real, personal or mixed in trust with Gladys I. Jordan for, or for the benefit of, Henry Jordan or any other person.\"\nPlaintiffs contend that the last will and testament of Emma D. Jordan is void and of no effect because one of the witnesses thereto was Dorothy S. Jordan, the wife of Norman R. Jordan, a son of the testatrix and a legatee named in his mother's will, who was beneficially interested under the will. Chap. 169, Sec. 1, R.S. 1954. This contention is without merit. The parties to the action admit the will was probated. The fact that it was probated is conclusive proof of its execution. Chap. 169, Sec. 15, R.S.1954; Page on Wills, Vol. 4, Chap. 49, Sec. 1604:\n\"In a suit for construction the proper execution of the will as probated is assumed.\"\nSee Knapp, Appellant, 145 Me. 189, 74 A.2d 217.\nThe three children of the testatrix, namely, Pomeroy D. Jordan, Lawrence L. Jordan and Stewart C. Jordan, were not mentioned in her will. They are claiming to be pretermitted heirs, within the meaning of Sec. 9, Chap. 169, R.S.1954 (formerly Sec. 9, Chap. 155, R.S. 1944). The pertinent portion of this statute reads:\n\"A child, or the issue of a deceased child not having any devise in the will, takes the share of the testator's estate which he would have taken if no will had been made, unless it appear that such omission was intentional, or was not occasioned by mistake, or that such child or issue had a due proportion of the estate during the life of the testator.\"\nThe law presumes that the omission to provide for a child in a will is the result of forgetfulness, infirmity or misapprehension, and not by design. Walton v. Roberts, 141 Me. 112, 39 A.2d 655. This presumption, however, is rebuttable. Extrinsic evidence is admissible to show the omission as being intentional. In the case of Ingraham, Appellant, 118 Me. 67, on page 70, 105 A. 812, on page 813, the Court said:\n\"The evidential office of the will is to prove that the child is without devise under it. The inquiry as to whether he was omitted therefrom by design and without mistake, and 766 not by blunder or oversight, arises under the statute. Seeking the testator's intention, it is pertinent to inquire, consonantly with the law of evidence, concerning him and his son; the affection, or lack thereof, that subsisted between them; of the motives which may be supposed to have operated with the testator and to have influenced him in the disposition of his property. All the relevant facts and circumstances, including the intention of the testator as he declared it before, at, or after the making of the will, may be shown.\"\nSee Whittemore v. Russell, 80 Me. 297, 14 A. 197.\nThere is evidence in this case which discloses, in light of all the circumstances, that Emma D. Jordan intended to omit her three sons as devisees. A witness in the person of one Dorothy Simpson Jordan, upon inquiry, testified in substance that she had occasion to talk with the testatrix, Emma D. Jordan, prior to the execution of her last will and testament. She was asked the question:\n\"Q. Can you tell us what Emma D. Jordan said to you about that will?\"\nand her answer was:\n\"A. Yes, I can. She said to me that she had taken care of the rest of her children except Gladys, whom she felt was able to take care of herself, and what she had left she wanted to go to Henry. She naturally worried about him, and she wanted to feel, when he did get out of the hospital, he would have something and what she had left, she wanted him to have.\"\nAnother witness, Norman R. Jordan, testified that his mother talked with him a few months before she executed her will by saying:\n\"A. She wanted what was left in her share in her father's farm left to Henry.\n\"Q. Did she say why? A. Yes.\n\"Q. Will you tell us why she said that? A. That was all there was left and the rest of us had had what she could give us.\"\nA preponderance of the evidence shows that the omission from the will of the three sons as devisees was intentional and by design. The contention that Pomeroy D. Jordan, Lawrence L. Jordan and Stewart C. Jordan, being sons of Emma D. Jordan, the testatrix, were unintentionally omitted from the will as devisees is untenable.\nPlaintiffs, in contention, further say that the language used by the testatrix is not dispositive but merely expresses desire and that paragraph 1 of the will does not create a valid and enforceable trust due to its indefiniteness as to the intention of the testatrix. Paragraph 1 of the will reads:\n\"I want the money from my share in Father's farm deposited in the Maine Savings bank for Henry it can be used to build a house for him on the lot I have reserved for him, I put in trust with Gladys.\"\nPlaintiffs argue that the language used by the testatrix in her will is more of an expression of desire rather than being dispositive and that it is in nature precatory and not mandatory. In the analysis of any portion of a will, with the view of construing it, great care must be used in arriving at the intention of the testator as it is paramount that the will speak as the testator intended. Intention must be found from the language of the will taken as a whole because as Justice Thaxter stated in Moore v. Emery, 137 Me. 259, at page 277, 18 A.2d 781, at page 790: \"There is no particular magic in isolated phrases.\" The rule is well expressed in the case of Cassidy v. Murray, 144 Me. 326, at page 328, 68 A.2d 390, at page 391, where the Court said:\n\"It is the intention of the testator which must prevail in the construction 767 of a will. But that intention must be found from the language of the will read as a whole illumined in cases of doubt by the light of the circumstances surrounding its making.\"\nPlaintiffs contend that the words \"I want\" were used by the testatrix in a precatory sense and it was not intended by her that they should be considered as mandatory. There have been some judicial determinations of the nature of the word \"want\" and its effect when used in a will. In the case of Anders v. Anderson, 246 N. C. 53, 97 S.E.2d 415, a holographic will was concerned in which the testatrix intended to devise real property by the use of the words \"I want.\" This case decided that the words as used in the will of Mrs Hollingsworth were in a mandatory and not a precatory sense. See Welch v. Rawls, Tex.Civ.App., 186 S.W.2d 103; In re Bearinger's Estate, 336 Pa. 253, 9 A.2d 342; Sellers v. Myers, 56 Pa.Super. 207. When in a question of construction it is necessary to determine whether the words used by a testator are dispositive or precatory, a sound rule is found in Page on Wills, Vol. 1, Chap. 4, Sec. 91, which reads in part as follows:\n\"* * * The test is whether or not testator intends, by his language, to control the disposition of his property. If he does, the words in question are testamentary and the instrument is his will, no matter in how mild a form this intention is expressed. Such terms are often said to be mandatory. Or, on the other hand, is he simply indicating what he regards as a wise disposition, or is he merely giving advice, leaving to some other person, frequently the person to whom the property in question is given by some other provision of the instrument, full discretion to ignore such advice and to make a different disposition of the property. If so, it is not a will. Terms of this sort are often said to be precatory.\"\nThe words used by the testatrix should be construed with liberality, having in mind that she being a layman would be using words having natural, ordinary and popular meaning. An interpretation of the words must be consistent with other words and provisions of the will, having in mind such admissible facts as existed at the time the will was written and with the ultimate purpose of carrying into effect the intentions of the testatrix. 95 C.J.S. Wills §§ 598, 599. See Doherty v. Grady, 105 Me. 36, 72 A. 869.\nPlaintiffs question that Emma D. Jordan by her will created a valid and enforceable trust because they say there is indefiniteness as to her intention to do so. In their brief, counsel for plaintiffs agree that \"most of the tests in favor of a valid trust are met in the case at bar.\" They say, however, that from the language used, her intention to create a trust is difficult of ascertainment. This court in many cases has set forth rules of guidance in construing wills where intentions of testators are in question as, for instance, in Tapley v. Douglass, 113 Me. 392, on page 394, 94 A. 486, on page 487, the Court said:\n\"In construing a will, it is proper to read it in the light of surrounding conditions, the relations between the testator and his intended beneficiaries, the amount and nature of his estate, and other relevant circumstances which legitimately tend, in cases of doubt, to show the probabilities of his intentions, one way rather than another.\"\nIn Bodfish v. Bodfish, 105 Me. 166, at page 172, 73 A. 1033, at page 1036:\n\"* * * whether or not such a result will follow from the use of the language quoted must depend upon the intention of the testator as disclosed by all of the provisions of the will examined in the light of such attending circumstances and manifest objects as may reasonably be supposed to have been in the contemplation of the testator at the time of making the will, such as the condition of his family and the situation and amount of his property.\"\n768 See New England Trust Co. v. Sanger, 151 Me. 295, 118 A.2d 760. A will should be construed so as to give effect to the intention of the testator and this intention is to be gathered from the language used in the will. It must be the intention of the testator at the time of the execution of the instrument. Gorham v. Chadwick, 135 Me. 479, 200 A. 500, 117 A.L.R. 805.\nEmma D. Jordan wrote her own will. She had a son Henry who was mentally deficient and of this mental incapacity she was aware. At the time she wrote her will she owned a share in her father's farm, which according to the record, constituted the major portion of her estate. It is only natural that uppermost in her mind would be the thought of providing, in so far as she could, for her son Henry. She was unfamiliar, as most laymen are, with the terminology and phraseology a trained scrivener would use in the drafting of a will but a reading of her will shows the use of words that give expression to her intent to provide for her child, Henry. She wrote, \"I want the money from my share in father's farm deposited in the Maine Savings Bank for Henry, * *.\" In light of all the circumstances as shown by the record, the only reasonable interpretation of the words \"I want\" as used in the will compels the conclusion that the testatrix intended her share in the farm be used for the benefit of Henry. To place an interpretation on the expression, \"I want\" as being words merely precatory or advisory in their nature would be to defeat intent when consideration is given to the will as a whole. Turning to the remaining portion of her will, she gives her bank book in the Casco Bank \"to Everett to pay my funeral expenses.\" She disposes of some pieces of her furniture by letting Norman have what he wants and she lets Philip have his furniture and what other furniture he wants. Mrs. Jordan at the time she drafted her will was approximately 80 years of age. She, no doubt, used those words to express her intention which were familiar to her. They are not such words as would be employed by a trained legal mind in drafting a will but those which had meaning to herwords she was accustomed to use in her daily life. Within the four corners of her will she has expressed an intent, first to care for the boy Henry, and after that she wanted to be sure that her funeral expenses were paid so she directed Everett to take the money in the Casco Bank and pay them. She indicated concern that upon her death her body be taken to an undertaker at once. Finally someone was to let Norman and Philip have the furniture. These are the things which Emma D. Jordan intended should take place after her death.\nIn construing the will of Emma D. Jordan, we are led to the conclusion that she intended that a valid and enforceable testamentary trust be created for the benefit of her son, William H. Jordan (otherwise known as and called Henry Jordan) and that Gladys Jordan be trustee, with power to sell the real estate and deposit the proceeds to be used, as to corpus and interest, for the benefit of Henry. The phrase \"it can be used to build a house for him on the lot I have reserved for him,\" we determine to be in the nature of a suggestion to the testatrix' trustee that the proceeds from the sale of her share of the farm could be used to build a house for Henry on the lot she had reserved for him. This is merely an expression of desire which may or may not reach fulfilment and, by nature, is precatory and not mandatory. We further conclude that it was the intention of the testatrix to intentionally and designedly omit as beneficiaries in her will her three sons, Pomeroy D. Jordan, Lawrence L. Jordan and Stewart C. Jordan.\nDecree to be made by the sitting Justice in accordance with the opinion.\nThe costs and expense of each of the parties, including reasonable counsel fees, to be fixed by the sitting Justice after hearing and paid by the Administratrix, c. t. a. of Estate of Emma D. Jordan, and charged to her probate account.\n", "ocr": false, "opinion_id": 1903540 } ]	Supreme Judicial Court of Maine	Supreme Judicial Court of Maine	S	Maine, ME
307,859	Brown, Clark, John, Rives	1973-01-19	false	charles-a-sammons-individually-and-estate-of-rosine-s-sammons	null	Charles A. Sammons, Individually, and Estate of Rosine S. Sammons, Deceased, Charles A. Sammons, Independent v. Commissioner of Internal Revenue	Charles A. SAMMONS, Individually, and Estate of Rosine S. Sammons, Deceased, Charles A. Sammons, Independent Executor, Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee	Sam G. Winstead, Vester T. Hughes, Jr., William D. Jordan, Dallas, Tex., for petitioners-appellants., Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Tax Div., U. S. Dept. of Justice, K. Martin Worthy, Chief Counsel, Chris J. Ray, Internal Revenue Service, Leonard J. Henzke, Jr., Tax Div., Dept. of Justice, Washington, D. C., for respondent-appellee.	null	null	null	null	ON PETITION FOR REHEARING	null	null	Rehearing Denied Jan. 19, 1973.	null	null	13	Published	null	<parties data-order="0" data-type="parties" id="b509-7"> Charles A. SAMMONS, Individually, and Estate of Rosine S. Sammons, Deceased, Charles A. Sammons, Independent Executor, Petitioners-Appellants, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee. </parties><br><docketnumber data-order="1" data-type="docketnumber" id="b509-9"> No. 71-3065. </docketnumber><br><court data-order="2" data-type="court" id="b509-10"> United States Court of Appeals, Fifth Circuit. </court><br><decisiondate data-order="3" data-type="decisiondate" id="b509-12"> Dec. 21, 1972. </decisiondate><br><otherdate data-order="4" data-type="otherdate" id="b509-13"> Rehearing Denied Jan. 19, 1973. </otherdate><br><attorneys data-order="5" data-type="attorneys" id="b510-16"> <span citation-index="1" class="star-pagination" label="450"> *450 </span> Sam G. Winstead, Vester T. Hughes, Jr., William D. Jordan, Dallas, Tex., for petitioners-appellants. </attorneys><br><attorneys data-order="6" data-type="attorneys" id="b510-17"> Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Tax Div., U. S. Dept. of Justice, K. Martin Worthy, Chief Counsel, Chris J. Ray, Internal Revenue Service, Leonard J. Henzke, Jr., Tax Div., Dept. of Justice, Washington, D. C., for respondent-appellee. </attorneys><br><p data-order="7" data-type="summary" id="b510-18"> ON PETITION FOR REHEARING </p><br><p data-order="8" data-type="judges" id="b510-19"> Before JOHN R. BROWN, Chief Judge, and RIVES and CLARK, Circuit Judges. </p>	[ "472 F.2d 449" ]	[ { "author_str": "Clark", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/472/472.F2d.449.71-3065.html", "author_id": null, "opinion_text": "472 F.2d 449\n 73-1 USTC P 9138\n Charles A. SAMMONS, Individually, and Estate of Rosine S.Sammons, Deceased, Charles A. Sammons, IndependentExecutor, Petitioners-Appellants,v.COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.\n No. 71-3065.\n United States Court of Appeals,Fifth Circuit.\n Dec. 21, 1972.Rehearing Denied Jan. 19, 1973.\n \n Sam G. Winstead, Vester T. Hughes, Jr., William D. Jordan, Dallas, Tex., for petitioners-appellants.\n Scott P. Crampton, Asst. Atty. Gen., Meyer Rothwacks, Tax Div., U. S. Dept. of Justice, K. Martin Worthy, Chief Counsel, Chris J. Ray, Internal Revenue Service, Leonard J. Henzke, Jr., Tax Div., Dept. of Justice, Washington, D. C., for respondent-appellee.\n ON PETITION FOR REHEARING\n Before JOHN R. BROWN, Chief Judge, and RIVES and CLARK, Circuit Judges.\n CLARK, Circuit Judge:\n \n \n 1\n The per curiam opinion of this court dated August 11, 1972 is withdrawn and the following opinion is adopted as the opinion of the court.\n \n \n 2\n The intricate facts of the several corporate transactions involved in this case are fully set out in the Tax Court opinion in Charles A. Sammons, 30 T.C.M. 626 (1971), and need not be repeated here. Suffice it to say that the facts outlined herein are highly simplified. Sammons, the prime mover in this intercorporate world, owned 99% of Reserve Life Insurance Company, which in turn owned a substantial interest in Standard Steel Works, Inc. Standard agreed to indemnify Sammons for any losses which he might incur by guaranteeing a bank loan to Aero-Test Equipment Company, a corporation which, at the time of indemnity, was owned by Standard. Sammons then guaranteed the bank loan to Aero, and later substituted his personal note to the bank for his guaranty of Aero's debt. Aero encountered financial difficulties and was unable to repay the loan. Reserve and other insurance companies controlled by Sammons then transferred approximately 1,200,000 dollars to Aero through the medium of purchasing Aero's preferred stock, using several other controlled corporations as vehicles to accomplish the transfer. Of this sum Sammons received 966,000 dollars, plus accrued interest, in satisfaction of the note which had been substituted for his guaranty of Aero's bank loan. In addition, he received 142,000 dollars in satisfaction of Aero obligations that he had acquired by the discount purchase of accounts due other Aero creditors. The Tax Court found as a fact that the primary purpose of the transfer by Reserve and the other corporations to Aero was to benefit Sammons by furnishing Aero with sufficient funds to pay the debts owed Sammons. 30 T.C. M. at 636. Thus, the Tax Court held that the approximately 1,100,000 dollars received by Sammons constituted a constructive dividend.\n \n \n 3\n If there is one thing that can be clearly comprehended through the bewildering corporate and fiscal complexities of this case, it is that any tax consequences of these arrangements must ultimately rest on a finding that a distribution of corporate funds to Sammons occurred. Our search for such a distribution may not be restricted to the usual probings to find a direct payment to the stockholder for which the corporate structures received no consideration, because, while Sammons did indeed receive approximately 1,100,000 dollars from Aero, that payment was wholly in satisfaction of various Aero debt obligations to Sammons. Thus, any dividend inherent in this situation, constructive or otherwise, must have been the result of the transfer of funds between the various corporate entities involved rather than of any transfer by any corporation to Sammons. It is the tax effect of this intercorporate transfer question which this opinion addresses.\n \n \n 4\n It is a well-established principle that a transfer of property from one corporation to another corporation may constitute a dividend to an individual who has an ownership interest in both corporations. That principle, however, does not provide a base for reasoning inductively to the broader proposition that all transfers from one corporation to another constitute dividends to a stockholder of both. In attempting to illuminate the line between the disparate tax characterizations given to ostensibly similar transactions, it is often necessary to resort to a bifurcated inquiry to test for dividend equivalence. In every case, the transfer must be measured by an objective test: did the transfer cause funds or other property to leave the control of the transferor corporation and did it allow the stockholder to exercise control over such funds or property either directly or indirectly through some instrumenality other than the transferor corporation. If this first assay is satisfied by a transfer of funds from one corporation to another rather than by a transfer to the controlling shareholder, a second, subjective test of purpose must also be satisfied before dividend characterization results. Though a search for intent or purpose is not ordinarily prerequisite to discovery of a dividend, such a subjective test must necessarily be utilized to differentiate between the normal business transactions of related corporations and those transactions designed primarily to benefit the stockowner. While the Tax Court found as a fact that this latter subjective test of purpose was satisfied in this case, and we find no error in that determination, it failed to perceive that the objective test was only partially satisfied. Thus, we must reverse in part and remand.\n \n \n 5\n In the context of this case which requires that both tests be applied, it facilitates understanding to review them in reverse order.\n \n The Purpose Test\n \n 6\n Our examination of the record convinces us that the court's factual finding that the corporate distribution was made primarily for the benefit of the taxpayer, rather than for any valid business purpose, is not clearly erroneous; consequently, this finding cannot be disturbed on appeal. Fed.R.Civ.P. 52(a); Commissioner v. Duberstein, 363 U.S. 278, 80 S. Ct. 1190, 4 L. Ed. 2d 1218 (1960); United States v. United States Gypsum Co., 333 U.S. 364, 68 S. Ct. 525, 92 L. Ed. 746 (1948); Casner v. Commissioner, 450 F.2d 379 (5th Cir. 1971); Chared Corp. v. United States, 446 F.2d 745 (5th Cir. 1971). As importantly, we think the \"primary purpose\" test is the appropriate test to apply to the case at bar. See W. B. Rushing, 52 T.C. 888, 893 (1969), aff'd on other issues, 441 F.2d 593 (5th Cir. 1971); Commissioner v. Offutt, 336 F.2d 483 (4th Cir. 1964); Walter K. Dean, 57 T.C. 32 (1971); PPG Industries, Inc., 55 T.C. 928 (1970).\n \n \n 7\n The taxpayer, however, contends that it successfully established at least some business-related justification for the distribution, and that any valid business purpose, no matter how tenuous, is sufficient to upset the Commissioner's determination and reverse the Tax Court. See Christie Coal & Coke Co., 28 T.C.M. 498 (1969). We do not agree.\n \n \n 8\n It is true that \"(t)he line between shareholder benefit and corporate benefit is not always clear . . . because some expenditures embody both elements; and an indirect [or an incidental] benefit to the shareholder should not by itself be treated as a distribution to him.\" B. Bittker & J. Eustice, Federal Income Taxation of Corporations and Shareholders p 7.05, at 7-27 (3d ed. 1972) (bracketed words added). But this does not mean that where the primary or dominant motivation for a distribution was to benefit the stockholder rather than the corporation that the articulation of a concededly subordinate business justification should cause the entire transaction to be recharacterized for tax purposes. To permit such a swallowing up of the greater by the lesser would require us to espouse a rule of law which both ignores the substance of corporate transactions and sharply departs from the recent trend of cases implementing analogous sections of the federal tax law. See United States v. Generes, 405 U.S. 93, 92 S. Ct. 827, 31 L. Ed. 2d 62 (1972); United States v. Donruss Co., 393 U.S. 297, 89 S. Ct. 501, 21 L. Ed. 2d 495 (1969); Scroll, Inc. v. Commissioner, 447 F.2d 612 (5th Cir. 1971); Campbell v. Cen-Tex, Inc., 377 F.2d 688 (5th Cir. 1967); Fireoved v. United States, 462 F.2d 1281 (3rd Cir. 1972); see also Lipnick, Business Purpose and Income Taxes: From Gregory to Goldstein, 46 Taxes 698, 724-29 (1968). We decline to so rule. Rather we hold that where the business justifications put forward are not of sufficient substance to disturb a conclusion that the distribution was primarily for shareholder benefit, this prong of the dividend characterization test is met. Thus, the subjective requirement for dividend characterization of the transfer is satisfied by the Tax Court's finding as to the primary purpose of the parties.\n \n The Distribution Test\n \n 9\n Uniquely, the objective question to be answered [Was there a distribution?] is the more complex inquiry in this case. The concept that a transfer of property between corporations with common ownership may constitute a dividend to the common owner, even when the stockholder has not received funds or property from either corporation, has been well established in the numerous cases dealing with transfers between corporations in which the stock of each is held by the same shareholder or group of shareholders, usually denominated brother-sister corporations. Although the term is normally applied to corporations owned directly by the controlling stockholders, it also encompasses corporations held through intervening corporate entities so long as neither corporation owns the other directly or indirectly. In the situation where funds are transferred from one such sibling corporation to another, the theory is that the funds pass from the transferor to the common stockholder as a dividend and then to the transferee as a capital contribution.1\n \n \n 10\n The complicating factor here is that we are dealing with corporations which are not aligned horizontally in a brother-sister sort of relationship, but vertically in a parent-child arrangementment. That is, the transferor corporation owns the transferee corporation directly or indirectly. While, as the Tax Court noted, the constructive dividend theory has been applied occasionally to vertically aligned corporations, its scope or purpose cannot be interpreted so broadly as to reach all cases where a corporation transfers funds to a corporation which it owns, either directly or through mesne corporations, even though the transfer is primarily to benefit the stockholder of the transferor.\n \n \n 11\n Our reasoning may best be focused by using a less complex hypothetical example rather than the actual convoluted factual matrix of the instant case. By way of illustration, let us assume that an individual owns all of the stock of Parent Corporation, which in turn owns all of the stock of Subsidiary Corporation. Then the critical question is this: if Parent makes a transfer of funds to Subsidiary-even though for the primary purpose of benefiting Parent's individual stockholder-does the law require that the transaction be treated as a constructive dividend to the individual?\n \n \n 12\n Certainly no dividend can be constructed unless there is a \"distribution\" to the individual. Thus, it is essential to the existence of a dividend, actual or constructive, that the stockholder receive something from the corporation. After a transfer of funds down the corporate chain of ownership, as in the paradigm example above, the stockholder of Parent has no more control over or right to the money than he did before the transfer occurred. His only interest in the funds after the transfer is that which redounds to him through his ownership of Parent. Though he may indirectly benefit from the transfer of the funds and their employment by Subsidiary in some other corporate activity, the benefit could be no different in substance than that which he might realize from a shift of funds within the same corporate entity. Nor, in this situation, does Parent relinquish its interest in the transferred funds, though its control over them may be attenuated. Only when funds are diverted from the lineal chain of ownership, either to the shareholder himself or to a collaterally owned chain of corporations, does his right to the funds have a source independent of his direct or indirect ownership of the stock of the distributing corporation, and only then has the corporation relinquished control of the funds.\n \n \n 13\n A transfer of funds by a corporation to another corporation which the former owns directly or indirectly can be a constructive dividend to the individual controlling stockholder only if (1) the funds are diverted away from the parent-subsidiary corporate structure and come within the control of the stockholder, and (2) no adequate consideration for the diversion passes from the stockholder to the corporation, i. e. there must be a net distribution.\n \n \n 14\n In all of the cases cited by the Tax Court to support its application of the constructive dividend rule to Sammons' vertically-aligned corporations the stockholder received property from one of the corporations for which he gave no consideration. See Jacob M. Kaplan, 43 T.C. 580, 591-592 (1965); George M. Tollefsen, 52 T.C. 671, 681 (1969), aff'd 431 F.2d 511 (2nd Cir. 1970), cert. denied, 401 U.S. 908, 91 S. Ct. 867, 27 L. Ed. 2d 806 (1971); Ben R. Meyer, 45 B.T.A. 228, 238-239 (1941). However, no case cited is authority for the extension of the constructive dividend theory to cases where there is merely a transfer to a subsidiary of the transferor without regard to the circumstances surrounding the payment to the supposed constructive distributee. In the case at bar there was no gratuitous transfer, no loan never intended to be repaid, and no siphoning off of funds from any corporation to Sammons. He received the payments from Aero as a creditor, not as a stockholder.2 Since full consideration had passed to the corporation when the debts were created, the repayment of the corporate debts could not constitute a distribution to Sammons for he received nothing that was not already owed.\n \n \n 15\n It is urged, however, that a transfer of corporate funds from a fiscally sound parent to an insolvent or near insolvent subsidiary corporation for the purpose of enabling the subsidiary to pay a debt to the controlling stockholder of the parent is not within the general rule that we have stated. Based upon the reasonable expectation that the parent should rely on its status as a separate corporate entity to insulate itself from the liability to any creditor which the subsidiary is unable to satisfy (including its own controlling shareholder), it is contended that the transfer of funds should be treated as a dividend to the parent corporation's stockholder. While there can be no quarrel with this contention, it does not reach the entire payment which Sammons received in the case at bar. Conceding that Aero would probably be unable to pay its debt to Sammons, the fact which overrides Aero's financial embarrassment is the indemnity obligation of Standard-a subsidiary of Reserve which, unlike Aero, was sufficiently solvent to meet its obligation to indemnify Sammons. Standard's indemnification agreement extended to any losses which Sammons might incur as a result of his guaranty of the bank loan. Thus, Standard remained obligated to indemnify Sammons to the extent of the note which he had executed in satisfaction of the bank loan (966,000 dollars and the interest thereon). We reject the Government's contention that Standard's indemnity did not apply to the note executed by Sammons in satisfaction of Aero's note on which he was guaranty. It is also irrelevant that the payment Sammons received was not explicitly designated as being in satisfaction of the indemnity obligation. No choice between form and substance is involved. Here, under both form and substance, the payment removed the indemnity obligation of Standard.\n \n \n 16\n The payment by the parent, Reserve, of the obligation of its solvent and financially secure subsidiary, Standard, does not constitute a gratuitous transfer to an insolvent corporation for the benefit of Sammons. Thus, the insolvency argument urged by the Commissioner has no application to so much of the payment as went to satisfy Sammons' claim to indemnity. However, the Commissioner's argument does reach the transfer of funds which Sammons eventually received in satisfaction of his other discounted debt purchase claims against Aero which were not subject to any indemnity agreement, and we affirm the Tax Court's decision as to that amount.\n \n \n 17\n For the sake of simplicity, we have thus far considered the case as if Standard were wholly owned by Reserve. The record before us indicates however that Reserve owned directly and indirectly only about 76.8% of the outstanding stock of Standard. Moreover, Sammons owned at least 13% of Standard apart from that interest which was his through his ownership of Reserve.3 Thus, although Reserve's ownership of the greater part of Standard created a parent-subsidiary relationship between the two corporations, they evidently were, to some extent, brother-sister corporations as a result of Sammons unrelated ownership interest in both. Reserve and the other insurance companies, through their indirect contributions to Aero bore the entire loss of indemnifying Sammons rather than just their respective distributive shares of the loss; thus, the shareholders of Standard other than the contributing insurance companies were, in some mathematical ratio, relieved of their portions of the loss occasioned by the indemnity agreement. Since Sammons, either directly or through other of his corporations, was apparently one of these other benefited shareholders, there remains the possibility that he received constructive dividends in some amount as a result of the contributions to Aero. This issue, already complex enough, is further clouded by the fact that the contribution to Aero came not only from Reserve but from other insurance companies controlled by Sammons. We decline to attempt to resolve this labyrinthine question of fact and law on the record before us without the benefit of the Tax Court's findings and opinions on the issue. However, we deem it appropriate to furnish that forum with a general example of the approach which the remanded issue requires.\n \n \n 18\n The basic question which must be resolved may be most simply illustrated by assuming that the entire transfer came from Reserve. Suppose, for example, that the Tax Court were to determine that Sammons owned 20% of the stock of Standard either directly or indirectly, excepting of course that interest in Standard which would be attributed to him through his ownership of Reserve. In that situation Reserve's contribution to Aero would have relieved Sammons' 20% stock interest in Standard of its share of the loss resulting from the indemnity agreement. Since that 20% share of the loss was borne not by Sammons, but by Reserve through its contribution to Aero, it could be contended that Sammons received a constructive dividend in an amount equal to 20% of the loss occasioned by the indemnity.\n \n \n 19\n We express no opinion on the merits as to whether this predominantly vertical-but perhaps partially horizontal-transfer constitutes a constructive dividend. It may be that the Tax Court would consider such a benefit only incidental to Sammons, and not a proper subject for application of the constructive dividend rule.4\n \n \n 20\n We remand to the Tax Court with instructions to determine (a) what part of the contribution to Aero is analogous to the transfer of funds from one brother-sister corporation to another, rather than a transfer down the chain of corporate ownership, and (b) whether that brother-sister portion of the contribution constituted a constructive dividend to Sammons.\n \n \n 21\n We have concluded that the Tax Court correctly construed all of the 142,121.20 dollars received by Sammons in payment of the deferred notes as a constructive dividend, and have given that court instructions as to treatment to be afforded the payment which satisfied the indemnity. One other point which may occur in connection with our remand should be addressed. While the total transfer to Aero was 1,200,000 dollars, the total payment (including the interest component) received by Sammons was only 1,120,960.96 dollars. The funds represented by the difference between these two figures, 79,039.04 dollars, were retained by Aero. The Tax Court's opinion is unclear as to whether there was a finding that the primary purpose of this 79,039.04 dollar portion of the transfer was to benefit Sammons. The Government made no claim that these particular transferred funds constituted a dividend (apparently because of its focus on the much larger sum of money which Sammons actually received). The Tax Court should determine whether an argument of dividend equivalence as to this amount can now properly be raised by the government, should it desire to do so. If it does and if the Tax Court determines that this issue can now properly be raised, it shall determine the proper tax treatment of that amount in accordance with the principles outlined in this opinion.\n \n \n 22\n When these determinations have been made the Tax Court is then directed to recompute the taxpayer's liability.\n \n \n 23\n Affirmed in part, reversed in part, and remanded with directions.\n \n \n \n 1\n See George W. Knipe, 24 T.C.M. 668 (1965), aff'd per curiam sub nom Equitable Publishing Co. v. Commissioner, 356 F.2d 514 (3d Cir. 1966); Sammons v. United States, 433 F.2d 728 (5th Cir. 1970); Worcester v. Commissioner, 370 F.2d 713 (1st Cir. 1966). This reasoning is analogous to that employed by the Commissioner in cases of income reallocation under Internal Revenue Code Section 482. The factual situations in those cases, where funds are transferred from one entity to another other than in accordance with the standards of arm's length dealing set out by Section 482, are, of course, parallel to situations such as the one in this case. See generally Asbill, The Application of Section 482 to Domestic Taxpayers-Current Status and Trends, 19 U. So. Calif. Tax Institute 673, 702-05 (1967); B. Bitker & J. Eustice, supra, p 7.05, at 7-25, and p 15.06, at 15-33; Loening, Section 482 Allocations, 30 N.Y. U. Fed. Tax Institute 1247, 1262-63, 1266 (1972)\n \n \n 2\n We decline to consider the contention raised for the first time on appeal that this debt actually constituted equity under the \"thin corporation\" doctrine\n \n \n 3\n This follows from the Tax Court's finding that Standard was controlled by Sammons. Control was defined by the Tax Court as a total direct and indirect ownership interest of 90% of the outstanding stock. 30 T.C.M. 628 & n.2. Since Sammons' ownership interest in Standard through Reserve appears to have been 76.8% at the most, at least some 13% of his ownership interest in Standard must have been separate and apart from his interest through Reserve\n \n \n 4\n These hypothetical illustrations should demonstrate our reasoning. Example 1. 98% of a subsidiary is owned by its corporate parent while the remaining 2% is directly owned by sole shareholder of the parent. Theoretically, 2% of a transfer to the subsidiary from the parent which does not increase the parent's percentage of ownership of the subsidiary constitutes a distribution to the sole shareholder of the parent. Assuming that the primary purpose of the transfer was to benefit the parent's stockholder, 2% of the transfer could be found to be a constructive dividend, but might also be ignored as de minimis. Example 2. The parent owns 51% of the subsidiary, while the parent's shareholder directly owns the remaining 49%. Given an existing subsidiary, the possibilities of diversion of earnings in the nature of a spin-off to the shareholder are more obvious and the likelihood of divident construction more certain. Such flagrant examples could possibly be dealt with under some form of the \"step transaction\" or \"sham\" doctrines\n \n \n ", "ocr": false, "opinion_id": 307859 } ]	Fifth Circuit	Court of Appeals for the Fifth Circuit	F	USA, Federal
2,677,932	null	2013-04-12	false	keyes-v-johnson	Keyes	Keyes v. Johnson	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	null	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": 1, "download_url": "http://appellate.nccourts.org/opinions/?c=1&pdf=30106", "author_id": null, "opinion_text": " IN THE SUPREME COURT OF NORTH CAROLINA\n\n No. 399A12\n\n FILED 12 APRIL 2013\n\nSHARON A. KEYES\n\n v.\n\nW. GLENN JOHNSON, Guardian of the Estate of Nelson T. Currin\n\n\n\n Appeal pursuant to N.C.G.S. § 7A-30(2) from the decision of a divided panel\n\nof the Court of Appeals, ___ N.C. App. ___, 731 S.E.2d 269 (2012), affirming an\n\norder granting summary judgment entered on 30 August 2011 by Judge Lucy N.\n\nInman in Superior Court, Harnett County. On 12 December 2012, the Supreme\n\nCourt allowed plaintiff’s petition for discretionary review as to additional issues.\n\nHeard in the Supreme Court on 11 March 2013.\n\n\n Sharon A. Keyes, pro se, plaintiff-appellant.\n\n Narron, O’Hale & Whittington, PA, by James W. Narron and Matthew S.\n McGonagle, for defendant-appellee.\n\n\n PER CURIAM.\n\n\n AFFIRMED; DISCRETIONARY REVIEW IMPROVIDENTLY ALLOWED.\n\n\n Justice BEASLEY did not participate in the consideration or decision of this\n\ncase.\n\f", "ocr": false, "opinion_id": 2677932 } ]	Supreme Court of North Carolina	Supreme Court of North Carolina	S	North Carolina, NC
284,635	Castle, Kerner, Kiley	1969-03-05	false	j-edward-jones-v-evelyn-s-jones	null	J. Edward Jones v. Evelyn S. Jones	J. Edward JONES, Plaintiff-Appellant, v. Evelyn S. JONES Et Al., Defendants-Appellees	J. Edward Jones, appellant pro se., John J. Stamos, State’s Atty., Donald J. Veverka, Asst. State’s Atty., Chicago, Ill., William G. Clark, Atty. Gen., John J. O’Toole, Asst. Atty. Gen., of counsel, for defendants-appellees McCormick, Schwartz and Dempsey., Louis C. Warchol, Chicago, Ill., pro se., Bernard B. Brody, Chicago, Ill., pro se and for Gerald Lee Turek., Richard G. Stege, Jr., Gertrude Stege, River Forest, Ill., for appellee Evelyn Jones.	null	null	null	null	null	null	null	null	null	null	33	Published	null	<parties data-order="0" data-type="parties" id="b427-3"> J. Edward JONES, Plaintiff-Appellant, v. Evelyn S. JONES et al., Defendants-Appellees. </parties><br><docketnumber data-order="1" data-type="docketnumber" id="b427-5"> No. 16765. </docketnumber><br><court data-order="2" data-type="court" id="b427-6"> United States Court of Appeals Seventh Circuit. </court><br><decisiondate data-order="3" data-type="decisiondate" id="b427-7"> March 5, 1969. </decisiondate><br><attorneys data-order="4" data-type="attorneys" id="b427-22"> J. Edward Jones, appellant pro se. </attorneys><br><attorneys data-order="5" data-type="attorneys" id="b427-23"> John J. Stamos, State’s Atty., Donald J. Veverka, Asst. State’s Atty., Chicago, Ill., William G. Clark, Atty. Gen., John J. O’Toole, Asst. Atty. Gen., of counsel, for defendants-appellees McCormick, Schwartz and Dempsey. </attorneys><br><attorneys data-order="6" data-type="attorneys" id="b427-24"> Louis C. Warchol, Chicago, Ill., pro se. </attorneys><br><attorneys data-order="7" data-type="attorneys" id="b427-25"> Bernard B. Brody, Chicago, Ill., pro se and for Gerald Lee Turek. </attorneys><br><attorneys data-order="8" data-type="attorneys" id="b427-26"> Richard G. Stege, Jr., Gertrude Stege, River Forest, Ill., for appellee Evelyn Jones. </attorneys><br><p data-order="9" data-type="judges" id="b427-27"> Before CASTLE, Chief Judge, and KILEY and KERNER, Circuit Judges. </p>	[ "410 F.2d 365" ]	[ { "author_str": "Kerner", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/410/410.F2d.365.16765.html", "author_id": null, "opinion_text": "410 F.2d 365\n J. Edward JONES, Plaintiff-Appellant,v.Evelyn S. JONES et al., Defendants-Appellees.\n No. 16765.\n United States Court of Appeals Seventh Circuit.\n March 5, 1969.\n \n J. Edward Jones, appellant pro se.\n John J. Stamos, State's Atty., Donald J. Veverka, Asst. State's Atty., Chicago, Ill., William G. Clark, Atty. Gen., John J. O'Toole, Asst. Atty. Gen., of counsel, for defendants-appellees McCormick, Schwartz and Dempsey.\n Louis C. Warchol, Chicago, Ill., pro se.\n Bernard B. Brody, Chicago, Ill., pro se and for Gerald Lee Turek.\n Richard G. Stege, Jr., Gertrude Stege, River Forest, Ill., for appellee Evelyn Jones.\n Before CASTLE, Chief Judge, and KILEY and KERNER, Circuit Judges.\n KERNER, Circuit Judge.\n \n \n 1\n Plaintiff-appellant Jones seeks a review of an order of the District Court dismissing his complaint which alleged a violation of his civil rights and was brought under 42 U.S.C. § 1983.\n \n \n 2\n The Court takes judicial notice of a series of legal actions between the Jones' in the Illinois courts beginning in the middle 1950's. Plaintiff-appellant Jones and defendant-appellee Jones were husband and wife and the various actions filed dealt with their marital matters. One of the actions involved a petition by Evelyn Jones for alimony and child support. An order for temporary child support was entered in the Circuit Court of Cook County, Illinois. J. Edward Jones refused to make any payments and was held in contempt and committed to jail. On appeal before the Illinois Appellate Court, First District, certain aspects of the proceedings were reversed and the contempt and commitment orders were sustained. Jones v. Jones, 40 Ill.App.2d 217, 189 N.E.2d 33 (1963).\n \n \n 3\n The civil rights action filed in the United States District Court named as defendants, Evelyn S. Jones, members of her family, her lawyers, judges of the Circuit Court and judges of the Illinois Appellate Court, and alleged that these defendants had combined to unconstitutionally deprive him of his constitutional rights. Motions to dismiss were filed and were granted on January 5, 1967. Notices of the dismissal were mailed.\n \n \n 4\n Appellant filed a motion to vacate the order of dismissal under Rule 60(b) on January 3, 1968. This motion to vacate was denied and plaintiff-appellant appeals.\n \n \n 5\n Circuit Judges David A. Canel, Raymond P. Drymalski and Alphonse A. Wells, and Appellate Judges Ulysses S. Schwartz, John V. McCormick and John T. Dempsey are named defendants. Each of these judges performed judicial functions in matters involving the various suits of the Jones.' The immunity of judges from liability in the regular performance of their official duties under 42 U.S.C. § 1983, is well established and finds its root in the common law and was most recently confirmed in Pierson v. Ray, 386 U.S. 547, 554, 87 S. Ct. 1213, 18 L. Ed. 2d 288 (1966); Brown v. Dunne, 409 F.2d 341 (7th Cir. Feb. 13, 1969); Stambler v. Dillon, 288 F. Supp. 646 (S.D.N.Y.1968).\n \n \n 6\n Attorneys Warchol, Brody and Turek are lawyers who represented Evelyn Jones in proceedings before the Circuit and Appellate Courts of Illinois in private litigation. Lawyers who are not also parties in interest and are engaged in private litigation on behalf of clients do not act under color of state law within the meaning of 42 U.S.C. § 1983. Every litigant is entitled to a zealous advocate in the presentation of his matters before the court. The state merely provides a forum for the litigants and although lawyers are considered \"officers of the court,\" they are not officers of the state within the meaning of the Civil Rights Act. See Skolnick v. Spolar, 317 F.2d 857 (7th Cir. 1963), cert. denied, 375 U.S. 904, 84 S. Ct. 195, 11 L. Ed. 2d 145, reh. denied, 375 U.S. 960, 84 S. Ct. 439, 11 L. Ed. 2d 318; Skolnick v. Martin, 317 F.2d 855 (7th Cir. 1963); Meier v. State Farm Mutual Auto Ins. Co., 356 F.2d 504 (7th Cir. 1966), cert. denied, 385 U.S. 875, 87 S. Ct. 151, 17 L. Ed. 2d 102, and United States v. Price, 383 U.S. 787, 86 S. Ct. 1152, 16 L. Ed. 2d 267 (1966). Cf. Link v. Greyhound Corp., 288 F. Supp. 898 (E.D.Mich.1968). Moreover, it would be improper for attorneys and judges who were not parties in interest to be joined with the other parties defendant. Brown v. Dunne, supra.\n \n \n 7\n Evelyn S. Jones, Richard G. Stege and Gertrude Stege, his wife, are the only other defendants not previously dealt with in this opinion. Plaintiff-appellant Jones' allegations involving these defendants refer back to the year 1962, four years prior to the filing of his action in the federal District Court.\n \n \n 8\n Neither federal common law nor the federal Civil Rights statute fixes a time limit within which suits for alleged violations must be commenced. The cases are clear that there being no federal statute fixing a limitation, the applicable statute of the forum state which governs the closest analogous state action will control. These last named defendants filed motions to dismiss the complaint and among other motions, pleaded the statute of limitations. O'Sullivan v. Felix, 233 U.S. 318, 322, 34 S. Ct. 596, 58 L. Ed. 980 (1913); Wilson v. Hinman, 172 F.2d 914-915 (10th Cir. 1949), cert. denied, 336 U.S. 970, 69 S. Ct. 933, 93 L. Ed. 1121; Mohler v. Miller, 235 F.2d 153, 155 (6th Cir. 1956); Crawford v. Zeitler, 326 F.2d 119, 121 (6th Cir. 1964).\n \n \n 9\n In considering the substance of the alleged injury and not merely the name given to it by the parties, we hold that the statute of limitation in Chapter 83, Illinois Revised Statutes, § 15 (§ 14 of the Limitations Act) applies:\n \n \n 10\n Actions for damages for an injury to the person, or for false imprisonment, or malicious prosecution * * * shall be commenced within two years next after the cause of action accrued.\n \n \n 11\n See Tranowski v. Chicago Bar Ass'n, 309 F.2d 421 (7th Cir. 1962), and Hileman v. Knable, 391 F.2d 596 (3d Cir. 1968). Compare Wakat v. Harlib, 253 F.2d 59 (7th Cir. 1958), in which a five year limitation was applied to an action for conspiracy under 42 U.S.C. § 1985.\n \n \n 12\n The complaint establishes the date of November 5, 1962, as the date of the court order upon which the wrongful action is based. The complaint was filed June 29, 1966, more than two years after the alleged action accrued.\n \n \n 13\n For the foregoing reasons, the decision of the District Court is affirmed.\n \n \n 14\n Affirmed.\n \n ", "ocr": false, "opinion_id": 284635 } ]	Seventh Circuit	Court of Appeals for the Seventh Circuit	F	USA, Federal
2,456,821	W. O. Murray	1957-12-18	false	bolen-v-board-of-firemen-policemen-fire-alarm-operators-trustees-of	Bolen	Bolen v. Board of Firemen, Policemen & Fire Alarm Operators' Trustees of San Antonio	Bennett R. BOLEN, Director of Finance, City of San Antonio, Texas, Appellant, v. BOARD OF FIREMEN, POLICEMEN AND FIRE ALARM OPERATORS’ TRUSTEES OF SAN ANTONIO, TEXAS	Carlos C. Cadena, City Atty., A. W. Worthy, Jr., Asst. City Atty., San Antonio, for appellant., Harvey L. Hardy, San Antonio, for ap-pellee.	null	null	null	null	null	null	null	Rehearing Denied Jan. 15, 1958.	null	null	21	Published	null	<parties id="b932-3"> Bennett R. BOLEN, Director of Finance, City of San Antonio, Texas, Appellant, v. BOARD OF FIREMEN, POLICEMEN AND FIRE ALARM OPERATORS’ TRUSTEES OF SAN ANTONIO, TEXAS. </parties><br><docketnumber id="b932-6"> No. 13305. </docketnumber><br><court id="b932-7"> Court of Civil Appeals of Texas. San Antonio. </court><br><decisiondate id="b932-9"> Dec. 18, 1957. </decisiondate><br><otherdate id="b932-10"> Rehearing Denied Jan. 15, 1958. </otherdate><br><attorneys id="b932-21"> Carlos C. Cadena, City Atty., A. W. Worthy, Jr., Asst. City Atty., San Antonio, for appellant. </attorneys><br><attorneys id="b932-22"> Harvey L. Hardy, San Antonio, for ap-pellee. </attorneys>	[ "308 S.W.2d 904" ]	[ { "author_str": "Murray", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n308 S.W.2d 904 (1957)\nBennett R. BOLEN, Director of Finance, City of San Antonio, Texas, Appellant,\nv.\nBOARD OF FIREMEN, POLICEMEN AND FIRE ALARM OPERATORS' TRUSTEES OF SAN ANTONIO, TEXAS.\nNo. 13305.\nCourt of Civil Appeals of Texas. San Antonio.\nDecember 18, 1957.\nRehearing Denied January 15, 1958.\nCarlos C. Cadena, City Atty., A. W. Worthy, Jr., Asst. City Atty., San Antonio, for appellant.\nHarvey L. Hardy, San Antonio, for appellee.\nW. O. MURRAY, Chief Justice.\nThis suit was instituted by the Board of Firemen, Policemen and Fire Alarm Operators' Trustees of San Antonio, Texas, hereinafter referred to as \"The Board,\" against Bennett R. Bolen, as Director of Finance for the City of San Antonio and ex officio Treasurer of the city, and by virtue 905 of the provisions of Section 6 of Art. 6243f, Vernon's Ann.Civ.Stats., treasurer of the pension fund administered by the Board, seeking a judgment declaring the Board's rights under Section 17 of Art. 6243f, Vernon's Ann.Civ.Stats., with respect to the State Constitution, and as to the validity and constitutionality of Chapter 242, Sec. 1, of the Acts, 1955, 54th Legislature, and as to the duty of defendant under such act.\nDefendant filed a motion for summary judgment against the Board, requesting that Section 17 of Art. 6243f be declared to be unconstitutional under Art. 3, Secs. 50 and 52, and under Art. 11, Sec. 3 of the State Constitution Vernon's Ann.St.\nThe facts all being fully stipulated, the trial court denied defendant's motion, granted the Board's motion, and proceeded to render judgment declaring Sec. 17 of Article 6243f, Vernon's Ann.Civ.Stats., to be constitutional and valid, and further declared that defendant is the ministerial agent and custodian of the Firemen, Policemen and Fire Alarm Operators' Pension Fund, and has the duty to invest portions of the Board's reserve retirement fund in accordance with the orders of the Board, which are made in compliance with the terms of the above statutes. From that judgment the defendant has prosecuted this appeal.\nThe Board, composed of the Mayor, two city councilmen, two firemen and two policemen, directed the investment of funds under its jurisdiction, in investment trust shares which represent an interest in stock in private corporations. This action is authorized by Section 17 of Art. 6243f.\nAppellant, who is ex officio treasurer of the funds of the pension system, refused to comply with the direction of the Board, on the ground that Section 17 violates the Texas Constitution, Art. 3, Secs. 50 and 52, and Art. 11, Sec. 3. Section 50 prohibits the State from loaning or pleading its credit to any individual or corporation, while Section 52 prohibits any county, city, town or other political corporation or subdivision, from lending its credit to any individual or corporation, with some exceptions, which are not here involved.\nThe above provisions of the Constitution do not prohibit the Board from investing its reserve funds in the manner prescribed by Section 17, and, therefore, Section 17 is neither void nor unconstitutional. The Board is not any of the entities mentioned in said Sec. 50 or 52, or in Sec. 3 of Art. 11. The Board is not the State, nor is it a county, a city, a town or any other political corporation or subdivision of the State. The Board is simply a group of statutory trustees charged with the management of the Pension Funds of the Firemen, Policemen and Fire Alarm Operators of the City of San Antonio.\nIt is true that the city pays money into this trust fund, but once it is paid into the fund the city loses control over it and it no longer belongs to the city. The law just happens to name the mayor and two councilmen as members of the Board, but it might just as well have named someone else. The fact that the mayor and two councilmen happen to be members of the Board does not make the trust funds property belonging to the city. The City Treasurer just happens to be named as ex officio treasurer of the pension fund, but this fact, again, does not give the city, as such, any control over the funds or make them city property.\nThe Board just simply is not a political corporation nor a political subdivision of the State. It does not have any of the attributes of a political subdivision. A political subdivision contemplates: geographical area and boundaries, public elections, public officials, taxing power and a general public purpose or benefit. The Board has none of these attributes. For a definition of a political subdivision, see Allison v. Corker, 67 N.J.L. 596, 52 A. 362, 60 L.R.A. 564; Arkansas State Highway Commission v. Clayton, 226 Ark. 712, 906 292 S.W.2d 77; City of Norwalk v. Daniele, 143 Conn. 85, 119 A.2d 732, 733.\nA city ward is not a political subdivision. Gibbany v. Ford, 29 N.M. 621, 225 P. 577, 579. A housing authority is not a political subdivision. Lloyd v. Twin Falls Housing Authority, 62 Idaho 592, 113 P.2d 1102. The Board of Regents of a State University is not a political subdivision of the State. State ex rel. Miller v. State Board of Education, 56 Idaho 210, 52 P.2d 141.\nA case somewhat in point here is Wallace v. Childers, 198 Okl. 604, 180 P.2d 1005, 1007.\nIn that case the Court said:\n\"The Firemen's Relief and Pension Fund is not a municipally-owned fund, but is held only in a separate and distinct right and capacity. Federal Deposit Ins. Corp. v. Casady, 10 Cir., 106 F.2d 784. It is a trust fund in which the cities and towns have no pecuniary interest whatever.\"\nThe judgment of the trial court is affirmed.\n", "ocr": false, "opinion_id": 2456821 } ]	Court of Appeals of Texas	Court of Appeals of Texas	SA	Texas, TX
2,151,321	Rizzi	1980-03-31	false	royal-globe-insurance-v-aetna-insurance	null	Royal Globe Insurance v. Aetna Insurance	ROYAL GLOBE INSURANCE COMPANY, Plaintiff-Appellant, v. AETNA INSURANCE COMPANY, Defendant-Appellee	Goldenson, Kiesler, Berman and Brenner, of Chicago (Robert L. Kiesler and Valerie S. Green, of counsel), for appellant., Wildman, Harrold, Allen & Dixon, of Chicago (Leonard C. Swanson and Craig M. White, of counsel), for appellee.	null	null	null	null	null	null	null	null	null	null	36	Published	null	<parties id="b1025-7" pgmap="1025"> ROYAL GLOBE INSURANCE COMPANY, Plaintiff-Appellant, v. AETNA INSURANCE COMPANY, Defendant-Appellee. </parties><br><court id="b1025-8" pgmap="1025"> First District (3rd Division) </court><docketnumber id="AVt1" pgmap="1025"> No. 78-1292 </docketnumber><br><decisiondate id="b1025-9" pgmap="1025"> Opinion filed March 31, 1980. </decisiondate><br><attorneys id="b1026-7" pgmap="1026"> Goldenson, Kiesler, Berman and Brenner, of Chicago (Robert L. Kiesler and Valerie S. Green, of counsel), for appellant. </attorneys><br><attorneys id="b1026-8" pgmap="1026"> Wildman, Harrold, Allen & Dixon, of Chicago (Leonard C. Swanson and Craig M. White, of counsel), for appellee. </attorneys>	[ "403 N.E.2d 680", "82 Ill. App. 3d 1003" ]	[ { "author_str": "Rizzi", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n82 Ill. App.3d 1003 (1980)\n403 N.E.2d 680\nROYAL GLOBE INSURANCE COMPANY, Plaintiff-Appellant,\nv.\nAETNA INSURANCE COMPANY, Defendant-Appellee.\nNo. 78-1292.\nIllinois Appellate Court First District (3rd Division).\nOpinion filed March 31, 1980.\n1004 Goldenson, Kiesler, Berman and Brenner, of Chicago (Robert L. Kiesler and Valerie S. Green, of counsel), for appellant.\nWildman, Harrold, Allen & Dixon, of Chicago (Leonard C. Swanson and Craig M. White, of counsel), for appellee.\nReversed and remanded.\nMr. JUSTICE RIZZI delivered the opinion of the court:\nPlaintiff, Royal Globe Insurance Company, brought a declaratory judgment action against defendant, Aetna Insurance Company, to determine the rights of the parties with respect to concurrent liability insurance policies. The trial court granted defendant's motion to dismiss the complaint. We reverse and remand.\nRoyal Globe issued a business liability insurance policy to Monticello Realty Company. Aetna issued a public liability and garage liability policy to Ganser-Oguss Parking, Inc., a company which operated a parking garage in a building for which Monticello was the managing agent. In September 1975, Monticello was listed as an additional insured under the Aetna policy.\nDuring the effective period of the two policies, a claim for injuries suffered in the parking garage was made against Monticello and Ganger-Oguss. This claim was subsequently referred to Aetna and Royal Globe. 1005 Despite an earlier letter to Monticello from Aetna indicating that Aetna would undertake defense and/or payment of the claim, Aetna refused to participate in settlement negotiations. The claim was subsequently settled by Royal Globe on behalf of Monticello. Royal Globe alleges that settlement was based on facts which indicated fault on the part of Monticello and lack of fault on the part of the injured party. Thus, according to the complaint, Royal Globe did not make payment as a volunteer.\nRoyal Globe made a demand on Aetna to pay one-half of the settlement since Aetna was a concurrent insurer of Monticello. Aetna refused to make such payment.\nThe issue presented for review is whether the complaint states a cause of action for declaratory relief. There are two basic requirements for bringing an action for declaratory relief. First, there must be an actual controversy. (Ill. Rev. Stat. 1977, ch. 110, par. 57.1(1).) This requires a legitimate dispute admitting of an immediate and definitive determination of the parties' rights, the resolution of which will aid in the termination of the controversy or some part thereof. (Underground Contractors Association v. City of Chicago (1977), 66 Ill.2d 371, 375, 362 N.E.2d 298, 300.) We believe that Royal Globe has sufficiently alleged a legitimate dispute regarding its right to obtain contribution from Aetna.\n 1 In insurance law, contribution is an equitable principle arising among co-insurers which permits one who has paid the entire loss to be reimbursed from other insurers who are also liable for the loss. (6 Appleman, Insurance Law & Practice § 3902, at 422 (1972).) The reason for this rule is that one insurer has paid a debt which is equally owed by the other insurers. Commercial Union Insurance Co. v. Farmers Mutual Fire Insurance Co. (Mo. App. 1970), 457 S.W.2d 224, 226; 16 Couch on Insurance § 62:141, at 560-61 (2d ed. 1966).\n 2 The fact that an insurer undertakes the burden of a full settlement payment prior to a possible judgment does not mean that the insurer is a volunteer. It is therefore not precluded from recovering contribution from other insurers liable for the same loss. (St. Paul Fire & Marine Insurance Co. v. Allstate Insurance Co. (1975), 25 Ariz. App. 309, 543 P.2d 147, 149-50; 8 Appleman, Insurance Law & Practice § 4913, at 398 (1962).) In order for the settling insurer to recover, however, it must prove all facts necessary to the claimant's recovery against the insured as well as the reasonableness of the amount paid. (Carolina Casualty Insurance Co. v. Oregon Automobile Insurance Co. (1965), 242 Ore. 407, 408 P.2d 198, 200; see 8 Appleman § 4913, at 399.) Additionally, in any contribution action, there must be an identity between the policies as to parties and insurable interests and risks. Republic Insurance Co. v. United States Fire Insurance Co. (1968), 166 Colo. 513, 444 P.2d 868, 870; 16 Couch § 62:160, at 570.\n1006 3 In the present case, Royal Globe alleges the existence of concurrent insurance policies which provided coverage to Monticello for the same claim. It also alleges that it paid the entire loss for which Aetna was equally liable. In order to recover, of course, Royal Globe will have to establish all facts necessary to the claimant's recovery against its insured and the reasonableness of the amount paid. But, Royal Globe is not a volunteer merely because it settled the claim. In sum, the allegations are sufficient to establish an actual controversy regarding Royal Globe's right to obtain contribution from Aetna. Royal Globe has therefore fulfilled this first requirement for declaratory relief.\nThe second requirement for bringing an action for declaratory relief is that the party bringing the action must be \"interested in the controversy.\" (Ill. Rev. Stat. 1977, ch. 110, par. 57.1(1).) This means that the party seeking relief must have a personal claim or right which is capable of being affected. Underground Contractors, 66 Ill.2d 371, 376, 362 N.E.2d 298, 301.\n 4 Here, Aetna contends that Royal Globe is not interested in the controversy because there is no legal relationship between them. Aetna argues that there is no allegation of an assignment of rights, a subrogation right or an independent contract between Royal Globe and Aetna. These allegations, however, are not necessary in an action for contribution. The right to contribution has its basis in equity rather than in contract. (Commercial Union, 457 S.W.2d 224, 226.) The right does not arise by way of an independent agreement between the parties. (Commercial Union, 457 S.W.2d 224, 226.) Nor does it arise by way of subrogation. (Carolina Casualty, 408 P.2d 198, 203.) Instead, the right arises when one insurer pays money for the benefit of another insurer. (Carolina Casualty, 408 P.2d 198, 203.) Since Royal Globe alleged in its complaint that it paid money for the benefit of Aetna, the complaint states a personal claim capable of being affected. Thus, Royal Globe has fulfilled this second requirement for declaratory relief.\nAetna also argues that Royal Globe does not possess any claim or right which entitles it to seek a declaration of rights under the Aetna policy. In its complaint, Royal Globe asks the court to declare the rights and liabilities of the parties \"under the terms and provisions of said policy of insurance.\" Although Royal Globe does not have any rights under the Aetna policy, we do not think that the inclusion of this request is fatal to Royal Globe's complaint. The remedy of declaratory judgment is not to be restricted by technicalities. (Department of Illinois Disabled American Veterans v. Bialczak (1976), 38 Ill. App.3d 848, 853, 349 N.E.2d 897, 901.) The complaint sufficiently states an actual controversy for contribution, and Aetna was reasonably informed of this claim. (Ill. Rev. Stat. 1977, 1007 ch. 110, par. 42(2).) The court may properly declare the rights of the parties with respect to the controversy.\n 5 When confronted with a motion to dismiss a complaint for declaratory judgment, the trial court must deny the motion unless it appears that a plaintiff is entitled to no relief on the facts alleged. (Mid-Town Petroleum, Inc. v. Dine (1979), 72 Ill. App.3d 296, 301, 390 N.E.2d 428, 432; La Salle Casualty Co. v. Lobono (1968), 93 Ill. App.2d 114, 119, 236 N.E.2d 405, 408.) Here, the complaint states a claim for contribution for which Royal Globe may be entitled to relief. Accordingly, the trial court erred in granting the motion to dismiss.\nThe order granting defendant's motion to dismiss is reversed. The case is remanded to the circuit court for further proceedings consistent with this opinion.\nReversed and remanded.\nMcGILLICUDDY, P.J., and SIMON, J., concur.\n", "ocr": false, "opinion_id": 2151321 } ]	Appellate Court of Illinois	Appellate Court of Illinois	SA	Illinois, IL
2,308,481	Barrington D. Parker, Jr.	1999-11-23	false	seb-sa-v-montgomery-ward-co-inc	null	SEB SA v. Montgomery Ward & Co., Inc.	SEB S.A., Plaintiff, v. MONTGOMERY WARD & CO., INC., Global-Tech Appliances, Inc., and Pentalpha Enterprises Ltd., Defendants	Norman Zivin, Cooper & Dunham, New York City, NY, for plaintiff., William Dunnegan, Perkins & Dunne-gan, New York City, NY, for defendants.	null	null	null	null	null	null	null	null	null	null	4	Published	null	<parties id="b441-7"> SEB S.A., Plaintiff, v. MONTGOMERY WARD & CO., INC., Global-Tech Appliances, Inc., and Pentalpha Enterprises Ltd., Defendants. </parties><br><docketnumber id="b441-10"> No. 99 Civ. 9284(BDP). </docketnumber><br><court id="b441-11"> United States District Court, S.D. New York. </court><br><decisiondate id="b441-13"> Nov. 23, 1999. </decisiondate><br><attorneys id="b442-5"> <span citation-index="1" class="star-pagination" label="400"> *400 </span> Norman Zivin, Cooper & Dunham, New York City, NY, for plaintiff. </attorneys><br><attorneys id="b442-6"> William Dunnegan, Perkins & Dunne-gan, New York City, NY, for defendants. </attorneys>	[ "77 F. Supp. 2d 399" ]	[ { "author_str": "Parker", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 2499, "opinion_text": "\n77 F.Supp.2d 399 (1999)\nSEB S.A., Plaintiff,\nv.\nMONTGOMERY WARD & CO., INC., Global-Tech Appliances, Inc., and Pentalpha Enterprises Ltd., Defendants.\nNo. 99 Civ. 9284(BDP).\nUnited States District Court, S.D. New York.\nNovember 23, 1999.\n400 Norman Zivin, Cooper & Dunham, New York City, NY, for plaintiff.\nWilliam Dunnegan, Perkins & Dunnegan, New York City, NY, for defendants.\n\nFINDINGS OF FACT AND CONCLUSIONS OF LAW\nBARRINGTON D. PARKER, Jr., District Judge.\nPlaintiff, SEB S.A. (\"SEB\") commenced this action against Montgomery Ward & Co., Inc., Global-Tech Appliances, Inc., and Pentalpha Enterprises Ltd., claiming that a deep fryer, marketed by Montgomery Ward and manufactured by Global-Tech, infringes United States Patent No. 4,995,312 (the \"'312 Patent\"). See 35 U.S.C. § 271.\nSEB moved by Order to Show Cause on September 10, 1999 for a preliminary injunction. Montgomery Ward appeared and opposed the motion, while Global-Tech and Pentalpha challenged the existence of personal jurisdiction in this Court. The application for the preliminary injunction was combined with the Markman hearing. See Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed.Cir. 1995), aff'd, 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996). The Court invited additional submissions by the parties and heard arguments of counsel on October 14, 1999. Subsequently, Pentalpha has appeared in this action.\nThe relevant facts are not substantially in dispute, although their legal consequences are contested. The essential controversy in this litigation is whether the '312 Patent permits the deep fryer's inner pan to be stabilized by a screw. This Court concludes that it does and, consequently, construes the claims at issue, makes the following Findings of Fact and Conclusions of Law pursuant to Fed. R.Civ.P. 65(d), and grants interlocutory relief.\n\nFINDINGS OF FACT\n1. Plaintiff SEB S.A. is a French company doing business in this District through its affiliate T-Fal Corporation (\"T-Fal\"). Through T-Fal, SEB sells a number of consumer appliances, including the deep fryer at issue in this lawsuit, to retailers throughout the United States including those in this District. Montgomery Ward has sold a very similar deep fryer under the Admiral brand. The Admiral fryer is \"the accused product\".\n2. Pentalpha is a corporation based in Hong Kong. Pentalpha is engaged in the manufacture and sale of small household appliances, including deep-fat fryers. Pentalpha manufactured and sold the accused product to Montgomery Ward.\n3. Global-Tech is a corporation with its principal place of business in Hong Kong. Global-Tech and Pentalpha are affiliated Hong Kong corporations.\n4. Montgomery Ward is a national chain of retail stores that imports and sells consumer appliances, including deep fryers. Montgomery Ward competes with SEB's customers throughout the United States including those in the State of New York and the Southern District of New York.\n5. The appliance subject to the '312 Patent is the SEB \"supercool\" safety fryer invented around 1988. The '312 Patent was issued in February 1991 and was subsequently assigned to SEB. SEB has not granted licenses under this Patent, apparently preferring to maintain exclusive rights to sell the product.\n6. The SEB \"supercool\" deep fryer solved a problem which existed prior to its invention. Previously, deep fryers generally had metal or aluminum outer walls, which, when touched by a user, could 401 cause burns as a consequence of the high temperatures achieved during use and, in addition, experienced substantial heat losses while in operation. Moreover, these models had the aesthetic disadvantages associated with the use of high heat resistant metals. One solution to these problems had been to construct the entire wall or skirt from a plastic material able to withstand extreme temperatures. The drawback of this approach, however, was that the use of heat resistant plastics tended to make products prohibitively expensive for household use.\n7. The \"supercool\" deep fryer was designed to remedy these deficiencies by allowing the use of standard, comparatively low-cost, plastic materials. The SEB fryer, in substance, addressed these problems by eliminating \"thermal bridges\" between the metal pan and the plastic outer skirt of the fryer. The absence of thermal bridges means the existence of an insulating gap between the inner metal frying pan and the outer decorative plastic skirt.\n8. The SEB deep fryer employs a ring made of heat resistance plastic to hold the metal pan in place and the metal pan is suspended from the ring which, in turn, is attached to the top of the plastic skirt. This assembly permits the skirt to be insulated from heat at the point of contact and also permits the minimal use of expensive heat-resistant plastics.\n9. In addition, the metal pan is stabilized by a pin attached to the bottom of the pan which extends through an insulated shaft in the base of the housing. Because of the heat-resistant insulated shaft, the pan does not establish a thermal bridge between the metal pan and the skirt. The controversy in this litigation boils down to whether claim 1 permits the use of this pin.\n10. The SEB \"supercool\" deep fryer has achieved substantial commercial success in the United States. It is sold in mass merchandise stores such as Wal-Mart and K-Mart and speciality shops such as Zabar's and Fortunoff. Sales have been high.\n11. The '312 Patent has 13 claims, including 1 independent claim, which is claim 1.\n12. Claim 1 of the '312 Patent recites:\nAn electrical deep fryer comprising a metal pan having a wall, and an electric heating resister that heats said wall directly by conductive heating to a temperature higher than 150~C., said pan being surrounded by a plastic skirt, wherein said skirt is of plastic material which does not continuously withstand a temperature of 150~c., said skirt entirely surrounding the lateral wall and said base of the pan being separated from said wall and said base by an air space of sufficient width to limit the temperature of the skirt to a value which is compatible with the thermal resistance of the plastic material of the skirt, said skirt being completely free with respect to the pan with the exception of a ring which joins only the top edge of the skirt to the top edge of the pan and to which the latter is attached, said ring being of heat-insulating material which is continuously resistant to the temperature of the top edge of the pan.\n13. The specification of the '312 Patent describes the metal pan spaced from the plastic skirt with at least three points of contact between the metal pan and the plastic skirt: a heating element, a thermostat, and the stabilizing connection at the bottom. Those elements are discussed in the text and shown in the drawings.\n14. Claim 8 of the '312 Patent, which relates to independent claim 1, recites, in part, \"the base of the pan has a vertical rod engaged in an opening formed in the base of the outer skirt and separated from the rod by a sleeve of heat-insulating material which affords resistance to the temperature of said rod.\"\n15. The prosecution history of the '312 Patent shows that the phrase \"completely free with respect to the pan\" in claim 1 402 means that the skirt is thermally insulated from the pan with an air gap, not that it is free from any other contacts with the pan:\n... the skirt 3 is practically free with respect to the pan 1 or in other words that no thermal bridge is created between the pan and the skirt....\n16. In connection with the prosecution of the '312 Patent, SEB did not change the original language of the claims in any material respect. In the prosecution history, SEB distinguished the \"cool wall\" invention from a cited Onishi patent, which shows the use of the adiabatic (insulating) material between the pan and the skirt. That discussion had essentially nothing to do with the presence or absence of a thermally insignificant stabilizing element.\n17. At some point in 1997 SEB learned that Sunbeam Products Inc. was advertising and selling deep-fat fryers which SEB believed infringed the '312 Patent. Consequently, in March 1998, SEB sued Sunbeam for patent infringement in the United States District Court for the District of New Jersey.\n18. Following the filing of that suit, SEB amended its complaint to name Pentalpha and Global-Tech as additional defendants. Pentalpha and Global-Tech did not appear until October 1998. At that point they moved to dismiss the amended complaint and to stay discovery. Discovery was stayed for approximately five months, and in January 1999, SEB settled with Sunbeam. Sunbeam agreed to cease selling the fryers and to pay substantial monetary damages to SEB.\n19. Shortly thereafter, SEB learned that Global-Tech and Pentalpha continued to sell a nearly identical deep-fat fryer through a new distributor, Montgomery Ward. Those sales are the subject of this lawsuit.\n20. In light of the progress of the New Jersey action, including the discovery stay and the settlement favorable to SEB, SEB did not unreasonably delay commencing this litigation.\n21. The accused appliance is \"an electrical deep fryer which has a metal pan having a wall, and an electric heating resister that heats said wall directly by conductive heating to a temperature higher than 150° C.\" See claim 1. This device is being sold to consumers throughout the United States and in this District.\n22. The accused device includes each and every element of claim 1 of the '312 Patent, either literally or by equivalents. In the accused device the \"pan [is] surrounded by a plastic skirt, wherein said skirt is of plastic material which does not continuously withstand a temperature of 150° C.\" Moreover, in the accused product the \"skirt entirely surround[s] the lateral wall and said base of the pan [and is] separated from said wall and said base by an air space of sufficient width to limit the temperature of the skirt to a value which is compatible with the thermal resistance of the plastic material of the skirt.\" Moreover, the skirt is \"completely free\" with respect to the pan within the meaning the '312 Patent.\n23. The accused device has \"a ring which joins only the top edge of the skirt to the top edge of the pan and to which this latter is attached, said ring being of heat insulating material which is continuously resistant to the temperature of the top edge of the pan.\"\n24. Montgomery Ward's sale of its deep fryer takes away sales which could have been made by SEB. This competition has the result of decreasing SEB's market share and decreasing its revenues through reduced prices.\n25. Because of the similarity of the products, SEB stands to lose substantial sales during the upcoming Christmas holiday season due to sales of the accused product. The extent of these lost sales cannot be accurately quantified.\n26. Montgomery Ward has not challenged the validity or enforceability of the '312 Patent. The injunction sought 403 herein is not inconsistent with the public interest.\n\nCONCLUSIONS OF LAW\n27. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1338 because SEB is asserting claims under the Patent Act. See 35 U.S.C. § 101 et seq. Venue is proper in this District pursuant to 28 U.S.C. § 1391(b), (c) and (d). SEB bears the burden of establishing its right to preliminary injunctive relief based on four factors: (1) a reasonable likelihood of success on the merits; (2) irreparable harm if the injunction is not granted; (3) a balance of hardships tipping in its favor; and (4) the impact of the injunction on the public interest. Bell & Howell Document Management Products Co. v. Altek Systems, 132 F.3d 701, 705 (Fed.Cir.1997). SEB is entitled to a presumption of irreparable harm by establishing the validity and the infringement of its patent. Reebok Intern. Ltd. v. J. Baker, Inc., 32 F.3d 1552, 1556 (Fed.Cir.1994); H.H. Robertson Co. v. United Steel Deck Inc., 820 F.2d 384, 390 (Fed.Cir.1987).\n28. 35 U.S.C. § 271 provides in part \"whoever without authority makes, uses, offers to sell, or sells any patented invent, within the United States ... during the term of the patent therefor, infringes the patent.\" 35 U.S.C. § 281 provides that \"a patentee shall have remedy by civil action for his infringement of his patent\" and courts \"may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.\" 35 U.S.C. § 283.\n29. To determine whether a patent has been infringed, a two-step analysis is used under which the Court: (1) construes the claim to determine its meaning and scope; and (2) compares the properly construed claim to the accused device. Markman v. Westview Instruments, Inc., 52 F.3d 967, 976 (Fed.Cir.1995), aff'd, 517 U.S. 370, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996); Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448, 1454 (Fed.Cir.1998). Claim construction is a question of law.\n30. In determining the proper construction of a claim, a number of sources may properly be utilized for guidance. These sources include both intrinsic evidence such as the patent's specification and file history and extrinsic evidence such as expert testimony. In cases where an analysis of the intrinsic evidence alone, however, will resolve any ambiguity in a claim term, reliance on extrinsic evidence is improper. Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582-83 (Fed. Cir.1996).\n31. Claims are to be construed in a manner consistent with the specification, whether or not the claim language is ambiguous. The specification is the \"single best guide to the meaning of a disputed term.\" Id. at 1582. Claims, both those which are clear and those which have been ambiguities, must be interpreted in light of the specification. Autogiro Co. of America v. United States, 181 Ct.Cl. 55, 384 F.2d 391, 397 (1967).\n32. Infringement occurs when all elements in an asserted device are found in the accused device. Amstar Corp. v. Envirotech Corp., 730 F.2d 1476, 1481 (Fed. Cir.1984).\n33. SEB is likely to succeed on the merits because that test is met here: the accused product contains each element of claim 1 of the '312 Patent. Consequently its use and sale in the United States infringes the patent.\n34. Montgomery Ward and Pentalpha, in essence, argue that the accused product does not infringe claim 1 because its skirt is not \"completely free with respect to the pan\" as stated in claim 1. Claim 1 recites in part:\n... said skirt entirely surrounding the lateral wall (1a) and the base (1b) of the pan and being separated from said wall 404 and said base by an air space (4) of sufficient width to limit the temperature of the skirt (3) ..., said skirt (3) being free with respect to the pan (1) with the exception of a ring (5) which joins only the top edge (3a) of the skirt to the top edge (1c) of the pan and to which this latter is attached, said ring (5) being of heat-insulating material....\n35. According to the '312 Patent, there are other points of contact between the skirt and the metal pan, such as a heating element, a thermostat and a stabilizing element at the bottom. These points of contact do not create the thermal bridges, which the patented invention seeks to prevent. Defendants contend, nonetheless, that the bottom of the fry pan is stabilized to the bottom of the skirt and, therefore, is not \"completely free with respect to the pan.\" The intrinsic patent evidence, however, does not permit this claim interpretation.\n36. When properly construed, claim 1 cannot mean that the skirt has no connection with the pan other than the heat-resistant ring. The specification of the '312 Patent unambiguously describes at least three other points of contact: a heating element, a thermostat, and a stabilizing connection at the bottom. Those elements are discussed in the text and shown in the drawings. According to defendants, claim 1 should be construed in a manner that would exclude the embodiment of the invention shown in the specification itself. This asserted claim construction is not correct. See Hoechst Celanese Corp. v. BP Chemicals Ltd., 78 F.3d 1575, 1581 (Fed.Cir.1996), cert. denied, 519 U.S. 911, 117 S.Ct. 275, 136 L.Ed.2d 198 (1996); Burke Inc. v. Bruno Independent Living Aids, Inc., 183 F.3d 1334, 51 U.S.P.Q.2d 1295, 1300 (Fed.Cir.1999).\n37. The prosecution history confirms that the phrase \"completely free with respect to the pan\" means that the skirt is thermally insulated from the pan with an air gap, and not that it is free of any other contacts with the pan:\n... the skirt 3 is practically free with respect to the pan 1 or in other words that no thermal bridge is created between the pan and the skirt....\n38. Moreover, a connection between the skirt and pan is recited in dependent claim 8. Thus, it is clear that the claims of the '312 do not exclude all connections between the skirt and the metal pan.\n39. This intrinsic patent evidence constitutes the public record on which competitors rely to determine the scope of the patented invention. Vitronics, 90 F.3d at 1577. Competitors who read the '312 Patent, look at its drawings and review its prosecution history, will learn that the claims cover a plastic skirt that is thermally insulated from the metal pan. They will understand that thermally insignificant contacts from the heating element, the thermostat and any stabilizing element do not create thermal bridges, and the appearance of these elements in a deep fryer does not remove it from the scope of the claimed invention. Defendants' asserted claim construction seeks to change the unambiguous public record, in violation of the principles of claim construction. Markman, 52 F.3d at 980-81.\n40. Thus, SEB is likely to prove at trial that the Admiral deep fryer infringes at least claim 1 of the '312 Patent.\n41. In addition to literal infringement, infringement may exist under the doctrine of equivalents, which applies where the differences between the claimed invention and accused device are insubstantial. Hilton Davis Chemical Co. v. Warner-Jenkinson Co., Inc., 62 F.3d 1512, 1517 (Fed. Cir.1995).\n42. Independent claim 1 is to be construed to cover the embodiment of the invention shown in the specification and drawings, which includes a vertical stabilizing rod which extends from the metal pan through an insulating sleeve into the plastic skirt.\n405 43. The phrase \"completely free with respect to the pan,\" as recited in claim 1 of the '312 Patent, means that the outer plastic skirt is thermally insulated from the hot oil frying pan. In other words, claim 1 means there are no thermal bridges between the skirt and the pan. Claim 1 of the '312 Patent covers a deep-fat fryer with a thermally insulated stabilizing element at the bottom of the hot oil pan.\n44. Claim 8 is a dependent claim. A dependent claim includes all the elements of the independent claim from which it depends. 35 U.S.C. § 112. Since an independent claim cannot be interpreted to exclude the elements of a dependent claim, the term \"completely free\" cannot be interpreted to exclude the heat insulated stabilizing pin claimed in dependent claim 8. Kress Corp. v. Alexander Services, Inc., 991 F.Supp. 740, 745 (W.D.Pa.1997). Consequently, SEB is likely to prove at trial not only literal infringement, but infringement under the doctrine of equivalents.\n45. The defendants have not challenged the validity of the '312 Patent, nor have they come forward with evidence of its invalidity. Consequently, the '312 Patent is presumed valid and this validity reinforces the prospect of the likelihood of success on the merits. This presumption has not been overcome.\n46. SEB has demonstrated irreparable injury even though it is entitled to this presumption. The Christmas selling season is about to begin and SEB will lose sales as well as its position as the exclusive source of \"supercool\" deep fryers. This loss cannot be quantified. In addition, SEB already has lost market share, has been required to lower its prices, and has lost consumer confidence. These injuries are irreparable.\n47. Determining the balance of hardships factor involves weighing the harm that would occur if the injunction were denied against the harm that would occur to the non-moving party if the injunction were granted. Hybritech Inc. v. Abbott Laboratories, 849 F.2d at 1446, 1457 (Fed. Cir.1988).\n48. Here, were preliminary injunctive denied, SEB would be deprived of its right to exclude others from selling the patented device. On the other hand, if the injunction were granted, defendants temporarily would be enjoined from selling the infringing Admiral deep fryer, which Montgomery Ward only recently has begun to sell. Consequently, the balance of hardships weighs in SEB's favor.\n49. In analyzing the public interest factor, courts consider whether any critical public interest would be harmed by the grant of the preliminary injunction. Hybritech, 849 F.2d at 1458. This Court divines none.\n50. SEB has demonstrated a likelihood of success on the merits, that it will suffer irreparable harm absent an injunction, that the balance of hardships tips in its favor, and that the public interest favors an injunction.\n\nCONCLUSION\nPlaintiff's motion for a preliminary injunction is granted. Plaintiff is directed to settle a proposed order in ten days on four days notice.\nSO ORDERED.\n", "ocr": false, "opinion_id": 2308481 } ]	S.D. New York	District Court, S.D. New York	FD	New York, NY
1,467,332	Rakoff	2007-08-28	false	duane-reade-inc-v-st-paul-fire-marine-insurance	null	Duane Reade, Inc. v. St. Paul Fire & Marine Insurance	DUANE READE, INC., Plaintiff, v. ST. PAUL FIRE AND MARINE INSURANCE CO., Defendant	James W.B. Benkard, Charles S. Dug-gan, Davis Polk & Wardwell, New York, NY, for Plaintiff., Lon A. Berk, Steven W. McNutt, Hun-ton & Williams, McLean, VA, for Defendant.	null	null	null	null	null	null	null	null	null	null	2	Published	null	<parties id="b739-7"> DUANE READE, INC., Plaintiff, v. ST. PAUL FIRE AND MARINE INSURANCE CO., Defendant. </parties><br><docketnumber id="b739-11"> No. 07 Civ. 574(JSR). </docketnumber><br><court id="b739-12"> United States District Court, S.D. New York. </court><br><decisiondate id="b739-14"> Aug. 28, 2007. </decisiondate><br><attorneys id="b740-5"> <span citation-index="1" class="star-pagination" label="700"> *700 </span> James W.B. Benkard, Charles S. Dug-gan, Davis Polk <em> & </em> Wardwell, New York, NY, for Plaintiff. </attorneys><br><attorneys id="b740-6"> Lon A. Berk, Steven W. McNutt, Hun-ton <em> & </em> Williams, McLean, VA, for Defendant. </attorneys>	[ "503 F. Supp. 2d 699" ]	[ { "author_str": "Rakoff", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": 2652, "opinion_text": "\n503 F. Supp. 2d 699 (2007)\nDUANE READE, INC., Plaintiff,\nv.\nST. PAUL FIRE AND MARINE INSURANCE CO., Defendant.\nNo. 07 Civ. 574(JSR).\nUnited States District Court, S.D. New York.\nAugust 28, 2007.\n700 James W.B. Benkard, Charles S. Duggan, Davis Polk & Wardwell, New York, NY, for Plaintiff.\nLon A. Berk, Steven W. McNutt, Hunton & Williams, McLean, VA, for Defendant.\n\nOPINION AND ORDER\nRAKOFF, District Judge.\nBy Order dated July 25, 2007, the Court granted the motion of defendant St. Paul Fire and Marine Insurance Company (\"St. Paul\") for summary judgment and denied the motion of plaintiff Duane Reade, Inc. (\"Duane Reade\") for summary judgment. This Opinion and Order states the reasons for those rulings, deals with other outstanding issues,[1] and directs the entry of final judgment.\nThis is the second case before the Court concerning an insurance policy (the \"Policy\") issued by St. Paul covering, inter alia, a Duane Reade drugstore located in the World Trade Center (the \"WTC Store\") that was destroyed during the terrorist attacks of September 11, 2001. See affidavit of James W.B. Benkard sworn to April 30, 2007 (\"Benkard. Aff.\"), Ex. C. In 2002, St. Paul initially paid Duane Reade $9,863,853 for losses related to the destruction of the WTC Store. See Defendant's 56.1 Statement (\"Def. 56.1\") ¶ 3; Plaintiffs Response 56.1 (\"Pl. Resp. 56.1\") ¶ 3. This was prior to the loss appraisal mandated by the Policy. A lawsuit, 02 Civ. 7676, was then commenced to determine certain questions concerning scope of coverage and to determine whether St. Paul's payment satisfied in full its obligation under the Policy, thereby rendering the appraisal unnecessary.\nThe Court issued a Memorandum Order in the prior action on August 20, 2003, construing, inter alia, the scope of coverage under the Policy's \"business interruption\" provision. See Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 279 F. Supp. 2d 235 (S.D.N.Y.2003). Among other things, that Memorandum Order referred to the time limits placed on the business interruption coverage by the \"Restoration Period\" clause, which provides, that:\nThe measure of recovery or period of indemnity shall not exceed such length of time as would be required with the exercise of due diligence and dispatch to rebuild, repair, or replace such property that has been destroyed or damaged, and shall commence with the date\" of such destruction or damage and shall not be limited by the date of expiration of this policy.\nPolicy (Benkard Aff., Ex. C) at 17-18. The Policy, however, also includes an Extended Recovery Period provision, as follows:\nThis policy is extended to cover the Actual Loss Sustained by the Assured resulting 701 suiting from interruption of business for such additional length of time as would be required with the exercise of due diligence and dispatch to restore the Assured's business to the condition that would have existed had no loss occurred, commencing with the latter of the following dates:\na) the date on which liability of the Company of loss resulting from interruption of business would terminate if the clause had not been attached to this policy or\nb) the date on which repair, replacement, or rebuilding of such part of the property as has been damaged is actually replaced; but in no event for more than twelve months from said later commencement date.\nId. at 21.\nIn the Memorandum Order of August 20, 2003, the Court held that the Restoration Period clause, with its subjunctive language (\"as would be required\"), provides coverage, in the context of the destruction of the World Trade Center, for a \"hypothetical or constructive\" period for rebuilding:\n[W]hat is to be hypothesized is the time it would take to rebuild, repair, or replace the WTC store itself, not the entire complex that once surrounded it. . . . Once Duane Reade could resume functionally equivalent operations in the location where its WTC store once stood, the Restoration Period would be at an end. . . . Any losses continuing beyond that point would be addressed by the \"Extended Recovery Period\" provision in the Policy . . . not by the Restoration Period clause.\nDuane Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 279 F.Supp.2d at 239. On June 22, 2005, the Second Circuit modified and affirmed this determination, upholding the finding that the Restoration Period depends on a hypothetical or constructive period of time but altering the definition to eliminate the requirement of functionally equivalent \"operations\" and the requirement that the replaced store be \"where [the] WTC store once stood.\" Instead, the Court of Appeals measured the Restoration Period by the hypothetical time that it would take Duane Reade to rebuild, repair or replace \"the functional equivalent of the store Duane Reade lost.\" See Duane Reade, Inc. v. St. Paul Fire and Marine Ins. Co., 411 F.3d 384, 392-399 (2d Cir.2005). This was because \"any discrepancies between the new building and the WTC [Store] in terms of benefits and advantages are exclusively accounted for under [another clause,] the Leasehold Interest clause.\" Id. at 398. As for losses that continued beyond the Restoration Period, the Second Circuit agreed with the District Court that they would be covered, if at all, \"by the `Extended Recovery Period' provision in the Policy, not by the Restoration Period clause.\" Id. at 399.\nMeanwhile, the parties proceeded with appraisal, as required under the Policy. Following the Second Circuit's decision, the appraisal panel, by letter dated June 5, 2006 (the \"Appraisal Award\"), made the following determinations:\nDuane Reade's Business Interruption loss for [the WTC Store] is $9,728,052 plus the Extended Period loss of $4,300,561 for a total of $14,028,613 based on a twenty-four (24) month Restoration Period and an Extended Period of twelve (12) months. In addition, interest on the award through May 2006 amounts to $2,395,045 for [the WTC Store] and $608,406 for the Extended Period loss. Offsetting these amounts are the advance paid by St. Paul of $9,863,853 and interest thereon through May 2006 of $2,668,065. Consequently the net amount due to Duane Reade 702 related to the [WTC Store] Business Interruption loss, including the Extended Period loss is $4,500,146.\nBenkard Aff., Ex. EE (\"Appraisal Award\") at 1-2. The panel also calculated that St. Paul owed Duane Reade a total of $1,131,821 in \"extended period\" losses and interest thereon involving 23 other stores. Id. at 2.\nDuane Reade then brought the instant action seeking (i) to confirm the Appraisal Award, (ii) to hold St. Paul liable for breach of contract for failing to pay the $5,631,967 due under the award, and (iii) seeking, by way of declaratory judgment and/or breach of contract, to hold St. Paul liable for still further sums allegedly due under the \"Leasehold Interest\" provision referenced in the Second Circuit opinion and under two other Policy provisions, the \"Attraction Properties\" and the \"Contingent Business Interruption\" provisions (which were not bases on which Duane Reade had sought recovery in the prior action). See Complaint.\nFirst, the Court confirms the portion of the appraisal award relating to the business interruption loss but denies the portion relating to the extended period loss. As the Second Circuit emphasized in its prior opinion, \"the scope of coverage provided by an insurance policy is a purely legal issue that cannot be determined, by an appraisal, which is limited to factual disputes over the amount of loss for which an insurer is liable.\" Duane Reads, Inc. v. St. Paul Fire and Marine Ins. Co., 411 F.3d at 389. See also Indian Chef, Inc. v. Fire and Casa Ins. Co. of Connecticut, 2003 WL 329054, at 3 (S.D.N.Y. Feb.13, 2003) (\"Appraisers are not empowered to address disputes arising from questions of coverage or liability.\"). Although both this Court and the Second Circuit stated that losses continuing past the Restoration Period \"would be addressed by\" the Policy's Extended Recovery Period provision, neither opinion held or even suggested that Duane Reade should automatically be entitled to recover under the Extended Recovery Period provision. On the face of the Policy, Duane Reade is not entitled to claim Extended Recovery Period coverage until after the \"repair, replacement, or rebuilding of such part of the property as has been damaged is actually replaced.\" Policy (Benkard Aff., Ex. C) at 21 (emphasis added). Duane Reade has not actually replaced the WTC Store arid therefore does not qualify for Extended Recovery Period losses at this time.\nContrary to Duane Reade's assertion, the fact that the Restoration Period relates to a hypothetical period of time does not dictate that the Extended Recovery Period likewise must be defined by reference to the hypothetical point at which the property reasonably could be replaced. Whereas the Restoration Period provision and the Business Interruption provision that it modifies are both phrased in the subjunctive (covering the period \"as would be required\" for restoration) and thereby guarantee recovery whether or not the assured chooses to replace the lost property, the Extended Recovery Period provision contains a requirement of actual replacement. This plain language must be given its plain meaning. See, e.g., Metropolitan Life Ins. Go. v. RJR Nabisco, Inc., 906 F.2d 884, 889 (2d Cir.1990).[2]\n703 Thus, the Court finds that the panel erred to the extent that it awarded $4,300,561 in \"Extended Period\" loss, on the WTC Store. Appraisal Award (Benkard Aff., Ex. EE) at 1-2. Deducting the award of Extended Period loss from the appraisal calculation, the Court finds that Duane Reade's Business Interruption loss for the WTC Store should be $9,728,052. St. Paul's advance payment to Duane Reade of $9,863,853 exceeded this figure by $135,801, which pursuant to one of St. Paul's counterclaims, is due to be remitted, with interest, to St. Paul. St. Paul does, however, owe Duane Reade the $862,615 plus interest that the appraisal panel found was due for Extended Period losses on 23 other Duane Reade stores that were affected-by the events of September 11, 2001 and on which the damaged property was actually replaced. Offsetting this loss amount by the overpayment described above, the Court finds that St. Paul owes Duane Reade $726,814 plus prejudgment interest on that amount (at the interest rates used by the appraisal panel). As so modified, the Court confirms the Appraisal Award.\nSecond, with respect to Duane Reade's other claims, which invoke Policy provisions not addressed in the prior action and seek relief not included in the Appraisal Award, the Court finds that such claims are barred by the doctrine of rep judicata because they could have been, and rightfully should have been, brought in the prior action. \"To prove that a claim is precluded under th[e] doctrine\" of res judicata, \"`a party must show that (1) the previous action involved an adjudication on the merits; (2) the previous action involved the [parties] or those in privity with them; [and] (3) the claims asserted in the subsequent action were, or could have been, raised in the prior action.'\" Pike v. Freeman, 266 F.3d 78, 91 (2d Cir.2001) (quoting Monahan v. New York City Dep't of Corr., 214 F.3d 275, 284-85 (2d Cir. 2000)); see Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 398, 101 S. Ct. 2424, 69 L. Ed. 2d 103 (1981) (\"A final judgment on, the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action.\"). The claims brought in this action satisfy all three of those requirements. Indeed., Duane Reade here seeks to invoke new legal theories to recover the exact same amounts it sought by way of declaration in the prior action. See affidavit of Steven McNutt in support of St. Paul's motion for summary judgment (\"McNutt Aff.\"), Ex. II.\nPlaintiff nonetheless contends that the doctrine of res judicata should not apply because the prior action initially took the form of a request for declaratory judgment. See Harborside Refrigerated Services, Inc. v. Vogel, 959 F.2d 368, 372-73 (2d Cir.1992) (res judicata ordinarily attaches to actions for declaratory relief only with respect to \"the precise issue before the court\"); Lynch v. Bailey, 279 A.D. 650, 108 N.Y.S.2d 134 (1st Dept.1951). The rationale for this exception to ordinary principles of res judicata, as articulated in Harborside, is, however, inapplicable here. As stated in Harborside:\nA common purpose behind both declaratory judgment availability and the doctrine of res judicata is litigation reduction and the conservation of judicial resources. Declaratory relief enables 704 federal courts to clarify the legal, relationships of parties before they have been disturbed thereby tending towards avoidance of full-blown litigation. . . . Similarly, res judicata operates to relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication. . . . A requirement that parties to an action for declaratory relief bring all possible claims and counterclaims at that juncture or else be barred by res judicata, would undermine efficient adjudication and optimal use of judicial resources. Actions for declaratory relief would rapidly develop into full-scale legal contests, and the option of a preliminary suit limited to a declaration of the rights of the parties would evaporate. To permit res judicata to be applied in such a case beyond the precise issue before the court would subvert the very interests in judicial economy that the doctrine was designed to serve.\nHarborside Refrigerated Services, Inc., 959 F.2d at 373 (internal citations and quotation marks omitted). Here, however, the prior action cannot be characterized as anything other than a \"full-scale legal contest\" concerning St. Paul's obligations under the Policy. In the prior action, plaintiff presented the strongest arguments it had for recovering the sums it sought. The interest of judicial economy is in no way served by permitting plaintiff to divide its attempts to determine the scope of coverage into multiple actions, each testing out a different theory of recovery.\nNor does the prior action fit within the doctrinal confines of the declaratory judgment exception. As the Second Circuit explained in Harborside, the exception to res judicata recognized under both Federal and New York law applies when \"the prior action involved only a request for declaratory`relief.\" Harborside Refrigerated Services, Inc., 959 F.2d at 372 (emphasis added). In addition to the request for declaratory relief and to plaintiffs breach of contract claims (which were dismissed without prejudice as unripe), the prior action involved defendant St. Paul's claims for, inter alia, breach of contract, which were dismissed with prejudice. See Duane Reade v. St. Paul Fire and Marine Ins. Co., 279 F. Supp. 2d 235. The presence of these claims seeking something other than declaratory relief, which the Court addressed on the merits, disqualifies this case for the declaratory judgment exception. See Giannone v. York Tape & Label, Inc., 2007 WL 1521500 (E.D.N.Y. May 23, 2007). Indeed, once defendant brought its claims for breach of contract, plaintiff was required under Fed.R.Civ.P. 13 to bring any claims it had against St. Paul \"aris[ing] out of the transaction or occurrence that is the subject matter\" of St. Paul's clairns.[3]\nFurthermore, even assuming arguendo this case did fit within the declaratory judgment exception, plaintiffs claims would nonetheless be barred by res judicata because the Complaint brings claims that were the very subject of the prior litigation. Even in the context of a pure declaratory judgment action, New York courts will not allow a party to retry issues that formed the subject matter of a prior *705 declaratory judgment action. See, e.g. Beck v. Eastern Mut. Ins. Co., 295 A.D.2d 740, 744 N.Y.S.2d 57 (3d Dept.2002) (\"plaintiffs' second declaratory judgment action is precluded because plaintiffs' claim . . . was the subject matter of the first declaratory judgment action\"); see also Harborside Refrigerated Services, Inc, 959 F.2d at 372 (\"Under this exception, the preclusive effect of the declaratory judgment is limited to the subject matter of the declaratory relief sought.\") Put another way, principles of collateral estoppel preclude plaintiff's claims. See Umhey v. County of Orange, N.Y., 957 F. Supp. 525, 529 (S.D.N.Y.1997) (\"collateral estoppel does apply to prior declaratory judgments\").\nPlaintiff attempts to narrowly circumscribe the prior proceeding by arguing that the prior action, which considered the business interruption provision as the primary source of recovery, did not address the issues raised in this action invoking the \"Leasehold Interest,\" \"Contingent Business Interruption,\" or \"Attraction Properties\" provisions. As all parties understood at the time, the prior action addressed the overall issue of scope of coverage under the Policy. The Court denied defendant's motion to compel appraisal prior to resolution of the prior action on the ground that appraisal could not proceed until the Court determined the scope of coverage under the Policy. See Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 261 F.Supp.2d at 296 (\"Given the dismissal of the breach of contract claims and the reduction of the case to claims for declaratory judgment regarding scope of coverage and related issues, this becomes such a case where appraisal is premature.\") In a letter to the Court dated June 20, 2003, Duane Reade stated that it \"interpreted this ruling to contain the implicit conclusion that appraisal would eventually be the appropriate vehicle for an assessment of Duane Reade's contractual damages after all the coverage issues had been decided.\" McNutt Aff., Ex. J at 2. It was only when the Second Circuit referenced the Leasehold Interest provision that plaintiff reconsidered its prior tactic of claiming coverage under the Policy for losses to the WTC Store derived primarily from the Business Interruption provision. In short, it is not the issue that has changed from the prior action to this case both actions address Duane Reade's entitlements under the Policy for losses arising from the terrorist attacks of September 11, 2001 but rather Duane Reade's strategy in approaching that issue. Neither the doctrine of res judicata nor the doctrine of collateral estoppel allows plaintiff to bring countless actions, one at a time, until plaintiff happens upon a legal theory that achieves the desired result. Principles of finality and judicial efficiency require plaintiff to have raised all of its issues concerning scope of coverage in its initial suit.\nThird, while neither party has formally moved for summary judgment on the counterclaims asserted in defendant's Answer, the foregoing determinations effectively dispose of the counterclaims.\nAccordingly, the Clerk of the Court is directed to enter final judgment confirming the Appraisal Award as here modified and holding St. Paul liable to Duane Reade in the sum of $726,814 plus prejudgment interest calculated according to the same rates used by the appraisal panel.[4]\nSO ORDERED.\nNOTES\n[1] In issuing its preliminary Order, the Court overlooked the fact that the plaintiff, by seeking confirmation of the entire award of the appraisal panel, thereby effectively also sought confirmation of that panel's award relating to Duane Reade stores outside the World Trade Center complex. As to that portion of the award, as discussed below, the Court essentially grants Duane Reade's motion for summary judgment and denies St. Paul's corresponding motion.\n[2] Duane Reade's suggestion that the requirement of actual replacement should be interpreted to be satisfied when the store could have been replaced would also render the second prong of the Extended Recovery Period provision meaningless. Under Duane Reade's reading, prong (b) would automatically be satisfied whenever prong (a) were satisfied. In contrast, by enforcing the requirement for actual replacement, the Court has given meaning to both requirements. For example, if Duane Reade were to delay and actually take more than the time that reasonably would be necessary to replace a protect. property, prong (a) would be satisfied (and coverage under the Restoration Period would terminate) when the property could have actually been replaced, and prong (b) would be satisfied (and coverage would recommence under the Extended Recovery Period) when Duane Reade did actually replace the property\n[3] In the prior action, plaintiff did, if barely, raise its claims to damages arising from the terrorist attacks of September 11, 2001 at stores other than the WTC Store, see Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 279 F.Supp.2d at 238, n. 3., and, as noted, the appraisal panel rendered an award on these claims. See Appraisal Award (Benkard Aff., Ex. EE) at 2.\n[4] The parties should, if possible, reach agreement on this calculation and submit an appropriate stipulation.\n\n", "ocr": false, "opinion_id": 1467332 } ]	S.D. New York	District Court, S.D. New York	FD	New York, NY
317,360	null	1974-02-27	false	united-states-v-harris	Harris	United States v. Harris	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "492 F.2d 1239" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/492/492.F2d.1239.73-1427.html", "author_id": null, "opinion_text": "492 F.2d 1239\n U. S.v.Harris\n 73-1427\n UNITED STATES COURT OF APPEALS Third Circuit\n 2/27/74\n \n 1\n D.Del.\n \n AFFIRMED\n ", "ocr": false, "opinion_id": 317360 } ]	Third Circuit	Court of Appeals for the Third Circuit	F	USA, Federal
409,575	null	1982-10-06	false	gordon-v-hobe-properties-inc	Gordon	Gordon v. Hobe Properties, Inc	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "690 F.2d 907" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/690/690.F2d.907.80-5800.html", "author_id": null, "opinion_text": "690 F.2d 907\n Gordonv.Hobe Properties, Inc.\n 80-5800\n UNITED STATES COURT OF APPEALS Eleventh Circuit\n 10/6/82\n S.D.Fla., 684 F.2d 736\n ", "ocr": false, "opinion_id": 409575 } ]	Eleventh Circuit	Court of Appeals for the Eleventh Circuit	F	USA, Federal
1,736,164	Powers, Gammage and Aboussie	1990-01-10	false	trevino-v-lightning-laydown-inc	Trevino	Trevino v. Lightning Laydown, Inc.	Emilia P. TREVINO, Et Al., Appellants, v. LIGHTNING LAYDOWN, INC., Et Al., Appellees	Bob Roberts, Law Offices of Bob Roberts, Austin, for appellants., Marc 0. Knisely, McGinnis, Lochridge & Kilgore, Austin, for appellees.	null	null	null	null	null	null	null	Rehearing Denied Feb. 7, 1990.	null	null	44	Published	null	<parties id="b982-7"> Emilia P. TREVINO, et al., Appellants, v. LIGHTNING LAYDOWN, INC., et al., Appellees. </parties><br><docketnumber id="b982-9"> No. 3-88-085-CV. </docketnumber><br><court id="b982-10"> Court of Appeals of Texas, Austin. </court><br><decisiondate id="b982-12"> Jan. 10, 1990. </decisiondate><br><otherdate id="b982-13"> Rehearing Denied Feb. 7, 1990. </otherdate><br><attorneys id="b983-12"> <span citation-index="1" class="star-pagination" label="947"> *947 </span> Bob Roberts, Law Offices of Bob Roberts, Austin, for appellants. </attorneys><br><attorneys id="b983-13"> Marc 0. Knisely, McGinnis, Lochridge & Kilgore, Austin, for appellees. </attorneys><br><judges id="b983-14"> Before POWERS, GAMMAGE and ABOUSSIE, JJ. </judges>	[ "782 S.W.2d 946" ]	[ { "author_str": "Aboussie", "per_curiam": false, "type": "010combined", "page_count": null, "download_url": null, "author_id": null, "opinion_text": "\n782 S.W.2d 946 (1990)\nEmilia P. TREVINO, et al., Appellants,\nv.\nLIGHTNING LAYDOWN, INC., et al., Appellees.\nNo. 3-88-085-CV.\nCourt of Appeals of Texas, Austin.\nJanuary 10, 1990.\nRehearing Denied February 7, 1990.\n947 Bob Roberts, Law Offices of Bob Roberts, Austin, for appellants.\nMarc O. Knisely, McGinnis, Lochridge & Kilgore, Austin, for appellees.\nBefore POWERS, GAMMAGE and ABOUSSIE, JJ.\nABOUSSIE, Justice.\nThis wrongful death and survival action arose from a collision in which a trailer suddenly detached from a truck and struck Jose Trevino's automobile, killing him. All of the defendants except appellee International Bank of Commerce settled before trial. The jury found that appellee's negligence proximately caused the accident and accounted for five percent of the fault causing the occurrence. The jury further found that appellee acted with conscious indifference, but declined to award exemplary damages. The court awarded appellants five percent of their total damages determined in accordance with the jury findings. Appellants contend that the jury's finding included damages for appellee's gross negligence and thereby rendered appellee liable to pay the entire amount of damages it assessed. See Service Lloyd's Ins. Co. v. Greenhalgh, 771 S.W.2d 688 (Tex.App.1989, writ granted). We will affirm the judgment of the trial court.\nAppellants brought suit against trailer owner Lightning Laydown, Inc., manufacturer Garber Industries/South Texas Tong, Inc., driver David Riley, and International Bank of Commerce (hereinafter referred to as IBC), alleging that the defendants had improperly manufactured the trailer, improperly hitched the trailer to the truck, or permitted a defective product to enter the stream of commerce. Appellee IBC was joined as a defendant based on the allegation that it had obtained a security interest in both the trailer and machinery, and that it repossessed and resold the defective trailer and machinery under a lease-purchase agreement. Shortly before trial, all of the defendants except IBC entered into a \"Mary Carter\" settlement agreement.\nThe jury found that the negligence of the three settling defendants as well as IBC proximately caused the accident, that IBC was five percent at fault, and that the settling defendants were ninety-five percent at fault. The jury assessed actual compensatory damages totalling $2,206,000. By its answer to question three, the jury also found that \"the conduct of [IBC] constitute[d] such an entire want of care as to indicate that the acts or omissions in question were the result of conscious indifference to the rights, welfare, or safety of the persons affected by it.\" However, when asked what amount of money should be awarded to appellants as exemplary damages, conditioned upon an affirmative answer to question three, the jury answered 948 \"none.\" Appellants do not challenge the jury's failure to award exemplary damages. The trial court rendered judgment against IBC for five percent of the actual damages, a total of $110,300, plus pre-judgment and post-judgment interest.\nAppellants argue that the trial court erred by failing to render judgment against IBC for the entire amount of damages found by the jury. They complain that the trial court improperly compared IBC's gross negligence with that of the settling defendants' ordinary negligence. They also argue that there is no statutory or common law basis on which to reduce appellee's liability and thus reduce their recovery. Appellants' argument apparently assumes that the jury's award included actual damages for all defendants' negligence and actual damages for appellee's gross negligence. Bellefonte Underwriters Ins. Co. v. Brown, 704 S.W.2d 742, 745 (Tex.1986).\nAppellants argue that \"conscious indifference\" is not negligence but instead is a separate and distinct cause of action, at least within the meaning of Duncan v. Cessna Aircraft Co., 665 S.W.2d 414 (Tex. 1984). They contend that, as a result, the comparative negligence statute then in effect, Tex.Rev.Civ.Stat.Ann. art. 2212a (1973)[1], did not apply and, therefore, their recovery should not have been reduced. If article 2212a applied, their recovery was correctly determined.\nArticle 2212a, and its successor statute, provided for comparative contribution among joint tortfeasors in negligence cases according to their respective percentage of fault. Duncan, 665 S.W.2d at 423. As Duncan notes, this statutory scheme referred only to negligence actions and not to other actions such as strict liability. Appellants argue that, therefore, article 2212a cannot apply to recovery based upon liability for gross negligence and should not apply, even when all defendants are guilty of ordinary negligence, so long as there is a finding against one of them of gross negligence.\nDuncan recognized that article 2212a controlled actions based upon negligence. In addition, Duncan also established a common law scheme for apportioning liability and allocating losses in products cases in which at least one defendant is found liable on a theory other than negligence. By this comparative causation system, the trier of fact compared the harm caused by the defendant's defective product with the harm caused by the negligence of the other defendants, any settling tortfeasors, and the plaintiff, apportioning responsibility among all whose action or products combined to cause the entirety of the plaintiff's injuries. Duncan, 665 S.W.2d at 427-8. In multiple defendant cases in which at least one tortfeasor settles with the plaintiff, Duncan held that the non-settling defendant's liability and the plaintiff's recovery shall be reduced by the percentage of causation allocated to the settling tortfeasor by the trier of fact, Id. at 429, rather than on a pro rata basis as earlier cases had held. See Palestine Contractors, Inc. v. Perkins, 386 S.W.2d 764 (Tex. 1964). The Court held that its judicially created plan applied to instances previously thought to be controlled by statute, such as when one tortfeasor was strictly liable. See General Motors Corp. v. Simmons, 558 S.W.2d 855 (Tex.1977). The Duncan opinion states that \"[t]he term `tortfeasor' includes those whose liability is based on strict products liability, breach of warranty, and negligence.\" Duncan, 665 S.W.2d at 430. Although appellants claim that gross negligence is a theory of liability separate from negligence, they nevertheless deny that their action is governed by the pure comparative causation scheme set forth in Duncan, under which appellants' recovery would be the same as that rendered in their favor. Because, as they 949 assert, a defendant found liable on a theory of conscious indifference (gross negligence)[2] is not expressly a \"tortfeasor\" under Duncan, they argue the settlement did not limit their recovery to the five percent causation attributed to appellee. Instead, argue appellants, IBC is jointly and severally liable for an action under another theory of liability (gross negligence as opposed to negligence), Duncan, 665 S.W.2d at 429, but is liable for the entire amount of compensatory damages found by the jury. Appellants concede that no Texas case so holds. We do not read Duncan's use of the term \"tortfeasor\" in the limited sense appellants suggest. The Court clearly was including those who were found to have caused the plaintiff's injury from any basis other than, or in addition to, negligence.\nWe reject appellants' arguments. Their position in part depends upon characterizing \"gross negligence\" as a theory other than negligence. The leading Supreme Court case on gross negligence is Burk Royalty Co. v. Walls, 616 S.W.2d 911 (Tex. 1981). There, a worker's compensation claimant sued his employer for exemplary damages, claiming that the employer had been grossly negligent. After thoroughly reviewing the applicable cases, the Court held that\n[g]ross negligence, to be the ground for exemplary damages, should be that entire want of care which would raise the belief that the act or omission complained of was the result of a conscious indifference to the right or welfare of the person or persons to be affected by it.\nBurk Royalty, 616 S.W.2d at 920.\nAlthough we agree that gross negligence refers to a different character of conduct, one's conduct cannot be grossly negligent without being negligent. In one instance, the actor fails to use ordinary care; in the other, he consciously commits the act or omission with an entire want of care. Gross negligence is established by evidence of the actor's mental state. Dyson v. Olin Corp., 692 S.W.2d 456, 458 (Tex.1985). As Burk Royalty recognized, gross negligence may result from a combination of negligent acts or omissions. Burk Royalty, 616 S.W.2d at 922. The defendant's mental attitude elevates ordinary negligence to the level of gross negligence and justifies the penal nature of imposition of exemplary damages. Burk Royalty, 616 S.W.2d at 922; Lawrence v. TD Industries, 730 S.W.2d 843, 845 (Tex. App.1987, writ ref'd n.r.e.).\nGross negligence may be shown by evidence that an actor made a decision, in the face of an impending harm to another party, without care about the consequences of an act that may lead to that harm. Williams v. Steves Industries, Inc., 699 S.W.2d 570, 573 (Tex.1985). No exact line can be drawn between negligence and gross negligence. Williams, 699 S.W.2d at 573. The difference between these two forms of negligence is one of degree rather than kind.\nThus, negligence that proximately causes actual damage to the plaintiff justifies the award of actual damages. When the actor is indifferent to his negligent act or omission in the face of an extreme degree of risk that a reasonable person would perceive, that negligence is gross negligence and supports the award of exemplary damages in addition to the actual damage award. Hylander v. Groendyke Transport, Inc., 732 S.W.2d 692, 694 (Tex. App.1987, writ ref'd n.r.e.); See Dyson, 692 S.W.2d at 458 (focus is on the mental attitude of the person charged and whether acts or omissions by that person display a conscious and deliberate disregard for the interest or safety of others). Where the 950 pleadings and evidence authorize an actual damage award, they may be awarded whether the actor was negligent or grossly negligent. A determination of gross negligence is relevant only to the assessment of exemplary damages, which this jury declined to award. Thus, the Dallas Court of Appeals has held that, within the meaning of Duncan, gross negligence is not a theory of liability other than negligence. Jannette v. Deprez, 701 S.W.2d 56, 60 (Tex. App.1985, writ ref'd n.r.e.).\nHere, the jury was to determine whose negligence was a proximate cause of the incident, the percentage of each one's fault, and whether appellee's conduct was committed with conscious indifference. The jury was asked how much money would compensate appellants for their losses, and what amount of exemplary damages should be awarded to punish appellee's grossly negligent conduct. Although the jury found that no exemplary damages should be assessed against appellee, and that appellee was only five percent at fault for the occurrence, appellants would now have this Court assess the entire amount of actual damages against appellee. We decline to reach this conclusion.\nAppellants cite cases where courts have refused to reduce an exemplary damage award by the percentage of a plaintiff's contributory negligence. See Elbar, Inc. v. Claussen, 774 S.W.2d 45 (Tex.App.1989, writ requested); Otis Elevator Co. v. Joseph, 749 S.W.2d 920 (Tex.App.1988, no writ); Hondo's Truck Stop Cafe, Inc. v. Clemmons, 716 S.W.2d 725 (Tex.App.1986, no writ); Anderson v. Trent, 685 S.W.2d 712 (Tex.App.1984, writ ref'd n.r.e.). They argue that these courts have refused to compare gross negligence with ordinary negligence because the two are separate causes of action too disparate to compare. In all four cases, however, the courts refused to compare plaintiff's negligence with defendant's gross negligence in order to reduce an exemplary damage award. See also Olin Corp. v. Dyson, 709 S.W.2d 251 (Tex.App.1986, no writ). The courts reasoned that the purpose of such damages is to punish the defendant and set an example for others, not to compensate the plaintiff. Joseph, 749 S.W.2d at 922; Anderson, 685 S.W.2d at 714. However, courts have held that it is permissible in some instances to compare plaintiff's negligence with defendant's negligence to reduce an actual damage award, even where the jury has found that the defendant also was grossly negligent. Jannette, 701 S.W.2d at 59. See Dyson, 709 S.W.2d at 252. Here, no fault was attributable to appellants, so it could not have been improperly compared. No exemplary damages were awarded by the jury for appellee's gross negligence, so the exemplary damages could not have been improperly reduced. Even under appellants' position, the jury's award could only represent actual compensatory damages for all defendants' negligence and for appellee's gross negligence, assuming it is a separate cause of action as suggested. We are cited to no reason why the liability of the various responsible parties could not be compared under these circumstances.\nAppellants also cite Olin Corp. v. Dyson, 678 S.W.2d 650 (Tex.App. 1984), rev'd, 692 S.W.2d 456 (Tex.1985), as authority for the proposition that gross negligence and ordinary negligence are two different causes of action. There, the court of appeals held that the evidence was factually insufficient to support an exemplary damages award. Stating that gross negligence is a different cause of action than negligence, it remanded only the exemplary damage issue for a new trial. Dyson, 678 S.W.2d at 659. We agree that gross negligence may be tried and determined separately from negligence, as in actions brought under the worker's compensation statute for exemplary damages. Tex.Rev. Civ.Stat.Ann. art. 8306 § 5 (1967). It also may be a separable issue which properly may be determined upon limited remand of a proceeding without unfairness to the parties, as held by the court of appeals in Dyson, 678 S.W.2d at 659. See Young v. *951 Hicks, 559 S.W.2d 343 (Tex.1977). (In Dyson the Supreme Court did not address this matter in its reversal.) However, we do not agree that gross negligence is a separate and independent cause of action in the sense proposed by appellants or that the jury's finding of gross negligence rendered the damages awarded improper.\nWe hold that the proceeding was governed by article 2212a, and that it was proper for the trial court to compare the negligence of all those liable and to reduce the compensatory damage award in accordance with the comparative negligence finding. See also Duncan, 665 S.W.2d at 430. We further conclude that gross negligence is not a \"theory other than negligence\" within the meaning of Duncan. Even assuming appellants are correct that conscious indifference is an independent action other than negligence, assuming the jury's assessment included damages for both, and assuming that 2212a did not apply, we hold that appellants' recovery would be determined by pure comparative causation and the result reached would be the same in light of Duncan. We overrule appellants' points of error and affirm the judgment of the trial court.\nNOTES\n[1] Article 2212a was the applicable law at the time of trial. The section has subsequently been repealed, and replaced by Texas Civ.Prac. & Rem.Code §§ 33.001-33.017 (1986 & Supp. 1989).\n[2] The parties use the terms \"conscious indifference\" and \"gross negligence\" interchangeably in their briefs. We do not decide that the two terms are synonymous. However, because the parties plainly use the phrase to refer to the \"conscious indifference\" jury question, which correctly sets forth the gross negligence standard, we assume that the parties mean to speak of gross negligence.\n\n", "ocr": false, "opinion_id": 1736164 } ]	Court of Appeals of Texas	Court of Appeals of Texas	SA	Texas, TX
409,577	null	1982-10-05	false	parks-v-united-states	Parks	Parks v. United States	null	null	null	null	null	null	null	null	null	null	null	null	0	Published	null	null	[ "690 F.2d 907" ]	[ { "author_str": null, "per_curiam": false, "type": "010combined", "page_count": null, "download_url": "http://bulk.resource.org/courts.gov/c/F2/690/690.F2d.907.81-5315.html", "author_id": null, "opinion_text": "690 F.2d 907\n Parksv.U. S.\n 81-5315\n UNITED STATES COURT OF APPEALS Eleventh Circuit\n 10/5/82\n N.D.Fla., 685 F.2d 1387\n ", "ocr": false, "opinion_id": 409577 } ]	Eleventh Circuit	Court of Appeals for the Eleventh Circuit	F	USA, Federal

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